Credible disclosure or mere puffery? Empirical evidence on the voluntary use of sustainability disclosure standards

51 Pages Posted: 25 Jul 2022 Last revised: 4 Jan 2025

See all articles by Khrystyna Bochkay

Khrystyna Bochkay

University of Miami Herbert Business School

Seungju Choi

University of Miami Herbert Business School

Jeffrey Hales

University of Texas at Austin - Department of Accounting

Date Written: July 20, 2022

Abstract

In this paper, we examine companies’ voluntary adoption of sustainability disclosure standards developed by the Sustainability Accounting Standards Board (SASB). Specifically, we study which company characteristics help explain the use of SASB standards and examine whether voluntary use is associated with sustainability-related activities and market-based outcomes. We find that peer behavior, sustainability-focused institutional ownership, company size and performance, and sustainability-related governance factors are key determinants associated with SASB adoption. Moreover, SASB adoption appears to be a highly persistent and progressively comprehensive disclosure choice that is significantly associated with stronger sustainability performance, such as lower greenhouse gas emissions and lower pollution levels, particularly when the SASB standards identify those issues as financially material topics. Finally, SASB adoption is associated with greater price informativeness, suggesting that investors get additional firm-specific information from companies' adoption of the standards.

Keywords: sustainability reporting standards; Sustainability Accounting Standards Board (SASB); environmental, social, and corporate governance (ESG) issues; voluntary disclosure

Suggested Citation

Bochkay, Khrystyna and Choi, Seungju and Hales, Jeffrey, Credible disclosure or mere puffery? Empirical evidence on the voluntary use of sustainability disclosure standards (July 20, 2022). Available at SSRN: https://ssrn.com/abstract=4167391 or http://dx.doi.org/10.2139/ssrn.4167391

Khrystyna Bochkay (Contact Author)

University of Miami Herbert Business School ( email )

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

Seungju Choi

University of Miami Herbert Business School ( email )

P.O. Box 248126
Florida
Coral Gables, FL 33124
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)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,304
Abstract Views
3,796
Rank
33,441
PlumX Metrics