ESG Performance and Disclosure: A Cross-Country Analysis

Lopez de Silanes, Florencio; McCahery, Joseph A.; Pudschedl, Paul C.

doi:10.2139/ssrn.3506084

ESG Performance and Disclosure: A Cross-Country Analysis

TILEC Discussion Paper No. DP2019-032

European Corporate Governance Institute - Law Working Paper No. 481/2019

52 Pages Posted: 20 Dec 2019 Last revised: 7 Jan 2020

See all articles by Florencio Lopez de Silanes

Florencio Lopez de Silanes

SKEMA Business School; National Bureau of Economic Research (NBER)

Joseph A. McCahery

Tilburg University - School of Law; European Banking Center (EBC); Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI)

Paul C. Pudschedl

Tilburg University - Department of Business Law; Tilburg Law and Economics Center (TILEC); University of Applied Sciences Wiener Neustadt - Finance Department

Date Written: December 18, 2019

Abstract

We use a unique dataset to examine the link between ESG disclosure and quality through a cross-country comparison of disclosure requirements and stewardship codes. We find a strong relationship between the extent of ESG disclosure and the quality of a firm’s disclosure. Furthermore, we find that ESG is correlated with decreased risk. This result suggests that firms with good ESG scores are simply disclosing more information. Finally, we show that ESG scores have little or no impact on risk-adjusted financial performance.

Keywords: ESG, Sustainable Finance, Stewardship Codes, Financial Performance, Disclosure

JEL Classification: G12, G14, G15, G23, G32, M1, M2, M4

Suggested Citation: Suggested Citation

Lopez de Silanes, Florencio and McCahery, Joseph A. and Pudschedl, Paul C., ESG Performance and Disclosure: A Cross-Country Analysis (December 18, 2019). TILEC Discussion Paper No. DP2019-032; European Corporate Governance Institute - Law Working Paper No. 481/2019. Available at SSRN: https://ssrn.com/abstract=3506084 or http://dx.doi.org/10.2139/ssrn.3506084