Financial Performance With Emphasis On the Role of Environmental Information Disclosure

Document Type : Original Article


1 Assistant professor of Accounting, Kermanshah branch, Islamic Azad University, Kermanshah, Iran.

2 Department of Accounting, Sanandaj branch, Islamic Azad University, Sanandaj, Iran.

3 Assistant professor of Management, Sanandaj branch, Islamic Azad University, Sanandaj, Iran.



Background: Given the strategic importance of environmental issues, especially in recent years, companies are trying to disclose environmental information. Financial performance of companies is an important factor regarding the disclosure of this information. Thus, the aim this study is to identify the components of financial performance based on the environmental information disclosure.
Methods: This study is a systematic review study conducted by searching English keywords, including financial performance, environmental, social and governance, ESG, disclosure and Persian keywords, including financial performance, disclosure, environmental performance and environmental disclosure in databases of PubMed, Scopus, ScienceDirect and Scholar Google, SID, Magiran, and IranDoc.
Results: After reviewing and screening 388 domestic and foreign articles, based on inclusion and exclusion criteria, 23 articles were carefully reviewed. The results of studies revealed that to measure the financial performance of companies to disclose environmental information, four variables of ROE, ROA, Tobin’s Q and profit margin were used. Other results also revealed that some variables including, the variables of corporate governance, type of industry and some macroeconomic variables (economic growth) can affect the relationship between financial performance and environmental information disclosure.
Conclusions: Large companies have good financial performance. Companies with have clients are aware of the importance of building and maintaining a company's reputation, so that the companies use environmental disclosure as a tool to communicate their operational results.  Environmental information disclosure is a tool to create corporate image and social contracts by publishing credible information about environmental performance to reduce or enhance the company reputation. Thus, financial performance can be directly affected by the environmental information disclosure.


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