Is environmental reporting important for public companies’ market valuation? The case of European Union developing markets

The aim of our study is twofold: to determine the quality of environmental information published by companies listed in developing EU markets (Bulgaria, the Czech Republic, Greece, Hungary, Poland, and Romania) and to assess the impact of this reporting on their market value. The research period covers 21 years, from 2003 to 2023. To test the quality of environmental reporting, we used the LSEG database. To assess the impact of environmental data disclosure on companies’ market value, we used the modified Ohlson Valuation Model. We apply a technique that makes it possible to assess whether environmental reporting has had a significant impact on companies’ market value. Contrary to our expectations, the quality of environmental information disclosed by companies was and is definitely unsatisfactory despite the non-financial reporting obligation. Nonetheless, the research showed a positive relationship between environmental reporting after the implementation of the directive on non-financial reporting in 2017 and their market value.