Date of Publication: Aug 20, 2020

Author: by Ionica Oncioiu, Delia-Mioara Popescu, Anca Elena Aviana, Alina Șerban, Florica Rotaru, Mihai Petrescu and Andreea Marin-Pantelescu

Summary:

In todayâ€s business environment, corporate governance and financial transparency have an impact on the performance of firms. These changes are important for understanding the widespread accessibility of relevant and reliable information regarding an entityâ€s financial and nonfinancial aspects. The purpose of this study was to show how the environmental, social, and governance disclosure performance of companies has gained a reputation of having a fundamental role in financial transparency and how it varies by stakeholder orientation and economic sector. In this regard, we developed a new model based on stakeholders†perceptions to analyze the impact of environmental, social, and governance disclosure on financial transparency using the Analytic Hierarchy Process (AHP) method and select the economic sector that ensures transparency in sustainable and financial reporting. This model was applied over the 2008–2018 period to 143 companies from eight countries in the most representative economic sectors: finance, energy, and telecommunication services. Our results portray that environmental, social, and governance reporting are a companyâ€s means of communication with stakeholders, as part of their accountability and stewardship obligations, and at the same time, they are a tool for achieving transparency regarding the financial performance of a firm. Furthermore, our findings also showed whether environmental, social, and governance (ESG) disclosures act as a vector of financial communication for enterprises, and this relationship will also be evident in their role in financial transparency. View Full-Text

Link to Full Reading:

https://www.mdpi.com/2071-1050/12/17/6757