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Abstract In recent years, greater attention has been paid to sustainability issues. Companies have received increasing pressure from stakeholders to adopt sustainable behavior and provide an adequate representation of sustainability practices. Nonfinancial disclosure has thus taken on a crucial role. In the academic field, several researchers have analyzed the effects of nonfinancial disclosure. However, limited attention has been paid to the impact of nonfinancial information on the cost of debt. This study aims at bridging this gap by analyzing the effect of ESG disclosure on the cost of debt. The fixed effects analysis conducted on a sample of 8264 observations (an unbalanced panel data of 919 firms for the period 2010–2019), shows a negative effect of the ESG disclosure on the cost of debt financing. The results demonstrate that companies with greater levels of transparency in the dissemination of ESG information benefit from accessing third party financial resources at better conditions.
Raimo et al. (Thu,) studied this question.