Cenci, Simone;
(2023)
A large-scale analysis of the heterogeneity of markets’
reactions to the disclosure of nonfinancial information.
Journal of Sustainable Finance & Investment
10.1080/20430795.2023.2228746.
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Abstract
To allocate capital to its most sustainable use, market participants need information on companies' sustainability plans and initiatives. This information is disclosed in sustainability reports, but the disclosure process is largely unregulated and voluntary. When do sustainability reports convey relevant information? To answer this question we estimate the heterogeneous effects of nonfinancial disclosure on analysts' estimates of earnings and firms' equity values. We have found that the information content of nonfinancial disclosure is larger when firms are subject to greater information asymmetry, and when nonfinancial information is integrated within a financial context. Moreover, positive responses have a long-lasting impact while negative shocks are corrected within a short window. Overall, our work suggests that market participants' interest in standalone nonfinancial information is limited, and integrated reporting increases the value of sustainability reports.
Type: | Article |
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Title: | A large-scale analysis of the heterogeneity of markets’ reactions to the disclosure of nonfinancial information |
Open access status: | An open access version is available from UCL Discovery |
DOI: | 10.1080/20430795.2023.2228746 |
Publisher version: | https://doi.org/10.1080/20430795.2023.2228746 |
Language: | English |
Additional information: | © The Author(s), 2023. This is an open access article distributed under the terms of the Creative Commons Attribution-Non Commercial-No Derivatives License 4.0 (CC-BY-NC-ND), where it is permissible to download and share the work provided it is properly cited. The work cannot be changed in any way or used commercially without permission from the journal. http://creativecommons.org/licenses/by-nc-nd/4.0/ |
Keywords: | Sustainability reporting, heterogeneous effects, information asymmetry, integrated reporting |
UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Bartlett School Env, Energy and Resources |
URI: | https://discovery.ucl.ac.uk/id/eprint/10196465 |
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