Environmental, social, and governance (ESG) performance and earnings management: evidence from the brazilian stock market

Authors

DOI:

https://doi.org/10.21680/2176-9036.2026v18n1ID38451

Keywords:

ESG, Gerenciamento de resultados, Mercado acionário brasileiro

Abstract

Purpose: The objective of this study is to analyze the influence of Environmental, Social, and Governance (ESG) performance on earnings management in the Brazilian stock market.

Methodology: Using a sample of 717 observations from 96 companies listed on Bolsa, Brasil, Balcão (B3) between 2010 and 2022, earnings management was estimated through two methods: accrual-based (EM-A) and real activities-based (EM-R). ESG performance was measured using the LSEG Data & Analytics platform score, which applies a proprietary methodology to rate companies on a scale from 0 to 100. The econometric analysis was conducted using Ordinary Least Squares (OLS) with robust standard error corrections and fixed effects for year and sector.

Results: The findings reveal that ESG performance does not influence earnings management overall. However, when breaking down the ESG components, corporate governance shows a significant negative effect on EM-A, indicating that stronger corporate governance reduces incentives to manipulate accounting earnings. Additionally, social performance has a significant negative impact on EM-R, suggesting that higher corporate social responsibility reduces earnings manipulation through real activities.

Contributions of the Study: Thus, the study seeks to provide support for governments to develop public policies and regulatory mechanisms aimed at transparency and sustainability; for companies to improve their governance and compliance systems; and for investors to incorporate ESG criteria into their decisions, contributing to the mitigation of conflicts of interest in the market.

 

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Author Biographies

Jocykleber Meireles de Souza, Universidade Estadual da Paraíba (UEPB).

Doutorando em Ciências Contábeis pela Universidade Federal da Paraíba (UFPB). Mestre em Ciências Contábeis pela Universidade Federal do Rio Grande do Norte (UFRN).

Vanessa Câmara de Medeiros Fernandes, Universidade Federal da Paraíba (UFPB)

Doutoranda em Ciências Contábeis pela Universidade Federal da Paraíba (UFPB). Mestra em Ciências Contábeis pela Universidade Federal do Rio Grande do Norte (UFRN). 

Camilla Araújo Amaral Duarte, Universidade Federal Rural do Semi-Árido (UFERSA

Mestranda em administração pela Universidade Federal Rural do Semi-Árido (UFERSA). 

Allisson Silva dos Santos, Universidade Estadual da Paraíba (UEPB)

Doutorando e Mestre em Administração pelo Programa de Pós-Graduação em Administração - PPGA da Universidade Federal da Paraíba - UFP

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Published

05-01-2026

How to Cite

Souza, J. M. de, Fernandes, V. C. de M., Duarte, C. A. A. ., & Santos, A. S. dos . (2026). Environmental, social, and governance (ESG) performance and earnings management: evidence from the brazilian stock market. REVISTA AMBIENTE CONTÁBIL - Universidade Federal Do Rio Grande Do Norte, 18(1), 170–192. https://doi.org/10.21680/2176-9036.2026v18n1ID38451

Issue

Vol. 18 No. 1 (2026): Jan./Jun.

Section

Section 1: Accounting Applied to the Business Sector (S1)

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