The Impact of ESG Disclosure on Brand Value: Evidence from Global Public Firms

Abstract

This paper explores the correlation between Environmental, social, and governance (ESG) disclosure and corporate brand value. The panel data analyzed is comprised of 32 Global listed companies that featured in the Brand Finance Top 100 rankings from 2022 to 2024. ESG disclosure scores are sourced from the LSEG (formerly Refinitiv) ESG database, whilst brand value data is obtained from Brand Finance. Control variables included company size, profitability and leverage ratio, each of which was derived from information contained in the publicly available financial statement. Both pooled OLS and two-way fixed-effects panel models were used in the study. No significant correlation was found between the composite ESG score and brand value within this sample, which may be related to the little variation in the top global brands' ESG scores. But the governance pillar score was positive and significant (β = 1.059, p < 0.05). That is, when it comes to the world's most valuable brands, it is not environmental or social aspects that are the difference when it comes to driving brand value – it is the governance disclosure. The results offer an extension of communication theory into the field of brand valuation and offer some actionable advice for managers looking to improve their brands with ESG communication.