Stakeholder responses to CSR information: Evidence from employees

solo-authored

Abstract: While there is ample evidence that investors use CSR disclosure, evidence for non-investor stakeholders is rare. Focusing on employees as a specific stakeholder group, I use a sample of Fortune’s “100 best companies to work for” list firms between 2005 and 2017 to provide evidence on employees’ long and short-term responses to positive, employee-specific CSR disclosure. Measuring the short-term response using abnormal Google search volume, I find a significant increase in searches following the list publication. However, this increased employee does not lead to a long-term response, as indicated by the insignificant increase of applications to the list firms. In contrast, firms seem to increase their CSR activities in employee-related matters, as they pay fewer non-financial misconduct fines after being featured on the list. Overall, I find that employees pay attention to tailored CSR information but fail to act upon it, whereas firms change their CSR activities when anticipating increased stakeholder attention.

Using Contracts to signal Commitment? Evidence from Climate Pledges 

with Victor Sehn

Abstract: In recent years, the number of firms announcing net-zero emission pledges has significantly increased. Since these pledges constitute long-term forecasts of corporate environmental performance, stakeholders face the challenge of assessing their credibility and distinguishing between credible commitments and cheap talk. This paper investigates the use of environmental contract clauses as a channel to signal credible commitment to environmental pledges. Analyzing material contracts between 2013 and 2022, we find a steady increase in environmental clauses over time, with a sharp increase in incentive clauses towards the end of the sample, which the firms also mention in their SEC filings. Firms include environmental clauses both before and after publishing a climate pledge. The market reacts more positive to net-zero announcements when the claims are backed by contractual obligations.