Are Management Earnings Forecasts Associated With Sustainability Performance Disclosures?

• In Event: Financial Accounting and Reporting III

Abstract

In this paper, we examine the possible association between sustainability performance disclosures (SPD) and management earnings forecasts (MEF) releases. More than 5,000 corporations worldwide are issuing sustainability reports on various dimensions (environmental, social, governance, ESG) of their sustainability performance. We posit that firms that disclose ESG sustainability information have more incentives to focus on sustainable and long-term economic performance and thus fewer incentives to release MEF. We calculate the firm’s sustainability using the scores obtained from the KLD Research and Analytics Database (KLD). We find that firms with higher level of ESG sustainability will be less likely to issue MEF.

Authors

• Zabihollah Rezaee, University of Memphis

• Lei Gao, The University of Memphis

• Ling Tuo, University of Memphis