See What We Did: CSR Disclosure After Performance Shortfalls
| Autoři | |
|---|---|
| Rok publikování | 2022 |
| Druh | Článek v odborném periodiku (nerecenzovaný) |
| Fakulta / Pracoviště MU | |
| Citace | |
| Popis | Environmental, social, and governance (ESG) disclosure has greatly influenced firms’ performance. Given the influence, one can ask whether firms deliberately use ESG disclosure as a tool to mitigate performance shortfalls. Performance shortfalls are situations in which the firm does not attain its performance aspiration. They create a compelling stimulus for managers to react and attempt to reverse the situation. With the growing inflow of funds into ESG investments, increasing disclosure represents a viable tactic for such a reversal. The hypotheses are tested using a sample of S&P 500 firms followed over the years 2011-2018. The study uses fixed-effects panel data models to statistically test the hypotheses. The paper shows firms react to performance shortfalls by increasing their ESG disclosure. However, the appeal of this response decreases with the size of the performance shortfall. The research uncovers a new situational determinant of ESG disclosure, performance shortfalls, and how firms react in their disclosure to experiencing them. Performance shortfalls provide additional motivation for firms to increase their disclosure. This is an important factor to be considered by the stakeholders when the firm does so. |