The Public Effect of Private Sustainability Reporting: Evidence from Incident-Based Engagement Strategy

Natalia Semenova ()
Additional contact information
Natalia Semenova: Linnaeus University

Journal of Business Ethics, 2023, vol. 182, issue 2, No 14, 559-572

Abstract: Abstract This study examines whether private information exchange between institutional investors and public companies in engagement dialogs on sustainability issues improves the publicly disclosed measurements of the target company’s financial and non-financial performance and transparency. It uses a unique dataset containing 326 private reports related to environmental, social, and anti-corruption recommendations to address material incidents among publicly traded MSCI World Index portfolio companies of Nordic institutional investors. The results indicate that target companies appear to have similar values with matched companies on sustainability performance and transparency ratings in the 3 years following the initiation of private reporting. Unexpected sustainability incidents are subsequently reflected in the next year’s fall in the market value of target companies relative to MSCI World Index. This paper provides empirical evidence for the legitimacy-based provision of private sustainability information used in a larger disclosure system of public companies.

Keywords: Risk management; Private engagement; Institutional investors; Sustainability risks; Sustainability reporting; Financial performance (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-021-05007-8 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:jbuset:v:182:y:2023:i:2:d:10.1007_s10551-021-05007-8

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-021-05007-8

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().