Sustainable Development Reporting and Financial Performance: Systematic Literature Review 2019-2024
DOI:
https://doi.org/10.60036/g1yhye97Keywords:
Sustainable Development Reporting, ESG Disclosure, Financial Performance, Sustainability Reporting, GRI, SDGs, Systematic Literature ReviewAbstract
This systematic literature review examines the relationship between sustainable development reporting (SDR) and corporate financial performance (CFP), synthesizing empirical evidence from studies published between 2019 and 2024. The review addresses the ongoing debate regarding whether sustainability disclosure creates or destroys shareholder value. Following PRISMA 2020 guidelines, this review analyzed 88 peer-reviewed empirical articles from Scopus, Web of Science, and Google Scholar. Studies were categorized by relationship direction, performance metrics used, reporting frameworks examined, and contextual moderators. The majority of studies (59%) report a positive relationship between SDR and CFP, supporting stakeholder theory and signaling theory. Mixed results (27%) suggest the relationship is contingent on moderating factors including firm size, industry, geographic region, and reporting quality. Negative relationships (9%) are primarily associated with short-term cost perspectives. GRI-aligned reporting and external assurance strengthen the positive SDR-CFP relationship. Market-based measures (Tobin’s Q) show stronger positive associations than accounting-based measures (ROA, ROE). This review provides a comprehensive framework integrating SDR dimensions, transmission mechanisms, and performance outcomes. It identifies critical moderating factors and offers actionable insights for practitioners while highlighting gaps for future research, including the need for longitudinal studies and investigation of SDG-specific reporting impacts.
References
Aboud, A., & Diab, A. (2018). The impact of social, environmental, and corporate governance disclosures on firm value: Evidence from Egypt. Journal of Accounting in Emerging Economies, 8(4), 442-458.
Arkoh, K., Bananuka, J., & Nkundabanyanga, S. K. (2024). Determinants of sustainability reporting: A systematic literature review. Corporate Social Responsibility and Environmental Management, 31(1), 157-182.
Buallay, A. (2019). Is sustainability reporting (ESG) associated with performance? Evidence from the European banking sector. Management of Environmental Quality, 30(1), 98-115.
DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2-3), 275-326.
Friede, G., Busch, T., & Bassen, A. (2015). ESG and financial performance: Aggregated evidence from more than 2000 empirical studies. Journal of Sustainable Finance and Investment, 5(4), 210-233.
Giannopoulos, G., Fagernes, R. V., Elmarzouky, M., & Hossain, K. A. (2022). The ESG disclosure and the financial performance of Norwegian listed firms. Journal of Risk and Financial Management, 15(6), 237.
Global Reporting Initiative. (2021). GRI Universal Standards 2021. Amsterdam: GRI.
Moussa, T., Allam, A., Elbanna, S., & Bani-Mustafa, A. (2020). Can board environmental orientation improve US firms' carbon performance? The mediating role of carbon strategy. Business Strategy and the Environment, 29(1), 72-86.
Nollet, J., Filis, G., & Mitrokostas, E. (2016). Corporate social responsibility and financial performance: A non-linear and disaggregated approach. Economic Modelling, 52, 400-407.
Page, M. J., et al. (2021). The PRISMA 2020 statement: An updated guideline for reporting systematic reviews. BMJ, 372, n71.
Rahi, A. F., Akter, R., & Johansson, J. (2024). Corporate sustainability and financial performance: A hybrid literature review. Corporate Social Responsibility and Environmental Management, 31(1), 134-156.
Shobhwani, K., & Lodha, S. (2024). Impact of ESG disclosure scores on financial, operating and market-based performance: Evidence from NSE-100 companies. Vision: The Journal of Business Perspective.
United Nations. (2015). Transforming our world: The 2030 Agenda for Sustainable Development. New York: United Nations.
Velte, P. (2017). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 8(2), 169-178.
Xie, J., Nozawa, W., Yagi, M., Fujii, H., & Managi, S. (2019). Do environmental, social, and governance activities improve corporate financial performance? Business Strategy and the Environment, 28(2), 286-300.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Angel II P. Esmeralda (Author)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
