University of Ghana http://ugspace.ug.edu.gh UNIVERSITY OF GHANA BUSINESS SCHOOL MASTER OF SCIENCE IN ACCOUNTING AND FINANCE INVESTIGATING THE ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRACTICES IN THE PHARMACEUTICAL INDUSTRYIN GHANA EVIDENCE FROM SELECTED COMPANIES ADRIAN KWAME ADOTEVI 10700387 A DISSERTATI ON PRESENTED T O THE UNIVERSITY OF GHANA B USINESS SCH O OL, LEG ON IN PARTIAL F ULFILMENT OF THE REQ UIREMENTS F OR THE AWARD OF MASTER OF SCIENCE DEGREE IN ACC O UNTING AND FINANCE SEPTEMBER, 2019 University of Ghana http://ugspace.ug.edu.gh DECLARATI ON I hereby declare that this dissertati on is pers onally pr od uced w ork fr om research  undertaken with the s upervisi on  of my s upervis or and that this research w ork is n ot s ubmitted t o any  other sch o ol, except f or acceptable references  of  other s o urces, that are f ully ackn owledged. ……………………………… ……………………………… ADRIAN KWAME ADOTEVI (10700387) DATE (Student) i University of Ghana http://ugspace.ug.edu.gh CERTIFICATION I hereby certify that this long essay was supervised in accordance with the procedures laid down by the university. ____________________________ ________________ DR. SAMUEL NANA YAW SIMPSON DATE (SUPERVISOR) ii University of Ghana http://ugspace.ug.edu.gh DEDICATI ON This w ork is dedicated t o G od Almighty f or his g uidance and pr otecti on granted me thr o ugh o ut my Masters ed ucati on at  University  of Ghana B usiness Sch o ol. iii University of Ghana http://ugspace.ug.edu.gh ACKNOWLEDGEMENTS Words of mouth cannot express my sincere gratitude to the Almighty God f or His grace and doings to enable me obtain a master‟s degree at the University of Ghana Business School. My gratitude and deep appreciation also goes to my wife, parents and my friends f or their great support during this Program. A big thank y o u t o my supervisor Dr. S.N.Y Simpson whose constructive critics and useful suggestions have been of immense help. Finally, to all who made it possible to complete this work, thank y o u all and may God bless y o u. iv University of Ghana http://ugspace.ug.edu.gh ABSTRACT This study explores the Environmental, Social and Governance (ESG) practices of pharmaceutical companies in Ghana. Specifically, the study examines whether pharmaceutical companies in Ghana were engaged in ESG practices, whether they adopt a structured approach to ESG practices, how they disclose and report ESG practices and the challenges (if any) that they face in their ESG practices. A cross-sectional descriptive study design was adopted for the study. The target population for the study was thirty seven (37) licensed pharmaceutical manufacturing companies in the Ghana. The sample size of twenty (20) was drawn using convenience sampling technique. A structured interview guide was employed to collect data. The data collected was analysed using the descriptive statistics in the Statistical Package for Service Solutions. Findings emanating from the study were that the understudied pharmaceutical companies were engaged in ESG practices. However, only two of the companies understudied had a policy for ESG practices, an ESG working group which co-ordinates and supervises all ESG related activities, an ESG strategy and reporting framework, trains staff regularly on ESG policies and practices and an annual budgetary allocation for ESG activities. These two companies referred to above were both those quoted and unquoted on the GSE as at the period of the study. Findings also show that maintaining healthy relationship with external stakeholders, attracting, motivating and retaining skilled staffs, winning and retaining customers, obtaining legitimacy and gaining competitive advantage were some of the benefits their respective companies derived from engaging in ESG practices. However, some of the challenges encountered in their ESG accountability practices included obtaining reliable performance data from different parts of the company, lack of resources and effort, multiple target audiences and multiple reporting frameworks. The respondents recommended developing an ESG policy, staff training on ESG policy and v University of Ghana http://ugspace.ug.edu.gh practices, setting up the framework for obtaining reliable performance data as ways of addressing the challenges encountered in their ESG practices. From the study, one can conclude that most pharmaceutical companies in Ghana are engaged in ESG practices in an informal and unstructured manner. There is also an observed relationship between the listing status of a company and the extent of their ESG practices. Finally, the awareness of the benefits associated with ESG practices should encourage companies to adopt a structured approach to ESG practices. vi University of Ghana http://ugspace.ug.edu.gh TABLE OF CONTENTS DECLARATI ON ........................................................................................................................ i CERTIFICATION ..................................................................................................................... ii DEDICATI ON......................................................................................................................... iii ACKNOWLEDGEMENTS ...................................................................................................... iv ABSTRACT ............................................................................................................................... v TABLE OF CONTENTS ......................................................................................................... vii LIST OF TABLES ..................................................................................................................... x CHAPTER ONE ........................................................................................................................ 1 INTRODUCTION ..................................................................................................................... 1 1.1 Background of the Study .................................................................................................. 1 1.2 Problem Statement ............................................................................................................ 3 1.3 Research Objectives ......................................................................................................... 5 1.4 Research Questions........................................................................................................... 5 1.5 Significance of the Study .................................................................................................. 6 1.6 Organization of the study ................................................................................................. 6 CHAPTER TWO ....................................................................................................................... 8 LITERATURE REVIEW .......................................................................................................... 8 2.0 Introduction ...................................................................................................................... 8 2.1 Theoretical Literature ....................................................................................................... 8 2.1.2 Stakeholder theory...................................................................................................... 9 2.1.3 The Agency theory ................................................................................................... 11 vii University of Ghana http://ugspace.ug.edu.gh 2.2.1 Empirical literature ................................................................................................... 12 2.3 Chapter Summary ........................................................................................................... 17 CHAPTER THREE ................................................................................................................. 18 RESEARCH METHODOLOGY............................................................................................. 18 3.1 Introduction .................................................................................................................... 18 3.2 Research Philosophy and Paradigm ............................................................................... 18 3.3 Research Approach and Design ...................................................................................... 20 3.4 Study Population............................................................................................................. 21 3.5 Sampling Technique ....................................................................................................... 22 3.6 Sample and Sample Size ................................................................................................. 23 3.7 Data Source and Collection Processes ............................................................................ 23 3.8 Data Analysis and Management ..................................................................................... 25 3.9 Ethical Issues .................................................................................................................. 26 3.10 Chapter Summary ......................................................................................................... 27 CHAPTER FOUR .................................................................................................................... 28 FINDINGS AND DISCUSSION ............................................................................................. 28 4.0 Introduction .................................................................................................................... 28 4.1 Background and Demography of Respondents .............................................................. 28 4.2 Arrangements for ESG Practices .................................................................................... 31 4.3 ESG Accountability Practices ........................................................................................ 33 4.4 Benefits of ESG Accountability ..................................................................................... 40 viii University of Ghana http://ugspace.ug.edu.gh 4.5 Challenges with ESG Accountability ............................................................................. 41 4.6 Recommendations for Addressing Challenges ............................................................... 42 CHAPTER FIVE ..................................................................................................................... 43 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION ...................... 43 5.0 Introduction .................................................................................................................... 43 5.1 Summary of Findings ..................................................................................................... 43 5.1.1 Demographic Data.................................................................................................... 43 5.1.2 Extent of ESG Practices ........................................................................................... 45 5.1.3 Benefits of ESG Practices ........................................................................................ 49 5.1.4 Challenges in ESG Practice...................................................................................... 50 5.2 Conclusion ...................................................................................................................... 50 5.3 Recommendations .......................................................................................................... 52 5.4 Recommendation for further study ................................................................................. 53 REFERENCES ........................................................................................................................ 54 APPENDIX .............................................................................................................................. 65 ix University of Ghana http://ugspace.ug.edu.gh LIST OF TABLES Table 4. 1 Demographic Characteristics of Respondent's Representatives .................................. 28 Table 4. 2 ESG Sustainability Disclosure and Reporting ............................................................. 32 Table 4. 3 Environmental, Social and Governance Accountability Practices .............................. 36 Table 4. 4 Benefits of ESG Accountability .................................................................................. 40 Table 4. 5 Challenges Faced in the Practice of ESG Accountability............................................ 41 Table 4. 6 Recommendations for addressing challenges .............................................................. 42 x University of Ghana http://ugspace.ug.edu.gh CHAPTER ONE INTRODUCTION 1.1 Background of the Study According to Bryman (2012), “Organizations including companies are accountable to their stakeholders, not just their owners or shareholders but also their suppliers, customers, government, employees, potential investors, civil society, business partners, legislators, regulators and indeed the general public”. The discharge of this responsibility requires inter alia communication and the disclosure of all relevant material information and events which affects the organization and by extension its stakeholders (Dutta, 2014). This obligation extends beyond the financial disclosures contained in their income statements, statement of financial position, statement of cash flows etc. Though there are no mandatory IFRS requirements for most non- financial reports as compared to financial reports and statements, the International Accounting Standards Board (IASB) encourages entities to voluntarily include non-financial reports in their financial reports (Lewis & Juravle, 2010). “As an emerging issue in global financial reporting, the International Integrated Reporting Council (IIRC) was formed in August 2010 with the aim of creating a globally accepted framework for a process that results in communications by an organization about value creation over time covering areas such as internal and external environment, social, governance, stakeholder relationships, business model, risks and opportunities, strategy, resource allocation and performance” (www.iasplus.com/en/resources/sustainability/iirc). This connotes the increasing need for financial and non-financial information by stakeholders for decisions making. 1 University of Ghana http://ugspace.ug.edu.gh According to Cowan (1992) “Environmental, Social and Governance (ESG) has in recent times attracted much attention in both practice and also in research”. The subject has undergone quite significant evolution, from value-based investment to ethical consideration (Bryman, 2012). Contemporary organizations capitalize on ESG to attract competitive advantage, as they seem to pay considerable attention to ESG practices without relegating the core interest of their investors to the background. “There seems to be a rising state of interest about ESG issues on the part of stakeholders as a risk management concern while for organizations it has become a part of their competitive strategy” (Christensen & Langer, 2009). There has been an increased usage of ESG information by stakeholders, mostly investors and customers in recent years. According to Cyrus Taraporevala, president and CEO of State Street Global Advisors, “ESG issues have become much more important for us as long-term investors, we seek to analyze material issues such as climate risk, board quality, or cyber security in terms of how they impact financial value in a positive or a negative way. That‟s the integrative approach we are increasingly taking for all of our investments”. Stakeholders are beginning to mount pressure on organizations to be accountable with issues related to the environment such as climate change, pollution and waste management (Galema & Scholtens, 2008). According to Malena and McNeil (2010), “modern organizations are becoming increasingly aware of the fact that ESG accountability and disclosure is vital to portray their good corporate image to meet the global challenge of environmental issues to their stakeholders”. The aim of ESG accountability practices is to influence the environment, society and company‟s own governance issues in a positive way. ESG accountability practices are the various ways by which an organization discloses its support for environmental sustainability to its internal and 2 University of Ghana http://ugspace.ug.edu.gh external stakeholders (Capelle & Monjon, 2012). However, ESG accountability and disclosure practices are largely ignored by many organizations, and therefore represents an unexploited area that remains competitive. Pharmaceutical companies play a significant role in health care delivery in Ghana. The relationship between their activities and ESG activities is not separable, since both fields are connected to healthy living. ESG activities are geared toward environmental sustainability, reduction in pollution and degradation of the surroundings of humankind which results in disease prevention and maintenance of good health. Practicing ESG accountability and disclosures could therefore be a viable ground for the pharmaceutical companies to attract good public image. 1.2 Problem Statement The activities of many industries are hazardous to the environment and ecological balances; they discharge liquid waste into water bodies and release chemicals into the atmosphere. The land is also polluted by the release of solid waste which is mostly not biodegradable. The abuse of human rights, disregard for the community and concerns over product safety has social consequences. The non-disclosure of material information, unethical business activities, bribery and corruption are all signs of a weak or non-existent corporate governance system. Pharmaceutical companies are not exempted from the above challenges which have far reaching consequences including health related complications. As a key player within the healthcare system, pharmaceutical companies are expected to play a fiduciary relationship in promoting healthy living and a sustainable environment. Therefore their engagement in ESG practices is very important and cannot be overemphasized. 3 University of Ghana http://ugspace.ug.edu.gh There has been a number of initiatives undertaken by companies with regards to ESG issues across the world and developing countries have not been left out in this regard. Ackers and Eccles (2015) reveal an increase in both ESG disclosures and assurance in South Africa. Darus, Sawani, Zain and Janggu (2014) in Malaysia, Simpson, Aboagye and Lovi (2014) in Ghana etc. Ghana like other developing countries is not exempted from the above-mentioned issues and as such cannot be disregarded in research concerning ESG issues. In fact, discussions on ESG becomes more interesting in Ghana with the country‟s commitment to the UN Sustainable development goals, the existence of varied regulatory bodies as well as the increase in ESG disclosures in Ghana (Ofori & Hinson, 2007). Ghana as a member of the Global Partnership for Sustainable Development Data (GPSDD) participated in the Open Working Group mandated to propose a set of sustainable development goals for the UN (NDPC, 2015). Following the institution of the UN sustainable development goals, the country has undertaken several post- 2015 agendas, initiatives and discussions on sustainability (NDPC, 2015) signifying the country‟s commitment to the phenomenon. A typical example of this is the launching of the Ghana Business Code (GHBC) and the award given to Newmonte in February 2018. Similarly, Ofori and Hinson (2007); Hinson, Boateng and Madichie, (2010) have shown that Ghana has experienced an upsurge in the number of disclosures on ESG issues. Simpson and Akyeampong (2014) observe similar findings of an increase in ESG disclosures as well as assurance in Ghana. According to McWilliams and Siegel (2001), modern organizations are becoming increasingly aware of the fact that ESG accountability and disclosure is critical to portray their good image in meeting the global challenge of environmental issues to their stakeholders. ESG activities are geared toward environmental sustainability which results in disease prevention and maintenance of good health. However, ESG disclosures have been argued as 4 University of Ghana http://ugspace.ug.edu.gh largely voluntary and unregulated (Nazari, Hrazdil & Mahmoudian, 2017; Leung, Parker & Courtis, 2015; Darus et al., 2014). From the above, it is clear that pharmaceutical companies including those in Ghana must harness the full benefits that comes along with ESG practices. The study is therefore targeted at investigating the ESG practices of pharmaceutical companies in Ghana. 1.3 Research Objectives The general objective of the study is to investigate the ESG accountability in pharmaceutical companies. Specific Objectives 1. To assess ESG accountability practices among the selected pharmaceutical companies in Ghana. 2. To assess the benefits and challenges of ESG accountability to the selected pharmaceutical companies in Ghana. 3. To consider the various ways of dealing with challenges in ESG accountability among pharmaceutical companies in Ghana 1.4 Research Questions The following questions represent the research questions for the current study; 1. What is the extent of ESG accountability among the selected pharmaceutical companies in Ghana? 2. What are the benefits and challenges associated with ESG accountability for the selected pharmaceutical companies in Ghana? 5 University of Ghana http://ugspace.ug.edu.gh 3. How can the challenges associated with ESG accountability among the selected pharmaceutical companies in Ghana be addressed? 1.5 Significance of the Study The study is significant in various ways. The foremost importance of this study is to add on to existing literature on ESG accountability. This study would contribute to the rising discussion on ESG issues globally. The study is also significant within the circles of the Ghanaian pharmaceutical industry as it would serve as a model and reference point for future ESG accountability practices. The study would also provide information regarding the challenges that are associated with implementing ESG accountability within the Ghanaian pharmaceutical industry. According to Tilt (2016), “country-level factors are critical in examining ESG issues and therefore it is relevant to pay attention to research from across the globe”. Unfortunately, developing countries have not received much attention in this regard (Rahman & Momin, 2009), making the current study timely in providing insight into an important but less addressed phenomenon from an emerging economy. Finally, this study would suggest measures in dealing with some of the challenges associated with ESG accountability. 1.6 Organization of the study This study is divided into five main chapters. Chapter one gives general background information of the study, this section also deals with the problem of the research, the rationale behind the study and its importance. Chapter two reviews a number of literature produced on theoretical and empirical aspect of the topic under study. Chapter three deliberates on the method used for the research and discusses the type of research, the mode of data collection and the problems the 6 University of Ghana http://ugspace.ug.edu.gh researcher is likely to encounter in the process of collecting the data for the study. Chapter four entailed the analysis of information gathered from the field study while chapter five summarizes, concludes and give recommendation(s) based on the findings. 7 University of Ghana http://ugspace.ug.edu.gh CHAPTER TWO LITERATURE REVIEW 2.0 Introduction The second chapter of this study reviews both theoretical and empirical literature. The theoretical literature in this study reviewed theories that have been propounded in line with the key variables of the study. However the empirical literature reviewed works that have been conducted in line with this research topic. 2.1 Theoretical Literature Literature reveals that studies examining ESG issues have been theory deficient (Selim, Woodward & Allegrini, 2009; Sarens, Abdolmoham & Lenz, 2012). There have been calls for innovative theoretical approaches to research in this regard (Guthrie & Parker, 2012). Farooq and De Villiers (2017) advance similar arguments highlighting that it was necessary for current studies to adopt different and alternative perspectives to theory in examining ESG issues. Ali et al. (2017) show that the legitimacy theory has gained dominance in research regarding ESG disclosures and assurance. That notwithstanding, other theories such as the institutional theory (Perego & Kolk, 2012), stakeholder theory (Ackers, 2016), signaling theory (Hummel et al., 2017), resourced based theory (Perego & Kolk, 2012) and many others have been used in one form of research or the other to explain the phenomenon. In research, no one theory explains the broad concepts of ESG and hence the call for a multi-theoretical analysis of the phenomenon (Farooq & De Villiers, 2017). Larrinaga-Gonzalez (2007) gives examples of how firms copy or mimic their competitors particularly in publishing reports on their Corporate Social Responsibilities (CSR) activities. 8 University of Ghana http://ugspace.ug.edu.gh Similar findings are revealed by Bansal (2005) who shows how the mimetic isomorphism influences companies in Canada to engage in ESG issues or disclosures. This explains that, it was possible for an organization to engage in ESG practices based on the fact that it seeks to imitate what other firms are doing. Fernandez-Feijoo et al. (2015) use the institutional theory in showing how country-level factors, industry-level factors and firm-level factors provide explanation for why firms may engage in ESG practices. The summary of the institutional theory is that rules, norms and beliefs prevalent in a particular structure, system or environment have influence on decisions and choices (Powell & DiMaggio, 1991). 2.1.2 Stakeholder theory The stakeholder theory indicates that in order for an organization to be successful, there is the need for a good relationship between stakeholders and management. The stakeholder theory establishes that the benefits to firms from social responsibility are realized when the organization has enhanced stakeholder relationships. Stakeholder theory provides an alternative view on corporate governance and business ethics. The stakeholder theory informs us that managers should take into consideration the benefits of all the stakeholders in a firm when making decisions. The state of environmental awareness and the level at which firms adhere to ESG principles could be heightened by the stakeholder theory. This will encourage businesses and specifically pharmaceutical companies to include other stakeholders in their ESG practices. First, from a stakeholder perspective, business can be understood as a set of relationships among groups that have a stake in the activities that make up the business (Walsh, 2005). It is about how 9 University of Ghana http://ugspace.ug.edu.gh customers, suppliers, employees, financiers (stockholders, bondholders, banks, etc.), communities and managers interact to jointly create and trade value. To understand a business is to know how these relationships work and change over time. It is the executive‟s job to manage and shape these relationships to create as much value as possible for stakeholders and to manage the distribution of that value (Freeman, 1984). Where stakeholder interests conflict, the executive must find a way to rethink solutions so that the needs of a broader group of stakeholders are addressed, and to the extent this is done even more value may be created for each (Harrison, Bosse, & Phillips, 2010). If trade-offs have to be made, as sometimes happens, then executives must figure out how to make the trade-offs, and then work on improving the trade-offs for all sides (Freeman, Harrison, & Wicks, 2007). Thus, in applying the stakeholder theory, the interest of all stakeholders must be advanced through ESG accountability. The researcher‟s choice of the stakeholder theory is to identify the primary audience(s) targeted with ESG information. Just as the reason for reporting ESG information affects its characteristics the intended audience for ESG information affects what companies report and deem to be material. Therefore, identifying the intended audience enables management to evaluate what is most useful for their needs and to determine the most material information for reporting to that particular audience (ESG Disclosure Handbook page 12). In assessing the extent of ESG accountability among the selected pharmaceutical companies, the various stakeholders targeted with the ESG reports would be identified. Stakeholder inclusiveness is one of the principles considered when defining the content of an ESG report. 10 University of Ghana http://ugspace.ug.edu.gh 2.1.3 The Agency theory The agency theory originates from the problem of risk sharing between principal and agents. This theory is a useful framework for designing governance and control in organizations. The theory describes the relationship between principal-agent and delegation of control. It explains how best to organize relationship in which one party (principal) determines the work and which another party (agent) performs or makes decisions on behalf of the principal (Jensen Meckling, 1979). The agency theory purports that the agent represents the principal in any business and is therefore expected to represent the best interest of the principals without any form of self – interest. The theory seeks to resolve the problem that can exist in a principal-agent relationship due to unaligned goals. Management of the selected pharmaceutical companies who are employees of the organization are (agents) and are expected to act in the best interest of the shareholders by making sure they act objectively and independently to add value to the organization‟s operations. According to Adams (1994), agency theory is extensively employed in the accounting literature to explain and predict the appointment and performance of managers. The agency theory framework proposes that there is the likelihood that agents (managers) of a company will emphasis on Corporate Social Responsibility (CSR) and support plans to invest in environmental concern activities than owners (shareholders). This tends to create conflict between the shareholders and managers. The conflict arises from the fact that the owner (shareholder) is simply interested in profitability and receiving high dividend. “Research shows that responsible management of ESG issues creates a business spirit and environment that builds both a company‟s integrity within society and the trust of its stakeholder” (Ishwerf, 2012). “Therefore, companies that disclose ESG practices in universal media were reported as having 11 University of Ghana http://ugspace.ug.edu.gh reputation gains, thereby increasing investor confidence; efficient use of resources and remain competitive” (International Journal of Trade, Economics and Finance, Vol. 7, No. 3, Page 72, June 2016). The researcher intends to use this theory to assess the level of transparency of the agents (managers) and whether the selected pharmaceutical companies derive the above benefits from their ESG practices. 2.2.1 Empirical literature Nielsen and Noergaard (2012) identify two main reasons for failure in ESG accountability in organizations as lack of comparability, meaning that there is no standardized way of measuring ESG rate of accountability practices which creates lack of transparency by the agencies ratings services. The second barrier is the lack of proof that ESG impacts on performance of businesses. Eccles and Serafiem (2013) mentioned ESG activities like: energy management; environmental accidents and remediation; water use and management; fuel management and transportation; climate change risk; GHG emission and air pollution; waste management and effluents; and biodiversity impact as the aspect that attracts competitive advantage for business. The environmental factors are also the category that is expected to generate the most attention for companies in the future. As far as governance aspect of ESG is concerned Renneboog et al (2008) emphasized corporate governance aspects like transparency, openness and accountability as important issues for positive screening of organizations. “Socially responsible policies lresults in positive impact on performance thereby providing several benefits such as reducing operating costs and financial risks, improving efficiency and competitiveness, corporate reputation and consumer confidence” (Kim, 2014). 12 University of Ghana http://ugspace.ug.edu.gh “Companies should adopt socially responsible policies; some managers, in fact, believe that fostering this kind of behaviour is necessary in order to maintain stable relationships with stakeholders” (Gooding, 1985), and also because shareholders call for CSR policies for ethical or moral reasons, even if this may involve reduced profits (Chang, 2012). Some scholars claim that some companies bear higher costs of socially responsible policies only for commercial purposes, and not for altruistic reasons (Grant, 2011), or in some cases to conceal fraudulent activities in order to preserve a clean-cut external image (Wisbro, 2012). “Long-term planning is necessary, so that any investments in socially responsible behaviours result in beneficial outcomes to shareholders” (www.res.mdpi.com). The effects of CSR policies carried out by stock-listed (and therefore bigger) companies show more relevant consequences than non-stock-listed ones (www.res.mdpi.com). These results proved by doctrinal frameworks notwithstanding, it is necessary also for the purpose of our study and taking into consideration the outcome of some significant meta-analyses to point out that research demonstrating positive relations is more relevant in terms of numerical incidence (www.res.mdpi.com). More specifically, several scholars have tried to find an existing direct causal relation between ESG and financial performances (Seraifim, 2017); “Further studies were not able to univocally demonstrate whether ESG factors might affect corporate results, either positively or negatively” (Ecles, 2014). In this regard, the recent thorough review in (Baldini, 2018) of the accounting and finance literature focused on the effects of environmental, social and governance disclosures and performance on firm value is remarkable. Studies have proved that the assessment of ESG factors allows an enhanced identification of the risks and opportunities that companies have to cope with, thus favouring advanced risk-management processes (Basen, 2008). Cowan (1992) posit that ESG practices leads to improvement of brand image and attraction of customers. 13 University of Ghana http://ugspace.ug.edu.gh 2.2.2 Environmental, Social and Governance (ESG) Disclosures Wiseman (1982) emphasizes that the discussions on ESG issues can be traced to the 1980s with rising attention in the 1989s. Prior to ESG disclosures, studies such as Hibbitt (2004) and Moser and Martin (2012) revealed that human resource reporting or disclosure was the main issue back in the 1990s. They emphasized that this was so because it was mandatory at that time to make such disclosures. Hibbit (2004) specifically stated that the attention given to social issues paved way for the demand for environmental disclosures. The UNEP and KPMG report in 2010 also reveal that other components of non-financial disclosures such as environmental disclosures are recently gaining global attention. This assertion was confirmed by Parker (2014) who emphasizes that recent studies have been geared towards environmental disclosures to the neglect of other components such as the social and governance disclosures. According to Ackers (2009), the responsibilities of entities today go beyond meeting shareholder‟s financial interest to include other issues of interest regarding environmental, social and governance issues. These new areas of firm disclosure have received much attention in recent literature as confirmed by Ali et al. (2017); Soh & Martinov-Bennie (2015); Ackers and Eccles (2015) and many others. Defining the term ESG is not an easy and conclusive one. The literature identifies several terms and phrases that are used to connote or mean the same as ESG. For instance, Gracia, Mendes- Da-Silva and Orsato (2017) use the terms corporate social responsibility and ESG interchangeably. Other commonly identified expressions in literature include corporate governance, sustainability, and socio-environmental reports among others which are used synonymously to ESG. Kolk (2010) likewise identifies terms such as social reports, community 14 University of Ghana http://ugspace.ug.edu.gh reports, environmental reports, sustainability reports, corporate social responsibility reports etc. For many researchers, the lack of consistency regarding the phenomenon and the existence of varied definitions have resulted in confusion as well as difficulty in coming up with theories (McWilliams, Siegel & Wright, 2006). The GRI (2013) defines ESG disclosures as the process of showing, measuring, determining and being answerable or accountable for the activities of the organization with respect to sustainable development. The definition of ESG disclosures by the GRI emphasizes accountability towards internal and external stakeholders. According to the 2015 report of KPMG, there has been a huge increase in the number of companies publishing ESG issues either standalone or as an integrated report. Cho, Michelon, Patten and Roberts (2014) also establish that the world has significantly seen a rise in the number of entities disclosing their ESG information. These disclosures are now identified as part of the corporate strategies of entities more particularly for purposes of gaining good public reputation (KPMG, 2011). Similarly, King, Bartels, McKenzie and Austin (2015), show that about 90% of the top 250 companies around the world are engaged in disclosing or publishing sustainability or ESG information of some sort. This has been rightly attributed to the perceived benefits of ESG disclosures and rising stakeholder demands (Dhaliwal, Tsang & Yang, 2011). Several factors have been identified as driving ESG disclosures globally. Fifka (2013) broadly categorizes them into internal and external factors which include the influence of firm industry, firm size, financial performance etc. and external factors like the media, stakeholder pressure, social, political and cultural factors in the country (Adams, 2002). Simnett, Vanstraelen and Chua (2009) also show that the nature of an industry and the effects of an entity‟s operation on the environment were key factors that affected the desire of the entity to disclose or even assure 15 University of Ghana http://ugspace.ug.edu.gh their ESG information. Simpson and Akyeampong (2014) revealed the impact of industry and ownership by showing that ESG disclosures were more prevalent among multinationals and environmentally sensitive industries (ESI) in Ghana. Regardless of the above, it is worth the note that, there is evidence to show that entities in the financial sector although not in environmentally sensitive industries are catching with both ESG disclosure and assurance (Kolk & Perego, 2010). Branco et al. (2014) reveal interesting findings in this regard by showing that firms in finance and telecommunication industry were more likely to disclose and assure ESG issues than those in the oil and materials industry. Results from their work show an increasing blurring effect of industry on a firm‟s decisions to disclose or assure their ESG information. In spite of the rising numbers in ESG disclosures, the phenomenon has not been without criticisms. ESG disclosures to a large extent have been argued as voluntary in nature with very few legislative or legal directives (Nazari et al., 2017). Nazari et al. (2017) argue that beyond the few accounting regulations for some items like contingencies for environmental issues, huge sections of ESG disclosures by firms in the US examined remain the discretion of the firm. The report of PWC in 2014 highlight that most of the US and global investors showed dissatisfaction regarding the differences that surround ESG practices and the application of discretion that around it. Similarly, Murphy and McGrath (2013) emphasize that ESG disclosures are merely used as communication tools to win public favor than actually champion transparency. These have been the key drivers of the increasing call for ESG assurance (Kolk & Perego, 2010). According to the 2018 KPMG report titled “ESG: A view from the top”, the existence of an ESG policy, working group, strategy and reporting framework, training and budgetary allocation demonstrate the extent of ESG practices by firms. Hopwood, Unerman and Fries (2010) suggested that some benefits accruing from ESG practices include winning and retaining 16 University of Ghana http://ugspace.ug.edu.gh customers; gaining competitive advantage; obtaining legitimacy; increasing shareholder and managerial wealth; attracting, motivating and managing reputational risks; maintaining healthy relationship with external stakeholders and driving operational efficiencies. 2.3 Chapter Summary This chapter provides both theoretical and empirical review of existing literature regarding the ESG phenomenon. The theoretical review highlights two main theories which comprises the stakeholder and agency theories. The empirical review was done considering the research objectives and existing literature in this regard. 17 University of Ghana http://ugspace.ug.edu.gh CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction This chapter elaborates on the processes and methods employed to provide answers to the research gap. The research methodology serves to provide guidance to a researcher on how the study is to be conducted (Bryman and Bell, 2004). This section of the research comprises the research paradigm, the research design, the techniques for data gathering and analyses. It gives details of the study population and sample, sampling techniques and ethical considerations. 3.2 Research Philosophy and Paradigm Research is affected by philosophical assumptions that inform and determine the conduct of the research (Creswell, 2007). These philosophical assumptions are usually the researchers‟ perspectives of what the nature of reality is (ontology) and how knowledge is created (epistemology). Neuman (2014) emphasizes that the philosophical assumptions form the foundation of a research providing an understanding that directs the entire research process and methodology. According to Guba (1990), research paradigms are a collection or set of beliefs that guide a research action. Creswell (2014) makes it known that the research paradigm serves as a general framework guiding or directing a research in terms of the research questions and research methods. Consequently, the paradigm for any study sets the basis for choosing the design of the research and the methods. This study adopts the descriptive qualitative approach. Qualitative description (QD) describes the approach adopted in qualitative research for studies which are descriptive in nature, particularly for examining health care and nursing-related 18 University of Ghana http://ugspace.ug.edu.gh phenomena (Polit & Beck, 2009, 2014). QD is one of the most used approach and is cited for its suitability for studies which seek to find answers to the who, what and where of a particular phenomenon, it is also said to be most suitable when a straight description of a phenomenon is desired or information is sought to develop and refine questionnaires or interventions (Neergaard et al., 2009; Sullivan-Bolyai et al., 2005). Several QD design features and techniques have been described in the literature. First, researchers generally draw from a naturalistic perspective and examine a phenomenon in its natural state (Sandelowski, 2000). Second, QD has been described as less theoretical compared to other qualitative approaches (Neergaard et al., 2009), facilitating flexibility in commitment to a theory or framework when designing and conducting a study (Sandelowski, 2000, 2010). According to Sandelowski, 2010, “researchers may or may not decide to begin with a theory of the targeted phenomenon and do not need to stay committed to a theory or framework if their investigations take them down another path”. Third, data collection strategies typically involve individual and/or focus group interviews with minimal to semi- structured interview guides (Neergaard et al., 2009; Sandelowski, 2000). Fourth, researchers commonly employ purposeful sampling techniques such as maximum variation sampling which has been described as being useful for obtaining broad insights and rich information (Neergaard et al., 2009; Sandelowski, 2000). Fifth, content analysis (and in many cases, supplemented by descriptive quantitative data to describe the study sample) is considered a primary strategy for data analysis (Neergaard et al., 2009; Sandelowski, 2000). In some instances thematic analysis may also be used to analyse data; however, experts suggest care should be taken that this type of analysis is not confused with content analysis (Vaismoradi et al., 2013). These data analysis approaches allow researchers to stay close to the data and as such, interpretation is of low- inference (Neergaard et al., 2009), meaning that different researchers will agree more readily on 19 University of Ghana http://ugspace.ug.edu.gh the same findings even if they do not choose to present the findings in the same way (Sandelowski, 2000). Finally, representation of study findings in published reports is expected to be straightforward, including comprehensive descriptive summaries and accurate details of the data collected, and presented in a way that makes sense to the reader (Neergaard et al., 2009; Sandelowski, 2000). 3.3 Research Approach and Design Yin (2015) argues that the choice of a research approach should be informed by the research objectives or questions. This is in line with the argument of Marshall (1996) who emphasizes that the selection of a research approach is dependent on the research questions. This study adopts a qualitative research approach. According to Marshall (1996), a qualitative research approach is one that aims to provide clarity and understanding of complex psychosocial issues. According to him, this research approach is most useful in answering the 'why' and 'how' questions and in providing an understanding of complex human issues rather than statistical generalizability of results. Similarly, Yin (2015) argues that the qualitative research enables researchers to examine the perceptions, views and thoughts of the study participants usually drawing on non-numeric data. Based on the study purpose and questions, the researcher employs a qualitative approach in investigating the ESG practices in the pharmaceutical industry in Ghana. Considering that ESG issues have not received in-depth research and understanding, O‟Dwyer et al. (2011) emphasize that a qualitative approach would be considered appropriate for providing insight into the phenomenon. According to Parker and Roffey (1997), the qualitative research approach is 20 University of Ghana http://ugspace.ug.edu.gh appropriate in examining phenomenon concerning ethics and social responsibility herein CSR or ESG issues. It is worth the mention that the current study adopts a descriptive research design. Considering the fact that ESG assurance and disclosure are still new and at infancy in Ghana (Simpson & Akyeampong, 2014), the researcher considers a descriptive research design most appropriate. Similarly, Saunders et al. (2009) argue that this research design allows for some level of flexibility which anchors the relatively new nature of the phenomenon being examined. 3.4 Study Population According to Saunders et al. (2009), the population of a study refers to the entire set of elements or cases from which the sample is chosen. According to them, it refers to those that the researcher is studying or researching on. The targeted study population includes all pharmaceutical manufacturing companies in Ghana. Currently, there are thirty seven (37) pharmaceutical manufacturers licensed by the Food and Drugs Authority (FDA) with twenty nine (29) of these companies located in the Greater Accra region and only three (3) of these companies listed on the Ghana Stock Exchange (GSE). The choice of this stakeholder group or respondents is anchored on the argument of O‟Dwyer et al. (2011) that respondents for any research must be in line with the objective of the research. Since the current study seeks to examine ESG practices in the pharmaceutical industry in Ghana it is considered the chosen study participants will be in the right capacity to contribute significantly to the research purpose and objective. According to Julien Foll (2018), Pharmaceutical companies operate at the cutting edge of one of the world‟s biggest long-term challenges – the quest for longer, better life. On the one hand they are well positioned to help promote good health and well-being. But on the other, the industry faces criticism over some of its business practices, especially in terms of product safety, 21 University of Ghana http://ugspace.ug.edu.gh marketing and price fixing. There is an idealistic tendency to assume that pharmaceutical companies prioritize public interest and to forget that they are actually, first and foremost, profit- orientated. They have financial obligations to meet, shareholders to please, and highly competitive CEOs at their helm like any other corporation (RepRisk Insight, 2014). 3.5 Sampling Technique Tracy (2012) argues that an appropriate sampling technique needs to take into consideration or be aligned with the research goals and objectives. Taking cognizance of this, the study employs the purposive sampling technique. According to Saunders et al. (2009) the purposive sampling technique is a non-probability sampling method which is most suitable for studies examining a particular group or sample with some special expertise or knowledge. According to them, using this technique is key to the quality of data collected, its reliability and validity as it ensures that the competence of the respondents in the field is guaranteed. The purposive sampling technique allows the researcher having an understanding of the study objectives to choose participants that best fit the research. Tongco (2007) argues that the use of a non-probability sampling technique is not unaffected by some biases such as selecting participants mainly for the purposes of convenience. He however mentions that this does not affect the validity of the approach and if well conducted or carried out appropriately, can prove efficient. Following the nature or purpose of this current study and the need for specialized expertise or knowledge of respondents, the researcher considers the purposive sampling technique as most fitting for the research objectives and purpose. 22 University of Ghana http://ugspace.ug.edu.gh 3.6 Sample and Sample Size A research sample refers to the portion or fraction of the population that is chosen or participates in a research to represent the entire population (Saunders et al., 2009). De Vos (2002) argues that sampling is considered cogent and acceptable where it is not probable a researcher would have access to the entire population for a study. The respondents or sample for the study includes twenty (20) licensed manufacturers of pharmaceutical products located in the Greater Accra region of Ghana. Research reveals that identifying the appropriate sample size for a qualitative study, unlike quantitative research, is not exact and comes with several challenges (Tongco, 2007). Thus, research emphasizes the need to be guided by the concept of data saturation in determining the sample size or the number of interviews to be conducted (Saunders et al., 2010). According to Guest et al. (2006), data saturation is the point where no new major issues or themes arise from the data gathering process. Thus, it is the point where further interviews do not bring new things out. Guest et al. (2006) argue that this usually occurs after 12 interviews. They emphasize the fact that in a qualitative research, major themes underpinning the research usually emerge after the sixth interview has been carried out. In this study, the researcher has carried out 20 interviews. At this point, the researcher considers that data saturation has been reached as no new major themes arising from the data have been observed. 3.7 Data Source and Collection Processes Considering the emergent nature of ESG disclosure and assurance in Ghana, the researcher deems it appropriate to rely largely on primary data in answering the research questions. In Ghana, ESG assurance is at its infancy (Simpson & Akyeampong, 2014). Thus, documents or secondary data available on the phenomenon may either be minimal, non-existent or difficult to 23 University of Ghana http://ugspace.ug.edu.gh access making it appropriate to consider primary data for the research. Primary data according to Hox and Boeiji (2005), is new data specific to particular research objectives and purpose. They emphasize that primary data entails the use of research approaches, methods or techniques that fit the objectives of a particular study. Saunders et al. (2009) argues that the use of primary data allows a researcher to gather data that is specific or suited to the research. As a result of the above argument, the main data source for this study is primary data. The study adopts a cross-sectional approach to data gathering. According to Neuman (2014), this refers to the situation where a researcher gathers data at a point in time. Saunders et al. (2009) argue that it is the study or examination of a particular research issue at a particular time. According to Mann (2003), this saves the researcher a great deal of resources particularly for studies that are time constraint. Considering the fact that the researcher seeks to gain in-depth insight into the phenomenon, the researcher considers the use of interviews, specifically structured interviews, as appropriate for gathering data. Interviews are one of the well-known and accepted approaches to gathering data in qualitative research (Qu & Dumay, 2011). “A structured questionnaire, on the other hand, is one in which the questions asked are precisely decided in advance. When used as an interviewing method, the questions are asked exactly as they are written, in the same sequence, using the same style, for all interviews. Nonetheless, the structured questionnaire can sometimes be left a bit open for the interviewer to amend to suit a specific context” (Bernard, 2002). According to Sawani et al. (2010), using interviews for sustainability or ESG research allows the researcher to gain in-depth insight and understanding into the perspectives of the particular interviewees. Saunders et al. (2009) also stressed that this technique is appropriate for exploring a new phenomenon and gaining deeper understanding. 24 University of Ghana http://ugspace.ug.edu.gh The data gathering process began by the researcher making initial contact with the respective organizations using a letter of introduction obtained from the department. Contacts were made to individual interviewees via phone call or in person after feedback was obtained from each organization. Before determining an appropriate respondent, a lot of dialogue took place between the researcher and each organization to clarify the study objectives and also determine who would be most suited or appropriate for the study. Having contacted the appropriate individual, the researcher obtained the participant consent and scheduled interview date and time. Prior to the interview date, the respondent had access to the interview guide to enable them to familiarize with the phenomenon and further confirm they were in the capacity to answer or grant the interview. Interviews ranged from 40 minutes to 1 hour with an average interview time of 45 minutes. The interview guide was developed taking into account the study objectives. The interview guide is divided into two sections. Section A focused on the profile and background of respondents which comprises of their gender, age, position, years of experience, educational background and the listing status of their employer. Section B of the guide focused on the extent of ESG practices within the company, the ESG reporting standards, principles and drivers as well as benefits and challenges associated with ESG practices. Finally, the respondents were allowed to make recommendations in addressing the challenges associated with ESG practices. Reference can be made to Appendix A for details of the interview guide and questions asked. 3.8 Data Analysis and Management Research identifies that no rigid and rigorous data analysis procedures exist for qualitative research (Roussy, 2013). Regardless of this, literature endorses good and acceptable practices such as that of Miles and Huberman (2003) or Strauss and Corbin (1990) on coding. “The 25 University of Ghana http://ugspace.ug.edu.gh analysis of close-ended questions, which are more or less quantitative, involves first summarizing the information in a tabular or statistical form, and then describing in words or text the information presented” (Edgley et al, 2010). In line with the above, the data analysis technique for this study first entails summarizing the information in a statistical form, expressing the responses in frequencies and percentages. Thereafter, the researcher draws themes from the data obtained by identifying the trends and patterns and then building arguments from the data gathered by making reference to literature and the research questions. Romelaer (2001) argues that researchers must develop robust arguments with regards to the chosen themes based on literature. According to him, entwining themes with literature ensures meaningful constructs and findings from the research work. 3.9 Ethical Issues Teddlie and Yu (2007) identified that very relevant and pertinent ethical issues exist in conducting research. According to them, issues pertaining to participant consent to take part in the study, assurance of confidentiality and anonymity as well as granting respondents the liberty to withdraw from participation as and when so desired are very essential ethical issues that need consideration. The researcher therefore, in an attempt to address these ethical issues ensures that appropriate permission and consent of participants is obtained. Interviews were carried out in places and in a manner that ensured the privacy of the interviewees. Anonymity and confidentiality of respondents were well assured and insured by using codes to identify respondents and prevent an ability of any third party to be able to trace respondents comment to the particular individual. The researcher also put measures in place to prevent any unwarranted access to the interviews and transcribed materials. Finally, participants were allowed the liberty to withdraw from the 26 University of Ghana http://ugspace.ug.edu.gh study when so desired. According to Creswell (2007), ensuring and putting these in place lessens and addresses reservations and issues of ethical concern that may arise. 3.10 Chapter Summary This chapter highlights the research methodology and approach adopted. The study adopts the descriptive qualitative paradigm. A structured interview was the main data gathering tool. 27 University of Ghana http://ugspace.ug.edu.gh CHAPTER FOUR FINDINGS AND DISCUSSION 4.0 Introduction This chapter covers the analysis of data, detailed presentation of facts emanating from the data analysis and discussion of the findings of the data analysis. The analysis and discussion of finding in this chapter are based on the primary data obtained using questionnaire for the purpose of the study and the secondary data that was used to support the finding and discussion make in this chapter. The analysis is based on the objectives and the design of the questionnaire. 4.1 Background and Demography of Respondents There were two categories of respondents (companies) in the selected sample; listed and unlisted companies. From table 4.1 below, out of the sample population of twenty (20) respondents, 17(85.0%) respondents are unlisted pharmaceutical companies while 3(15.0%) are listed pharmaceutical companies on the Ghana Stock Exchange. Table 4. 1 Demographic Characteristics of Respondent's Representatives Frequency (n) Percentage (%) G ender Male 1 8 90.0 Female 2 10.0 Age 25 to 39 Years 2 10.0 40 to 50 Years 12 60.0 28 University of Ghana http://ugspace.ug.edu.gh Above 50 Years 6 30.0 Highest Level of Education Bachelor's Degree 1 1 55.0 Master's Degree 9 45.0 Position in Company Accounts and Finance Manager 12 6 0.0 Quality or Regulatory Affairs Manager 5 25.0 Administrator 3 15.0 Years of work in the Company 1 to 3 Years 3 1 5.0 4 to 6 Years 6 30.0 Over 6 Years 11 55.0 Company type Unlisted Company 1 7 85.0 Listed Company 3 15.0 Source: Fieldwork, (2019) Majority of the representatives of the respondents, 18(90.0%) were male while 2(10.0%) were females. The age group with the highest number of the representatives 12(60.0%) was 40 to 50 years, followed by ages above 50 years with 6(30.0%) representatives while 2(10.0%) representatives were between ages 25 to 39. More than half of the representatives, 11 (55.0%) had bachelor's degree whereas the remaining 9(45.0%) had master's degree as their highest level of education. The position with majority of the representatives was Accounts and Finance Managers 12(60.0%) followed by Quality or Regulatory Affairs Managers 5(25.0%) while 29 University of Ghana http://ugspace.ug.edu.gh 3(15.0%) representatives held the position of administrator. A few of the representatives 3(15.0%) had between 1 to 3 years working experience with the respondents while 6 (30.0%) representatives had 4 to 6 years working experience with the respondents. More than half of the representatives had over 6 years of working experience in their respective respondents. The relevance of the background of the respondent‟s representatives was to assess whether there were any observable relationship between the representative‟s demographic information and the respondent‟s ESG practices. For instance, the representative‟s level of education, position and experience may have an impact on the respondent‟s appreciation of ESG issues. This finding reveals how respondents‟ individual factors such as educational background and the context they find themselves in (accounting or business-related sectors) influence their understanding and perspectives of ESG disclosures. Thus, the difference in training or sector of respondents in a way influences their perspectives of ESG disclosures and assurance. This may be well explained by the Giddens (1984) structuration theory which highlights how an agent‟s social factors such as education, position, gender etc. and the context they find themselves in can influence their understanding and decisions. The normative isomorphism of the institutional theory (DiMaggio & Powell, 1983) likewise provides explanation for the influence of norms and values on respondent choices and perspectives. Hence interviewees who commonly used the annual reports as a means of reporting were more likely to first identify the annual reports for ESG disclosures showing how their context influence their perspectives. Also, Fifka (2013) broadly categorizes the factors that have been identified as driving ESG disclosures globally into internal and external factors. The demographic factors mentioned above would be classified as internal factors. From the findings, an observable relationship was identified between the level of education, position held and years of experience and the extent of ESG practices assessed. The 30 University of Ghana http://ugspace.ug.edu.gh only 2 companies which had an ESG policy, working group, strategy and reporting framework, training and annual budgetary allocation both had their representative having a Master‟s Degree, Accounts and Finance education and over 6 years working experience. These 2 companies with exceptional ESG practices are both listed on the GSE. In agreement with Simpson and Akyeampong (2014), the ownership type and industry sensitivity would impact on the company‟s ESG disclosure. 4.2 Arrangements for ESG Practices From the responses as shown in Table 4.2, all 20(100%) respondents were said to be actively engaged in good Environmental, Social and Governance (ESG) Practices. Notwithstanding the above overwhelming response only 2(10%) respondents out of the 20 had an ESG policy framework, ESG working group and ESG strategy. These 2 (10%) respondents, which are listed on the Ghana Stock Exchange, also train their staffs regularly on ESG policies as well as allocate funds in their annual budgets for ESG activities. The other 18 (90%) respondents including one listed company do not have an ESG policy framework, ESG working group and ESG strategy. These 18 respondents neither train their staff on ESG policies and practices nor make annual budgetary allocations for ESG activities. In congruence with the 2018 KPMG report titled “ESG: A view from the top”, the existence of the above factors in the 2 listed companies demonstrates a high extent of ESG practices. The effects of CSR policies carried out by stock- listed (and therefore bigger) companies show more relevant consequences than non-stock-listed ones (Galbreath, 2015). This statement can also be used to explain why the 2 listed companies have demonstrated a distinguished approach to ESG practices relative to the unlisted companies. 31 University of Ghana http://ugspace.ug.edu.gh Table 4. 2 ESG Practices YES NO I s your company actively engaged in good Environmental, Social and Governance (ESG) Practices 20(100.0) 0(0.0) Does your company have a policy/regulatory framework for ESG practices 2(10.0) 18(90.0) Does your company have an ESG working group which co-ordinates and supervises all ESG related activities 2(10.0) 18(90.0) Does your company have an ESG strategy and reporting framework 2(10.0) 18(90.0) Does your company train staffs regularly on ESG policies and practices 2(10.0) 18(90.0) Does your company have an annual budgetary allocation for ESG activities 2(10.0) 18(90.0) Does your company consider ESG disclosure and reporting a responsibility rather than a demand driven activity 20(100.0) 0(0.0) Does your company use ESG disclosure and reporting to provide useful information to stakeholders 20(100.0) 0(0.0) Does your company have any financial and non-financial challenges associated with ESG accountability 20(100.0) 0(0.0) Does your ESG report reflect both positive and negative aspects of the company‟s performance to enable a reasoned assessment of overall performance 2(10.0) 18(90.0) Source: Fieldwork, (2019) 32 University of Ghana http://ugspace.ug.edu.gh Again from table 4.2 above all 20 (100%) respondents posit that they consider ESG disclosure and reporting a responsibility rather than a demand driven activity, that they use ESG disclosures and reporting to provide useful information to stakeholders and that there are both financial and non-financial challenges associated with their respective ESG accountability. This position held by all the respondents and the high level of awareness regarding their responsibility towards their stakeholders is supported by the stakeholder theory and the effects of the industry‟s activities on the environment as stated by Simnett, Vanstraelen and Chua (2009). Notwithstanding the above, only 2 (10%) respondents (listed companies) reflect both positive and negative aspects of their respective company‟s performance in their ESG reports to enable a reasoned assessment of overall performance. The majority of respondents 18 (90%) including one listed company do not reflect both positive and negative aspects of the company‟s performance in their respective ESG disclosures or reports. According to KPMG (2018), accountability, transparency, stakeholder inclusiveness, materiality and completeness are key principles which define the content of ESG reports while balance, comparability, accuracy, timeliness, clarity and reliability ensure the quality of the report. Based on the result of the study, 90% of the respondents do not consider balance in the ESG practices. The problem with this is that they would only disclose information which is expected to lead to their benefit. 4.3 ESG Accountability Practices From table 4.3 below, none of the 20 (100%) respondents currently adopt any of the seven (7) selected ESG reporting standards namely International Integrated Reporting Council (IIRC), Organization for Economic Co-operation and Development (OECD), International Organization for Standardization (ISO 26000), Sector-specific Sustainability Accounting Standards (SASB), 33 University of Ghana http://ugspace.ug.edu.gh Global Reporting Initiative GRI, UN Global Compact, and AccountAbility (AA1000SES) in rendering their respective ESG accountability. Regarding the choice of medium (apart from the annual financial statements) employed in disclosing or reporting their respective ESG practices, table 4.3 below shows that all 20 (100%) respondents selected traditional media (e.g. newspaper), 10 (50%) respondent including the three listed companies selected both social media and company website while two of the listed companies again posited that they employed separate voluntary reports in disclosing or reporting their respective ESG practices. None of the respondents selected periodic compliance/mandatory reports and any other medium. All the respondents reported that their companies presented both Director's report and Auditor's report as part of their ESG/Sustainability reports. Also, table 4.3 below shows that, 15 (75.0%) of respondents including all three listed companies selected Corporate Social Responsibility Reports as one of the non-financial reports they prepare and present as part of their ESG/Sustainability reports. Only 2 (10%) listed respondents selected both Environmental reports and Corporate Governance Reports as additional non-financial reports prepared and presented as part of their respective ESG/Sustainability reports. None of the respondents suggested any other non-financial report. All 20 respondents (100%) as shown in table 4.3 below, posited that communicating important information to stakeholders was an objective for their respective ESG accountability. Additionally, only 2 (10%) of the listed respondents posited that their respective objectives for 34 University of Ghana http://ugspace.ug.edu.gh ESG accountability included both aligning to peer practice and also contributing to policy goals. None of the respondents selected participating in ratings, rankings and indices, satisfying compliance requirements as an objective for their respective ESG accountability. No other objective was suggested by any of the respondents. The shown in table 4.3 below, the principles considered by all 20 (100%) respondents when defining the content of company‟s ESG reports were both Stakeholder inclusiveness and Accountability. Transparency, Materiality and Completeness as principles considered when defining the content of a company‟s ESG reports were each selected by 8(40.0%) respondents including all 3 listed companies. Every respondent selected at least one of the above principles. As a consideration made to ensure the quality of a company‟s ESG reports, 12 (60%) respondents selected Clarity and Reliability, 8 (40%) respondents selected Accuracy and Timeliness while the 2 out of the 3 listed respondents each added Balance and Comparability as considerations to ensure quality of company's ESG reports. Every respondent selected at least one of the considerations mentioned above. Table 4.3 below shows that the number of respondents who included the following components as part of their company's standard disclosure on ESG accountability were 10 (50.0%) for Environmental, 20 (100.0%) for Social, 2 (10.0%) for Anti-corruption, 2 (10.0%) for Management Approach and 1 (5.0%) for Strategy and Profile. Every respondent selected at least one component mentioned above. 35 University of Ghana http://ugspace.ug.edu.gh From table 4.3 below, all 20 (100%) respondents selected Employee motivation, Reputation/Brand, Strengthen relationships with stakeholders as drivers of their respective company's ESG reports. This follows the propositions of a report of KPMG on the Drivers of ESG in 2015. Additionally, 10 (50%) respondents including all three listed companies selected Economic as well as Ethical considerations as drivers while two of the listed companies again selected Innovation and Learning as well as Risk management as drivers of their ESG reports. Every respondent selected at least one of the ESG accountability drivers mentioned above. Regarding the various stakeholders targeted with the company‟s ESG reports, table 4.3 below shows that, all 20 (100%) respondents selected Providers of capital, Employees, Customers/Consumers, Regulatory authorities, Community/Society. Additionally, 10 (50%) respondents including all three listed companies selected Suppliers as well as Prospective Investors as stakeholders targeted with their respective ESG reports. Every respondent selected at least one of the stakeholders mentioned above. Table 4. 3 ESG Accountability Practices Frequency Percentage Framework/standard(s) for ESG International Integrated Reporting Council (IIRC) 0 0 .0 Organization for Economic Co-operation and Development (OECD) 0 0.0 International Organization for Standardization (ISO 26000) 0 0.0 Sector-specific Sustainability Accounting Standards (SASB) 0 0.0 36 University of Ghana http://ugspace.ug.edu.gh Global Reporting Initiative GRI 0 0.0 UN Global Compact 0 0.0 Accountability (AA1000SES) 0 0.0 None of the above 20 100.0 Medium of disclosing ESG practices Periodic Compliance/Mandatory Reports 0 0.0 Social Media 10 50.0 Separate Voluntary Reports 2 10.0 Company Website 10 50.0 Traditional Media (example Newspaper) 20 100.0 None of the above 0 0.0 Non-financial Reports in ESG Practices Director‟s Report 20 100.0 Corporate Social Responsibility Report 15 75.0 Environmental Report 2 10.0 Corporate Governance Report 2 10.0 Auditor‟s Report 20 100.0 None of the above 0 0.0 Objective for ESG accountability Satisfy compliance requirements 0 0.0 Contribute to policy goals 2 10.0 Participate in ratings, rankings and indices 0 0.0 Align to peer practice 2 10.0 37 University of Ghana http://ugspace.ug.edu.gh Communicate important information to stakeholders 20 100.0 None of the above 0 0.0 Principles in ESG accountability Accountability 20 100.0 Transparency 8 40.0 Stakeholder inclusiveness 20 100.0 Materiality 8 40.0 Completeness 8 40.0 None of the above 0 0.0 Quality of ESG accountability Balance 2 10.0 Comparability 2 10.0 Accuracy 8 40.0 Timeliness 8 40.0 Clarity 12 60.0 Reliability 12 60.0 None of the above 0 0.0 Standard disclosure in ESG accountability Strategy and Profile 1 5.0 Management Approach 2 10.0 Social 20 100.0 Environmental 10 50.0 Anti-Corruption 2 10.0 38 University of Ghana http://ugspace.ug.edu.gh None of the above 0 0.0 Drivers of ESG reports Economic consideration 10 50.0 Ethical consideration 10 50.0 Innovation and Learning 2 10.0 Employee motivation 20 100.0 Risk management 2 10.0 Reputation/Brand 20 100.0 Strengthen relationships with stakeholders 20 100.0 None of the above 0 0.0 Stakeholders in ESG accountability Providers of capital 20 1 00.0 Employees 20 100.0 Customers/Consumers 20 100.0 Suppliers 10 50.0 Regulatory authorities 20 100.0 Community/Society 20 100.0 Prospective Investors 10 50.0 None of the above 0 0.0 Source: Fieldwork, (2019) 39 University of Ghana http://ugspace.ug.edu.gh 4.4 Benefits of ESG Accountability From table 4.4 below, maintaining healthy relationship with external stakeholders, attracting, motivating and retaining skilled staffs, gaining competitive advantage as well as winning and retaining customers were identified benefits of ESG accountability that all 20 (100%) respondents selected. Additionally, 10 (50%) of the respondents including all three listed companies posited that obtaining legitimacy, increasing shareholder and managerial wealth as well as shaping risk perceptions and managing reputational risks were other benefits their respective companies derived from ESG accountability. Only two of the listed companies selected driving operational efficiencies as a benefit derived from ESG accountability. Table 4. 4 Benefits of ESG Accountability Frequency Percentage Winning and retaining customers 20 100.0 Gaining competitive advantage 20 100.0 Obtaining legitimacy 10 50.0 Increasing shareholder and managerial wealth 10 50.0 Attracting, motivating and retaining skilled staffs 20 100.0 Shaping risk perceptions and managing reputational risks 10 50.0 Maintaining healthy relationship with external stakeholders 20 100.0 Driving operational efficiencies 2 10.0 Source: Fieldwork, (2019) 40 University of Ghana http://ugspace.ug.edu.gh 4.5 Challenges with ESG Accountability Table 4.5 below shows that the challenges identified by all 20 (100.0%) respondents in their practice of ESG accountability were obtaining reliable performance data from different parts of the company as well as the lack of Resources and Effort. Also, 14 (70%) respondents including all three listed companies selected multiple target audiences, multiple reporting framework and differing definitions of materiality as further challenges encountered in their respective practice of ESG accountability. Finally, 10 (50%) of the respondents including all three listed companies posited that the increasing depth of expertise required was a challenge in their ESG accountability. Table 4. 5 Challenges with ESG Accountability Frequency (n) Percentage (%) Obtaining reliable performance data from different parts of the company 20 100.0 Multiple reporting framework 14 70.0 Multiple target audiences 14 70.0 Increasing depth of expertise 10 50.0 Resources and Effort 20 100.0 Differing definitions of materiality 14 70.0 Source: Fieldwork, (2019) 41 University of Ghana http://ugspace.ug.edu.gh 4.6 Recommendations for Addressing Challenges Table 4.6 shows the recommendations given by the respondents with regards to addressing challenges in ESG accountability among pharmaceutical companies in Ghana. The proposed solutions to their challenges included developing a policy framework for ESG accountability which was suggested by 14 (70%) respondents. Other recommendations included staff training on ESG policies and practices, treating ESG accountability as a responsibility as well as setting up the framework for obtaining reliable performance data from various parts of the company were also recommended by 2 (10%) respondents in each case. Table 4. 6 Recommendations for addressing challenges Frequency (n) Percentage (%) Develop a policy framework for ESG accountability 14 70.0 Set up the framework for obtaining reliable performance data from various parts of the company 2 10.0 Staff training on ESG policies and practices 2 10.0 Treat ESG accountability as a responsibility and report regularly as done with financial reports 2 10.0 Source: Fieldwork, (2019) 42 University of Ghana http://ugspace.ug.edu.gh CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION 5.0 Introduction This chapter presents the summary of findings emanating from chapter four. Conclusion was also drawn per the finding in line with the various research questions. The study also provides recommendation as well as suggestion for future research. 5.1 Summary of Findings The objective of the study was to investigate the Environmental, Social and Governance (ESG) practices in pharmaceutical companies in Ghana. The summary of results is presented in line with the various specific objectives. 5.1.1 Demographic Data Findings emanating from the demographic data of the respondents‟ representatives shows there is male domination, mainly in the age range of 40 to 50 years and a bachelor‟s degree was the lowest academic qualification attained. Majority of the representatives held the position of Accounts and Finance Manager, with over 6 years of working experience in their current company (respondent). There were two categories of respondents (companies) in the selected sample; listed and unlisted companies. According to Setó‐Pamies, (2015); a high level of female representation at top level of a firm would increase the firm‟s likelihood of engaging in ESG practices, thus; the male – female representation of the respondents could mean less emphasis may be placed on ESG practices. The above factors; according to Giddens, (1984) and Setó‐ Pamies, (2015) influence a firms view and ability to engage in ESG; though according to them the relationship is not so clear. The relevance of the demographic information on the 43 University of Ghana http://ugspace.ug.edu.gh respondent‟s representatives was to assess whether there were any observable relationship between the representative‟s demographic information and the respondent‟s ESG practices. For instance, the representative‟s level of education, position and experience may have an impact on the respondent‟s appreciation of ESG issues. This finding reveals how respondents‟ individual factors such as educational background and the context they find themselves in (accounting or business-related sectors) influence their understanding and perspectives of ESG practices. Thus, the difference in training or sector of respondents in a way influences their perspectives of ESG practices. This may be well explained by the Giddens (1984) structuration theory which highlights how an agent‟s social factors such as education, position, gender etc. and the context they find themselves in can influence their understanding and decisions. The normative isomorphism of the institutional theory (DiMaggio & Powell, 1983) likewise provides explanation for the influence of norms and values on respondent choices and perspectives. Hence interviewees who commonly used the annual reports as a means of reporting were more likely to first identify the annual reports for ESG disclosures showing how their context influence their perspectives. Also, Fifka (2013) broadly categorizes the factors that have been identified as driving ESG disclosures globally into internal and external factors. The demographic factors mentioned above would be classified as internal factors. From the findings, an observable relationship was identified between the level of education, position held and years of experience and the extent of ESG practices assessed. The 2 companies which had an ESG policy, working group, strategy and reporting framework, training and annual budgetary allocation both had their representative having a Master‟s Degree, Accounts and Finance education and over 6 years working experience. These 2 companies with exceptional ESG practices are both listed on the 44 University of Ghana http://ugspace.ug.edu.gh GSE. In agreement with Simpson and Akyeampong (2014), the ownership type and industry sensitivity would impact on the company‟s ESG disclosure. 5.1.2 Extent of ESG Practices All respondents were said to be actively engaged in good Environmental, Social and Governance (ESG) Practices, a result with corroborates the findings of Simpson & Akyeampong (2014); where they found that firms operating in environmentally sensitive sectors were more likely to engage in ESG practices. Notwithstanding the above overwhelming response, only two respondents out of the twenty had an ESG policy framework, ESG working group and ESG strategy. These two respondents, which are both listed on the Ghana Stock Exchange, also train their staffs regularly on ESG policies and practices as well as allocate funds in their annual budgets for ESG activities. The remaining eighteen respondents including one listed company do not have an ESG policy framework, ESG working group and ESG strategy. These eighteen respondents neither train their staff on ESG policies and practices nor make annual budgetary allocations for ESG activities. These results support the arguments made by Brooks & Oikonomou, (2017), De la Cuesta & Valor (2013) and KPMG, (2010); that firms are only more likely to adopt a structured framework for their ESG practices if a regulatory body such as the Stock Exchange imposes such on them. Again all respondents posit that they consider ESG disclosure and reporting a responsibility rather than a demand driven activity, that they use ESG disclosures and reporting to provide useful information to stakeholders and that there are both financial and non-financial challenges associated with their respective ESG accountability. However, only two respondents (listed 45 University of Ghana http://ugspace.ug.edu.gh companies) reflect both positive and negative aspects of their respective company‟s performance to enable a reasoned assessment of overall performance. The majority of respondents including one listed company do not reflect both positive and negative aspects of the company‟s performance in their respective ESG disclosures or reports. That the firms saw ESG reporting as a responsibility, follows the positions put forward by Fernandez-Feijoo et al. (2015); when they posited that regulatory requirements are mostly the drive for ESG reporting by firms. Burh (2003), also took a similar position. However, none of the twenty (20) respondents currently adopt any of the seven (7) selected ESG reporting standards namely International Integrated Reporting Council (IIRC), Organization for Economic Co-operation and Development (OECD), International Organization for Standardization (ISO 26000), Sector-specific Sustainability Accounting Standards (SASB), Global Reporting Initiative GRI, UN Global Compact, and AccountAbility (AA1000SES) in rendering their respective ESG accountability. This finding can be explained from the perspective that, unlike financial reporting which spells out specific/mandatory accounting standards to be adopted by firms, ESG standards are not mandatory and are also not specific, hence firms may choose to or not adopt a standard for its reports (Darus et al., 2014; Farooq & De Villiers, 2017 and Ackers & Eccles, 2015) Regarding the choice of medium (apart from the annual financial statements) employed in disclosing or reporting their respective ESG practices, all twenty respondents selected traditional media (e.g. newspaper), half of the respondent including the three listed companies selected both social media and company website while two of the listed companies again posited that they employed separate voluntary reports in disclosing or reporting their respective ESG practices. 46 University of Ghana http://ugspace.ug.edu.gh None of the respondents selected periodic compliance/mandatory reports and any other medium. This findings are in tandem with that of Fatemi et al. 2017. Fatemi et al. 2017, posited that ESG reporting should not be limited to annual reports but should be broadened to include information on firms‟ website, newspapers and other sources within the company. This is also in agreement with the GRI (2013) expose of what constitutes an ESG report. All the respondents reported that their companies presented both Director's report and Auditor's report as part of their ESG reports. Also, fifteen respondents including all three listed companies selected Corporate Social Responsibility Reports as one of the non-financial reports they prepare and present as part of their ESG reports. Only two (out of the three) listed respondents selected both Environmental reports and Corporate Governance Reports as additional non-financial reports prepared and presented as part of their respective ESG reports. None of the respondents suggested any other non-financial report. According to the 2015 report of KPMG, there has been a huge increase in the number of companies publishing ESG issues either standalone or as an integrated report. Cho, Michelon, Patten and Roberts (2014) also establish that the world has significantly seen a rise in the number of entities disclosing their ESG information. These disclosures are now identified as part of the corporate strategies of entities more particularly for purposes of gaining good public reputation (KPMG, 2011). All twenty respondents posited that communicating important information to stakeholders was an objective for their respective ESG accountability. Additionally, only two (out of the three) of the listed respondents posited that their respective objectives for ESG accountability included both aligning to peer practice and also contributing to policy goals. The results support the stakeholder theory. Thus, the results indicate that firms engaged in ESG as a way of satisfying 47 University of Ghana http://ugspace.ug.edu.gh various stakeholder group requirements. This agrees with Walsh, (2005); Freeman (1984); and Harrison, Bosse, & Phillips, (2010). The principles considered by all twenty respondents when defining the content of company‟s ESG reports were both Stakeholder inclusiveness and Accountability. Transparency, Materiality and Completeness as principles considered when defining the content of a company‟s ESG reports were each selected by eight respondents including all three listed companies. Every respondent selected at least one of the above principles. As a consideration made to ensure the quality of a company‟s ESG reports, twelve respondents selected Clarity and Reliability, eight respondents selected Accuracy and Timeliness while the two listed respondents each added Balance and Comparability as considerations to ensure quality of company's ESG reports. Every respondent selected at least one of the considerations mentioned above. The number of respondents who included the following components as part of their company's standard disclosure on ESG accountability was ten for Environmental, twenty for Social, two each for Anti-corruption and Management Approach and one for Strategy and Profile. Every respondent selected at least one component mentioned above. The state of environmental awareness and the level at which firms adhere to ESG principles could be heightened by the stakeholder theory. This will encourage businesses and specifically pharmaceutical companies to include the non-traditional stakeholders like the adversarial regulatory groups in their ESG practices. According to KPMG (2018), accountability, transparency, stakeholder inclusiveness, materiality and completeness are key principles which define the content of ESG reports while balance, comparability, accuracy, timeliness, clarity and reliability ensure the quality of the 48 University of Ghana http://ugspace.ug.edu.gh report. The above factors according to KPMG (2018) together determine the extent and quality of ESG practices. From the study, 2 (out of the 3) listed companies stand out with regards to the extent of their ESG practice by adopting several ESG principles, targeting more stakeholders and enriching the quality of their ESG reports. 5.1.3 Benefits of ESG Practices As a finding emanating from the study, maintaining healthy relationship with external stakeholders, attracting, motivating and retaining skilled staffs, gaining competitive advantage as well as winning and retaining customers were benefits of ESG accountability that all twenty respondents identified with. Additionally, ten respondents including all three listed companies posited that obtaining legitimacy, increasing shareholder and managerial wealth as well as shaping risk perceptions and managing reputational risks were other benefits their respective companies derived from ESG accountability. Only two of the listed companies identified driving operational efficiencies as a benefit derived from ESG accountability. The benefits shown in the results as emanating from good ESG reports are corroborated in the literature. For example, according to a KPMG report in 2011, engaging in ESG boost firms reputation. Dhaliwal, Tsang & Yang, (2011) also cited stakeholder acceptability of one of the main benefits arising from ESG practices. Companies that disclose ESG practices in universal media were reported as having reputation gains, thereby increasing investor confidence; efficient use of resources and remain competitive (International Journal of Trade, Economics and Finance, Vol. 7, No. 3, Page 72, June 2016). This finding is also congruent with the Agency theory which stipulates that where agents (managers) are objective and transparent in their bid to resolve the agency problem, they position their organizations in a much better place to derive the above 49 University of Ghana http://ugspace.ug.edu.gh benefits from through ESG practices. This notwithstanding, the financial benefits from ESG practices is not very certain as in literature (Taylor, Vithayathil & Yim, 2018). 5.1.4 Challenges in ESG Practice The challenges identified by all twenty respondents in their practice of ESG accountability were obtaining reliable performance data from different parts of the company as well as the lack of Resources and Effort. Also, fourteen respondents including all three listed companies selected multiple target audiences, multiple reporting framework and differing definitions of materiality as further challenges encountered in their respective practice of ESG accountability. Finally, ten respondents including all three listed companies posited that the increasing depth of expertise required was a challenge in their ESG accountability. These challenges have much resemblance with those reported in the empirics, examples include empirical literature from Maclean & Rebernak (2007) and MCNally, Cerbone & Maroun (2017). 5.2 Conclusion In line with the various research objectives the following conclusions were drawn. The pharmaceutical manufacturing companies are actively engaged in good Environmental, Social and Governance (ESG) Practices and also consider ESG disclosure as a responsibility rather than a demand driven activity. However, most of these companies neither had a policy or regulatory framework to dictate and guide their overall ESG accountability practice nor an ESG working group to co-ordinates and supervises their ESG related activities. Most of these companies also had no ESG strategy and reporting framework and do not train their staffs regularly on ESG policies and practices. There is also the absence of annual budgetary allocation for ESG activities in most of these companies. 50 University of Ghana http://ugspace.ug.edu.gh A significant finding is that none of the companies adopt any of the internationally recognised ESG reporting standards such as IIRC, OECD, ISO 26000, SASB, GRI, AA1000SES and UN Global Compact. Also, aside Director's and Auditor's reports presented by all the companies as part of non-financial reports, most of the companies do not prepare and present Corporate Social Responsibility Reports, Environmental reports and Corporate Governance Reports as additional non-financial reports. No other non-financial reports were prepared and presented by these companies. The main objective for ESG accountability for these companies was to communicating important information to stakeholders. Most of the companies could not identify any other objectives for their ESG accountability. Stakeholder inclusiveness and Accountability were considered as principles in defining the content of ESG reports for all the companies. A few of the companies also consider Transparency, Materiality and Completeness as principles considered when defining the content of a company‟s ESG reports. Most of the companies considered Clarity and Reliability in ensuring the quality of their company‟s ESG reports while a few others took into account Accuracy and Timeliness. Balance and Comparability were not of much consideration by these companies in ensuring the quality of their company's ESG reports. While all companies included Social issues in their ESG standard disclosures, only a handful of companies included Environmental and Anti-corruption issues. Management Approach, Strategy and Profile were not included as part of the ESG standard disclosures for most of these companies. Employee motivation, reputation/brand, strengthening relationships with stakeholders were major drivers of ESG reports for these companies. Economic and ethical considerations, innovation and learning as well as risk management were not familiar drivers of ESG reports for these companies. The key stakeholders targeted with these company‟s ESG reports were 51 University of Ghana http://ugspace.ug.edu.gh providers of capital, employees, customers/consumers, regulatory authorities, community/society. While all these companies still use the traditional media such as newspapers as a medium to disclose or report their ESG practices, social media and company websites were also used to convey ESG accountability. Periodic compliance/mandatory reports as well as separate voluntary reports are not used by most of these companies. It can be concluded that maintaining healthy relationship with external stakeholders, attracting, motivating and retaining skilled staff, gaining competitive advantage as well as winning and retaining customers were the major benefits of ESG accountability to these companies while their major challenges in practicing ESG accountability were obtaining reliable performance data from different parts of the company, lack of Resources and Effort, Multiple target audiences, multiple reporting framework and differing definitions of materiality. The above factors point to the fact that most of the selected pharmaceutical companies adopt an unstructured approach to ESG practices. 5.3 Recommendations The following recommendations were provided for the study. Developing a policy or regulatory framework to dictate and guide ESG practices. There should be regular staff training on ESG policies and practices. Companies should set up a framework for obtaining reliable performance data from various parts of the company to be used for ESG accountability. Finally, companies should treat ESG accountability as a responsibility and report regularly as done with financial reports. 52 University of Ghana http://ugspace.ug.edu.gh 5.4 Suggestion for Future Studies The study examined the ESG accountability in selected pharmaceutical companies in Ghana. The study could not cover all the companies therefore the researcher recommends that further studies could be conducted to cover all the pharmaceutical companies as well as other strategic sectors of the economy such as mining, oil and gas. Also, the researcher recommends that further studies could be conducted to assess whether the size and type (listed versus unlisted) of the company influences their ESG accountability practices. 53 University of Ghana http://ugspace.ug.edu.gh REFERENCES Ackers, B. (2009). 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An evaluation of environmental disclosures made in corporate annual reports. Accounting, Organizations and Society, 7(1), 53-63. www.res.mdpi.com 64 University of Ghana http://ugspace.ug.edu.gh APPENDIX UNIVERSITY OF GHANA INTERVIEW GUIDE FOR THE SELECTED PHARMACEUTICAL COMPANIES TOPIC: INVESTIGATING THE ENVIRONMENTAL, SOCIAL AND GOVERNANCE ACCOUNTABILITY PRACTICES OF COMPANIES IN THE PHARMACEUTICAL INDUSTRY SECTION A: Demographic Information Instruction: Please tick only one option that reflects the true circumstances in each case. You are assured that any information you provide will be used for academic purpose only. 1. Gender A. Male [ ] B. Female [ ] 2. Age (years) of respondent A. Below 25 [ ] B. 26-39 [ ] C. 40-50 [ ] D. Above 50 [ ] 3. Highest level of academic education attained A. Secondary [ ] B. Diploma [ ] C. Bachelor‟s Degree [ ] D. Master‟s Degree [ ] E. Doctorate Degree [ ] 4. What is your current position within the company? A. Managing Director [ ] B. Accounts and Finance Manager [ ] C. Quality/Regulatory Affairs Manager [ ] D. Corporate Affairs Manager [ ] E. Administrator [ ] F. Other (Specify)………………. 5. How long have you worked with this company? A. Below 1year [ ] B. 1-3 years [ ] C. 3-6 years [ ] D. Over 6 years [ ] 65 University of Ghana http://ugspace.ug.edu.gh 6. Which category below does your company belong to? A. Listed Company [ ] B. Unlisted Company [ ] SECTION B: ENVIRONMENTAL, SOCIAL AND GOVERNANCE ACCOUNTABILITY PRACTICES Please tick only one option that reflects the true circumstances in each case ESG/SUSTAINABILITY DISCLOSURE & REPORTING YES NO 7. Is your company actively engaged in good Environmental, Social and Governance (ESG) practices? 8. Does your company have a policy/regulatory framework for ESG practices? 9. Does your company have an ESG working group which co-ordinates and supervises all ESG related activities? 10. Does your company have an ESG strategy and reporting framework? 11. Does your company train staffs regularly on ESG policies and practices? 12. Does your company have an annual budgetary allocation for ESG activities? 13. Does your company consider ESG disclosure and reporting as a responsibility rather than a demand driven activity? 14. Does your company use ESG disclosure and reporting to provide useful information to stakeholders? 15. Does your company have any financial and non-financial challenges 66 University of Ghana http://ugspace.ug.edu.gh associated with ESG accountability? 16. Does your ESG report reflect both positive and negative aspects of the company‟s performance to enable a reasoned assessment of overall performance? Instruction: Please tick as many options (single or multiple) that reflect the true circumstances in each case. 17. Which of the following standard(s) is/are employed in your company‟s ESG reporting? A. International Integrated Reporting Council (IIRC) framework [ ] B. Organization for Economic Co-operation and Development (OECD) [ ] C. International Organization for Standardization (ISO 26000) [ ] D. Sector-specific Sustainability Accounting Standards (SASB) [ ] E. Global Reporting Initiative GRI [ ] F. UN Global Compact [ ] G. AccountAbility (AA1000SES) [ ] H. None of the above [ ] 18. Apart from your annual financial statements, which other medium is/are employed in disclosing or reporting your company‟s ESG practices? A. Periodic Compliance/Mandatory Reports [ ] B. Social Media [ ] C. Separate Voluntary Reports [ ] D. Company Website [ ] E. Traditional Media (Eg. Newspaper) [ ] F. Others (Specify)………….. 19. Which of the following non-financial reports are prepared and presented by your company as part of your ESG/Sustainability reports? A. Director‟s Report [ ] B. Corporate Social Responsibility Report [ ] 67 University of Ghana http://ugspace.ug.edu.gh C. Environmental Report [ ] D. Corporate Governance Report [ ] E. Auditor‟s Report [ ] F. Others (Specify)………………………….. 20. Which of the following is your company‟s objective for sustainability/ESG reporting? A. Satisfy compliance requirements [ ] B. Contribute to policy goals [ ] C. Participate in ratings, rankings and indices [ ] D. Align to peer practice [ ] E. Communicate important information to stakeholders [ ] F. Others (Specify…………………………………….. 21. Which of the following principle(s) is/are considered when defining the content of your company‟s ESG reports? A. Accountability [ ] B. Transparency [ ] C. Stakeholder inclusiveness[ ] D. Materiality [ ] E. Completeness [ ] F. None of the above [ ] 22. Which of the following consideration(s) is/are made to ensure the quality of your company‟s ESG reports? A. Balance [ ] B. Comparability [ ] C. Accuracy [ ] D. Timeliness [ ] E. Clarity [ ] F. Reliability [ ] G. None of the above [ ] 23. Which of the following is/are included as part of your company‟s standard disclosure on ESG accountability? A. Strategy and Profile [ ] B. Management Approach [ ]C. Social [ ] D. Environmental [ ] E. Anti-Corruption [ ] F. None of the above[ ] 24. Which of the following is/are the drivers of your company‟s ESG reports? A. Economic consideration [ ] B. Ethical consideration [ ] C. Innovation and Learning [ ] D. Employee motivation [ ] 68 University of Ghana http://ugspace.ug.edu.gh E. Risk management [ ] F. Reputation/Brand [ ] G. Strengthen relationships with stakeholders [ ] H. None of the above [ ] 25. Which of the following stakeholder(s) is/are targeted with your company‟s ESG reports? A. Providers of capital [ ] B. Employees [ ] C. Customers/Consumers [ ] D. Suppliers [ ] E. Regulatory authorities [ ] F. Community/Society [ ] G. Prospective Investors [ ] H. None of the above [ ] 26. Which of the following would you consider as benefit(s) your company derives from ESG accountability? A. Winning and retaining customers [ ] B. Gaining competitive advantage [ ] C. Obtaining legitimacy [ ] D. Increasing shareholder and managerial wealth [ ] E. Attracting, motivating and retaining skilled staffs [ ] F. Shaping risk perceptions and managing reputational risks [ ] G. Maintaining healthy relationship with external stakeholders [ ] H. Driving operational efficiencies [ ] I. None of the above [ ] 27. Which of the following is/are challenge(s) encountered in your company‟s ESG accountability practices? A. Obtaining reliable performance data from different parts of the company [ ] B. Multiple reporting framework [ ] C. Multiple target audiences [ ] D. Increasing depth of expertise [ ] E. Resources and Effort [ ] F. Differing definitions of materiality [ ] G. None of the above [ ] 28. What recommendations would you like to offer in addressing the challenges associated with ESG accountability and improving overall sustainability reporting? 69 University of Ghana http://ugspace.ug.edu.gh i. ………………………………………………………………………… ii. ………………………………………………………………………… iii. ………………………………………………………………………… iv. ……………………………………………………………………… I would like express my profound appreciation to you for taking time to complete this interview and to once again assure you that the information provided would be used for the intended academic purpose only. Thank you. 70