The quality of nonfinancial voluntary disclosure: A systematic literature network analysis on sustainability reporting and integrated reporting

Minutiello, Valentina; Tettamanzi, Patrizia

doi:10.1002/csr.2195

Cited by 50 publications

(44 citation statements)

References 93 publications

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“…Several studies review the emerging body of IR literature (e.g., Dumay et al, 2016; Kannenberg & Schreck, 2019; Rinaldi & Unerman, 2018; Vitolla, Raimo, & Rubino, 2019). Moreover, Minutiello and Tettamanzi (2022) provide a review of current studies on IRQ, while Lueg and Lueg (2021) provide a taxonomy for critical assessment of IR types.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Does integrated reporting quality matter to capital markets? Empirical evidence from voluntary adopters

Leukhardt

Charifzadeh

Diefenbach

2022

Corp Soc Responsibility Env

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This study examines the relevance of integrated reporting quality (IRQ) to capital markets. We investigate whether IRQ benefits capital market participants by improving a firm's information environment, using analyst earnings forecast accuracy as a proxy. Our study focuses specifically on companies that publish integrated reports on a voluntary basis. Based on a scoring model, we assess IRQ and its effects with data from 2015 to 2019 of 101 companies. The results indicate no significant relationship between IRQ and analyst earnings forecast accuracy. Thus, IRQ does not appear to improve a firm's information environment, at least not currently in a voluntary setting. Drawing on previous literature in the field, this study further concludes that integrated reporting (IR) in general has not yet reached its full potential in benefitting capital markets. Potential implications of our results are that the standard setters should work to improve the specificity and rigor of their guidelines, and analysts should become more involved in developing IR guidelines to make them more relevant to their information needs. IR seems to unfold its benefits better in mandatory settings, which could call for regulators to make IR mandatory.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Does integrated reporting quality matter to capital markets? Empirical evidence from voluntary adopters

Leukhardt

Charifzadeh

Diefenbach

2022

Corp Soc Responsibility Env

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“…IR is recognized as being different from sustainability reporting in treating non-financial information. Sustainability reporting purely puts emphasis on environmental and social impacts ( Minutiello and Tettamanzi, 2021 ) whereas IR explicitly treats these non-financial aspects of a firm as the capital. IR’s prominent display of non-financial performance to the creation of value is commendable as it is important to investors and other stakeholders to accurately assess a firm’s value and performance.…”

Section: Discussionmentioning

confidence: 99%

Does Multiple Capitals Disclosure Affect the Capital Market? An Empirical Analysis in an Integrated Reporting Perspective

Sun

Qiao

et al. 2022

Front. Psychol.

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Integrated reporting (IR), as a novel corporate reporting approach, focuses on how six forms of capital promote corporate value. This paper explores whether this kind of multiple capitals disclosure (MCD) framework has an impact on the capital market. Using a sample of Chinese A-share firms from 2012 to 2016, we examine the relationship between MCD quality and firm value. The results indicate that a higher MCD quality leads to a greater firm value. Our results are robust to a variety of sensitivity tests. Further evidence suggests that MCD quality could increase profitability by affecting the decision-making of non-financial stakeholders and enhance the value relevance of financial information by affecting the decision-making of investors. The paper helps understand how the IR approach affects the perception of investors on the value of a firm. The findings of the paper are of interest to academics, corporate management, investors, and governmental officials.

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“…Although increasing the quantity of the information disclosed does not necessarily mean that this information is of high quality (Minutiello & Tettamanzi, 2021; Plumlee et al, 2015), there is good reason to believe that firms which follow ESG reporting guidelines may also improve their information credibility. Information credibility refers to the extent to which external stakeholders perceive firms' sustainability information to be trustworthy and reputable (Joshi et al, 2007).…”

Section: Theorymentioning

confidence: 99%

Do ESG reporting guidelines and verifications enhance firms' information disclosure?

Darnall

Iwata

et al. 2022

Corp Soc Responsibility Env

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Environment, social, and governance (ESG) reporting guidelines are institutional rules that can enhance the credibility of firms' publicly disclosed information related to ESG. Reporting is often voluntary and global ESG reporting guidelines typically rely on process-focused third party verification. However, in developing its reporting guidelines, the Japanese government gave firms the unusual option of pursuing either process-or content-focused verification. This paper draws on the unique Japanese setting to examine whether firms that use ESG reporting guidelines increase their quantity of disclosed sustainability information. Furthermore, it assesses whether, given the option, (1) firms tend to pursue process-or content-focused verification, and (2) which type of verification leads to greater information disclosure. We show that firms that follow ESG guidelines disclose 39% more sustainability information compared to firms that publish sustainability reports but do not follow ESG reporting guidelines. Content-focused verification leads to greater information disclosure than process-focused verification in that firms publish 23% more text in their sustainability reports. Moreover, given the option, firms prefer to use content-over processfocused verification. However, most global ESG reporting guidelines endorse process-focused verification and this verification is less effective than content-focused verification at encouraging firms' information disclosure. Our findings raise a timely and relevant question about the movement by global ESG standard developers to promote process-rather than content-focused verification. They also suggest that firms that wish to create sustainability distinction by way of ESG reporting may benefit by advocating for more robust forms of verification.

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The quality of nonfinancial voluntary disclosure: A systematic literature network analysis on sustainability reporting and integrated reporting

Cited by 50 publications

References 93 publications

Does integrated reporting quality matter to capital markets? Empirical evidence from voluntary adopters

Does integrated reporting quality matter to capital markets? Empirical evidence from voluntary adopters

Does Multiple Capitals Disclosure Affect the Capital Market? An Empirical Analysis in an Integrated Reporting Perspective

Do ESG reporting guidelines and verifications enhance firms' information disclosure?

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