Determinants of ESG Disclosure Quality in an Emerging Market: The Role of Firm and Governance Characteristics

This study examines the determinants of Environment, Social and Governance (ESG) disclosure quality among companies listed on the South Pacific Stock Exchange (SPX), with particular emphasis on quality rather than quantity of ESG information disclosed. Using panel data from SPX-listed companies for 2016 to 2024, the study assesses ESG disclosure quality through a structured content analysis of annual reports, guided by a multi-construct evaluation framework. The final measurement model retains eight environmental and social disclosure items and excludes four governance items that did not meet convergent-validity requirements, so the ESG Disclosure Quality construct reflects environmental and social disclosure quality rather than the full governance dimension of ESG. The study tests hypothesised relationships between firm characteristics, governance mechanisms, and ESG disclosure quality using Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings indicate that firm size, industry sector, and board size are significantly associated with ESG disclosure quality, whereas profitability, leverage, board independence, and audit quality show no significant association. These results suggest that organisational visibility and governance capacity play a more important role in shaping ESG disclosure quality than financial performance. The study contributes to the growing ESG disclosure literature by providing evidence from a small-island emerging market (Fiji) that remains underrepresented in sustainability reporting research. The findings are interpreted through Salient Stakeholder Theory, suggesting that organisational visibility and governance capacity function as observable proxies for stakeholder salience in a frontier market context, although the theory’s core attributes of stakeholder power, legitimacy, and urgency are not directly measured in this study.