Sustainability Reporting in Transitional Economies

Abstract

This chapter provides insights on some issues associated with the development of sustainability reporting in Egypt as a transitional economy that recently developed the S&P/EGX ESG index. In a dynamic world, and faced with a scientific proof that relates dangerous climatic changes to corporate activity, corporate financial reporting needs to be placed in perspective. Hence, as a social science, accounting should play a vital role in integrating corporate financial and non-financial measures. Semi-structured interviews were employed to investigate the extent to which sustainability reporting is appreciated in the Egyptian market by both business enterprises and the investors. Results indicate that sustainability information is of limited interest to markets except when it is identified as relevant in terms of risk or governance. On the investors' side, returns were seen as the main driver of portfolio selection. However, sustainability issues would be seriously considered when comparing among alternatives with similar returns.