Abstract

http://ssrn.com/abstract=1799589
 
 

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The Consequences of Mandatory Corporate Sustainability Reporting


Ioannis Ioannou


London Business School

George Serafeim


Harvard University - Harvard Business School

March 30, 2011

Harvard Business School Research Working Paper No. 11-100

Abstract:     
We examine the effect of mandatory corporate sustainability reporting (MCSR) on several measures of social responsibility using both country and firm-level data. Using data for 58 countries, we show that after the adoption of MCSR laws and regulations, the social responsibility of business leaders increases and both sustainable development and employee training become a higher priority for companies. Moreover, for companies in countries with MCSR, corporate governance improves and on average, companies implement more ethical practices, bribery and corruption decrease, and managerial credibility increases. These effects are larger for countries with stronger law enforcement and more widespread assurance of sustainability reports. We complement the country-level analysis using environmental, social and governance metrics at the firm-level in conjunction with a differences-in-differences research design and we find that for the treatment group, energy as well as waste and water consumption significantly decline, while investments in employee training significantly increase after the adoption of MCSR laws and regulations.

Number of Pages in PDF File: 44

Keywords: sustainability reporting, mandatory reporting, corporate social responsibility, integrated reporting

JEL Classification: A13, I31, J24, J28, M00, M1, M14, M41, D82, D83, D84

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Date posted: April 3, 2011 ; Last revised: October 27, 2012

Suggested Citation

Ioannou, Ioannis and Serafeim, George, The Consequences of Mandatory Corporate Sustainability Reporting (March 30, 2011). Harvard Business School Research Working Paper No. 11-100 . Available at SSRN: http://ssrn.com/abstract=1799589 or http://dx.doi.org/10.2139/ssrn.1799589

Contact Information

Ioannis Ioannou
London Business School ( email )
Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom
02070008748 (Phone)
HOME PAGE: http://www.london.edu
George Serafeim (Contact Author)
Harvard University - Harvard Business School ( email )
381 Morgan Hall
Boston, MA 02163
United States
HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=15705
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