Determinants of voluntary adoption of SASB standards to disclose sustainability issues: An international perspective

Abstract

Purpose: The purpose of this research is to investigate the impact of company- and country-specific variables on voluntary adoption of the Sustainability Accounting Standards Board (SASB) Standards in organisations that publish Integrated Reports (IR) and simultaneously use GRI standards to disclose ESG practices. Methodology/Approach: It is based on an international sample of 8,247 firm-year observations between 2019 and 2021, where 6,856 used GRI standards and the remaining 1,391 used both SASB and GRI standards. Findings: The findings indicate that business characteristics such as large size, profitability, leverage, ESG score, board size, independent directors, and specific abilities are relevant determinants. Firms that conform to the IR and use GRI are more likely to simultaneously adopt SASB Standards voluntarily if they are located in nations with a higher GDP per capita. Furthermore, the findings show that larger market-to-book ratios, gender diversity on the board, and the number of non-executive members on the board had low effect on the adoption of SASB Standards by firms that have already adhered to the IR. Research implication: Firms can compare themselves with their peers to analyse factors that increase the likelihood of applying voluntary SASB standards at the same time as integrated reporting is being prepared. Originality: To boost the use of SASB standards in Europe, as the USA did, by promoting the work of the International Sustainability Standards Board (ISSB).