Eco-Innovation Accounting, Sustainability and Firm Value: An Integrated Perspective

The purpose of this study is to examine the effect of integrating sustainability reporting and Eco-innovation activities on the firm value. The study proposes an integrated reporting approach that combines the benefits of reporting on Sustainability in all dimensions (environmental performance, economic performance, social performance, and corporate governance) with innovation performance in all dimensions (product innovation, process innovation, organizational innovation, and marketing innovation) to increase the firm's value. The research analyzes the financial reports of 21 Iraqi industrial businesses from 2011 to 2020 using content analysis, giving 194 observations (company-year). The research employed GRI indicators (G4) for Sustainability, the Macron (2017) matrix for eco-innovation, and TobinQ for firm value. Sample firms report less on Sustainability and eco-innovation than the study's overall values. The research found that sustainability reporting significantly affects Iraqi firm value, the sample, and all its characteristics. The data also show that eco-innovation in all four aspects of the innovation scorecard (product, process, organizational, and marketing innovation) substantially improves the sample businesses’ Firm value. The data also show that sustainability and eco-innovation reporting boosts corporate worth. This study provides an integrated perspective for improving the firm value using innovation and sustainability performance indicators. It integrates the industry 4.0 capabilities with Sustainable development Goals to enhance the firm value. The findings of this paper help regulators and economic policymakers develop sustainable development strategies at the national level and establish mechanisms that regulate the process of financial reporting in companies’ financial statements.