Can ESG disclosures promote firms going concern? Evidence from BRICS countries

Abstract

This study examines the moderating role of managerial ownership on environmental, social and governance (ESG) disclosures and the going concern of chemical manufacturing firms in Brazil, Russia, India, China, and South Africa (BRICS) countries. We employed a quantitative research methodology, using panel data from 236 listed firms operating in the chemical manufacturing sector between 2007 and 2022. For the analysis, we utilized the Augmented Mean Group and the Common Correlated Effects Mean Group estimators. The results showed that ESG disclosures significantly impact the continued existence of chemical manufacturing companies in BRICS nations. Additionally, high managerial ownership exerts a significant positive influence on the association between ESG disclosures and the going concern of chemical manufacturing firms. The findings affirm the need for businesses to disclose their ESG issues to stakeholders to ensure carbon neutrality goals for BRICS. Hence, it is recommended that policymakers and business owners promote and incentivize managerial ownership, recognizing its pivotal role in enhancing the positive relationship between ESG disclosure and firms' continuity, thereby contributing to the realization of carbon neutrality goals in the BRICS region.