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Policy assessment model
DIMENSION
OPTIONS
DESCRIPTION
RATIONALE
POLICY TYPE
MANDATORY Policies that impose a requirement to comply; i.e.,
to disclose the information specified in the policy.
Mandatory policies are more likely to generate
higher disclosure since adherence to the
provisions is motivated by the desire to avoid
the negative consequences of enforcement.
VOLUNTARY Compliance with the disclosure requirement is optional.
POLICY CLARITY
PRESCRIPTIVE The policy clearly specifies the categories
or specific items to be disclosed.
It is expected that clearer policies may
encourage adoption and may facilitate
implementation, hence leading to higher
take-up and disclosure by affected entities.
PRINCIPLES
Policies that only speak of sustainability/CSR reporting
as a general requirement.
POLICY SCOPE
BROAD The policy affects the disclosure of more than one first
generation sustainability indicator across multiple sectors.
Policies that either affect a larger number of
indicators or are applicable to multiple sectors
are more likely to lead to higher disclosure rates
as they help establish sustainability reporting as
a standard corporate practice.
NARROW
The policy only concerns a single first generation
sustainability indicator, or a single industrial sector.
Source: CK Capital
Assumptions
The existence of at least one policy that is
mandatory in nature, that is prescriptive and that
has broad applicability is assumed to create positive
spill-over effects where affected companies are
then encouraged to adhere to other non-voluntary,
narrow or principles-based policies that are in
existence in their given jurisdictions.
While we examine disclosure performance by large
companies over the 2007 – 2011 period, disclosure
policies that came into force after 2011 are also
included in our analysis. It is assumed that such
policies have influenced corporate sustainability
disclosure in the years prior to enactment as a
result of the consultation process between the
implementing authority and the corporations.
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