A Meta-Analysis Of Esg Disclosure And Listed Companies’ Financial Performance

Listed companies face challenges in standardising Environment, Social and Governance (ESG) disclosures, resource constraints, reputation and regulatory risks, and investor pressure while seeking to reap the benefits of ESG disclosure of financial performances. Hence, the study’s objective is to meta-analytically review the overall effect of ESG disclosure on listed companies’ financial performances. PRISMA protocol was applied as guidelines, and 32 articles were included and reviewed quantitatively based on coefficient correlation results for each article. This study’s finding indicated that ESG disclosure significantly and negatively influenced listed companies’ financial performances. Despite the negative relationship concluded, the overall effect is still weak. This finding contributes towards the body of knowledge in terms of methodology, whereby meta-analysis is an alternative to analyse and summarise quantitative findings. In addition, this study also contributes towards the existing literature on presenting three applied theories – agency theory, signalling theory, and salient stakeholder theory. However, this study will have several limitations and future research directions.