Sustainability disclosure and firms’ performance in a voluntary environment

This study aims to investigate whether sustainability disclosures (SD) can improve financial, operational and market performance for businesses in Jordan. This research is based on the idea that firms that are open and transparent about their sustainability efforts tend to perform better than their competitors.

This study used an empirical approach for data collection and analysis. The independent variable was SD, and the dependent variables were performance indicators (i.e. Tobin’s Q, return on equity and return on assets). This study analyzed 81 non-financial companies listed on the Amman Stock Exchange from 2014 to 2018.

The present study found a significant and positive relationship between corporate SD and operational, financial and market performance.

The analysis shows that implementing corporate SD may lead to better performance. Specifically, firms may benefit internally by becoming more aware of important actions to be taken internally and externally by understanding the sustainability-related desires of other stakeholders and regulators for better sustainable development.

This study offers new insights into the effect of SD on firm performance and its implementation in emerging markets, which has not been extensively studied in academia. This research provides new insights into the link between SD and performance, and is particularly timely in its contribution to this topic, which is important for the government’s adoption and implementation of a robust SD code.