The Effects of Mandatory ESG Disclosure Around the World

Philipp Krueger, Zacharias Sautner, Dragon Yongjun Tang and Rui Zhong ()
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Zacharias Sautner: Frankfurt School of Finance & Management; European Corporate Governance Institute (ECGI)
Dragon Yongjun Tang: The University of Hong Kong - Faculty of Business and Economics

No 21-44, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We examine the effects of mandatory ESG disclosure around the world using a novel dataset. Mandatory ESG disclosure increases the availability and quality of ESG reporting, especially among firms with low ESG performance. Mandatory ESG reporting has in turn beneficial effects on firm’s information environment: analysts’ earnings forecasts become more accurate and less dispersed after ESG disclosure becomes mandatory. On the real side, negative ESG incidents become less likely, and stock price crash risk declines, after mandatory ESG disclosure is enacted. These findings suggest that mandatory ESG disclosure has beneficial informational and real effects.

Keywords: Sustainability reports; ESG reporting; Nonfinancial information; ESG incidents (search for similar items in EconPapers)
JEL-codes: G14 G15 G18 G32 G38 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2021-04
New Economics Papers: this item is included in nep-isf
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Citations: View citations in EconPapers (40)

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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2144

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