Global Study Proves Strong ESG Reporting Drives Higher Corporate Market Value

Ilustration by AI 

FORMOSA NEWS

Corporate commitment to sustainability pays off in the global stock markets, a new comprehensive scientific review reveals. The breakthrough study, published in mid-2026 by researchers Cindy Nur Azaria Mansa, Haliah, and Darmawati from Hasanuddin University, synthesizes five years of empirical data across multiple continents. The findings confirm that transparent Environmental, Social, and Governance (ESG) performance acts as a massive value driver for modern businesses. As institutional investors actively look for risk-resilient organizations, this research explains exactly how sustainability disclosures directly translate into elevated corporate market valuations.

Why ESG Disclosures Matter in Modern Markets

The rise of global sustainability issues has completely changed the modern corporate landscape. Global data indicates that investment assets managed under ESG frameworks previously exceeded USD 35 trillion and continue to skyrocket. Driven by strict regulatory policies, changing consumer preferences, and evolving investor standards, organizations are no longer judged solely by financial returns.

Instead, non-financial metrics have become standard indicators of long-term commercial viability. However, previous independent studies frequently yielded conflicting conclusions regarding whether sustainability disclosures act as a profitable business signal or a wasteful operational cost.

To clear this confusion, the research team from Hasanuddin University conducted a definitive analysis to determine how these reporting frameworks impact actual financial market performance.

Simple and Bias-Free Research Framework

The research team minimized selection bias by conducting a Systematic Literature Review (SLR) strictly guided by the international PRISMA 2020 reporting protocol. The researchers accessed the Google Scholar database using targeted software to capture peer-reviewed academic articles tracking ESG performance and market valuations between 2021 and 2025.

Beginning with a pool of 500 initial research records, the investigators carefully filtered the literature against strict inclusion criteria. Only empirical, quantitative studies evaluating clear financial proxies—such as Tobin’s Q or Price-to-Book Value—were accepted. This filtering process resulted in a final analytical sample of 35 core journal articles.

Because the accepted papers featured diverse geographic regions, sectors, and statistical designs, the Hasanuddin University researchers utilized an advanced narrative synthesis approach to combine the global evidence.

Key Findings: Higher ESG Scores Boost Valuations

The systematic review carried out by Cindy Nur Azaria Mansa, Haliah, and Darmawati uncovered three definitive insights regarding sustainability disclosure strategies:

• The Positive Connection Dominates: Fully 60% of the reviewed empirical studies prove that companies with higher ESG scores achieve significantly greater market value. This positive trend is driven by heightened investor trust, minimized business risk, and enhanced brand equity.
• Industry-Tailored Metrics Outperform Generic Ones: The choice of evaluation measurement matters heavily. The study reveals that industry-calibrated ESG Materiality Scores are far more accurate at explaining increases in corporate market value than generic, one-size-fits-all scoring aggregates.
• Context Dictates Local Market Success: The relationship between corporate sustainability and financial value is moderated by regional factors. Positive financial impacts are exceptionally strong in developed markets like Western Europe and North America, whereas emerging economies sometimes exhibit lag times or mixed results due to younger regulatory environments.

Real-World Impacts for Managers and Investors

The core implication of this research is that ESG reporting must be integrated into corporate strategy as a long-term investment rather than an administrative burden. For policymakers and regulatory authorities, the study provides a clear rationale to mandate uniform sustainability disclosures. For institutional investors, the findings validate the practice of using structured sustainability metrics to filter out high-risk assets and secure sustainable long-term returns.

In their published text, the research team highlights the broader perspective underlying these economic dynamics:

"Firms which genuinely address the interests of a broad stakeholder constituency, rather than focusing exclusively on shareholder returns, cultivate greater legitimacy and institutional trust, which ultimately accrues to market valuation," state lead author Cindy Nur Azaria Mansa and her colleagues from Hasanuddin University.

Ultimately, the research proves that reducing the information gap between corporate management and external stakeholders through transparent reporting creates a powerful economic advantage.

Profiles of the Authors

• Cindy Nur Azaria Mansa is a primary researcher affiliated with Hasanuddin University. Her academic focus centers on sustainability disclosure strategies, ESG reporting, and corporate performance metrics.
• Haliah is a senior academic and professor at Hasanuddin University. She specializes in corporate governance mechanisms, non-financial disclosure frameworks, and financial economics.
• Darmawati is a prominent researcher and faculty member at Hasanuddin University. Her field of expertise covers stakeholder management, business strategy, and quantitative empirical literature reviews.

Research Source Information

Article Title: ESG Reporting and Firm Value: A Systematic Literature Review of Sustainability Disclosure Strategies
Journal Name: International Journal of Asian Business and Management (IJABM)
Publication Year: 2026
Official DOI Link: https://doi.org/10.55927/ijabm.v5i3.12
URL : https://journalijabm.my.id/index.php/ijabm/index