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ESG reporting – class actions, deterrence, and avoidance

Author

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  • Daniel Murphy
  • Dianne McGrath

Abstract

Purpose - The purpose of this paper is to expand our understanding of the motivations for corporate environmental, social and governance (ESG) reporting. Design/methodology/approach - This paper provides a conceptual exploration of the motivation for corporations to provide ESG reports and proposes deterrence theory and avoidance as a complementary explanatory motivation for such reports. Findings - Within this paper it is argued that part of the motivation for some corporations to increase ESG disclosures is to avoid, or mitigate, the risk of class actions and the associated financial penalties. This paper proposes that in Australia the deterrence impact, and ancillary avoidance behaviour, of civil litigation class action provides a further motivation for improving both corporate ESG disclosure and sustainability performance. Originality/value - This paper extends the social and environmental accounting (SEA) reporting literature by proposing deterrence theory and avoidance as a corporate motivation for environmental, social and governance (ESG) reporting. Deterrence is proposed as a different, yet complementary, motivation to the oft‐cited variations of stakeholder and legitimacy theory which are dominant in the SEA reporting motivation literature.

Suggested Citation

  • Daniel Murphy & Dianne McGrath, 2013. "ESG reporting – class actions, deterrence, and avoidance," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 4(2), pages 216-235, August.
    • Handle: RePEc:eme:sampjp:sampj-apr-2012-0016
    DOI: 10.1108/SAMPJ-Apr-2012-0016
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    Citations

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    Cited by:

    1. Paul Arkoh & Antonio Costantini & Francesco Scarpa, 2024. "Determinants of sustainability reporting: A systematic literature review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 1578-1597, May.
    2. Hakan Gökhan Gündoğdu & Ahmet Aytekin & Şura Toptancı & Selçuk Korucuk & Çağlar Karamaşa, 2023. "Environmental, social, and governance risks and environmentally sensitive competitive strategies: A case study of a multinational logistics company," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4874-4906, November.
    3. Xue, Qinyuan & Jin, Yifei & Zhang, Cheng, 2024. "ESG rating results and corporate total factor productivity," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    4. Vicky Ching Gu, 2023. "How independent should a board be? Examine the corporate social responsibility performance in the US healthcare sector," Service Business, Springer;Pan-Pacific Business Association, vol. 17(3), pages 695-721, September.

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