Abstract
This study examines whether sustainable practices enhance shareholders’ wealth in Jordanian non-financial companies. Using a sample of 78 listed firms, the research analyzes the relationship between sustainable practices and shareholders’ wealth, measured through earnings persistence, market value, and return on equity. Sustainable practices were categorized into three types: social, environmental, and economic information, based on 38 items. The findings suggest that companies with lower market value tend to engage in more sustainable practices, which can guide stakeholders in decision-making and promote ethical corporate behavior. Additionally, firms that disclose more extensive sustainability information aim to improve earnings persistence and return on equity, though not all proxies, such as earnings persistence, showed a direct relationship with sustainable practices. The overall level of sustainability disclosure remains relatively low, likely due to the absence of legal enforcement or unified disclosure standards. Despite this, the study highlights the ethical implications of sustainability disclosure and its role in influencing investors’ perceptions and decision-making processes. By integrating multiple financial proxies and expanding the scope of sustainability dimensions, this research provides a more comprehensive understanding of how ethical corporate behavior intersects with shareholder value. The study contributes to the growing literature on sustainability and corporate performance, particularly in emerging markets, and offers recommendations for policymakers to enhance sustainability disclosure frameworks that align corporate conduct with broader societal expectations.
Keywords: Earnings Persistence, Market Value, Return on Equity, Shareholders’ Wealth, Sustainability Practices.