Environmental, Social, and Governance (ESG) Practices and Firm Value: Evidence from BRICS Countries

Abstract

This paper aims to investigate the impact of ESG disclosure on firm value in the context of BRICS countries. The research sample comprises 3560 observations for the 2015–2022 period. We used Refinitiv's ESG rating as a measure to assess the extent of a firm's ESG disclosure comprehensively. The findings suggest that ESG disclosure has a positive impact on firm value. Further analysis shows a variation in the investors’ responses to the dimensions of ESG score (environmental, social, and governance scores) regarding the nature of their informational content. Specifically, the results show that investors pay more attention to environmental and social activities. The study’s results contribute significantly to the broader discourse on sustainable business practices and their implications for long-term economic growth. Understanding how ESG practices impact firm value within BRICS nations provides investors, policymakers, and businesses with valuable insights.