THE IMPACT OF ESG DISCLOSURE ON FIRM VALUE: EVIDENCE FROM THE TOURISM INDUSTRY

Avoiding Distortion in Corporate Valuation Litigation: An Application of Discounted Cash Flow

The impact of environmental, social, and governance disclosure on firm value: The role of CEO power

Purpose We investigate whether environmental, social, and governance (ESG) disclosure and board gender diversity (BGD) affect the firm value for a sample of French non-financial listed firms during the concurrent enactment of French CSR and BGD quota laws. Specifically, we investigate whether ESG disclosure is positively associated with firm value, examine the impact of BGD on firm value, and explore whether reaching a critical mass of female directors (three or more) further enhances firm value. Design/methodology/approach Drawing upon agency theory, resource dependence theory, and critical mass theory, we develop our study hypotheses. We apply Generalized Method of Moments (GMM) multivariate linear models to 900 observations during the period 2011 to 2019 to reach empirical findings while addressing endogeneity concerns. Findings Our findings indicate that ESG score positively influences the firm value (Tobin’s Q), whereas BGD has a negative impact. Moreover, BGD positively affects the firm value when the number of women directors reaches a threshold of five, supporting the critical mass theory perspective. Research limitations/implications Our study focuses solely on France, limiting generalizability due to its unique regulatory environment, yet emphasizing the importance of considering diverse regulatory contexts in future research. Practical implications The study offers insights for corporate management to address stakeholders’ growing demands to disseminate a greater volume of ESG information, comply with women’s quota systems, and appoint experienced and talented female directors to ensure effective governance, rather than symbolically increase female representation in boardrooms. Social implications The study informs regulators and policymakers on promoting ESG disclosure practices and establishing guidelines for achieving an optimal number of qualified women directors to maximize governance effectiveness. Originality/value The study enhances stakeholders' understanding of how ESG disclosure and BGD influence firm market value, with a specific focus on the implications of the Copé-Zimmermann law and French CSR regulations.

This study investigates the relationship between environmental, social, and governance (ESG) disclosure scores and firm performance in the context of BRICS nations (Brazil, Russia, India, China, and South Africa). As ESG factors gain prominence in decision-making, particularly among investors focused on sustainable investing, this research aims to provide insights into how ESG disclosures influence financial and market performance. The study analyzes data from 254 non-financial listed companies across BRICS nations from 2011 to 2023, sourced from Thomson Reuters’ Refinitiv Eikon database. Using generalized method of moments (GMM) techniques, the findings reveal a significant positive impact of ESG disclosure scores on financial performance, measured by return on assets (ROA) and return on equity (ROE). Conversely, ESG disclosure scores table a significant negative impact on market performance, measured by closing price and Tobin’s Q. This research contributes to the limited empirical evidence on ESG disclosure and firm performance in emerging markets, offering valuable insights for investors, policymakers, and corporate leaders aiming to enhance long-term financial resilience and societal impact through sustainable business practices. The study underscores the importance of ESG integration in achieving sustainable development, particularly in economies that collectively represent over 41% of the global population, 24% of global GDP, and 16% of world trade.

This paper aims to investigate the impact of ESG disclosure on firm value in the context of BRICS countries. The research sample comprises 3560 observations for the 2015–2022 period. We used Refinitiv's ESG rating as a measure to assess the extent of a firm's ESG disclosure comprehensively. The findings suggest that ESG disclosure has a positive impact on firm value. Further analysis shows a variation in the investors’ responses to the dimensions of ESG score (environmental, social, and governance scores) regarding the nature of their informational content. Specifically, the results show that investors pay more attention to environmental and social activities. The study’s results contribute significantly to the broader discourse on sustainable business practices and their implications for long-term economic growth. Understanding how ESG practices impact firm value within BRICS nations provides investors, policymakers, and businesses with valuable insights.

This study investigates the impact of Enterprise Risk Management (ERM) disclosure on working capital efficiency, profitability, and firm value of non-financial public companies in Indonesia during the period 2017-2022. Additionally, it examines the moderating role of Environmental, Social, and Governance (ESG) disclosure on the relationship between ERM disclosure and these three variables. The research adopts a quantitative approach, utilizing secondary data from companies' annual reports. Working Capital Turnover (WCT) measures efficiency, profitability is assessed by Return on Assets (ROA), and firm value is evaluated using Tobin’s Q ratio. ERM and ESG disclosures are assessed based on the COSO ERM 2017 framework and GRI Standards, respectively. The findings reveal that ERM disclosure has a significant positive impact on firm value but shows no significant effect on working capital efficiency and profitability. Furthermore, ESG disclosure positively moderates the relationship between ERM disclosure and firm value, highlighting the synergistic benefits of integrating robust ERM practices with comprehensive ESG disclosures. This study underscores the necessity for companies to enhance the quality of their risk management and ESG-related disclosures to improve financial performance and corporate value. By providing empirical evidence on the benefits of ERM and ESG disclosures, this research contributes to the literature and offers practical implications for non-financial public companies in Indonesia.

With the development of sustainability, ESG information has become a key factor for investors in capital market, but researches on the relationship between ESG disclosure and capital market efficiency has not been clear. Using the data of Chinese A‐share listed companies from 2011 to 2019, this study examined the relationship between ESG disclosure and market mispricing. The results showed that the higher ESG disclosure with lower level of mispricing, which was also verified in both the overvalued and undervalued samples. The test of environmental (E), social (S), and, governance (G) showed that environmental disclosure can restrain the over‐valuation, social disclosure can mitigate the under‐valuation, and corporate governance disclosure has no significant impact on the mispricing. In addition, this paper identified the effect of ESG disclosure on market mispricing by using exogenous market fluctuation. Furtherly, mechanism analysis results showed that ESG disclosure can affect pricing deviation through signaling and supervision effects.

Tourism has always been one of the most profitable service industries. But because of the COVID-19 pandemic, the tourism industry is facing some big problems. As a result, the tourism industry lost a lot of money. This paper aims to find and rank recovery solutions to help the tourism industry. This article investigates two key areas: firstly, how government aid can best be prioritised among the various subsectors of the hospitality and tourism industry, and secondly, whether public assessment of the measures the US government took against the pandemic is related to the outlook for recovery, including the role played by perceptions of government performance and efficacy at handling the crisis and self-efficacy in terms of avoiding infection. Two studies were conducted among US consumers, using different methods of data collection and analysis. The first study utilised an open market valuation technique to explore how governmental aid might be prioritised among the tourism and hospitality industries. The second study used AMOS/SEM to examine travellers’ positive perceptions of the likelihood of hospitality and tourism industry recovery. Study 1 found that all six industry subsectors investigated (hotels, airlines, restaurants, car rentals, casinos and cruise lines) had been influenced negatively by COVID-19, with the heaviest impact felt by hotels and cruise lines. Study 2 indicated that the level of public satisfaction with the US government’s performance in addressing the pandemic was positively related to expectations of hospitality and tourism industry recovery. The findings could guide policymakers in deciding how best to allocate public funds between the different subsectors of the hospitality and tourism industry.

This study examines the impact of environmental, social, and governance (ESG) disclosures on the value of non-financial firms listed on the Saudi Stock Exchange (Tadawul) from 2017 to 2022. It explores how ESG practices influence firm profitability and market valuation. Using earnings per share (EPS) and Tobin’s Q as firm value indicators, the study analyses 100 firms. To address endogeneity concerns, it applies the generalized method of moments (GMM). The study also examines the moderating role of firm size in ESG disclosure and performance. The results indicate that increased ESG disclosure enhances firm value, with environmental and governance factors playing a key role. Firm size, return on assets (ROA), and debt-to-equity ratio significantly impact performance. Larger firms exhibit better ESG practices, leading to higher earnings per share. This study confirms the positive relationship between ESG disclosure and firm value, emphasizing environmental and governance aspects. Firm size is a crucial factor influencing ESG adoption and financial outcomes. The study recommends mandatory ESG disclosure frameworks, sector-specific regulations, and incentives to enhance corporate transparency and sustainability. These measures can strengthen firms' market competitiveness and align them with Saudi Arabia’s Vision 2030.

This study examines the impact of Environmental, Social, and Governance (ESG) disclosure on firm value in the banking sector listed on the Indonesia Stock Exchange (IDX) from 2020 to 2023. Utilizing a quantitative approach, this research employs secondary data collected through purposive sampling, resulting in a sample of 80 banking companies that met specific ESG disclosure and financial reporting criteria. ESG disclosure data were obtained based on the Global Reporting Initiative (GRI) Standards, specifically GRI 300 (Environmental), GRI 400 (Social), and GRI 2 (General Disclosures), while firm value was measured using the Price-to-Book Value (PBV) ratio. Multiple regression analysis was conducted to assess the relationship between ESG disclosure and firm value. The findings reveal that environmental, social, and governance factors do not have a significant effect on firm value. This suggests that ESG disclosure in the Indonesian banking sector has not yet been a primary determinant of firm valuation, potentially due to factors such as limited investor awareness, weak regulatory enforcement, or prevailing market skepticism regarding the financial relevance of ESG initiatives. These results contribute to the existing discourse on sustainable banking by providing empirical evidence on the limited impact of ESG disclosure on firm value within the Indonesian banking sector. Furthermore, this study underscores the importance of regulatory bodies in promoting ESG disclosure as a key performance indicator for banking institutions. Future research could examine moderating factors such as financial performance, risk management strategies, or the effectiveness of corporate governance frameworks in strengthening the relationship between ESG disclosure and firm value. These insights are valuable for investors, policymakers, and banking institutions in optimizing ESG strategies to maximize firm value and ensure sustainable financial growth.

Using recently available GRESB ESG public disclosure data for REITs around the world, we examine how ESG disclosure is related to REIT debt financing and firm value. We find that REITs with higher levels of ESG disclosure have lower cost of debt, higher credit ratings, and higher unsecured debt to total debt ratio, controlling for key firm characteristics. These findings suggest that improving ESG disclosure can help REITs to gain better access to the capital markets and enhance corporate financial flexibility, as lenders have paid close attention to a firm’s ESG disclosure and integrated evaluation of ESG factors into their lending decisions. Moreover, firm value of REITs is positively associated with their ESG disclosure level. When using the Covid-19 pandemic as a quasi-experimental setting, we find evidence that REITs with higher ESG disclosure levels before the pandemic exhibit higher firm value during the pandemic. These results indicate that investors do value active ESG disclosure by REITs. Additional analyses show that ESG disclosure level is sensitive to institutional ownership, implying that institutional investors may drive REIT ESG disclosure efforts. Taken together, this paper suggests that effective ESG disclosure can have a positive impact on REIT debt financing and firm value due to the increased corporate transparency, and the ESG reporting framework developed by GRESB appears to be effective to provide transparency and comparability across the global real estate industry.

PurposeThis study attempts to examine the effect of greenhouse gas (GHG) emissions disclosure and its compounding effect with environmental, social, and governance (ESG) disclosure on firm value in Korea. This study focuses on the unique institutional setting in Korea that implements mandatory GHG emissions disclosure and voluntary ESG disclosure.Design/methodology/approachUsing a dataset comprising 25,968 firm-year observations from publicly listed Korean firms from 2000 to 2021, we applied an ordinary least squares (OLS) regression model to test hypotheses.FindingsThe results show that, in a voluntary disclosure regime, ESG disclosure has a positive impact, whereas in a mandatory disclosure regime, GHG emissions disclosure has a negative impact on firm value. The results also indicate that when a firm discloses both its GHG emissions and ESG performance information, the voluntary disclosure of ESG information synergistically mitigates the adverse effects of mandatory disclosure of GHG emissions information. This synergy contributes significantly to enhancing the firm’s overall value. The findings indicate that a firm can enhance its value by proactively disclosing ESG information, especially when it is compulsorily required to report GHG emissions data.Originality/valueThis study investigated the effect of corporate non-financial disclosure on firm value by shedding light on the differential attributes between voluntary and mandatory disclosures and between quantitative and qualitative information.

Prior studies on the relationship between ESG information and cost of debt have found mixed results. They conclude that this relationship may be affected by some characteristics or attributes of the company. In this study, we examine whether corporate reputation mediates the relationship between ESG information and cost of debt. In other words, this study explores how ESG information influences corporate reputation, and how, in turn, corporate reputation affects the cost of debt financing. Data for corporate reputation were obtained from the Fortune “World’s Most Admired Companies” List, whereas data on ESG information were extracted from two sources: ESG performance were obtained from Sustainalytics database and ESG disclosure were obtained from Bloomberg database. Data on cost of debt and other control variables were also collected from Bloomberg database. Using structural equation models, we report a positive effect of both ESG performance and disclosure on corporate reputation. We also find that a good corporate reputation reduces the cost of debt financing and mediates the relationship between ESG performance/disclosure and cost of debt. We therefore conclude that firms that manage and disclose information on ESG issues have a better reputation, which in turn reduces their debt financing costs.

Objective: This study investigate how the quality of IR and ESG disclosures can affect the level of information asymmetry and enhance legitimacy and signal about firm value. Theoretical Framework: IR will increase the company's transparency to stakeholders so that reduces the problem of information asymmetry and long-term business value creation. SDGs encourages organizations to pursue credentials by implementing ESG to increase corporate credibility. High profitability can provide positive signals that encourage managers to implement IR and submit ESG reports, thereby reducing information asymmetry and increasing firm value. Method: Based on data from the IDX database, this study analyses companies that are members of the LQ45 group. We have collected annual reports and sustainability reports for the period between 2013 and 2022. Results and Discussion: IR quality has a negative influence on FA and firm value, while ESG disclosure has a positive influence on FA and firm value. Profitability variable is able to strengthen the effect of IR quality and ESG disclosure on FA. Therefore, IR quality and ESG disclosures have a strong influence on FA. Research Implications: Theoretically, this study’s result strengthen the study of legitimacy and institutional theories in explaining the relationship between IR quality and sustainability disclosures on information asymmetry and firm value in the long run. Practically, it highlights the importance for managers to enhance IR and ESG disclosures, thereby promoting corporate transparency and accountability. Originality/Value: This considers profitability variables to understand the motives and drivers of managers to implement integrated reporting formats and deliver sustainability reporting.

This study discusses the current trend regarding company performance which is not only seen from the financial aspect but how the company will sustain by contributing to its stakeholder in terms of its environmental, social, and governance aspects (ESG). CEO narcissism is a CEO character that encourages the improvement of the environmental, social, and governance (ESG) performance. This study examines the effect of ESG disclosure on firm value and the role of CEO narcissism to moderate the relationship between ESG disclosure and firm value. The ESG score from Thomson Reuters measured ESG disclosure, and the unobtrusive indicators by Chatterjee and Hambrick (2007) measured CEO narcissism. Samples are from non-financial companies in ASEAN-5 countries with period cover years from 2014 to 2017. The results show that the ESG disclosure and CEO narcissism increase the firm value. Further, CEO narcissism strengthens the positive influence of ESG disclosure on firm value.