Do shareholders reward or punish risky firms due to CSR reporting and assurance?

Whether shareholders reward/punish risky firms for undertaking corporate social responsibility (CSR) reporting practices represents a gap. The analysis yielded diverging results for different financial distress proxies. In the model in which volatility in return on assets was the proxy of firm risk, the findings indicated that shareholders punish risky firms due to CSR reporting. Interestingly, they reward CSR reporters with higher firm value due to the attainment of assurance for CSR reports and following the Global Reporting Initiative (GRI) framework in CSR reporting. Hence, they advocate CSR reporting if it is accompanied by an assurance and prepared following the GRI.