Material environmental sustainability disclosure and firms’ market capitalization: A cross-country analysis in the tourism sector

Given the tourism sector's considerable environmental impact and economic relevance, assessing environmental sustainability is important. This is particularly relevant given the commitments established in the UN 2030 Agenda for Sustainable Development. A sample of 147 firms from 39 countries and Refinitiv data accessed via LSEG Workspace were used to construct an index of material environmental disclosure based on Sustainability Accounting Standards Board standards. Using a Generalized Method of Moments approach, we find that environmental disclosure is positively associated with market capitalization, with a stronger relationship observed in common law jurisdictions. These findings underscore the value of managerial proactivity in adopting materiality-based sustainability disclosures and highlight the role of regulatory initiatives in fostering such practices, which may strengthen investor confidence and enhance firm value.