Abstract
The study’s relevance stems from the growing role of non-financial disclosure in corporate reporting and the lack of a clear understanding of the extent to which ESG information enhances the quality and suitability of financial data for investment analysis. The article aims to examine the impact of ESG reporting on the information value of financial reporting for decision-making by institutional investors. The research was based on the works of leading domestic and international scientists. The following methods were used in the work: analysis of the scientific literature to study current developments in the subject; generalization and systematization to present the research results. It was found that ESG disclosure significantly expands the analytical potential of financial reporting by including non-financial indicators that reflect long-term risks, sustainable development factors and strategic sustainability of companies. The analyzed modern methodological approaches to assessing ESG factors in financial analytics demonstrated that integrating ESG indicators contributes to a more comprehensive understanding of company performance, though this is accompanied by challenges related to data heterogeneity and methodological inconsistencies. The empirical evidence reviewed confirms the existence of a positive relationship between the level of ESG disclosure and the quality of financial information, particularly in terms of transparency, reduced information asymmetry and increased data reliability. It is found that institutional investors widely use ESG information to improve risk assessment, optimize portfolio allocation and align investment strategies with sustainable development goals, thereby increasing the overall efficiency of capital markets. It is emphasized that, despite the potential of ESG reporting to significantly enhance the information value of financial reporting, its effectiveness depends on the development of uniform standards, improvements in data verification mechanisms, and greater transparency in disclosure practices. Further scientific research is needed to develop integrated models for assessing the combined impact of financial and ESG indicators on investment decision-making, as well as to standardize ESG reporting methodologies.
References
1. Chen, Z., & Xie, G. (2022). ESG disclosure and financial performance: moderating role of ESG investors. International Review of Financial Analysis, (83), 102291. https://doi.org/10.1016/j.irfa.2022.102291
2. Kumawat, R., & Patel, N. (2022). Are ESG disclosures value relevant? A panel-corrected standard error (PCSE) approach. Global Business Review, 23(6), 1558–1573. https://doi.org/10.1177/09721509221128637
3. Vander Bauwhede, H., & Van Cauwenberge, P. (2022). Determinants and value relevance of voluntary assurance of sustainability reports in a mandatory reporting context: Evidence from Europe. Sustainability, 14(15), 9795. https://doi.org/10.3390/su14159795
4. Cheng, M., & Micale, J. A. (2022). ESG risks and the value relevance of current and historical earnings. Financial Markets, Institutions & Instruments, 31(5), 207–237. https://doi.org/10.1111/fmii.12162
5. Zheng, Y., Wang, B., Sun, X., & Li, X. (2022). ESG performance and corporate value: analysis from the stakeholders’ perspective. Frontiers in Environmental Science, (10), 1084632. https://doi.org/10.3389/fenvs.2022.1084632
6. Park, S. R., & Oh K. S. (2022). Integration of ESG information into individual investors’ corporate investment decisions: Utilizing the UTAUT framework. Frontiers in Psychology, (13), 899480. https://doi.org/10.3389/fpsyg.2022.899480
7. Gopikumar, V., Nair, S., & Sisodia, G. S. (2022). The effect of financial reporting quality on institutional ownership. Applied Economics Letters, 30(12), 1685–1688. https://doi.org/10.1080/13504851.2022.2089341
8. Shaikh, I. (2022). Environment-social-governance disclosures nexus between financial performance: A sustainable value chain approach. Resources, Conservation and Recycling, (186), 106571. https://doi.org/10.1016/j.resconrec.2022.106571
9. Atif, M. (2022). ESG disclosure and firm performance: a bibliometric and meta analysis. Research in International Business and Finance, (61), 101668. https://doi.org/10.1016/j.ribaf.2022.101668
10. Parasii-Verhunenko, I. M., Hordopolov, V. Yu., & Busenko, A. O. (2025). Vykorystannia finansovoi ta nefinansovoi informatsii v stratehichnomu analizi dilovoho partnerstva pidpryiemstv [Use of financial and non-financial information in the strategic analysis of business partnership of enterprises]. Aktualni problemy staloho rozvytku – Current Problems of Sustainable Development, 2(4), 182–188. https://doi.org/10.60022/2(4)-22S (in Ukrainian)
11. Lopez-de-Silanes, F., McCahery, J. A., & Pudschedl, P. C. (2024). Institutional investors and ESG preferences. Corporate Governance: An International Review, 32(6), 1060–1086. https://doi.org/10.1111/corg.12583
12. Chopra, S. S., Senadheera, S. S., Dissanayake, P. D., Withana, P. A., Chib, R., Rhee, J. H., & Ok, Y. S. (2024). Navigating the challenges of environmental, social, and governance (ESG) reporting: the path to broader sustainable development. Sustainability, 16(2), 606. https://doi.org/10.3390/su16020606
13. Ellili, N. O. D. (2022). Impact of ESG disclosure and financial reporting quality on investment efficiency. Corporate Governance: The International Journal of Business in Society, 22(5), 1094–1111. https://doi.org/10.1108/CG-06-2021-0209
14. Tkachenko, P. (2026). Effectiveness of animated infographics for enhancing the level of understanding of complex financial information by consumers. Current Issues of Economic Sciences, (19). https://doi.org/10.5281/zenodo.18372309
15. Sokolenko, A. (2026). Comparative analysis of the factors of price competitiveness of niche eco-products on marketplaces in the United States and the European Union. Current Issues of Economic Sciences, (21). https://doi.org/10.5281/zenodo.19592973
16. Gharpure, A. (2025). ESG reporting in enterprise financial systems: Challenges and innovations. Journal of Computer Science and Technology Studies, 7(3), 194–201. https://doi.org/10.32996/jcsts.2025.7.3.22
17. Monteiro, A. P., Vale, J., Leite, E., Lis, M., & Kurowska-Pysz, J. (2022). The impact of information systems and non-financial information on company success. International Journal of Accounting Information Systems, (45), 100557. https://doi.org/10.1016/j.accinf.2022.100557
18. Fagbemi, B. T., Saah, B. P., Nduka, A. I., & Aloke, E. M. (2025). The evolution of ESG and sustainability reporting: a review of standards, challenges, and impacts on corporate transparency. Journal of Economics, Business, and Commerce, 2(2), 297–305. https://doi.org/10.69739/jebc.v2i2.1239
19. Riabokon, A. (2026). Institutional efficiency of DAOs in scaling digital business ecosystems. Achievements of Economics: Prospects and Innovations, (26). https://doi.org/10.5281/zenodo.18300112
20. Ishchenko, V. (2026). Economic efficiency of dynamic pricing algorithms in the secondary car market under conditions of full digitalization. Achievements of Economics: Prospects and Innovations, (26). https://doi.org/10.5281/zenodo.19142901
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Copyright (c) 2026 Iryna Dutchak, Svitlana Derevianko, Uliana Vytvytska