ESG Information Disclosure and Enterprise Accounting 
Conservatism: A Concise Overview

Danping Wu

doi:10.70711/memf.v2i11.8231

ESG Information Disclosure and Enterprise Accounting Conservatism: A Concise Overview

Danping Wu

Abstract

Environmental, Social, and Governance (ESG) information disclosure has shifted from voluntary corporate practice to mandatory regulatory requirement, deeply influencing stakeholder decision-making and corporate financial behavior. Accounting conservatisma
core financial reporting principle requiring timely recognition of potential losses and cautious confirmation of gainssafeguards against
information risk in imperfect markets. This study explores ESG disclosure's impact on corporate accounting conservatism and its transmission mechanisms, using a theoretical framework integrating agency theory, signaling theory, and stakeholder theory. Based on 4, 268 firmyear observations of Chinese A-share listed firms (20182023) and ESG ratings from Huazheng, Wind, and MSCI, it employs Basu's reverse
regression model and generalized method of moments (GMM) to address endogeneity. Results show a significant positive correlation between
ESG disclosure quality and accounting conservatism, mediated by information asymmetry and agency cost. Heterogeneity analysis reveals the
relationship is stronger in high-polluting industries and firms with weak internal governance, but weaker in state-owned enterprises (SOEs)
and firms with concentrated equity. This research enriches literature on non-financial disclosure and financial reporting quality, supporting
regulators in improving ESG standards and firms in optimizing sustainable strategies.

Keywords

ESG Information Disclosure; Accounting Conservatism; Information Asymmetry; Agency Cost; Stakeholder Theory

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DOI: http://dx.doi.org/10.70711/memf.v2i11.8231

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