Social Disclosure and its Accountability Assignment Samples

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Chapter 1 Introduction Part

Background of the study

In the early 1990s, increased attention towards detrimental impact of corporate functions on environment introduced public environmental reporting, as per which, all the establishments need to communicate their initiatives and efforts so as to ensure environmental safety for the community (Saleh, Zulkifli and Muhamad, 2010). In current era, growing number of companies undertook various environmental efforts along with their economic activities for environmental stewardship. In Malaysia, raising concerns our environment make it essential for the companies to report and communicate the impact of their business functions on the environment in their annual reports. In order to recognize firm for raising corporate transparency and their environmental initiatives, Department of Environment also introduced Malaysia Environment and Social Reporting Awards (MESRA). In the country, rapid technological advancement had a greater influence over society and raise public concerns for safe and healthy living (Manaf, Atan and Mohamed, 2006). Adverse impact on environment such as heavy rain, flooding, tsunami, soil erosion, excessive pollution, biodiversity loss, emission of harmful gases, habitat loss and others gain attention of the corporations towards such issues (NazliNik Ahmad and Sulaiman, 2004). Media also plays a major role in it as they continuously highlighted such increasing concerns in publications and bring attention to the need of governmental intervention for enforcing new laws. As a result, Malaysian Environmental Protection Agency, Consumer Association of Penang and SahabatAlam Malaysia pressurize domestic firms to comply with the environmental security and safety requirement and maintain ecological integrity. Companies were also charged with the penalties for any offences which negatively affected environment (Haniffa and Cooke, 2002).

Although, at present, many large companies of Malaysia disclose environmental and social reporting in their annual reports, still, the country is still at infancy level because there is no legal enforcement that mandates for the firms to produce such report. Although government took many initiatives to encourage companies to publish environmental reports such as Financial Reporting Standard (FRS) 101 and MASRA, still, there is no legislation has been developed yet(Sarumpaet, 2006). Therefore, companies just emphasize more towards maximizing their net profitability without fulfilling their environmental responsibilities. It is because;they are unaware about the financial benefits which they can get through such initiatives. Therefore, the current research study mainly aims at examining the social disclosure practices among 100 public listed companies from the Malaysian environmental sensitive sectors i.e. construction, plantation, properties, consumer product and industrial product. It will also investigate that whether CSD is related to the company profitability, financial leverage and ownership or not. Besides this, the paper will also examine the type of information whether qualitative, quantitative or monetary are incorporated in corporate social disclosure through applying content analysis.

Research aim and objectives

Aim: To examine social disclosure practices and its accountability within Malaysian environmental sensitive industries

Objectives:

• To undertake extensive literature review on different theories of corporate social disclosure practices
• To examine relationship between Corporate Social Disclosure (CSD) and company size
• To investigate whether CSD helps firms to maximize their profitability and financial performance or not
• To find out relationship between firm's environmental and social disclosure and country of ownership

Research hypothesis

Are the company characteristics (company size, profitability, financial leverage, number of independent directors and country of ownership) will affect the level of disclosure?

Rationale of the study

There are limited researches conducted, one is by Teoh and Thong1984 based on 100 Malaysian public listed companies which reported that large companies with foreign ownership public corporate social reporting. Another study of Andrew and et.al.,1989 found that only 26% firms disclose social reporting with main emphasizes on their human resources. Both the studies now become outdated. Recently, in 2016, a study has been conducted by Sarumpaet (2006) on Malaysian public-listed organizations but researcher just studied relationship between CSG and EPS for both the high and less-environmental sensitive companies. However,the current study will be new, because it focuses only on Malaysianenvironmental sensitive industries which operations resultant significant environmental hazards like construction, plantation, industrial product, consumer product and properties and investigate its relationship with company's profitability as well as financial leverage.

Potential contribution of the study

The study will be of great significance for the Malaysian companies to identify that whether by undertaking social and environmentally-responsible activities, they will be able to maximize their performance and financial status or not. Thus, by this way, it would aware firms about the need of environmental and social disclosure practices in their annual report. Academicians and scholars can also get assistance of the study so as to develop an idea about the impact of CSD on business performance.Governmental authorities and regulatory bodies can also use it to identify that whether there is a need for designing a new legislative framework on Environmental and Social Disclosure for companies or not.

Chapter outline

Chapter 1: Introduction - The beginning section brings attention of the reader towards current social disclosure practices adopted by Malaysian firms along with the reporting requirements. Thereafter, the study presents the research aims, objectives and hypothesis that have been studied by scholar. Finally, it outlines rationale and the potential significance of the industries.

Chapter 2: Literature review - This chapter of the thesis looks at how Malaysian political, social and economic development currently affects company's social reporting practices. The section undertakes review of various scholarly articles on different CSD theories like legitimacy theory, stakeholder theory, accountability theory and political economy theory. 

Chapter:3: Research methodology - This section presents methodological constituents covering research paradigm, approach, design, sample selection, size and method along with the research instrument. Finally, it presents how study gave attention to the ethical concerns.

Chapter: 4: Research findings and analysis - It interprets all the collected information about Malaysian companies to investigate their reporting practices and its impact on their performance. It will test all the designed research hypothesis applying suitable statistical tools in the SPSS such as correlation, regression and others.

Chapter: 5: Conclusion and recommendation - Finally, study will bring attention to the key findings of the research undertaken along with the necessary recommendation for the further detailed investigation in future period.

Chapter 2 Literature Review

Introduction

This section will provide details about studied that had been conducted in the past period on the similar research issue. In this, various researches were critically investigated to develop theoretical understanding and also laid down the attention on critics which helps to develop own opinion. In this, secondary material will be used because previous research studies and articles will be studied in order to provide theoretical base and thereby develop conceptual framework for the study bridging discovered gap.

Corporate Social Reporting and its need

According to Wang and Sarkis (2017), CSR can be defined as a procedure to communicate environmental as well as social impact of organizational economic activities to the public. The need of corporate social reporting began in the early 19 century so as to satisfy the information need of different stakeholders. Over the years, more and more companies started publishing their social reporting to satisfy stakeholders need. In US, UK and Wester Europe, corporations voluntarily disclose social reports in their annual reports covering key focus on the social and environmental aspect. Although, the content of reporting practices of different companies may vary over time, still, their main objective of corporate social reporting is to inform decision-makers so that they can make good decisions. In the opinion of Nazli and Sulaiman (2004), companies are engaged in social reporting to give moral nature of their regular activities, satisfy implicit demand of society and to legitimize firm in the market to build positive image. Besides this, considering market related factors, stakeholders and creditors can also get benefit from responsible business operations influenced by the information disclosed in the social reports.

As per the views of Van der Laan (2009), CSR practices in Malaysia are continuously increasing as in today's time, firms are actively involved in protecting the impact of their economical business activities on the environment so as to maintain healthier environment for the public. Although, in Malaysia, firms do not have any legal compulsion to present their social report in their annual reports, still, its disclosure constitutes discharging accountability towards various stakeholders, in which, firms report their interaction within environment and society in various forms.

Likewise, Alberici and Querci (2016), suggested that in current period, establishments cannot operate in the market successfully without recognizing their social as well as environmental accountability. Now, they no longer simply run to gain more wealth and profitability, however, they owes responsibility for the activities undertaken for achieving their business objectives. With the growth of the company and good image in them market, companies are held liable towards a wider public.Growing concerns over environmental safety arisen the need for the corporation to meet societal demands. It is therefore, entities taken extra care to maintain good relation with the societal groups. Crises i.e. environmental destruction, poverty, oil spills encouraged firms to provide information on environment, human resource, social participation and others. In this respect, companies are expected to run their routine activities and functions sustainably and ethically so as to maintain good life standard and wealth creation on the behalf of the community. Presenting the information about the impact of enterprise's economic activities makes report more valuable & qualitative. Thus, all these factors led to bring more focus on the social accounting.

Type of information disclosed in corporate social reports

In CSR, both quantitative as well as qualitative information are presented by the companies which contains detailed discussion of firm's actions with necessary facts and figures.

Quantitative disclosure

San and et.al., (2016), stated that quantitative disclosure is about the variety of content that is being covered in the social reports published by the enterprises. As per content analysis method, it can be judged by selecting categories, counting page numbers, sentences and word count as well. It examines manifest content that is covered in the corporate social reports. For instance, human resource section covers disclosure about number of workers, training & development, awards, staff welfare activities, workers safety etc. Environmental information constitute pollution, waste control, emission control, energy efficiency, optimum use of natural resources and others, however, community involvement includes education, sports, culture, health, poverty eradication etc.

In the research findings of Wang and Sarkis (2017),it is found that organizations who are engaged in resource industry group paid more focus upon environmental disclosure, however, food businesses who are involved in agricultural and food sector, paid least focus on the same. In this respect, establishments disseminate disclosure of environmental practices in the corporate governance section which covers details about firm's environment safety policy, cost, waste management and other activities undertaken for the environmental safety.

However,Kweh and et.al., (2017) reported that in countries of increasing prevalence of environmental challenges and hazards i.e. China & South Africaled to significant increase in the disclosure practices in corporate world. In contrast to this, nations which are suffering fewer challenges like Malaysia and Denmark, companies are not interested in disseminating more and more information in their reporting practices. In despite of this, research study of Kabir and et.al.,(2017) examined environmental disclosure practices among national as well as international oil and gas companies. By applying word count technique, it is determined that both the companies are engaged in communicating detailed information on their environmental impact of their economic actions due to increasing number of word count.

Qualitative disclosure

Kweh and et.al., (2017), opined that qualitative disclosure also gains significant importance in presenting important information about their environmental initiatives and others and helps in performance evaluation. It is perceived as a key value driver for the business growth. Evidencing it, Rattanphaphtham and Kunsrison found that high quality disclosure on environmental information is directly and positively related with the communication efficiency,transparency, reputation, sustainability and stakeholder's creditability.

Van der Laan (2009), also investigated the impact of qualitative disclosure applied by US companies working in environmentally sensitive sector. The results reported that firms like oil and gas extraction. chemical manufacturing, metal production generally communicate higher quality information. As per the outcome, adverse relation between qualitative disclosure and cost of equity, firms are voluntarily wish to report high quality presentation and thereby maximize stakeholders perception with minimizing cost of equity.

On the contrary note, Wachira (2017) contemplated that businesses with favorable environmental results took interest in disseminating high quality disclosure in comparison to the firms, who did not take sustainable environmental initiativesfor maintaining safe & healthier environment. At the same time, companies with strong performance also disclose objective & verifiable information. On the critical note, Rivera, Muñoz and Moneva (2017), argued that organizations with bad reputation on the basis of environmental aspect disseminated additional disclosure also so as to inform users about various functions what they undertook to manage ecological integrity and prevent environmental harm. The main aim of it is to reduce information asymmetry between shareholders & management.

Monetary disclosure

Fifka (2013), stated that monetary disclosure constitutes communicating details through presenting real data and figures helps for performing analysis. According to CIMA (Cement Industries of Malaysia Berhad) companies engaged in cement sector, their reporting practices include monetary information. However, other sectors does not provide monetary details and their primary disclosure are considered more narrative and descriptive. Property companies in the country hardly committed to present a separate environmental report containing monetary details just to highlight facts without any detailed factual and monetary presentation. The reason behind limited disclosure of monetary information is because they do not want to brag their operations and just wish to maintain a low profile.

Influence of company characteristics on corporate social disclosure

Size

Many academicians' studies found that there are number of factors or characteristics of the business which have influence company's social reporting practices. Earlier researches founded favorable relation between company size and their social reporting and disclosure initiatives. Research study performed by Juhmani (2014), stated that firms with bigger size, profitability and capital expense have a positive relation with qualitative disclosure. As a result, such company managers are highly encouraged and motivated to communicate enough details about their environmental practices s as to develop a good image in the eyes of public. They want to disclose more information on such activities and initiatives undertaken to minimize environmental pollution.

Similarly, Amran and et.al., (2017) discovered that larger companies are extremely popular in the market and operates at a large scale, therefore, their activities have a great impact on the society which is clearly visible. Besides this, their shareholders are also in large number who identifies social programs run by the entity for satisfying societal demand. Despite this, Ali, Frynas and Mahmood (2017), mentioned that companies with bigger size are highly interested in their corporate social reporting campaigns for the cost curtailment because they are enough aware that political costs reduces wealth creation and affect organizations adversely.

Profitability and financial leverage

CSR initiatives undertaken by the business entity have a positive relation with the profitability. It is because, as per the views of Muhammad, N. and et.al. (2015), firms economic performance gains importance in two different manner. Firstly, it determines relative weight of societal demand which helps firms in gaining attention of the decision-makers. During the period of weak operational profitability and high level of debt used by the firm, firms highly prioritize economic demand over societal. Secondly, the economic outcome of the entity impacts its financial capability to makecostly programs in order to fulfill societal demands. Thus, the relation between both the factors implies that social responsive need the same managerial attention, style and commitment what they undertaken to maximize profitability.

However, on the contrary side,Fifka (2013), determined consequences of corporation environmental management practices on the financial results is negative. Different practices took by the firm to ensure safe environment positively affects their profitability and financial performance. Here, it is essential to note that although both the variables are favorably related, still, realizing benefits from such initiatives take a lengthy time however, adverse consequences are considered short-term. As per the research findings, improvement in financial performance i.e. higher yield and strong credit rating for a given year is the results of investment in environmental management held in earlier years.

Despite this, Muttakin and Khan (2014), identified that social disclosure is strongly related to the sales growth. It means that disclosing enough amount of information on environmental and other aspects creates a strong image and strengthens relationship with stakeholders. It makes firms products highly acceptable among customers resultant maximizing demand and grow sales. At the same time, it holds positive relation with the innovation in company's goods and supplies. Drawing attention towards it, research indicated that an organization must consider environmental impact of their operations on research & design stage in order to gain sustainable competitive advantage and introduce innovative product in the market.

As per agency theory, if firm uses debts in very high proportion then the possibility of conflict between shareholders, managers and creditors becomes high resultant higher agency cost and incentivize managers to disclose more information. Thus, establishments with high leverage are liable to disclose more information thus, they have high propensity to voluntary disclose more details in their social reporting. Evidencing it from the findings ofYusoff and Lehman (2006), it is determined that Australian companies with subject to heavy use of debt disclose more set of information in their social and environmental reports, however, the findings for Malaysian companies provided inconsistent results. 

Country of ownership

There is limited number of researches which found relationship on the effect of country of ownership on the corporate social reporting. Alberici and Querci (2016), stated that in developed nations like US, UK and others, companies are actively involved in the disclosure practices. Besides this, foreign-owned enterprises and companies who run overseas are interested in presenting social reporting. It is because, they believed that satisfying societal demand and commitment and its appropriate presentation in annual report helps to overcome possible controversies and unjustifiable criticism.

Ali, Frynas and Mahmood (2017), found that US individualized culture and open democracy really had a great impact over company's social reporting practices and they are extremely diverted towards public and consumers. In Western Europe, collectivist-oriented culture influenced social accounting practices, more importantly; it considers employee unions and institutional necessities.

Number of independent board of directors

According to Malaysian revised corporate code, listed companies of Malaysia need to include both dependent and independent members in their board of directors which may be independent or dependent. Revised MCCG in 2007 paid focus on board composition which needs at least 1/3^rd non-executive directors in the board composition. However, for the board independency, under Market listing requirement for the domestic companies of Malaysia who needs to list their stock on Bursa Malaysia Securities Bhd must comprise at least 2 or 1/3^rd of the board, whichever is higher as an independent. Their diversified specialization, expertise and experience bring a lot of benefit for the organizations.

Ortas, Álvarez and Zubeltzu (2017)investigated the relationship between BOD and Corporate social performance through performing a meta analysis and as per the findings, it is determined that both the variables have positive relationship. Similarly, Harjoto, Laksmana and Lee (2015), stated that organizations with more number of independent board members are found to be highly committed towards stakeholder engagement, well-being of community, biodiversity preservation, environmental stewardship and stakeholders engagement so as to build favorable image in the front of public.

Theoretical foundations of corporate social disclosure

Social contract

In early 17 century, the concept was developed in the field of corporate social reporting, which indicates that society is dynamic, evolving and forever changing. The theory also believed in unequal distribution of power among institutions and society. Henceforth, in order to meet collective goals, society agrees with the overriding control to some extent. As per the views of Kweh and et.al., (2017), any corporation and no-doubt, businesses are not the exception of it run their operations in society, it is therefore, their survival and growth is heavily dependent upon delivering socially desired goods and running ethical operations. Rendering economical, political and social benefits helps organizations to gain power. Thus, according to this, neither institutional power not service requirement is permanent just due to prevailing dynamic changes in the society. As a result, it is necessary for the firm to meet twin legitimacy test and relevance by reflecting that people need quality products and services and societal group benefited from the rewards.

However, in a neo-pluralistic society, it can be understand and manipulated in various ways. Haniffa and Cooke (2002), argued that in an economy where no different types of organization operates, there will no cooperation between various individuals for the production purpose. Thus, organization will be able to run their operations effectively just due to economies of scale, labor division and others. Nevertheless, if company did not carry out sustainable activities, then public as well as consumers will suffer loss. For instance,depletion of natural resources, excessive emission of harmful gases and environmental pollution results in loss for the public.

Fifka (2013), opined that thesocial contract theory can be seen as an invisible covenant wherein companies are expected to fulfill social desires with having legal rights and power. For instance, employees are the important assets of the firm and their commitment, dedication and efforts are the base for business existence. As a result, establishment owes accountability to reward high-performers who benefited the business entity with their extra efforts. Towards general community, companies are liable to use resources like capital, material and labor in a responsible way.

Accountability theory

Nazli and Sulaiman (2004), defined accountability as a responsibility of the organization which they owes under an established contract. Accountability theory simply presents a general framework of social reporting considering firm's responsibilities towards community and environment. Unlike social contract theory, in a neo-pluralistic society, this theory presents a clear relationship of the organization with various user-groups.Ali, Frynas and Mahmood (2017), stated that every business organization owes accountability towards society, hence, CSR can be viewed as an extension of company's financial accounting so as to present discharge of accountability and thereby enhance corporate image. it also helps business entities to maximize their reporting transparency because they communicate their stakeholders with both the quantitative and qualitative information in their annual reports that they had satisfied accountability what they owed.

On the contrary side, Muttakin and Khan (2014), disagreed by stating that social accounting practices are majorly evolved in the liberal democracy which do not helps to drive change. At the same time, they are opposed to the capitalist as well as marginalist system with their heavy reliance upon changing market place in order to assure enough return. The theory illustrates user information right and business obligation to furnish all the necessary information demanded by the users.

Besides this, Saleh, Zulkifli and Muhama (2010), presented that company's responsibilities did not remain same and changes over time to time which is highly dependent upon the social environment. Therefore, it seems necessary for the organizations to understand, examine and evaluate social struggle and possible conflicts that might took place between their own requirement and social interest. They viewed accountability as an essential mechanism which contributes towards more justifiable results with better informed public.

On the critical side, Sarumpaet (2006),commented that theory believes existence of perfect world which is not true. It is because, theory intend that every organization deliver equal information demanded by users, however, in the real world, it cannot be proven true. Besides this, it perceived company as an active role to provide all set of information required by the public which lead to legitimacy. However, looking to real corporate scenario, companies disclose social reports due to multiple of reasons, thus, by this way, it is a combination of complex set of political and socio-theories which includes stakeholder theory, legitimacy theory and political economy theory, and all cannot be separated from each other.

Legitimacy theory

Dube and Maroun (2017), defined legitimacy as an existence of status or condition when company's value system present congruence with the social system, for which, entity is considered as an important part of the same. Existence of relationship between both the value systems brought legitimacy threats to the entity. Its strategy covers educating public about business activities, changing public perception and external expectations as well. The theory believed that communicating environmental and social disclosure is the result of reaction to the external market factors including political, social or economic factors. Ali, Frynas and Mahmood (2017), viewed it as an “window dressing” because in this, firms are attempted to attract users attention towards a particular matter and thereby make users happy and pleased.

In the opinion of Fifka (2013), organizations are established with the clear motive to survive and sustain in the market for the unstoppable period, however, their long-term existence in the current dynamic market era requires legitimacy in the eyes of public. Corporate social reporting is viewed as an attempt of the business entity to legitimize the firm by developing an image among society that company is socially aware and running their regular business activities in a sustainable manner. Bringing attention upon it, business entities exercise power to influence and present their social concerns awareness through disclosure. They viewed harmonized relationship between organization & society because both shares mutual interest.

However, on the contrary side, Saleh, Zulkifli and Muhama (2010), argued that legitimacy theory is largely a reactive process which aims at demonstrating congruence between societal norms and social values that are integrated in their business activities. They also viewed such disclosure as a potential threat because, excessive pressure by public might result into legal formulation.

Stakeholder theory

This theory presents relationship with organization and other external world. As per the views of Kent and Zunker (2015), companies have number of stakeholders such as shareholders, environmental public, customers and many others. It is the responsibility of every business unit to comply with the same so as to satisfy all the people. Thus, the theory acknowledges the relationship between establishment's group of stakeholders and dynamic market constitutes firm's responsibilities as well as accountability. It covers social concerns, environmental challenges, staff welfare activities and many others. As per the views of Freeman and et.al., (2017), the theory states that identifying all the people who have any kind of interest and stake in business operations and might be affected by the same and person towards whom company owes accountability, it is necessary to report and disclose necessary details about various business initiatives undertaken under corporate social disclosure.

However, on the other hand, Amran, Lee and Devi (2014), commented that in practical world, companies do not provide all the information that is actually needed by the users due to different reasons such as management strategic posture which is negative towards social demand. Besides this, powerful stakeholders like investors are in position to put pressure on the entity to present all required information in comparison to general public & customers. In the opinion of Miles (2017), the theory requires stakeholder identification, prioritizing their interest and information right evaluation. This ranking or prioritizing assists companies to identify key stakeholders who are required to be properly communicated while others are not. Such heterogeneity and inadequate information reported under corporate social disclosure (CSDs), it resultant conflicts. It is therefore, said that social disclosure practices helps companies to manage strong relationship with the stakeholders. This in turn, it facilitates establishments in long-term and sustainable growth and build favorable image. 

Political economy theory

Manaf, Atan and Mohamed (2006), studied that political economy is an integrated framework covering social, political and economic factors wherein human life actually takes place. In this, political economy pay more emphasizes towards infrastructure, fundamental relations in society and recognizes business environment which support corporate reporting system. It view accounting reports as necessary document and tool that helps for developing sustainable and legitimize theme contributing private interest of business itself. Thus, publishing social reporting helps to achieve political or ideological goals defining their beliefs, values, norms and perceptions.

However, it is argued bySaleh, Zulkifli and Muhamad (2010),underlining that if it so, then such value will be of no significance for the stakeholders in making economic decisions. Although, several organizations might report considering ethical reasons, still, it exhibit that firms are trying to deflect users attention to reduce possible pressure by environmentalists, governments and public. However, such groups desires more control on the disclosure practices.

Nazli and Sulaiman (2004), viewed the theory of political economy as a mixture of both stakeholder and legitimacy theory. In this, it is generally believed that economy is just a single element of business survival and there requirements must be interwoven with the political and social recognition. Sarumpaet (2006), said that this theory considers, that individual and society pressurize firm to publish social reports whereas on the other side, organization desires to given such information with the legitimacy view so as to minimize criticism in wider community.

Chapter 3 Research Methodology

5.1 Introduction

The research is interested in exploring the extent to which Malaysian based public listed firms are engaged in tackling environmental concerns and accordingly publishes reports in their annual reports. The key question of the thesis is whether environmental and social disclosure practices of the Malaysian companies' impact their financial results or not. To attain this, researcher examined the particular impact of firm size, financial leverage, profitability, country of ownership and board of director's independence on the return on assets and return on equity. Thus, all the key questions can be addressed only by applying scientific tools and methods. Therefore, the current chapter presents methodological constituents covering research paradigm, approach, design, sample selection, size and method along with the research instrument.

5.2 Research hypothesis

Company size (market capital)

H₀: Company size does not affect the corporate social disclosure.

H₁: Companies who have high market capital disclose more information.

Profitability (ROE, ROA and EPS)

H₀: Companies who gain larger profitability reported do not generally disclose more amount of information in their corporate sustainability reports.

H₁: Companies who gain larger profitability disclose more amount of information in their social disclosure.

Financial leverage

H₀: There is no impact of financial leverage of the organization on their level of social disclosure.

H₁: There is significant impact of financial leverage of the organization on their level of social disclosure.

Industry

H₀: There is no impact of sector/industry in which firm operates on their social disclosure 

H₁: There is significant impact of sector/industry in which firm operates on their social disclosure.

Board of Directors Independence

H₀: There is no impact of number of independent directors in board on corporate social and environmental disclosure.

H₁: There is significant impact of number of independent directors in board on corporate social and environmental disclosure. 

Country of ownership

H₀: Corporate social disclosure does not vary according to the country of ownership.

H₁: Corporate social disclosure varies according to the country of ownership.

5.3 Research paradigm

Philosophy of the research covers two key components, epistemology (examining truthfulness) and doxology (what is believed to be true). Both these assist researchers in selecting the best philosophy for the research.

5.3.1 Positivism

The philosophical approach is found perfect or highly suitable for the studies of natural science because it is based on observation of social entities. Considering objectivity, it is based on hypothesis development and its testing (Bergold and Thomas, 2012). Moreover, such paradigm is featured with rigid structure, in which, scholar works on quantifiable dataset and observation and accordingly, statistical tests are being applied.

5.3.2 Interpretivism

Interpretivist follows subjective viewpoint, in which, they works on qualitative dataset, more importantly, used in studies of social science. Its epistemology focuses on examining differences between various social factors. Thus, data are interpreted in accordance with own set of meaning (Petty, Thomson and Stew, 2012).

5.3.3 Realism

The paradigm believed that certain components of reality are independent from perceptions, concepts and practices. Therefore, this branch of epistemology is belonging to the scientific investigations which mainly focuses on disclosure of truth of reality and objects prevalent in human mind (Zikmund and et.al., 2013).

Out of above three, positivism is considered perfect for the chosen research problem because, it is based on natural science so as to study existing social reporting practices of Malaysian companies which need an extremely structured framework. It covers quantitative aspects like ROA, ROE, leverage, board of director independence and others which can be studied only through scientific tools. Therefore, the requirement of hypothesis creation and applying different analytical methods in statistical package (SPSS) prefers positivist paradigm.

5.4 Research approach

5.4.1 Deductive

This approach tests collected information by hypothesis development and focuses on causality. It is particularly emphasizes on quantitative studies which is also considered as aimed and testing theory.

5.4.2 Inductive

It particularly emphasizes on exploring either a new phenomenon or evaluating earlier investigated phenomenon from a distinctive perspective. Scholars use such approach in qualitative studies (Eriksson and Kovalainen, 2015).

From both of these approaches, prior is considered appropriate for the present study because it is a quantitative research, in which, investigator tested the relationship between social reporting and financial performance by hypothesis. Its reasoning works from generalized issue towards specific concerns, therefore, also called top-down approach wherein designed research hypothesis had been tested for confirmation with the original theories. Straightforward attention to the specific area with precise analysis and less-time consuming process are the two core benefit of deductive approach.

5.5 Research design

Design of the research integrates multitude of components in a logical manner so that investigator will be able to address properly the designed questions or research hypothesis. This study targeted at assessing relationship between environmental disclosure and company's financial performance in Malaysia. Thus, in order to examine the extent to which firms disclose useful information in their social reports, content analysis framework has been used. It is a technique which is used to make valid inferences through interpreting textual variable. In this technique, qualitative data can be converted into quantitative dataset for the purpose of analysis. With the help of content analysis, Malaysian publicly-listed companies annual report will be examined considering three disclosure aspects, monetary, quantitative and qualitative. In this, level of social reporting and disclosure will be taken as dependent variables (Drake and Heath, 2010). Besides this, investigator had also examined the impact of country of ownership (moderator), company size, profitability (ROA and ROE), number of independent board of directors and leverage (control variable) on their social reporting practices.

Study variables

Dependent variables	Level of social disclosure
Moderator	Country of ownership
Control variable	Number of independent board of directors
Independent variable	Company size, profitability and leverage

5.6 Data collection

It is the process of extracting useful or materialistic information that are required by the investigator to tailor their specific research requirement and study the problem in detail. There are two sources from where information needed can be collected, presented underneath:

5.6.1 Primary data source

Primary sources provide direct information and firsthand evidences to the investigator include experimental results, statistical data, audio & video recordings, historical & legal documents, eyewitness accounts and others. It specifically targets the end goal of the study and provides customized dataset suited for the analysis (Zivkovic, 2012). The most important drawback of the method is that it is too costly way of data extraction and takes lengthy time in information gathering. For instance, doing questionnaire survey, field observation, experiments and interview are some of the popular methods of data extraction.

5.6.2 Secondary data source

Unlike primary, secondary set of data includes that information which is already available and there is no need for the scholar to collect such information by original investigation. It includes both internal and external sources, former incorporates those dataset which exists and stored inside the corporation whereas external data includes such information that is acquired by other individuals (Chilisa, 2011). For instance, profitability statement, company's annual reports etc. are inner sources whereas government and industrial publications, trade reports, corporate fillings are external sources.

For the chosen field of study, required set of data has been extracted from secondary sources. As the report thrust is to investigate the impact of company's social and environmental reporting practices on the financial results, thus, both the data is available in company's annual report. Thus, from the corporate annual reports of selected public-listed companies on Bursa Malaysia, information such asnumber of independent directors, country of ownership, company size, profitability, financial leverage, country of ownershiphas been collected and examined its association with their social reporting and disclosure practices. Annual reports are commonly used methods of social disclosure and communication to the stakeholders. Moreover, listed companies also needs to audit their reports for verifiability, thus, it helped investigation in extracting reliable & prominent information. As companies publish it, therefore, it is easily accessible on its original website and online source.For the study, investigator only targeted 5 different environmental-sensitive industries of Malaysia includes industrial products, construction, properties, plantation and consumer products.

5.7 Sample selection and size

5.7.1 Target population

The population for the current study is all the public-listed establishments of Malaysia listed on Bursa Malaysia (Kuala Lumpur Stock Exchange). It is too large; therefore, it is almost impossible for the investigator to study all of the units. Therefore, investigator needs to choose a sample which the study targeted.

5.7.2 Sampling methods

There are two popular methods of sample selection, random/probabilistic and non-random/non-probabilistic defined underneath:

5.7.2.1 Random sampling

Drawing sample units from the universe with defined or known probabilities is known as probabilistic sampling. It is an unbiased method and includes methods like simple random sampling, stratified and systematic sampling (Coleman and Ringrose, 2013).

5.7.2.2 Non-random sampling

Unlike above, non-random is used as a speedy or convenient method which does not need any sampling frame i.e. judgemental or purposive sampling, quota sampling and others.

In the current study, investigator paid entire focus on environmental-sensitive industries who are require to disclose more set of information in their social reporting to build positive corporate image due to environmental concerns of their operating activities. For the study, Among a large number of companies operating in environmentally-sensitive industries, researcher selected a sample of 100 companies of Malaysia using stratified random sampling. In this method, universe/population is divided into smaller units called stratagrouping all-together the units who share similar characteristics and attributes. Afterwards, all these subsets are pooled to create a random sample. In this, as per current corporate scenario, there are 525 companies operating in 5 industries to which relative weights have been assigned for sample selection.

Industry	Total	Calculation	Number Representative
Consumer Products	124	(100/525) x 124	24
Industrial Products	218	(100/525) x 218	41
Construction	47	(100/525) x 47	9
Properties	95	(100/525) x 95	18
Plantation	41	(100/525) x 41	8
525	100

5.7.3 Sampling element

Malaysia based publically-listed companies on Bursa Malaysia operating in either of five highly environmental-sensitive industries (consumer product, construction, properties, plantation and industrial product) are the sampling element for the investigation.

5.8 Data analysis and evaluation

As said earlier, that current investigationis a scientific study, in which, a number of research hypothesis addressing the key question of the research has been designed which is tested or confirmed using statistical package (SPSS). In this, number of statistical methods and tools like descriptive, multiple regression, correlation and others had been performed to investigate whether or not environmental and social disclosure have an impact over business performance. In this regards, multiple regression test will facilitate researcher to determine the impact of all the independent variables (company size, profitability, financial leverage and country of ownership) over their social and environmental disclosure practices. Moreover, using content analysis, quantitative, qualitative or monetary-disclosure of corporations social reporting has been examined to determine sector which highly prefers voluntary disclosure in their social reports to create a positive image among public (Schmitt, 2010). However, in order to check normality, Kolmogorov-Smirnov (KS) and Sharpio-Wilk (SW) test has been performed so as to examine whether gathered data set is normally distributed or not.

5.9 Reliability & validity

Malaysian companies who are listed on Kuala Lumpur Stock Exchange can only publish their annual reports after an independent audit. Thus, extracting information about all the dependent, independent, control variables and moderator will from audited annual reports satisfied requirement of collecting reliable & valid dataset. In despite of these, although there are various databases from where company's profitability like return on equity and return on assets as well as financial leverage can be gathered, still, it does not assure reliability and validity aspect. Therefore, information is only generated from the establishment's original annual report.

5.10 Ethical concerns

The ethical concerns for the study constitutegetting authorization from the company's directors to use their published annual reports. As investigator will use critical business data, therefore, scholar owes accountability to keep data confidential so as to protect it from any kind of misuse. Thus, loss of confidential data is an ethical concern for the researcher which only can be mitigated by fully-compliance with data safety & security requirement.

Chapter 4 Data Analysis and Discussion

6.1 Introduction

This chapter deals with the examination of the data collected and gathered through various graphs and statistical results about company's social disclosure practices. All the statistical calculations are being performed in SPSS (Statistical Package). Besides this, many statistical tools like correlation, multiple regression and descriptive statistics are being performed to test the results.

6.2 Descriptive data

6.2.1 Country of ownership

Country of ownership
Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Malaysia	96	96.0	96.0	96.0
	Japan	1	1.0	1.0	97.0
	France	1	1.0	1.0	98.0
	USA	1	1.0	1.0	99.0
	Singapore	1	1.0	1.0	100.0
	Total	100	100.0	100.0

A sample of 100 publically listed companies on Bursa Malaysia (KLSE) had selected. Out of these, 96 had shown Malaysian ownership while only 1 had Japanese, 1 had France, 1 had USA and 1 had Singapore ownership. Thus, it becomes clear that majority of the organization selected for the sample were headquartered in Malaysia.

6.2.2 Type of Industries

Sector
Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Plantation	8	8.0	8.0	8.0
	Construction	9	9.0	9.0	17.0
	Properties	18	18.0	18.0	35.0
	Consumer product	24	24.0	24.0	59.0
	Industrial product	41	41.0	41.0	100.0
	Total	100	100.0	100.0

Above illustrated graph present that out of 100 companies, 8 operating under plantation sector, 9 under construction, and 18 in the properties sector, 24 in consumer product and remaining 41 companies belong to industrial product sector. Thus, maximum 41% companies of the sample chosen were operating in the industrial product.

6.3 General Social Disclosure

6.3.1 Frequency & percentage of presenting corporate social disclosure by ownership

Disclosure
Country of ownership			Frequency	Percent	Valid Percent	Cumulative Percent
Malaysia	Valid	Yes	69	71.9	71.9	71.9
		No	27	28.1	28.1	100.0
		Total	96	100.0	100.0
Japan	Valid	Yes	1	100.0	100.0	100.0
France	Valid	No	1	100.0	100.0	100.0
USA	Valid	No	1	100.0	100.0	100.0
Singapore	Valid	No	1	100.0	100.0	100.0

Over the period, raising concerns of companies operations on environmental impact found thatout of 96, 69 (71.9%) companies disclosed their CSR reports in their annual accounts, however, only 27 (28.1%) did not made any disclosure. Besides this, increase in their market size, worldwide operations, social commitment and pressure, firms started publishing their annual reports. There is only one Japanese firm which discloses CSR so as to make society aware about their environmental impact of economic activities and create a good corporate image. In contrast, there is only 1 company identified as USA, Singapore and France owned which do not make any social and environmental disclosure.

6.3.2 Frequency & percentage of presenting corporate social disclosure by industry

Disclosure
Sector			Frequency	Percent	Valid Percent	Cumulative Percent
Plantation	Valid	Yes	6	75.0	75.0	75.0
		No	2	25.0	25.0	100.0
		Total	8	100.0	100.0
Construction	Valid	Yes	4	44.4	44.4	44.4
		No	5	55.6	55.6	100.0
		Total	9	100.0	100.0
Properties	Valid	Yes	14	77.8	77.8	77.8
		No	4	22.2	22.2	100.0
		Total	18	100.0	100.0
Consumer product	Valid	Yes	18	75.0	75.0	75.0
		No	6	25.0	25.0	100.0
		Total	24	100.0	100.0
Industrial product	Valid	Yes	28	68.3	68.3	68.3
		No	13	31.7	31.7	100.0
		Total	41	100.0	100.0

In properties sector, majority of firms (77.8%) disclose social reports because their regular activities have a damaging impact on the society and environment. Thus, firms publish sustainability reports to make society and stakeholders aware about their initiatives so as to gain environmental stewardship, workforce management, community welfare and others. Thereafter, in plantation and consumer product industry, 75% enterprises made such disclosure. However, in industrial product and construction, only 68.3% and 44.4% entity publish such reports due to absence of any mandatory requirement.

6.4 Themes of disclosure

6.4.1 Amount of disclosure by industry

Descriptive Statisticsa
Country of ownership		N	Minimum	Maximum	Sum	Mean
Malaysia	Total word count	94	0	18000	102334	1088.66
	Valid N (listwise)	94
Japan	Total word count	1	637	637	637	637.00
	Valid N (listwise)	1
France	Total word count	1	0	0	0	.00
	Valid N (listwise)	1
USA	Total word count	1	0	0	0	.00
	Valid N (listwise)	1
a. No statistics are computed for one or more split files because there are no valid cases.

As per the results, out of 69 Malaysian companies who made social disclosure, total word count disclosure is 102,334 at maximum disclosure of 18000 words and average disclosure is 1089 words. However, in Japan, there is only 1 organization, Panasonic who disclosed 637 words in their corporate sustainability reports. In contrast, companies in USA, France and Singapore did not disclose such reports.

6.4.2 Amount of disclosure of total word count by sector

Descriptive Statistics
Sector		N	Minimum	Maximum	Sum	Mean
Plantation	Total word count	8	0	1553	3108	388.50
	Valid N (listwise)	8
Construction	Total word count	9	0	865	1621	180.11
	Valid N (listwise)	9
Properties	Total word count	18	0	1291	8153	452.94
	Valid N (listwise)	18
Consumer product	Total word count	21	0	18000	56324	2682.10
	Valid N (listwise)	21
Industrial product	Total word count	41	0	5385	33765	823.54
	Valid N (listwise)	41

Facts given above are clearly reflecting that in case of consumer product segment there is large number of disclosures. It can be seen that in case of plantation number of disclosures are 3108 and same for construction are 1621. This reflects that in case of plantation sector firms there are large number of disclosures then construction. In case of properties sector disclosure of total word count is 8153 and same in case of consumer product is 56324. All these facts are revealing that for consumer product there is larger number of disclosure of word count. At second number for industrial product there is higher word count of disclosure which is 33765. On average basis disclosures made in consumer product is 2682 and same is 823 in case of industrial products. 18000 is maximum word count for consumer products and same is 5385 for industrial products. In case of plantation mean maximum word count stand at 1553. It can be said that on average basis firms that produce and sold consumer products disclose more and more information in respect to sustainability in their annual report.

6.4.3 Frequency of disclosure in social reports by separate heading according to country

Envt disclosure		Workplace disclosure		Community disclosure		Marketplace disclosure		Education and training disclosure		Customer disclosure		Other disclosure
Yes	No	Yes	No	Yes	No	Yes	No	Yes	No	Yes	No	Yes	No
No.	No.	No.	No.	No.	No.	No.	No.	No.	No.	No.	No.	No.	No.
Sector	Plantation	5	3	4	4	4	4	1	7	2	6	0	8	0	8
	Construction	3	6	3	6	2	7	1	8	1	8	0	9	0	9
	Properties	10	8	9	9	11	7	6	12	1	17	1	17	1	17
	Consumer product	17	7	15	9	14	10	7	17	4	20	4	20	3	21
	Industrial product	27	14	27	14	23	18	13	28	2	39	4	37	6	35

In case of plantation in respect to event disclosure and other categories like workplace disclosure, community disclosure, marketplace, education and training, customer and other disclosure there are very few firms. However, this trend is different in case of properties, consumer product and industrial products. Performance in case of consumer product is far better than properties and industrial product. This is because in case consumer product category there is wide gap between yes and no category. Whereas, in case of industrial product category it can be observed that gap between yes and no category is wide which reflect that in case of one category there are larger number of firms and in case of other category there are less number of firms.

6.4.4 Amount of disclosure by country of ownership

Environment	Workplace	Community	Marketplace	Education & training	Customer	Other
Country of ownership	Malaysia	Maximum	4274	2687	5100	3076	1014	2078	355
		Minimum	0	0	0	0	0	0	0
		Mean	242	260	257	96	37	39	15
		Sum	23209	24993	24674	8966	3480	3629	1393
		Total N	96	96	96	96	96	96	96
	Japan	Maximum	455	178	0	0	0	0	0
		Minimum	455	178	0	0	0	0	0
		Mean	455	178	0	0	0	0	0
		Sum	455	178	0	0	0	0	0
		Total N	1	1	1	1	1	1	1
	France	Maximum	0	0	0	0	0	0	0
		Minimum	0	0	0	0	0	0	0
		Mean	0	0	0	0	0	0	0
		Sum	0	0	0	0	0	0	0
		Total N	1	1	1	1	1	1	1
	USA	Maximum	0	0	0	0	0	0	0
		Minimum	0	0	0	0	0	0	0
		Mean	0	0	0	0	0	0	0
		Sum	0	0	0	0	0	0	0
		Total N	1	1	1	1	1	1	1
	Singapore	Maximum	0	0	0	0	0	0	0
		Minimum	0	0	0	0	0	0	0
		Mean	0	0	0	0	0	0	0
		Sum	0	0	0	0	0	0	0
		Total N	1	1	1	1	1	1	1

In case of amount of disclosure by companies of ownership it is observed that Malaysia is the top most country. This reflects that out of 100 firms majority of them are started in Malaysia. In case of France, USA and Singapore there are single firms that are disclosing facts and figures in their annual reports. In case of Malaysia disclosure sum is 23209 in case of environment, 24993 in case of workplace, 24674 in case of community, 8966 disclosures in case of market place. Apart from this, 3480 disclosures are observed in case of education and training and 3629 disclosures in case of customer segment as well as there are 1393 disclosures in other category. On the basis of these facts it can be said that sufficient disclosures are made by Malaysian firms in comparison to other nation firms and there are high disclosures in case of environment, workplace and community category.

6.4.5 Amount of disclosure by sector

Environment	Workplace	Community	Marketplace	Education & training	Customer	Other
Sector	Plantation	Mean	113	88	87	19	82	0	0
		Count	8	8	8	8	8	8	8
		Minimum	0	0	0	0	0	0	0
		Maximum	700	400	300	150	500	0	0
	Construction	Mean	55	30	83	7	6	0	0
		Count	9	9	9	9	9	9	9
		Minimum	0	0	0	0	0	0	0
		Maximum	200	165	700	60	50	0	0
	Properties	Mean	129	100	123	28	28	7	11
		Count	18	18	18	18	18	18	18
		Minimum	0	0	0	0	0	0	0
		Maximum	717	501	685	199	500	111	199
	Consumer product	Mean	430	374	575	232	90	137	11
		Count	24	24	24	24	24	24	24
		Minimum	0	0	0	0	0	0	0
		Maximum	4274	2687	5100	3076	1014	2078	140
	Industrial product	Mean	235	327	175	75	6	9	24
		Count	41	41	41	41	41	41	41
		Minimum	0	0	0	0	0	0	0
		Maximum	1840	2300	1245	700	137	123	355

In case of consumer products and industrial products higher amount of disclosures are made in comparison to other industries. It can also be seen from table given above that properties and plantation comes at third and fourth number in terms of disclosure. Interesting fact is that in case of all sectors higher disclosures are made in respect to environment, workplace and community. However, marketplace, education and training and customer as well as other category there are less number of disclosures. Hence, it can be said that firms across different sectors are interested in disclosing more and more information or intends to do more in respect to environmental, workplace and community area.

Regression: Impact of company characteristics on disclosure practices

Shown in Appendix 1

According to the regression statistics, it is found that R is determined to 0.364 which depicts that company characteristics (profitability, financial leverage, market size, country of ownership, number of independent directors) have positive relationship with their level of disclosure. As per the coefficient table, P value for ROE is 0.133

Regression: Impact of profitability on social disclosure in 2016

Shown in Appendix 2

In regression analysis relationship between ROA, EPS and ROE is identified. It can be observed that value of R is 0.159 which means that there is less relationship between dependent and independent variables. Value of level of significance is 0.483 and this means that there is no significant mean difference between dependent and independent variables and null hypothesis accepted. R square value is .025 which means that model is explaining 2% variation that is observed in dependent variable due to change in independent variable. Facts revealed that with increase in earnings per share decline comes in disclosure. Apart from this, with increase in return on assets also firms make less disclosure in their annual reports. However, in case of return on equity inverse trend is observed as with increase in return on equity disclosures increased only by 0.009.

Correlation between company characteristics and social disclosure

Correlations
Market Cap	ROA (2016)	Sector	ROE (2016)	EPS (2016)	Disclosure	Number of independedent directors	Country of ownership	Financial leverage (2016)
Market Cap	Pearson Correlation	1	.139	.006	.090	-.014	.152	.032	-.018	-.041
	Sig. (2-tailed)	.167	.950	.376	.893	.132	.754	.856	.683
	N	100	100	100	100	100	100	100	100	100
ROA (2016)	Pearson Correlation	.139	1	.074	.932**	-.013	-.042	-.096	.017	-.140
	Sig. (2-tailed)	.167	.463	.000	.894	.675	.342	.866	.166
	N	100	100	100	100	100	100	100	100	100
Sector	Pearson Correlation	.006	.074	1	.021	-.007	-.022	.010	.100	-.048
	Sig. (2-tailed)	.950	.463	.834	.941	.827	.923	.321	.637
	N	100	100	100	100	100	100	100	100	100
ROE (2016)	Pearson Correlation	.090	.932**	.021	1	.006	.008	-.155	.006	-.069
	Sig. (2-tailed)	.376	.000	.834	.955	.934	.124	.954	.493
	N	100	100	100	100	100	100	100	100	100
EPS (2016)	Pearson Correlation	-.014	-.013	-.007	.006	1	-.070	-.042	-.013	.947**
	Sig. (2-tailed)	.893	.894	.941	.955	.491	.677	.895	.000
	N	100	100	100	100	100	100	100	100	100
Disclosure	Pearson Correlation	.152	-.042	-.022	.008	-.070	1	-.114	.243*	-.062
	Sig. (2-tailed)	.132	.675	.827	.934	.491	.257	.015	.537
	N	100	100	100	100	100	100	100	100	100
Number of independedent directors	Pearson Correlation	.032	-.096	.010	-.155	-.042	-.114	1	-.141	-.042
	Sig. (2-tailed)	.754	.342	.923	.124	.677	.257	.163	.678
	N	100	100	100	100	100	100	100	100	100
Country of ownership	Pearson Correlation	-.018	.017	.100	.006	-.013	.243*	-.141	1	-.030
	Sig. (2-tailed)	.856	.866	.321	.954	.895	.015	.163	.770
	N	100	100	100	100	100	100	100	100	100
Financial leverage (2016)	Pearson Correlation	-.041	-.140	-.048	-.069	.947**	-.062	-.042	-.030	1
	Sig. (2-tailed)	.683	.166	.637	.493	.000	.537	.678	.770
	N	100	100	100	100	100	100	100	100	100
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

Correlation value in case of market capitalization and disclosure is 0.152 and this reflects that there is low correlation between both variables. ROA have negative correlation with disclosures as its value is -.042. ROE disclosure value is 0.008, which is too low, and same trend is observed in case of EPS where correlation value is -.070. Country of ownership has low but high correlation then other variable as its value is 0.243. In case of variables number of independent Directors and financial leverage correlation value is -.114 and -.62. It can be said, that apart from country factor all variables have very less correlation with disclosure.

Chapter 5 Conclusion

The thrust of attempted research study was to identify that whether company characteristics affect their voluntary disclosure practices or not. Owing to this, 100 Malaysian companies were examined through content analysis and statistical tools. On the basis of obtained results it is concluded that amount of disclosures revealed by the firm in its annual report is not affected by varied factors like firm profitability that is measured in the research study by computing firm return on equity and earning per share etc. Results indicate that whether firm earn profit in its business or not such kind of factors does not have any impact on disclosures that are made by the firm in its annual report. It is common assumption among people that if any firm face heavy loss in its business then in that case it does not make much amount of disclosures. Contrary to this, in case heavy profit is earned then good amount of information is revealed in annual report. Such kind of assumptions are wrong as this research study reflect that there is very low or no impact of dependent variables on dependent variable which is disclosure. It can be said that every firm irrespective of its size or any other factor reveal disclosures according to its own discretion. There may be firms that show only few things as disclosure in their annual report. On other hand, there may be firms that may reveal abundant amount of disclosures in their annual report. Hence, company to company disclosures given in annual report get changed and it does not have any relationship with firm's profitability and size. In research process it is identified that most of firms make disclosures related steps that they take to protect environment and in order to increase facilities for employees. Some of firms show these disclosures under hard corporate social responsibility and sustainability. It can be said that most of companies like to show more and more about them to people so that their special identity can be created among them. Such kind of things benefit a lot to the business firms. By demonstrating steps firm takes in sustainability report is try to show people that it is not only earning profit in its business but also working for them and environment. All these things create good image of firm among people and increase its profitability. Regression analysis is conducted to identify relationship between dependent and independent variables. Coefficient values are very low in case of all sort of independent variables and this indicate that slight change in these independent variables will not cause big variation in dependent variable. Correlation value is also very low and this reflect that there is less association between dependent and independent variables. Hence, it can be said that if any company is showing less details in its disclosures then in that case it is not performing well or does not take any step for welfare of general public. It is also concluded that amount of disclosures made by the firms also very from each other. There are few firms that disclose environment and employees related information in their sustainability report. Opposite to this, there are few firms that provide more information about innovation they are doing in their business. Thus, scope of sustainability report vary from company to company. However, size and profitability does not have any sort of relevance with scope or amount of information that is covered in sustainability report.

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