Beyond symbolic: can SDGs disclosure mitigate the negative impact of ESG reputational risks on firm value? A firm-level analysis

Heba Ali

Review of Accounting and Finance, 2026, 1-25

Abstract: PurposeDrawing on the substantive role of SDGs disclosure, this paper aims to examine the nexus between firm value, Environmental, Social and Governance (ESG) reputational risks and SDGs by investigating whether these SDGs disclosure practices can mitigate the negative impact of ESG controversies on firm value.Design/methodology/approachThis study examines a large sample of 23,211 firm-year observations in 5,870 firms listed in the G-7 countries during the period (2019–2024), using a series of Fixed Effects and two-stage least squares regressions. To further test the robustness of the main results, a subsample regression analysis is conducted for non-US and US firms.FindingsThe findings of this study reveal that firms that are exposed to ESG controversies tend to disclose more information relating to the SDGs. Moreover, both the baselines and the regression results provide novel evidence that ESG controversies have a less negative impact on firm value among firms that support the SDGs. These findings remain robust to addressing endogeneity and sample-selection biases.Practical implicationsFrom a managerial perspective, it highlights the role of the SDGs discourse as a value-protection tool that firms can use to mitigate the negative impacts of exposure to negative publicity. This suggests that SDGs disclosure is not merely “a regulatory compliance tool”; firms, therefore, should reevaluate and enhance their SDGs disclosure to enhance their value resilience.Originality/valueTo the best of the author’s knowledge, no previous research has investigated the nexus between ESG controversies, firm value and SDGs disclosure. Therefore, this study helps provide answers to a broader and more debatable question: whether SDGs disclosure has a substantive role in bringing value-enhancement effects to the firm or if it is only a symbolic communication to investors.

Keywords: ESG controversies; Firm value; SDGs disclosure; G-7 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rafpps:raf-07-2025-0250

DOI: 10.1108/RAF-07-2025-0250

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