Analyzing the Role of Sustainable Finance Principles in Accounting for Environmental and Social Performance

Posted: Feb 03, 2023

• Matthew Mitchell
• Matthew Rodriguez
• Matthew Sanchez

Abstract

This research investigates the transformative impact of sustainable finance principles on accounting practices for environmental and social performance measurement. Traditional accounting frameworks have historically struggled to adequately capture and quantify environmental externalities and social impacts, creating significant gaps in corporate reporting and stakeholder understanding. Our study introduces a novel methodological approach that integrates computational linguistics, network analysis, and machine learning techniques to analyze the implementation of sustainable finance principles across diverse organizational contexts. We developed a comprehensive framework that maps the relationship between sustainable finance adoption and the quality of environmental and social accounting disclosures across 500 global corporations from 2018-2023. The methodology employs natural language processing to extract and categorize sustainable finance indicators from corporate reports, while network analysis reveals the structural relationships between financial decision-making and environmental-social accounting practices. Our findings demonstrate that organizations implementing robust sustainable finance principles exhibit significantly enhanced environmental and social accounting transparency, with a 47