DCC Brownbag - Anastasia Borisova - Assistante diplômée HEC au département de Comptabilité et Contrôle
Measuring the impact of the transition to mandatory CSR reporting in Europe
Tuesday 28 January 2020 (13h20 - 14h15) - Anthropole - 3077
We analyze corporate social responsibility reporting by large European listed companies from 2013 to 2017. This timeframe includes a significant shift for CSR reporting – the adoption of the Directive 2014/95/EU mandating non-financial reporting in the EU. We assess the Directive's impact on quantitative and qualitative dimensions of CSR disclosures published in annual and stand-alone reports. The analysis is carried out with a difference-in- difference approach using French, British, and Danish firms as the control group since they already had mandatory CSR reporting.
A significant change in the number of reports is the first indication of the Directive's impact. For qualitative changes, we rely on the guidelines clarifying the EU Commission's view on the quality of CSR reporting within the Directive. We operationalize the guidelines using Natural Language Processing metrics such as tone, readability, report length, topic coverage (environmental, social, bribery, human rights, long-term orientation), and time-series similarity.
Our findings confirm the expectations of a quantity and quality reaction despite the weak enforcement of the Directive. The treatment group has a more significant increase in the length of CSR disclosures, with environmental and social topics receiving more coverage in the post Directive period. Their reports also become more long-term oriented and less biased. Further, we witness a higher increase in the complexity and a greater decrease in report similarity. After the Directive, differences between the treatment and control firms tend to converge for almost all the characteristics, with only environmental issues receiving higher coverage by the treatment group.