Institutional investors' impact on sustainability disclosure: exploring the moderating role of financial performance

Purpose - This paper aims to investigate the relationship between institutional investors and sustainability disclosure, specifically examining the impact of fi nancial performance as a moderator variable on the relationship between institutional investors and sustainability disclosure. Design/methodology/approach - This paper used a panel data set of 51 fi rms from the industrial sector listed in the Amman Stock Exchange, with a total of 459 observations during 2013-2021. Multiple regression models were used to test the direct and moderating relationships. Findings - The fi ndings of this paper indicate that institutional investors exhibit varying attitudes toward sustainability disclosure. Institutional investors have a positive and significant impact on fi rm sustainability disclosure. Furthermore, the relationship between institutional investors and sustainability disclosure is significantly influenced by fi nancial performance. Social implications - The study's fi ndings encourage regulators to enhance fi rms ' awareness of sustainability disclosures by balancing the economic, social and environmental pillars. This can be achieved by conserving natural resources, protecting the environment and promoting social justice for future generations. Originality/value - The paper's insights can be valuable for policymakers' sustainable practices by encouraging institutional investors to support sustainability activities actively.