Water Disclosure and Firm Value: A Pathway to Corporate Sustainability

Abstract

This paper examines the relationship between water disclosure and firm value within the stakeholder framework. Data were collected from non-financial companies listed on the FTSE Emerging Asia Pacific index from 2018 to 2022, encompassing 779 observations from seven countries. Using a robust panel regression model, our results indicate that water disclosure positively impacts firm value. Transparent water disclosure not only enhances corporate reputation but also fulfills stakeholders' growing demand for environmental accountability. This study provides empirical evidence that companies' transparent water management enhance their market value, supporting Stakeholder Theory. We also tested the robustness of our findings using sub-sampling, alternative measurements, and address potential endogeneity issues. Our study uniquely focuses on the specific impact of water disclosure, contrasting previous research on overall corporate social responsibility (CSR) disclosure. This research offers significant theoretical, empirical, and managerial insights into the role of environmental disclosure in business ethics and firm valuation.