The role of voluntary reporting standards for the disclosure of material information

We investigate, using longitudinal data, whether the adoption of voluntary reporting standards is associated with the disclosure of more material ESG information, thereby addressing an important gap in the limited and inconclusive prior literature. Using panel data on STOXX Europe 600 constituents with ESG reports from 2014 to 2021, we constructed a unique dataset by hand-mapping companies’ adoption of voluntary reporting standards. ESG performance metrics were obtained from Refinitiv, and materiality was identified using the MSCI materiality map. Using a generalized staggered DID model, we found that, post-adoption of reporting standards, companies reported more material information, with the association being strongest for environmental and social metrics. Companies that adopted voluntary standards provided information on five additional ESG metrics, one additional material topic, and three additional material ESG metrics. We contribute empirical evidence to the existing literature and provide regulators with evidence-based insights to enhance compliance with voluntary reporting standards.