Does persistence explain ESG disclosure decisions?

Garrett A. McBrayer

Corporate Social Responsibility and Environmental Management, 2018, vol. 25, issue 6, 1074-1086

Abstract: Advocates of an increased focus on environmental, social and governance (ESG) initiatives have argued that increased ESG disclosure is a necessary first step. Given the limited regulatory requirements on ESG disclosure, managerial preference serves as a primary determinant of ESG transparency. Using data on ESG disclosure from Bloomberg, I examine the extent to which disclosure persistence on the behalf of firm management, as proxied by managerial tenure, affects firms' ESG disclosure strategies. Overall, I find that ESG disclosure quality and ESG disclosure variability are reduced as management tenure increases. Further, I find that the replacement of a firm's CEO interrupts disclosure persistence; e.g., median ESG disclosure scores increase by roughly 9.7% in the two years following the replacement of a firm's CEO. The results of this study highlight one inhibitor, i.e. persistence, to inducing more complete, transparent ESG disclosure.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:25:y:2018:i:6:p:1074-1086

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