Business Strategies and Corporate Reporting for Sustainability: A Comparative Study of Materiality, Stakeholder Engagement, and ESG Performance in Europe

Abstract

This study investigates the relationship between corporate reporting practices and the value relevance of accounting information by analyzing 100 publicly listed non-financial European firms between 2015 and 2019. Drawing on the Ohlson valuation framework, the analysis combines random effects with Driscoll–Kraay standard errors and System GMM estimations to assess the role of financial and non-financial disclosures. Materiality and stakeholder engagement were scored through content analysis of corporate reports, while ESG performance data were obtained from Refinitiv Eikon. The results show that financial fundamentals remain the most robust determinants of firm value, consistent with Ohlson’s model. Among qualitative disclosures, materiality demonstrates a strong and statistically significant positive association with market value in the random effects specification, while stakeholder engagement and ESG scores do not attain statistical significance. In the dynamic panel model, lagged market value is highly significant, confirming the persistence of valuation, while the effect of materiality and stakeholder engagement diminishes. Interaction models further indicate that materiality strengthens the relevance of earnings but reduces the role of book value, underscoring its selective contribution. Overall, the findings provide partial support for the claim that Integrated Reporting enhances the value relevance of accounting information. It suggests that the usefulness of IR depends less on adoption per se and more on the quality and substance of disclosures, particularly the integration of financial material ESG issues into corporate reporting. This highlights IR’s potential to improve transparency, accountability, and investor decision making, thereby contributing to more effective capital market outcomes.

1. Introduction

In recent years, firms have increasingly adopted strategic reporting frameworks, with Integrated Reporting (IR) emerging as a key approach [1]. This trend reflects a broader demand for transparency, accountability, and trust from investors, as well as a recognition that financial statements alone are insufficient to capture a firm’s full value creation potential. This study compares three types of corporate reports: voluntary Integrated Reports, consolidated financial reports, and sustainability reports. The analysis focuses on the quality of materiality disclosures, stakeholder engagement, and relevant environmental, social, and governance (ESG) performance indicators.

The rise of IR is primarily driven by the need for non-financial information that complements traditional disclosures and offers a more holistic forward-looking view of corporate performance. However, this shift introduces several challenges, particularly due to the lack of standardized frameworks and variability in implementation practices across organizations and countries. In response, the International <IR> Framework was introduced to unify financial and non-financial disclosures through a principles-based approach that links governance, strategy, business models, risk, and performance. Adoption of the <IR> Framework has expanded globally, including in Greece, where institutional and regulatory support has facilitated its diffusion.

This research contributes to the existing literature by being the first to examine, at a European level, the relationship between accounting information relevance, stakeholder engagement, and materiality disclosures across three distinct reporting formats. Building on prior work [2,3,4,5], it addresses what remains a key unresolved issue in IR research: the degree to which IR improves the relevance of financial reporting [6,7]. Using a sample of 100 firms from the Refinitiv Eikon database over the 2015–2019 period, and applying the Ohlson valuation model, this study provides empirical insights into how IR practices inform capital providers’ decision making.

The findings aim to advance theoretical understanding of corporate reporting by integrating financial and non-financial elements into a unified narrative. Although prior studies [2,3,4,5] have explored IR's effects, the precise impact of IR on accounting information relevance remains unclear. Scholars such as Solomon and Maroun [6,7] identify this as a key unresolved issue within IR research, warranting further investigation.

The novelty of this research lies in the empirical use of two core IR guiding principles, materiality and stakeholder engagement, as explanatory variables affecting the relevance of accounting information. These principles are designed to enhance the usefulness and credibility of corporate reporting by enabling a more comprehensive picture of firms to create long-term value. By incorporating both financial and non-financial elements, IR aims to reduce information asymmetry and increase investor confidence, which, in turn, is expected to impact market valuation.

Overall, this study expands the theoretical boundaries of corporate reporting by empirically testing the impact of integrated thinking on accounting relevance. It provides valuable insights for investors, regulators, and policymakers into how engagement with stakeholders and disclosure of material issues influence capital providers’ decision making. Moreover, it highlights IR's potential role in enhancing the strategic quality of corporate disclosures, bridging the gap between financial performance and long-term sustainability.

The remainder of the paper is structured as follows. Section 2 provides a review of the literature and develops the research hypotheses. Section 3 outlines the materials and methods. Section 4 presents the empirical results and comparative analyses. Section 5 offers a discussion of the findings and concludes the paper.

2. Literature Review and Research Hypotheses Development

2.1. Consolidated Reports

Consolidated annual reports, guided by IFRS and national GAAPs, aim to provide investors with reliable financial information for informed decision making [8]. Despite their foundational role in transparency, they are often criticized for their limited adaptability in evolving stakeholder expectations and economic complexity [9].

A key limitation is the insufficient treatment of non-financial factors, such as reputation, environmental impact, and risk management, which significantly influence long-term performance. The Deepwater Horizon oil spill, for instance, illustrated how reputational risk can severely affect firm value [10].

Additionally, the increasing complexity of financial instruments like derivatives has reduced the clarity of disclosures [11,12]. Reports have become overly technical, masking strategic information related to intangible assets such as management quality and organizational culture [13,14].

Finally, their retrospective focus on past performance limits their usefulness for predicting future outcomes, reducing their value as tools for assessing long-term growth and resilience [15,16].

These weaknesses highlight the need for integrated frameworks that combine financial and non-financial insights, supporting a more forward-looking approach to reporting.

2.2. Sustainability Reports

Sustainability reports serve as key tools for communicating corporate performance in areas such as environment, labor, consumer relations, and governance. They respond to increasing stakeholder demand for transparency, especially from socially responsible investors and advocacy groups. Corporate social performance is now seen as an indicator of financial health and long-term success [17,18].

Materiality is a core principle, shaped by the GRI framework, which encourages firms to focus on issues most relevant to stakeholders and long-term value creation. This requires aligning stakeholder expectations with strategic KPIs while avoiding vague or overly broad disclosures.

Globally, sustainability reporting has grown significantly. KPMG [19] noted that 95% of the world’s largest firms issue some form of responsibility report. Adoption is strong in Europe, Latin America, and Asia, while U.S. firms often emphasize external image over internal integration, which may increase reputational risk.

Since 2008, drivers of sustainability reporting have shifted beyond reputation to include innovation and learning [20]. While financial reporting is mandatory, sustainability reporting remains voluntary in many regions. The EU’s 2013 Directive represents a move toward standardization, though a global regulatory framework is still lacking [21].

Debate continues between voluntary and mandatory approaches. Voluntary reporting is seen as more flexible and innovative but may lack consistency. Regulatory frameworks are argued to ensure comparability and credibility [22].

To support varied users, the GRI introduced G4 guidelines, focusing on stakeholder inclusiveness, sustainability context, materiality, and accuracy. Reports can follow a “Core” or “Comprehensive” format, the latter including detailed Disclosures on Management Approach (DMAs).

In sum, sustainability reports help firms align with stakeholder expectations, build legitimacy, and demonstrate long-term commitment to social and environmental values, with materiality and transparency shaping future non-financial reporting [23].

2.3. Integrated Reporting

IR, introduced by the IIRC in 2010, is a modern corporate reporting framework focused on how an organization creates value over time [24]. Unlike traditional financial or sustainability reports, IR offers a concise interconnected view of strategy, governance, performance, and future outlook, primarily targeting investors and financial stakeholders.

It adopts a multi-capital approach, covering six types of capital: financial, manufactured, intellectual, human, social and relationship, and natural. This allows organizations to communicate how they use and develop these resources to generate sustainable value.

IR is structured around key components such as risk management, performance, and strategic positioning, enabling a forward-looking narrative. The framework is based on principles like strategic focus, information connectivity, stakeholder relationships, materiality, and consistency, ensuring a comprehensive and meaningful disclosure beyond static financial data [25].

A central strength of IR lies in the emphasis on materiality and the connection between operations and long-term goals. It encourages firms to demonstrate how current actions impact future outcomes, enhancing transparency and strategic alignment [26].

As an evolving reporting model, IR signifies a shift in corporate communication integrating financial and non-financial information to provide stakeholders with deeper insights into long-term value creation and sustainability.

2.4. Comparison of Annual, Sustainability, and Integrated Reports

Corporate reporting has evolved from traditional annual reports to sustainability reports and, more recently, to IR, reflecting the growing demand for comprehensive and stakeholder-oriented disclosures [27].

Annual reports primarily target investors, focusing on financial data with a retrospective outlook. In contrast, IR integrates both financial and non-financial elements, offering a holistic narrative that encompasses strategy, governance, and future outlook [24]. By addressing the limitations of annual reports, such as their complexity and lack of long-term perspective, IR represents an evolution of the annual report rather than of the sustainability report [28]. Moreover, while annual reports emphasize short-term financial outcomes, IR prioritizes long-term value creation [29].

Materiality in annual reports is typically framed in terms of financial impact. IR broadens this concept by incorporating multiple forms of capital (financial, social, human, intellectual, and natural) aligning with stakeholder theory and enabling a more integrated assessment of performance and value creation.

Compared to annual and sustainability reports, IR places greater emphasis on engaging diverse stakeholders. While sustainability reports provide valuable environmental and social data, they are often perceived by investors as less credible due to their weaker financial linkages. IR addresses this gap by combining financial and non-financial dimensions into a cohesive and investor-relevant disclosure [30].

By synthesizing the strengths of annual and sustainability reports, IR offers a more strategic, comprehensive, and trustworthy model. It reflects a broader shift toward recognizing the interconnected nature of financial and non-financial performance in today’s socially conscious business environment.

IR and sustainability reporting play distinct yet complementary roles in corporate transparency [31]. IR, as promoted by the IIRC, follows a principles-based flexible framework that emphasizes long-term value creation, particularly for providers of financial capital. Sustainability reporting, often structured around GRI standards, focuses on standardized disclosures of environmental, social, and economic performance, thereby enhancing comparability across firms and industries.

The two approaches differ fundamentally in their foundations. IR adopts a capital-based model, centering on six forms of capital (financial, intellectual, human, social, natural, and manufactured) reflecting an investor-oriented view of value creation. Sustainability reporting, particularly under the GRI framework, takes a stakeholder-based approach, highlighting how corporate activities affect various groups such as employees, communities, and regulators, with a focus on ESG performance.

Although IR provides a holistic view of strategy, governance, and resource allocation, it may not delve deeply into specific environmental or social impacts. In contrast, dedicated sustainability or ESG reports allow organizations to offer more detailed stakeholder-specific information, especially when certain issues, such as environmental impact, are of critical importance.

Ultimately, the choice between IR and sustainability reporting depends on an organization’s strategic objectives and stakeholder expectations [32]. Some firms adopt a hybrid model, combining the broad strategic narrative of IR with the detailed focus of sustainability reporting. This integrated approach can better meet the increasing demand for transparency, accountability, and comprehensive evaluation of long-term performance across diverse stakeholder groups.

The shift in corporate reporting toward greater transparency and the integration of financial and non-financial data has generated increased academic attention to frameworks such as IR, consolidated reporting, and sustainability reporting. Central themes in the literature include materiality, stakeholder engagement, and the impact of reporting practices on the relevance of accounting information and corporate performance [33].

IR has emerged as a leading framework promoting holistic and value-oriented reporting. Sierra-García [34] observed that IR is more commonly adopted by large firms, those with externally verified CSR reports, and firms applying industry-specific standards. The study emphasized the role of the International IR Council (IIRC) and suggested that institutional support can foster wider IR diffusion. Fuente et al. [35] found that IR reduces information asymmetry, particularly in jurisdictions with strong investor protection. Through enhanced transparency, IR enables better-informed decisions by both investors and managers, contributing to market efficiency and long-term planning.

Torelli et al. [36] explored the operationalization of materiality and stakeholder engagement, concluding that alignment with GRI and IIRC guidelines improves disclosure quality. The study stressed that meaningful IR dependson stakeholder dialogue and the prioritization of relevant issues.

Fasan [28] compared traditional annual reports, sustainability reports, and Integrated Reports, noting that consolidated financial statements often overlook ESG dimensions, thus failing to meet stakeholder expectations for holistic value creation narratives.

Hamad et al. [37] examined IR adoption in Malaysia through stakeholder and agency theory lenses. He argued that sustainability reporting enhances transparency and reduces asymmetry, particularly in developing markets. Governance quality and cultural context also emerged as critical factors.

Lai [38] focused on materiality, proposing that it should not be treated as mere disclosure compliance, but strategically aligned with corporate objectives, enhancing engagement and trust building.

Salvioni and Gennari [39] discussed the evolution of corporate communication and IR's theoretical grounding. The IIRC framework was presented as a hybrid between process and content standardization, aiming to integrate materiality and stakeholder interests. She identified three IR adoption patterns, imitative, simplified, and original, and highlighted the trade-off between comparability and flexibility in cross-sector adoption.

IR is increasingly linked to the concept of accounting information relevance, defined by Ohlson [40] as the ability of financial data to support investor decision making. Various empirical studies have addressed whether and how IR enhances this relevance.

In the above context, Baboukardos and Rimmel [41] showed that IR adoption increased earnings relevance but reduced the explanatory power of book value on the Johannesburg Stock Exchange. Cortesi and Vena [42] demonstrated that IR quality boosts accounting relevance in high-asymmetry environments. Loprevite et al. [43] found that IR improves earnings quality and interpretability. Haleem et al. [3] reported that book value, EBIT, and leverage influence firm value in Sri Lankan banks, whereas ROE and size do not. Dey [44] linked board structure to IR adoption in Bangladeshi banks, where value relevance but no effect on liquidity was found. Utami et al. [45] observed that forward-looking IR disclosures increase firm value in Indonesia. Tlili et al. [5] and Coorey et al. [46] found that IR enhances value relevance when combined with financial disclosures. Lebriez et al. [47] argued that, while IR improves ESG disclosure relevance, it may not outperform sustainability reports. Delegkos et al. [48] found that IR, book value, and earnings per share increase firm value in European energy firms [35]. Permatasari and Tjahjadi [49] emphasized the stronger influence of sustainability reporting over IR in certain regions. Jaffar et al. [50] found that specific IR content elements had no significant effect on accounting relevance in Malaysian firms. Lastly, Sun et al. [51] showed that high-quality multi-capital disclosures strengthen profitability and accounting usefulness.

In sum, the literature demonstrates that IR is increasingly associated with the value relevance of accounting information, though the magnitude and direction of its influence remain contingent on institutional settings, market structures, and disclosure quality. While studies in emerging markets often emphasize the role of IR in enhancing earnings quality and forward-looking disclosures, evidence from mature economies suggests that IR’s effect depends strongly on governance practices and the integration of ESG dimensions. Moreover, comparative findings highlight that sustainability reporting can, in certain cases, exert an equal or even stronger influence on accounting relevance, underscoring that IR should not be viewed as a universal solution but rather as part of a broader evolution in corporate transparency. Taken together, these mixed results reinforce the need for further empirical investigation into how IR quality, stakeholder engagement, and materiality disclosures affect the decision usefulness of accounting information in different regulatory and market contexts.

2.5. Research Hypotheses Development

Based on the above literature and prior empirical findings, the following hypotheses are developed:

H1. 

Core financial variables, such as book value and earnings per share (EPS), maintain their value relevance in Integrated Reporting (IR) firms over time.

H2. 

The relevance of accounting information is higher for listed European firms that publish Integrated Reports under the framework compared to those that do not (NIR firms).

H3. 

Materiality disclosures within IR influence the relevance of accounting information.

H4. 

Stakeholder engagement, as reported in Integrated Reports, influences the relevance of accounting information.

H5. 

Integrated Reporting enhances the value relevance of accounting information.

3. Materials and Methods

3.1. Sample Selection

This study examines 100 publicly listed European firms over the 2015–2019 period, following methodological precedents set by prior research [2,3,5,43,44,45,46]. Finally, a large sample of 625 corporate reports (250 IRs, 250 consolidated reports, and 125 sustainability reports) was retrieved from the firms examined.

The selected timeframe enables a focused assessment of post-<IR> Framework adoption practices while avoiding potential distortions associated with the COVID-19 period. It also ensures data availability and comparability across firms and reporting formats. Data were obtained from the Refinitiv Eikon database, which offers reliable financial information for over 72,000 firms, covering about 99% of global market capitalization.

The sample includes two groups: (1) firms that consistently used IR (IR firms) for five years and (2) firms that did not adopt IR (NIR firms). Financial sector firms were excluded due to their distinct financial statements and differing valuation methods, which could distort comparative results.

This focused approach ensures relevant insights into IR practices within non-financial firms and supports the study’s aim of analyzing reporting effectiveness and comparability.

The selection of IR firms was based on the IIRC’s official list of IR reporters, firms that reference the <IR> Framework or are affiliated with related networks. From an initial pool of 173 listed firms, the following applied:

• 80 did not consistently use IR from 2015 to 2019,
• 27 lacked sufficient data in the Refinitiv Eikon database,
• 16 belonged to excluded sectors (financial, insurance, real estate).

The final IR sample included 50 listed firms from 15 countries that met the defined criteria. NIR firms were selected from the same industries and countries as the IR firms, with total assets matched as closely as possible. This ensured a comparable and balanced design. The final NIR group also consisted of 50 firms, allowing for a 1:1 comparative analysis. This careful matching process strengthens the validity of the study’s findings regarding differences in reporting practices.

3.2. Data Extraction Methods and Variables

The second phase of analysis examines the annual reports of selected firms, with a focus on Integrated Reports that include detailed disclosures on materiality, materiality matrices, and stakeholder engagement. ESG scores were to ensure standardized and credible evaluation.

The following key variables were used:

• Materiality: Defined by the IFRS Foundation, materiality concerns the relevance of information for decision making. It helps determine whether certain content should be disclosed in corporate reports.
• Stakeholder Engagement: Also based on the IFRS framework, this involves identifying, understanding, and integrating stakeholder concerns into business decisions, reflecting the quality of interaction between a firm and its stakeholders.
• ESG Score: The ESG score evaluates environmental, social, and governance performance, providing a numerical assessment of a firm’s sustainability and ethical behavior.

More specifically, referring to materiality, to assess how firms apply the materiality principle, a scale from 1 to 6 was developed [10,36], measuring the depth of disclosure:

• No mention of materiality;
• General acknowledgment of the principle;
• Brief explanation of what is considered material;
• Disclosure of key material issues;
• Detailed presentation of the process and outcomes;
• Strong focus on materiality throughout reporting.

Stakeholder involvement in materiality analysis is classified into three levels [36]:

• No engagement;
• Indirect engagement (e.g., surveys, media analysis);
• Direct engagement (e.g., focus groups, workshops).

This framework enables a structured analysis of how organizations integrate stakeholder perspectives and prioritize issues in their reporting.

3.3. Model and Variables

This research adopts the price model, based on the Ohlson [37] framework, as the primary method for determining the relevance of accounting information. The choice aligns with prior studies [3,41,42,43,46,48], which frequently employ this model. The basic form of the model is as follows.

MV_it = c + a₁ BV_it + a₂ EPS_it

(1)

This equation investigates the relationship between book value, earnings per share, and market value of the firm. It is complemented by a set of control variables to account for exogenous factors that might influence market valuation. These include board size, board independence, board gender diversity, net assets, and ROE. Additionally, the model is extended by incorporating two core principles of IR, materiality and stakeholder engagement, to assess their impact on the explanatory power of the model.

To test hypothesis H2, the following extended algebraic model is used.

MV_it = c + a₁ BV_it + a₂ EPS_it + a₃ ESGscore_it + a₄ BoardSize_it + a₅ BoardGender_it + a₆ BoardIndependent_it + a₇ ROE_it
+ a₈ Size_it + e_it

(2)

For the set of hypotheses H1, H3, and H4, the extended model is expressed as follows.

MV_it = c + a₁ BV_it + a₂ EPS_it + a₃ Materiality_it + a₄ StakeholderEngagement_it + a₅ ESGscore_it + a₆ BoardSize_it
+ a₇ BoardGender_it + a₈ BoardIndependent_it + a₉ ROE_it + a₁₀ Size_it + e_it

(3)

Lastly, to test hypothesis H5, the following model is developed.

MV_it = c + a₁ BV_it + a₂ EPS_it + a₃ (BV × Materiality)_it + a₄ (EPS × Materiality) + a₅ (BV × StakeholderEngagement) + a₆ (EPS × StakeholderEngagement) + a₇ (BV × ESG) + a₈ (EPS × ESG) + a₉ Controls + e_it

(4)

Table 1. Variable definitions and measurement.

Variable	Definition and Measurement	Unit/Scale	Typical Value Range
Market Value (MV)	Market value per share (closing stock price) of firm i at the end of period t	Euros per share	~0.50 to 6900
Book Value (BV)	Book value per share of firm i, calculated as equity/number of shares	Euros per share	~0.50 to 627
Earnings per Share (EPS)	Earnings per share before taxes of firm i in period t	Euros per share	~−5 to 124
Materiality	Score indicating the quality and extent of materiality disclosures in IR reports	Index score (0–6)	0 to 6
Stakeholder Engagement	Score reflecting the depth of stakeholder engagement practices disclosed in IR reports	Index score (0–3)	0 to 3
ESG Score (ESGSCORE)	Overall ESG performance score as provided by data vendors (e.g., Refinitiv, Sustainalytics)	Composite index (0–100)	10 to 100
Board Size (BSIZE)	Number of directors on the board	Count	5 to 24
Board Independence (boardind)	Percentage of independent (non-executive) directors	% (Percentage)	30% to 100%
Board Gender	Percentage of female board members	% (Percentage)	0% to 70%
ROE	Return on equity: net income/shareholder’s equity	% (Percentage)	−30% to 130%
Size (sizelog)	Natural logarithm of total assets of firm i	Log (Euros)	~10 to 20
ε	Error term	–	–

summarizes the definition and measurement and unit/scale of all variables used in the regression analysis. Moreover, the inclusion of value range enhances transparency by showing the scale and spread of each variable, which assists in interpreting the coefficients and identifying any potential scale-related distortions.

The examined dataset is structured as a panel, with the firm identifier defined as the unit indicator (FIRM) and the year as the time indicator (YEARS). Prior to estimation, the data were cleaned for missing values and outliers, and variable names were standardized for clarity.

The core model of this study examines the impact of non-financial disclosure indica-tors, specifically materiality and stakeholder engagement, on firm market value, while controlling for key financial and corporate governance variables. The model includes ESG score, return on equity (ROE), firm size (proxied by the natural logarithm of total assets), and governance characteristics such as board size, board independence, and board gender diversity [52]. Although the initial specification was based on a fixed effects framework, the final model adopts a random effects structure with Driscoll–Kraay standard errors, as the Hausman test indicated no statistical evidence against the consistency of the random effects estimator.

The choice of control variables is grounded in theoretical reasoning as follows:

• Board size, board independence, and board gender diversity capture corporate governance structures that may influence both the quality of ESG disclosures and firm valuation. These variables also help mitigate omitted variable bias.
• ROE is a core measure of financial performance, enabling control for firm profitability to isolate the effect of disclosure practices.
• The ESG score serves as a broad indicator of corporate responsibility, ensuring that the effects of materiality and stakeholder engagement are not merely reflections of overall ESG quality.
• Firm size (log of assets) accounts for firm scale, which may affect transparency and market visibility. The logarithmic transformation is used to normalize the distribution.

The model is estimated using a random effects specification with Driscoll–Kraay robust standard errors, which correct for heteroskedasticity, serial correlation, and cross-sectional dependence. The Hausman test yielded an insignificant result (p > 0.05), indicating that the random effects estimator is consistent and, thus, preferred over the fixed effects alternative.

As a robustness check, a dynamic panel model (System GMM) was also estimated to test for potential effects of lagged firm performance (MV {it − 1}) and to capture dynamic behavior in valuation.

3.4. Sample Distribution and Country-Level and Industry-Level Insights

Table 2. Distribution of sample firms by industry.

Industry	Number of Firms
Basic materials	26
Basic consumer goods	10
Non-consumer goods	4
Energy	10
Health	6
Industrials	16
Technology	14
Utilities	14
Total	100

shows the distribution of the 100 sampled firms across eight industry sectors for the five-year period 2015–2019.

As with the country-level sample, the industry-level composition remains stable across all years, ensuring consistency and comparability in the longitudinal analysis. Industry-level distribution shows that the Materials Sector is most represented (26%), followed by Industrials (16%), Utilities and Technology (14%), Basic Consumer Goods (10%), Energy (10%), Healthcare (6%), and Non-Consumer Goods (4%).

Table 3. Distribution of sample firms by country.

Country	Number of Firms
Austria	2
Belgium	4
Denmark	4
Finland	2
France	6
Germany	10
Italy	6
Luxembourg	2
Netherlands	12
Poland	6
Russia	2
Spain	24
Sweden	4
Switzerland	4
United Kingdom	12
Total	100

shows the distribution of the 100 sampled firms across 15 European countries over the five-year period 2015–2019. The sample remains constant across all years, ensuring balanced representation and comparability in the panel data analysis. Spain accounts for the largest share (24%), followed by the Netherlands and the United Kingdom (12% each). Other countries represented include Germany (10%), France, Poland, and Italy (6% each), along with several others such as Belgium, Denmark, and Sweden. This distribution reflects Spain’s strong engagement with IR. The Netherlands follows in adoption rates.

This trend aligns with IIRC data [53], which also highlight a strong presence of Materials Sector firms among IR adopters, which are likely due to the sector’s high exposure to environmental and social impacts, which necessitate greater transparency.

The industry diversity within the sample enables a well-rounded examination of IR practices across different organizational contexts. It provides a basis for analyzing how sector-specific challenges influence the adoption and quality of IR, particularly regarding stakeholder engagement and governance.

4. Results

4.1. Firm Comparisons

4.1.1. Integrated Reports, Sustainability Reports, and Consolidated Reports

For this study, we classified corporate reports into three categories. Integrated Reports combine financial and non-financial information in accordance with the IIRC framework. Consolidated reports mainly include statutory consolidated financial statements, while sustainability reports focus on ESG disclosures, often based on GRI standards. This classification ensures comparability across countries where reporting practices and terminology differ.

Table 4. Integrated Reports, sustainability reports, and consolidated reports.

Variables	Integrated Reports	Consolidated Reports	Sustainability Reports
Materiality	4.12	2.46	4.86
Stakeholder Engagement	2.77	1.73	2.79
ESG score	73.05	56.53	67.46
N (firm reports)	250	250	125

presents a comparative analysis of Integrated Reports, sustainability reports, and consolidated reports based on three key disclosure variables: materiality, stakeholder engagement, and ESG performance scores. The results illustrate significant differences in the depth and quality of reporting across the three formats, offering insights into how each framework approaches transparency, stakeholder communication, and sustainability.

Based on the average scores reported in Table 3, it is observed that sustainability reports provide higher materiality scores (4.86) compared to Integrated Reports (4.12) and consolidated reports (2.46). This indicates that sustainability reports address materiality issues more thoroughly, reflecting a stronger commitment to transparency.

Similarly, the stakeholder engagement score is higher for sustainability reports (2.79) compared to Integrated Reports (2.77) and consolidated reports (1.73). This highlights that sustainability reports place greater emphasis on stakeholder involvement, showcasing the importance of engaging stakeholders in the decision-making process.

Finally, Integrated Reports show the highest ESG score (73.05) compared to om-sustainability reports (67.46) and consolidated reports (56.53). This suggests that firms adopting IR practices perform better in addressing environmental, social, and governance factors, thereby improving their overall sustainability performance.

Differences across report types were statistically tested using the Welch two-sample t-test. The test indicated that the above-mentioned results were statistically significant given that p-values were lower than 0.05.

4.1.2. Reporting for NIR Firms with Sustainability Reports

Table 5. Reporting for NIR firms with sustainability reports.

Variables	Consolidated Reports	Sustainability Reports
Materiality	2.55	4.86
Stakeholder Engagement	1.72	2.79
N (firm reports)	250	125

presents a focused comparison between NIR firms that issue consolidated financial reports and also publish sustainability reports. The comparison centers on the quality of materiality disclosures and stakeholder engagement, two key elements of transparent and stakeholder-responsive reporting.

Statistical differences across report types were assessed using the Welch two-sample t-test. The results were found to be statistically significant, with p-values below the 0.05 threshold for the key disclosure dimensions reported above. More specifically, it was found that firms that produce consolidated reports and sustainability reports have an average materiality disclosure score of 2.55. However, in sustainability reports, this average significantly increases to 4.86, indicating a much more detailed and comprehensive approach to materiality in sustainability reporting.

For firms that issue consolidated reports, the average score for stakeholder engagement disclosure is 1.72. In contrast, sustainability reports show a notable increase in the average score to 2.79. This suggests that sustainability reports place a greater emphasis on stakeholder engagement, reflecting a commitment to involving stakeholders in the reporting process.

4.1.3. Reporting for NIR Firms Without Sustainability Reports

Table 6. Reporting for NIR firms without sustainability reports.

Variables	Consolidated Reports	Sustainability Reports
Materiality	2.45	4.86
Stakeholder Engagement	1.76	2.79
ESG Score	49.59	67.46
N (firm reports)	250	125

compares non-IR firms that issue only consolidated financial reports with those that also issue sustainability reports, focusing on three key indicators: materiality disclosure, stakeholder engagement, and ESG performance. The comparison sheds light on the added reporting value associated with sustainability disclosure practices.

Based on the data provided in the above table, firms that do not issue sustainability reports have an average materiality disclosure score of 2.45, which is slightly lower than the score of firms that provide sustainability reports. This indicates that the level of detail regarding materiality is less comprehensive among firms that forgo sustainability reporting. In terms of stakeholder engagement disclosure, these firms show an average score of 1.76, which is slightly higher than the scores of firms that produce consolidated reports and sustainability reports. This suggests that, while they may not engage in sustainability reporting, they still maintain some level of stakeholder engagement. The overall ESG score for firms that do not issue sustainability reports is 49.59. This score reflects their performance in environmental, social, and governance factors, indicating that these firms may face challenges in achieving higher sustainability standards.

The Welch two-sample t-test confirmed that the observed differences across report types were statistically significant, as all relevant p-values fell below 0.05.

4.2. Model for Determining the Relevance of Accounting Information

4.2.1. Multicollinearity Diagnostics

To assess potential multicollinearity among the independent variables, Variance Inflation Factors (VIFs) and Belsley–Kuh–Welsch (BKW) diagnostics were conducted. All VIF values were below 2.5, indicating no problematic multicollinearity across the predictors as shown in

Table 7. Variance Inflation Factors (VIFs) for independent variables.

Variable	VIF
Book Value	2.35
Earnings Per Share	2.20
Board Size	1.59
Materiality	1.31
Stakeholder Engagement	1.35
ESG Score	1.86
Board Gender	1.32
Board Independence	1.67
ROE	1.21
Size	1.90

. The BKW condition index analysis revealed some higher values (>30), suggesting possible collinearity in specific subsets of variables, particularly among book value, EPS, board independence, stakeholder engagement, firm size, and ESG score. However, no single pair of variables showed excessive joint variance proportions, and the diagnostics support the inclusion of all predictors in the estimation models.

Table 8. Descriptive statistics for IR firms.

Variable	Mean	Median	St. Dev.	Min	Max	N
Market Value	221.00	50.90	485.00	1.41	2650.00	250
Book Value	34.90	13.30	60.80	0.09	426.00	250
Earnings per Share	5.47	1.47	13.40	0.07	104.00	250
Board Size	11.40	11.00	3.70	5.00	24.00	250
Board Gender	2.98	3.00	2.16	0.00	13.00	250
Board Independence	6.29	6.00	3.47	0.00	20.00	250
ESG Score	73.10	76.60	14.50	29.70	93.50	250
ROE	17.50	14.60	15.90	−30.00	139.00	250
Size	10.30	10.20	0.56	8.92	11.30	250
Materiality	4.12	4.00	1.52	1.00	6.00	250
Stakeholder Engagement	2.77	3.00	0.46	1.00	3.00	250

provides the descriptive statistics referring to firms that consistently used IR (IR firms).

The descriptive statistics reveal notable heterogeneity in the financial fundamentals and governance attributes of the sampled IR firms:

• Market value (MV) shows a high standard deviation and a large gap between mean and median, indicating positive skewness due to a few very large firms.
• BOOKVALUE and EPS similarly exhibit high dispersion, reflecting substantial differences in financial performance and capital structure across firms.
• Board size (BSIZE) averages around 11 members, which is consistent with typical corporate governance structures in Europe.
• Board gender diversity and board independence vary considerably, with several firms exhibiting low or zero values, which may weaken the governance signaling effect in less mature IR adopters.
• The ESG score is relatively high on average (mean = 73.1), suggesting an overall strong environmental, social, and governance performance among IR adopters.
• ROE presents a wide range (from −30% to +139%), indicating volatile profitability profiles.
• Size (measured in logarithmic terms) is moderately concentrated, with the mean at 10.3, corresponding to firms of medium-to-large scale.
• The materiality and stakeholder engagement scores are generally favorable, with most firms scoring 3 or above, reflecting moderate-to-high levels of disclosure quality in line with the principles of Integrated Reporting.

Figure 1 presents the correlations between the IR firms’ variables. Based on this figure, we obtain the following:

• Financial fundamentals, especially EPS, demonstrate strong and statistically significant associations with market value, reinforcing their role in equity valuation.
• Book value and ROE also show moderate positive correlations, aligned with traditional accounting-based valuation perspectives.
• The relationship between non-financial disclosures and market value is mixed.
• The ESG score shows a weak but positive correlation, indicating investor concerns over non-substantive disclosures.
• Board size and firm size appear to negatively affect valuation, suggesting that governance structure and scale might not be universally perceived as value-enhancing.

4.2.2. Differentiated Methodological Approach per Hypothesis

To test the research hypotheses, a differentiated methodological approach was applied depending on the scope and dataset of each hypothesis. The core research strategy focuses on firms that publish Integrated Reports (IR firms), examining the value relevance of accounting information and the role of qualitative disclosures.

For hypotheses H1, H3, and H4, the full sample of IR firms was employed, and panel estimators (random effects with Driscoll–Kraay standard errors and System GMM) were applied. These models incorporated both financial variables (earnings per share, book value, ROE, size) and qualitative disclosure indicators (materiality and stakeholder engagement). The inclusion of ROE and size was retained based on multicollinearity diagnostics (VIF and BKW tests), which indicated no statistical interference among variables within the IR subset.

For hypothesis H5, which examines whether Integrated Reporting enhances the value relevance of accounting information, the model was extended to include interaction terms between the core accounting variables (book value, earnings per share) and the qualitative IR disclosures (materiality, stakeholder engagement, and ESG scores). This specification captures whether non-financial disclosures strengthen or weaken the explanatory power of financial fundamentals, thereby providing a more comprehensive test of IR’s contribution to value relevance.

This strategy ensures both theoretical alignment with the Ohlson (1995) [40] valuation framework and statistical robustness, allowing for a nuanced assessment of how Integrated Reporting and its qualitative dimensions influence the relationship between accounting information and market value.

4.3. The Impact of Integrated Reporting, Materiality, and Stakeholder Engagement on Accounting Information Relevance

4.3.1. Random Effects and System GMM Estimations

Table 9. Effect of qualitative ESG disclosures (materiality and stakeholder engagement) on firm value (random effects model).

Variables	Coefficient	Std. Error	p-Value 1
Constant	827.538	(1067)	0.4381
Book Value	0.525946	(0.858)	0.5403
EPS	13.9303	(6.187)	0.0244 **
Board Size	−5.76395	(5.395)	0.2854
Board Gender	10.2299	(6.073)	0.0921 *
Board Independence	−8.31664	(4.241)	0.0499 **
ESG Score	1.68459	(1.532)	0.2716
ROE	1.63465	(0.652)	0.0122 **
Size (log)	−70.0647	(114.4)	0.5403
Materiality	18.2999	(4.223)	<0.0001 ***
Stakeholder Engagement	−43.9369	(31.79)	0.1670

¹ * p < 0.10; ** p < 0.05; *** p < 0.01.

and

Table 10. GMM model—diagnostic tests.

Variables	Model 1 (Lag 1.1) 1	Std. Error	Model 2 (Lag 1.1) 1	Std. Error
MV(−1)	0.885 ***	(0.031)	0.863 ***	(0.031)
Book Value	0.275 **	(0.135)	0.444 **	(0.214)
EPS	2.291 *	(1.230)	—	—
ROE	0.657 *	(0.344)	0.948 ***	(0.340)
Materiality	3.979	(6.10)	3.799	(5.44)
Stakeholder Engagement	−5.540	(8.40)	−12.84	(8.38)
ESG Score	0.506	(0.75)	0.99	(0.95)
Board Size	−0.145	(2.52)	−0.726	(2.69)
Board Independence	−0.227	(2.23)	−0.184	(2.32)
Board Gender	−4.46491	(3.00)	−3.463	(3.53)
Size Log	−10.20	(19.67)	−17.71	(24.58)
Constant	74.36	(185.31)	142.33	(227.97)

¹ * p < 0.10; ** p < 0.05; *** p < 0.01.

present the results from the random effects and System GMM estimations regarding the impact of qualitative ESG disclosures, materiality, and stakeholder engagement on firm value. The model controls for corporate governance and financial performance variables.

The Hausman specification test yielded a p-value of 0.211, which is above the conventional 0.05 threshold. This implies that the null hypothesis of consistency of the random effects estimator cannot be rejected, and, hence, the random effects model is deemed appropriate for our analysis.

Using the random effects model with Driscoll–Kraay standard errors, we find that materiality disclosures remain positively and significantly associated with market value (β = 18.30, p < 0.001), supporting the view that investors reward firms providing meaningful ESG-related information.

Furthermore, EPS (β = 13.93, p < 0.05), ROE (β = 1.63, p < 0.05), and board independence (β = −8.32, p < 0.05) are also statistically significant, indicating that both traditional financial metrics and governance quality still carry explanatory power under this specification. Board gender diversity (β = 10.23, p < 0.10) shows weak significance, suggesting a possible perception of diversity as a positive governance signal.

Interestingly, while book value and firm size (log of assets) are not statistically significant, the sign and direction remain consistent with expectations.

These findings suggest that the market valuation of firms integrates both financial and non-financial information. The random effects specification allows us to account for unobserved heterogeneity across firms, assuming this is uncorrelated with the regressors, which is a plausible assumption in our case given the Hausman results.

4.3.2. System GMM Estimation

To account for potential endogeneity and the dynamic nature of market valuation, a System GMM (Arellano-Bover/Blundell-Bond) estimator was applied. This approach incorporates the lagged dependent variable (MV_t⁻¹), thus capturing the influence of historical firm performance on current valuation outcomes.

The results reveal strong dynamic persistence, as the coefficient of MV_t⁻¹ is both statistically significant and economically meaningful (β = 0.885, p < 0.001), which is consistent with Ohlson’s [37] valuation model. This finding reinforces the notion that past firm value is a key determinant of current market perceptions.

Within this dynamic framework, book value becomes statistically significant (p = 0.0401), while EPS shows marginal significance (p = 0.0640). These outcomes indicate that the effects of accounting fundamentals may be better captured in a dynamic setting, suggesting cumulative or indirect mechanisms through which these variables affect valuation.

In contrast, the non-financial disclosure variables, materiality and stakeholder engagement, lose statistical significance. This may imply that such ESG-related disclosures have a more immediate or symbolic impact that fades over time or is absorbed by other firm-level characteristics in the long run.

To assess the robustness of the GMM specification, a second model was estimated excluding EPS. This test aimed to determine whether the significance of book value and other co-variates was contingent upon the inclusion of EPS.

Key findings from the robustness test include the following:

• Book value remained statistically significant (p = 0.044), affirming its relevance across specifications.
• ROE increased in significance, indicating that profitability is a consistently robust determinant of market value.
• Materiality and stakeholder engagement remained statistically insignificant but exhibited stable coefficients, suggesting robustness in their neutral effect.
• Overall, the core relationships persist even when excluding a key financial variable, reinforcing the validity and stability of the GMM results.

Based on the above analyses, the research hypotheses H1, H3, and H4 are summarized as below:

• H1 is supported; in the dynamic panel (GMM) model, both book value (p = 0.0401) and EPS (p ≈ 0.0640) show statistical significance, indicating persistent influence on firm value when accounting for firm history.
• H3 is supported; in the random effects model with Driscoll–Kraay standard errors, materiality exhibits a strong and statistically significant positive association with market value (p < 0.001), confirming its relevance to investors.
• H4 is not supported; although the coefficient is negative in both the random effects and GMM models, stakeholder engagement is not statistically significant in either specification (p = 0.167 in random effects, p > 0.05 in GMM), suggesting limited explanatory power in its current disclosure form.

4.3.3. Model Comparison and Interpretation

The comparison between the random effects and dynamic panel (System GMM) models reveals complementary insights into how both financial and non-financial information shape firm valuation within the context of Integrated Reporting (IR).

The random effects model, supported by the Hausman test (p = 0.211), is considered consistent and appropriate for the data structure. Under this specification, materiality disclosures emerge as the only ESG-related factor with a statistically significant and positive association with market value. This finding suggests that investors place greater value on disclosures that are focused, decision-useful, and aligned with the firm’s strategic priorities. In contrast, stakeholder engagement does not attain statistical significance, implying that such disclosures may be perceived as symbolic or lacking direct relevance to firm performance.

On the other hand, the System GMM model addresses potential endogeneity and dynamic effects by incorporating the lagged dependent variable. The lagged market value (MV_t⁻¹) is highly significant (p < 0.001), indicating strong persistence in firm valuation over time. Within this dynamic framework, both book value and earnings per share (EPS) regain statistical significance, reinforcing their long-term informational relevance. However, materiality and stakeholder engagement lose their statistical significance in this model, suggesting that their influence may be short-lived, context-specific, or mediated through internal performance dynamics and investor expectations.

In sum, the random effects model captures the cross-sectional impact of ESG disclosure quality and, particularly, materiality on firm valuation, while the GMM model highlights the enduring role of financial fundamentals and the temporal nature of valuation processes. The integration of both approaches provides a more nuanced understanding of the drivers of firm value.

4.4. The Effect of Integrated Reporting on the Value Relevance of Accounting Information

Table 11. Interaction terms of book value and EPS with IR disclosures (random effects model).

Variables	Coefficient	Std. Error	p-Value 1
Constant	571.9	(921.3)	0.5247
Book Value	1.589	(4.511)	0.7246
EPS	3.973	(20.09)	0.8432
Board Size	−6.072	(5.196)	0.2425
Book Value × Materiality	−0.291	(0.129)	0.0218 **
EPS × Materiality	2.985	(1.097)	0.0065 ***
Book Value × Stakeholder engagement	−0.097	(1.614)	0.952
EPS × Stakeholder Engagement	−5.227	(6.113)	0.3925
Book Value × ESG	0.0087	(0.018)	0.6285
EPS × ESGt	0.0624	(0.196)	0.7509
Board Independence	−8.274	(3.694)	0.025 **
ROE	1.781	(0.423)	<0.0001 ***
Size	−37.09	(89.59)	0.6789

¹ ** p < 0.05; *** p < 0.01.

reports the results of the interaction model, where accounting variables (book value, EPS) are interacted with qualitative IR disclosures (materiality, stakeholder engagement, ESG scores).

To test hypothesis H5, which posits that Integrated Reporting enhances the value relevance of accounting information, it was necessary to include interaction terms between the core accounting variables (book value, EPS) and qualitative IR disclosures (materiality, stakeholder engagement, ESG scores). The rationale behind this approach is that value relevance is not only captured through the direct effect of disclosures on market value, but primarily through the extent to which these disclosures strengthen or weaken the explanatory power of accounting measures.

The results reveal that materiality has a mixed but statistically significant effect: the interaction EPS × Materiality is positive and significant, indicating that materiality disclosures enhance the relevance of earnings per share for explaining market value. In contrast, the negative and statistically significant BV × Materiality interaction suggests that the presence of materiality disclosures reduces the role of book value as a determinant of market value, as investors seem to rely more heavily on other information, such as earnings. The interactions with stakeholder engagement and ESG scores are not statistically significant.

The explanatory power of the model, as reflected in the R², improves only marginally (0.362 compared to 0.357 in the models without interactions). This indicates that the interaction terms do not substantially increase the predictive capacity of the model; however, the statistical significance and direction of the coefficients provide strong evidence of the differentiated role of materiality.

Overall, the findings provide partial support for H5. Integrated Reporting appears to enhance the value relevance of accounting information primarily through the dimension of materiality, while no comparable effect is observed for other qualitative disclosures. The partial confirmation of the hypothesis suggests that the mere adoption of IR is not sufficient; rather, the quality and substance of disclosures are critical to improving the usefulness of accounting information for the market.

5. Discussion and Conclusions

This study examined the relationship between business strategies and corporate reporting practices by comparing IR, sustainability reporting, and consolidated financial reports across a balanced panel of 100 European listed non-financial firms. By focusing on materiality, stakeholder engagement, and ESG performance, the analysis contributes to the growing body of research on the value relevance of non-financial disclosures [41,42].

The results from the random effects estimation indicate that materiality disclosures exert a strong and statistically significant positive influence on market value, confirming that investors reward the integration of financially material ESG issues into corporate reporting. This finding aligns with the IIRC’s emphasis on decision-useful disclosure, as materiality appears to reduce information asymmetry and enhance the relevance of financial fundamentals. In contrast, stakeholder engagement disclosures do not achieve statistical significance in either specification, suggesting that markets do not perceive such narratives as directly linked to firm performance unless they are explicitly tied to measurable strategic outcomes.

The dynamic specification using the System GMM estimator highlights the strong persistence of firm valuation, with lagged market value emerging as highly significant and economically meaningful. Within this framework, book value remains statistically significant, while earnings per share display only marginal significance, reflecting their overlapping and sometimes transitory informational role. Notably, materiality and stakeholder engagement lose their explanatory power in the dynamic model, which implies that their influence may be short-lived or overshadowed by fundamental financial drivers in the long run.

Overall, the results highlight the differentiated role of Integrated Reporting in shaping the value relevance of accounting information. Financial fundamentals (book value and earnings per share) remain the most robust determinants of market value, consistent with the Ohlson [37] valuation model. Among qualitative disclosures, only materiality demonstrates a statistically significant and positive association with firm value, whereas stakeholder engagement and ESG scores do not attain significance. Interaction models further reveal that materiality strengthens the relevance of earnings while reducing reliance on book value, underscoring its selective but meaningful contribution to valuation. These findings provide partial support for H5 and reinforce the view that the usefulness of IR depends not on its adoption per se, but on the quality and substance of the disclosures it contains.

Like all empirical research, this study faces several limitations that frame the interpretation of its results and suggest avenues for further inquiry.

First, hypothesis H2, which aimed to compare the value relevance of accounting information between IR and non-IR firms, could not be reliably tested due to severe multicollinearity between book value and earnings per share. Although alternative specifications and robustness checks were performed, the results remained unstable; therefore, this aspect is acknowledged as a limitation rather than part of the main findings.

Second, the temporal scope is confined to 2015–2019, a period chosen to capture a mature stage of IR adoption while avoiding distortions from the COVID-19 pandemic. While this enhances internal validity, it limits long-term generalizability, and future studies covering 2020–2024 under the CSRD and ESRS frameworks may yield different results.

Third, the geographic scope on European listed firms provides a coherent regulatory environment but restricts generalization to other regions with different institutional settings. Finally, while firm-level governance and ESG variables are included, macroeconomic indicators and industry-specific risks were excluded to preserve comparability, which may raise omitted variable concerns. Future studies should address these limitations through extended datasets, cross-country comparisons, and alternative econometric designs such as difference-in-differences or instrumental variables.

Fourth, stakeholder engagement was assessed solely on the basis of corporate disclosures, which may not fully capture the quality, authenticity, or outcomes of engagement activities. This is a common limitation in disclosure-based research [54]. While this paper focuses on the informational value of disclosures themselves, future studies could complement content analysis with stakeholder interviews or surveys to validate the alignment between reported and actual engagement practices. While the present analysis focuses on the informational value of disclosures, future studies could complement content analysis with stakeholder interviews or surveys to validate the alignment between reported and actual engagement practices. Similarly, the use of ESG composite scores limits the ability to detect dimension-specific effects. Although composite scores ensure comparability, disaggregating them into environmental, social, and governance components may reveal more nuanced relationships with firm value.

Building on these limitations, several avenues for future research emerge. First, extending the analysis to 2020–2024 would capture both the impact of the COVID-19 pandemic and the introduction of the CSRD and ESRS, which have reshaped reporting requirements by introducing double materiality and stricter assurance provisions. Such an extension would allow for an assessment of whether the relevance of IR disclosures (particularly materiality and stakeholder engagement) has changed under a more standardized regulatory environment.

Second, mixed-methods approaches combining quantitative disclosure analysis with qualitative insights (e.g., interviews, surveys, case studies) could provide a deeper understanding of why materiality disclosures are consistently valued by markets while stakeholder engagement remains less influential.

Third, sector-specific analyses are warranted, especially in industries where social license to operate is critical (e.g., mining, energy, pharmaceuticals), as the value implications of ESG disclosures may vary significantly across contexts [55,56].

Fourth, the role of third-party assurance on non-financial disclosures merits closer examination, as external assurance may enhance the credibility of ESG information and strengthen its value relevance [57].

Finally, methodological innovations including textual analysis of disclosure specificity, sentiment, and forward-looking orientation could help distinguish between generic symbolic reporting and decision-useful narratives, providing further clarity on why certain ESG disclosures are priced by investors while others are not.

Ultimately, the findings underscore that the adoption of Integrated Reporting is not merely a matter of disclosure volume, but of disclosure substance. Materiality emerges as a key driver of value relevance, while financial fundamentals (book value, earnings) retain their enduring explanatory power. This suggests that IR can contribute to sustainable value creation only when it embeds financial material ESG considerations within a credible strategic narrative. In this sense, IR functions both as a driver and as an enabler of green business strategies, enhancing transparency, accountability, and investor confidence while supporting the broader transition toward sustainability-oriented markets [58,59].