Comparative analysis of environmental, social, and governance disclosures

Homayoun

et al. 2023

MAJ

Self Cite

Purpose This paper aims to examine the association between sustainable development goals (SDGs) at the micro level and firms’ inclination to sustainability reporting and assurance (SRA). Design/methodology/approach The authors use global data from 44 countries in the 2016–2021 period and perform the probit and logistic models in testing the hypotheses. Findings The results show that socially responsible firms adopting SDGs are more likely to issue sustainability reports and obtain assurance statements. The authors find that the link between firms’ compliance with SDGs and SRA is stronger for firms domiciled in stakeholder-oriented countries. Originality/value SRA issues are gaining the attention of regulators, investors, businesses and academics worldwide. Results pertaining to the relationship between SDGs and SRA are robust to alternative measures and several sensitivity tests and, thus, provide policy, practice and research implications.

Section: Methodsmentioning

confidence: 99%

Business sustainability reporting and assurance and sustainable development goals

Homayoun

et al. 2023

MAJ

Self Cite

Administrative Sciences

“…Across the member states of the European Union, differences in disclosure quality usually do not arise from the nature of the text analysis used. Still, they are consequences of actual variation in the companies' operation (Rezaee et al 2023). Especially in countries in the eastern region of Europe, the economic transition is burdened by difficulties of various natures (Gyura 2020).…”

Section: Relevant Literaturementioning

confidence: 99%

Disclosure Compliance with Different ESG Reporting Guidelines: The Sustainability Ranking of Selected European and Hungarian Banks in the Socio-Economic Crisis Period

Tőzsér,

Lakner,

Sudibyo

et al. 2024

As the relevant European Union directives require in-depth sustainability reporting from large institutions, banks are among the concerned with disclosure obligations. Several institutions prepare self-structured recommendations by which companies are indirectly fostered to make their operation more sustainable through reporting and to help compliance with the upcoming Corporate Sustainability Reporting Directive (CSRD) regulations. However, in the preparation period, differences can be found in the actual sustainability disclosure practices across Europe (primarily by a western–eastern European relation). To examine this issue, this study aimed to investigate if there was any variation in the reporting compliance with aspects (key performance indicators—KPIs) of three reporting guidelines (Global Reporting Initiative—G4, Financial Services Sector Disclosures—GRI; Alliance for Corporate Transparency—ACT; ISO 26000:2010—ISO) between top European and Hungarian banks according to their 2021 sustainability/ESG reports, using content analysis-based disclosure scoring. The results revealed no significant differences among the general (aspect-pooled) scores for different guidelines, while the differences were significant for each guideline between the two bank groups. In the aspect-level evaluation, the European banks had higher scores in most cases, with the Hungarian banks receiving higher scores in 4 of 49 GRI, 1 of 16 ACT, and 2 of 37 ISO aspects. Significant correlations were indicated in disclosure score values between the two bank groups, which suggested similar preferences for the aspects demonstrated; however, elaboration levels differed. These findings showed that the European and Hungarian banks could be differentiated by their sustainability disclosure patterns. The results suggest a better CSRD-level preparedness of the top European banks than of the Hungarian ones, with the latter being introduced as a model group of the region. This reflects the need for more efficient adoption of best practices by financial institutions in the eastern parts of Europe.

“…ESG reporting enables the investors to identify which entities are "good corporate citizens" [36] and to integrate non-financial ESG factors into their investment decisions [37][38][39]. It has been found that ESG disclosure lowers the cost of capital and has a positive association with market performance, firm value, and quality of reported earnings [40,41].…”

Section: Literature Reviewmentioning

confidence: 99%

“…It has been found that ESG disclosure lowers the cost of capital and has a positive association with market performance, firm value, and quality of reported earnings [40,41]. ESG disclosure "can improve the firm's communication with all inside and outside stakeholders and shareholders" [36] because it improves transparency, which enables more effective management monitoring and navigates stakeholders to develop their own informed decisions.…”

Section: Literature Reviewmentioning

confidence: 99%

Socio-Economic Factors Affecting ESG Reporting Call for Globally Agreed Standards

Krambia-Kapardis,

Savva,

Stylianou

2023

Sustainability

The ESG ecosystem has evolved over the years, and macro decisions have had an impact on the implementation and reporting of the ESG Index. This paper aims to first investigate if all the components of the ESG index are equally reported and secondly to identify the impact of socio-economic and political variables on the composite ESG index. To achieve this aim, the authors have utilized macroeconomic variables over the period 1984–2020 for 139 countries from the Refinitiv database and have constructed composite indices based on principal component analysis for the ESG components using a panel fixed effects model with structural breaks. The findings have significant policy implications, emphasizing the importance of globally accepted standards. Finally, by addressing the ESG at a macro level, it provides the context within which to consider the adoption of the ESG ecosystem diachronically, thus providing the backdrop for considering the implementation of the ESG at the micro level.