Unraveling the smokescreen of ESG disclosure debate: Shedding light on excessive ESG disclosure and economic risk

Imen Khanchel and Naima Lassoued

Business Ethics, the Environment & Responsibility, 2025, vol. 34, issue 4, 1713-1729

Abstract: This paper investigates the correlation between excessive ESG disclosure and economic risk, measured through the cost of capital. We analyze a sample comprising 430 S&P 500 US firms over 12 years, from 2011 to 2022. Our findings show that excessive ESG disclosure is associated with a reduction in the cost of capital. Specifically, the environmental and social dimensions of ESG disclosure exhibit explanatory power in decreasing the cost of capital, with the environmental dimension demonstrating particularly strong influence. Conversely, excessive governance disclosure shows no significant impact. Additionally, our study shows that CSR assurance serves as a negative moderator in the relationship between excessive ESG disclosure (including overall excessive ESG score, and environmental and social dimensions) and economic risk.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/beer.12726

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:buseth:v:34:y:2025:i:4:p:1713-1729

Access Statistics for this article

More articles in Business Ethics, the Environment & Responsibility from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().