Making companies report their "green" and social stats actually stops bosses from handing shady deals to their relatives.
SSRN · March 18, 2026 · 6431220
The Takeaway
Critics often dismiss ESG (Environmental, Social, and Governance) mandates as 'greenwashing' or corporate PR. This research proves that the 'Governance' part of the mandate acts as a powerful anti-corruption tool, forcing companies to stop shady 'related-party transactions' that were previously hidden from the public.
From the abstract
We examine whether mandatory environmental, social, and governance (ESG) disclosure requirements affect opportunistic related party transactions (RPTs) in emerging markets. Analysing India’s staggered implementation of ESG reporting mandates from 2015 to 2021 and employing a pooled difference-in-discontinuity design, we find that ESG disclosure mandates significantly reduce opportunistic RPTs by 24-32% relative to pre-mandate levels. This effect is concentrated among transactions involving direc