A0352
Title: Effectiveness of mandatory CSR reporting: Improvement of firms' CSR disclosure information
Authors: Bianca Minuth - ESCP Business School, Paris (France) [presenting]
Abstract: In a world of climate change and increasing social incidence more and more jurisdictions are changing their regulations towards a mandatory corporate social responsibility (CSR) reporting regime. Likewise, the CSR Directive 2014/95/EU was issued in 2014 with the objective to increase transparency of non-financial information and thus improving CSR disclosure quality in the European Union (EU). I examine whether firms adjust their CSR disclosure content as a response to the CSR disclosure mandate. Applying topic modeling, I investigate firms' disclosure quality, comparability, and reliability around the CSR Directive. In particular, I make use of the BERTopic modeling technique as a state-of-the-art large language model (LLM) to cluster CSR-related topics and analyse their development and similarity over time. Using a difference-in-difference model, I compare European firms CSR disclosure content with a sample of U.S. control firms before and after the introduction of a CSR regulation. The results provide evidence of an improvement in firms CSR disclosure quality and comparability after the CSR Directive. With my study, I enrich the debate on CSR reporting regime choices towards a more sustainability-oriented society.
