Does Capital Expenditure Matter for ESG Disclosure? A UK Perspective

Ahmed Saber Moussa, Mahmoud Elmarzouky

Research output: Contribution to journalArticlepeer-review


This study examines how capital expenditure (capex) affects Environmental, Social, and Governance (ESG) reporting and how corporate governance moderates this effect. We use data from non-financial firms in the FTSE All Share index from 2012 to 2021 and measure ESG disclosure with the Bloomberg ESG Disclosure Score, capex with logarithm of the ratio of capital expenditure to total assets, and corporate governance with a composite index based on Board Size, Independent Board, Board Diversity, and Audit Committee Non-Executives. We also examine the non-linear and threshold effects of capex on ESG disclosure with spline regression models. We find that capex is positively linked to ESG disclosure and that this association is robust for firms with better corporate governance. Our findings imply that capex improves ESG performance and impact and that corporate governance enables ESG communication to stakeholders. Our research advances the existing literature by revealing the link between capex, governance, and ESG reporting in a dynamic and uncertain environment. Our study holds practical significance for companies, investors, and regulators who want to incorporate ESG factors into capex decisions and reporting.
Original languageEnglish
Article number429
JournalJournal of Risk and Financial Management
Issue number10
Publication statusPublished - 28 Sept 2023

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© 2023 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
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  • ESG disclosure
  • capital expenditure
  • principal component analysis
  • resource dependence theory
  • stakeholder theory


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