The economics of ESG disclosure regulation

Richard Frankel, S. P. Kothari () and Aneesh Raghunandan
Additional contact information
Richard Frankel: Washington University in Saint Louis
S. P. Kothari: Massachusetts Institute of Technology
Aneesh Raghunandan: Yale School of Management

Review of Accounting Studies, 2025, vol. 30, issue 4, No 3, 3218-3253

Abstract: Abstract We provide an economics-based review of the pros and cons of ESG disclosures, emphasizing environmental disclosures from an investor-centric perspective. Our survey intends to guide corporate management and regulators in navigating the ESG disclosure terrain. Rather than summarizing the vast and growing ESG literature, we assess the economic arguments for ESG disclosure regulation and the form of this disclosure. We discuss investors’ demand for ESG information and its supply by publicly traded firms. We analyze the case for and against mandatory ESG disclosure. Finally, we weigh the efficiency of disclosure requirement characteristics, assuming mandatory ESG disclosure is warranted. We intend to be positive rather than prescriptive, providing a line of reasoning readers can employ to reach their own conclusions about what we ought to do.

Keywords: Disclosure regulation; ESG disclosure; Supply; Demand; M4; G14; Q56 (search for similar items in EconPapers)
JEL-codes: G14 M4 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11142-025-09900-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:reaccs:v:30:y:2025:i:4:d:10.1007_s11142-025-09900-9

Ordering information: This journal article can be ordered from
http://www.springer.com/accounting/journal/11142

DOI: 10.1007/s11142-025-09900-9

Access Statistics for this article

Review of Accounting Studies is currently edited by Paul Fischer

More articles in Review of Accounting Studies from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().