The More, the Better? Multiple Sustainability Reporting Standards and the Usefulness of Disclosures for Passive ESG Raters
Type
dissertation project
Start Date
2023
Keywords
sustainability reporting standards
ESG ratings
sustainability reporting
ESG rating divergence
automated textual analysis
Description
We examine whether using multiple sustainability standards in firms’ sustainability reporting influences the usefulness of disclosures. Using a unique sample of 5,780 firm-year observations from 879 European firms between 2012 and 2021, we find that the number of sustainability standards referenced in firms’ reports is negatively associated with the divergence between ESG ratings that mainly rely on public disclosures and those that do not. This effect is particularly pronounced in low information environments where alternative sources are scarce. Together, these findings suggest that using multiple sustainability standards benefits public disclosures from a structuring and signaling perspective, offering a novel perspective on current efforts to harmonize the sustainability reporting landscape.
Leader contributor(s)
Member contributor(s)
Andreas Seebeck
Robin Wolter
Funder
Range
HSG + other universities
Division(s)