Environmental and social disclosures: Link with corporate financial performance

Yan Qui, Amama Shaukat*, Rajesh Tharyan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

458 Citations (Scopus)


Environmental and social disclosures entail costs, yet increasingly, large listed firms are making higher and better quality disclosures. In this paper we examine the link between a firm's environmental and social disclosures and its profitability and market value. We find that past profitability drives current social disclosures. However, consistent with the existing evidence, we do not find any relation between environmental disclosures and profitability. Further, while prior literature has largely focussed on environmental disclosure, we find that it is the social disclosures that matter to investors. We find that firms that make higher social disclosures have higher market values. Further analysis reveals that this link is driven by higher expected growth rates in the cash flows of such companies. Overall our findings are consistent with the resource based view of the firm and the voluntary disclosure theory, suggesting that firms with greater economic resources make more extensive disclosures which yield net positive economic benefits.
Original languageEnglish
Pages (from-to)102-116
Number of pages15
JournalBritish Accounting Review
Issue number1
Early online date13 Nov 2014
Publication statusPublished - 1 Mar 2016
Externally publishedYes


Dive into the research topics of 'Environmental and social disclosures: Link with corporate financial performance'. Together they form a unique fingerprint.

Cite this