CSR Research: Sustainability Reporting

Researchers reviewed social reports from 100 companies and found consistent themes across industries. This study also identifies management of pressures to meet stakeholder demands as a common primary goal of producing reports.

Some exchanges in the global market are now requiring publicly traded companies to issue environmental and social reports in addition to financial reports. Outside the United States more companies are moving toward integrated reporting that combines financial and nonfinancial information in one document.

This study found that pressures from competitors and the media, combined with a company’s corporate citizenship visibility are important determinants for the adoption of the Global Reporting Initiative guidelines. Because of the external nature of these factors, the researchers suggest a greater role of marketing professionals who are expert at managing reputation and stakeholders.

A global survey by KPMG of more than 3,000 companies in multiple sectors finds corporate citizenship reporting is a growing practice, particularly among the largest global companies. An increasing number of companies say they derive business value from the reporting process.

This study looks at how companies communicate about both economic and social interests in corporate social reports by using euphemisms that can overcome sometimes conflicting language and concerns.

Researchers examined whether the disclosure of CSR-related information in ESG reports helps to improve the accuracy of the earnings forecasts of sell-side financial analysts. They found the ESG reports complement financial reporting and lead to more accurate forecasts by financial analysts.

In a study of manufacturing firms, researchers explored the effects of self-auditing and self-reporting emissions violations on emissions and the cost of regulation with various levels of regulatory considerations. Findings show that reduced penalties for firms that self-audit and report violations reduced pollution rates and inspections of participating firms. Policies that granted immunity generally raised pollution rates as well as inspection rates – and therefore the cost of regulation.

Researchers examined the link between transparency, liquidity, cost of capital and firm valuation at firms across 46 countries. Their results indicate that transparent companies achieve higher liquidity and lower transaction costs making the company more attractive to investors.

Researchers examined the connection between transparency and stock liquidity. They found that stocks of transparent firms are more reliably liquid to trade than stocks of opaque firms, which can make transparent firms more attractive to investors and increase their value.

This study looked at the connection between the level of information investors have about a firm and the cost of capital for a firm. The results suggest that the benefits of information disclosure and dissemination may outweigh the costs for some firms.

Researchers found that shareholder resolutions and the threat of state regulation provoked firms’ public disclosure of important environmental information.

Gathering data on US facilities subject to the US Clean Air Act, researchers investigated a wide array of areas of environmental practice and regulation. What they found was that regulators interpret a facility’s voluntary disclosure of environmental violations as a signal of effective self-policing.