Global Evolution of ESG Disclosure in Annual Reports
Prof. Rui SHEN, Associate Professor of Accounting, The Chinese University of Hong Kong, Shenzhen
Date: 05 May 2023 (Friday)
Time: 1:30 pm – 3:00 pm
Venue: E22-G015
Host: Prof. Feng TANG, Assistant Professor in Accounting
Online registration: https://umac.au1.qualtrics.com/jfe/form/SV_6n7JOVPr6c9j13g
Abstract
This paper seeks to provide descriptive evidence pertinent to the changing global landscape of ESG disclosure in annual reports. We aim to better understand how market forces, firm characteristics, voluntary frameworks, and mandatory regulations have jointly shape ESG reporting practices over the past two decades. We apply the word embedding model to annual reports published between 2001 and 2020 for publicly listed firms in 30 international regions and construct a broad set of measures capturing ESG disclosure quantity and quality. We validate our main ESG disclosure measure using human subjects. We provide several main findings. First, we document a significant increase in the amount of ESG disclosure and related infographics over time, although ESG disclosure has also become more generic, less specific, and stickier. Second, we document that many region-level (e.g., pollution) and firm-level factors (e.g., the adoption of voluntary frameworks) have contributed to the cross-sectional and time-series variation of ESG disclosure attributes. Finally, although we do not observe significant changes in ESG disclosure quantity and quality around the adoption of mandatory disclosure regulations, several region-level characteristics appear to explain regulators’ decisions to issue these mandates.
Speaker
Prof. Rui SHEN is the Associate Professor of Accounting in The Chinese University of Hong Kong, Shenzhen. Before joining CUHK-Shenzhen, Prof. Shen worked as an assistant professor at NTU Singapore and Rotterdam School of Management (RSM), Erasmus University. His main research interests are in the area of heterogeneous interpretations of public accounting information, market anomaly and corporate decisions. His research has been published in The Accounting Review, Journal of Financial and Quantitative Analysis and Strategic Management Journal.
All are welcome!
