ESG REPORTING AND FIRM VALUE OF LISTED COMPANIES IN EAST AFRICAN COMMUNITY COUNTRIES

Robert Njagi GATHAIYA; Joseph MACHERU; Cliff OSORO

doi:10.65672/fs.2026.3.5

ESG REPORTING AND FIRM VALUE OF LISTED COMPANIES IN EAST AFRICAN COMMUNITY COUNTRIES

Authors

Robert Njagi GATHAIYA - School of Business and Economics, The Catholic University of Eastern Africa, Nairobi, Kenya.
Joseph MACHERU - School of Business and Economics, The Catholic University of Eastern Africa, Nairobi, Kenya.
Cliff OSORO - School of Business and Economics, The Catholic University of Eastern Africa, Nairobi, Kenya.

Landing page: https://www.icfm.ro/fs.icfm.ro/articles/vol30i3p106-125.html

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DOI: 10.65672/fs.2026.3.5

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Abstract

Environmental, Social and Governance (ESG) reporting has become an increasingly important consideration in investment decisions, and firms that overlook ESG issues may face operational, legal, and reputational costs that can erode firm value. This study assessed the relationship between ESG reporting and firm value among companies listed on East African Community (EAC) securities exchanges. Applying a positivist philosophy and a longitudinal design, the study drew a purposive sample of 15 out of 93 listed EAC firms that disclose ESG information, based on inclusion criteria. The study obtained secondary data on ESG reporting and firm value from 2018 to 2024 from annual reports, sustainability reports, and securities exchange records, treating firm value as the dependent variable. Descriptive statistics and multivariate regression showed that ESG reporting exerted a statistically significant, positive effect on firm value. The study concludes that ESG reporting materially strengthens firm value and recommends that regulators tighten mandatory ESG requirements, that companies build more robust ESG reporting systems, and that investors factor ESG reporting into their decision-making.

JEL Classification

G32, M14, Q56, O16

Keywords

sustainability disclosure, capital market, financial performance, Tobin's Q, stakeholder theory

How to cite

Robert Njagi GATHAIYA, Joseph MACHERU, Cliff OSORO (2026). ESG REPORTING AND FIRM VALUE OF LISTED COMPANIES IN EAST AFRICAN COMMUNITY COUNTRIES. Financial Studies, 30(3), 106-125. DOI: 10.65672/fs.2026.3.5.

RePEc record

Handle: RePEc:vls:finstu:v:30:y:2026:i:3:p:106-125