Beyond Volume: A Legitimacy‐Theory Analysis of the Substance of Corporate Sustainability Reporting

ABSTRACT This study examines whether the expansion of corporate sustainability reporting reflects substantive improvement or legitimacy‐oriented disclosure. Using hand‐collected sustainability reports from 364 U.S.‐listed Forbes Global 2000 firms (2018–2023), we classify GRI indicators by news direction and sensitivity and estimate firm fixed‐effects models across a pre‐COVID period (2018–2019), an acute COVID period (2020–2021), and a post‐acute phase (2022–2023). While reporting volumes increased—especially for social indicators—coverage remains far below GRI benchmarks, particularly in sensitive areas. High‐impact industries exhibit stronger growth in environmentally sensitive disclosures during the pre‐COVID and acute COVID periods, but growth decelerates in the post‐acute phase and between‐industry differences largely diminish. Overall, disclosure expansion is disproportionately concentrated in positive and non‐sensitive indicators, consistent with legitimacy‐driven reporting rather than substantive accountability.