Disclosure of Sustainability Practices in Annual Reports and the Funding Cost of Cooperative Financial Organizations

Bruno de Medeiros Teixeira (), Clea Beatriz Macagnan, Cenaide Francieli Justen and Israel Patiño-Galvan
Additional contact information
Bruno de Medeiros Teixeira: Center for Human and Social Sciences, University of Vale do Taquari (Univates), Av. Avelino Talini, 171, Lajeado 95914-014, RS, Brazil
Clea Beatriz Macagnan: Postgraduate Program in Accounting Sciences (PPGCC), Federal University of Paraíba (UFPB), Campus I, Cidade Universitária, João Pessoa 58051-900, PB, Brazil
Cenaide Francieli Justen: Postgraduate Program in Accounting Sciences, University of Vale do Rio dos Sinos (Unisinos), Av. Unisinos, 950, São Leopoldo 93022-750, RS, Brazil
Israel Patiño-Galvan: División de Gestión Empresarial, Tecnológico de Estudios Superiores de Ecatepec (TESE), Av. Tecnológico, s/n, Ecatepec de Morelos C.P. 55210, Estado de México, Mexico

JRFM, 2025, vol. 18, issue 4, 1-24

Abstract: This study aimed to analyze the level of disclosure of information representing sustainability practices from the stakeholders’ perspective and its relationship with the funding cost of cooperative financial organizations. The level of disclosure was measured using 46 information indicators representing sustainability practices from the stakeholders’ perspective, identified in the annual reports of cooperative financial organizations (CFOs) listed in the World Cooperative Monitor 2023, totaling 155 observations. The relationship between disclosure and the cost of financing was analyzed using a random effects estimator with cluster-robust standard errors. The results demonstrate a negative relationship between the disclosure of sustainability practices and the funding cost. When disaggregated by sustainability pillar, the results show that disclosure in the social, environmental, and cultural pillars is negatively associated with funding cost, while the economic pillar shows no statistically significant effect. This suggests that disclosing sustainability-related information from the stakeholders’ perspective reduces the cost of funding and enhances the legitimacy of CFO managers, setting them apart from traditional banks. This study examines the relationship between sustainability disclosure and funding cost in CFOs by adapting validated indicators and applying a robust econometric approach. Unlike existing literature focused on traditional banks, it empirically investigates how sustainability disclosure affects information asymmetry, funding costs, and managerial legitimacy within the cooperative financial sector.

Keywords: disclosure; cooperative financial organizations; sustainability; funding cost; annual reports (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/18/4/205/pdf (application/pdf)
https://www.mdpi.com/1911-8074/18/4/205/ (text/html)

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:gam:jjrfmx:v:18:y:2025:i:4:p:205-:d:1632096

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().