Corporate Social Responsibility Commitment Research Articles

Socially Responsible Firms Outsource Less

Implementing corporate social responsibility (CSR) in supply chains is not a trivial task. In fact, many firms in recent years have publicly proclaimed that in order to keep their CSR commitments, they had to reduce reliance on external suppliers by vertically integrating their operations. Our aim in this article is to examine whether there is truly a relationship between a firm’s CSR performance and its level of vertical integration. Drawing on a multi-industry sample of 2,715 firm-year observations, and after addressing endogeneity concerns, we demonstrate that firms with higher CSR performance tend to vertically integrate more (or, outsource less). We also demonstrate that this tendency is weaker for firms that have higher degrees of asset specificity or international diversification. Our core conclusion is that CSR performance and outsourcing are at odds, but firms can reconcile this tension by deepening their collaborations with suppliers.

Impact of corporate social responsibility practices on employee commitment

PurposeThe purpose of this paper is to critically review the existing literature on corporate social responsibility (CSR) to develop a framework to analyse the impact of CSR on employee commitment to the organisation.Design/methodology/approachUsing the scoping review, this paper reviewed the published articles on CSR and employee commitment and how CSR and employee commitment were defined, theoretically supported and conceptualised for a comprehensive understanding of current and future research directions in the field.FindingsThis paper presents a framework developed through the analysis of existing literature on the impact of CSR) on employee commitment to the organisation. This framework aims to explore the impact of internal CSR and external CSR on employee commitment while using the contractual position of employees as an intervening variable.Originality/valueDuring a time where employee attraction and retention is widely discussed as a competitive advantage, this framework could be used by any industry, especially those with high staff turnover such as mining. The researchers propose to use this framework to explore how perception towards external CSR (directed towards external stakeholders) and perception towards internal CSR (directed towards the own employees) can influence organisational identification and commitment levels. To address several gaps in the literature, this model is based on the Maslow’s Hierarchy of Needs and Social-Identity Theory.

The joint effect of board independence and CSR committee on CSR disclosure: Evidence from Italian listed companies

Sustainability has become one of the key hubs around which the actions conducted by international economic operators revolve. This new perspective, perhaps better defined as “requirement”, given its specific weight in the global context, needs analysis of firms’ behaviours with regard to sustainability disclosure and the corporate governance (CG) mechanisms influencing the information released. Board of directors and CSR committee are critical CG mechanisms in that sense. This paper aims at investigating the relationship between specifics board characteristics and corporate social responsibility (CSR) disclosure. More specifically, the study investigates the relation between board independence and CSR disclosure, and how this relationship is moderated by the presence of a CSR committee. The analysis has been conducted on a sample of 119 Italian non-financial listed companies. The results obtained, using OLS regression method, show the existence of a positive and significant relationship between board independence and CSR disclosure. Moreover, the findings reveal that the presence of a CSR committee positively moderates the previous relationship, showing the complementary role played by board independence and CSR committee. These results have critical implications for boards, managers, regulators, and policymakers operating to define better corporate governance mechanisms, highlighting the importance of the joint effect of board independence and CSR committee in improving firms’ CSR disclosure practices. Our study also has relevant implications for researchers, evidencing the need to study the complementary effects of different CG mechanisms, rather than the single effect, on influencing CSR disclosure.

Undervaluation and Non-Financial Disclosure: Evidence from Voluntary CSR News Releases

In this paper, we examine whether stock market imperfection plays a role in a firm’s decision to disclose non-financial information and if yes, what are the underlying channels. To address our questions, we web-scraped corporate social responsibility (CSR) news for a sample of publicly traded non-financial US firms from CSRwire and explored the exogeneous variation in stock valuation driven by institutional price pressure. Our empirical results show that firms facing stock market undervaluation are more likely to release CSR news and the effect is concentrated in firms with low CSR commitment and low stock price informativeness. Lastly, we find evidence that stock market reacts positively to CSR news released by undervalued firms, and more so for undervalued firms with high information asymmetry.

Corporate Governance and Corporate Social Responsibility

We study compliance of Indian firms to the 2013 Corporate Social Responsibility (CSR) regulation that mandates qualifying firms to spend 2 percent of the pre-tax profits on CSR. We demonstrate that the formation of CSR committees and the appointment of directors with relevant experience (CSR-Directors) increase compliance to the CSR law by 11 percent. Further, we show that CSR-Directors improves compliance by implementing a cost-effective CSR strategy by reducing the number and geographic spread of CSR projects. CSR directors are more likely to implement a cost-effective CSR strategy for companies in more competitive industries, companies with high debt, and companies with no previous history of CSR. Companies with higher CSR compliance gain in value and have increased creditworthiness.

Sectoral Corporate Social Responsibility Commitments

Certain sectors face particular challenges when it comes to corporate social responsibility (“CSR”) due to the specific nature of the operational activities and the locations of those activities since local governments often are unwilling and/or unable to exercise legal and regulatory responsibility for the environmental and social impacts of the activities. The response to these challenges, often driven by criticisms from a wide range of stakeholders, has been sectoral CSR commitments, which often take the form of a framework of principles with respect to environmental and social issues and emerge from collective CSR initiatives among companies and other stakeholders (e.g., trade unions) involved in particular business sectors and/or with a common interest in a specific social or environmental responsibility issue. Sectoral frameworks usually include targets for compliance with minimum social standards and fundamental environmental protection measures taking into account sector-specific criteria and requirements as decisions are being made.

How to Lead the Board of Directors to a Sustainable Development of Business with the CSR Committees

The sustainable development of business requires adjustments in corporate governance to assure the economic, social and environmental aspects of a firm’s responsibility are managed according to the triple bottom line approach. For this purpose, the board of directors can establish devoted corporate social responsibility (CSR) committees to reduce a company’s exposure to responsibility failures. By means of a quantitative analysis on listed firms on FTSE MIB and STAR markets of the Italian Stock Exchange and embracing different theories this paper aims at finding the potential influence of external (soft law and socio-environmental industry risk) and internal (firm size and ownership structure) factors on the presence of CSR committees. This study contributes to the existing literature about sustainability in business, recommends to directors to not underestimate the risk of ‘strategic unsustainability’, and offers to regulators significant food for thought to improve the contribution to sustainable development by companies.

Corporate Social Responsibility Commitment and Environmental Disclosures Quality: Study of the French Context

The aim of this study is to examine the effect of firms’ corporate social responsibility commitment (CSR) on the quality of their environmental reporting. The proactive approach of the legitimacy theory is retained to formulate our expectations. We develop a multidimensional content analysis index used to apprehend environmental disclosure faithfulness dimensions. The variance analysis is applied to these indicators classified according to the variables of CSR commitment for a sample of French industrial firms listed in the SBF120 index. The study confirms the proactive approach of legitimacy. It provides empirical evidence in the French context that firms use environmental reporting for accountability with a substantial legitimation strategy. Indeed, most CSR committed sampled firms disclose in their annual reports more comprehensive mandatory environmental information and more abundant and precise voluntary information than others. They also tend to introduce more statements to justify the credibility of their disclosures than less committed firms.

Exploring stakeholders’ dialogue and corporate social responsibility (CSR) on Twitter

Social networks are an opportunity to foster and strengthen dialogue between companies and their audiences and also to integrate social expectations into their corporate social responsibility (CSR) strategies. This research analyses communication on CSR on Twitter and its main objectives are: 1) to analyze if there are CSR concepts which can lead the conversation among Twitter users and companies when discourse is limited to CSR related concepts; and 2) to detect those concepts which might create engagement (underlying conversations) between companies and Twitter users. Our research is focused on insurance companies included in the Dow Jones Sustainability Indices (DJSI). The methodology used is qualitative and the sample comprises more than 8,500 tweets which include a set of keywords related to CSR, that were published by the companies in the sample and/or mentioned those companies. The results show that industry-related words, financial performance messages and the local activities of the company are opportunities to spread the CSR commitment. We concluded that communication is scarce between companies and users related to CSR. In general, companies and users shared interests, but these were not related to a real conversation about CSR and sustainability.

Mixing business with politics: Does corporate social responsibility end where lobbying transparency begins?

AbstractScholars increasingly have argued that the future effectiveness and legitimacy of firms' corporate social responsibility (CSR) activities are dependent on more transparent forms of lobbying to ensure firms' policy positions are aligned with their CSR commitments. Very little empirical work, however, has systematically analyzed firms' lobbying disclosures or examined how these firms coordinate their lobbying and CSR activities. We address these empirical questions by analyzing the CSR reports of 150 corporations from Germany, the UK and the US over an 18‐year period and by conducting interviews with the CSR managers of these firms. We find that corporations have become more transparent about their public policy advocacy over time, thus acknowledging that lobbying is a CSR issue. For most firms, however, this commitment to transparency appears to be largely ceremonial. Few firms disclose the specific policy positions they advocate or sufficiently coordinate the work of their lobbying and CSR units to foster greater alignment of these activities. These modest changes in lobbying transparency appear to be driven by legitimacy concerns and, in a few instances, by governance gaps firms perceive to be relevant to their future business interests.

The explanatory effect of CSR committee and assurance services on the adoption of the IFC performance standards, as a means of enhancing corporate transparency

PurposeIn view of the significant deficiencies that have been observed in corporate social responsibility (CSR) reporting practices, some companies have undertaken a new communication strategy based on a combination of the GRI guidelines and the IFC Performance Standards (termed the GRI-IFC strategy). This paper aims to analyse the role of the CSR committee and of assurance services in promoting this novel practice.Design/methodology/approachThe authors use an unbalanced sample of 750 international companies that operate in emerging markets for the years 2011-2016, in which logistic and ordinal regressions are applied to the panel data to test the research hypotheses.FindingsThe results show that the existence of a CSR committee facilitates adoption of the GRI-IFC strategy, thus promoting sustainable management policies and systems and enhancing communication with stakeholders. In addition, these specialised committees often commission assurance for sustainability reports, to reinforce strategies aimed at improving corporate transparency.Research limitations/implicationsThe analysis of mediation shows that diverse characteristics of corporate governance mechanisms interact in improving sustainability and business transparency.Practical implicationsThere is an evident need for greater commitment by institutions to sustainability, for example by requiring greater specialisation of the members of the CSR committee in social and environmental issues. In addition, consideration should be given to including the creation of a CSR committee as a good practice, within the code of corporate governance and to establishing a specific framework for the committee’s actions.Social implicationsThe previously cited impacts of this paper all contribute indirectly to a greater social welfare by generating higher levels of transparency, ethics and corporate performance. Specifically, higher quality verification services will have an impact on the improved functioning of the financial and capital markets, as well as in decision-making by internal and external stakeholders with more reliable information that will favour the implementation of more sustainable processes that in the short and long term will mean more companies who are responsible towards the environment and society.Originality/valueThis novel study explains why companies adopt voluntary strategies in compliance with GRI guidelines, seeking to provide better CSR disclosure.

CSR Stipulations of Companies Act, 2013 and Actual CSR Expenditure by Top Indian Companies Prior to Its Implementation: A Comparative Study

The Companies Act, 1956 had no mandatory provisions for Corporate Social Responsibility (CSR) and companies operated CSR programs according to their own policies. The Companies Act, 2013 has made CSR spending mandatory for a certain size of companies- these companies from the ongoing financial year will have to spend at least two percent of their three year average net profits on CSR. This paper studies Corporate Social Responsibility expenditure of the ten largest and most powerful companies in India prior to the implementation of CSR provisions of Companies Act 2013- these companies were selected from the 2013 Forbes Global 2000 list. CSR expenditure by these companies was compared with the provisions of the Companies Act, 2013 to assess whether they were fulfilling the spending norms now prescribed or will they have to scale up their CSR programs significantly to meet the requirements of the new Act and the provisions of Companies ( Corporate Social Responsibility Policy) Rules, 2014 which came into effect from April 1, 2014. Studies suggest that large corporations are precursors to CSR commitments in a society and hence, mandatory CSR spending in large companies is likely to positively influence CSR in smaller companies. This study will provide a base for further research in CSR especially with reference to implementation of new CSR provisions.

CSR Committees and Their Effect on ESG Performance in UK, France, Germany, and Spain

The multidisciplinary nature of a corporate social responsibility (CSR) committee reflects the commitment as well as the expectations and demands of diverse stakeholders. So far, CSR committees have been mainly considered as variables of control in larger corporate governance models and independent variables that determine CSR or environmental, social, and governance (ESG) disclosure and its reporting quality. However, the effect on corporate performance has been biased to financial performance, so the potential of the analysis of the effect it may have on different facets of non-financial performance has not been exploited. Which it should, since it can be a fundamental tool to achieve sustainability. The objective of this contribution is to test whether companies with a CSR committee not only leads to higher economic scores, but also to higher ESG (environmental, social, governance) scores. To do this, we used regression panel data models in 197 listed firms in Spain, France, Germany, and the UK during the period 2005–2015 including the perspective of European organizations and completing the extant studies in US-based samples. Our results showed that 90% of companies in the sample had a CSR committee in 2014, and that those companies had significantly different ESG scores than those without a CSR committee. Having a CSR committee also triggered better non-financial performance when considering the four scores and the four countries independently (except for the economic scores in Spain). These results have great implications for practitioners, reflecting the importance of promoting these tools in an organization to enhance non-financial performance and sustainability.

When Boards Matter: The Case of Corporate Social Irresponsibility

AbstractWhile academic research has made remarkable progress in understanding corporate social responsibility (CSR), we have scant understanding of corporate social irresponsibility (CSiR). This paper adopts a stakeholder‐agency perspective towards CSiR to ask two related questions: (1) What board‐level structures can monitor management to reduce CSiR? and (2) What are the conditions that render board monitoring more effective? Employing a unique objective measure of CSiR and a sophisticated system generalized method of moments with dynamic panel model on a sample of publicly listed firms in the USA between 2002 and 2015, this paper demonstrates how firms with a specific board‐level governance bundle (i.e. a large, more independent board, with a board CSR committee, a higher proportion of women within boards with frequent director activity) are better equipped to reduce irresponsible behaviours, both in terms of number of irresponsible incidents as well as in terms of their economic costs to the firm. Moreover, the effectiveness of this governance bundle sustains under conditions of high institutional ownership and high board remuneration. This paper has implications for CSR and corporate governance literatures, as well as for managers and policymakers.

Corporate social responsibility: a pathway to sustainable competitive advantage?

Purpose The purpose of this paper is to investigate the impact of customers’ perceptions of corporate social responsibility (CSR) on affective and continuance commitment. It analyses the moderation effect of relationship age on the CSR-commitment relationships in the banking industry of an emerging economy. Design/methodology/approach Partial least squares based structural equation modeling was used to test the proposed hypotheses in a sample of 360 respondents collected from the retail banking sector of Pakistan. Findings Customers’ CSR perceptions directly and positively influence affective and continuance commitment. The findings also confirm that relationship age is a positive moderator of the CSR-continuance commitment relationship, but does not influence the CSR-affective commitment relationship. Practical implications Marketers should use CSR activities to enhance customers’ commitment. Given the moderating role of relationship age, marketers should devise different strategies for new and long-term customers. The results clearly show that relationship age affects the CSR-continuance commitment relationship. Long-term banking customers will more likely be in a binding relationship when their banks do CSR activities and disseminate those activities to long-term customers. The study explicitly indicates that maintaining long-term customers’ base through CSR activities helps the marketers in achieving sustainable competitive advantage. Originality/value First, it is the pioneering study to empirically investigate the understudied relationship between CSR and continuance commitment. Second, it examines the moderation effect of relationship age on CSR-commitment relationships in the banking industry of an emerging economy.

The Potential Value-Added of a Multilateral Framework on Investment Facilitation for Development

This article argues that investment facilitation needs to be seen in the context of the principal FDI determinants and, in particular, the all-important economic determinants. Beyond that, when negotiating a multilateral framework on investment facilitation for development, it is crucial to (1) give full attention to the development dimension of investment facilitation, by promoting sustainable FDI for sustainable development; (2) establish an inventory and benchmark of good practices regarding investment facilitation, with ground-level input by practitioners;(3)keep in mind that the framework can help domestic reforms; (4) require transparency for home country measures and investors’ corporate social responsibility commitments; and (5) ensure that the framework provides for technical assistance to developing countries (and especially the least developed among them) for negotiating and implementing such a framework. Developing countries in particular need to seek to advance these issues. If substantial progress toward an explicit development dimension can be made (or, at a minimum, some of these issues can become part of a firm built-in agenda for future negotiations), a multilateral framework on investment facilitation for development would create a value-adding instrument in the FDI tool-box that is currently available in the international investment area.

Do board characteristics affect environmental performance? A study of EU firms

AbstractThis paper explores the relationship between board characteristics and environmental performance. We adopt a triple perspective of environmental performance, focussing on emissions (waste and CO2), resource consumption (water and energy), and the implementation of environmental initiatives. The sample comprises 644 nonfinancial European Union–based companies. The data cover the period 2002 to 2017. The results confirm that gender diversity and the existence of a corporate social responsibility committee are positively associated with the firms' environmental performance. This finding is consistent with the view that the educational background, talent, and experience of women help promote sustainable environmental initiatives. The existence of a corporate social responsibility committee reflects a company's commitment to sustainable development.

Top management commitment, corporate social responsibility and green human resource management

PurposeThe purpose of this paper is to analyse the relationship between top management commitment, corporate social responsibility (CSR) and green human resource management (GHRM).Design/methodology/approachA self-administered questionnaire was adopted to perform a systematic collection of data from manufacturing and service organisations in Malaysia. The partial least squares method was used for the conceptual framework of the study.FindingsThe observed findings indicate a significant positive relationship between top management commitment and CSR, as well all dimensions of GHRM. However, counterintuitively, the relationship between CSR and GHRM was found not to be as significant as expected (except for CSR and green analysis/job description), which can be explained through the emerging perspective that CSR and HRM should be linked.Research limitations/implicationsThe findings provide insights as to the nature of GHRM and how it is affected by CSR and top management commitment in an emerging economy – in this particular study, Malaysia. Moreover, the observed results highlight the crucial importance of top management commitment in implementing GHRM practices and CSR efficiently in order to create positive environmental performance.Originality/valueThe authors believe that, to date, no study has explored the links between top management commitment, CSR and GHRM using empirical data from Malaysia, as well as that this research is an important emerging topic for researchers, academicians and practitioners.

Is corporate governance relevant to the quality of corporate social responsibility disclosure in large European companies?

PurposeThis paper aims to report on the quality of corporate social responsibility (CSR) disclosure in S&P Europe 350 companies. The paper also examines the impact of corporate governance structure and other firm-specific characteristics on the quality of CSR disclosure in European companies.Design/methodology/approachThe paper uses a disclosure index adopted from Jizi et al. (2014). Moreover, the paper contributes to the CSR disclosure literature by developing a new index that includes all the aspects introduced by the Global Reporting Initiative version 4.The data of CSR reporting are manually collected from the firms’ reports. The population and sample of this study are related to 350 companies operating in 16 European countries. Tobit regression analysis is used to test the hypotheses.FindingsThe results reveal that directors’ ownership, the presence of a CSR committee and firm size positively affect the quality of CSR reporting. Further testing of the independent variables on each CSR sub-category is made. The CSR sub-categories used are, namely, community involvement, employees, environment, social product and service quality, supply chain sustainability and business ethics. The presence of a sustainability committee inside the company is the only factor that shows a strong positive effect on the disclosure of every CSR sub-category and the CSR inclusive index.Research limitations/implicationsThe limitations of this research are that it focuses exclusively on the effect of the internal corporate mechanisms on the quality of CSR reporting; disregarding the economic, institutional, political and cultural factors that can play a role in influencing sustainability reporting of the companies.Practical implicationsBetter CSR disclosure leads to the firm having a better image in the society; this, in turn, has implications on firm performance, attracting funds, as well as recruiting and retaining high profile employees. Stakeholders are placing cumulative significance to corporate transparency particularly in the area of CSR. Managers should exert more efforts into not only improving the disclosure of the various facts of CSR but also into using the various media available for disclosure. Companies should take the initiative of establishing a CSR committee to ensure effective formation and implementation of CSR policies and disclosure of CSR activities.Social implicationsThe CRS research itself bears the merit of social implications. Moreover, the findings of this research pave the way for future researches to examine the effect of the adoption of global CSR initiatives and frameworks on the quality of CSR reporting.Originality/valueThis paper contributes to the CSR disclosure literature by developing a new index that includes all the aspects of CSR and exploring the relation between the rarely explored “presence of sustainability committee” and CSR disclosure, as well as testing a vast number of CSR sub-categories that is not extensively covered in previous studies. Moreover, the paper covers a large sample of companies across 16 European countries, in terms of their stand-alone sustainability reports, dedicated chapters of CSR in annual reports, integrated reports, website CSR information and any attachments/links provided on the websites for further CSR documents, brochures or data sheets.

Sustainable compensation policies and its effect on environmental, social, and governance scores

AbstractThe incorporation of sustainable compensation policies reflects the willingness of companies to manage the behavior of directors towards long‐term goals, responding to a large number of stakeholders with different demands. Analysis of compensation policies is biased to financial performance, so that the effectiveness of sustainable policies remains unexplored. This paper investigates whether having a sustainable compensation policy has a positive influence on environmental, social, and governance (ESG) and economic scores. These relationships are tested by estimating a fixed‐effects model for listed companies from Spain, France, Germany, and the United Kingdom in the period 2005–2015. According to the results, sustainable compensation policies affect ESG scores, but especially when firms have a corporate social responsibility committee acting as control mechanism and supporting the achievement of those objectives, triggering better nonfinancial performance. This paper contributes to literature by exploring the effect of sustainable incentives and expands the range and richness of results by including four different scores.