Corporate Social Responsibility Reporting Reforms around the World: Evidence on Firm Value and Externalities

Corporate social responsibility (CSR) reporting reforms are increasingly being adopted worldwide, with unclear implications for firm value and externalities. Using a novel dataset of global CSR reporting reforms and a stacked difference-in-differences design, we find that treated firms experience a 9.25 percent decline in value but a 16.4 percent reduction in CO2 and CO2 equivalents emissions and a 10.27 percent increase in CSR ratings. Effects are stronger under reforms that require greenhouse gas disclosures, lack safe harbor provisions, do not recommend a specific reporting framework, or do not mandate external assurance. Stronger changes also emerge in jurisdictions with weaker stakeholder orientation and more developed market institutions and among firms without CSR-contingent executive compensation or with weaker CSR transparency and performance. Country-level reform jurisdictions reduce emissions by 40.75 million metric tons, yielding societal savings of $7.5 billion. Overall, CSR reporting reforms reduce firm value but generate significant societal and environmental benefits.