Challenges of ESG Ratings and Financial Reporting

A special issue of International Journal of Financial Studies (ISSN 2227-7072).

Deadline for manuscript submissions: 30 April 2027 | Viewed by 608

Editors


E-Mail Website
Guest Editor
Newcastle University Business School, Newcastle University, Newcastle upon Tyne NE4 5TG, UK
Interests: ESG; behavioural finance; corporate finance; capital structure; mergers and acquisitions

E-Mail Website
Guest Editor
Queen's Business School, University Rd, Belfast BT7 1NN, UK
Interests: corporate governance; corporate disclosures; external auditing; textual analysis; internal controls; corporate failure

Special Issue Information

Dear Colleagues,

The increasing importance of Environmental, Social, and Governance (ESG) ratings in financial markets has created new challenges for investors, regulators, and corporations. While ESG ratings are now a key component of investment and financing decisions, their inconsistent methodologies, data quality issues, and lack of transparency raise concerns about their reliability and implications for financial reporting.

This Special Issue, “Challenges of ESG Ratings and Financial Reporting,” aims to advance understanding of how ESG ratings interact with financial reporting practices and affect corporate finance decisions. We invite submissions that provide empirical or theoretical insights into how ESG information is integrated into corporate disclosures, valuation, and capital allocation.

We particularly welcome research addressing (but not limited to) the following:

  • The relationship between ESG ratings, firm value, and the cost of capital.
  • The role of ESG disclosure transparency in improving market efficiency.
  • The impact of ESG information on investment decisions and market reactions.
  • Methodological and measurement challenges in ESG ratings and financial reporting.
  • The influence of governance and regulatory frameworks on ESG disclosure quality.
  • Cross-country evidence on ESG ratings and financial transparency in capital markets.

This Special Issue encourages contributions from scholars in corporate finance, financial accounting, and sustainable finance, aiming to bridge the gap between ESG assessment and financial decision-making.

Dr. Yousry Ahmed
Dr. Mohamed Elsayed
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 250 words) can be sent to the Editorial Office for assessment.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-anonymized peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. International Journal of Financial Studies is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • ESG ratings
  • financial reporting
  • transparency
  • corporate finance
  • firm value
  • cost of capital
  • sustainable finance

Benefits of Publishing in a Special Issue

  • Ease of navigation: Grouping papers by topic helps scholars navigate broad scope journals more efficiently.
  • Greater discoverability: Special Issues support the reach and impact of scientific research. Articles in Special Issues are more discoverable and cited more frequently.
  • Expansion of research network: Special Issues facilitate connections among authors, fostering scientific collaborations.
  • External promotion: Articles in Special Issues are often promoted through the journal's social media, increasing their visibility.
  • Reprint: MDPI Books provides the opportunity to republish successful Special Issues in book format, both online and in print.

Further information on MDPI's Special Issue policies can be found here.

Published Papers (1 paper)

Order results
Result details
Select all
Export citation of selected articles as:

Research

20 pages, 348 KB  
Article
ESG Performance and Firm Value: Evidence on Nonlinear Effects and Individual ESG Dimensions from European Union Listed Companies
by Algirdas Justinas Staugaitis and Česlovas Christauskas
Int. J. Financ. Stud. 2026, 14(8), 223; https://doi.org/10.3390/ijfs14080223 - 19 Aug 2026
Viewed by 163
Abstract
This study examines both the linear and nonlinear relationship between overall Environmental, Social, and Governance (ESG) performance and firm market value, while also comparing the effects of the Environmental, Social, and Governance dimensions in publicly listed companies from the European Union. The analysis [...] Read more.
This study examines both the linear and nonlinear relationship between overall Environmental, Social, and Governance (ESG) performance and firm market value, while also comparing the effects of the Environmental, Social, and Governance dimensions in publicly listed companies from the European Union. The analysis is based on an unbalanced panel of 1706 non-financial listed firms covering the period 2011–2025. Firm value is primarily measured by Tobin’s Q, with the Price-to-Book ratio and Return on Assets (ROA) used for robustness analysis. The results indicate a significant U-shaped relationship between overall ESG performance and firm value, suggesting that the value-enhancing effects of ESG emerge only after firms achieve sufficiently high sustainability performance. In contrast, the individual Environmental, Social, and Governance dimensions in most cases do not exhibit significantly different effects on firm market value. Additional subsample analyses reveal that the nonlinear relationship is more pronounced among Western European firms and companies with lower greenhouse gas emissions intensity. The findings suggest that investors primarily evaluate firms based on their overall sustainability profile rather than individual ESG dimensions. The study contributes to the ESG literature by providing further evidence of the nonlinear nature of the ESG–firm value relationship and by comparing the explanatory power of aggregated and disaggregated ESG measures within the European Union’s harmonized sustainability reporting environment. Full article
(This article belongs to the Special Issue Challenges of ESG Ratings and Financial Reporting)
Back to TopTop