Loughborough University
Browse
Bus Strat Env - 2023 - Aboud - Does mandating ESG reporting reduce ESG decoupling Evidence from the European Union s.pdf (392.73 kB)

Does mandating ESG reporting reduce ESG decoupling? Evidence from the European Union's Directive 2014/95

Download (392.73 kB)
journal contribution
posted on 2024-02-09, 12:14 authored by Ahmed Aboud, Ahmed Saleh, Yasser EliwaYasser Eliwa

This paper investigates the impact of Directive 2014/95 (hereafter, ‘the Directive’) issued by the European Union (EU) that mandates the disclosure of ESG information on ESG decoupling behaviour by EU-listed firms and whether the strength of national enforcement systems of member states plays a moderating role in this relationship. Using a difference-in-differences design and employing a propensity score matched sample of 3020 firm-year observations from the EU and the United States, we find that both the passage of the Directive in 2014 and the implementation of the Directive in 2017 have a mitigating effect on ESG decoupling. We also find that the strength of national enforcement systems has no impact on the relationship between the Directive and ESG decoupling. Furthermore, our additional analysis indicates that the effect of the Directive is less pronounced for firms that have their ESG information independently audited. Additionally, we find that the impact of the Directive is more pronounced for firms operating in non-controversial industry sectors. While the Directive is under ongoing revision by the EU Parliament and Commission to be replaced by the new Corporate Sustainability Reporting Directive (CSRD), our study provides timely insights into the effectiveness of the Directive and its impact on ESG information.

History

School

  • Loughborough Business School

Published in

Business Strategy and the Environment

Volume

33

Issue

2

Pages

1305 - 1320

Publisher

Wiley

Version

  • VoR (Version of Record)

Rights holder

© The Authors

Publisher statement

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial (https://creativecommons.org/licenses/by-nc/4.0/) License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes.

Acceptance date

2023-08-02

Publication date

2023-08-26

Copyright date

2023

ISSN

0964-4733

eISSN

1099-0836

Language

  • en

Depositor

Dr Yasser Eliwa. Deposit date: 26 August 2023

Usage metrics

    Loughborough Publications

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC