Toward sustainable transparency: the need for standardized ESG reporting by banks listed on the Colombo stock exchange, Sri Lanka

Purpose This study aims to investigate the environmental, social and governance (ESG) reporting practices of the banks listed on the Colombo Stock Exchange (CSE). Design/methodology/approach A quantitative content analysis was conducted using three years of annual reports from all 12 banks listed on the CSE to measure and examine ESG reporting practices. Findings The study found that social disclosures by banks are lower compared to governance and environmental disclosures. Significant variations in ESG reporting practices among banks were observed, with firm size and leverage significantly impacting these practices. Practical implications The variations in ESG reporting among banks underscore the need for a standardized reporting approach to ensure credibility and transparency within the sector. Furthermore, the study emphasizes the significance of organizational capacity and resources in driving the sustainability initiatives of banks listed on the CSE. Moreover, the study recommends that all CSE-listed banks seek external assurance for their reported ESG information to enhance both the credibility and impact of their disclosures. Originality/value This study contributes to the sparse literature on ESG reporting in the banking sector within developing countries.