Independent assurance compliance of sustainable development disclosures in The Johannesburg stock exchange firms

Abstract

This paper examines the extent to which the sustainable development disclosures of companies listed on the Johannesburg stock exchange (JSE) comply with independent external assurance. This is necessary to provide information to responsible investors and to assess the sustainable development commitment of firms in the JSE. A sample of firms within the JSE was taken from the Socially Responsible Index (SRI) group and the non-SRI group. Analysis indicates an increase in the number of firms vying for recognition as socially responsible firms in the JSE's SRI. Furthermore, a chi-square analysis shows that the SRI and non-SRI group of companies have a comparable rate of compliance with the independent external assurance of sustainable development disclosures. Overall findings indicate that the JSE's SRI initiative has been functional in driving the sustainable development initiatives of firms in the JSE. There is practical evidence of firms' commitment to carbon reduction, energy efficiency, waste management, black economic empowerment, water efficiency and other sustainable development initiatives. The paper concludes that stock exchanges may be a catalyst for driving sustainable development behaviour in firms located in emerging and developing countries, hence the paper recommends that stock exchanges in these countries may replicate the sustainable development initiative of the Johannesburg Stock Exchange as this may contribute to the sustainable economic development of emerging and developing countries. The paper offers opportunities for future research on the role of global stock exchanges in fostering sustainable development.