Tangibility of intangibles in the ESG disclosure–carbon intensity nexus for S&P 500 firms

Purpose Given the substantial contribution of intangible assets to firms’ overall valuation in the present knowledge-based era, this study aims to explore how these non-physical assets influence the effectiveness of ESG disclosure in reducing carbon intensity (CI). Design/methodology/approach This study focuses on the S&P 500 firms for the period 2015–2016 to 2022–2023 to study the overall impact of ESG disclosure on CI and investigate the differential impact of the same based on firms’ intangible assets by applying the system generalized method of moments (GMM) and two stage least squares (2SLS) regression models. Findings This study finds that overall, there is a significant negative impact of ESG disclosure on CI. However, the impact of ESG disclosure on CI varies based on firms’ intangible assets. In particular, ESG disclosure leads to significant mitigation of CI for firms with high intangible assets, while the same relationship becomes insignificant for the firms with low intangible assets. Originality/value Given the extant ESG literature that largely focuses on its financial outcome, this study makes a novel contribution by studying the impact of ESG disclosure on a sustainability parameter, that is CI in the context of the US. Moreover, this research adds deeper insights into the strategic importance of intangible assets in enhancing corporate sustainability performance.