Business Strategies and Corporate Reporting for Sustainability: A Comparative Study of Materiality, Stakeholder Engagement, and ESG Performance in Europe

Andreas-Errikos Delegkos, Michalis Skordoulis () and Petros Kalantonis
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Andreas-Errikos Delegkos: Department of Tourism Management, University of West Attica, Egaleo Park Campus, GR-12243 Egaleo, Greece
Michalis Skordoulis: Department of Tourism Management, University of West Attica, Egaleo Park Campus, GR-12243 Egaleo, Greece
Petros Kalantonis: Department of Tourism Management, University of West Attica, Egaleo Park Campus, GR-12243 Egaleo, Greece

Sustainability, 2025, vol. 17, issue 19, 1-23

Abstract: This study investigates the relationship between corporate reporting practices and the value relevance of accounting information by analyzing 100 publicly listed non-financial European firms between 2015 and 2019. Drawing on the Ohlson valuation framework, the analysis combines random effects with Driscoll–Kraay standard errors and System GMM estimations to assess the role of financial and non-financial disclosures. Materiality and stakeholder engagement were scored through content analysis of corporate reports, while ESG performance data were obtained from Refinitiv Eikon. The results show that financial fundamentals remain the most robust determinants of firm value, consistent with Ohlson’s model. Among qualitative disclosures, materiality demonstrates a strong and statistically significant positive association with market value in the random effects specification, while stakeholder engagement and ESG scores do not attain statistical significance. In the dynamic panel model, lagged market value is highly significant, confirming the persistence of valuation, while the effect of materiality and stakeholder engagement diminishes. Interaction models further indicate that materiality strengthens the relevance of earnings but reduces the role of book value, underscoring its selective contribution. Overall, the findings provide partial support for the claim that Integrated Reporting enhances the value relevance of accounting information. It suggests that the usefulness of IR depends less on adoption per se and more on the quality and substance of disclosures, particularly the integration of financial material ESG issues into corporate reporting. This highlights IR’s potential to improve transparency, accountability, and investor decision making, thereby contributing to more effective capital market outcomes.

Keywords: integrated reporting; sustainability reporting; consolidated reporting; materiality; stakeholder engagement; ESG performance; value relevance; business strategies; corporate governance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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