- Title
- Textual characteristics of corporate sustainability disclosure and corporate sustainability performance: evidence from Australia
- Creator
- Li, Zhongtian; Jia, Jing; Chapple, Larelle J.
- Relation
- Meditari Accountancy Research Vol. 31, Issue 3, p. 786-816
- Publisher Link
- http://dx.doi.org/10.1108/MEDAR-03-2021-1250
- Publisher
- Emerald
- Resource Type
- journal article
- Date
- 2022
- Description
- Purpose: This study aims to analyze whether various textual characteristics in corporate sustainability disclosure associate with corporate sustainability performance in Australia, pertaining to tones of language and readability. The voluntary disclosure theory and legitimacy theory are used to formulate the study hypothesis. Design/methodology/approach: Using data from Australian listed firms (2002–2016), four textual characteristics are examined: tone of optimism, tone of certainty, tone of clarity and readability. Corporate sustainability performance is measured by Thomson Reuters Asset4 ratings. Different strategies are adopted to mitigate endogeneity concerns. Findings: The authors found that there is a positive relationship between the textual characteristics of sustainability disclosure and sustainability performance. Specifically, firms with better performance communicate in an optimistic, certain, clear and more readable manner. Practical implications: The results suggest that Australia’s voluntary reporting status does not induce a combination of poor performance and positive disclosure. This paper should be of interest to investors and other stakeholders and also informs regulatory policy on sustainability disclosure in Australia. Originality/value: The authors contribute to the sustainability disclosure literature using computer-based textual analysis to explore whether firms reveal their sustainability performance by “how things are said” (i.e. textual characteristics) in sustainability disclosure. As far as the authors could ascertain, they are the first to investigate textual characteristics of sustainability disclosure in Australia.
- Subject
- asset4; corporate sustainability; corporate social responsibility; diction 7; linguistic analysis; readability; SDG 9; SDG 12; Sustainable Development Goals
- Identifier
- http://hdl.handle.net/1959.13/1475644
- Identifier
- uon:49613
- Identifier
- ISSN:2049-372X
- Language
- eng
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