REGULATION MEETS REALITY: DO MANDATORY ESG DISCLOSURES CREATE FINANCIAL VALUE

Abstract

Mandatory environmental, social, and governance disclosure requirements expanded significantly in 2024 as regulators across global markets sought to improve transparency, comparability, and accountability in corporate sustainability reporting. While policy objectives emphasize investor protection and market discipline, questions persist regarding whether mandatory ESG disclosures translate into measurable financial value for firms. This study examines the financial implications of mandatory ESG disclosure regimes in 2024 by analyzing their impact on firm performance, cost of capital, and investor perception. The research evaluates whether regulatory compliance functions merely as a reporting obligation or contributes to value creation through improved governance, risk management, and strategic alignment. By focusing on the interaction between regulation and firm outcomes, the study contributes to understanding the economic consequences of ESG disclosure mandates.