The Evolution of Sustainability Reporting Textual Disclosure: Evidence from the Largest US Corporations

• In Event: CSR and Sustainability

Abstract

As companies issue corporate social responsibility (CSR) reports in increasing numbers in the US, it is imperative to investigate whether they contribute towards their value. In this study, we quantify a variety of CSR disclosure attributes, provide initial descriptive evidence on trends from 2006–2017, and, investigate the impact of disclosures in sustainability reports on a company’s value, specifically Economic Value Added (EVA) (Stewart 1991), along with traditional measures. EVA is one of the best measures of wealth creation and in explaining changes in shareholder wealth (Stewart 1994). Further, some companies also seek third-party assurance on such reports to build credibility (Simnett, Vanstraelen and Chua 2009) and to signal their value relevance (Cohen and Simnett 2015). Hence, in addition to the above, we examine if there is a significant difference in EVA and other traditional measures between companies that are assured and companies that are not assured.

Authors

• Sunita S Rao, Washburn University

• Karthik Srinivasan, University of Kansas