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The impact of corporate ESG performance disclosure across Australian industries
Arian, Adam Sands, John Shams, Syed
Arian, Adam
Sands, John
Shams, Syed
Author
Abstract
The aims of this study are threefold. Firstly, it examines the long-term improvement in the corporate environmental, social and governance (ESG) performance. Secondly, it highlights the favourable financial implications of the higher corporate ESG performance disclosure. The third aim is to provide insight into the industrial impact on the relationship between corporate ESG performance disclosure and financial performance. This study uses a sample of all Australian publicly listed companies between 2007 and 2017 and conducts a panel regression analysis. It also performs several robustness checks to address the methodological, sample selection and endogeneity issues concerning corporate ESG performance disclosure. The findings show a tangible improvement in Australian companies' corporate ESG performance disclosure, favourably associated with financial performance. However, while the corporate ESG performance disclosure appears to be linked to higher financial performance, this is not the case across different industries. The industrial impact on the association between corporate ESG performance disclosure and financial performance has several implications. Firstly, the stakeholders' pressure on companies to address ESG-related concerns is substantial, enhancing corporate financial performance. Secondly, the findings indicate that corporate ESG performance disclosure does not benefit corporations in different industry sectors equally. It, therefore, requires more focus and interpretation by corporate decision-makers. Thirdly, by promoting ESG-related disclosure, managers should consider diverse stakeholders in different industries that weigh business objectives differently. The results of this study provide insights for corporate managers regarding prioritising resource allocations to ESG-related activities that could impact financial performance differently in different industry sectors. The results of this study contribute to the growing literature on the financial implications of corporate ESG performance disclosures, notably different industrial characteristics.
Keywords
Environmental, Social, Governance, Corporate performance, Industrial sectors
Date
2022
Type
Journal article
Journal
Australasian Journal of Economics Education
Book
Volume
16
Issue
4
Page Range
180-200
Article Number
ACU Department
Peter Faber Business School
Faculty of Law and Business
Faculty of Law and Business
Collections
Relation URI
Event URL
Open Access Status
Published as ‘gold’ (paid) open access
License
CC BY-NC
File Access
Open
Notes
© The Author(s), 2022.
This work is licensed under a Creative Commons Attribution-Non Commercial License. https://creativecommons.org/licenses/by-nc/4.0/deed.en
This work is licensed under a Creative Commons Attribution-Non Commercial License. https://creativecommons.org/licenses/by-nc/4.0/deed.en