Selective Disclosure in ESG Reports

Speaker：Shen Rui, Professor, Chinese University of Hong Kong (Shenzhen）

Host：Zhu Xiaoyu, Associate Professor, Lingnan College

Time and Date：14:30, October 26, 2026 (Monday)

Venue：Wang Dao Han Conference Room (101), Lingnan Hall

Language：English + Chinese

Abstract：

We examine how firms selectively disclose public environmental events in their ESG reports. Combining ESG reports issued by U.S. public firms during 2010–2024 with environmental events recorded by FactSet Truvalue Labs, we use large language models to identify event-specific disclosure. We find that negative events are 23.7 percentage points less likely than positive events to receive direct disclosure in ESG reports, controlling for event and firm characteristics. The disclosure gap narrows with firm visibility and widens with external negative environmental news. These results cannot be explained by proprietary cost or litigation cost, and are consistent with an awareness-cost explanation of selective reporting. Among directly disclosed events, negative events receive less quantitative and less forward-looking discussion. We also find that negative events without direct disclosure predict subsequent environmental risk and violations. These findings show that firms select among public environmental events when preparing ESG reports and that undisclosed events retain information relevant to future environmental outcomes.

Profile:

Shen Rui is a professor and assistant Dean (Research) of the School of Management and Economics at The Chinese University of Hong Kong (Shenzhen), and the director of the Doctoral Program. Before joining The Chinese University of Hong Kong (Shenzhen), Dr. Shen Rui was an assistant professor at Nanyang Technological University in Singapore and also an assistant professor at Erasmus University Rotterdam School of Management. The main research directions include the application of emerging tools such as corporate finance, accounting information disclosure, machine learning, and large language models in the study of business administration. Published in top international journals such as RFS, JAR, TAR, SMJ, OS, JET, RAST, JFQA; More than ten papers have been published in top domestic journals such as Economic Research Journal.