ESG Performance and Voluntary ESG Disclosure: Mind the (Gender Pay) Gap

51 Pages Posted: 13 Oct 2020 Last revised: 26 May 2022

See all articles by June Huang

June Huang

University of Texas at Dallas

Shirley Lu

Harvard University - Business School (HBS)

Date Written: May 13, 2022

Abstract

We study if firms with better ESG performance are more likely to provide voluntary ESG disclosure, an assumption embedded in many ESG ratings. We focus on gender diversity and proxy for performance using a firm's gender pay gap ("GPG") disclosed under a UK disclosure mandate. Contrary to the prediction of traditional disclosure models, before the mandate, we find firms with better GPGs are less likely to voluntarily disclose other information on gender diversity. As a practical implication, these firms have lower social scores from ESG rating companies. We find suggestive evidence that firms with better GPGs do not need to disclose because they already receive workplace diversity awards and that firms with worse GPGs engage in selective disclosure.

Keywords: Gender Pay Gap, Gender Diversity, Voluntary Disclosure, ESG Ratings, ESG, Corporate Social Responsibility

JEL Classification: D80, M14, M41

Suggested Citation

Huang, June and Lu, Shirley, ESG Performance and Voluntary ESG Disclosure: Mind the (Gender Pay) Gap (May 13, 2022). Available at SSRN: https://ssrn.com/abstract=3708257 or http://dx.doi.org/10.2139/ssrn.3708257

June Huang (Contact Author)

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Shirley Lu

Harvard University - Business School (HBS) ( email )

Boston, MA 02163
United States

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