Insights into the Link Between Sustainability Disclosure and Financial Performance: A Systematic Review and Meta-Analytic Approach

Recent global events have slowed progress toward achieving the Sustainable Development Goals (SDGs), making robust sustainability reporting (SR) systems critical for monitoring and corrective actions. While research on the link between corporate sustainability performance (CSP) and corporate financial performance (CFP) is extensive, the specific role of sustainability reporting as a communication channel remains insufficiently explored. Therefore, the objective of this paper is to address this gap in the literature by assessing the relevance of sustainability reporting for modeling the relationship between CSP and CFP. In this study, a univariate meta-analysis based on a PRISMA screening framework was performed to assess the unidirectional relationship between SR and CFP, specifically investigating whether SR acts as a moderating or mediating factor in the CSP-CFP nexus. The analysis is limited to 19 high-quality articles published in top-tier accounting journals between 2014 and 2024 to minimize publication bias and ensure reliability. The meta-analysis reveals no statistically significant moderating effect of SR on CFP. Instead, the results confirm a significant mediating effect, particularly when considering the presence of sustainability reports rather than just their specific content. These findings suggest that SR serves as a vital catalyst for corporate communication, providing more positive effects in voluntary compared to mandatory disclosure settings. This paper has both theoretical and practical implications, which are mainly relevant to standard-setters for assessing the efforts of SR disclosure regulation, and is of fundamental importance to managers as it indicates that SR does not relate solely to the practice of conformity, but rather to essential channels of communication and value creation.