MBA Theses and Dissertations (2024)

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Browsing MBA Theses and Dissertations (2024) by Author "Karanja, K. M."

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    Company characteristics of early adopters of Environmental Social Governance disclosures on the Nairobi Securities Exchange
    (Strathmore University, 2024) Karanja, K. M.
    The ESG concept brings together environmental, social, and governance issues in businesses. The concept of Environmental, Social, and Governance (ESG) reporting is gaining increasing attention in the global business community. ESG disclosures refer to a set of voluntary non-financial disclosures made by companies to provide stakeholders with information on their environmental, social, and governance performance. This research aimed to explore the characteristics of firms that are early adopters of ESG disclosures on the Nairobi Securities Exchange (NSE) in Kenya. The Central Bank of Kenya in 2021 introduced regulations requiring financial institutions to adopt climate risk guidelines to foster sustainable finance practices in the banking sector. Following this the Nairobi Securities Exchange developed guidelines on ESG disclosures for use by all NSE listed companies at least annually, with mandatory reporting beginning twenty ninth November 2022. Reporting has lagged at fourteen percent of NSE listed firms even five months past the mandatory deadline. The research had three objectives, namely - identify the firm characteristics that make firms early adopters of ESG disclosures, analyze the motivations and incentives behind firms' decisions to adopt ESG reporting practices, and assess the challenges and barriers faced by firms in adopting and implementing ESG reporting practices in Kenya. The research provided current practice information and discerned approaches to enhance compliance. The research utilized a mixed-method approach methodology, which combined both quantitative and qualitative data collection and analysis methods. The quantitative research methods involved collecting financial data and analyzing the relationship between ESG reporting and firm characteristics using regression analysis. The qualitative research methods involve questionnaires to key stakeholders to gain insights into the motivations and challenges associated with ESG reporting. The target population for the study was the listed firms in the Nairobi Securities Exchange already adopting ESG disclosures before the November 2022 deadline. The researcher used a pre-designed questionnaire for primary data collection which was administered online through use of google docs because of the high response rates associated with the approach. The researcher also used secondary data derived from published annual reports of the listed companies to complement the primary data. Before the commencement of the data collection, there was a pilot study done by the researcher to test the study tool and validate it. Correlation analysis was used to examine the inter-relationship between the independent and the dependent variable. Regression analysis was used to examine the impact of the independent variables on the dependent variable and to identify the most significant predictors of early adoption of ESG disclosures. The findings of the research provided a better understanding of the drivers of ESG adoption and the challenges that firms encounter in implementing ESG reporting practices in Kenya. The research conclusions contributed to the development of policies and strategies that encourage ESG reporting among firms and improve the overall quality of ESG reporting in Kenya.