Sustainability in context : SDG disclosure across African stock exchanges

Abstract

PURPOSE : The sustainable development goals (SDGs) provide a comprehensive framework for transitioning to sustainable development. African companies play a crucial role in this process because the continent lags significantly in achieving the SDGs. This study examines the extent of SDG-related disclosure by African companies and the role of institutional factors, financial stakeholders and legitimacy concerns in shaping this disclosure. DESIGN/METHODOLOGY/APPROACH : The study analyses 6,534 annual reports from 964 companies across 16 African countries from 2015 to 2023. The authors assess SDG-related disclosure from the frequency of SDG-related keywords in the reports using computer-assisted textual analysis. FINDINGS : African companies most frequently report on topics related to SDG3 (good healthcare and well-being), SDG8 (decent work and economic growth), SDG9 (industry, innovation and infrastructure) and SDG16 (peace, justice and strong institutions). SDG disclosure remains relatively stable from 2015 to 2020, with a notable increase thereafter. The authors find that debt providers are generally associated with lower SDG disclosure levels, whereas other determinants’ influence varies by countries. Institutional quality and development assistance are linked to lower SDG disclosure in South Africa and countries with strong institutions but increase disclosure where institutions are weak, suggesting a greater impact in less developed settings. Cross-listing reduces SDG disclosure in South Africa, likely due to a de facto reporting mandate, but increases it elsewhere, underscoring the role of international market pressure in African countries other than South Africa. Finally, affiliation with environmentally sensitive industries is associated with higher disclosure only in weak institutional settings, reflecting the importance of legitimacy pressures where formal institutions are lacking. RESEARCH LIMITATIONS/IMPLICATIONS : The findings highlight the role of the institutional environment and financial stakeholders in African countries and emphasise the need to differentiate between different African countries. PRACTICAL IMPLICATIONS : Policymakers and regulators can use these insights to tailor sustainability reporting guidelines to regional contexts, and corporations can leverage the findings to align their reporting with stakeholder expectations and global sustainability goals. ORIGINALITY/VALUE : To the best of the authors’ knowledge, this study is the first to provide large-scale empirical evidence on SDG disclosures by African companies. The study offers novel insights into how institutional quality, financial stakeholders and legitimacy pressures shape SDG-related disclosure, thereby accounting for the diversity of African contexts.