Non-financial information and cost of equity capital: an empirical analysis in the food and beverage industry

Purpose: This study examines the effect that environmental, social and governance (ESG) disclosure generates on the cost of equity capital in the food and beverage (F&B) sector. Design/methodology/approach: This study analyses a sample of 171 international listed firms pertaining to the F&B sector and headquartered in North America, Western Europe and Asia Pacific (developed), forming an unbalanced panel of 1,316 observations, spanning the period 2010–2019. We run a fixed-effects panel regression model to test the relationship between ESG disclosure and the cost of equity capital. Findings: Our empirical outcomes suggest a significant negative relationship between ESG disclosure and the cost of equity capital. We find support for the notion that increased levels of ESG disclosure are linked to an improved access to financial resources for firms. Originality/value: This is the first study that analyses the impact of ESG disclosure on the cost of equity capital in the F&B sector, taking existing literature a step further into more detailed and specific aspects of the relationship of focus.