Abstract
Purpose This paper aims to examine the relationship between sustainability reporting and firm performance in New Zealand, encompassing the materiality concept of sustainability reporting based on the newly available sustainability reporting standards of the Sustainability Accounting Standards Board (SASB). This set of disclosure items published in 2018 is likely to impact on investors' decision-making and firm performance, as stipulated by the SASB. Design/methodology/approach Using a sample of 84 New Zealand companies during the period 2017-2019 and an ordinary least squares statistical approach, this research examines whether firms disclosing sustainability reporting and financially material sustainability information have better performance than the ones non-disclosing. Findings Consistent with the legitimacy and stakeholder theories, a positive relationship between sustainability reporting and performance is observed. This positive association is stronger when the sustainability disclosure is financially material information as defined by the SASB. Originality/value The outcome of this study provides evidence of the financial incentives for firms to initiate sustainability reporting, especially including financially material sustainability information as guided by the SASB. It also supports the rationale of the SASB for developing new standards that can be globally applicable, influencing investors' decisions and firm's financial performance. The results also have implications for the management of New Zealand firms in considering the disclosure of material sustainability information which is linked to firm performance.