CSR Research: Sustainability Reporting

RESEARCH BRIEF - Firms that focus on the opportunities presented by climate change, rather than the perceived risks are more likely to have superior corporate citizenship performance, which in turn leads to stronger financial performance.

RESEARCH BRIEF - Multinational companies are likely to engage in more comprehensive corporate citizenship reporting when they are headquartered in countries with weak governance systems.

RESEARCH BRIEF - By issuing a sustainability report, firms with strong corporate citizenship performance can increase their market performance in short and long terms.

RESEARCH BRIEF - Firms with stronger corporate citizenship performance produce longer and more readable sustainability reports.

RESEARCH BRIEF - In an integrated report, analysts are able to more accurately assess the materiality of nonfinancial issues when they are provided with a narrative or visual representation (such as a materiality matrix) of the link between the strategic objectives of the firm.

RESEARCH BRIEF - While a firm’s listing on a sustainability ranking such as the Dow Jones Sustainability Index (DJSI) may not influence stock price immediately, there are increasing benefits over time related to visibility and analyst coverage.

RESEARCH BRIEF - Companies with independent directors are more likely to create a CSR committee on their boards, which ultimately helps encourage a more transparent culture and disclosure through sustainability reporting using widely adopted standards, such as GRI.

RESEARCH BRIEF - For firms that actively manage their sustainability, jargon and complex sentences can depress environmental performance scores.

RESEARCH BRIEF - Firms that appear towards the bottom of “best of” corporate citizenship lists may face negative market consequences.

RESEARCH BRIEF - Disclosing environmental, social, and governance (ESG) information via a CSR report has a positive impact on a company’s financial performance. This effect is stronger for firms with fewer employees.

RESEARCH BRIEF - Firms with formally communicated stakeholder engagement policies are more likely to disclose environmental information, however, this relationship does not hold for companies with especially strong financial performance.

RESEARCH BRIEF - Firms that are undervalued in the stock market tend to issue additional nonfinancial information beyond their CSR reports. Evidence states that this may lead to positive stock performance.