Visualizing environmental, social, and governance disclosure in non-financial reports: does it matter for lenders? A machine-supported approach

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:This paper provides empirical evidence on the financial impact of visual ESG disclosure, using machine learning to quantify images.

🏢実務担当者:Corporate disclosure teams can consider visual presentation of ESG data as a cost-effective signal to lenders, but need to ensure consistency.

🏛政策担当者:Regulators exploring non-financial reporting standards might consider guidelines on visual disclosure quality.

Purpose In recent years, companies have increasingly adopted visual tools to communicate their sustainability practices, responding to growing stakeholder demand for more transparent and accessible non-financial information. Within this context, the use of visual content in environmental, social, and governance (ESG) disclosure has also gained prominence in academic literature. Under the lens of signaling theory, the purpose of this study is to investigate the relationship between visual ESG disclosure and the cost of debt. Design/methodology/approach This study adopts a machine-supported approach, relying on Google’s Vision API to assess the extent to which a sample of 279 listed firms included in the MSCI Europe Index incorporate photographs and images related to ESG issues in their non-financial reports for the 2023 financial year. A regression model was used to assess the relationship between the level of visual ESG disclosure, proxied by the natural logarithm of the number of ESG photographs and images retrieved from sampled non-financial reports, and the cost of debt. Findings The results of this study reveal that the majority of ESG photographs and images in corporate non-financial reports are linked to environmental themes, followed by social topics and, to a much lesser extent, governance content. In addition, the findings of this study indicate that a greater use of visual ESG disclosure is associated with a reduction in the cost of debt. Originality/value This study enriches the ESG disclosure literature by shifting attention from the content to the form of disclosure, emphasizing the strategic role of visual elements in non-financial reporting and their influence on the cost of debt. To the best of the authors’ knowledge, this is the first study to offer empirical insight into the impact of using photographs and images for ESG disclosure on borrowing costs. This study also advances the application of signaling theory by demonstrating how visual communication can serve as a credible signal of corporate transparency in capital markets.

• openaire https://doi.org/10.1108/vjikms-03-2025-0124first seen 2026-05-05 19:08:34