From Triple Bottom Line to Triple Checks: The Interplay Between ESG , Conservatism, and Investor Trust

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🔬研究者:Scholars studying ESG disclosure quality, greenwashing, and accounting conservatism will find empirical evidence linking ESG to reduced conservatism and the role of investor trust.

🏢実務担当者:Corporate sustainability and reporting teams should note that high ESG scores may not align with prudent accounting; implementing a triple-check framework can enhance credibility.

🏛政策担当者:Regulators (e.g., SSBJ, ISSB) should consider integrating accounting conservatism checks into ESG reporting frameworks to prevent symbolic compliance.

This study examines the relationship between environmental, social, and governance (ESG) disclosure and accounting conservatism as the foundation of investor confidence in assessing the credibility of financial reporting. Although ESG disclosure is often perceived as reflecting a company's commitment to sustainable and ethical business practices, accounting conservatism remains a key mechanism in maintaining the prudence and reliability of financial information. Using dynamic panel data regression and the Hausman–Taylor estimator to address potential endogeneity, we analyze 13,398 firm‐year observations from 30 countries over the period 2010–2022. ESG data are obtained from Thomson Refinitiv, while accounting conservatism is measured using unconditional conservatism, balance sheet‐based models, and conditional conservatism approaches. Key results indicate that higher levels of ESG disclosure are consistently correlated with lower levels of accounting conservatism. Furthermore, high investor confidence in a company's sustainability narrative actually weakens market demand for accounting conservatism practices. This pattern is stronger in companies in developed countries and in entities with perceived strong governance structures, indicating that institutional legitimacy can strengthen the symbolic effect of ESG disclosure. These findings reveal the potential for greenwashing, where ESG disclosures serve as reputational signals that are not always supported by adequate accounting prudence. This study extends the ESG and accounting literature by emphasizing the need for a triple checks approach—integrating ESG evaluation, accounting conservatism, and investor confidence—to distinguish between substantive and symbolic sustainability. The implications of these findings are relevant for investors, regulators, and policymakers in designing reporting and oversight frameworks that can enhance transparency and prevent greenwashing practices in the era of a sustainable economy.

• semanticscholar https://doi.org/10.1002/bsd2.70323first seen 2026-05-29 05:39:52 · last seen 2026-06-03 05:17:42
• scopus https://api.elsevier.com/content/abstract/scopus_id/105039932022first seen 2026-06-03 05:38:40