Hyung-Rok Jung

1 Introduction Managers' disclosure choices have gradually shifted from financial information to a diversified form, including non-financial narrative disclosures (Stolowy and Paugam 2018). While these non-financial disclosures aim to reduce information asymmetry between investors and managers by providing more information, managers inherently have greater discretion in interpreting financial data to digest them into narrative format.

ABSTRACT This study investigates the effect of Environmental, Social, and Governance (ESG) performance on capital-raising costs in the debt market. The study also examines the role of internal audit organizations in this relationship. The results of the current study show that firms with high ESG performance have lower cost of debt. More importantly, when ESG is classified into sub-factors (E, S, and G), all three are negatively associated with the cost of debt.