Financial Services Sustainability Reports Proposal

Introduction

Critical analysis and evaluation of sustainability reports of financial services has become an instrumental aspect of local and global accounting principles. Specifically, many organization and economies across the global business arena have put in place policies and instruments to ensure that there is growth and rapid evaluation of different sustainability reporting instruments as part of their competitive advantage. At present, different regions have unique and proactively tailored sustainability reporting instruments that are created to standardize their accounting principles in line with the global acceptable values (Eisenbeis, Frame, & Wall 2007, p. 89).

Despite these developments, there are problems encountered in the development of financial services and the relationship with the global economy. In relation to this proposed research, the scope of establishing different sustainability reporting instruments will include the United State of America, United Kingdom, China, and parts of European countries.

Research Background

The aspect of sustainability disclosure has become a basic accounting principle for different economic blocs across the globe (Knights & Mccabe 1996, p. 18). Specifically, a sustainability report of financial services defines the scope of instruments used in reporting, whether voluntary or mandatory in different regions across the globe (Black Sun Plc 2012, p. 5). In the recent years, a lot of research has been carried out on instrumentation of voluntary and involuntary reporting instruments in different regions in conformity with the twenty first accounting principles (Cheng, Loannou, & Serafeim 2011, p. 19).

In the last five years, there has been a surge in the growth of sustainability reporting instruments to the demand of different economies. There were 400 reporting instruments identified in the year 2016 in 64 countries as opposed to 180 instruments in the year 2012 (Corporate Register 2016, p. 8). This trend indicates that modernizing economies are becoming more complex and require businesses to proactively report financial and non-financial performance information (Dhaliwal, Li, Tsang, & Yang 2011, p. 84).

The drivers of the trend are attributed to growth in accounting regulatory principles in the United State of America, United Kingdom, China, and parts of European countries. For instance, explain or comply reporting approaches adopted within Europe has ensured that many economies in this region are ahead in sustainability reporting instruments (Dhaliwal, Li, Tsang, & Yang 2011, p. 742). Specifically, the European Union’s national measures on information disclosure to capture risks, policies, and outcomes associated with sustainability have propelled the current focus on non-financial sustainability reporting (Gordon 2013, p. 75; Leszczynska 2012, p. 921).

Similar trend was recorded in the US following review of sustainability reporting instrumentation by different financial regulatory agencies. For instance, the reporting instruments increased from 23 in the year 2012 to 39 in the year 2014 (European Commission 2014, p. 17). The Asia Pacific region has not been left behind in the growth and expansion of the suitability reporting instruments. China has become a key player in promoting the growing trend in financial reporting instruments. In the last five years, the economy of China has recorded an average annual growth in financial reporting instrumentation of 20% (European Commission 2014, p. 78). It is however important to note that most of these instruments are designed by government agencies in China due to the economy’s active market control.

As indicated in the 2015 KPMG report, the regulations within the United State of America, United Kingdom, China, and parts of European countries has improved on sustainability reporting (GRI 2016, p. 15). Therefore, it is necessary to establish the sustainability reporting of financial services in different regions that have developed regulations on reporting instruments. Specifically, the research will attempt to carry out comparative analysis of the sustainability of the reporting instruments within the United State of America, United Kingdom, China, and parts of European countries. This will be necessary in identifying potential problems encountered in the development of financial services and the relationship with the global economy.

Research Aim and Objectives

The primary aim of the proposed research is to analyze and evaluate sustainability reports of financial services in different economic regions across the globe in order to establish a comparative performance as part of the global accounting systems. Specifically, the case study economies will include China, the U.K, the U.S and part of European countries reports. This means that the findings of the proposed research project would be instrumental in exploring the potential challenges that regulation agencies and accounting policy creators face in creating financial services within the global business arena. Therefore, the objectives of the proposed research are summarized below.

1. To establish the reporting instruments applied in the case study economies.
2. To establish the nature of the reporting instruments applied in these economies as either voluntary or mandatory.
3. To establish how the financial services in the banking sectors of these economies apply different sustainability approaches in financial reporting.
4. To establish the nature of the reporting instruments as either similar or dissimilar across the different economies.
5. To establish similarities and dissimilarities in the sustainability reporting instruments formats for financial services across the case study economies.
6. To quantify the financial reporting instruments applicable in these economies and their focus on social and environmental factors.
7. To establish potential challenges in developing financial services based on different reporting regimes applied in the case study economies.

Research Questions

From the above research aim and objectives, the following research questions were created to explore the research topic.

1. What reporting instruments are applied in the case study economies?
2. Are the reporting instruments applied in these economies voluntary or mandatory?
3. How do the financial services banking sectors of these economies apply different sustainability approaches in financial reporting?
4. Are the reporting instruments broad and similar or dissimilar across the different economies?
5. Do the sustainability reporting instruments have similar or dissimilar formats for financial services?
6. How many financial reporting instruments applicable in these economies focus on social and environmental factors?

Research Rationale

There are series of values and potential reasons for the proposed research in establishing potential challenges in financial services reporting and application at the global business arena. The proposed research will be critical in giving a lucid assessment of the sustainability reporting instruments that are applied in different regions in terms of their legislation, application, and challenges at local and global levels.

The research will attempt to address the potential challenges in sustainability reporting instruments for financial services as they are key principle of proper accounting standards for present and future organizational performance. Thus, the proposed quant research study will reveal the effectiveness of different sustainability financial reporting instruments in terms of their legislation and application in creating standard accounting system in different regions across the globe. Specifically, the interest of the proposed research in reporting instruments in the United State of America, United Kingdom, China, and parts of European countries ensures that the findings capture the general practices in the American, Asian, and European continents.

Besides, the is need to enumerate the current challenges that policy developer have to deal with in creating competitive sustainable reporting instruments for different financial services in order to create standardized global accounting principles. Thus, through quantitative research approach, this research proposal will attempt to reveal significant trends in sustainability reports of financial services in the United State of America, United Kingdom, China, and parts of European countries.

The aspect of quality in research is dependent on the reliability and validity of its content. Since this research is quantitative, the focus will be on the internal reliability and validity aspects of proactive data collection and interpretation. Specifically, reviewing the trends in sustainability reporting instruments and their application in different economies will put the research findings into perspective (Kothari 2013, p. 56). Thus, determination of the internal reliability and validity will involve proactive comparison of the research study findings against previous literature on the same topic. This is necessary in fast tracking the match between the research study findings and the theoretical background or existing literature on the topic. In effect, the research quality will be ensured through adherence to the authenticity and trustworthiness in data collection, interpretation, and analysis.

Methodology

The proposed research will be conducted through the use of quantitative approach through review of secondary data on the reporting landscape in United State of America, United Kingdom, China, and parts of European countries. The choice of these economies was informed by availability of the relevant financial reporting instruments (Blaxter, Hughes, & Malcolm 2014, p. 45). The research will begin identifying the instrumental reporting instruments applied in the banking sectors of these economies. Specifically, enumeration of the reporting instruments wills narrowed to capture instrumentation that encourage information disclosure as related to performance sustainability (Bryman 2012, p. 56).

Research Limitations and Delimitations

Several limitations will be faced in the course of the research study since it is very dynamic and complex. To begin with, the secondary data collection and research will consume time since little research has been carried out before on the same topic (Cooper 2014, p. 25). Besides, access to some information would require placing special request and waiting for responses (Paul 2013, p. 29). This means that actual data collection might take up to three weeks, especially considering the discrete nature of the China information policy. In order to address this limitation, the researcher will ensure that enough time is allocated for data collection besides prior planning for each and every day of information access (Mason 2015, p. 17). Moreover, the researcher will consult online sources from reputable organizations such as Yahoo Finance and KPMG among others (Tullis 2014, p. 6).

Limited compatibility between the researcher and the scope of the research might create a deceptive narrative, especially when personal biases are not minimized. For instance, the researcher might be influenced by prejudice on certain markets or economies to falsify information gathered or present incomplete data as the actual result (Miller, Mauthner, Birch, & Jessop 2012, p. 89). This will seriously jeopardize the seriousness of the actual findings. Since the success of the proposed research would depend on interpretation and the collected data, lack of data analysis skills or use of the wrong tool would compromise the integrity of the entire project.

In order to address this limitation, the researcher will ensure that clear research ethics procedures are adhered to in sourcing for information (Monks & Minow 2012, p. 34). Specifically, the researcher will attend training on confidentiality management when gathering data. Besides, the data gathered will be properly coded and stored in the right medium to avoid potential interference (Paul 2013, p. 17).

Research Timeline

Week 1: Research Commencement

This stage will commence with research topic review and end with creation of research objectives and questions.

Week 2 & 3: Choosing the case study

This second stage is very challenging in terms of defining the scope and sources of data to address the research questions.

Week 4 & 5: Background research

This stage will take two weeks since it involves merging the materials collected to make sense of the research background.

Week 6, 7, & 8: Conducting the literature review

This stage will take three weeks since it involves probing journals, books, and other relevant sources to establish the current position of the research topic.

Week 9, 10, & 11: Collecting data and analysing data

This is the most demanding stage in the entire research. It involves collection of data from secondary sources, coding the collected material, and proactive interpretation to make sense of the research rationale. The researcher selected quantitative data collection and analysis approach because the scope of the research is focused.

Week 12 & 13: Research conclusion

In this stage, emerging themes of the research will be identified after the interpretation of the findings of the initial research questions. The researcher will proactively manage the interpretation of the data findings within the extent of the research topic to balance the potential dynamics that might come into play. This will be followed by review of the entire project for comprehensiveness before submission.

Conclusion

Despite the fact that quantitative research approach is ideal for the proposed study, there is need for proper review of the actual scope and data interpretation since it will cover more than five markets in different regions. This is necessary in gathering quality information to ensure that reliability and validity are guaranteed. The researcher will have to collect rich secondary data in order to be able to present actual explanations and description of the identified issues. Besides, observation of research ethics would facilitate proactive quality assurance in addressing potential research limitations.

Reference List

Black Sun Plc 2012, “Understanding transformation: Building the business case for integrated reporting,” Black Sun Plc, 4 November, pp. 4-7.

Blaxter, L, Hughes, C & Malcolm, T 2014, How to research, Open University Press, Berkshire, UK.

Bryman, A 2012, Social research methods, OUP Oxford, New York.

Cheng, B, Loannou, L & Serafeim, G 2014, “Corporate social responsibility and access to finance,” Industrial Management & Data Systems, vol. 11, no. 7, pp. 11 – 28.

Cooper, W 2014, Business research methods, Tata McGraw-Hill Education, California, LA.

Corporate Register 2016, CRRA Global winners & reporting trends 2016. Web.

Dhaliwal, D, Li, Z, Tsang, A & Yang, G 2012, “Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting”, The Accounting Review, vol. 86, no.1, pp. 59-100.

Dhaliwal, D, Li, Z, Tsang, A & Yang, G 2012, “Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure,” The Accounting Review, vol. 87, no. 3, pp. 723-759.

Eisenbeis, A, Frame, S & Wall, L 2007, “An analysis of the systemic risks posed by fanniemae and freddie mac and an evaluation of the policy options for reducing those risks”, Journal of Financial Services Research, vol. 31, no. 2-3, pp. 75-99.

European Commission 2014, “Communication from the commission to the European parliament, the council, the European economic and social committee and the committee of the regions: A renewed EU strategy 2011-14 for corporate social responsibility,” European Commission, 20 May, pp. 7-25.

Gordon, J 2013, Project management and project planning, Prentice Hall, London, UK.

GRI, 2016, Report or explain: A smart policy approach for non-financial information disclosure. Web.

Knights, D & Mccabe, D 1996, “An evaluation of quality in financial services: problems and prospects”, Journal of Service Theory & Practice, vol. 6, no. 1, pp. 18-21.

Kothari, R 2013, Research methodology: Methods and techniques, New Age International, New Delhi, India.

Leszczynska, A 2012, “Towards shareholders’ value: an analysis of sustainability reports”, Industrial Management & Data Systems, vol. 112, no. 6, pp. 911 – 928.

Mason, J 2015, Designing quantitative research, Sage, London, UK.

Miller, T, Mauthner, M, Birch, M & Jessop, J 2012, Ethics in quantitative research, SAGE Publications Limited, London, UK.

Monks, R & Minow, N 2012, Corporate governance, John Wiley & Sons, New York, NY.

Paul, O 2013, The student’s guide to research ethics, Open University Press, London, England.

Tullis, P 2014, “Bloomberg’s push for corporate sustainability,” Fast Magazine, pp. 6.