Environmental, Social and Governance (ESG) Disclosure and the Dividend Policies of Brazilian Companies

This research aimed to analyze the effects of environmental, social and governance (ESG) disclosure on dividend policies of Brazilian companies. To achieve this goal, a descriptive documentary research employing a quantitative approach (Multiple Linear Regression and Logistic) was conducted from 2015 to 2020, involving a sample of 104 companies. The results revealed that ESG disclosure contribute to the stability of dividend payments made by Brazilian companies from one year to the next. The results suggest that companies with higher ESG disclosure tend to have a more stable dividend payout. Regarding the effects of ESG disclosure on dividend payments, the findings revealed that increased investments in general ESG and its pillars make companies distribute dividends to shareholders. Concerning the value of dividends paid, only the pillar of corporate governance enhances this variable. Based on these findings, the conclusion was drawn that companies with higher ESG disclosure reveal better long-term alignment with shareholders and stakeholders due to more stable profit sharing. This research contributes to the dividend policy literature by highlighting the relatively unexplored determining potential of ESG disclosure within these policies. In addition, it contributes by revealing that involvement in ESG initiatives encourages companies to increase dividend payments and uphold stability. This, in turn, fosters heightened investor motivation to invest in socially responsible companies.