An Accounting Framework for ESG Reporting

Bonham, Jonathan; Riggs-Cragun, Amoray

doi:10.2139/ssrn.4016659

Cited by 2 publications

(2 citation statements)

References 9 publications

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“…The adoption of ESG Pay has the potential to partially align the objectives of a company's management with shareholders that intrinsically care about ESG outcomes in addition to financial outcomes (Hart and Zingales [2017, 2022], Pastor, Stambaugh, and Taylor [2021], Bonham and Riggs‐Cragun [2022]). This possibility is supported by recent empirical research showing that some investor groups are willing to trade financial returns for improvements in ESG performance (Riedl and Smeets [2017], Hartzmark and Sussman [2019], Krueger, Metzger, and Wu [2020], Barber, Morse, and Yasuda [2021], Ceccarelli, Ramelli, and Wagner [2021]).…”

Section: Conceptual Frameworkmentioning

confidence: 99%

Executive Compensation Tied to ESG Performance: International Evidence

Cohen

Kadach

Ormazábal

et al. 2023

J of Accounting Research

136

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Section: Conceptual Frameworkmentioning

confidence: 99%

Executive Compensation Tied to ESG Performance: International Evidence

Cohen

Kadach

Ormazábal

et al. 2023

J of Accounting Research

136

View full text Add to dashboard Cite

show abstract

“…Management needs to balance the cost and income when making an ESG investment (CAI et al, 2016). When ESG outcomes can be perfectly measured, directly subsidizing the ESG outcome is more effective to improve enterprise ESG; and when ESG cannot be reliably measured, regulators can indirectly improve ESG outcomes by subsidizing the financial performance of firms with socially desirable technologies (Bonham and Riggs, 2022). PBB can reduce the information asymmetry between taxpayers and the government, financial departments, and budget departments, effectively reduce agency conflict, and broaden the space for government environmental subsidies.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Can performance-based budgeting reform improve corporate environment in ESG? Evidence from Chinese-listed firms

Wang

2022

Front. Environ. Sci.

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Finance is a pillar industry of national governance. It also provides a solid guarantee for achieving the official Double Carbon target. The question of how to forefront the role of environmental governance in the reform of fiscal and taxation systems, whilst also motivating enterprises to enhance Environment in Environmental, Social, and Governance (EESG) considerations is worth investigating in depth. This study takes A-share listed companies in China from 2001 to 2020 as examples. The effect of Performance-Based Budgeting (PBB) reform on the EESG of these enterprises is empirically examined through quasi-natural experiments using a multi-time difference-in-difference model. We find that PBB significantly optimizes the EESG of the enterprises. The placebo test, the difference-in-difference method, and a series of other robustness tests all support this conclusion. Furthermore, it is suggested that the environmental governance effect of PBB is more significant in areas with heavy financial pressure and stronger government audit. The environmental governance effect of the PBB reform is significant for enterprises with government contracts, strong green innovation capabilities, or high financing constraints. The mechanism test is performed, and the results suggest that the influence mechanism of this environmental governance role lies in the fact that PBB has improved environmental protection subsidies and enhanced fiscal transparency. Through the economic consequences test, we find that enterprise EESG can bring economic benefits to enterprises, which is reflected in the improvement of enterprise return on total assets, price-to-book ratio, and total patent authorization. This study enriches literature on the economic consequences of PBB, and has significance in deepening current fiscal and tax system reform, vigorously optimizing the major strategy of carbon peak and carbon neutrality.

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An Accounting Framework for ESG Reporting

Cited by 2 publications

References 9 publications

Executive Compensation Tied to ESG Performance: International Evidence

Executive Compensation Tied to ESG Performance: International Evidence

Can performance-based budgeting reform improve corporate environment in ESG? Evidence from Chinese-listed firms

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