Published 2025-10-29
Abstract
This study explores the influence of environmental accounting disclosure on investor decision-making in South Korea’s publicly traded firms. Analyzing ESG (Environmental, Social, Governance) reports from 250 companies over five years, the paper examines how transparency in environmental data affects stock performance, investor trust, and market valuation. Using regression analysis and event study methodology, findings show that firms with detailed and verifiable environmental disclosures experienced positive abnormal returns post-reporting. Investor surveys revealed that environmental accounting transparency significantly increases perceptions of corporate responsibility and long-term viability. Moreover, institutional investors are particularly responsive to third-party verified disclosures, while retail investors value clarity and accessibility. This study introduces an Environmental Disclosure Index tailored to the Korean context and calls for integration of environmental metrics into national financial reporting standards. Policy implications suggest mandatory ESG disclosures and incentives for green investment. This research contributes to sustainable finance literature and supports the transition toward responsible investing in emerging markets.