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Climate-related issues have become increasingly relevant, as reflected in current political and academic discourse. This development is also reflected in investors' capital allocation decisions and their demand for climate-related information. Considering the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), we first investigate the climate-related disclosure quality of listed German firms. We use self-constructed scoring models based on the TCFD recommendations to measure disclosure quality. Second, we use regression analysis to investigate whether corporate governance can explain climate-related disclosure quality. The results indicate that disclosure quality is heavily dispersed across firms, with risk disclosure being better than disclosure of opportunities. Corporate governance factors exert distinct but mostly weak influence on climate-related disclosure quality and that institutional ownership promotes climate-related disclosure quality. We show several implications for research and practice and highlight the relevance for firms to implement a comprehensive approach to communicating climate-related issues.
The European Commission published the European Single Electronic Format (ESEF) regulation act for mandatory adoption of XBRL and hypertext markup language (HTML) usage by European listed firms. The results of prior quantitative and qualitative studies already evidence the growing dissemination of voluntary HTML-formatted financial information on the internet and reveal its perceived benefits. However, there is a lack of empirical evidence on the determinants of standardised financial reports in accordance with IFRS that are voluntarily published in HTML format, called online financial reports (OFR). We investigate the determinants of the decision of European listed firms to publish OFR from 2014 to 2019. We find that the decision of using an OFR is adversely affected by firm leverage and ownership concentration. Our findings contribute to the ongoing research on internet financial reporting and aim to improve our understanding of what determines OFR usage in an international context. Our findings may have practical implications for the disclosure strategy of listed firms.
In recent years, the European Union has been increasingly concerned with ensuring more transparency concerning sustainable financial flows. This momentum is also reflected in the current development at the European level regarding the harmonization of sustainability reporting. Recently, the European Commission published a proposal for a new Corporate Sustainability Reporting Directive (CSRD) on April 21, 2021, which would amend the existing reporting obligation of the Non-Financial Reporting (NFR) Directive (2014/95/EU) and entail several changes regarding sustainability reporting for numerous firms. This article is intended to provide an initial insight into what is in store for firms, and which listed firms in Germany are ex-ante compliant with the additional requirements for sustainability reporting. The main question to be answered is how compliant the companies currently are according to the latest CSRD proposal.
Does corporate social responsibility impact mergers & acquisition premia? New international evidence
(2021)
The goal of this paper is to examine the impact of CSR on M&A premia from both acquirers’ and targets’ perspectives. Using an international sample of 1,598 transactions for the acquirers’ perspective and 449 deals for the targets’ perspective conducted between 2003 and 2018, we find that neither acquirers’ nor targets’ CSR performance alone does significantly impact M&A premia. However, we find that the interaction of the acquirers’ governance quality and CSR performance negatively affects acquisition premia. This study provides new empirical evidence and supports the notion of Yen and André (2019) that the relationship between CSR and M&A premia is more complex than expected and cannot be fully explained by the shareholder or stakeholder theory alone.
Die Coronavirus-Pandemie hat die globalisierte Wirtschaft verändert und die Anforderungen an das professionelle (Krisen-)Management in vielen Unternehmen neu definiert. Dabei stellt die Kommunikation mit Investoren ein zentrales Element des Krisenmanagements dar. Für Emittenten gilt es, die Anleger wirksam über die Auswirkungen der Pandemie auf das eigene Unternehmen zu informieren sowie von den Maßnahmen des Unternehmens zur Krisenbewältigung zu überzeugen. In einer gemeinsamen Studie untersuchten HHL Leipzig Graduate School of Management und Kirchhoff Consult daher die Krisenkommunikation der DAX160- und ATX-Prime-Unternehmen auf Basis des „Corona-Scores“ (vgl. Zülch/Ottenstein/Thun, KoR 2020 S. 563) zur Messung effektiver Krisenkommunikation bezüglich der COVID-19-Pandemie.
Welche Trends zeigen sich in der Quartalsberichterstattung im Jahr 2020? Spiegelt sich die Coronavirus-Pandemie dort wider? Diesen Fragestellungen widmet sich dieser Beitrag auf Basis einer empirischen Untersuchung der Quartalsfinanzberichte bzw. Quartalsmitteilungen der Unternehmen aus DAX, MDAX und SDAX in einem Längsschnitt von 2016-2020. Neben den bisherigen Erkenntnissen zur Quartalsberichterstattung aus dem Schrifttum wird ein Blick auf die gängige Praxis sowie Trends im DAX160 geworfen, insb. im Lichte der Coronavirus-Pandemie. Abschließend werden mehrere Praxisbeispiele aus der Quartalsberichterstattung mit explizitem Bezug zur Coronavirus-Pandemie dargestellt und erläutert.
Digital reporting is a growing phenomenon in the ongoing practice of advanced financial reporting. Over the past years, the dissemination of financial information via the internet has increased and the use of standardized financial reports that are published in HTML format, called online financial reports (OFR), has become an important part of an integrative disclosure strategy. The results of prior qualitative studies already mentioned the perceived benefits of disseminating financial information using advanced financial reporting formats such as IFR and XBRL. However, there is a lack of empirical evidence on the benefits and consequences of using OFR as part of an integrative disclosure strategy. This study addresses this research gap and investigates the impact of OFR on the information environment of European listed firms. Our baseline results support the perceived benefits of the increasing dissemination of OFR in line with signaling theory. However, these findings are subject to endogeneity (self-selection) and are not robust to instrumental variable analysis. Overall, our findings are informative to different stakeholders on the capital markets such as financial report preparers and investors.
Purpose:
The aim of this paper is to examine the effects of the European Non-financial Reporting Directive (2014/95/EU) on firms' sustainability reporting practices, especially reporting quantity (i.e. availability of information) and quality (i.e. comparability and credibility).
Design/methodology/approach:
To test the main hypotheses, the authors select 905 treated firms from the EU 28 + 2 countries for a difference-in-differences regression analysis of dependent variables from the Refinitiv ESG database.
Findings:
The results suggest that the Directive influences sustainability reporting quantity and quality. Treated firms provide around 4 percentage points more sustainability information (i.e. availability) than propensity score matched control firms and are 19 percent more likely to receive external assurance (i.e. credibility). However, we also find that the Directive is not the decisive factor in the adoption of GRI guidelines (i.e. comparability).
Research limitations/implications:
The analysis is restricted to large listed firms and does not account for small, mid-sized and private firms. Further, cross-cultural differences which influence sustainability reporting are controlled for but not investigated in detail. The authors derive several suggestions for future research related to the NFR Directive and its revision.
Practical implications:
The authors’ findings have practical implications for the future development of sustainability reporting in the EU and for other regulators considering the adoption of sustainability reporting.
Originality/value:
This study is the first to provide evidence on the NFR Directive's reporting effects across multiple countries. It adds to the growing literature on the consequences of mandatory sustainability reporting. Additionally, this paper introduces a novel measurement approach sustainability information quantity that could benefit researchers.
This paper-based dissertation comprises five essays dealing with corporate sustainability and digital reporting and is structured in six chapters. The first chapter is the introduction and provides an overview of the structure and aims of the dissertation, lays out the contribution of the work, and introduces the five manuscripts. The second chapter, respectively the first manuscript, deals with the consequences of mandatory sustainability reporting in Europe. Specifically, the study deals with the question whether Directive 2014/95/EU has achieved its objectives of increasing reporting quantity and quality. In the third chapter, the sustainability reports of the largest European firms are analyzed using computer-aided text analysis. This study investigates whether and how external assurance of sustainability reports is beneficial from the viewpoint of report transparency, which is proxied by reporting scope, optimism, and readability. In the fourth chapter, the role of corporate sustainability in the context of M&A transactions is examined, precisely whether sustainability influences the premia paid in M&A transactions. The fifth and the sixth chapters center around the voluntary usage of online financial reporting (OFR) in Europe. While the fifth chapter is concerned with the usage and empirical determinants of OFR, the analysis in the sixth chapter examines the impact of OFR on the financial market, specifically on analyst following and stock liquidity.