The Value Relevance of Corporate Sustainability Disclosures: An Analysis of a Dataset from One Large Asset Owner

Serafeim, George; Grewal, Jyothika

doi:10.2139/ssrn.2966767

Cited by 14 publications

(8 citation statements)

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“…Our results suggest that ESG/environmental disclosure is lower in firms with a higher percentage of insider holdings. This is similar to findings of Serafeim and Grewal (), which suggests that firms that are larger and less closely held tend to disclose more.…”

Section: Data Sources and Empirical Resultssupporting

confidence: 89%

“…Cheng, Ioannou, and Serafeim (2014) document that firms with better ESG actual performance-related scores can benefit from lower capital constraints. Serafeim and Grewal (2017) suggest that nonfinancial information can be used to predict expected future financial performance of the firm. Bank of America Merrill Lynch (2017) find that ESG-based investing would have helped investors avoid 90% of bankruptcies in the time frame they examined.…”

Section: Firm's Esg Transparency and Firm Valuementioning

confidence: 99%

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Environmental, social and governance transparency and firm value

2018

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We investigate whether environmental, social and governance (ESG) transparency, the extent of ESG disclosure, has an impact on firm value. Reducing investors’ information symmetry and agency costs is the mechanism by which better ESG transparency potentially impacts firm value. Using Bloomberg ESG disclosure scores to assess a firm's ESG transparency, we look at a sample of 1996 large cap companies across 47 developed and emerging countries and territories. Our empirical analyses suggest that the benefits from ESG disclosure outweigh their costs for the average listed firm. We find supporting evidence for greater disclosure of ESG issues boosting firm valuation measures, such as Tobin's Q. Furthermore, our results suggest that firms with greater asset size, better liquidity, higher R&D intensity, fewer insider holdings and good past financial performance will be more transparent in ESG issues.

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Section: Data Sources and Empirical Resultssupporting

confidence: 89%

Section: Firm's Esg Transparency and Firm Valuementioning

confidence: 99%

Environmental, social and governance transparency and firm value

2018

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“…For example, Leuz et al (2009) show that foreign investors tend to invest less in firms with poor governance standards and less reliable disclosure information. Moreover, Serafeim and Grewal (2017) suggest that non-financial information (ESG data) can be used to predict the financial performance of firms. In a similar vein, Czerwińska and Kaźmierkiewicz (2015) find that greater transparency of Polish companies in disclosing non-financial data (ESG data) results in lower volatility of stock return.…”

Section: Research Design and Hypothesesmentioning

confidence: 99%

International variations in ESG disclosure – Do cross-listed companies care more?

Luu²

2021

International Review of Financial Analysis

148

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“…Another illustration of how investors can place pressure and incentivize firms to put ESG factors into management practice is Norges Bank Investment Management (NBIM), the world's largest sovereign wealth fund. The three key investment criteria recently set by NBIM cover three areas: water, children's rights and climate change (Serafeim and Grewal, 2017). With regard to the sustainable and responsible investment practice, EY (2014) argues that corporate social responsibility information can provide institutional investors with additional information about their portfolio firms' future benefits and risks (EY, 2014).…”

Section: Introductionmentioning

confidence: 99%

Greenwashing in environmental, social and governance disclosures

Luu²,

Chen

2020

Research in International Business and Finance

420

157

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The environmental, social, and governance (ESG) data provided in firms' sustainability reports is often unaudited. If ESG information disclosed by firms is not reliable, a firm's greenwashing behavior can be a barrier to integrating ESG factors into investment decisions.In this paper, we study mechanisms to lessen firms' greenwashing behavior in ESG dimensions holistically. Firstly, we identify "greenwashers" as firms which seem very transparent and reveal large quantities of ESG data but perform poorly in ESG aspects. By creating peer-relative greenwashing scores for a cross-country dataset comprised by 1925 large-cap firms, we measure the extent to which large-cap firms engage in greenwashing. We find evidence that greenwashing behavior in ESG dimensions can be deterred by scrutiny from (a) independent directors, (b) institutional investors, (c) influential public interests via a less corrupted country system, and (d) being cross-listed. Our results suggest that the two firm-level governance factors are most effective at attenuating firms' misleading disclosure relating to ESG dimensions.

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The Value Relevance of Corporate Sustainability Disclosures: An Analysis of a Dataset from One Large Asset Owner

Cited by 14 publications

References 0 publications

Environmental, social and governance transparency and firm value

Environmental, social and governance transparency and firm value

International variations in ESG disclosure – Do cross-listed companies care more?

Greenwashing in environmental, social and governance disclosures

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