The effect of Environmental, Social, and Governance disclosure on cost of debt: A life‐cycle perspective

Drawing on life cycle theory, this paper explores the relationship between Environmental, Social, and Governance (ESG) disclosure and the cost of debt using 556 Indian‐listed firms. The findings show that ESG disclosure is negatively related to the cost of debt; however, the impact of ESG disclosure is more pronounced in the growth and mature stages compared to the introduction, decline, and shakeout stages. The study deepens the analysis by investigating the effect of individual dimensions of ESG disclosure and the findings reveal that the environmental and social aspects have a more pronounced impact on the cost of debt compared to the governance component.