Talk
Investor Commitment to Responsible Investing and Firm ESG Disclosure
Helena Isidro (Isidro, H.); Dirk E. Black (Dirk E. Black); Ana Marques (Marques, A.);
Event Title
Accounting and Business Research 50 year Conference
Year (definitive publication)
2023
Language
English
Country
United Kingdom
More Information
Web of Science®

This publication is not indexed in Web of Science®

Scopus

This publication is not indexed in Scopus

Google Scholar

Times Cited: 2

(Last checked: 2024-06-07 13:54)

View record in Google Scholar

Abstract
We examine whether investors’ commitment to socially responsible investment principles influence the public disclosure of environmental, social, and governance (ESG) issues of their investee firms. We find that following institutional investors’ public commitment to the United Nations Principles for Responsible Investment (PRI), ESG disclosure in SEC reports increases with the proportion of shares owned by institutional investors committed to PRI. Our evidence is robust to considering: (1) ownership by PRI investors before they signed the PRI protocol and ownership by other (non-PRI) investors, (2) current and past firm ESG performance, (3) simultaneous estimation of investment, ESG performance, and ESG disclosure, and (4) shock to investor demand of environmental information. We also find that the improvement in firm ESG disclosure is attributable primarily to PRI institutional investors from Europe and it is not driven only by large influential institutional investors. We also provide evidence that PRI investors actively influence ESG reporting of their portfolio firms through shareholder proposals that directly request additional disclosure on sustainability. Our analyses suggest that investors public commitment to social responsibility is a critical mechanism to improve firms’ public disclosure of ESG activities.
Acknowledgements
--
Keywords
Corporate social responsibility (CSR),Principles for Responsible Investment (PRI),sustainability,institutional ownership,socially responsible investment (SRI)
  • Economics and Business - Social Sciences
Funding Records
Funding Reference Funding Entity
Fundação para a Ciência e a Tecnologia, grant UIDB/00315/2020 FCT BRU

With the objective to increase the research activity directed towards the achievement of the United Nations 2030 Sustainable Development Goals, the possibility of associating scientific publications with the Sustainable Development Goals is now available in Ciência-IUL. These are the Sustainable Development Goals identified by the author(s) for this publication. For more detailed information on the Sustainable Development Goals, click here.