Sustainable development goals disclosure and analyst forecast quality

Giuseppe Nicolò, Giovanni Zampone, Giuseppe Sannino and Paolo Tartaglia Polcini

Journal of Applied Accounting Research, 2024, vol. 26, issue 6, 1-25

Abstract: Purpose - This study aims to investigate the relationship between corporate sustainable development goals (SDGs) disclosure and analyst forecast quality. Design/methodology/approach - The study focuses on a sample of 95 Italian-listed companies preparing the mandatory non-financial declaration (NFD) according to the Global Reporting Initiative (GRI) standards over a five-year period (2017–2021), corresponding to an unbalanced sample of 438 observations. Analyst forecast quality was proxied by earnings forecast accuracy (FA) and earnings forecast dispersion (FD), built on data retrieved from the Refinitiv database. A manual content analysis was performed on NFDs to derive an SDG disclosure score (SDGD) for each sampled company. Findings - This study provides empirical evidence suggesting that voluntary SDG disclosure matters to the capital market in that it helps enhance the information environment of companies, evidenced by improved analyst forecast quality. In particular, this study highlighted that SDG disclosure positively influences analyst FA while negatively affecting analyst FD. Research limitations/implications - This study focuses on the Italian context, which has idiosyncratic characteristics regarding the structure of the financial market, the composition of corporate ownership and experience in non-financial reporting practices. Practical implications - This study indicates to corporate managers that following GRI standards may represent the right way to better integrate SDG disclosure in corporate non-financial reports and increase the relevance of such information for investors and other capital market participants. Originality/value - To the best of the authors’ knowledge, this is the first study that empirically examines the association between SDG disclosure and analyst forecast quality.

Keywords: Sustainable development goals; SDGs; analyst forecast quality; analyst forecast dispersion; non-financial reporting (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jaarpp:jaar-07-2023-0223

DOI: 10.1108/JAAR-07-2023-0223

Access Statistics for this article

Journal of Applied Accounting Research is currently edited by Associate Professor Orthodoxia Kyriacou

More articles in Journal of Applied Accounting Research from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().