This paper investigates triple bottom-line (TBL) disclosures of 50 of the largest US and Japanese companies. Twenty disclosure criteria were developed for each of the TBL disclosure areas: economic, social, and environmental. Disclosure information was examined in annual reports, stand-alone reports, and special website reports.Regression analysis was used to examine empirically the determinants of TBL disclosure practice. Our results indicate that, for total TBL disclosure (combining economic, social, and environmental categories), the extent of reporting is higher for firms with larger size, lower profitability, lower liquidity, and for firms with membership in the manufacturing industry. Further analysis indicates that the results for the total TBL disclosure are primarily driven by non-economic disclosures. We also find that the extent of overall TBL reporting is higher for Japanese firms, with environmental disclosure being the key driver. This result could be attributed to the differences in national cultures, the regulatory environment, and other institutional factors between the United States and Japan.

The relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP) has long been debated. Ullman (1985) pointed out that the conflicting results could be influenced by many factors, such as sample size, industrial context, inconsistent measurement of CSP and CFP, research methodologies, and procedures for data collection and analysis. This paper addresses Ullman's (1985) concerns by providing a more methodologically rigorous review of the CSP-CFP relationship than prior research studies. A meta-analysis of 198 studies yields a total sample size of 31,514 observations. The meta-analytic findings suggest that sustainability performance likely increases a firm's financial performance, especially in the long run. Compared to social sustainability, environmental sustainability, to a larger extent, contributes to the positive CSP-CFP relationship. In addition, CSP appears to be more highly correlated with accounting-based measures of CFP than with market-based indicators. Multi-industry, pre-2000 studies, and non-U.S. sample firms seem to show a stronger impact on the positive relationship between CSP and CFP than other sample indicators. A final finding is that the methodology used in the analysis has a significant impact on the results.

Over the last several years, sustainable (or socially responsible) investing has experienced rapid growth around the world reflecting an increasing awareness by investors of social, environmental, ethical, and corporate governance issues. This heightened awareness among investors has resulted in a demand for sustainability reporting and a corresponding increase in demand for assurance of sustainability information to enhance its credibility. Using an investor-based view, we examine the impact of country-level investor protection on reporting companies' voluntary sustainability assurance decisions. We find that both the decision to obtain voluntary sustainability report assurance and the decision to obtain higher quality assurance are more likely for firms domiciled in countries that have weaker investor protection. Our results indicate that managers in low investor protection countries use voluntary sustainability assurance as a substitute monitoring mechanism.

The purpose of this study is to investigate the prevalence of both accrual-and activities-based earnings management for Chinese A-share firms surrounding the adoption of substantially IFRS-convergent accounting standards. Since 2007, all listed A-share firms in China have been required to comply with a new set of accounting standards that have substantially conformed to IFRS. The new reform also produced a set of new auditing standards and internal control reporting requirements. Based on a sample of 4,050 firm-year observations from 2002 to 2011, we find that Chinese firms in the post-IFRS period (2007)(2008)(2009)(2010)(2011) are less likely to engage in accrual-based earnings management. The magnitude of discretionary accruals also declines after IFRS adoption. In response, we see firms turning to real activities manipulation as a substitute for upward earnings management. The reduction in accrual-based earnings management could stem from higher quality accounting standards associated with IFRS adoption and/or concurrent changes in the governance regimes introduced with the IFRS mandate. A further analysis, however, indicates that the benefits of IFRS adoption in curbing upward accrual-based earnings manipulation are not evenly distributed across firms. Specifically, the benefit diminishes for firms that are controlled by Chinese central or local governments, are located in less developed regions, and that have weak financial performance and therefore subject to delisting status. We also find that The authors appreciate the valuable comments provided by the benefit is less pronounced for manufacturing firms than for their non-manufacturing counterparts.

Purpose The purpose of this paper is to study the relationships among environmental performance (EP), environmental disclosure (ED), and financial performance (FP) (three corporate constructs) using data from Newsweek’s green rankings. Design/methodology/approach Previous studies document mixed results about the relations among the three constructs. A firm’s overall management strategy may affect the three constructs simultaneously; therefore, the interrelationships among EP, ED, and FP were jointly examined. A simultaneous equations approach was used to test the hypothesis. Findings The three-stage least square (3SLS) estimation results show a negative relationship between EP and FP and a positive relationship between EP and ED, suggesting that financially successful firms are less likely good environmental performers but green firms are more likely to disclose their EP. Research limitations/implications Since the sample firms examined in this study are US large-size companies, the results found in this paper may not apply to small- and/or medium-size firms or to companies in other countries. Practical implications Three corporate constructs are jointly correlated with each one. A firm’s overall strategic plan on environmental engagement is likely reflected in how it engages in each of the constructs that affect costs and benefits. Sustainable efforts, in short term, may put firms at risk. Companies may need to take a long-term perspective when cutting costs is curtailed. Originality/value The research contributes to the ED and EP literature by using a 3SLS simultaneous equation method and analyzing a more recent and comprehensive multi-industry data. By controlling industry effect, the research investigates the interrelationships among three corporate constructs and finds interesting results. An interpretation and discussion are provided.