The stock market's reaction to the mandatory disclosure of ESG information
DOI:
https://doi.org/10.21680/2176-9036.2025v17n1ID38667Palavras-chave:
Sustainability practices; Mandatory disclosure; Stock market; Event study; Brazil.Resumo
Purpose: Analyze the impact of mandatory disclosure of ESG information in Brazil on the price of shares in the local market.
Methodology: This analysis is carried out through an event study, which refers to the publication of the Reference Form (FRE) of companies in the metal and mining sector - that are environmentally sensitive. The date of the event is the date of disclosure of each company's FRE, for the fiscal year ending on December 31, 2022.
Results: The results confirm the main hypothesis of this study: The mandatory disclosure of sustainability practices by Brazilian companies impacts the return on their shares. It is possible that the market understands that the short-term costs - related to the implementation of sustainability practices - still exceed the benefits that will lead to the appreciation of companies in the long term. However, the progressive integration of global markets foresees an alignment of sustainable practices that should reach the Brazilian market in the medium term.
Contributions of the Study: This research differs from others by finding that the mandatory disclosure of sustainability practices - by Brazilian companies - negatively impacts the return on their shares, after the implementation of Resolution no. 59/2021. It contributes to academia with the empirical analysis of the market efficiency hypothesis. Furthermore, its results can help companies, investors and the capital market to better understand the initial effects of mandatory publication of sustainable practices. Finally, this study also contributes to the stimulation or adaptation of policies defined by regulatory bodies on sustainability issues.
Downloads
Referências
Akerlof, G.A. (1970). The market for “lemons”: Quality uncertainty and the market mechanism. Quarterly Journal of Economics, 84(3), 488-500. https://doi.org/10.2307/1879431
Alberti‐Alhtaybat, L., Hutaibat, K., & Al‐Htaybat, K. (2012). Mapping corporate disclosure theories. Journal of Financial Reporting and Accounting, 10(1), 73-94. https://doi.org/10.1108/19852511211237453
Alsayegh, M.F., Rahman, R.A, & Homayoun, S. (2020). Corporate economic, environmental, and social sustainability performance transformation through ESG disclosure. Sustainability, 12(9), 3910. https://doi.org/10.3390/su12093910
Bergh, D.D., Ketchen Jr, D.J., Orlandi, I., Heugens, P.P., & Boyd, B.K. (2019). Information asymmetry in management research: Past accomplishments and future opportunities. Journal of Management, 45(1), 122-158. https://doi.org/10.1177/0149206318798026
Bolognesi, E., & Burchi, A. (2023). The impact of the ESG disclosure on sell-side analysts’ target prices: The new era post Paris agreements. Research in International Business and Finance, 64, 101827. https://doi.org/10.1016/j.ribaf.2022.101827
Brazilian Securities and Exchange Commission (BSEC) (2009a). Instruction No. 480. Annex 24. Contents of the reference form. https://www.gov.br/SEC
Brazilian Securities and Exchange Commission (BSEC) (2009b). Instruction no. 481. Provides for information and public requests for powers of attorney to exercise the right to vote at shareholder meetings. https://www.gov.br/SEC
Brazilian Securities and Exchange Commission (BSEC) (2021). Resolution no. 59. Annex C. Item 1.9. Reference form content. https://www.gov.br/SEC
Brazilian Securities and Exchange Commission (BSEC) (2022). Resolution no. 80. Subsection II – Reference form. https://www.gov.br/SEC
Campbell, J.Y., Lo W.A., & Mackinlay C.A. (1997). The econometrics of financial markets. Princeton University Press, Princeton, New Jersey.
Capital IQ (CIQ) (2023). Database. Company Screening Report. Standard & Poor´s
Chamber of Deputies (2020). Government project makes mineral exploration possible on indigenous lands. https://www.camara.leg.br/noticias/634893-projeto-do-governo-viabiliza-exploracao-de-minerios-em-terras-indigenas/
Christensen, H.B., Hail, L., & Leuz, C. (2021). Mandatory CSR and sustainability reporting: Economic analysis and literature review. Review of Accounting Studies, 26(3), 1176–1248. https://doi.org/10.1007/s11142-021-09609-5
Chen, L., Khurram, M.U., Gao, Y., Abedin, M.Z., & Lucey, B. (2023). ESG disclosure and technological innovation capability of the Chinese listed Companies. Research in International Business and Finance, 65, 101974. https://doi.org/10.1016/j.ribaf.2023.101974
Chen, Z., & Xie, G. (2022). ESG disclosure and financial performance: Moderating role of ESG investors. International Review of Financial Analysis, 83, 102291. https://doi.org/10.1016/j.irfa.2022.102291
Chung, R., Bayne, L., & Birt, J.L. (2023). Determinants of ESG disclosure among listed firms under voluntary and mandatory ESG disclosure regimes in Hong Kong. Journal of Applied Accounting Research. Ahead-of-print. https://doi.org/10.1108/JAAR-07-2022-0179
Commerce Gazette (2021). The importance of mining in the Brazilian economy. https://diariodocomercio.com.br/opiniao/a-importancia-da-mineracao-na-economia-brasileira/#gref
Cosma, S., Soana, M. G., & Venturelli, A. (2018). Does the market reward integrated report quality? African Journal of Business Management, 12(4), 78-91. https://doi.org/10.5897/AJBM2017.8469
Do, T.K., & Vo, X.V. (2023). Is mandatory sustainability disclosure associated with default risk? Evidence from emerging markets. Finance Research Letters. In press, 103818. https://doi.org/10.1016/j.frl.2023.103818
Fama, E.F. (1970). Efficient capital markets: A review of theory and empirical work. Journal of Finance, 25(2), 383-417. https://doi.org/10.1111/j.1540-6261.1970.tb00518.x
Fama, E.F. (1991) Efficient capital markets: II. Journal of Finance, 46(5), 1575-1617. https://doi.org/10.1111/j.1540-6261.1991.tb04636.x
Fama, E.F. (1998). Market efficiency, long-term returns, and behavioral finance. Journal of Financial Economics, 49(3), 283-306. https://doi.org/10.1016/S0304-405X(98)00026-9
Favero, L.P., & Belfiori, P. (2019). Data science for business and decision making. Academic Press
Garcia, A. S., Mendes-Da-Silva, W., & Orsato, R. J. (2017). Sensitive industries produce better ESG performance: Evidence from emerging markets. Journal of Cleaner Production, 150, 135-147.
García-Meca, E., Ruiz-Barbadillo, E., & Martínez-Ferrero, J. (2024). High-quality assurance, ESG legitimacy threats and board effectiveness. British Accounting Review, In Press, 101385. https://doi.org/10.1016/j.bar.2024.101385
Global Reporting Initiative (GRI) (2023). The global standards for sustainability impacts. https://www.globalreporting.org/standards/
Grewal, J., Riedl, E.J., & Serafeim, G. (2019). Market reaction to mandatory nonfinancial disclosure. Management Science, 65(7), 3061-3084. https://doi.org/10.1287/mnsc.2018.3099
Hu, J., Zou, Q., & Yin, Q. (2023). Research on the effect of ESG performance on stock price synchronicity: Empirical evidence from China's capital markets. Finance Research Letters, 103847. https://doi.org/10.1016/j.frl.2023.103847
Jensen, M.C., & Meckling, W.H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X
Lu, H (2016). The ‘legalisation’ of corporate social responsibility: Hong Kong experience on ESG reporting. Asia Pacific Law Review, 24(2), 123-148. http://dx.doi.org/10.1080/10192557.2016.1245385
MacKinlay, A.C. (1997). Event studies in economics and finance. Journal of Economic Literature, 35(1), 13-39. https://www.jstor.org/stable/2729691
Mio, C., Fasan, M., Marcon, C., & Panfilo, S. (2020). The predictive ability of legitimacy and agency theory after the implementation of the EU directive on non‐financial information. Corporate Social Responsibility and Environmental Management, 27(6), 2465-2476. https://doi.org/10.1002/csr.1968
Naeem, N., Cankaya, S., & Bildik, R. (2022). Does ESG performance affect the financial performance of environmentally sensitive industries? A comparison between emerging and developed markets. Borsa Istanbul Review, 22(2), S128-S140. https://doi.org/10.1016/j.bir.2022.11.014
Olsen, B. C., Awuah-Offei, K., & Bumblauskas, D. (2021). Setting materiality thresholds for ESG disclosures: A case study of US mine safety disclosures. Resources Policy, 70, 101914. https://doi.org/10.1016/j.resourpol.2020.101914
Pulino, S.C., Ciaburri, M., Magnanelli, B. S., & Nasta, L. (2022). Does ESG disclosure influence firm performance? Sustainability, 14(13), 7595. https://doi.org/10.3390/su14137595
Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571-610. https://doi.org/10.5465/amr.1995.9508080331
Sustainability Accounting Standards Board (SASB) (2023). SASB Standards. https://sasb.org/standards/
Tahir, S., Ehsan, S., Hassan, M. K., & Zaman, Q. U. (2023). Does corporate governance compliance condition information asymmetries? Moderating role of voluntary disclosures. Journal of Asian Business and Economic Studies, 30(1), 2-25. https://doi.org/10.1108/JABES-07-2021-0085
Veltri, S., De Luca, F., & Phan, H. T. P. (2020). Do investors value companies' mandatory nonfinancial risk disclosure? An empirical analysis of the Italian context after the EU Directive. Business Strategy and the Environment, 29(6), 2226-2237. https://doi.org/10.1002/bse.2497
Wang, J., Hu, X., & Zhong, A. (2023). Stock market reaction to mandatory ESG disclosure. Finance Research Letters, 53, 103402. https://doi.org/10.1016/j.frl.2022.103402
Wen, H., Ho, K. C., Gao, J., & Yu, L. (2022). The fundamental effects of ESG disclosure quality in boosting the growth of ESG investing. Journal of International Financial Markets, Institutions and Money, 81, 101655. https://doi.org/10.1016/j.intfin.2022.101655
Downloads
Publicado
Como Citar
Edição
Seção
Licença
Copyright (c) 2025 REVISTA AMBIENTE CONTÁBIL - Universidade Federal do Rio Grande do Norte - ISSN 2176-9036
Este trabalho está licenciado sob uma licença Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Autores que publicam nesta revista concordam com os seguintes termos:
Os autores mantêm os direitos autorais e concedem à revista o direito de primeira publicação, com o trabalho simultaneamente licenciado sob a Licença Creative Comomns Attribution que permite o compartilhamento do trabalho com reconhecimento da autoria e publicação inicial nesta revista.
Os autores têm autorização para assumir contratos adicionais separadamente, para distribuição não-exclusiva da versão do trabalho publicada nesta revista (ex.: publicar em repositório institucional ou como capítulo de livro), com reconhecimento de autoria e publicação inicial nesta revista.
Os autores têm permissão e são estimulados a publicar e distribuir seu trabalho online (ex.: em repositórios institucionais ou na sua página pessoal) a qualquer ponto antes ou durante o processo editorial, já que isso pode gerar alterações produtivas, bem como aumentar o impacto e a citação do trabalho publicado.
A Revista Ambiente Contábil utiliza uma licença Creative Commons CC-BY-NC-ND (Atribuição-NãoComercial – SemDerivações 4.0). Isso significa que os artigos podem ser compartilhados e que a Revista Ambiente Contábil não pode revogar estes direitos desde que se respeitem os termos da licença:
Atribuição: Deve-se dar o crédito apropriado, prover um link para a licença e indicar se mudanças foram feitas.
Não Comercial: Não se pode usar o material para fins comerciais.
Sem Derivações: Se for remixar, transformar ou criar a partir do material, não se pode distribuir o material modificado.
Creative Commons - Atribuição-NãoComercial-SemDerivações 4.0 Internacional
Português (Brasil)
English
Español (España)
