Abstract
The United Kingdom’s government has recently set out a set of Sustainability Reporting Standards for firms. Currently, there is a plethora of standards and frameworks, but most are voluntary rather than mandatory, raising questions about firms’ commitment to them. At the same time, stakeholders for e.g., investors, customers, and employees increasingly demand greater transparency and disclosure regarding sustainability issues. This places pressure on organisations to enhance their reporting to meet stakeholders' expectations. By undertaking a detailed literature review of the environmental, social, economic, and governance factors associated with sustainability reporting, we develop a conceptual framework that examines how sustainability reporting affects a firm's financial performance. We then use a mixed-methods approach to analyse the impact of alternative sustainability reporting frameworks on the financial performance of 223 SMEs in the Northwest of England. We analyse their performance using measures such as Return on Assets, Return on Equity, and Net Assets, and follow up with qualitative interviews to draw nuanced conclusions about the link between sustainability reporting and financial performance. We find that sustainability reporting enhances stakeholders’ awareness of sustainability issues but identify several areas for improvement and innovation that could lead to greater social, environmental, and financial value from sustainability reporting. The potential benefits of sustainability reporting frameworks are immense, but standards may need to be refined and integrated to maximise these benefits. We conclude by providing a roadmap for sustainability reporting that uses the standard best suited to a firm’s needs.