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Effects of integrating CSR information in financial reports on investors’ firm value estimates

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  • Abdifatah Ahmed Haji
  • Paul Coram
  • Indrit Troshani

Abstract

Using an experiment, we find that corporate social responsibility (CSR) performance measures have a greater impact on investors’ firm value estimates when reported in a separate report than when integrated into a financial report. We also find that more investors misclassified CSR information as assured when integrated into financial reports than when reported in separate reports. Investors who misclassified CSR information rated its credibility higher and derived higher firm value estimates compared to investors who correctly classified this information as non‐assured. Overall, our results identify potential costs of integrating CSR measures in financial reports, and inform global regulators considering alternative CSR reporting frameworks.

Suggested Citation

  • Abdifatah Ahmed Haji & Paul Coram & Indrit Troshani, 2021. "Effects of integrating CSR information in financial reports on investors’ firm value estimates," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 3605-3647, June.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:2:p:3605-3647
    DOI: 10.1111/acfi.12713
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    2. Carlos Sánchez‐Camacho & Rocío Carranza & David Martín‐Consuegra & Estrella Díaz, 2022. "Evolution, trends and future research lines in corporate social responsibility and tourism: A bibliometric analysis and science mapping," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(3), pages 462-476, June.
    3. Guillermo Badía & Fernando Gómez‐Bezares & Luis Ferruz, 2022. "Are investments in material corporate social responsibility issues a key driver of financial performance?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(3), pages 3987-4011, September.
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    5. Altendorfer, Andreas, 2024. "Evidence on the incremental information content of concurrent financial and non-financial corporate disclosures," Finance Research Letters, Elsevier, vol. 60(C).
    6. Thanyawee Pratoomsuwan & Yingyot Chiaravutthi, 2023. "Willingness to invest and the assurance of corporate social responsibility reports," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 192-208, January.

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