Izzo, Teresa, Russo, Antonella ORCID: https://orcid.org/0000-0001-9376-1383 and Risaliti, Gianluca (2026) Corporate sustainability and firm valuation in the global oil and gas industry: the moderating role of external sustainability assurance. Journal of Accounting, Finance and Auditing Studies (JAFAS). ISSN 3005-9844 (Print), 2149-0996 (Online) (In Press)

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Abstract

The relationship between corporate sustainability performance and firm valuation has attracted considerable scholarly and practical attention; however, empirical evidence remains inconclusive, particularly within environmentally sensitive and carbon-intensive industries. This study examines the association between corporate sustainability performance and firm valuation in the global oil and gas (O&G) sector and further investigates whether external sustainability assurance moderates this relationship. Grounded in Stakeholder Theory and Legitimacy Theory, an empirical analysis was conducted using a sample of 100 publicly listed O&G companies across multiple jurisdictions during the 2022–2023 period. Corporate sustainability performance was measured using Environmental, Social, and Governance (ESG) scores, while firm valuation was employed as the primary indicator of financial outcomes. In addition, the presence of independent third-party sustainability assurance was incorporated as a moderating variable to assess whether externally verified sustainability disclosures enhance the credibility and economic relevance of sustainability initiatives. The findings indicate that corporate sustainability performance is not significantly associated with firm valuation within the O&G industry. Furthermore, no significant moderating effect of external sustainability assurance was identified. These results suggest that sustainability-related activities and disclosures may not yet be perceived by investors as value-enhancing mechanisms in carbon-intensive sectors. It is also possible that stakeholders regard such initiatives as symbolic responses to legitimacy pressures rather than as substantive drivers of long-term economic performance. The findings challenge the widely accepted assumption that superior sustainability performance necessarily translates into improved market valuation and financial benefits. By providing evidence from a sector characterised by substantial environmental exposure, regulatory scrutiny, and stakeholder pressure, this study contributes to the growing literature on the economic consequences of corporate sustainability. The results further underscore the importance of developing industry-specific sustainability frameworks and assurance practices capable of strengthening stakeholder confidence and improving the integration of sustainability considerations into corporate value creation processes.

Item Type:	Article
Uncontrolled Keywords:	Corporate Social Responsibility (CSR), firm valuation, ESG performance, external sustainability assurance, O&G industry, stakeholder theory, legitimacy theory
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HF Commerce H Social Sciences > HF Commerce > HF5601 Accounting
Faculty / School / Research Centre / Research Group:	Greenwich Business School Greenwich Business School > Political Economy, Governance, Finance and Accountability (PEGFA) Journal of Economic Literature Classification > Political Economy, Governance, Finance and Accountability (PEGFA) Greenwich Business School > Political Economy, Governance, Finance and Accountability (PEGFA) > Centre for Governance, Risk and Accountability (CGRA) Journal of Economic Literature Classification > Political Economy, Governance, Finance and Accountability (PEGFA) > Centre for Governance, Risk and Accountability (CGRA) Greenwich Business School > School of Accounting, Finance and Economics
Last Modified:	12 Jun 2026 15:45
URI:	https://gala.gre.ac.uk/id/eprint/53755

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