Table 1 Variable definition and... | Emerald Publishing

Table 1

Variable definition and measurement

Variably acronym	Variable definition	Variable measurement
ROE	Return on equity	ROE is added to control the company’s financial performance. It is one year lagged compared to the fiscal year of the nonfinancial disclosure analyzed Source: LSEG
SDG_Disclosure	SDGs disclosure	Consistent with previous studies (Hamad et al, 2023; Zampone et al, 2024), the extent to which a company is reporting information related to its contribution toward the SDGs is captured by the variable SDG_Disclosure. SDG_Disclosure is calculated by computing the average score based on the number of SDGs a company is reporting out of the total 17 SDGs, as outlined below: SDG_Disclosure = (Number of SDGs disclosed by firm) / (Total of 17 SDGs) Each company receives a score of “1” for each SDG it reports in its report; otherwise, it receives a score of “0”. Consequently, the lowest possible score for a company is 0 points (if it does not support any of the 17 SDGs), while the highest attainable score is 17 points (representing full reporting for all SDGs). Thus, the SDG_Disclosure ranges from 0% to 100% (Izzo et al, 2020)
ESG_Combined_Score	ESG combined score	Consistent with previous research (Beretta et al, 2019; Buallay et al, 2020; Beretta et al, 2023), the ESG Performance is captured by the ESG Combined Score, measured as a continuous variable as provided in the LSEG Database (known previously as Refinitiv, Thomson Reuters, 2018) Source: LSEG
Size	Size	The logarithm of the balance sheet total assets is used as a proxy for firm size Source: LSEG
ENV_SENSITIVE	Environmental sensitive industry	The extant literature also suggests that firms’ ESG performance varies across different sectors of operation (Lourenço and Branco, 2013; Garcia et al, 2017; Izzo et al, 2020; Curtó-Pagès et al, 2021; Calvo-Centeno et al, 2022; Datta and Goyal, 2022; Low et al, 2023). Thus, the ENV_SENS_IND variable distinguishes between companies operating in environmentally sensitive industries (oil and gas, basic materials, industrials or utilities) and nonenvironmentally sensitive industries
Market_Cap	Market capitalization	The variable represents a market indicator of the value of shares and the value of companies in general (Toramane et al, 2009; Dias 2013) Source: Orbis
Leverage	Firm leverage	The variable is measured by total debt to total assets of the firm (i), in the period (t) (Alareeni and Hamdan, 2020) Source: Orbis
Assets_Turnover	Assets turnover	The variable is measured by net sales as a percentage of total assets (Alareeni and Hamdan, 2020) Source: Orbis
FTSE_MIB	FTSE MIB	Dummy variable equal to 1 if the company is listed in the FTSE MIB Index, 0 otherwise

Variably acronym	Variable definition	Variable measurement
ROE	Return on equity	ROE is added to control the company’s financial performance. It is one year lagged compared to the fiscal year of the nonfinancial disclosure analyzedSource: LSEG
SDG_Disclosure	SDGs disclosure	Consistent with previous studies (Hamad et al, 2023; Zampone et al, 2024), the extent to which a company is reporting information related to its contribution toward the SDGs is captured by the variable SDG_Disclosure. SDG_Disclosure is calculated by computing the average score based on the number of SDGs a company is reporting out of the total 17 SDGs, as outlined below:SDG_Disclosure = (Number of SDGs disclosed by firm) / (Total of 17 SDGs)Each company receives a score of “1” for each SDG it reports in its report; otherwise, it receives a score of “0”. Consequently, the lowest possible score for a company is 0 points (if it does not support any of the 17 SDGs), while the highest attainable score is 17 points (representing full reporting for all SDGs). Thus, the SDG_Disclosure ranges from 0% to 100% (Izzo et al, 2020)
ESG_Combined_Score	ESG combined score	Consistent with previous research (Beretta et al, 2019; Buallay et al, 2020; Beretta et al, 2023), the ESG Performance is captured by the ESG Combined Score, measured as a continuous variable as provided in the LSEG Database (known previously as Refinitiv, Thomson Reuters, 2018)Source: LSEG
Size	Size	The logarithm of the balance sheet total assets is used as a proxy for firm sizeSource: LSEG
ENV_SENSITIVE	Environmental sensitive industry	The extant literature also suggests that firms’ ESG performance varies across different sectors of operation (Lourenço and Branco, 2013; Garcia et al, 2017; Izzo et al, 2020; Curtó-Pagès et al, 2021; Calvo-Centeno et al, 2022; Datta and Goyal, 2022; Low et al, 2023). Thus, the ENV_SENS_IND variable distinguishes between companies operating in environmentally sensitive industries (oil and gas, basic materials, industrials or utilities) and nonenvironmentally sensitive industries
Market_Cap	Market capitalization	The variable represents a market indicator of the value of shares and the value of companies in general (Toramane et al, 2009; Dias 2013)Source: Orbis
Leverage	Firm leverage	The variable is measured by total debt to total assets of the firm (i), in the period (t) (Alareeni and Hamdan, 2020)Source: Orbis
Assets_Turnover	Assets turnover	The variable is measured by net sales as a percentage of total assets (Alareeni and Hamdan, 2020)Source: Orbis
FTSE_MIB	FTSE MIB	Dummy variable equal to 1 if the company is listed in the FTSE MIB Index, 0 otherwise

Source: Authors’ own work