Abstract
This article has received the considerable critical attention that seeking to enhance sustainability disclosure may essentially make progress firms’ market valuation. It aims to provide the corporate sustainability disclosure level organized according to the ‘7 + 1’, seven core subjects of the International Organization for Standardization (ISO) 26000 and the energy disclosure items, then set out to assess the effectiveness of sustainability reporting on the listed firms’ market valuation during the period 2010–2015. To achieve this objective, data were collected from a sample of 98 Iranian manufacturing and service organizations from various industry sectors at the Tehran Stock Exchange and generalized method of moments (GMM) approach was conducted for a dynamic panel data to evaluate the effect of the sustainability reporting level on the listed firms’ market valuation. As can be seen from the results, the overall extent of sustainability disclosure arranged in accordance with the low rate of sustainability reporting for listed firms in TSE. It was also found that the sensitive firms have a greater level of corporate sustainability disclosure than the other firms. Moreover, sustainability reporting has been shown to be related to market valuations in which firms activating in sensitive industries environmentally with sustainability reporting had higher market valuations than firms activating in non-sensitive industries with sustainability reporting. Our ‘7 + 1’ sustainability disclosure practice aspects all together with their basic measurement items can be applied as a checklist for assessing how well sustainability disclosure practices are performed at TSE.
Highlights
The current global tendencies have been close to the environmental protection and ecology values as well as anticipating enterprises for fulfillment attainment in socialECONOMIC RESEARCH-EKONOMSKA ISTRAZIVANJA responsibilities associated with environmental issues
This study seeks to obtain hands-collected data which will help to overcome a lack of easy access to annual reports the listed companies in the TSE that had contributed in several levels of gaining Iranian Excellence Award (INP&EA) and National Productivity according to the European Foundation intended for model of Quality Management (EFQM)
The empirical analysis is employed using sys-generalized method of moments (GMM) estimator for evaluating the influence of the level of corporate sustainability on the market valuation which we reveal our descriptive and estimation results with respect to disclosing the extents of sustainability of TSE-listed firms
Summary
The current global tendencies have been close to the environmental protection and ecology values as well as anticipating enterprises for fulfillment attainment in socialECONOMIC RESEARCH-EKONOMSKA ISTRAZIVANJA responsibilities associated with environmental issues. The disclosure of Environmental and Social by large listed firms in many nations all over the world have expanded phenomenally to the extent that growing from almost a page dedicated to employee related disclosure in the 1970s (Gray et al, 1995) to specified stand-alone sustainability reports released by a lot of listed firms more recently (Qiu et al, 2016) This tendency is in accordance with the developing interest in environmental and social issue as part of a corporate stakeholder diversity comprising socially responsible investors, employees, customers, regulators, government (Clarkson et al, 2011; Clarkson et al, 2008; Deegan, 2004; Qiu et al, 2016). It may consider where the amount of 35% of the worldwide largest firms provided a sustainability report by 1999, while the amount of 95% was reported by 2011
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