ESG disclosures, uncertainties and firm risk in tourism sector firms

This study highlights the importance of ESG disclosures in reducing the adverse effects of political and climate change uncertainties on tourism firms’ total and systematic risks. The study additionally examines the link between ESG disclosures and firms’ risk and the association between uncertainties and firms’ risk to demonstrate the viability of risk-reduction theory and stakeholder theory. The results indicate that the quantity of ESG disclosures plays a significant role in moderating the association between uncertainties and the risks faced by various segments of the tourism sector (Recreation & Entertainment, Transportation, and Hospitality & Restaurants). This shows that the active participation of tourism firms in sustainability activities can assist firms in this industry to better manage risk and mitigate the impact of uncertainties more effectively.