Sustainability reporting and energy sectorial performance: developed and emerging economies

Abstract

Purpose

The purpose of this study is to investigate the relationship between the level of sustainability reporting [environmental, social and governance (ESG)] and sectorial energy performance across both developed and emerging economies.

Design/methodology/approach

Using data culled from 3,311 observations from 50 different countries over a ten-year period (2008–2017), an ESG-score-derived independent variable is regressed against dependent performance indicator variables (operation ratio, return on equity and Tobin’s Q). Two types of control variables complete the regression analysis in this study: firm-specific and macroeconomic.

Findings

The findings of this study elicited from the empirical results demonstrate that there is a significant relationship between ESG and operational performance (operation ratio). However, there is no significant relationship between ESG and financial performance (return on equity) and market performance (Tobin’s Q). However, the relationship between ESG and operation ratio is stronger in emerging than in developed economies.

Originality/value

The model in this study presents a valuable analytical framework for exploring sustainability reporting as a driver of performance across energy sectors in both developed and emerging economies. In addition, this study highlights energy-sectorial managerial implications contrasting developed, as juxtaposed with, emerging economies.

Citation

Alhawaj, A., Buallay, A. and Abdallah, W. (2023), "Sustainability reporting and energy sectorial performance: developed and emerging economies", International Journal of Energy Sector Management, Vol. 17 No. 4, pp. 739-760. https://doi.org/10.1108/IJESM-10-2020-0020