Enhancing Sustainability Reporting Among Tanzanian Listed Companies: Exploring the Influence of Firm Characteristics

Abstract

This study examines the influence of firm characteristics on the extent ofsustainability reporting among listed companies in Tanzania. Data was collectedfrom the annual reports of companies listed on the Dar es Salaam StockExchange (DSE) spanning the period from 2016 to 2021 resulting in a panel dataset of 130 firm-year observations. These were analysed using both OrdinaryLeast Squares (OLS) and Random Effects (RE) regression model techniques. Theresults indicate that the size of a firm and the presence of a sustainabilitycommittee have a significant positive relationship with the extent of sustainabilityreporting. In contrast, the age of a firm exhibits a significant negativerelationship with the extent of sustainability reporting. Additionally, financialmetrics namely liquidity, gearing, and profitability as well as audit quality didnot show any significant relationship with sustainability reporting.The findings suggest that large and young firms are more inclined to adoptextensive sustainability reporting than their counterparts and challengetraditional assumptions about the influence of financial attributes. This impliesthat regulators such as DSE and Capital Markets and Securities Authority(CMSA) should persist in encouraging smaller companies to keep enhancingtheir sustainability reporting, supporting older firms in improving their reportingpractices and fostering awareness about the benefits of sustainability reportingacross all listed entities. Similarly, DSE and CMSA may require listed firms toestablish sustainability committees on the boards of directors to enhancesustainability reporting disclosure. Keywords: Sustainability reporting, Firm characteristics, Listed companies, Tanzania.