Disclosure standards and communication norms: Evidence of voluntary disclosure standards as a coordinating device for capital markets

44 Pages Posted: 24 Sep 2021

See all articles by Khrystyna Bochkay

Khrystyna Bochkay

University of Miami Herbert Business School

Jeffrey Hales

University of Texas at Austin - Department of Accounting

George Serafeim

Harvard Business School

Date Written: September 22, 2021

Abstract

In this paper, we examine how the emergence of voluntary disclosure standards can alter the nature of information available to capital market participants. Using industry-specific dictionaries of sustainability terms contained in voluntary disclosure standards developed by the Sustainability Accounting Standards Board (SASB), we find a significant increase in earnings call sustainability disclosures following the release of SASB standards, particularly for firms that had little or no coverage of sustainability issues historically. This trend begins around the time when SASB released a provisional disclosure standard for a given company’s industry and continues in the years after. We also find a stronger impact of SASB standards on sustainability disclosures of firms operating in industries with high uncertainty around sustainability reporting. Overall, these results inform our understanding of the conditions under which standards created in response to market forces are likely to affect voluntary disclosures and communication norms.

Keywords: environmental, social, and corporate governance (ESG) disclosures, sustainability, reporting standards, voluntary disclosure, earnings conference calls

JEL Classification: G2, G38, M1, M2, M4, Q5

Suggested Citation

Bochkay, Khrystyna and Hales, Jeffrey and Serafeim, George, Disclosure standards and communication norms: Evidence of voluntary disclosure standards as a coordinating device for capital markets (September 22, 2021). University of Miami Business School Research Paper No. 3928979, Available at SSRN: https://ssrn.com/abstract=3928979 or http://dx.doi.org/10.2139/ssrn.3928979

Khrystyna Bochkay (Contact Author)

University of Miami Herbert Business School ( email )

5250 University Drive
Coral Gables, FL 33146-6531
United States

Jeffrey Hales

University of Texas at Austin - Department of Accounting ( email )

Austin, TX 78712
United States
512-471-2163 (Phone)
512-471-3907 (Fax)

George Serafeim

Harvard Business School ( email )

Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=15705

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