Authors: Dr. S Revathi, Dr. M. Mariammal
Abstract: This paper explores the link between ESG reporting and financial sustainability of corporations across different economies. Relying on the synthesis of empirical evidence gathered during 2021-2026, the study explores the impact of the quality of ESG reporting on cost of capital, firm valuation and financial sustainability of firms in the long run. The methodology suggested consists of meta-analytic literature review and panel analysis of firm-level data. The findings reveal a positive connection between high ESG scores and cost of debt and equity that is considerably lower than that of firms with lower ESG scores, especially those related to social and governance dimensions of ESG ratings. Based on meta-analytical evidence based on 60,247 firm-level observations, the results reveal that ESG disclosure lowers the weighted cost of capital and improves market-based performance measures. However, the relationship between disclosure and performance is conditional upon the institutional setting, assurance quality and the nature of ESG involvement.
DOI: http://doi.org/10.5281/zenodo.23099669
