Is Triple Bottom Line Necessary? Evidence from Pakistan Stock Exchange

Abstract

This study aims to investigate triple-bottom-line (TBL) disclosures of the Pakistan Stock Exchange (PSX) 30-index by developing the twenty disclosure criteria for each area: economic, social, and environmental. All the required information for disclosures is collected through the company's websites and annual and stand-alone reports. Multiple regression analysis is used to analyze the determinants of TBL reporting empirically. This study adds broader implications of research, emphasizing the importance of TBL disclosures in today's global business environment and the specific relevance of our findings to corporate practices in Pakistan. TBL disclosures are further classified into five categories: economic, social and environmental, non-economic, and total exposures. According to the results, the degree of entire disclosures (financial, social, and environmental) and economic disclosures is higher for larger-size firms in the PSX-30 index. As the leverage level increases in the sample firms' revelations, the level of social, environmental, and non-economic disclosures significantly declines. Liquidity is reported as negative (against the sign of the proposed hypothesis) but significant under all five revelations that confirm that the current ratio of firms will be less. Finally, the relationship between profitability and the five disclosure classes is positive and insignificant. These results could be attributed to fewer environmental regulations, less socially responsible practices, weak economic positions, climate vulnerability, an increasing population, ever-increasing demand for industrial goods, an increasing concentration of greenhouse gases and CO2 in the atmosphere, and declining forests in developing economies like Pakistan. Therefore, listed firms on the Pakistan Stock Exchange must adopt a socially responsible, economically sound, and environmentally friendly practice and appropriately disclose all in the respective reporting resources.