Purpose The purpose of this paper is to concentrate on environmental, social and governance performance (ESGP) in total and divided in each component and evaluate their impact on financial performance (FINP). Design/methodology/approach The study covers a sample selection of companies listed on the German Prime Standard (DAX30, TecDAX, MDAX) for the business years 2010-2014 (412 firm-year observations). A correlation and regression analysis was carried out to evaluate possible links between ESGP as determined by the Asset4 database of Thomson Reuters and accounting and market-based measures of FINP (Return on Assets [ROA] and Tobin’s Q). Findings ESGP has a positive impact on ROA but no impact on Tobin’s Q. Furthermore, by analyzing the three different components of ESGP, governance performance has the strongest impact on FINP in comparison to environmental and social performance. Originality/value The analysis makes a key contribution to the empirical corporate social responsibility (CSR) research as the author breaks down ESGP into their three components and include both accounting-based and market-based FINP measures for the German setting for the first time. Not only companies but also regulators and researchers are affected by the notion that CSR and FINP are close together and should be lead to a successful stakeholder management.

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This study examines determinants of materiality disclosure quality (MDQ) in integrated reporting (IR) in an international setting. To this purpose, we constructed a novel, hand-collected MDQ score in line with the guiding principles introduced by the International Integrated Reporting Council. On the basis of a cross-national sample consisting of 359 firm-year observations between 2013 and 2016, we find that MDQ is positively associated with learning effects, gender diversity, and the assurance of nonfinancial information in the integrated report. On the other hand, we find that IR readability, listing in the Dow Jones Sustainability Index, and earnings management do not affect MDQ. Our results are robust to different statistical models.We expand on earlier empirical findings on IR disclosure quality and provide valuable insights for research, practice, and standard setting.

Abstract:Corporate social responsibility (CSR) reporting is becoming increasingly relevant in light of modern corporate governance. There is growing activity among empirical research in one-tier systems that considers the link between board composition and CSR reporting. This study is the first of its kind on the German two-tier system with special regard for the supervisory board. We analyze gender diversity, expertise, the presence of former managers, frequency of meetings, and the size of the supervisory board. Our multiple regressions indicate that gender diversity has a positive impact on CSR disclosure intensity, which is in line with prior studies on one-tier systems. Our findings have implications for both users and public policy and suggest that current European corporate governance regulations could help to increase the decision usefulness of CSR reporting.

The role of European businesses in addressing environmental issues and climate change has taken center stage with the European Green Deal. With increasing attention to the effect of board gender diversity (BGD) on firms' environmental performance, the question arises whether BGD has any influence on carbon emissions.Based on legitimacy and critical mass theory, this study empirically investigates the impact of BGD on firms' carbon performance (CP), based on total carbon emissions intensity. The paper relies on two-stage least squares (2SLS) regressions with instrumental variable (IV) and a two-step generalized method of moments (GMM) system approach to analyze a cross-country sample of 3123 observations from non-financial firms in the European STOXX600 index over the 2009-2018 period. Our findings add to the growing empirical evidence twofold: (1) there is a robust linear and positive relationship between BGD and CP, whereas some indication of a U-shaped relationship is found; and (2) we find that a critical mass of at least two women directors needs to be reached to increase CP. Our research results contribute to the current discussion on sustainable corporate governance, especially in the European capital market, and have implications for researchers, business practice, and regulatory issues alike.