Sustainability Reporting and Corporate Value: Evidence for Portuguese Listed Corporations

This paper investigates the impact of sustainability reporting in the value of publicly traded companies in Portugal. We use content analysis of sustainability reports from 2019 to 2022 to construct four sustainability report indices based on the Global Reporting Initiative (GRI) standards. We then use panel data regression models to assess the impact of sustainability reporting on corporate value. The results indicate a significant increase in sustainability reporting between 2019 and 2022. On average, corporations disclose more topics related to environmental performance (60%), followed by social (56%) and economic (48%) performance. Furthermore, panel data regression models show that the impact of sustainability reporting on market value is not statistically significant, regardless of the sustainability report index used. Therefore, contrary to what was expected, sustainability reporting does not increase firm value. This suggests that the market does not yet value the disclosure of sustainability information. This study contributes to the literature since it analyses the evolution of sustainability reporting over a 4-years period and allows to investigate if the market values sustainability information, distinguishing among economic, environmental and social information.