Mandatory sustainability reporting and corporate hiring: the impact of CSRD introduction in Germany

Abstract Adopting an institutional theory perspective, I study the impact of the introduction of mandatory sustainability disclosure regulation on corporate hiring efforts for new sustainability reporting personnel. Using a difference-in-differences (DID) methodology, I analyse the hiring responses of large public and private companies to the introduction of the EU Corporate Sustainability Reporting Directive (CSRD) in Germany between 2018 and 2023. I show that companies significantly increased their hiring efforts for new sustainability reporting personnel, as measured by the number of online job postings, following the release of the CSRD proposal and as the first compliance date approached. Significant increases in hiring efforts are observed for regulated non-financial companies and professional services companies. In addition, companies with voluntary sustainability commitments show significantly stronger hiring responses. The study sheds light on systematic shifts in hiring practices as a company-level consequence of mandatory sustainability disclosure introduction. The findings are consistent with institutional theory predictions about the role of coercive and normative pressures in shaping companies’ demand for human capital under mandatory sustainability disclosure regulation.