Corporate ESG disclosure in agribusiness: effects on market value and investor behavior

This paper examines the impact of market value and investor behaviour associated with Environmental, Social and Governance (ESG) disclosure in agribusiness. ESG disclosure is an important area of corporate reporting, as investors are increasingly focused on sustainability, accountability, and good governance when making investment decisions. The paper is based on a 5-year longitudinal database for 150 publicly traded agribusiness firms with a total of 750 firm-year observations. The results show that one point increase in the ESG disclosure score is related to an increase in market capitalization by about USD 0.45 billion (p = 0.000). In addition, ESG disclosure has a positive relationship with investor sentiment, with a coefficient of 0.35 (p = 0.000), meaning that the more transparency there is, the more positive the investors’ perception. The results also confirm that corporate governance quality is positively associated with the quality and reliability of ESG disclosure, thus promoting long-term investment. Overall, this study underlines the increasing importance of ESG factors in shaping the market performance and investor engagement of agribusiness. By presenting empirical evidence on the relationship, this study informs the sustainable finance literature and has practical implications for managers, policymakers, and stakeholders interested in shaping business growth that is aligned with responsible and transparent business practices.

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