Can Financial Literacy Enhance <scp>ESG</scp> Disclosures?

ABSTRACT Using an international sample of firms and two country‐level measures of financial literacy, we find robust evidence of a positive relation between financial literacy and firms' Environmental, Social and Governance (ESG) disclosures. In cross‐sectional analyses, we find that the effect of financial literacy in enhancing ESG disclosures is more prominent in poorer information environments, weaker legal institutions and weaker ESG reporting environments. Lastly, we find that financial literacy also enhances ESG performance. Our study contributes to and extends the literature by providing strong evidence that citizens' financial literacy enhances firms' ESG disclosure and the associated ESG performance.

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Publication Details

Journal
Accounting and Finance
Published
2026-04-01
DOI
https://doi.org/10.1111/acfi.70212
Primary Topic
Financial Literacy, Pension, Retirement Analysis
Type
article
Field-Weighted Citation Impact
0.00

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article

Can Financial Literacy Enhance ESG Disclosures?

Kiridaran Kanagaretnam, Chee Yeow Lim, Xiaoran Jia, Jimmy Lee
Accounting and Finance
Financial Literacy, Pension, Retirement Analysis
article

Can Financial Literacy Enhance ESG Disclosures?

Kiridaran Kanagaretnam, Chee Yeow Lim, Xiaoran Jia, Jimmy Lee
article en

Abstract

ABSTRACT Using an international sample of firms and two country‐level measures of financial literacy, we find robust evidence of a positive relation between financial literacy and firms' Environmental, Social and Governance (ESG) disclosures. In cross‐sectional analyses, we find that the effect of financial literacy in enhancing ESG disclosures is more prominent in poorer information environments, weaker legal institutions and weaker ESG reporting environments. Lastly, we find that financial literacy also enhances ESG performance. Our study contributes to and extends the literature by providing strong evidence that citizens' financial literacy enhances firms' ESG disclosure and the associated ESG performance.

Accounting and Finance
York University (CA), Wilfrid Laurier University (CA), Singapore Management University (SG)
Singapore Management University, Social Sciences and Humanities Research Council of Canada
Quality Education
Openalex Percentile: Top 29%
Financial Literacy, Pension, Retirement Analysis
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