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The purpose of this paper is to explore the state of S&P 500 companies’ transparency by analyzing their Bloomberg ESG (Environmental-Social-Governance) disclosure scores. Additionally, the effects of industry sector, firm size, and governance practices on transparency are examined.

Data were retrieved from Bloomberg using the financial analysis environmental, social and governance function for companies comprising the S&P 500 index. Descriptive statistics are provided on each of the three components separately (ESG). Nonparametric procedures are used to test for significant differences in transparency within each of these three areas based on industry sector. Additionally, nonparametric tests are used to determine the impact of firm size (market capitalization) and governance factors (board size, board gender diversity, chief executive officer (CEO) duality, and linking executive compensation to ESG disclosure) on the composite ESG score.

Descriptive statistics reveal that S&P 500 companies differ in their level of disclosure across the three areas (ESG). The highest level of transparency is found on Governance and the lowest on Environmental. Moreover, there is much variability in the percentage of S&P 500 companies disclosing information about specific Social policies (e.g. child labor). Significant differences in transparency on both the Social and Governance dimensions are found between certain industry sectors. The results also reveal that large-cap companies have significantly higher ESG disclosure scores than mid-cap companies and that governance factors impact ESG disclosure. Significantly, higher ESG disclosure scores are observed for S&P 500 firms with larger boards of directors, with boards that are more gender diverse, that allow CEO duality, and that link executive compensation to ESG scores.

This study focuses on corporate transparency through a granular analysis of ESG disclosure scores when most other studies have been primarily conducted at the macro level. Stakeholders, analysts, and shareholders are increasingly scrutinizing firms’ sustainability disclosures in their assessment of management quality, as it reflects on the practices/policies that are employed to improve firms’ environmental and social footprints.

The authors’ examination of corporate social responsibility (CSR) scores in dual-class firms provides a window on firms’ CSR performance when insulated from external pressure. Dual-class ownership confers greater voting rights on a superior class of shares held by insiders; consequently, managers of dual-class firms are insulated from external pressure from inferior class shareholders and, potentially, from society. The authors compare CSR scores in dual- and single-class firms and investigate the association between CSR scores and cash flow rights in dual-class firms. This analysis reveals that dual-class firms have lower CSR scores than their single-class counterparts and that CSR scores in dual-class firms are positively related to the relative cost of CSR borne by the superior class of shares. The findings suggest that external accountability encourages CSR performance, and CSR performance is higher when the superior class bears a smaller portion of the cost of CSR activities. It follows that the analysis suggests the importance of governance structures for encouraging CSR, and the dampening impact of cost to CSR performance.

This study aims to examine and compare the current waqf governance practices in waqf institutions in Malaysia.

This paper reviews professional documents and literature to propose a new and practical waqf governance measurement. Waqf governance measurements were used to examine and compare the current waqf governance practices among waqf institutions in Malaysia. The annual reports of all waqf institutions under the State Islamic Religious Councils (SIRCs) were analysed using content analysis on the current waqf governance practices using binomial logic.

Overall, the results indicate moderate waqf governance practices under three waqf governance categories, namely waqf governance policy, waqf governance board and waqf governance processes. This study also found a significant impact of corporatisation reformation of waqf institutions on waqf governance practices.

The findings indicate the need for all waqf institutions in Malaysia, especially for non-corporate waqf institutions, to enhance their waqf governance practices by disclosing all relevant information to the public. This is because the success of waqf fund management can be portrayed through the management’s transparency in waqf governance practices on how they deliver and use their resources to attain socio-economic objectives.

To the best of the authors’ knowledge, this study is among the first studies that examined and evaluated the current waqf governance practices in several waqf institutions in Malaysia.

This paper aims to review the performance of corporate governance practices in Malaysia from the beginning of the 21st century until recently. This paper also highlights the history of corporate governance practices in Malaysia and the country’s financial statement fraud situation.

Malaysia is a multi-ethnic society that requires managing corporations and firms collectively. Hence, corporate governance practices and good practices are compelled to fit society’s uniqueness. This paper used the survey findings generated from the Corporate Governance Watch Report (CG Watch Report) by the Credit Lyonnais Securities Asia and the Asian Corporate Governance Association from the year 2002 to the year 2018 and discussed the corporate governance performance related to financial statement fraud in Malaysia. The market ranking survey oversees five categories of corporate governance scores: rules and regulations, enforcement, political/regulatory environment, adoption of International Generally Accepted Accounting Principle and corporate governance culture

The findings reported that firms in Malaysia have benefited from good laws and regulations through corporate governance reforms.

This study’s findings are relevant to regulators, board members, shareholders, potential investors, analysts and others to produce more informative timely comparisons. Future research should consider analysing and comparing the corporate governance performance in Malaysia with the corporate governance performance of other countries in Asia.

This study summarized the findings generated from a periodical CG Watch Report from the year 2003 to 2018. This study also underlined the actions of responsible agencies and regulatory bodies determined to have a decent corporate governance practice in Malaysia, especially in minimizing financial statement fraud occurrence in the country.

This research study examines the impact of social and governance initiatives on financial performance of global banks. The study is significant in the context of massive changes in regulations, government policy, social attitudes and market development attributed to banking sector.

The source of data for this study was ESG database of Thomson Reuters. The study was based on 472 global banks. The research paper uses two-stage least square model and the study covered the five-year period 2015–2019.

Banks with high intensity of social and governance-related activities have positive market-based valuation effects. Adequately capitalized banks tend to invest more in social initiatives. Banks' governance initiatives directed toward the use of anti-takeover defensive mechanisms are skeptically perceived by markets. Riskier banks tend to have less investments in social initiatives.

The findings are relevant in the context of expectations from policymakers, consumers and investors with respect to the role which banks ought to play in funding the development of a sustainable economy. The research finding that strong governance and social initiatives by banks are value-enhancing measures is a clear evidence of the significance of ESG initiatives as value-creating mechanisms as perceived by markets.

This study addresses the gap in the research, which examines the role of governance and social initiatives on value creation in the banking sector firms. The study examines the impact of different elements of governance and social initiatives on financial performance of banks.

This paper aims to evaluate the extent of materiality assessment disclosures in sustainability reports and their determinants. The study examines the disclosure practices of listed companies based in the member states of the Cooperation Council for the Arab States of the Gulf, colloquially referred to as the Gulf Cooperation Council (GCC).

First, the materiality assessment disclosures were scored through a content analysis of sustainability reports published by listed GCC companies during a five-year period from 2013 to 2017. Second, a fixed effect ordered logic regression was used to examine the determinants of materiality assessment disclosures.

While sustainability reporting rates improved across the sample period, a significant majority of listed GCC companies do not engage in sustainability reporting. The use of internationally recognised standards has also declined. While reporters provide more information on their materiality assessment, the number of sustainability reports that offer information on how the reporter identifies material issues has declined. These trends potentially indicate the existence of managerial capture. Materiality assessment disclosure scores are positively influenced by higher financial performance (Return on Assets), lower leverage and better corporate governance. However, company size and market-to-book ratio do not influence materiality assessment disclosures.

The findings may prove useful to managers responsible for preparing sustainability reports who can benefit from the examples of materiality assessment disclosures. An evaluation of the materiality assessment should be included in the scope of assurance engagements and practitioners can use the examples of best practice when evaluating sustainability reports. Stock exchanges may consider developing improved corporate governance guidelines as these will lead to materiality assessment disclosures.

The findings may assist in improving sustainability reporting quality, through better materiality assessment disclosures. This will allow corporate stakeholders to evaluate the reporting entities underlying processes, which leads to transparency and corporate accountability. Improved corporate sustainability reporting supports the GCC commitment to implement the United Nations Sustainable Development Goals and transition to sustainable development.

This study addresses the call for greater research examining materiality within a sustainability reporting context. This is the first paper to examine sustainability reporting quality in the GCC region, focussing particularly on materiality assessment disclosures.

This paper aims to identify the most significant governance provision in enhancing the financial information quality of UK listed firms. In addition, it investigates the influence of this governance provision in explaining stock returns of 20 UK industry portfolios.

To identify the main governance provision in enhancing the accruals quality, the paper runs regressions of accruals quality variable on the total governance variable, on the governance provisions individually, and on the governance provisions taken together with and without integrating control variables. Next, Asset Pricing tests are employed to examine the capacity of the audit provision, as proved the most influential governance provision on accruals quality, to explain stock returns. The quantitative approach used in the paper enables to investigate the relationship between corporate governance, accruals quality, and stock returns.

Results indicate that audit provision is the most important governance mechanism affecting accruals quality. In addition, this mechanism is comparable with the book-to-market factor in explaining the time-series variation in portfolios returns. Furthermore, the introduction of the Audit factor to Fama-French model reduces the significance of the size factor and the book-to-market factor in explaining stock returns. This suggests that size and the book-to-market factors contain information related to the audit provision.

The findings of the paper carry implications for investors as they do not need to equally weight all corporate governance provisions in their resource allocation decisions. The significant influence of audit provision on accruals quality needs to be taken into consideration when investment decisions are made. Audit factor is important in predicting future returns. It is also found to be as good as book-to-market factor in explaining portfolios returns. Also, the findings have many implications for regulatory bodies in their efforts to enhance financial information quality. Establishing roles for best governance in reducing information risk should focus, among other things, on the significant elements of corporate governance in improving accruals quality. The main limitation of the study is the restricted variation in the Audit governance factor which comes from the source of corporate governance data, i.e. CGQ. Firms in the sample do not exhibit diversified levels of Audit scores. Accordingly, when constructing audit risk factor it was found that firms could only be split into two portfolios according to their Audit scores instead of five.

This study identifies audit provision as the most significant governance mechanism in enhancing the financial information quality of UK listed firms. In addition, a factor representing audit provision is constructed to investigate the influence of this provision on stock returns. To the authors' knowledge, this is the first study that examines the capacity of the audit provision to explain stock returns in an asset pricing framework.

This study aims to examine the impact of sustainable practices as proxied by the environmental, social and governance (ESG) score on capital structure. It also investigates whether ESG performance influences the speed of adjustment (SOA) to target leverage in firms.

The sample covers 116 non-financial firms listed on the main stock exchanges from five Southeast ASEAN countries (Bursa Malaysia, Indonesia Stock Exchange, Philippines Stock Exchange, Singapore Stock Exchange and Stock Exchange of Thailand) over the period 2012–2019. The study adopts the OLS regression and system-GMM estimators to perform the data analysis.

The authors show that the ESG score is positively associated with book leverage, suggesting that firms increase their debt capital through sustainable practices. However, they find that the ESG score is negatively associated with market leverage across our model estimations. The authors also reveal that environmental, social and governance pillar scores produce about 7.82%, 2.88% and 0.47% SOAs, respectively, higher than the SOA of the traditional SOA without the ESG factor. The aggregate ESG score has about 3.41% SOA higher than the baseline SOA without the ESG factor.

This study is of interest to investors, corporate firms and policymakers. The study demonstrates that the ESG score increases the firm’s SOA to target leverage. By disaggregating the ESG score, the authors establish that ESG pillar scores produce higher SOAs than the traditional SOA (without ESG), with the environmental score inducing the fastest SOA. Practically, the study implies that environmentally sustainable activities reduce environmental transaction costs, benefit firms through better information transparency and enhance a trustful climate between the firm and suppliers of capital. Therefore, this study demonstrates that firms do not only incur the cost of disseminating ESG information but also benefit from lower information asymmetry and a higher SOA with better tax-deductible advantages.

The findings have combined advantages for both stakeholders and directors who monitor and manage the firms’ resources to improve the quality of ESG practices and initiatives.

To the best of the authors’ knowledge, this study is among the first to establish that sustainable practices induce higher debt capital. Secondly, unlike prior research focusing on the cost of capital, the authors examine whether ESG performance affects capital structure patterns. Thirdly, it documents the extent to which sustainable practices influence the SOA towards target leverage in firms. The authors contribute to corporate finance literature that firms reach faster to their target leverage in the presence of ESG performance. Theoretically, through the notion of the stakeholder proposition, the study establishes that the firms’ pursuance of stakeholder goals further enhances the prediction of the trade-off theory.

The purpose of this study is to determine the impact of environment, social and governance (ESG) disclosure on credit ratings of companies in India.

Firms under study are listed on the Bombay Stock Exchange (BSE) 500 and represent almost 93 per cent of the total market capitalization on BSE. This study considers a sample of 122 firms from a population of 500 to examine the relationship between ESG scores and Credit Rating. The scope of this study is confined to those firms listed on the S&P BSE 500 which have made ESG disclosures and were rated by various credit rating agencies like Crisil, ICRA and CARE. Data were sourced from Bloomberg. Ratings were given in ascending order. In the first model, credit rating was used as predicted variable; ESG score as predictor variable and market capitalization, net debt to equity, and total debt to asset as control considering the ordered nature of dependent variable in the study, ordered logistic regression was applied. It was repeated taking individual scores on environment rating, social rating and governance rating as predictors. The authors further segregated the 122 selected firms into large, medium and low capital firms and assessed separate logistic regression models taking credit rating as the predicted variable and overall ESG score as the predictor.

It was found that overall ESG performance and performance of individual components (environment, social and financial variables such as market capitalization, and debt to equity ratio) had significant positive indicators of creditworthiness as measured through credit rating. Governance score had a positive and insignificant relation with credit rating. Market capitalization was observed to have significant direct relationship with credit worthiness. On the other hand, number of independent directors in companies showed significant inverse relationship with creditworthiness. ESG significantly impacted credit rating in the desired direction only for small- and middle-level firms; for large firms which already had higher credit rating, ESG showed no effect. It was also found that credit rating itself determined significantly the extent of overall ESG reporting and disclosure of its components.

This is unique study that covers the aspects of ESG reports and its impact on credit rating.

The purpose of this study is to evaluate the performance of mutual funds during the COVID-19 pandemic with environmental, social and governance (ESG) criteria. The main research question is whether mutual fund performance differs with respect to the level of the mutual fund’s ESG score.

The data set contains global fund data, and mutual fund performance is analyzed using two types of data envelopment analysis (DEA) models: the DEA portfolio index (DPEI) and the range direction measure (RDM) DEA. Propensity score matching and logistic regression are also applied.

The results reveal that: nonequity mutual funds present significantly higher performance compared to the performance of equity mutual funds; mutual funds with high ESG scores are associated with significantly higher performance compared to those with low to medium ESG scores; funds with high ESG scores experience higher performance irrespective of their type; and efficiency scores derived from the RDM DEA are significantly higher than those derived from the DPEI model.

Investors, fund managers and market participants can benefit from the findings of this study and improve their investment decision-making process, including more sustainable funds in their portfolios. Regulators and policymakers should further promote or even require the inclusion of more sustainable investments in the financial products offered by institutional investors. The main limitation of the study is related to data availability regarding the ESG score of mutual funds.

To the best of the authors’ knowledge, this is the first study that provides robust evidence in support of a positive association between ESG scores and mutual fund performance during the pandemic-induced crisis applying a DEA methodology.