Sustainability Performance and CSR Disclosure

Abstract

Sustainability disclosure is a topic of great interest among academics and practitioners. As a key means of disclosing an organization’s sustainability information, the corporate social responsibility (CSR) report is adopted by most organizations nowadays. It also becomes an important information source for stakeholders. However, there is a concern that many stakeholders perceive CSR reports are reflections of the sustainability performance of organizations. This misunderstanding could lead to undesired outcomes (e.g., lower the expected risks than actual risks). In this study, the authors explore the relationship between organizations’ CSR disclosure and their sustainability performance. Their result shows that there is a significant relationship between an organizations’ sustainability performance and its sustainability disclosure level. At the same time, they observe many organizations that have inconsistent levels of sustainability performance and disclosure (e.g., good sustainability performance but low level of CSR disclosure). In order to a have comprehensive view of all possible scenarios, the authors propose four archetypes that categorize organizations according to their CSR disclosure levels and sustainability performances. Underpinning theories and rationales are discussed for each archetype.