Search Results (111)

The loss of urban nature and declining biodiversity pose significant challenges to the sustainability of cities and the well-being of their inhabitants. Existing initiatives such as the Taskforce on Nature-related Financial Disclosures (TNFD) have begun to address ecological risks in real estate, but they still address mental health, biodiversity, and social equity only partially as non-financial values. This article adopts an integrative review and conceptual framework approach. It develops a nature-based accounting framework for urban real estate that combines principles of traditional Chinese architecture with contemporary sustainability metrics. The study reviews ecological theory, nature-related accounting, and evidence on biodiversity and mental health, and then undertakes an operational mapping from classical site planning, courtyard design, water management, and community structures to measurable indicators that remain compatible with TNFD-aligned reporting. The framework groups indicators into three main domains: nature-related conditions, ecosystem service pathways, and human well-being outcomes. It also outlines simple procedures for normalising and combining these indicators at the project scale to support assessments of biodiversity, microclimate, mental health, and basic aspects of cost-effectiveness and social accessibility in urban real estate projects. The paper provides a structured, heritage-informed basis for future applications and empirical testing, helping to incorporate biodiversity, mental health, and equity into urban real estate assessment. Full article

In the context of green transformation, climate change and its economic implications are attracting increasing attention. Based on the Trade-off Theory framework, this study examines how climate risk affects firms’ shadow banking activities in emerging markets. This study focuses on emerging market economies, using a panel dataset of Chinese A-share non-financial listed firms from 2007 to 2023 to systematically examine the relationship between climate risk and shadow banking activities, that is, financing conducted outside the formal banking system. The empirical findings reveal that climate risk significantly dampens the shadow banking activities of non-financial firms. Further mechanism analysis suggests that this effect operates through two key channels: the weakening of corporate resilience and adjustments in capital structure decisions. Moreover, the analysis uncovers heterogeneous impacts of climate risk on shadow banking, depending on the quality of information disclosure, industry characteristics, and the degree of financing constraints. This research provides new insights into the evolution of corporate financial behavior under climate risk and offers empirical evidence to support firms in optimizing their financial strategies and enhancing their financial risk management capabilities. Full article

This study investigates the relationship between investor sentiment (IS) and trust in sustainability reports (TSRs) in Egypt, which is an emerging market that has recently strengthened its sustainability disclosure practices. Drawing on behavioral finance and disclosure theory, this study also examines the moderating role of financial literacy (FL) in shaping this relationship. A quantitative, questionnaire-based survey was presented to 328 individual investors who are familiar with sustainability and ESG reporting. The data were analyzed using descriptive statistics, reliability tests, and both simple and hierarchical regression analysis. The results indicate that IS has a strong and significant positive effect on trust in sustainability reports, with market optimism and emotional influence emerging as the most influential dimensions. Furthermore, the hierarchical regression results reveal that FL significantly strengthens the relationship between IS and TSR, indicating that, within the present sample, more financially literate investors translate sentiment into more informed and rational trust judgments. These findings contribute to the accounting and sustainability reporting in the literature by demonstrating that trust in non-financial disclosures is not only shaped by reporting practices but is also heavily influenced by investor psychology and financial competence. This study highlights the importance of enhancing both disclosure quality and investor financial literacy to strengthen confidence in sustainability reporting in emerging markets. Full article

This study analyses disclosures on materiality in non-financial information (NFI) reporting by examining their likely explanatory factors, including entities’ financial or structural characteristics, governance features, and contextual factors, grounded in a set of relevant theories. Based on archival research and content analysis, this study uses consolidated NFI reports from 2021 of entities listed in the main Euronext indices. The descriptive analysis reveals that while 71% of companies present a materiality matrix, only about half (50%) meet all eight criteria of materiality disclosure, with double materiality being addressed by just 16%. The regression results show that the level of materiality disclosure is significantly and positively associated only with the size of the board of directors, whereas other expected relationships, such as those with firm size, profitability, or debt, were not statistically significant, challenging traditional assumptions from stakeholders, agency, and positive accounting theories. These findings suggest that governance structures may play a more decisive role in transparency regarding materiality than the entities’ financial or structural characteristics. This research contributes to both the academic literature and practice by identifying explanatory factors and empirical patterns in materiality disclosure in NFI reporting, which may be relevant for standard-setting bodies, regulators, auditors, and stakeholders. Full article

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. Full article

This study investigates whether the presence of an ESG committee in promoting sustainable practices is symbolic or substantive to creditors when setting costs. With unbalanced panel data, the study used 1518 company-year observations from non-financial firms listed on the IDX period 2018 to 2023. The hypothesis testing of this study was conducted by using moderated regression analysis (MRA). Hypothesis testing using a fixed effects model indicates that ESG disclosure can significantly lower the cost of debt. The role of the ESG committee is to act as a quasi-moderator for the relationship between ESG disclosure and the cost of debt. While the presence of an ESG committee can significantly reduce the cost of debt, the committee itself weakens the relationship between ESG disclosure and the cost of debt. Therefore, these findings suggest that the role of the ESG committee in promoting ESG disclosure to creditors in determining the cost of debt is becoming more substantive, moving away from a merely symbolic role that focuses on maintaining the company’s reputation and strengthening substantive management to control governance risk. The results of this study are expected to contribute to formulating policies that strengthen the role of ESG committees in improving corporate governance and sustainability practices by providing stakeholders with important and relevant ESG disclosure information for investment and funding decisions. Full article

This study aims to examine how organizations disclose Circular Economy (CE) information through multimodal communication. While conventional reporting often fails to capture the complexity of CE, we adopt a Multi-Discourse Analysis (MDA) framework that integrates textual, numerical, visual, spatial, and sensory dimensions. The methodology involves a qualitative content analysis of non-financial reports from 13 Italian electronics firms, a sector with a high environmental impact and low circularity. Key findings show a dominance of textual narratives and increasing use of numerical indicators aligned with the European Union Taxonomy. Visual elements are underutilized and largely symbolic, reflecting a product-centric rather than systemic view of circularity. The spatial dimension, operationalized through ESRS E5 categories, reveals fragmented CE integration and limited forward-looking financial disclosures. The sensory dimension, assessed via integrated thinking, highlights a polarization between firms that embed CE into strategy and those that do not. Recommendations are provided to enhance the clarity, comparability, and strategic relevance of CE disclosures, with implications for corporate practice, regulatory development, and future research. Overall, this study advances the understanding of CE by applying MDA to reveal the interplay of communicative modes, the gaps in systemic representation, and the degree of strategic integration in sustainability reporting. Full article

This study investigates the impact of environmental, social, and governance (ESG) disclosure on value creation in a balanced panel of 100 non-financial Sharia-compliant firms listed on the Saudi Stock Exchange over the period 2014–2023. The analysis employs a combination of econometric techniques, including fixed effects models with Driscoll–Kraay standard errors, Pooled Ordinary Least Squares (POLS) with Driscoll–Kraay standard errors and industry and year dummies, and two-step system generalized method of moments (GMM) estimation to address potential endogeneity and omitted variable bias. Value creation is measured using Tobin’s Q (TBQ), Return on Assets (ROA), and Return on Equity (ROE). The models also control for firm-specific variables such as firm size, leverage, asset tangibility, firm age, growth opportunities, and market capitalization. The findings reveal that ESG disclosure has a positive and statistically significant effect on firm value across all three performance measures. Furthermore, firm size significantly moderates this relationship, with larger Sharia-compliant firms experiencing greater value gains from ESG practices. These results align with agency, stakeholder, and signaling theories, emphasizing the role of ESG in enhancing transparency, reducing information asymmetry, and strengthening stakeholder trust. The study provides empirical evidence relevant to policymakers, investors, and firms striving to achieve Saudi Arabia’s Vision 2030 sustainability goals. Full article

This study examines the influence of ethical leadership on corporate sustainability and financial performance, highlighting the moderating effect of firms’ commitment to the United Nations Sustainable Development Goals (SDGs). Utilizing panel data from 420 automotive companies spanning 2015 to 2024, the analysis applies the System Generalized Method of Moments (GMM) to control for endogeneity and unobserved heterogeneity. All data were gathered from the Refinitiv Eikon Platform (LSEG) and annual reports. Panel GMM regression is used to estimate the relationship to deal with the endogeneity problem. The results reveal that ethical leadership significantly improves corporate sustainability performance—measured by ESG scores from Refinitiv Eikon and Bloomberg—as well as financial indicators like Return on Assets (ROA) and Tobin’s Q. Additionally, firms that demonstrate breadth (the range of SDG-related themes addressed), concentration (the distribution of non-financial disclosures across SDGs), and depth (the overall volume of SDG-related information) in their SDG disclosures gain greater advantages from ethical leadership, resulting in enhanced ESG performance and higher market valuation. This study offers valuable insights for corporate leaders, policymakers, and investors on how integrating ethical leadership with SDG alignment can drive sustainable and financial growth. Full article

This study explores how corporate reputation and regulation influence the quantity and quality of non-financial information (NFI) disclosure. While internal drivers of NFI reporting are well-studied, external pressures remain underexplored. Analyzing Ibex35 firms (2015–2019) during Spain’s adoption of Directive 2014/95/EU, the study uses panel data analysis to assess the impact of reputation and regulation on NFI reporting. The findings show that highly reputed firms disclose more extensive and higher-quality NFI, while regulatory changes significantly improve both variables of NFI reporting. Thus, firms go beyond mere compliance. By distinguishing between quality and quantity, the study clarifies conflicting prior findings and highlights the complementary roles of reputation and regulation in fostering transparency. The results offer valuable insights for managers and policymakers, enhancing stakeholder trust and the effectiveness of regulation in promoting corporate transparency. Full article

In the context of the intensifying global climate change and its associated risks, the interaction between corporate climate risk disclosure and analyst forecasting behavior has become a pivotal scholarly focus in sustainability research. This study uses a sample of 20,978 firm-year observations from non-financial Chinese A-share listed companies over the period 2007–2021 to examine the impact of corporate climate risk disclosure on analyst coverage, applying ordinary least squares (OLS) regression. The results reveal a positive relationship between corporate climate risk disclosure and analyst coverage. This positive effect is more prominent in firms with lower annual report readability, a higher proportion of independent institutional investors, and in contexts involving team analysts or analysts from large brokerage firms. Mechanism analysis reveals two pathways for increased analyst coverage: increasing institutional investors’ demand for information and reducing analysts’ reliance on on-site research to uncover private information. Further research reveals that severe and chronic risk disclosures attract more analyst coverage than transition risk disclosures. Additionally, climate risk disclosure can significantly reduce analyst forecast dispersion and long-term forecast bias. Overall, this study holds important implications for improving corporate climate risk disclosure practices and enhancing analysts’ role as information intermediaries. Full article

This article examines whether the presentation of integrated reports (IRs), the external assurance of non-financial information, and the use of auditing standards affect market liquidity and the accuracy of earnings per share forecasts in the Chilean market following the publication of the International IR Framework. Using ordinary least squares estimations, results show that IRs significantly reduce information asymmetry, thereby improving market liquidity. This effect is reinforced when non-financial information is externally assured, particularly under the ISAE3000 standard. However, neither IRs nor external assurance significantly impact financial analysts’ earnings forecast accuracy, suggesting that such information serves a complementary role in their evaluations. This study contributes to the literature by providing empirical evidence on the role of IRs and assurance in emerging economies, emphasizing their effectiveness in enhancing transparency and liquidity. The findings have direct implications for companies, as they suggest that adopting IRs and obtaining external assurance can strengthen market perceptions and investor confidence, particularly when using the ISAE3000 standard. For regulators, the results highlight the potential benefits of promoting standardized sustainability disclosures and assurance mechanisms to foster transparency in capital markets. Investors, in turn, can use IR quality and assurance as signals of corporate credibility and long-term value creation. Full article

The readability of a firm’s financial disclosure has long been used as a variable to predict firm performance and explain investors’ decision-making in the market. We investigate whether readability is informative for non-financial disclosure. Based on signaling theory and a sample of over 10,000 ESG reports released by Chinese public firms, this study explores how readability moderates the relationship between ESG ratings and firm value. Empirical evidence highlights that ESG ratings have a greater influence on firm value for firms releasing more readable ESG reports. The moderating effect of disclosure readability is weakened by firms’ growth potential and institutional ownership due to the extent of information asymmetry in the market. These results are robust to the use of alternative readability measures. This paper contributes to the literature by emphasizing the importance of textual characteristics in sustainability reporting and providing actionable insights for practitioners and policymakers. Full article

The aim of this article is to analyse the disclosure of financial and non-financial information in an ESG report on the energy sector in Poland, using the example of the Enea Group, i.e., information on the following: (1) the structure of the Enea Group, its business model, and created values; (2) the impact of the energy sector on the natural environment; (3) environmental protection costs in correlation with the calculation of electricity prices and rates (financial and non-financial aspects); and (4) pro-ecological projects. The specific aim is to adapt the accounting policy of business entities to environmental challenges by proposing changes to the energy sector’s chart of accounts, using the example of the Enea Group, which ultimately leads to changes in the structure of the integrated report and finally in the ESG report. This study is of a theoretical and conceptual nature. As a result of the triangulation of the scientific methods used in this article, it was found that neither the accounting policy nor the company’s chart of accounts have so far presented correct records of costs related to environmental protection, which implies the development and proposal of implementing changes in this area. The research sample is limited to three years and includes a case study of the Enea Group. The presented discussion allows us to fill the research gap in the scope of information on the activities undertaken by the Enea Group for the protection of the natural environment and the costs of environmental protection incurred. The added value is the original structure of the integrated report presented by the authors and ultimately the ESG report of the energy group and adapting the accounting policy to environmental challenges. Full article

Purpose: The new global approach to sustainability within the context of the SDGs is driving a digital transition. However, new technologies bring challenges related to the energy efficiency of their infrastructures. The aim of this exploratory work is to identify the companies with best practices in various aspects of the management, disclosure and verification of the energy efficiency of emerging technologies. Design/methodology/approach: Using a mixed qualitative and quantitative approach, the Non-Financial Information Statements of Spanish IBEX 35 companies are assessed. Findings: The results show that companies disclose non-financial information in relation to the materiality of energy efficiency and the actions implemented to improve it, but regulatory development is still required to ensure greater comparability of such information. Originality: To the best of our knowledge, this is the first study to analyse information on ICT energy sustainability in the context of Law 11/2008 in Spain, which also includes an analysis of information on the double materiality of risks and the policies and actions implemented by companies to manage them. Practical implications: Improving the information disclosed will increase its usefulness for the internal decision-making of companies, to improve ICT energy efficiency and SDG. Social implications: Improving the information disclosed will increase its usefulness for external decision-making by the different stakeholders, as regulators and other disclosing companies may take these selected companies as an example in each sector of activity. Full article