Evaluating sustainability reporting on GRI standards in developing countries: a case of Pakistan

Purpose This study aims to examine sustainability reporting through the lens of global reporting initiative (GRI) standards in developing economies, particularly in Pakistan, from the perspective of stakeholder theory, legitimacy theory, and system theory. Design/methodology/approach Qualitative and quantitative analyses on economic, social and environmental areas of sustainability reporting based on the GRI standards are applied across 57 organizations listed on the Pakistan stock exchange over the years 2016–2020. Findings The results from the content analysis and descriptive statistics show that overall sustainability reporting increased persistently over time and limited organizations disclose economic, social and environmental sustainability based on GRI standards. Moreover, the result from the two-tailed correlation analysis shows positive relations between economic, social and environmental sustainability reporting. Research limitations/implications Following the GRI standards, the regulators, government and policymakers need to assess the sustainability reporting based on GRI standards to improve corporate operations' transparency, stakeholder trust and legitimacy. The organizations should move beyond the compliance of regulatory norms and adopt the globally accepted sustainability GRI standards to improve sustainability reporting. The same kind of sustainability reporting is also advised for other countries with similar backgrounds and sustainability challenges. Social implications The integrated sustainability reporting framework based on GRI standards enables the organizations to work as a system of interconnected economic, social and environmental sustainability to resolve the issue of sustainability reporting, ensure the trust of multiple stakeholders and legitimize their business operations in society. Originality/value To the best of the authors' knowledge and thorough review of literature, this is the first study that examines the sustainability reporting based on GRI in the developing country of Pakistan to extend the findings of previous studies from conventional sustainability reporting to the globally accepted GRI based sustainability reporting. Using system theory, this study provides an additional contribution to the consideration concerning sustainability reporting based on GRI standards in the context of Pakistan.