In the evolving landscape of corporate governance, voluntary disclosure of corporate social responsibility (CSR) and environmental, social, and governance (ESG) information is emerging as a defining factor in shaping investor and societal trust. Unlike many countries where regulatory frameworks mandate such disclosures, Japan presents a unique environment in which non-financial information reporting remains completely voluntary. This distinctive regulatory backdrop offers a rare opportunity for researchers to deeply probe the underlying dynamics that influence corporate decision-making in the absence of legal compulsion.
A comprehensive study analyzing more than 15 years of quarterly data from 5,915 publicly listed Japanese companies revealed illuminating insights into the complex web of factors driving voluntary disclosure practices. The researchers applied sophisticated statistical methodologies to dissect and quantify the influence of various organizational elements, including financial health, corporate characteristics, market listing segments, industrial classifications, and shareholder structures. By integrating a wide array of data points, the study offers a nuanced understanding of how companies navigate the voluntary disclosure space amid a non-mandatory disclosure regime.
One of the key revelations centered on the role of internationally recognized certifications. Firms that have acquired ISO 14001 certification for environmental management and ISO 45001 certification for occupational health and safety consistently demonstrated elevated levels of information disclosure. These certifications, adopted by companies to signal their adherence to global sustainability standards, appear to institutionalize a culture of transparency and information literacy that extends into voluntary CSR and ESG reporting practices.
Corporate size emerged as another pivotal determinant. Larger companies tend to display higher information literacy, arguably due to their greater resource capacity and heightened scrutiny by both domestic and international stakeholders. Moreover, firms listed on Japan’s prime market segments, which feature stringent listing requirements and attract a sophisticated investor base, were significantly more prone to engage in voluntary disclosures. This suggests a symbiotic relationship between market positioning and transparency practices aimed at meeting or exceeding investor expectations.
Interestingly, the study challenges conventional assumptions about the effect of overseas listings. Contrary to expectations that foreign market exposure might incentivize greater transparency, the findings indicate that listing on overseas markets can actually be a restraining factor in voluntary disclosure among Japanese firms. This anomaly raises provocative questions about cross-border regulatory environments, investor cultures, and the possible strategic withholding of information to maintain competitive advantage or comply with disparate international norms.
Industry-specific analysis further illuminated the heterogeneous attitudes toward disclosure. Companies operating in sectors with higher environmental and social impacts generally tend to adopt more rigorous information disclosure policies. However, even within such industries, there is a marked variation influenced by corporate governance structures and shareholder composition. For example, firms with a higher proportion of institutional investors showed a greater inclination towards transparent CSR and ESG reporting, underscoring the influential role of shareholder activism and demand for accountability.
The relationship between ownership patterns and voluntary disclosure also surfaced as a defining aspect of corporate behaviour. Companies with diversified shareholder bases or significant foreign shareholding appear to exhibit different disclosure tendencies compared to those with concentrated or domestic ownership. This diversity in shareholder composition shapes not only the strategic decisions regarding information transparency but also reflects varying expectations and pressures stemming from distinct investor groups.
The researchers emphasize that voluntary disclosure in Japan functions less as a compliance exercise and more as a strategic communication tool. Transparency is harnessed to build and sustain legitimacy, manage reputational risks, and differentiate the company in a competitive market. Given the absence of mandatory requirements, firms with advanced information literacy effectively leverage voluntary disclosures to curate their public image and bolster investor confidence.
These findings hold profound implications for policymakers and business leaders alike. For policymakers, understanding the factors that promote or hinder voluntary disclosure can inform the design of supportive frameworks that encourage transparency without imposing undue burdens. For corporate managers, the study highlights the strategic value embedded in proactive disclosure and the potential competitive advantages it may confer.
Moreover, the study’s longitudinal approach — spanning over 15 years — captures evolving trends and shifts in disclosure practices against the backdrop of growing global ESG awareness. This temporal dimension enables a robust assessment of how external pressures, certification adoptions, and market evolutions collectively influence disclosure strategies over time.
The intricate interplay between organizational features and market positioning revealed by this research underscores a multifaceted landscape where voluntary disclosure decisions are far from uniform. Instead, these decisions emerge from a confluence of factors that include internal governance capacity, external investor scrutiny, industry norms, and cultural elements unique to the Japanese corporate milieu.
In summary, this ground-breaking empirical analysis provides a panoramic view of voluntary CSR and ESG disclosure within a non-mandatory regulatory setting. It uncovers the pivotal role of ISO certifications, corporate scale, market listing status, and shareholder diversity in shaping transparency outcomes. Simultaneously, it challenges preconceived notions by revealing unanticipated restraints associated with overseas listings, offering a fresh perspective on global corporate disclosure behavior.
As ESG and CSR considerations increasingly dominate the investment landscape, these insights will prove invaluable in guiding both corporate transparency initiatives and policy formulations. The study’s comprehensive approach sets a new benchmark for future research, encouraging deeper explorations into the shifting dynamics of non-financial disclosure amidst global sustainability challenges and complex market architectures.
Subject of Research: Voluntary disclosure of CSR and ESG information among Japanese listed companies
Article Title: Determinants of voluntary disclosure: An empirical analysis of financial, market, and organizational factors
News Publication Date: 4-Jun-2025
Web References: https://doi.org/10.1371/journal.pone.0324625
References: (Not specified)
Image Credits: (Not specified)
Keywords: Corporate Social Responsibility, Environmental, Social, and Governance, Voluntary Disclosure, Information Literacy, ISO 14001, ISO 45001, Japanese Corporations, Market Listing, Shareholder Composition, Non-Financial Reporting
