An evaluation of the relationship of ESG Ratings, ESG Disclosure and Market Capitalisation. A study of the Johannesburg Stock Exchange (“JSE”) listed companies – 2019 to 2023

Abstract

This thesis investigates the relationship between Environmental, Social, and Governance (ESG) ratings, ESG disclosures, and market capitalisation among companies listed on the Johannesburg Stock Exchange (JSE) from 2019 to 2023. While ESG integration into capital markets has gained global traction, there remains a paucity of empirical evidence within African financial systems. This study addresses that gap by evaluating whether ESG performance, measured using ESG GPS, a proprietary AI-powered tool, is associated with firm market value in South Africa, an emerging market characterised by structural inequality, resource dependence, and evolving sustainability disclosure practices. The study employs a positivist, quantitative, multi-method approach incorporating Pearson’s correlation, cross-sectional regression, and sector specific longitudinal panel regression models. Data from over 300 JSE-listed companies are analysed, with a sectoral focus on the banking sector, given its systemic economic role and regulatory ESG maturity. The research is underpinned by stakeholder, signalling, legitimacy and institutional theories, providing a robust conceptual framework for assessing ESG disclosure as both a strategic and institutional response to stakeholder expectations and market pressures. Results demonstrate a positive relationship between ESG ratings and market capitalisation, although the strength and significance of this relationship vary across sectors and are influenced by disclosure quality, firm characteristics and the financial materiality of ESG factors.
This research contributes to the advancement of ESG scholarship by offering one of the first full-sample exchange-level empirical analyses within an African context. It also provides methodological contributions through the application of ESG GPS data as a data standardisation and measurement tool and strengthens theoretical understanding of ESG disclosure through the integrated application of signalling, stakeholder, institutional and legitimacy perspectives in emerging markets.

Date of Award	21 Aug 2026
Original language	English
Awarding Institution	University of Northampton
Supervisor	Nadeem Aftab (Director of Studies), Ngozi Ibeji (Supervisor) & David A. Crowther (Supervisor)