Circular Economy Disclosure and ESG Performance: Signal, Substance, or Symbol?

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Quantitative analysis shows circular economy disclosures enhance ESG performance in 1247 firms, highlighting implications for investment decisions.

Environmental improvements are correlated with energy efficiency and resource reduction disclosures, showing positive impacts on ESG performance.
Energy efficiency and resource reduction disclosures yield the strongest effects on ESG performance, with external audits enhancing validity.
Assessment using multiple regression models in 1247 European firms reveals the complex role of external audits on disclosure outcomes.
Findings suggest the importance of transparent and verifiable sustainability reports to reduce the risk of greenwashing.

Leggerini et al. (2025) studied this question.

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Quantitative analysis shows circular economy disclosures enhance ESG performance in 1247 firms, highlighting implications for investment decisions.