Sustainability Reporting Practices of Corporations in African Countries (Nigeria and Rwanda)

Abstract

This study examined the level of awareness, adoption, and compliance with InternationalFinancial Reporting Standards (IFRS) Sustainability Disclosure Standards—specifically IFRS S1 and IFRS S2—among corporations in Africa, with evidence from Nigeria and Rwanda. Using cross-sectional survey research techniques, data were collected from stakeholders across the financial reporting value chain. A total of 134 valid responses were analysed using descriptive statistics and Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings reveal a high level of general compliance with IFRS standards, reflecting the formal adoption of IFRS in both countries. The results further indicate that African companies are fairly compliant with IFRS sustainability standards, although sustainability reporting (IFRS S1) practices are more established than climate-specific disclosures (IFRS S2). Structural model results show that both sustainability reporting compliance and climate reporting compliance have significant positive effects on overall IFRS compliance, with sustainability reporting compliance exerting the stronger influence. The study also identifies several challenges to effective implementation, including reporting complexity, high compliance costs, data and information management issues among others. The study concludes that while IFRS sustainability standards adoption in Africa is progressing, targeted capacity-building initiatives, regulatory support, and infrastructural development are required to enhance compliance,  particularly with climate-related disclosures.