ESG and Information Asymmetry in Health Care

Improving sustainability disclosure and performance - and consequently ESG score - should, in theory, reduce information asymmetry between the company and stakeholders. Nonetheless, to date, whether this manifests in practice is unclear. Focusing on top-ranking health care companies listed in the Euro Stoxx 600, results indicate that different decisions regarding the framework for non-financial reporting, the communication of social responsibility initiatives, and the activities and structure of listed companies have a diverse impact on analysts’ capacity to evaluate and predict companies’ financial performance. This variation affects the level of information asymmetry between capital and stock markets, and information intermediaries.