Exploring the Drivers and Barriers of Sustainability Reporting Practices in Ghanaian Small and Medium-Sized Enterprises (SMEs).

Abstract

Sustainability reporting is increasingly regarded as essential for ensuring accountability and enhancing competitiveness; however, its adoption among Small and Medium-Sized Enterprises (SMEs) in Ghana remains limited. This study investigates the preparedness of SMEs for sustainability reporting, with a focus on the interaction between internal capabilities and external institutional pressures that facilitate or impede this adoption. Grounded in the Resource-Based View (RBV) and Institutional Theory, the research is guided by two primary objectives: first, to examine how factors such as leadership commitment, organizational culture, financial capacity, and technical expertise influence internal readiness; and second, to evaluate the effects of regulatory frameworks, market dynamics, and institutional support systems. Employing an interpretivist philosophical approach and qualitative methodology, the study involved semi-structured interviews with seven carefully selected participants from sectors including finance, healthcare, textiles, waste management, and agriculture within the Greater Accra and Central Regions. Thematic analysis, following the framework established by Braun and Clarke, facilitated a systematic identification of patterns across the cases. The findings suggest that the readiness of SMEs for sustainability reporting is not determined solely by resources or institutional pressures, but rather by the alignment of these factors. The presence of visionary leadership and adaptive organizational cultures significantly enhances preparedness, while constraints such as limited financial resources and expertise hinder progress. Externally, regulatory and market pressures promote sustainability reporting; however, inconsistent enforcement and insufficient institutional support can undermine their effectiveness. This study contributes to the understanding of sustainability reporting by focusing on SMEs in emerging economies and offers practical recommendations, including the implementation of incentive-based policies, targeted sector-specific training, and the strengthening of institutional collaboration to foster broader adoption.