5.2.3. Global Reporting Initiative (H3)

The results show that the impact of adopting the GRI initiative on ESG quality disclosure practices has mixed results for the regression analysis. Overall, Table 5 shows that GRI is not negatively significantly correlated to SD and GD. However, it is positively correlated with ESG and ED at a p-value of 0.01. The results suggest that there is a positive association between ESG and the ED pillar, since the GRI strongly focusses on environmental factors, while sustainability reporting is driven by following the GRI sustainability reporting guidelines. As there is a positive significant correlation between GRI and general disclosure of ESG, our evidence supports the previous literature that shows that the adoption of GRI increases disclosure scores for ESG [72]. Our results also support previous literature in which there are current methodological difficulties and information gaps within the voluntary disclosure of GRI, and this is seen through the mixed results of the disclosures [66,67]. The results also further support the theoretical framework of ESG disclosure for signaling and legitimacy theories since the following GRI reporting demonstrates effective management and long-term communication to develop further sustainability practices and overall stakeholder participation [70]. Sustainable disclosure practices signal to stakeholders and society the strong corporate governance practices that are implemented, providing strong transparency, long-term goals, and overall stakeholder engagement as such relating to the stakeholder theory.
