Stock market reactions to adverse ESG disclosure via media channels

Wong, Jin Boon; Zhang, Qin

doi:10.1016/j.bar.2021.101045

Cited by 183 publications

(94 citation statements)

References 134 publications

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“…In order to establish a fair, just and open ESG rating mechanism, many third‐party rating agencies have also actively participated in the formulation and evaluation of ESG ratings. Although ESG information is not disclosed compulsorily in corporate financial report, increasingly socially responsible firms endeavor to disclose their ESG activities, which can not only attract investors attention, but also improve corporate reputation (Griffin et al, 2021; Nirino et al, 2021; Wong & Zhang, 2022). Moreover, according to agency theory (Jensen & Meckling, 1976), as a voluntary information disclosure behavior, ESG disclosure and ratings can alleviate information asymmetry between a firm and its stakeholders.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…Tang and Zhang (2020) argued that the issuance of “green bonds” contributes to increasing stock prices, higher stock liquidity, which is instrumental in higher corporate value in the near future. Wong and Zhang (2022) found that better ESG performance is related to lower cost of contracts, or lower cost of equity capital (Reverte, 2012).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

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Corporate sustainability and trade credit financing: Evidence from environmental, social, and governance ratings

Tian

2022

Corp Soc Responsibility Env

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Corporate sustainability and trade credit financing: Evidence from environmental, social, and governance ratings

Tian

2022

Corp Soc Responsibility Env

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“…Issuers with smaller capitalization and less liquid stocks that have a good reputation and do not belong to "sinful" industries (production and sale of alcoholic beverages, tobacco products, organization of gambling, etc.) experience the greatest adverse impact [19].…”

Section: Motives For Investors To Take Into Account the Company's Esg...mentioning

confidence: 99%

Which shareholders are interested in the esG-indicators of the company?

Karginova-Gubinova

2022

jour

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Today Russian companies have a low level of compliance with the principles of sustainable economy, which can be largely determined by a weak interest of some corporate stakeholders to ESG (environmental, social and governance) indicators. It determines the relevance of studying the individual groups of stakeholders and determine the measure of their interest in ESG-strategy.The purpose of this work is to determine which shareholders are most interested in ESG indicators of companies whose securities are traded on the Russian stock market. The research is based on the data from Yahoo Finance and the website of the Sustainalytics, Inc. company as of the end of 2021.Cluster, variance, regression and correlation analyses were carried out and methods of descriptive statistics were used.Results of this work have revealed the presence of the features of ownership structure of Russian companies in comparison with companies of developed countries. The lack of insiders’ interest in corporate ESG characteristics has been confirmed. At the same time, the increase in the share of institutional shareholders leads to decrease in the assessed risk of ESG but its rate is less than the change in the shares of institutional owners. The different importance of individual components of the ESG assessment for institutional shareholders has been noted.The novelty of this research is the study of Russian investors and issuers that have not been systematically studied before as well as the ascertainment of complex influence of insiders/outsiders and institutional/private investors. The scientific significance is determined by the development of a new approach to study the influence of the degree of investor responsibility on corporate characteristics. The practical significance of the results lies in obtaining the possibility of developing targeted incentive tools for company shareholders to increase their interest in corporate ESG-indicators and to increase the sustainability of the company and territories. This research will be of interest to investors, company managers, authorities, non-profit organizations and specialists in the field of ESG investment.

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“…What is more, ESG-related news may act as a factor which triggers stock market reactions (cf. Wong & Zhang, 2022;Capelle-Blancard & Petit, 2019).…”

Section: Are Esg Disclosures Relevant For the Users Of A Financial St...mentioning

confidence: 99%

The Importance of the ESG Factors and Their Potential Impact on an Audit of a Financial Statement

Indyk¹

2022

IBES

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This review paper aims to determine the potential impact of Environmental, Social, and Corporate Governance (ESG) factors on an audit of a financial statement. For this reason, a triangle of implications has been proposed, i.e., for: (1) audit clients whose business activity is reflected in a financial statement; (2) a financial statement; and (3) audit firms which perform an audit. The evidence represents a collection of a) scientific articles, b) publications offered by professional accounting bodies and consulting firms, and c) relevant standards and legal regulations. The paper finds that ESG has become a factor which must be considered, and the financial world will face multiple changes. For audit clients, the critical aspect will be ESG integration with a business model. Financial reporting will evolve under Exposure Drafts IFRS S1 and IFRS S2. A financial statement will require in-depth knowledge about existing accounting standards to reflect the financial implications of ESG-related products and transactions. Moreover, there is a distinction between “financial audit” and “ESG assurance” in audit and assurance services. However, some ESG-related risks and matters may be considered in the financial audit cycle. The paper’s findings are significant from the scientific research perspective as only a few studies contribute to ESG and auditing. The article also provides some practical implications that might be important for audit clients, firms, and regulators.

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Stock market reactions to adverse ESG disclosure via media channels

Cited by 183 publications

References 134 publications

Corporate sustainability and trade credit financing: Evidence from environmental, social, and governance ratings

Corporate sustainability and trade credit financing: Evidence from environmental, social, and governance ratings

Which shareholders are interested in the esG-indicators of the company?

The Importance of the ESG Factors and Their Potential Impact on an Audit of a Financial Statement

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