The value relevance of GRI reporting in European banks

Maria del Mar Miralles-Quiros, José Luis Miralles-Quiros, Irene Guia Arraiano


Purpose: The aim of this study is to analyse whether sustainability reports published by listed banks following the Global Reporting Initiative (GRI) guidelines provide incremental value to investors on the ten major European stock markets taking into account the international financial crisis and the legislative differences that still exist in Europe.

Design / Methodology / Approach: We employ the Ohlson’s valuation mode that is based on the premise that the market value of a firm is a function of its book value and its annual earnings, as well as other non-accounting information that may be considered relevant and increase the value of a company.

Findings: Our overall results show that the stock markets positively and significantly value this type of information. Moreover, our findings reveal that the financial crisis has not changed the preferences of investors for this type of information.

Originality / Value: Banks have an enormous impact on the economy, but also on society and, therefore, on different stakeholders. However, the value relevance for shareholders of sustainability disclosure has not been sufficiently researched. Previous studies analyse the social responsibility information published by financial institutions on their websites providing mixed results. By contrast, we take into account a set of standards which are widely applicable and reliable and provide conclusive results.


Keywords: Banks; sustainability reports; investor engagement; financial crisis.

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