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The Consequences of Mandatory Corporate Sustainability Reporting


  • Ioannis Ioannou

    () (London Business School)

  • George Serafeim

    () (Harvard Business School, Accounting and Management Unit)


We examine the effect of mandatory corporate sustainability reporting (MCSR) on several measures of social responsibility using both country and firm-level data. Using data for 58 countries, we show that after the adoption of MCSR laws and regulations, the social responsibility of business leaders increases and both sustainable development and employee training become a higher priority for companies. Moreover, for companies in countries with MCSR, corporate governance improves and on average, companies implement more ethical practices, bribery and corruption decrease, and managerial credibility increases. These effects are larger for countries with stronger law enforcement and more widespread assurance of sustainability reports. We complement the country-level analysis using environmental, social and governance metrics at the firm-level in conjunction with a differences-in-differences research design and we find that for the treatment group, energy as well as waste and water consumption significantly decline, while investments in employee training significantly increase after the adoption of MCSR laws and regulations.

Suggested Citation

  • Ioannis Ioannou & George Serafeim, 2011. "The Consequences of Mandatory Corporate Sustainability Reporting," Harvard Business School Working Papers 11-100, Harvard Business School, revised Oct 2012.
  • Handle: RePEc:hbs:wpaper:11-100

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    Cited by:

    1. Maria RYBALKO, 2016. "International Experience of the Development of Corporate Social Responsibility: Comparative Analysis of the Influence of the State," Management Dynamics in the Knowledge Economy Journal, College of Management, National University of Political Studies and Public Administration, vol. 4(3), pages 427-447, September.
    2. Peter Seele & Irina Lock, 2015. "Instrumental and/or Deliberative? A Typology of CSR Communication Tools," Journal of Business Ethics, Springer, vol. 131(2), pages 401-414, October.
    3. Karin Buhmann, 2016. "Public Regulators and CSR: The ‘Social Licence to Operate’ in Recent United Nations Instruments on Business and Human Rights and the Juridification of CSR," Journal of Business Ethics, Springer, vol. 136(4), pages 699-714, July.

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    sustainability reporting; mandatory reporting; corporate sustainability; corporate social responsibility;

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