Environmental disclosures and financial performance amid banking crisis and COVID-19: evidence from Ghana

Abstract

Purpose

The purpose of this study is to examine the impact of environmental disclosures (END) on the corporate financial performance (CFP) of listed companies in Ghana before and during the Banking crisis (BKC) and the COVID-19 pandemic (COV).

Design/methodology/approach

This study used data from 16 companies listed on the Ghana Stock Exchange between 2012 and 2021. The END Index was used, which uses percentile ranking and is guided by Global Reporting Initiative guidelines. A diverse set of empirical tests were used to examine whether ENDs affect CFP during crises.

Findings

The study offered support for the stakeholder and signaling theories generally applied to the study of END. The results confirmed that ENDs have a significant positive effect on CFP measures, return on equity and earnings per share, before and during the crises. The BKC and COV had no impact on the CFP.

Practical implications

As Ghana is still recovering from the 2017 to 2020 BKC and COV, the findings of this study highlight the need for managers to embrace END reporting and engagement strategies to improve CFP and firm reputation.

Originality/value

To the best of the authors’ knowledge, this study is the first to examine the effect of END on CFP in the context of before and considering the Ghanaian BKC and COV. In addition, it is one of the few studies that investigates how ENDs affect the CFP of Ghanaian-listed firms.

Citation

Opuni-Frimpong, J., Oheneba Akomaning, J. and Ofori-Boafo, R. (2024), "Environmental disclosures and financial performance amid banking crisis and COVID-19: evidence from Ghana", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-08-2023-0498