The role of sustainable disclosure of social responsibility in reducing the cost of capital for economic units

Abstract

The research aims to clarify the concept of sustainable disclosure and its three dimensions (economic, environmental, and social), as well as to explain the concept of the cost of capital and its measurement models, while analyzing the impact of sustainable disclosure on reducing it. Sustainable disclosure serves as a means of presenting both financial and non-financial performance, enabling investors and creditors to better assess risks and reduce uncertainty, which in turn contributes to lowering the cost of capital.

The study adopted the standards of the Global Reporting Initiative (GRI) to measure the level of disclosure in Baghdad Soft Drinks Company, one of the companies listed on the Iraq Stock Exchange. Published financial statements were used, and (SPSS v.22) was employed to test correlation and impact relationships. The findings indicate that sustainable disclosure enhances reporting quality, reduces information asymmetry, and increases investor confidence, thereby attracting investment and lowering the cost of capital. The study recommends adopting standardized sustainable disclosure statements in industrial firms to enhance information objectivity and demonstrate the effectiveness of social performance