The Impact of Human Rights Reporting and Presentation Formats on Non-Professional Investors’ Perceptions and Intentions to Invest

William D. Brink, Karen De Meyst and Tim V. Eaton
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William D. Brink: Department of Accountancy, Farmer School of Business, Miami University, Oxford, OH 45056, USA
Karen De Meyst: Nijmegen School of Management, Radboud University Nijmegen, 6500 HK Nijmegen, The Netherlands
Tim V. Eaton: Department of Accountancy, Farmer School of Business, Miami University, Oxford, OH 45056, USA

Sustainability, 2022, vol. 14, issue 4, 1-25

Abstract: Compared to other types of sustainability information, it remains uncommon for companies to report human rights information, and critics argue that when companies do report, they often report opportunistically. This is problematic as non-professional investors may rely on this information when making investment decisions. In this study, we use an experiment to examine how non-professional investors react to human rights information presented in varying formats (i.e., numerical, graphs, qualitative) compared to no reporting. Consistent with our expectations, we find that when information is positive, participants do not react to qualitative information. However, they react positively to numerical and graphical information and seem to use a less critical mindset when processing this type of information, which is associated in the literature with an “aura” of accuracy, objectivity, and neutrality. This is problematic because, similar to what is often the case in reality, participants had no certainty about the accuracy of the information. Further, when information is less positive, participants do not react to numerical or graphical information, but they do react negatively to qualitative information, which is more vague and may be perceived as companies trying to obfuscate less positive performance. We offer a critical discussion of our results.

Keywords: human rights reporting; sustainability reporting; non-professional investors; presentation format (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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