Sustainability Reporting and Corporate Transparency

Abstract

This dissertation investigates the extent to which sustainability reporting enhances corporate transparency and firm value, focusing on FTSE 100 firms in the first year of the Corporate Sustainability Reporting Directive (CSRD). Using a cross-sectional dataset of 98 firms for the 2024 financial year, the study examines ESG disclosure levels, assurance practices, and their relationship with firm value, measured by Tobin's Q. Descriptive analysis shows considerable variation in ESG transparency across firms, with social disclosures typically exceeding environmental and governance dimensions. Correlation analysis highlights strong interdependencies among ESG measures but reveals no direct association with firm value. Regression results confirm that external assurance does not significantly improve ESG transparency (H1), ESG sub-dimensions do not explain firm value (H2), and overall ESG transparency has no measurable effect on valuation (H3). Profitability emerges as the dominant driver of Tobin's Q, with leverage and board independence showing secondary effects. The findings suggest that, in the early stage of CSRD implementation, financial fundamentals overshadow sustainability disclosures in shaping market valuations.