Environmental, social, and governance disclosure: The role of religiosity at a cross-country level

Some studies highlight the influence of religiosity on corporate decisions defining religion as a proxy of culture and as a key factor in affecting beliefs and behavior (Kennedy & Lawton, 1998), on the cost of debt (Chen, Huang, Lobo, & Wang, 2016), on financial reporting irregularities and accruals-based earnings manipulation (Du et al., 2014; Dyreng et al., 2012; Kanagaretnam et al., 2015; McGuire et al., 2012), on risk exposure (Hilary & Hui, 2009; Jiang et al., 2015), on tax avoidance (Boone et al., 2012), on the volatility of the stock price (Blau, 2017; Callen & Fang, 2015), on attitudes toward business ethics (Mazzi et al., 2017), and on Integrated Report development (Gelmini, 2017). This is study extends this stream of research by investigating the relationship between religiosity and ESG disclosure at the cross-country level, more preciously, by arguing that the salience of the religious social norms in the local community affects corporate behaviors, thus the extent of the ESG disclosure. The conclusions of this study may also help standard-setters, regulators, and managers. As religious social norms potentially represent a mechanism in enhancing ESG disclosure, providing evidence on the positive association between religiosity and ESG disclosure could be relevant for shaping appropriate non-financial reporting standards