Colloquium: Frank Schiemann "Choice of Disclosure Channels and Firm Risk: Evidence from Initiated and Continued Social Disclosure between SEC-filings, Sustainability Reports, and Financial Reports"

Zoom:
https://tu-dresden.zoom.us/j/83808644243?pwd=YXYrSlMyTXByemFOQkhCa29aOXEzQT09

Meeting-ID: 838 0864 4243
Kenncode: !8BGm5^.  

Authors: Andreas G. Hoepner, Frank Schiemann

Abstract:
Firms can disclose social information via different channels such as SEC filings, stand-alone sustainability reports, or financial reports. Based on the notion that investors interpret social disclosure, as part of sustainability disclosure, from a risk perspective, we analyse how disclosure choices specific to each disclosure channel are related to idiosyncratic risk. Studying S&P 1,500 constituents between 2011 and 2015, we distinguish between initiated and continued disclosure along each of the three aforementioned disclosure channels. We find initiated disclosure of social issues via SEC filings to increase idiosyncratic firm risk. Furthermore, the risk increasing effect is stronger when initial SEC disclosure coincides with initial disclosure in a sustainability report. We do not observe significant relations between initiated disclosure of social issues via sustainability reports or financial reports and idiosyncratic risk, and we find continuous disclosure of social issues to be risk reducing in line with previous literature. Our findings challenge the notion that sustainability disclosure is universally risk reducing and emphasize the different importance of disclosure channels for non-financial disclosure.