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Does Capital Expenditure Matter for ESG Disclosure? A UK Perspective

Author

Listed:
  • Ahmed Saber Moussa

    (Customs Authority, Ministry of Finance Egypt, Nasr City 11635, Cairo, Egypt)

  • Mahmoud Elmarzouky

    (Aston Business School, Aston University, Birmingham B4 7ET, UK)

Abstract

This study examines how capital expenditure (capex) affects Environmental, Social, and Governance (ESG) reporting and how corporate governance moderates this effect. We use data from non-financial firms in the FTSE All Share index from 2012 to 2021 and measure ESG disclosure with the Bloomberg ESG Disclosure Score, capex with logarithm of the ratio of capital expenditure to total assets, and corporate governance with a composite index based on Board Size, Independent Board, Board Diversity, and Audit Committee Non-Executives. We also examine the non-linear and threshold effects of capex on ESG disclosure with spline regression models. We find that capex is positively linked to ESG disclosure and that this association is robust for firms with better corporate governance. Our findings imply that capex improves ESG performance and impact and that corporate governance enables ESG communication to stakeholders. Our research advances the existing literature by revealing the link between capex, governance, and ESG reporting in a dynamic and uncertain environment. Our study holds practical significance for companies, investors, and regulators who want to incorporate ESG factors into capex decisions and reporting.

Suggested Citation

  • Ahmed Saber Moussa & Mahmoud Elmarzouky, 2023. "Does Capital Expenditure Matter for ESG Disclosure? A UK Perspective," JRFM, MDPI, vol. 16(10), pages 1-19, September.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:10:p:429-:d:1249889
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    References listed on IDEAS

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    Cited by:

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    13. Yi‐Shuai Ren & Najoua Elommal & Xiaolin Kong & Xukang Liu, 2026. "The Effects of Top Management Team R&D Functional Background on Corporate Social Responsibility: Detrimental or Beneficial in Family Firms?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 31(1), pages 1369-1394, January.
    14. Eid M Alotaibi & Ashraf Khallaf & Abed Al-Nasser Abdallah & Taisier Zoubi & Awwad Alnesafi, 2024. "Blockchain-Driven Carbon Accountability in Supply Chains," Sustainability, MDPI, vol. 16(24), pages 1-30, December.
    15. Chuo-Hsuan Lee & Edward Lusk, 2024. "ISS corporate governance risk profiling: Testing the caretaker persona," International Journal of Business Ecosystem & Strategy (2687-2293), Bussecon International Academy, vol. 6(5), pages 158-173, October.
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