ESG Reporting Quality, Investor Sentiment, and Firm Valuation in Asian Emerging Markets
Author(s): Wei-Lin Tan
Affiliation: NUS Business School, National University of Singapore, Singapore
Page No: 74-77-
Volume issue & Publishing Year: Volume 3,Issue 3, 2026/03/19
Journal: International Journal of Modern Engineering and Management | IJMEM
ISSN NO: 3048-8230
DOI:
Abstract:
Environmental, Social, and Governance (ESG) reporting has transitioned from voluntary best practice to regulatory mandate across Asian emerging markets: India's Business Responsibility and Sustainability Reporting (BRSR) framework became mandatory for the top 1,000 NSE/BSE-listed firms from FY2022-23; Singapore's SGX requires climate-related disclosures under TCFD; and Thailand, Malaysia, and Indonesia have introduced phased ESG disclosure requirements. Yet the relationship between ESG reporting quality and firm valuation remains empirically contested, with conflicting findings across different market, sector, and institutional contexts. This study examines ESG reporting quality and investor sentiment as co-determinants of firm valuation across 386 listed companies in India, Singapore, and Thailand using a panel event-study methodology combined with text-based ESG quality scoring. ESG reporting quality is assessed using a novel Natural Language Processing (NLP) framework applied to 3,860 annual report sustainability sections, scoring specificity, quantification, third-party verification, and forward-looking commitment dimensions. Panel fixed-effects regression reveals that ESG quality score is positively associated with Tobin's Q (β=0.028 per 10-point quality improvement, p<0.001) and negatively associated with cost of equity capital (β=-0.34 percentage points per 10-point improvement, p<0.01). The investor sentiment channel — measured through text-based analysis of 47,200 institutional investor earnings call transcripts — partially mediates the ESG-valuation relationship, with ESG quality improving sentiment scores (β=0.19, p<0.01), which in turn predict valuation premiums (β=0.31, p<0.001). Post-BRSR mandatory adoption, the ESG-valuation premium strengthened by 34% in India relative to pre-mandate baseline, suggesting that regulatory credibility amplifies investor value attribution of ESG quality signals.
Keywords:
SG reporting, BRSR, investor sentiment, firm valuation, Tobin's Q, natural language processing, TCFD, cost of equity, India, Singapore, Thailand, panel data
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