Publications
Publications
- 2022
- HBS Working Paper Series
The Evolution of ESG Reports and the Role of Voluntary Standards
By: Ethan Rouen, Kunal Sachdeva and Aaron Yoon
Abstract
We examine the evolution of ESG reports of S&P 500 firms from 2010 to 2021. The
percentage of firms releasing these voluntary disclosures increased from 35% to 86%
during this period, although the length of these documents experienced more modest
growth. Using a semisupervised machine-learning approach and guided by voluntary
standards that identified material ESG issues, we explore whether the content
in these reports has become more relevant to investors. On average, firms devote
most of their reports to topics that are material to their sector. The relative amount of
material information increased by 11% after the release of voluntary standards. This
increase was driven by firms that were not involved in the standard-setting process.
Firms that helped develop the standards increased material disclosures at similar
rates while the standards were being developed. These results provide new insights
into how ESG reports evolved.
Keywords
Voluntary Disclosure; Textual Analysis; Modeling And Analysis; Corporate Social Responsibility and Impact; AI and Machine Learning; Accounting
Citation
Rouen, Ethan, Kunal Sachdeva, and Aaron Yoon. "The Evolution of ESG Reports and the Role of Voluntary Standards." Harvard Business School Working Paper, No. 23-024, October 2022.