THE IMPACT OF ESG DISCLOSURE PERCEPTION ON ANALYST FORECAST ACCURACY
DOI:
https://doi.org/10.55197/qjssh.v6i6.925Keywords:
ESG disclosure perception, analyst forecast accuracy, environmental disclosure, social disclosure, governance disclosureAbstract
In recent years, the growing emphasis on environmental, social, and governance (ESG) practices has transformed the way financial markets assess corporate transparency and performance. Analysts, as key information intermediaries, increasingly rely on ESG disclosures to evaluate firms’ long-term value and risks. This study investigates the impact of ESG disclosure perception on analyst forecast accuracy. Drawing on information asymmetry and signaling theories, the research employs a questionnaire survey of 352 financial analysts and applies structural equation modeling (SEM) to examine how perceptions of environmental, social, and governance disclosure quality influence forecasting precision. The empirical results reveal that all three ESG dimensions significantly enhance analysts’ forecast accuracy. Environmental disclosure perception exerts the strongest positive effect, followed by social and governance disclosure perceptions. These findings suggest that analysts’ confidence in credible, transparent, and verifiable ESG information can substantially reduce uncertainty and improve analytical judgments. The study contributes to the literature by linking non-financial disclosure perception to capital market efficiency and provides practical implications for improving ESG reporting standards, regulatory oversight, and analyst training programs.
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Copyright (c) 2025 RONGHUAN ZHANG, SAIRA KHARUDDIN, RIDZWANA MOHD SAID
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