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The United States Securities and Exchange Commission (SEC) issued an interpretative release ostensibly mandating the disclosure of the impact that climate change may have on the registrant. One means of enforcement for this release is through the use of comment letters. Prior empirical studies have supported the argument that the SEC oversight through issuing comment letters is effective in enhancing the quality of firms’ disclosures (Asthana & Boone, 2009; Johnston & Petacchi, 2017). With a total of 27 comment letter cases (34 comments based on the topics) regarding climate change disclosure, we do not find clear evidence strongly supporting that the SEC implements its oversight process through systematic procedures and that SEC comment letters enhance the quality of firms’ climate change disclosure. Although some firms responded to the comments proactively, qualitative analysis reveals that the firm’s revisions were not sufficient to provide useful information for market participants in general. The overall finding suggests that the current oversight mechanism for climate change disclosure needs to be significantly improved to enhance the quality of firms’ climate change disclosure.

This study investigates the reaction to the Securities and Exchange Commission’s (SEC) 2010 interpretative guidance on climate risk disclosures. Issued on February 8, 2010, the release represents one of the few examples of authoritative requirements for environmental disclosure in filers’ 10-K reports. As such, we attempt to determine the effect of the new requirement on companies’ disclosures as well as how the market reacted to the guidance announcement. Based on a sample of 155 large companies drawn randomly from the Fortune 500, we find first, that, as expected, climate change disclosures increased significantly following the release, but overall, the information provision remained quite limited. We further find that, presumably as intended, companies from industries facing greater climate change exposures exhibited significantly larger increases in disclosure (controlling for prior levels of information provision). Finally, we document that the market reaction to the release of the SEC guidance was significantly positive and driven by more positive returns from firms in climate risk industries. We interpret these unexpected findings as potentially being due to investors believing the new requirements were less demanding than might have been anticipated or that they believe firms facing climate risks were in a better position to respond than other companies.

The purpose of this paper is to discuss the progress and future prospects of two relatively “new” institutions in this field: the European Commission (EC), together with the European Financial Reporting Advisory Group (EFRAG), and the International Financial Reporting Standards (IFRS) Foundation.

This paper reflexively analyses the recent events that characterise the European Union (EU) regulatory standard-setting landscape in the sustainability field. It is mainly based on publicly available documents.

After analysing the different routes followed to enter the field, this paper shows how the EC/EFRAG takes a wider view than the IFRS Foundation on certain key reporting aspects, that is, target audience, materiality and reporting boundary. As for the reporting scope, although it seems that the IFRS Foundation has a more restrictive vision, it is working to broaden it.

This paper provides some ideas about the potential cooperation between the two institutions. This paper also highlights some potential problems stemming not only from their intrinsic characteristics but also from the routes they have taken to enter the field.

By envisioning how the EU sustainability reporting standard-setting landscape might evolve, this paper sheds light on how companies might need to approach sustainability reporting to adapt to the new institutional demands. Suggestions for collaboration between the two institutions could help them reach common ground and, thus, prevent misunderstandings for companies and stakeholders.

The reflections and takeaways benefit from the authors’ first-hand information, as both are involved in the EU process. The authors could, therefore, feed into further discussions on the developments and challenges facing the EU in this domain.

This study examines shareholder and board motivations regarding corporate social responsibility (CSR) to understand boards' stewardship approaches to environmental issues.

Using content analysis, the authors classify CSR motivations in all environmental shareholder proposals and board responses of Fortune 250 companies from 2013 to 2017 from do little (a shareholder primacy perspective) to do much (a stakeholder pluralism perspective). The authors calculate the motivational dissonance for each proposal-response pair (the Talk Gap) and use cluster analysis to observe evidence of board stewardship and subsequent environmental disclosure and performance (ED&P) changes.

Board interpretations of stewardship are not uniform, and they regularly extend to stakeholders beyond shareholders, most frequently including profit-oriented stakeholders (e.g. employees and customers). ED&P changes are highest when shareholders narrowly lead boards in CSR motivation and either request both action and information or information only. The authors observe weaker ED&P changes when shareholders request action and the dissonance between shareholders and boards is larger. When shareholders are motivated to do little for CSR, ED&P changes are weak, even when boards express more pluralistic motivations.

The results show the important role that boards play in CSR and may aid activist shareholders in determining how best to generate change in corporate CSR actions.

This study provides the first evidence of board stewardship at the proposal-response level. It measures shareholder and board CSR motivations, introduces the Talk Gap, and examines relationships among proposal characteristics, the Talk Gap, and subsequent ED&P change to better understand board stewardship of environmental issues.

The aim of this chapter is to determine the need for water management and accounting.

This chapter first gives an overview of water-related business risks and exposes the need for sound corporate water management and accounting; it then critically examines water-related issues from an accountability perspective. Furthermore, it gives an overview of Australian Standardised Water Accounting (SWA) and General Purpose Water Accounting (GPWA) as possible practices to strengthen water disclosure.

The present study confirms the need for, and the importance of, transparent, high-quality, credible and comparable water disclosure. Water is considered a public good and involves a public interest and, consequently, public responsibility for its usage, management and protection. Following this line of reasoning, the chapter draws attention to the need for accountability to be ‘public’ or at least shared between crucial stakeholders (government – at national and international levels, water industries, communities, environmentalists, NGOs, etc.).

Company efforts are commonly focused on internal and self-referred operations. The different and conflicting uses that may be made of water, and the fact that water is geographically and temporally sensitive, necessitate a search for more flexible and more extended forms of accountability. An implication of these findings is the need and opportunity to switch focus from a single/private perspective to a more general/public one, with benefits for all the stakeholders.

This research enhances our understanding of water management and accounting and may serve as a sound base for future studies on this challenging topic.

The purpose of this paper is to compare the sustainability disclosure methods‐instruments practiced by the two most widely employed indexes/instruments (DJSI World and GRI‐G3 Guidelines). The paper suggests that the newly created triple bottom line (TBL) reporting practices need to undergo further standardization and enforcement to avoid, or give early warnings about, future corporate mismanagement that leads to socio‐economic consequences detrimental to investors and consumers in general.

This paper utilizes sample firms from the DJSI World Index and the GRI‐G3 Sustainability Guidelines membership list to draw inferences on sustainability indicators of performance. The authors compare the GRI reporting guidelines with the disclosure indicators of the DJSI World.

The authors' findings suggest that TBL reporting has made enormous progress over the last two decades. However, the two widely used sustainability reporting instruments/indexes (DJSI World and GRI‐G3 Guidelines) differ in disclosure practice‐methods and the authors recommend that further standardization and enforcement is necessary. The authors' view is that the Securities and Exchange Commission (SEC) and Financial Accounting Standards Board (FASB) should become actively involved with the issue of standardization and enforcement of corporate socio‐environmental disclosures. The paper presents evidence that investors have neither rewarded nor penalized firms for adhering to or violating sustainability matters in their corporate decisions.

The authors argue for further standardization and enforcement with regard to the disclosure methods of the two widely used (GRI and DJSI) sustainability indicators in order to avoid future corporate mismanagement that leads to (systemic) economic and socio‐environmental consequences detrimental to citizen investors and consumers in general.

The research is of interest to academicians and practitioners who are interested in the theory and practice of sustainability reporting or TBL reporting. The findings suggest that this newly created disclosure instrument needs to undergo further standardization and enforcement for meaningful and accurate disclosure of economic‐social and environmental performance. The authors' view is that the SEC and FASB should become actively involved with the issue of standardization and enforcement of socio‐environmental disclosure of corporate sustainability.

This paper aims to examine the nature of academic engagement with policy and the (lack of) responsiveness by policymakers to the scientific community through the development of the International Financial Reporting Standards (IFRS) Foundation Trustees’ Consultation Paper on Sustainability Reporting (IFRS Foundation, 2020).

The 577 submissions to the IFRS Foundation consultation were reviewed, and 39 were identified as being submitted by academics. These 39 included collectively 104 academic signatories from 74 organisations or networks and 20 countries. They were analysed using NVivo. Drawing on the literature on techniques used to discredit or credit arguments, we examine the academic responses to the consultation questions, particularly those concerning: the role of the IFRS Foundation; perceptions of the “investor perspective”; the audience for reporting; the definition of materiality; and a climate first approach.

The majority (72%) of academic submissions were opposed to the IFRS Foundation Trustees’ proposals on key issues. This dissenting majority collectively have substantial research records in sustainability reporting and its outcomes. Those supportive were significantly less likely to reference research or state their credentials and, despite being supportive, nevertheless raised concerns with the proposals.

Senior academics undertaking research in the field have engaged, in unusually high numbers, with a policy development they believe will not work and maybe counter to achieving sustainable development. The findings underscore the importance of highlighting the discrediting strategies and tactics used in this discursive “battle”. The findings have implications for the legitimacy of policymakers on sustainability-related initiatives which are not engaging with the relevant scientific community.

Policy initiatives that are judged as potentially harmful to sustainable development attract more intense, activist and sustained engagement supported by research evidence.

The paper identifies the importance of evidence-based academic engagement and highlights strategies that engaging academics need to persist over. It highlights the collective view of academics in the field on the IFRS Foundation consultation paper.

This study reviews research that examines economic and behavioural consequences of CSR reporting regulations. Specifically, the authors evaluate the impact of CSR reporting regulations on (1) reporting quality, (2) capital-markets and (3) firm behaviour.

The authors first describe the stated objectives and enforcement level of CSR reporting regulations around the world. Second, the authors review over 130 archival studies in accounting, finance, economics, law and management that examine consequences of the regulations.

The stated objectives and enforcement of CSR reporting regulations vary considerably across countries. Empirical research finds no significant changes in reporting quality and generally concludes that CSR reporting continues to be ceremonial rather than substantive after the regulations – consistent with corporate legitimation and “greenwashing” views. In contrast, growing evidence shows both positive and negative capital-market and real effects of the regulations. Overall, the findings from this review indicate that, on balance, there remains a significant number of questions on the net effects of CSR reporting regulations.

The authors offer a comprehensive review of the literature examining consequences of CSR reporting regulations. The authors identify apparent tensions in studies assessing different outcomes after the regulations: between symbolic reporting and positive capital-market outcomes; between profitability and CSR; and between CSR and the welfare of non-shareholder groups. Additionally, we highlight differences in the scope and stated objectives of CSR regulations across countries, with the regulations often reflecting socio-economic development and national interests of implementing countries. Collectively, our review indicates that institutional details are crucial when considering the design or consequences of CSR reporting regulations and/or standards.

The purpose of this study is to examine the impact of country-level governance on sustainability performance, taking into account the effect of sustainable development goals (SDGs) and board characteristics.

This study uses panel data analysis using fixed effect models to investigate the influence of country-level governance on sustainability performance while considering the effect of SDGs and board characteristics. The sample comprises 8,273 firms across 41 countries during the period spanning from 2016 to 2021. The sample is divided into two categories based on the score of SDGs.

The findings of this study show that countries with high SDGs score have better overall country-level governance and board attributes which have a statistically significant positive impact on sustainability performance. However, for those countries with low SDGs, political stability shows a statistically insignificant and negative impact on sustainability performance, while government effectiveness indicates a statistically insignificant positive impact on sustainability performance.

This study contributes to the literature by providing empirical evidence on the relationship between country-level governance, SDGs, board characteristics and sustainability performance. The study also highlights the importance of considering the effect of SDGs on the relationship between country-level governance and sustainability performance. The findings of this study could be useful for policymakers and firms in improving their sustainability performance and contributing to sustainable development.