Abstract

This dissertation consists of two essays relating to corporate ESG disclosure. The first essay examines the predictive value of forward-looking statements (FLS) in ESG reports issued by U.S. public firms. I predict that the disclosure level and linguistic features of FLS in ESG reports contain information about future ESG performance. To examine this prediction, I collect a sample of ESG reports issued by U.S. public firms from 2000 to 2019. The empirical tests show that a higher disclosure level of FLS and a more positive tone of FLS are associated with lower future ESG performance. I also find that more specific FLS and less boilerplate FLS are associated with higher ESG performance in the future, indicating that higher-quality disclosure signals better future performance. This study advances our understanding of forward-looking information in ESG. All findings are robust to specifications that consider alternative measures. The second essay examines whether board ESG expertise is associated with the usefulness of ESG reports. I posit that board ESG expertise plays a pivotal role in shaping the company’s ESG disclosure, aligning it with firm performance, stakeholder expectations and regulatory requirements. To examine this prediction, I collect a sample of ESG reports issued by U.S. public firms from 2002 to 2021. Consistent with my predictions, I find that board ESG expertise is associated with the disclosure of material ESG information, less positive ESG disclosure tone, more specific ESG disclosure, and more year-over-year modifications in ESG reports. Difference-in-differences analysis, falsification tests and lagged regression analysis support the main findings. The results indicate that a board of directors with ESG expertise enhances the usefulness of ESG reports. In both essays, we gain critical insights into the predictive value and usefulness of ESG reports, revealing how the quality and characteristics of forward-looking statements and the presence of board ESG expertise significantly shape the predictive value and usefulness of these disclosures.