Examining the Environmental, Social, and Governance of Fintech Companies: A framework of sustainability reporting

Abstract

The study examined the relationship between environmental, social and governance (ESG) disclosures and company performance (finance and non-financial) from the perspectives of integrated reporting and sustainability reporting. We estimate an OLS model using firm performance as the dependent variable, and use item-level disclosure ratings (0–3) aggregated into pillar indexes for 11 fintech and related financial service organisations. Results suggest that ESG scores jointly explain a small proportion of the variation in performance. Only social disclosure has a positive marginally significant association to performance, with environmental and governance disclosures being statistically insignificant. These findings demonstrate that social information on employees, consumers and communities is especially decision‑useful in this environment and should be important to sustainability and integrated reporting narratives. Simultaneously, the small, context-specific sample and disclosure-based performance measure limit predictability and provide motivation for bigger, longitudinal investigations employing financial and market outcomes.