Sustainability Disclosureunder CSRD: Do FirmCharacteristics Matter? : An Empirical Study of Swedish ListedCompanies

Sammanfattning

This study examines the firm characteristics that explain the level of sustainabilitydisclosure among Swedish listed companies in the context of the newly implementedCorporate Sustainability Reporting Directive (CSRD) and European SustainabilityReporting Standards (ESRS). The introduction of stricter sustainability reportingrequirements has increased pressure on corporations to disclose environmental, social,and governance (ESG) information in a transparent and standardized manner. At thesame time, the field remains somewhat divided by changing regulations, concernsregarding comparability, and the reliability of ESG measurements. Against thisbackground, the study aims to contribute to a deeper understanding of why some firmsdisclose sustainability information more extensively than others. The research is grounded in stakeholder theory, legitimacy theory, and signaling theory.Together theory explains how companies respond to stakeholder demands, maintainlegitimacy, and communicate signals of responsibility and transparency to the market.Based on these theoretical perspectives, the study develops hypotheses regarding therelationship between sustainability disclosure and selected firm characteristics. Thestudy applies a quantitative research design with a deductive approach and analysesSwedish companies listed on Nasdaq Stockholm. Data are collected from publiclyavailable sustainability reports for the financial year 2024 and the database LSEG. Theincluded variables in the model are firm size, profitability, leverage, firm age andexternal ESG scores. Additionally, an ESG index acting as the dependent variable iscreated through a pre-set word count based on each firm's sustainability report. The findings show no statistically significant relationship between the investigated firmcharacteristics and the level of sustainability disclosure. The results therefore indicatethat sustainability disclosure is not primarily explained by internal companycharacteristics. Instead, the findings suggest that sustainability reporting has become amore institutionalized and standardized practice driven by external factors such asregulations, norms, and reporting requirements under CSRD. The study also highlightsthat external ESG scores and actual sustainability disclosure may capture differentdimensions of sustainability performance, raising important questions regarding thereliability and interpretation of ESG measurements in investment and reporting contexts. The study contributes to the ongoing discussion regarding the effectiveness and futuredevelopment of sustainability reporting regulation by providing empirical evidencefrom the first fiscal year affected by the new CSRD framework. The findings arerelevant for regulators, auditors, investors, and companies, as they demonstrate thatsustainability disclosure appears to be shaped more by institutional pressures than bytraditional firm characteristics.