Does Environmental, Social, and Governance Disclosure Improve Financial Performance Evidence from Latin American Firms

Ratna Septiyanti (Universitas Lampung, Bandar Lampung, Indonesia)

Goodwood Akuntansi dan Auditing Reviu
Vol 4 No 1 (2025): November

Purpose: This study aims to examine the effect of Environmental, Social, and Governance (ESG) disclosure on corporate financial performance among firms in Latin America (LATAM). The study seeks to determine whether greater ESG disclosure contributes to improved financial outcomes.Research Methodology: This study employs a quantitative research approach using secondary data from 86 LATAM firms over a decade of observation. The data were analyzed using linear regression analysis.Results: The findings reveal that ESG disclosure positively and significantly affects financial performance.Conclusions: This study concludes that ESG disclosure positively influences firms' financial performance in LATAM. Companies with stronger ESG transparency tend to achieve higher profitability.Limitations: This study is limited to publicly listed LATAM firms over a decade, which may reduce the generalizability of the findings to different contexts or regions.Contributions: This study contributes to stakeholder theory by providing empirical evidence from the Latin American region. Keywords: corporate governance, ESG disclosure, financial performance, Latin America