“You Cannot Hide Forever Luke”: Understanding the Strategic Use of Sustainability Disclosure in the Short and Long Term

  • Samuel Touboul Society and Organizations Research Center, HEC Paris, France
  • Asli Kozan Department of Strategy and Management, IPAG Business School, Paris, France
Keywords: Sustainability disclosure, Sustainability performance, Financial performance, Conformity mechanism, Revelation mechanism


This study investigates the relationships among firms’ sustainability disclosure, sustainability performance, and financial performance. Based on legitimacy theory and signaling theory, it argues that sustainability disclosure participates in two distinct mechanisms: a conformity mechanism through which disclosure shows conformity to the norms and a revelation mechanism through which disclosure reveals or hides a firm’s achieved degree of sustainability. In an attempt to contrast and reconcile the two mechanisms, the study assesses their impact on financial performance in the short and long term. Hypotheses are tested using longitudinal data (2002–2010), which cover 10,814 observations of firms from major indexes of stock exchanges worldwide. The results show that the conformity mechanism is effective in both the short and long terms, whereas the revelation mechanism is only effective in the short term. As a consequence, firms with poor sustainability performance may hide their detrimental impact and achieve higher financial performance in the short term by limiting their disclosure but not in the long term in which their lack of conformity is punished. In the long term, only conformity to the norms of disclosure leads to higher financial performance, even in the case of poor sustainability results.

Manuscript accepted by Simon Porcher


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Author Biographies

Samuel Touboul, Society and Organizations Research Center, HEC Paris, France

Samuel Touboul is an Investment Officer at Proparco Africa Private Equity and a lecturer at HEC Paris. He worked for various private equity funds in Europe, as well as for various international organizations (e.g. the United Nations and the International Finance Corporation) in Southeast Asia and the United States. His academic research work focuses on the role of sustainability and its disclosure, and their impact on firms’ financial performance. He is a graduate of ESSEC, Sciences Po Paris, and holds a PhD degree from HEC Paris where he continues to teach.

Asli Kozan, Department of Strategy and Management, IPAG Business School, Paris, France

Asli Kozan is an assistant professor of Strategic Management at IPAG Business School in Paris. She is also an affiliated member of the Society and Organizations Research Center at HEC Paris, from where she obtained her PhD degree in Strategy and Management. Her research is focused on performance implications of firms’ nonmarket strategies, particularly on the impact of firms’ relationship with politicians and on firms’ sustainability engagement. She teaches in Executive Education, MBA, and other master’s level programs and is a visiting professor at Hanoi School of Business in Vietnam.


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How to Cite
Touboul, S., & Kozan, A. (2020). “You Cannot Hide Forever Luke”: Understanding the Strategic Use of Sustainability Disclosure in the Short and Long Term. M@n@gement, 23(1), 19-37. https://doi.org/10.37725/mgmt.v23.4427
Original Research Articles