Msimanga, Thokozani2024-07-262024-07-262023Msimanga, Thokozani. (2023). The relationship between sustainability reporting and banks financial performance [Master’s dissertation, University of the Witwatersrand, Johannesburg]. WireDSpace. https://hdl.handle.net/10539/39874https://hdl.handle.net/10539/39874A research report submitted in partial fulfillment of the requirements for the degree of Master of Management in Finance and Investment to the Faculty of Commerce, Law and Management, Wits Business School, University of the Witwatersrand, Johannesburg, 2023Sustainability reporting, which involves environment, social, governance (ESG) is about reporting non-financial information regarding a company. It explains how the three sustainability components affect a company. ESG has gained significant popularity in the last ten years as new risk factors for investors are introduced by global sustainability concerns such as climate change, growing regulatory constraints, and social transformations. There is limited ESG-related research in South Africa, hence the aim of this study is to empirically evaluate whether sustainability reporting, improves financial performance and value for investors and other stakeholders. This has created a knowledge gap that may be investigated and used to start a discussion about the relationship sustainability has with financial performance from a South African banking perspective. This study’s data covered a 16-year period being, 2006 – 2021, across the six largest locally controlled banks listed on the JSE; Absa, Capitec, FirstRand, Investec, Nedbank, and Standard Bank. To examine for a statistical association, panel data regression analysis is used in this study.Multiple methods of estimation were considered, ultimately various diagnostic tests conducted concluded the fixed effects model as the most robust. A negative relationship with financial performance was found. Two models, Return on Equity and Tobin’s Q model showed a negative and significant relationship with the performance of banks. The Return on Assets model also indicated a negative relationship, but it was not statisticallysignificant. This indicates that an increase in sustainability reporting, leads to a decline in financialperformance from both an accounting and market perspectiveen© 2023 University of the Witwatersrand, Johannesburg. All rights reserved. The copyright in this work vests in the University of the Witwatersrand, Johannesburg. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of University of the Witwatersrand, Johannesburg.EnvironmentalFinancial PerformanceGovernanceReturn on AssetsReturn on EquitySustainabilitySocialTobin’s QUCTDSDG-8: Decent work and economic growthDissertationUniversity of the Witwatersrand, Johannesburg