Does the assurance level of environmental disclosure affect financial analysts’ decisions? An experimental Study

An important body of works show the relevance of environmental disclosure to decisionmaking by investors (Aerts & al., 2007 ; Orens & Lybaert, 2007 ; De Villiers et Van Staden,2010 ; Guidry & Patten, 2010 ; Van der Laan Smith & al., 2010 ; Coram & al., 2011 ; Saïd & al.,2013). Some more recent papers raise the question of the assurance statement of theseenvironmental disclosure and its impact on investment decision (De Villiers et Van Staden,2010 ; Pflugrath & al., 2011). Our study proposes to further specify this question by examiningif different levels of assurance have different impacts on investment'choice. In the context ofthe "New Regulation in Economics" Law, France provides an appropriate setting for such astudy.To address this research question, we have conducted an experiment on a sampleof 108financial analysts, which are known to have relevant skills in financial reporting (Chan & Milne,1999). Moreover, their recommendations are likely to have a significant impact on otherparticipants of the financial market (Campbell & Slack, 2011).The empirical results of our study show that environmental disclosure has a positive impacton investment recommendations. More surprisingly, they suggest that financial analysts givesless recommendations in favor of a company that display environmental disclosure with a lowlevelassurance than for a company with no assurance statement at all.