Determinants of ESG-Related Digital Transparency: Evidence from Energy Firms in Emerging Economies

Existing research has largely treated digital transformation and ESG performance as separate dimensions, while widely used ESG indicators are strongly driven by disclosure practices. This creates a measurement problem, as it remains unclear how companies’ underlying sustainability performance translates into effective digital transparency. This study addresses this gap by analyzing the relationship between ESG performance and ESG-related digital transparency, defined as companies’ capacity to disclose sustainability-related information through digital systems. We construct a novel ESG-Related Digital Transparency Index (EDTI), capturing key dimensions of disclosure, compliance, and firm capacity through a composite structure based on principal component analysis, in which the largest contribution is associated with the Digital Governance and Transparency sub-index. Using an unbalanced panel of 95 energy firms (2015–2024), based on annual data, and a dynamic panel model, the results show that digital transparency is highly persistent and positively associated with adjusted ESG performance. Environmental policies reinforce this relationship, while financial factors play a more limited role. Moreover, ESG performance amplifies the effect of environmental pressures, highlighting the role of interaction mechanisms. These findings show how substantive ESG capabilities translate into digital transparency, emphasizing the role of organizational and informational processes in firms’ sustainability-related digital development.