Mandatory CSR and Sustainability Reporting: Economic Analysis and Literature Review

121 Pages Posted: 31 Jul 2019 Last revised: 20 May 2021

See all articles by Hans Bonde Christensen

Hans Bonde Christensen

University of Chicago - Booth School of Business

Luzi Hail

University of Pennsylvania - The Wharton School; European Corporate Governance Institute (ECGI)

Christian Leuz

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Center for Financial Studies (CFS); CESifo Research Network

Multiple version iconThere are 2 versions of this paper

Date Written: May 17, 2021

Abstract

This study collates potential economic effects of mandated disclosure and reporting standards for corporate social responsibility (CSR) and sustainability topics. We first outline key features of CSR reporting. Next, we draw on relevant academic literatures in accounting, finance, economics, and management to discuss and evaluate the potential economic consequences of a requirement for sustainability reporting for U.S. firms, including effects in capital markets, on stakeholders other than investors and on firm behavior. We also discuss issues related to the implementation and enforcement of CSR and sustainability reporting standards as well as two approaches to sustainability reporting that differ in their overarching goals and materiality standards. Our analysis yields a number of insights that are relevant for the current debate on mandatory CSR and sustainability reporting. It also points scholars to avenues for future research.

Keywords: Transparency, Regulation, SASB, GRI, Standard setting, Accounting standards, Mandatory disclosure, Environmental, social and governance (ESG)

JEL Classification: F30, G38, K22, L21, M14, M41, M48

Suggested Citation

Christensen, Hans Bonde and Hail, Luzi and Leuz, Christian, Mandatory CSR and Sustainability Reporting: Economic Analysis and Literature Review (May 17, 2021). European Corporate Governance Institute - Finance Working Paper No. 623/2019, Available at SSRN: https://ssrn.com/abstract=3427748 or http://dx.doi.org/10.2139/ssrn.3427748

Hans Bonde Christensen

University of Chicago - Booth School of Business ( email )

5807 South Woodlawn Avenue
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Luzi Hail (Contact Author)

University of Pennsylvania - The Wharton School ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Christian Leuz

University of Chicago - Booth School of Business ( email )

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HOME PAGE: http://faculty.chicagobooth.edu/christian.leuz/

National Bureau of Economic Research (NBER) ( email )

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European Corporate Governance Institute (ECGI)

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Center for Financial Studies (CFS) ( email )

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CESifo Research Network

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