Corporate sustainability disclosure and market valuation in a Middle Eastern Nation: evidence from listed firms on the Tehran Stock Exchange: sensitive industries versus non-sensitive industries

Abstract

This article has received the considerable critical attention that seeking to enhance sustainability disclosure may essentially make progress firms' market valuation. It aims to provide the corporate sustainability disclosure level organized according to the '7 þ 1', seven core subjects of the International Organization for Standardization (ISO) 26000 and the energy disclosure items, then set out to assess the effectiveness of sustainability reporting on the listed firms' market valuation during the period 2010-2015. To achieve this objective, data were collected from a sample of 98 Iranian manufacturing and service organizations from various industry sectors at the Tehran Stock Exchange and generalized method of moments (GMM) approach was conducted for a dynamic panel data to evaluate the effect of the sustainability reporting level on the listed firms' market valuation. As can be seen from the results, the overall extent of sustainability disclosure arranged in accordance with the low rate of sustainability reporting for listed firms in TSE. It was also found that the sensitive firms have a greater level of corporate sustainability disclosure than the other firms. Moreover, sustainability reporting has been shown to be related to market valuations in which firms activating in sensitive industries environmentally with sustainability reporting had higher market valuations than firms activating in non-sensitive industries with sustainability reporting. Our '7 þ 1' sustainability disclosure practice aspects all together with their basic measurement items can be applied as a checklist for assessing how well sustainability disclosure practices are performed at TSE.

Stock Return Movement in Indonesia Mining Companies

“…It will implicate the stock returns increase. The results of this research are supported by Mohammadi et al (2018) that said the overall extent of sustainability disclosure arranged in accordance with the low rate of sustainability reporting for listed firms in Tehran Stock Exchange. It was also found that sensitive firms have a higher level of corporate sustainability disclosure than other firms.…”

“…Weir (2010) showed that the stock market reacts negatively to news about the environmental behavior of firms. Mohammadi et al (2018) said the overall extent of sustainability disclosure arranged in accordance with the low rate of sustainability reporting for listed firms in Tehran Stock Exchange.…”

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“…Vegetarian consumers belong to the group of consumers who are aware of their surroundings and seek to build a model in which economic activity goes as far as possible not to harm the available natural and biological resources. In the search for a more sustainable and environmentally-friendly system, many stakeholders have the power and the responsibility to carry out this transformation in pursuit of the common good [88]. This is so because achieving more sustainable practices requires the coordination and support of all parties involved in the production and consumption processes [ Figure 3].…”

Exploring the Key Driving Forces of the Sustainable Intergenerational Evolution of the Industrial Alliance Innovation Ecosystem: Evidence from a Case Study of China’s TDIA

“…An enterprise's sustainability depends on small businesses and their surroundings to co-create value for customers [18]. Firms acting in environmentally sensitive industries with sustainability reporting have higher market valuations [19]. Third, policy and public support are needed for sustainability transitions [20].…”