Integrating Sustainability Reports into Financial Statements: An Experimental Study

44 Pages Posted: 29 Mar 2012 Last revised: 11 Jan 2023

See all articles by Markus C. Arnold

Markus C. Arnold

University of Bern - Institute for Accounting

Alexander Bassen

University of Hamburg; University of Reading - ICMA Centre

Ralf Frank

GISMA Potsdam

Date Written: June 11, 2012


In recent years, sustainability has increasingly attracted the attention of capital market participants. While event studies have established that stock prices react to news about environmental, social, and governance (ESG) performance, further empirical evidence raises the question of whether market participants always rationally process ESG information included in a standalone sustainability report. In an experiment with investment professionals, this study investigates whether a disconnect between financial statements and sustainability reports leads to an anchoring effect in the assessment of ESG information. Results show that users of standalone sustainability reports fully adjust their valuations to the level of integrated (financial and sustainability) report users following information about bad ESG performance. However, none of the standalone reports users adjust their valuations following information about good ESG performance. Thus, financial statement users asymmetrically anchor on their financial value judgments when assessing ESG information provided in a standalone report.

Keywords: Sustainability, financial performance, ESG information, anchoring

Suggested Citation

Arnold, Markus C. and Bassen, Alexander and Frank, Ralf, Integrating Sustainability Reports into Financial Statements: An Experimental Study (June 11, 2012). Available at SSRN: or

Markus C. Arnold (Contact Author)

University of Bern - Institute for Accounting ( email )

Engehaldenstr. 4
Bern, 3012

Alexander Bassen

University of Hamburg ( email )

Von-Melle-Park 5
20146 Hamburg

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

Ralf Frank

GISMA Potsdam ( email )

Konrad-Zuse-Ring 11
Potsdam, Brandenburg 14469

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