Corporate Governance, ESG Disclosure, and Sustainable Development Goals: An Integrated Analysis of Financial Transparency and Accountability in Contemporary Firms

Abstract

The increasing demand for corporate transparency and accountability has significantly reshaped the landscape of financial reporting and governance practices across global capital markets. In recent decades, traditional financial disclosures have been deemed insufficient to capture the full spectrum of risks, opportunities, and responsibilities faced by corporations operating in complex socio-economic and environmental contexts. Consequently, Environmental, Social, and Governance (ESG) disclosure and Sustainable Development Goals (SDGs) reporting have emerged as critical mechanisms through which firms communicate their broader value creation processes and societal impacts. This study develops a comprehensive and theoretically grounded examination of the role of ESG and SDG-related disclosures in enhancing financial transparency, strengthening corporate governance, and improving stakeholder trust. Drawing strictly on established literature in corporate governance, voluntary disclosure, sustainability reporting, and financial transparency, this research integrates agency theory, stakeholder theory, legitimacy theory, and resource dependence theory to explain why firms engage in expanded disclosure practices and how governance structures influence disclosure quality.

The study adopts a qualitative, text-based methodological approach, synthesizing empirical

findings and theoretical arguments from prior research to construct a coherent analytical framework. Particular attention is given to board characteristics, ownership structures, regulatory environments, and cultural contexts as determinants of disclosure behavior. The analysis reveals that robust corporate governance mechanisms—such as board independence, diversity, and effective oversight—are consistently associated with higher-quality ESG and SDG disclosures. Furthermore, ESG transparency is shown to mitigate information asymmetry, reduce agency costs, and enhance investor confidence, thereby contributing indirectly to firm performance and long-term sustainability.

The findings also highlight persistent shortcomings in SDG reporting, including selective disclosure, lack of standardization, and symbolic adoption, which undermine the credibility and comparability of sustainability information. Despite regulatory initiatives such as the European Union’s Directive 2014/95/EU, compliance remains uneven, suggesting that regulation alone is insufficient without strong governance incentives and stakeholder pressure. By offering an extensive theoretical elaboration and integrative discussion, this article contributes to the literature by bridging corporate governance research with sustainability and disclosure studies. It provides valuable insights for policymakers, regulators, investors, and corporate leaders seeking to enhance transparency and accountability in pursuit of sustainable development objectives.