CSR disclosures in buyer-seller markets: Research design issues, greenwashing and regulatory implications, and directions for future research

Abstract

Using a laboratory market experiment, De Meyst, Cardinaels, and Van den Abbeele (current issue) show that assurance of sustainability disclosures acts as a deterrent for “cheap talk” for report preparers who are incentivized to invest in sustainability initiatives. The study also shows that report users value sustainability investments more when reports about sustainability initiatives are assured and when the report preparers are incentivized to invest in sustainability initiatives. The study is both timely and relevant in light of the recent introduction of U.S. and international rules that mandate corporate sustainability disclosures in regulatory filings and independent assurance on these disclosures. My commentary discusses some research design issues regarding boundary conditions and the assurance manipulation, the implications of the fast-evolving regulatory landscape, and concludes with some directions for future research.