Abstract:
The purpose of this research is to investigate the impact of financial performance on
the sustainability performance of listed companies in Sri Lanka. The research evaluates
the impact of Return on Equity, Return on Sales and Return on Assets as the financial
performance on the sustainability performance including of Listed Companies in Sri
Lanka. It was able to identify the level of disclosures on Sustainability performance is
lower than the expectation and with the comparison of foreign listed entities. As the
sustainability disclosure is not a mandatory part to be provided in annual reports and
the number of voluntarily disclosing the performances are very low. Thus, out of 290
listed companies 20 Listed Companies with Sustainability reporting specially with
regards to the past five years from 2015 to 2019 has been selected for the analysis
purpose. All these companies fellow either the GRI G4 or Cent guidelines. Then this
study considers secondary data collected from the annual reports both from the
Financial and Non-Financial reporting. For the purpose of analysis Descriptive
statistics, Regression analysis and correlation tests have been conducted. The Findings
show that there is a strong positive relationship between the financial performances
including ROA, ROS and sustainability performances. At the same time the ROE
consists of a negative impact on sustainability performance. By referring to the
previous research findings it could be identified there is a bi-directional causality
among the financial performance and sustainability performance. Thus, the
consideration either on sustainability performance or on financial performance a
company can achieve a positive vibe over the years
