Reassessing the Role of Integrated Reporting in Driving Financial and Esg Outcomes: A Cross-Country Analysis of Southern African Banks

Abstract

This study reassesses the role of integrated reporting in influencing sustainability outcomes and financial performance across the Southern African banking sector, a region that remains underrepresented in mainstream ESG (Environmental, Social, and Governance) disclosure research. The study draws on a panel dataset covering 39 listed banks across 10 countries in the Southern African Development Community (SADC) region from 2019 to 2023. It employs a Fixed Effects Pooled OLS regression model to examine the impact of integrated reporting quality (IRQ), firm-level financial indicators, and political stability on sustainability performance, measured through ESG-related scores. The results reveal that IRQ, return on assets (ROA), market capitalization, and strategic financial investment are positively and significantly associated with sustainability outcomes, supporting the relevance of integrated thinking in value creation. Conversely, variables such as Tobin’s Q and WACC show limited explanatory power, indicating that traditional financial market signals may not fully capture ESG dynamics in emerging institutional settings. Notably, the interaction between IRQ and political stability demonstrates a modest but significant effect, suggesting that institutional context conditions the effectiveness of integrated reporting practices. These findings are interpreted through a multidimensional theoretical lens incorporating Stakeholder, Legitimacy, Resource-Based, Signalling, and Institutional theories. The study contributes to ESG and corporate governance literature by highlighting the conditional relevance of integrated reporting frameworks in politically and economically diverse settings. It also provides practical insights for policymakers, investors, and corporate actors seeking to strengthen sustainability accountability in emerging financial markets.