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Factors Affecting Corporate Environmental, Social and Governance (ESG) Reporting: A Literature Review

Author

Listed:
  • Suhaily Hasnan
  • Mohamad Zakwan Zabidi Adil Zaibidai Ad
  • Muhammad Haziq Danial Mohd Farmy
  • Muhammad Irfan Anuar
  • Muhammad Zulhelmy Mohd Nazri
  • Amir Rayyan Muhammad Shaifuddin

Abstract

This study aims to further explore the factors that influence corporate environmental, social, and governance (ESG) reporting in public listed companies (PLCs) around the world. The information was gathered from prior studies, which were conducted globally. The results are in line with the legitimacy theory, which holds that companies should disclose more ESG information in order to justify their continued existence. Discussion and findings in this study are significant to businesses and stakeholders, as well as policymakers. While businesses may think of ways to improve ESG reporting in order to compete on the global stage, stakeholders may put pressure on businesses to reveal more information about ESG, and also on policymakers to create an egalitarian framework on ESG that is suitable for businesses in their respective regions. The findings suggest that several factors have played a crucial role in influencing PLCs to disclose ESG reporting in their annual reports. The factors include company size, profitability, board of directors’ attributes, economic sustainability performance (ESP), financial leverage, audit committee external members, and the existence of a female director (or directors) on the corporate board. Most prior studies have found that these determinants have positive relationships with the tendency of PLCs to include ESG aspects in their annual report.

Suggested Citation

  • Suhaily Hasnan & Mohamad Zakwan Zabidi Adil Zaibidai Ad & Muhammad Haziq Danial Mohd Farmy & Muhammad Irfan Anuar & Muhammad Zulhelmy Mohd Nazri & Amir Rayyan Muhammad Shaifuddin, 2023. "Factors Affecting Corporate Environmental, Social and Governance (ESG) Reporting: A Literature Review," Accounting and Finance Research, Sciedu Press, vol. 12(4), pages 1-13, November.
    • Handle: RePEc:jfr:afr111:v:12:y:2023:i:4:p:13
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    References listed on IDEAS

    as
    1. Jun Xie & Wataru Nozawa & Michiyuki Yagi & Hidemichi Fujii & Shunsuke Managi, 2019. "Do environmental, social, and governance activities improve corporate financial performance?," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 286-300, February.
    2. Rey Dang & Maria Giuseppina Bruna & L'Hocine Houanti & Riadh Manita, 2018. "Board gender diversity and ESG disclosure: Evidence from the US," Post-Print hal-01847924, HAL.
    3. Mariateresa Torchia & Andrea Calabrò & Morten Huse, 2011. "Women Directors on Corporate Boards: From Tokenism to Critical Mass," Journal of Business Ethics, Springer, vol. 102(2), pages 299-317, August.
    4. Riadh Manita & Maria Giuseppina Bruna & Rey Dang & L’Hocine Houanti, 2018. "Board gender diversity and ESG disclosure: evidence from the USA," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 19(2), pages 206-224, May.
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    6. Zhihong Wang & Tien‐Shih Hsieh & Joseph Sarkis, 2018. "CSR Performance and the Readability of CSR Reports: Too Good to be True?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(1), pages 66-79, January.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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