The real effects of mandated information on social responsibility in financial reports: Evidence from mine-safety records

Christensen, Hans B.; Floyd, Eric; Liu, Lisa Yao; Maffett, Mark G.

doi:10.1016/j.jacceco.2017.08.001

Cited by 415 publications

(197 citation statements)

References 31 publications

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“…Corporate social responsibility (CSR) reporting represents a form of voluntary corporate non-financial disclosure for managers to signal their trustworthiness and communicate private information to investors. The literature indicates that CSR information has incremental value to investors when evaluating, for example, companies' future financial performance (Orlitzky et al, 2003;Servaes and Tamayo, 2013;Manchiraju and Rajgopal, 2017;Clarkson et al, 2019), cost of equity capital (Dhaliwal et al, 2011), labour productivity (Christensen et al, 2017), earning quality (Kim et al, 2012), and even the propensity to commit high-profile corporate misconduct (Christensen, 2016). Given such evidence, companies both within the United States and globally are increasingly providing standalone CSR reports voluntarily, in addition to traditional corporate financial disclosures, in response to the growing demand for CSR information by stakeholders (KPMG, 2015).…”

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confidence: 99%

A Textual Analysis of US Corporate Social Responsibility Reports

Clarkson

Ponn²,

Richardson

et al. 2020

Abacus

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We employ computer‐based textual analysis to examine disclosure patterns for a sample of US corporate social responsibility (CSR) reports from the period 2002–2016. Starting from 466 features commonly used in computational linguistics, our results show that the linguistics or disclosure patterns in CSR reports can be used to accurately predict the actual CSR performance type of CSR reporters. Specifically, we find that the two most commonly used disclosure characteristics, number of words and number of sentences, alone can be used to predict reporting firms’ CSR performance type with 81% accuracy. The accuracy of prediction increases to 96% when the top 50 linguistics features most relevant to firms’ CSR performance are included in the prediction model. In addition, we find that the linguistic features of CSR disclosure identified by our study are incrementally value relevant to investors even after controlling for the actual CSR performance score from the professional CSR rating agencies. This finding suggests that the linguistic features of CSR disclosure can be an important venue for capital market participants in evaluating firms’ CSR performance type, especially when professional CSR performance ratings are not available.

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confidence: 99%

A Textual Analysis of US Corporate Social Responsibility Reports

Clarkson

Ponn²,

Richardson

et al. 2020

Abacus

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“…Two potential channels emerge from the extant literature (e.g. Christensen et al ., ). On the one hand, it is possible that investors believe that improved practices will ultimately result in economic benefits, such as efficiency gains.…”

Section: Discussionmentioning

confidence: 99%

“…Christensen et al . () investigated capital markets and real effects associated with US firms filing CMDs yet without examining their adherence to Section 1502. Thus, it remains a relevant and timely empirical question to examine: (1) the level of CMD and (2) the enabling firm‐level characteristics associated with CMD levels.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…Ettredge et al ., ; Peters and Romi, ). Our findings also relate to the long‐standing concerns of policy‐makers and securities regulators regarding the effectiveness of mandatory norms designed to enhance due diligence practices via disclosure requirements (Prakash and Rappaport, ; Heitzman et al ., ; Christensen et al ., ). The interest around CMD is reinforced by regulatory initiatives similar to the Dodd–Frank Act currently unfolding in the European Union (Thomas and Economides, ; European Commission, ), China (China Chamber of Commerce, ), Canada and Australia (PricewaterhouseCoopers, ), thereby calling for more empirical evidence in this area.…”

Section: Introductionmentioning

confidence: 97%

“…Since 2014, companies publicly listed in the United States for which 3TG minerals are ‘necessary for the functionality or production’ of their products must disclose to the US Securities and Exchange Commission (SEC) their practices related to conflict minerals. This mandatory reporting regime, ratified in Section 1502 of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd–Frank Act), is the first attempt to legislate human rights disclosures (Arikan et al ., ; Sankara et al ., ; Christensen et al ., ). The Dodd–Frank Act illustrates the emerging need to regulate social conflicts and human rights abuses by demanding an increase in the disclosure of management practices regarding conflict minerals issues as part of a firm's business strategy.…”

Section: Introductionmentioning

confidence: 99%

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Determinants of Conflict Minerals Disclosure Under the Dodd–Frank Act

Via

Perego

2018

Bus Strat Env

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This paper examines conflict minerals disclosure (CMD) as mandated by the Dodd-Frank Act. We rely on a thorough content analysis conducted by the Responsible Sourcing Network on a sample of 122 firms that filed CMDs with the US Securities and Exchange Commission in 2015. We document that firms with long-term oriented incentives, a greater number of board meetings, strong corporate governance systems and inclusion in a sustainability index are associated with higher levels of CMD. Our results suggest that in the presence of enforcement leniency, both internal and external firm-specific factors affect strategic (non-)compliance with a mandatory social disclosure regime. We provide implications for supply chain managers, corporate reporters and policy-makers involved in the adoption of responsible sourcing strategies.

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The real effects of ESG reporting and GRI standards on carbon mitigation: International evidence

Luo

Tang

2022

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This study explores the real effects of environmental, social, and governance (ESG) reporting and the adoption of global reporting initiative (GRI) standards on carbon mitigation. Using a sample of large international companies, our empirical evidence does not show that a general form of ESG reporting is associated with carbon mitigation. However, after controlling for ESG reporting, firms that follow GRI standards when preparing their ESG reports are more likely to achieve greater carbon mitigation. Channel tests show that such firms tend to set more proactive carbon strategies and policies, make environmental investments, and actively engage with stakeholders. Finally, we find that the real effects of GRI standards tend to occur mainly in weak institutional settings (e.g., countries with less stringent carbon regulations, lower climate consciousness, and weaker legal enforcement). Overall, the central insight of the study is that standardized ESG reporting under GRI plays a soft substituting role in promoting green aspirations in an institution void of a high degree of global warming awareness.

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The real effects of mandated information on social responsibility in financial reports: Evidence from mine-safety records

Cited by 415 publications

References 31 publications

A Textual Analysis of US Corporate Social Responsibility Reports

A Textual Analysis of US Corporate Social Responsibility Reports

Determinants of Conflict Minerals Disclosure Under the Dodd–Frank Act

The real effects of ESG reporting and GRI standards on carbon mitigation: International evidence

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