Voluntary Disclosure of GRI and CSR Environmental Criteria in Colombian Companies

Iván Andrés Ordóñez-Castaño,Angélica María Franco Ricaurte,Edila Eudemia Herrera-Rodríguez,Luis Enrique Perdomo Mejía

doi:10.3390/su13105405

Abstract

The study analysed the asymmetry in the disclosure of environmental criteria of the Global Reporting Initiative (GRI) standard based on financial and non-financial information in 37 companies in 19 sub-sectors of the Colombian economy that were assessed by MERCO (Business Monitor of Corporate Reputation) in 2017 and 2018 in terms of corporate reputation, responsibility, and corporate governance. It is based on the theories of agency, stakeholders, and legitimacy, whereby six hypotheses were postulated. The indicators of environmental criteria were retrieved from the website and sustainability reports of each company, using a dichotomous approach for collecting information on environmental activities. The hypotheses were contrasted with a binary choice and panel data models. The results showed that increasing quality and transparency in voluntarily disclosed information decreases its asymmetry, thereby meeting the information needs of stakeholders, providing confidence, and strengthening corporate social responsibility (CSR) activities. In addition, the most indebted and largest companies disclose less information on environmental activities, in contrast to companies with higher solvency. Overall, the study contributed with the calculation of an asymmetry ratio with the MERCO indicators and the use of the insolvency risk variable as an explanatory variable for disclosure. Additionally, it contributed to the field of study of CSR from the Latin American context.

Highlights

In order to do this, 37 companies belonging to 19 subsectors of the Colombian economy were observed that report under the Global Reporting Initiative (GRI) standard, and that have been assessed for corporate reputation, responsibility, and governance by MERCO in 2017 and 2018
This study analysed the asymmetry and factors in the disclosure of environmental criteria of the Global Reporting Initiative (GRI) standard based on financial and non-financial information in Colombian companies rated in corporate reputation, responsibility, and corporate governance by MERCO in 2017 and 2018
As companies increase in size, they report fewer activities under the GRI standard

Summary

Introduction

Corporate scandals have negatively affected the confidence of interest groups in companies. This lack of confidence has highlighted the need for transparent reporting for two key reasons: Accountability and governance [1]. Corporate governance focuses on the quality, transparency, and reliability of relationships between agents and stakeholders. As such, addressing compliance with corporate governance standards reflects the need for organisations to show more responsibility and transparency to shareholders [2]. A balanced relationship between companies and society should be maintained [3], because the decisions and actions of entrepreneurs do affect themselves, and their stakeholders, as stated by [4].

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Conclusion