Market reactions to the first‐time issuance of corporate sustainability reports

Ronald P. Guidry (Illinois State University, Normal, Illinois, USA)
Dennis M. Patten (Illinois State University, Normal, Illinois, USA)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Publication date: 3 July 2010



The paper attempts to determine whether market participants see value in the corporate choice to begin publishing a standalone sustainability report. It also seeks to investigate whether differences in market reactions are associated with the quality of the sustainability report.


The paper uses standard market model methods to isolate the unexpected change in market returns in the period surrounding the announcement of the release of a first‐time sustainability report.


The paper finds, on average, no significant market reaction to the announcement of the release of the sustainability reports. However, in cross‐sectional analyses, it is found that companies with the highest quality reports exhibited significantly more positive market reactions than companies issuing lower quality reports. These results hold when we control for firm size and membership in socially exposed industries.

Research limitations/implications

The paper examines only the US firms and the measure of quality is based on an assessment of the extent to which reports provide disclosures recommended by the Global Reporting Initiative. The sample is also relatively small. Finally, the analysis examines perceived value for only one potential stakeholder group – shareholders. Future research could address any of these shortcomings.

Practical implications

The evidence suggests that companies seeking value from their sustainability reporting need to carefully consider the quality of their presentations.


The finding that quality of sustainability reporting is important to investors provides valuable evidence to support improvements in the implementation of sustainability accounting and reporting.



Guidry, R. and Patten, D. (2010), "Market reactions to the first‐time issuance of corporate sustainability reports", Sustainability Accounting, Management and Policy Journal, Vol. 1 No. 1, pp. 33-50.

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