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Disclosure or action: Evaluating ESG behavior towards financial performance

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  • Yoo, Sunbin
  • Managi, Shunsuke

Abstract

We investigate whether the information disclosure of Environmental, Social, Governance (ESG) criteria is more crucial than actions for the financial performance of firms by using two different ratings with more than 1,000,000 samples. Our result shows that disclosure is more important for profits while action is more critical in Tobin’s Q and IVA scores.

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  • Yoo, Sunbin & Managi, Shunsuke, 2022. "Disclosure or action: Evaluating ESG behavior towards financial performance," Finance Research Letters, Elsevier, vol. 44(C).
    • Handle: RePEc:eee:finlet:v:44:y:2022:i:c:s1544612321001896
    DOI: 10.1016/j.frl.2021.102108
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    14. Remo-Diez, Nieves & Mendaña-Cuervo, Cristina & Arenas-Parra, Mar, 2023. "Exploring the asymmetric impact of sustainability reporting on financial performance in the utilities sector: A longitudinal comparative analysis," Utilities Policy, Elsevier, vol. 84(C).
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    17. Pompei MITITEAN & Nicoleta-Florina SĂRMAȘ, 2023. "The Relationship Between Sustainability Reporting and Corporate Performance. Evidence from the European Energy Sector," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(7), pages 49-59, July.
    18. Bin Wang & Fangzheng Wang & Xiaofei Kong & Li Liu & Chunlu Liu, 2024. "Environmental, social, and governance disclosure and capital market mispricing," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 2383-2401, May.
    19. Lei, Ni & Miao, Qin & Yao, Xin, 2023. "Does the implementation of green credit policy improve the ESG performance of enterprises? Evidence from a quasi-natural experiment in China," Economic Modelling, Elsevier, vol. 127(C).
    20. Yoshida, Kenichi & Iino, Yoshiaki & Managi, Shunsuke, 2022. "Do Japanese keiretsu promote better CSR activities?," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 452-475.
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    22. Lee, King Fuei, 2023. "The Role of Catering Incentives in ESG Disclosure," MPRA Paper 120930, University Library of Munich, Germany.

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