This study aims to analyze the impact of the environmental, social, and governance (ESG) disclosure on the firm performance, given the stakeholders’ increasing attention to the firm’s ESG practices. Looking at the European context, the Directive 2014/95/EU and its update encouraged European large companies to provide disclosure about their socially responsible practices. Acting within the Agency and Signaling theory frameworks, this paper focuses on the Italian situation where the Legislative Decree 254/2016 implemented the European Directive and forced the largest firms (those with more than 500 employees) to disclose comprehensive information about their social and environmental activities starting from 2017. By applying a panel regression analysis, using a sample of the largest Italian listed companies, and considering a time span of 10 years (from 2011 to 2020), this study finds that there is a positive relationship between environmental, social, and governance disclosure and firm performance, measured by EBIT. Our findings will help firms’ stakeholders, decision-makers, policymakers, as well as academics, to improve their awareness of the impact of ESG disclosure on the performance of the firm, both as a comprehensive factor and individually by pillar. The findings, which support the positive relationship between ESG disclosure and firm performance, should incentivize managers to invest in CSR practices.

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ocial entrepreneurship (the third sector) is an increasingly important global economic phenomenon that is squarely under the academic lens. Social entrepreneurship represents an interesting opportunity for policy makers to explore new frontiers of economic growth and implement innovation in a potentially growing services sector with possible job opportunities coming from new job creation in the upcoming decades. Based on evidence from Italy, this paper considers the broader picture of this phenomenon. Addressing the need to better understand the drivers of social entrepreneurship policy, we propose a model for interpreting the impact of the recent Italian reform of the third sector at various levels of the ecosystem, which favors innovation, technology adaptation, and greater employability. The presented results contribute to laying the foundation for the further development of a theory of entrepreneurship policy.

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