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  • Ioannis Ioannou and George Serafeim

The consequences of mandatory corporate sustainability reporting

Ioannis Ioannou

London Business School - Department of Strategic & International Management

George Serafeim

Harvard Business School


More and more governments are making corporate sustainability reporting mandatory. This paper looks at the effect of sustainability disclosure regulations on firm valuation and disclosure practices. The paper explores ESG reporting mandates in China, Denmark, Malaysia and South Africa. The authors compare data from periods prior to the mandated regulation to the period after the enforcement.


The authors find that following the regulations, the treated firms significantly increased their sustainability disclosure. They also find that treated firms are more likely to volunteer to receive assurance in order to enhance the credibility of their disclosure, even if assurance is not mandatory. The increased sustainability disclosures also seem to be linked to an increase in the firm’s valuations. All in all, this paper points towards the effectiveness of ESG disclosure mandates in increasing the quality and quantity of reporting as well as creating value for participating firms.


SSRN-id1799589
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