Three essays on ESG disclosure credibility

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🔬研究者:Provides a comprehensive credibility-based framework linking ESG disclosure to market risk, stakeholder outcomes, and debt structure, with robust cross-country evidence.

🏢実務担当者:Highlights that ESG teams must align disclosure with actual performance to avoid raising equity risk and to secure favorable debt terms.

🏛政策担当者:Supports regulatory efforts to mandate credible, assurance-backed ESG disclosures by showing real economic consequences of decoupling.

This thesis comprises three essays that examine the economic consequences of environmental, social, and governance (ESG) disclosure credibility. The central premise is that the value of ESG reporting depends not only on the extent of disclosure, but also on the degree to which such disclosures are aligned with firms’ underlying ESG performance and observable stakeholder-related conduct. When disclosure exceeds actual practice, ESG communication may become symbolic rather than informative, thereby reducing its effectiveness in decision-making and generating significant implications for investors, lenders, regulators, and other stakeholders. To address this issue, the thesis develops an integrated credibility-based framework in which the effects of ESG reporting operate through three interrelated channels: information asymmetry, legitimacy pressure, and monitoring demand. The first essay, "ESG Decoupling and Stock Price Crash Risk", investigates whether ESG decoupling, defined as the extent to which ESG disclosures exceed realised ESG performance, influences stock price crash risk in the United States and China over the period 2008 to 2022. Using ESG-flagged firms from Refinitiv DataStream, the analysis covers 10,154 firm-year observations from the United States and 1,957 from China. The findings indicate that ESG decoupling is positively associated with stock price crash risk in China, whereas the ESGD-SPCR relationship is statistically significant in the United States baseline specifications but less consistent across robustness tests. A formal coefficient-difference test indicates that the estimated ESGD coefficients are larger in China than in the United States, although the cross-country coefficient differences are not statistically significant at conventional levels. The effect is more pronounced among Chinese non-state-owned enterprises. These results suggest that credibility gaps in ESG reporting are more consequential in institutional settings characterised by stronger policy compliance pressures and weaker external verification. The evidence is consistent with the argument that decoupled ESG reporting exacerbates information asymmetry and encourages the withholding of adverse information in environments where monitoring is less effective. Additional analysis shows that investor sentiment does not significantly moderate this relationship in either market. The second essay, "ESG Disclosure and Stakeholder Orientation", examines whether ESG disclosures reflect substantive stakeholder commitment or symbolic compliance in the United States. Grounded in signalling theory and legitimacy theory, it is argued that ESG disclosures may either convey credible information about firms’ stakeholder-oriented behaviour when aligned with underlying practices or serve as symbolic signals aimed at gaining external legitimacy when decoupled from actual conduct. Using a sample of US-listed parent firms with ESG disclosure scores from Bloomberg and stakeholder-related compliance violations from Violation Tracker, the analysis covers 24,478 firm-year observations over the period 2005 to 2023. The results reveal that higher ESG disclosure is associated with lower incidence of stakeholder-related compliance violations, indicating that ESG disclosure can serve as a signal of stakeholder-oriented conduct. However, this relationship is heterogeneous across firms. It is stronger in sensitive industries, exhibits a non-linear pattern in which disclosure appears more symbolic at lower levels but more substantive at higher levels, and is more closely associated with reductions in employee-related violations than customer-related violations. These findings highlight that the informativeness of ESG disclosure depends not only on its level, but also on the context and intensity with which it is provided. They further suggest that stakeholder-related outcomes offer a meaningful benchmark for distinguishing substantive ESG practice from symbolic reporting. The third and final essay, "ESG Disclosure Credibility and Debt Structure", explores whether ESG disclosure credibility influences firms’ debt structure in the United States over the period 2005 to 2024. Drawing on information asymmetry and monitoring-based theories of debt contracting, it is posited that lower ESG disclosure credibility increases uncertainty about firms’ underlying risk and limits the usefulness of public disclosure for external capital providers, thereby inducing creditors to rely more heavily on private debt arrangements that allow for enhanced screening, covenant design, and ongoing monitoring. Using 14,598 firm-year observations, this study examines whether firms with greater ESG decoupling rely more on private debt. ESG decoupling is measured as the extent to which Bloomberg ESG disclosure scores exceed realised ESG performance scores from London Stock Exchange Group (LSEG)/Refinitiv, while private debt reliance is identified using instrument-level debt data from S&P Capital IQ. The results demonstrate that higher ESG decoupling is associated with a greater reliance on monitoring-intensive private debt. This association is stronger among firms with lower managerial ability, weaker corporate culture, lower financial constraints, and lower exposure to climate-related risk. However, results for the high-climate-risk subsample should be interpreted cautiously as its smaller sample size may partly reduce statistical power. Collectively, these findings support a credibility-based segmentation of debt markets in which lower ESG disclosure credibility increases the value of lenders’ screening, verification, covenanting, and monitoring functions. Taken together, the three essays demonstrate that the credibility of ESG disclosure is central to understanding how ESG information is interpreted, enforced and reported. Across equity markets, stakeholder-related outcomes, and debt contracting, the thesis demonstrates that ESG reporting cannot be evaluated solely based on disclosure volume but must be assessed in relation to observable organisational outcomes and behaviour towards stakeholders. The broader contribution of the thesis is to integrate market risk, stakeholder accountability, and financing structure within a common credibility-based framework and to position ESG disclosure credibility as a non-financial reporting quality issue, because ESG information is more decision-useful when disclosed claims truly represent underlying organisational performance and conduct. This reinforces the thesis’s central claim that credibility, rather than disclosure volume alone, explains the real consequences of ESG reporting. Overall, the thesis contributes to accounting and finance literature by showing that ESG disclosure credibility operates as a reporting, accountability, and contracting mechanism across capital-market, stakeholder, and creditor settings.

• openalex https://doi.org/10.82348/our-archive.00228first seen 2026-07-18 05:56:25