THE EFFECT OF ESG DISCLOSURE ON FIRM VALUE: A SYSTEMATIC LITERATURE REVIEW

Abstract

This systematic literature review critically examines the theoretical frameworks and empirical evidence linking Environmental, Social, and Governance (ESG) factors to corporate value by analyzing 20 articles that underwent title and abstract screening, followed by a narrative synthesis using thematic analysis. studies published between 2021 and 2025. Using a PRISMA-based methodology, this review identifies patterns of positive impacts, variations in results, and mediating and moderating factors affecting firm value. The synthesis results indicate that ESG disclosure tends to have a positive impact on firm value, as measured by Tobin’s Q, the market-to-book ratio, or market capitalization. This increase occurs primarily through reduced information asymmetry, enhanced reputation, and lower capital costs. Positive effects are more consistently observed in firms in emerging markets and within the governance dimension. Some studies have found a negative or insignificant relationship, particularly in the short term or in developed markets. Factors that strengthen this relationship include company size, sales growth, and competitive advantage. Meanwhile, mediators such as profitability and organizational visibility also play a role. High-quality ESG disclosures support long-term value creation when integrated with business strategy in a balanced manner. These findings provide a basis for companies to enhance the transparency of their ESG reporting to strengthen corporate value.