Disclosure Transparency Research Articles

Textual Attributes of Corporate Sustainability Reports and ESG Ratings

While the textual attributes of corporate financial documents, such as annual reports, have been extensively analyzed in the academic literature, those of corporate sustainability reports, which serve as a critical channel for nonfinancial disclosure, are relatively under-explored. Given the increasing importance of Environmental, Social, and Governance (ESG) factors in corporate strategy and stakeholder evaluation, understanding the role of textual attributes in sustainability reporting is crucial. This study examines 10,021 hand-collected sustainability reports from Chinese firms between 2009 and 2021, focusing on six key textual attributes: length, readability, tone, boilerplate language, redundancy, and completeness. Using computational linguistics, we analyze how these attributes evolve over time and their impact on ESG ratings provided by both international (MSCI, FTSE) and domestic (SNSI) agencies. Our findings reveal that the length and completeness of sustainability reports significantly influence ESG scores across agencies, demonstrating a shared appreciation for detailed and transparent disclosures. However, international and domestic rating agencies exhibit differing responses to attributes like tone, boilerplate language, and redundancy. These differences highlight variations in evaluation standards, methodologies, and value orientations between global and local stakeholders. The results emphasize the need for firms to tailor their sustainability disclosures to meet diverse stakeholder expectations. This study contributes to the growing body of literature on nonfinancial reporting by providing empirical evidence on how specific textual characteristics of sustainability reports can shape ESG evaluations, offering insights for both corporate communicators and policymakers.

Application of Duty of Candour legislation in post-colonoscopy colorectal cancer: a prospective cohort study.

Background & Study Aims The study investigates the application of Duty of Candour (DoC) legislation in the context of post-colonoscopy colorectal cancers (PCCRCs). DoC mandates transparent disclosure of notifiable safety incidents to patients in the English National Health Service, including those leading to severe or moderate harm. This study aims to analyse the application of DoC in PCCRCs, improve understanding of the legislation and identify challenges in its implementation. Patients & Methods A national audit of PCCRCs was conducted between September 2021 to May 2022. PCCRCs were identified using linked administrative datasets and root-cause analyses were performed using a structured template. 1,724 PCCRCs were included. 'Avoidability' and harm categorised into specific levels, with guidance provided to improve consistency in judgments. Results 16% of PCCRCs resulted in major harm or death, of which 27%(75) were at least probably avoidable. Hospitals deemed DoC discharge necessary in only 53% of these cases. When including moderate harm, 11% of all PCCRCs would trigger DoC discharge, yet this was deemed necessary in only 41% of these cases. Conclusions There is inconsistent application of DoC in PCCRC cases. Challenges include determining 'avoidability' and harm, particularly when there is a delay in diagnosis. Clearer guidance and definitions of harm are needed to improve adherence to regulations.

Disclosures & Disclaimers: Investigating the Impact of Transparency Disclosures and Reliability Disclaimers on Learner-LLM Interactions

Large Language Models (LLMs) are increasingly being used in educational settings to assist students with assignments and learning new concepts. For LLMs to be effective learning aids, students must develop an appropriate level of trust and reliance on these tools. Misaligned trust and reliance can lead to suboptimal learning outcomes and reduced LLM engagement. Despite their growing presence, there is a limited understanding of achieving optimal transparency and reliance calibration in the educational use of LLMs. In a 3x2 between-subjects experiment conducted in a university classroom setting, we tested the effect of two transparency disclosures (System Prompt and Goal Summary) and an in-conversation Reliability Disclaimer on a GPT-4-based chatbot tutor provided to students for an assignment. Our findings suggest that disclaimer messages included in the responses may effectively mitigate learners' overreliance on the LLM Tutor in the presence of incorrect advice. Disclosing System Prompt seemed to calibrate students’ confidence in their answers and reduce the occurrence of copy-pasting the exact assignment question to the LLM tutor. Student feedback indicated that they would like transparency framed in terms of performance-based metrics. Our work provides empirical insights on the design of transparency and reliability mechanisms for using LLMs in classrooms.

A Systematic Literature Review on Transparency in Executive Remuneration Disclosures and Their Determinants

There are ongoing debates globally regarding excessive executive compensation, the perceived weak link between pay and performance, and the widening inequality gap. The South African corporate governance code King IV’s Principle 14 addresses the need for fair, responsible, and transparent remuneration. At the same time, the newly enacted Companies Amendment Act No. 16 of 2024 in South Africa emphasizes transparency in compensation, shareholder voting, and responding to shareholder feedback. This study conducts a systematic literature review of 30 articles on the transparency of executive remuneration disclosures and their determinants by analyzing Scopus-indexed articles published between 2010 and 2023, selected through specific keyword searches. The findings suggest an increasing focus on research regarding the disclosure of executive compensation, predominantly conducted in the Global North and primarily framed through agency theory. Studies exploring the factors influencing executive remuneration and the relationship between pay and performance are prevalent, with mixed results generally indicating a positive connection. Firm size emerges as a key factor in transparency, and many studies employ binary scoring to evaluate whether executive compensation disclosure is present. This paper provides valuable insights for investors, analysts, and policymakers and adds to the current understanding of executive remuneration transparency.

The Ripple Effects of Financial Fraud: Investor Trust and Risk Appetite Post-Kangmei Pharmaceutical

The financial fraud at Kangmei Pharmaceutical (stock code: 600518) has had profound implications for retail investors. This paper, through data analysis, explores the correlation between information asymmetry and investment outcomes for retail investors. Information asymmetry often leaves retail investors unable to access the true financial state and operational conditions of companies, leading them to make speculative investments. Post-exposure, as information transparency increased, retail investors became aware of the company's financial issues and rushed to sell, causing a stock plunge. This highlights how information asymmetry not only affects investment decisions but also amplifies market volatility. To mitigate risks from information asymmetry, regulators must strengthen oversight and penalties, improve disclosure transparency and authenticity, while investors need to enhance self-protection awareness and information gathering and analysis capabilities. Only then can we minimize the impact of information asymmetry on retail investors and uphold fairness and stability in financial markets. This paper suggests that by implementing a robust regulatory framework and encouraging proactive investor education, we can better safeguard retail investors from the detrimental effects of information asymmetry, thereby fostering a more resilient and equitable financial market ecosystem.

The impact of environmental, social and governance disclosure on stock prices: Empirical research in Vietnam

The aims of this research is to evaluate the impact of Environmental, Social and Governance (ESG) information disclosure (using both financial and non-financial information) on stock prices of businesses in Vietnam; From there, propose recommendations to promote transparent practices and information disclosure about ESG of businesses related activities; Contribute to developing sustainable investment goals in businesses, and the financial market in general. Based on the (Ohlson, 1995) [40] valuation model, and developed by Barth and Clinch (2009) [41] the research was conducted empirically in 30 listed companies in Vietnam in the period 2019–2022. Research results based on the GLS method show that ESG positively impacts stock prices. Additionally, this paper conducted an in-depth analysis of each individual pillar and found that the environmental pillar was considered the most meaningful to market participants. However, the correlation between ESG and stock prices is weakened for environmentally sensitive businesses. This study also makes a valuable contribution to the current literature on non-financial information reporting by using manually collected data and investigating the effects of ESG reporting on market participants in the public system voluntary information disclosure system of an emerging market like Vietnam.

EXPERIENCE WITH GREENHOUSE GAS EMISSION ALLOWANCE ALLOCATION AND ANALYSIS OF LESSONS FOR VIET NAM

This study analyzes and synthesizes international experiences in allocating greenhouse gas emission quotas, drawing lessons for Viet Nam's developing carbon market. The research examines emission trading systems (ETS) and quota allocation methods from various countries and regions, including the European Union, Germany, Austria, the United Kingdom, Switzerland, the United States, Canada, Nigeria, Kenya, South Africa, China, Japan, and New Zealand. Key findings highlight the importance of diversifying allocation methods, combining free allocation, auctioning, and benchmarking approaches. The study emphasizes the need for flexibility in system design, adapting to specific economic and social conditions of each country. Lessons learned include prioritizing high-emission reduction potential sectors, setting reasonable emission caps based on actual data, ensuring transparency in information disclosure, and establishing effective monitoring and evaluation mechanisms. The research also stresses the importance of providing technical support to businesses, especially small and medium enterprises, in complying with ETS regulations. Additionally, the study addresses concerns such as preventing carbon leakage, assessing social impacts, and ensuring international compatibility of the system. These insights provide a valuable foundation for Viet Nam to develop an effective greenhouse gas ETS that aligns with national conditions and sustainable development goals.

Green public procurement and corporate environmental performance: An empirical analysis based on data from green procurement contracts

Green public procurement (GPP) is regarded as a vital tool for achieving energy conservation and emission reduction. This policy aims to guide enterprises towards cleaner production by creating market demand for green products on the demand side. However, it remains unclear whether GPP can genuinely improve corporate environmental performance. This study reviews relevant policy documents and constructs a wordlist of “green procurement contract" using the Word2vec model. By employing text analysis, we identify public procurement contracts that meet green standards. Subsequently, we match these contracts with data from China's A-share-listed companies to empirically test the impact of GPP contracts on corporate environmental performance. The findings reveal that GPP significantly enhances corporate environmental performance, primarily through conceptual governance effects, source governance effects, terminal governance effects, and supervision governance effects. Heterogeneity analysis indicates that this environmental incentive effect is particularly significant among non-state-owned enterprises and small and medium-sized enterprises. Additionally, the effect is more pronounced in regions with high government environmental awareness and moderate environmental enforcement intensity. Further analysis shows that GPP also improves corporate social responsibility performance and promotes corporate ESG performance, thereby fostering sustainable development. Moreover, the study points out that increasing the transparency of information disclosure, enhancing procurement efficiency, and maintaining the stability of procurement relationships all contribute to strengthening the environmental performance incentive effect of GPP. This article helps to deepen the understanding of the “proactive government” promoting the development of green economy and also provides theoretical reference for the breakthrough of corporate green transformation under the target of “dual carbon.”

Corporate Governance Reforms and the Quality of Financial Information of Listed Non-Financial Services Firms in Nigeria

The increasing demand for high quality financial information by the relevant users of financial report has become a serious concern and inevitable on the management of listed non-financial services firms in Nigeria. The primary objective of this study is to examine the nexus between corporate governance reforms and the quality financial information of listed non-financial services firms in Nigeria. Using an ex-post facto as the research design for the study, data was obtained from the secondary sources through the extraction method from the annual financial reports and accounts of the listed firms for 276 firm-year observations, from 2018 to 2023 period. Out of the seventy-five (75) listed non-financial services firms in Nigerian Exchange Group as at 31st December, 2018, a sample size of fourty-six (46) listed firms were used with aid of purposive filter sampling technique. The Feasible Generalized Least Square (FGLS) regression was used as the model estimation technique for the study. Based on the regression analysis, it was found that board size, assurance services and transparency have positive significant impact on financial information quality of listed non-financial services firms in Nigeria. However, sustainability was statistically found to have insignificant impact on quality of financial information of listed non-financial services firms in Nigeria. Therefore, it is recommended that the board of directors of listed non-financial services firms in Nigeria ensure that more members are nominated to participate in the board’s decision. This is because of the fact that larger board sizes are more likely to create avenue for cross-fertilization of ideas thereby, making decisions that can safeguard, uphold and enhance the quality of the financial information of the listed non-financial services firms in Nigeria. The results also underscore the relevance of corporate governance codes and their impacts on FIQ and transparent disclosure. This study offers policy implications to regulatory agencies and standard-setters in their oversight function over the quality of financial information disclosed in annual reports.

A Study of Theoretical Justifications for Mandatory ESG Disclosure in Korea

The growing global focus on sustainable development and Environmental, Social, and Governance (ESG) factors necessitates robust disclosure legislation, including in South Korea, where corporate conglomerates, or chaebols, dominate the economy. This research underscores the critical need for comprehensive ESG disclosure laws, supported by Stakeholder Theory, Sustainability Theory, and Legitimacy Theory, within the Korean context. Stakeholder Theory emphasizes the accountability of chaebols to diverse groups beyond shareholders, advocating for transparent ESG practices that align with societal expectations. Sustainability Theory highlights the importance of aligning corporate actions with long-term national sustainability goals, such as Korea's Green New Deal, to enhance environmental and social resilience. Legitimacy Theory supports the notion that transparent ESG disclosures build local and global legitimacy, fostering trust and compliance with evolving standards. This study explores the intersection of these theories, demonstrating how mandatory ESG disclosures can enhance corporate governance, support sustainable business practices, and improve market competitiveness. By legislating comprehensive ESG disclosure requirements, Korea can ensure long-term value creation, stakeholder engagement, and alignment with global sustainability trends. This research provides a theoretical foundation for policy-makers, suggesting that robust ESG disclosure laws are essential for promoting transparency, accountability, and sustainable economic growth in Korea.

The Effect of Disclosure of Sustainable Development Goals on the Financial Performance of Banking Companies in Indonesia

This study aims to analyze the impact of Sustainable Development Goals (SDG) disclosure on the Return On Assets (ROA) of banking companies in Indonesia, to analyze the impact of SDG disclosure on the Return On Equity (ROE) of banking companies in Indonesia, and to analyze the impact of SDG disclosure on the Return On Investment (ROI) of banking companies in Indonesia. The data used in this research are secondary data sourced from the Annual Reports and Sustainability Reports of financial service companies in the banking sector listed on the Indonesia Stock Exchange (IDX) for the period 2019-2023. The research sample was selected using purposive sampling method, resulting in 15 companies as samples. The data analysis used for hypothesis testing is panel data analysis using Eviews 12 software. The results of the study indicate that SDG disclosure has a positive effect on ROA, SDG disclosure has a positive effect on ROE, and SDG disclosure has a positive effect on ROI of banking companies in Indonesia. These findings provide important empirical evidence that can encourage banking companies to pay more attention to and integrate SDGs into sustainable business strategies to achieve optimal financial performance, and promote more comprehensive and transparent SDG disclosure regulations to help investors make better investment decisions, as well as encourage investors to consider sustainability factors in their investment decisions. The implication of this research is the encouragement for banking companies to pay more attention and integrate SDGs in business strategy.

Enhancing the Clinical Utility of Radiomics: Addressing the Challenges of Repeatability and Reproducibility in CT and MRI.

Radiomics, which integrates the comprehensive characterization of imaging phenotypes with machine learning algorithms, is increasingly recognized for its potential in the diagnosis and prognosis of oncological conditions. However, the repeatability and reproducibility of radiomic features are critical challenges that hinder their widespread clinical adoption. This review aims to address the paucity of discussion regarding the factors that influence the reproducibility and repeatability of radiomic features and their subsequent impact on the application of radiomic models. We provide a synthesis of the literature on the repeatability and reproducibility of CT/MR-based radiomic features, examining sources of variation, the number of reproducible features, and the availability of individual feature repeatability indices. We differentiate sources of variation into random effects, which are challenging to control but can be quantified through simulation methods such as perturbation, and biases, which arise from scanner variability and inter-reader differences and can significantly affect the generalizability of radiomic model performance in diverse settings. Four suggestions for repeatability and reproducibility studies are suggested: (1) detailed reporting of variation sources, (2) transparent disclosure of calculation parameters, (3) careful selection of suitable reliability indices, and (4) comprehensive reporting of reliability metrics. This review underscores the importance of random effects in feature selection and harmonizing biases between development and clinical application settings to facilitate the successful translation of radiomic models from research to clinical practice.

Analysis Of Financial Ratios and Company Size As Determining Factors For Islamic Social Reporting Disclosure In Sharia Banks In Indonesia (Period 2015-2020)

This study investigates the determinants of Islamic Social Reporting (ISR) disclosure among Islamic banks in Indonesia from 2015 to 2020. Using financial ratios (ROA, CR, DER) and firm size as factors, the research explores their impact on the extent of ISR disclosures. The study employs quantitative analysis based on data from annual reports of Indonesian Islamic banks, applying regression models to test hypotheses derived from stakeholder theory, legitimacy theory, and resource dependency theory. The findings reveal that profitability and liquidity positively influence ISR disclosures, indicating that more profitable and liquid banks are more likely to engage in and report on social responsibility activities. In contrast, leverage shows a negative relationship with ISR disclosures, suggesting that highly leveraged banks disclose less about their social initiatives. Additionally, firm size positively correlates with ISR disclosures, highlighting that larger banks tend to provide more comprehensive reports on their social responsibilities. Theoretical implications suggest that Islamic banks strategically manage their financial and organizational resources to enhance legitimacy and stakeholder trust through transparent ISR disclosures. Practical implications underscore the importance of integrating CSR practices into business strategies to promote sustainability and accountability. The study contributes to the literature by providing empirical insights into ISR practices in Islamic banking and informs stakeholders about the factors influencing social responsibility disclosures.

Exploring the drivers of modern slavery reporting quality in Indonesia

AbstractVulnerability to modern slavery in Indonesia, particularly driven by poverty and discrimination against minority groups, has become a primary concern in the context of information transparency. This study aims to investigate the factors that can support the reporting quality of modern slavery in Indonesia, namely the industry sector, profitability, social responsibility commitment, and gender diversity as the moderating variable. The research utilized a sample of 225 companies listed on the Indonesia stock exchange (IDX) from 2020 to 2022. Data were collected from financial reports and sustainability reports as well as the Refinitiv Eikon database. Panel data regression analysis was conducted to analyze the determinants of the disclosure quality. The research findings indicate that high‐risk industry sectors tend to disclose less information regarding modern slavery, with this outcome having a partially negative impact. However, profitability is not associated with the quality of voluntary modern slavery disclosure. In contrast, corporate responsibility commitment is positively associated. Additionally, this study reveals that gender diversity does not moderate the association between the industry sector, profitability, and corporate responsibility commitment with the disclosure quality of modern slavery. This research contributes to the growing literature on the accountability of modern slavery in an emerging country context through institutional theory and gender socialization theory lenses by identifying the firm‐level factors to enhance corporate disclosure in this area. This study also contributes to corporate understanding of modern slavery issues within supply chains. With growing attention to this problem, the awareness of labor exploitation within corporate supply chains is also increasing. The findings of this research can assist companies in recognizing the importance of transparency and voluntary disclosure regarding modern slavery in their supply chains.

Reporting Corporate Risk: An Empirical Inquiry into Listed Entities in the Saudi Capital Market

A capital market with greater transparency provides more accurate metrics for measuring corporate performance, which can be utilized to inform market participants’ decisions. Informed risk is crucial to corporate reporting transparency. This empirical study explores the extent to which firms in the Saudi capital market disclose risk information, whether financial or non-financial. A risk disclosure index (RDI) is constructed based on a rigorous literature review of previous studies, considering suggested items related to corporate risk that must be disclosed. The sample comprises 50 corporations, with five companies representing the energy sector, three representing the utility sector, and forty-two representing the materials sector. The findings reveal moderate financial risk disclosure (sample mean 56%) and low non-financial risk disclosure (sample mean 33%) in the Saudi capital market. In the energy sector, the disclosed financial and non-financial risks comprise 57% and 37%, respectively; in the utility sector, these proportions are 56% and 31%, while in the materials sector, they are 54% and 33%, respectively. Regulators should prioritize high-quality, transparent, and comparable risk information disclosure to attract direct foreign investment. To improve their risk disclosure, managers of firms can also employ the RDI to examine the extent of risk their companies face. This study is limited to the annual and board reports of companies in the three sectors.

Can climate-related information disclosures strengthen green innovation capacity? Firm-level evidence using textual analysis

This study presents novel insights on modelling the implications of voluntary climate-related information disclosure on corporate green innovation (GI) in China. Based on a constructed dataset of 13,664 firm-year observations between 2014 and 2020, we quantify climate-related disclosures under the Task Force on Climate-Related Financial Disclosures framework using computerized text analysis. Our findings show that climate-related information disclosure substantially bolsters corporate green innovation after addressing endogeneity concerns. However, the promoting effects vary drastically across industry attributes, ownership structure, and environmental regulations. Further channel analysis demonstrates that “greenwashing” behaviours and financial constraints adversely moderate the nexus between climate-related information disclosure and green innovation of firms, while digital finance positively moderates it. Overall, this study enriches the literature and offers practical implications for firms engaging in the green innovation process more effectively under a more transparent environment-related disclosure system.

Macroeconomic news and price jumps: evidence from ETFs and LOFs in China

PurposeWe examine the relationship between macroeconomic news and fund price jumps, using high-frequency 5-min intraday data for Exchange Traded Funds (ETFs) and Listed Open-end Funds (LOFs) from 2019 to 2020.Design/methodology/approachWe utilize the non-parametric jump test known as the LM method to detect fund price jumps. In addition, we perform Logistic regression to analyze the relationship between macroeconomic news and fund price jumps. Moreover, we use multiple linear regression to explore the relationship between fund price jumps and subsequent returns.FindingsThe probability of price jumps increases by 22.56% when macroeconomic news is released. Moreover, the returns associated with news-driven price jumps display a reversal pattern, and there is an asymmetric relationship in subsequent returns following macroeconomic shocks. Specifically, funds tend to exhibit lower returns after news-driven price jumps compared to those that are not influenced by news events.Research limitations/implicationsIn today's digital age, investors have unprecedented access to a wealth of information through the Internet and various communication platforms. News and market data can be instantly accessed and disseminated, allowing for swift dissemination of information to investors worldwide. However, despite this enhanced accessibility, investors continue to exhibit overreactions or underreactions to new information.Practical implicationsMacroeconomic news release provide crucial insights into the overall health and performance of the economy. By monitoring and analyzing these indicators, investors can gain valuable information that can guide their investment decisions. Furthermore, by fostering a transparent and reliable information disclosure systems, governments can play a critical role in ensuring the stability and transparency of the funds market.Originality/valueThe paper utilizes 5-min high-frequency data from funds and incorporates a comprehensive macroeconomic news information database. These methodological choices enhance the precision and reliability of the analysis, allowing for a more nuanced understanding of the relationship between macroeconomic news releases and fund price jumps.

Pengaruh Profitabilitas, Leverage, dan Ukuran Perusahaan Terhadap Transparansi Pengungkapan Sukarela

This study analyze the effect of financial conditions and company size on the transparency of voluntary disclosure in financial statements. The financial conditions in this research are profitability and leverage, while company size is measured using the company's total assets. The analytical technique used is multiple linear regression analysis, processed using IBM SPSS Statistics 23. The population in this study consists of transportation companies listed on the Indonesia Stock Exchange from 2019 to 2022, selected using purposive sampling, resulting in a total of 84 data points over four years. The results of this study indicate that profitability and leverage influence voluntary disclosure, whereas company size does not affect voluntary disclosure.

The impact of corporate digital transformation on share price synchronisation

With the rapid development of the digital economy, digital transformation of firms has become an important factor affecting their operations and market performance. This study examines the impact of corporate digital transformation on stock price synchronisation, focusing on the mediating role of disclosure and corporate governance in it. Through empirical analyses of A-share listed companies in Shanghai and Shenzhen from 2010 to 2021, this paper finds that digital transformation significantly reduces firms' stock price synchronicity. Specifically, digital transformation reduces information asymmetry by enhancing the transparency of firms' disclosure and the efficiency of corporate governance, which reduces the synchronisation of firms' share prices with market volatility. In addition, this paper finds that digital transformation has a more significant impact on manufacturing and high-tech firms. This study not only enriches the theoretical research on the impact of corporate digital transformation, but also provides practical references for corporate managers and policy makers.

Corporate disclosure behavior during financial crises: Evidence from Korea

We examine corporate disclosure patterns according to changes in firm states during financial crises in Korea. Using panel data on Korean listed firms from 1995 to 2019, we first confirm that they transparently (opaquely) disclose information when the change in return on assets is positive (negative) during crises. Moreover, we check that these disclosure patterns increase debt financing but are ineffective for equity financing. Finally, for chaebols with internal capital markets, we find that internal capital receivers provide transparent (opaque) disclosure of negative (positive) changes in their states. By contrast, providers show the opposite patterns. (JEL G01, G30, M40)