The Impact of ESG Reporting on Analyst Forecast Accuracy: A Cross-Market Review

Abstract

As the importance of Environmental, Social, and Governance (ESG) reporting grows, companies, investors, and policymakers increasingly focus on its impact on financial markets. Existing studies suggest that ESG disclosures can help analysts better understand a company’s risks and opportunities, potentially improving forecast accuracy. However, the relationship is complex due to the qualitative nature of ESG data, inconsistent reporting standards across markets, and varying regulatory and cultural environments. This review examines the existing literature on ESG reporting and analyst forecast accuracy, highlighting key challenges such as inconsistencies in disclosure practices and information asymmetry. It also identifies gaps in cross-market comparisons and emphasizes the need for further research to explore how ESG factors influence financial analysis in different contexts. The findings offer insights for scholars, policymakers, and market participants aiming to improve the relevance and consistency of ESG reporting.