Informal disclosure standards in environmental reporting
Project Description
The project examines the extent to which companies report on their environmental performance and how this affects their valuation - especially when relevant information is missing. The hypothesis under investigation is that certain environmental indicators have become established as common pracice in many industries, even though obligatory requirements are often still pending. The project aims to systematically identify these unofficial reporting standards. Specifically, this process entails the identification of indicators that are typically disclosed within an industry and that hold particular relevance for investors. A thorough ESG data analysis of numerous companies is conducted to identify which of these indicators exhibit a particularly strong correlation with company value. This results in an industry-specific set of "key indicators" that serves as a framework for companies to provide targeted, transparent, and resource-efficient ESG reporting, especially in areas without clear regulatory requirements. The "minimum disclosure set" is a concept that aims to provide support to ESG managers in the strategic planning of resource utilisation in the context of reporting.
Relevance to Liechtenstein
This project contributes to the positioning of Liechtenstein as a forward-looking financial center in the field of sustainable corporate and investor communication. By identifying environmental indicators that are relevant to investors and empirically analyzing their impact on firm valuation, the research provides a data-driven foundation for credible ESG disclosure. This is a key issue for banks, asset managers and reporting companies in Liechtenstein. Concurrently, the initiative serves to consolidate the University of Liechtenstein's academic profile in the domains of sustainable finance and ESG transparency, whilst concurrently cultivating knowledge exchange with local financial institutions. This initiative contributes to the sustainable development of Liechtenstein's financial sector in accordance with the United Nations Sustaina-ble Development Goals.
Scientific, Economic and Societal Impact
In view of the evolution of regulatory frameworks (e.g. SFDR, CSRD) and mounting concerns regarding greenwashing, the project provides practical guidance for navigating ESG reporting expectations. It assists Environmental, Social and Governance (ESG) officers in the strategic allocation of reporting resources and the alignment of their activities with the expectations of investors and regulatory authorities.
