72nd CARF Seminar: Do Financial Disclosures Affect Corporate Sustainability Practices?

Tuesday, March 17th, 2026 10:30 – 12:00（Pre-registration necessary)
※Language: English

Luo Zuo
Chair Professor of Accounting and Finance
National University of Singapore
https://discovery.nus.edu.sg/24557-luo-zuo

We examine whether financial disclosures influence firm sustainability practices. Using mandatory segment reporting in the United States as a shock, we find that disclosing financial information about previously hidden segments in pollutive industries reduces toxic emissions from firm plants. This effect is consistent with the notion that segment disclosures enhance the monitoring of firm pollution by highlighting the financial materiality of pollutive segments and drawing stakeholders’ attention to their environmental impact. The effect is stronger when the newly disclosed segments are more pollutive. Disclosing firms achieve this reduction by implementing better pollution prevention practices and increasing green innovation. Overall, this study highlights the role of mandatory financial disclosures in shaping corporate practices beyond the scope of the disclosed information.