Corporate Social Responsibility Regulation Research Articles

Do Good, Have Good: Mandatory CSR Policy and Foreign Subsidiary Performance in India

In 2013, the Companies Act in India mandated that foreign subsidiaries with specified profitability and size spend at least 2% of their net income on corporate social responsibility (CSR). The study uses this natural experiment to isolate the impact of CSR spending on multinational enterprise (MNE) subsidiary performance. Using a triple difference estimation method on 175 foreign subsidiaries from 2005 to 2020, this study finds a positive impact of the compulsory CSR regulation on the CSR spender subsidiaries. We also find that higher institutional distance and greater subsidiary age benefit affected subsidiaries, positively impacting their performance because of mandatory CSR spending. The findings offer suitable recommendations for managers and policymakers in emerging markets as navigating regulatory CSR policies in the host country requires considering both resource-based and institutional environment factors.

The impact of corporate governance and corporate social responsibility on SA REITs’ performance

ABSTRACT Corporate governance (CG) is one of the most sought after areas of research globally. This paper employs a corporate governance index (CGI) formulated from the KING III and IV reports to examine the link between corporate performance and the quality of CG and corporate social responsibility (CSR) of SA REITs listed on the Johannesburg Stock Exchange (JSE). The CGI index is created from King III and IV to measure the compliance of 33 SA REITs listed on the JSE as of January 2023. These REITs are assessed from 2013. The empirical investigation using multiple correspondence analysis (MCA) reveals that CG practices have a positive influence on firm performances measured by TSR (such as total share return). The results imply that CG’s standard principles influences the firm performance of SA REITs with a higher magnitude. The CSR index is created from the King reports, and the MCA was also used. This indicates that an SA REIT that complies with CSR regulations will improve returns.

The construction of the normative persuasion of social and environmental reporting regulation

PurposeThis study aims to understand why some social and environmental reporting (SER) regulations are more successful than others in modifying collective corporate reporting behaviour and expectations. More specifically, it presents a qualitative and historically informed exploration of the construction of the enabling conditions for corporate adoption of SER regulation in a national context.Design/methodology/approachDrawing on insights from structuration theory and the sociological approach to legal studies, the authors examined the normative persuasion of the first regulation in Spain requiring firms to disclose social and environmental information in a stand-alone report: Article 39 of the Spanish Sustainable Economy Law. The case study is based primarily on 38 semi-structured interviews with relevant actors involved in this SER regulation from 2008 to 2014. Other sources such as legal and policy documents, historical documents, books, press reports and field notes from attendance at technical meetings related to the phenomenon under study help inform and complement the analysis of the interviews.FindingsThe analysis reveals that the agency of regulators, regulatees and other relevant actors involved in the SER regulation led to the law becoming a dead letter. However, only by examining the structural circumstances, shaped by history and socio-economic context, can the authors understand how the normative persuasion of law is constructed or undermined.Research limitations/implicationsThe study underscores the importance of the national context in developing corporate social responsibility (CSR) regulation and the crucial role of history. The results of this research also suggest that significant progress towards a more transformative CSR regulation cannot be achieved without the support of enabling structures/Practical implicationsRecent SER regulations (European Corporate Sustainability Reporting Directive and IFRS sustainability standards, to mention those that are gaining most traction) may not achieve sufficient compliance if those responsible for drafting them do not ensure that the conditions for the emergence of regulatory persuasion are met. Regulators must therefore have a profound understanding of how these conditions are constructed as part of a historical process inextricably linked to the social structures of the environment in which the law is to be applied.Social implicationsThe study reveals the changing landscape of corporate social responsibility, where scientists, academics, NGO activists and civil society organisations struggle to gain some agency in a field populated by actors, such as trade unions or employers, who were constitutive of Western industrial liberal democracies.Originality/valueThis study presents an in-depth and historically grounded analysis of the dynamics involved in creating the conditions that lead to successful SER legislation in a national context.

Regulation of Corporate Social Responsibility through Environmental Development Program: A Review from a CSR Perspective

The Company, as a business entity, must take on social and environmental responsibility, which is known as corporate social responsibility (CSR). Community empowerment programs are part of implementing CSR forms used in the Company's efforts to support sustainable development based on the 3P principles, namely Profit, People, and Planet. This research aims to analyze the implementation of the Community Development Program as a strategy in CSR management and the implementation of CSR arrangements in managing corporate responsibility in environmental aspects. The method in this research is normative juridical research. The approaches used are the Legislation Approach, Case Approach, and Concept Approach. Implementing the environmental development program is a strategic step that can have a long-term positive impact on the Company. A critical aspect of the Program is that it focuses on sustainable development. Companies involved in this activity are concerned with current environmental elements and aim to leave positive things for future generations. By adopting environmentally friendly practices and sustainability projects, companies can create positive impacts that are sustainable in the long run. Implementing CSR regulations in managing environmental responsibility is an essential step companies take to balance business sustainability and social and environmental impacts. CSR regulation in managing ecological responsibility is about more than just complying with rules or meeting market expectations. But also as an effort to create long-term value, build strong relationships with stakeholders, and become an agent of positive change in society.

IMPLEMENTASI PROGRAM BINA LINGKUNGAN SEBAGAI STRATEGI PENGELOLAAN TANGGUNG JAWAB SOSIAL PERUSAHAAN: TINJAUAN DARI PERSPEKTIF CSR

ABSTRACT
 Corporate as business entities have obligations in social and environmental responsibility or known as CSR. The community development program is the development of Corporate Social Responsibility (CSR) Implementation which is used as the Company's effort in sustainable development based on the 3P principle; namely Profit, People, and Planet. This study aims to analyze the implementation of the Community Development Program as a strategy in CSR management and analyze the implementation of CSR arrangements in the strategy of managing corporate responsibility in environmental aspects. The method in this study is normative juridical research. with the approach used, namely the Statutory Approach, Conceptual Approach, Case Approach. The implementation of the Community Development program is a strategic step that can have a long-term positive impact on the company. One important aspect of the Community Development Program is its focus on sustainable development. Companies that involve themselves in this activity not only pay attention to the current environmental aspects, but also aim to leave positive for future generations. By adopting eco-friendly practices and sustainability projects, companies can create a sustainable positive impact in the long run. and the implementation of Corporate Social Responsibility (CSR) arrangements in environmental responsibility management is an important step taken by companies to maintain a balance between business sustainability and social and environmental impacts. CSR regulation in environmental responsibility management is not just about complying with regulations or meeting market expectations. but also, as an effort to create long-term value, build strong relationships with stakeholders, and become agents of positive change in society.
 Keywords : Community Development Program, Corporate, Social and Environmental, Responsibility

Mandatory CSR regulations and social disclosure: the mediating role of the CSR committee

PurposeThis study aims to examine the association between mandatory corporate social responsibility (CSR) regulations (CSR mandate) and social disclosures (SOCDS) in India. It also investigates whether CSR committees mediate the relationship between CSR mandate and SOCDS. Furthermore, this paper explores how business group (BG) affiliation moderates CSR committee quality and SOCDS.Design/methodology/approachThis study uses a data set of 5,345 observations from the Bombay stock exchange (BSE)-listed firms over 10 years (2011–2020) to examine the research questions. Baron and Kenny’s (1986) three-step model is estimated to examine the mediating role of CSR committees on the relationship between CSR mandate and SOCDS.FindingsThe study reveals that the CSR mandate positively impacts SOCDS in India due to coercive pressures. CSR committees mediate this relationship, with higher CSR committee quality leading to increased SOCDS. Furthermore, the authors report that SOCDS in India is positively related to CSR committee quality, and this relationship is stronger for BG firms. Finally, the supplementary analysis reveals that promoting CSR committee quality enhances firms’ likelihood of meeting CSR mandatory spending and actual CSR spending in India.Originality/valueThis research contributes to the academic literature by shedding light on the intricate dynamics of CSR mandates, CSR committees and SOCDS in emerging economies. Notably, the authors identify the previously unexplored mediation role of CSR committees in the link between CSR mandates and SOCDS. The creation of a composite index that measures complementary CSR committee attributes allows us to undertake a novel assessment of CSR committee quality. An examination of the moderating influence of BG affiliation documents the importance of CSR committee quality, particularly in governance, for enhancing SOCDS transparency within BG firms.

Public Regulation and People’s Welfare Orientations of Indonesia’s Corporate Social Responsibility (CSR) in the Mining Industry

Corporate Social Responsibility (CSR) is an important topic in the intersections between businesses and the society, being used to address the negative effects of corporate and business activities on the society and environment. Regardless of the variants of its definition and forms, CSR has been used as a form of regulation in many countries including Indonesia. Indonesia’s mining industry has a unique CSR regulation in the sense that it is backed by sectoral mining regulations used to protect certain uniquely defined societal interests. Since Indonesia’s mining regulation prescribes certain manners of mineral production, mandatory CSR obligations have been created for industry players that will have to be read in the light of public regulation and people’s welfare orientations. This paper finds that the expansive use of CSR particularly in the mining regulatory framework will create implications for the international legal commitments undertaken by Indonesia including those under the World Trade Organization (WTO).

The Influence of Corporate Social Responsibility in a Legal Context

Corporate Social Responsibility (CSR) represents a commitment by businesses to ethical practices and social responsibility beyond profit generation. Drawing a comparative analysis between different countries and regions, we highlight variations and similarities in legal approaches to CSR. The research identifies the challenges and controversies surrounding CSR in the legal the legal context and engages in discussions about the effectiveness and limitations of CSR regulations. In conclusion, this article provides recommendations for companies, policymakers, and stakeholders in navigating the complex legal landscape of CSR and anticipates future trends in CSR within the legal context. The findings underscore the significance of CSR as an ethical and legal imperative for businesses in today's global landscape.

Examining the Employment Dimension of Corporate Social Responsibility (Between Global Initiatives and Indonesia Statutory)

<span lang="IN">This article examines the employment aspects of CSR regulations. Every company needs a reference to verify its CSR activities support economic, social, and environmental development. The government has enacted laws to encourage corporate social responsibility (CSR). Since CSR funds are in the company's income statement, they often conflict with fiduciary duty. The study reveals that business views on CSR's employment dimension have shifted. Initially, CSR managed risk and prevented reputational and financial damages. Labor was considered an expense, not an investment. Many companies now employ CSR as a key value and competitive advantage</span>

Utilizing Corporate Social Responsibility to Strengthen Brand Equity

This research aims to analyze and evaluate the role of using Corporate Social Responsibility (CSR) in strengthening a company's brand equity. Utilizing CSR has become a major focus for companies that want to improve their brand image in the eyes of consumers and society. This research uses qualitative analysis methods with descriptive methods. The research results show that effective implementation of the Corporate Social Responsibility (CSR) program provides significant benefits in strengthening a company's brand equity. Active participation in CSR activities not only improves a company's reputation in the eyes of consumers, but also differentiates the brand from competitors, builds close relationships with consumers, and increases customer loyalty. In addition, engagement in CSR also helps companies manage reputational risks related to social and environmental issues, while ensuring compliance with relevant CSR regulations and standards. Thus, CSR has an important role in establishing a strong and responsible brand image, which ultimately supports a company's long-term growth and sustainability in a competitive market.

The Administration of Corporate Social Responsibility in the District Regulation in Indonesia

Abstract In Indonesia, Corporate Social Responsibility (CSR) is corporate activity that is regulated by the law. By means of the Investment Law No.25 year of 2007 and the Limited Liability Company Act No. 40 year of 2007, it is regulated that every company in Indonesia is obliged to implement CSR. However, these regulations are not set technically; therefore, some local governments have made guidelines for the implementation of CSR through the District Regulations. The problems of this study are: (1) how is the CSR regulation model in the District Regulation? (2) What are the company’s attitude and the company’s request towards the CSR regulation in the District? This study uses normative law research method that examines the provisions of the law, as well as empirical legal research method that used to observe the behavior and the attitude of the government and corporate actors. This research took place in several provinces in Indonesia.The results of this research are: First, the CSR regulation in regional area is formulated based on local government authorities. The provisions of these district regulations are customized to the interests of each region, although it still normatively refers to the standard legislation. Second: The Company’s attitudes prefer the self-regulated regulations arranged by their respective companies. Additionally, the setting of CSR can make the arrangement of CSR activities in accordance with the District Government program; as a result, it can speed up the community development.

Legitimising CSR through the institutional backup – gauging compliance of the Indian corporate sector in the mandatory regime

PurposeThis study aims to calculate the corporate social responsibility (CSR) expenditure made by companies as per the provisions of Section 135 of Companies Act 2013 and check the status of compliance/non-compliance of these provisions in the mandatory regime of CSR.Design/methodology/approachBased on a sample of top 500 Indian companies listed on Bombay Stock Exchange, the study compares the CSR expenditure required to be incurred by companies with the actual CSR expenditure made by them over a time span of seven years and calculates the extent of surplus or deficit attained by them starting from the year of inception of CSR provisions, 2014–2015, till the most recent year, 2020–2021.FindingsThe findings indicate that the average CSR expenditure made by Indian corporate sector is less than the mandatory requirement. More than half of the companies do not comply with the CSR regulations of the country. Even the “Most Profitable” companies fail to contribute the minimum required amount towards social activities akin to their counterparts in the “Less” and “Least” profitable categories.Practical implicationsThe disobedience towards the statutory provisions implies that Indian companies are non-compliant towards CSR guidelines despite the regulative institutional pressure that makes CSR a mandatory practice to legitimise it.Originality/valueThe study contributes to the CSR literature in the light of the transformed regulative institutional environment in India. It includes a comprehensive analysis of compliance of companies with the revised statutes over all the years since the inception of new mandatory guidelines on CSR till the most recent time period on a representative sample, thus, making the findings robust and generic with respect to India.

Foreign ownership, passive‐learning knowledge spillovers, and corporate social responsibility reporting in China

AbstractAs there are many studies on the predictors of corporate social responsibility (CSR) reporting, the influences of foreign direct investments (FDIs) knowledge spillovers (KSs) on CSR reporting in developing countries remain unclear. This paper introduces the passive‐learning KSs concept to explain whether, why, and how domestic firms learn CSR knowledge from their foreign counterparts. First, we investigate the relationship between foreign ownership and the quality of CSR reporting (CSRQ). Second, we test the moderating effect of three types of direct institutional pressures: the green development policy, the mandatory CSR reporting requirement, and CSR regulations issued by the State‐owned Assets Supervision and Administration Commission. Third, we examine the moderating effect of board interlocks to explore the indirect impacts of institutional pressures. We run regressions on a sample of Chinese A‐share listed companies and the hypotheses are generally supported. This paper contributes to the literature on CSR reporting and FDIs KSs by adopting the passive‐learning KSs theory to explain CSR KSs in developing countries.

Tradeoff between corporate investment and CSR: The moderating effect of financial slack, workforce slack, and board gender diversity

This paper investigates the existence of a tradeoff between corporate investment (i.e., tangible and intangible) and corporate social responsibility (CSR) in the presence of the moderating effects of financial slack, human resources slack, and board gender diversity. Based on an international sample of 44,129 firm-year observations between 2005 and 2019, we find that corporate investment leads to significantly lower CSR engagement in all three pillars (i.e., environmental, social, and governance). Furthermore, while financial slack positively moderates between corporate investment and CSR, human resources slack and board gender diversity negatively moderate between corporate investment and CSR. This outcome is robust in terms of endogeneity concerns, alternative sampling, alternative investment proxies, CSR regulations, and timing impacts. Hence, we find the dominance of the shareholders' perspective rather than the stakeholders' perspective. The results outline the tradeoff between corporate investment and CSR and the role of contingencies in this tradeoff relationship.

Challenges of CSR in Sub-Saharan Africa: clarifying the gaps between the regulations and human rights issues

This paper discusses the practice of Corporate Social Responsibility (CSR) and its challenges in Sub-Saharan Africa. The main purpose is to highlight and clarify the gaps between CSR regulations and human rights abuses caused by business organizations.From a historical perspective, natural resources have been recognized as a common reason for pushing the CSR agenda in Sub-Saharan Africa, especially with the presence of big businesses in the outcome of globalization. However, despite a development-oriented CSR agenda and therefore on African local needs such as hospitals, housing, and roads, big businesses that have embarked on CSR activities are often involved in human rights violations. This is despite the insertion of human rights in some African state regulations, the UN Global Compact, and the UN Guiding Principles on Business and Human Rights in which those businesses are signatories. This is the case in Gabon, Nigeria, and South Africa whose regulations were established by the respective states indicate business’ broader societal priorities directed towards stakeholders (local communities in particular) but in terms of corporate obligations, ‘Human Rights appear to be a blind spot in CSR’.The reasons for that are indicated in the findings of this qualitative inquiry, which reveals deep problems of corporate governance and little understanding of corporate human rights in domestic legislation. According to international law, human rights fulfillment focuses on nation-states as sole bearers. This means other non-state actors have indirect human rights responsibilities. Therefore, the challenge remains to extend and interpret existing domestic and international frameworks to include CSR alongside traditional state obligations. This could make corporate human rights more ‘applicable’ to businesses.Previous research by Visser and Amodu has focused on proposing models to respond to the challenges of CSR in Africa. This paper clarifies the challenges of CSR with human rights issues and suggests an extension of the current legislative framework covering CSR. The article is qualitative and has used a Desk Research study approach that includes published academic papers, government documents some secondary data such as case studies, interviews, and discussions.

How and When Does Mandatory CSR Disclosure Affects Firms’ CSR Disclosure Strategy?

ABSTRACTResearch on corporate social responsibility (CSR) disclosure recognizes the importance of the government and examines how firms respond to government CSR regulations. However, little attention is given to how government regulations affect firms’ disclosure strategy in multiple fields of CSR. Based on institutional theory, this study proposes that mandatory CSR disclosure increases the legitimacy management cost for firms, and thus firms disclose more CSR scope to gain legitimacy and less CSR emphasis to reduce costs. Using data from Chinese A-share listed firms in 2008–2018, this study finds that mandatory CSR disclosure is positively related to CSR scope but negatively related to CSR emphasis. In addition, firm visibility strengthens the aforementioned positive and negative relations, whereas market competition weakens the relation between mandatory CSR disclosure and CSR emphasis. This study contributes to the literature on CSR disclosure and studies on organizational responses to the government mandate.

Natural resources and financial development: Role of corporate social responsibility on green economic growth in Vietnam

In this study, the relationship among natural resources, financial development, and the role of corporate social responsibility (CSR) on green economic growth in Vietnam has been analyzed. We have applied the Pooled Mean Group-Autoregressive Distributed Lag (PMG-ARDL) model to assess this relationship for the period of 1990–2018. The Johansen–Fisher panel cointegration and Kao tests show that the variables are cointegrated. Accordingly, CSR, the PMG-ARDL findings, financial development, and natural resources development all have a long-term positive association but a short-term negative relationship with green economic growth. If efficient fiscal and financial management measures are not implemented, the panel nations' public debt sustainability will be jeopardized due to CSR’s overreliance on natural resources rents (NRR). Natural resources may have a detrimental impact on financial growth if laws are not implemented. CSR regulations in Vietnam may reduce greenhouse gases (GHG) emissions and promote green economic growth. If this criterion is met, NRR-related improvements in financial development may be sustained, and relevant policy recommendations may be made.

Sinkronisasi Pengawasan CSR dalam Hukum Positif Indonesia

Since CSR has become an obligation for companies through Law Number 40 of 2007 concerning Limited Liability Companies. However, in its implementation there are still many problems. One of them is the regulation of CSR which has been implicitly regulated in various sectoral laws. So the problem that will be studied in this paper is how to synchronize the supervision of Corporate Social Responsibility (CSR) in the Limited Liability Company Law, Investment Law, Government Regulation No. 47 of 2012, as well as Article 23 and Article 24 of Malang Regency Regulation No. 1 of 2013. The research method used in this paper uses a normative juridical research type, using a statutory approach, a conceptual approach, and a comparative approach. The PT Law and the PM Law have different definitions regarding CSR, although both laws require the implementation of CSR, both have not provided clear regulations regarding the mechanism for monitoring CSR implementation. Then based on the mandate in Article 74 paragraph (4) of the Company Law, PP No. 47 of 2012, the establishment is intended to clarify the implementation of CSR but in fact the articles contained in the PP also do not accommodate the supervision of CSR implementation. Although it is not regulated in the Law and PP, the Malang Regency Regulation clearly regulates the supervision of CSR implementation. In this study, it is concluded that the various regulations are synchronized, namely in terms of implementation accountability, sanctions, and regulations for monitoring the implementation of CSR. Therefore, the government needs to form a separate law that accommodates CSR comprehensively along with the mandate of establishing a CSR supervisory body whose job is to oversee the implementation of CSR, giving executive authority to impose sanctions on those who do not carry out CSR.

Board attributes and CSR expenditure before and during COVID-19

PurposeThis study aims to investigate the impact of board attributes on the corporate social responsibility (CSR) expenditure of the listed firms before (2019) and during (2020) COVID-19 in Nigeria.Design/methodology/approachThe data were manually extracted from the annual reports of all the listed companies that published their reports for the years. A total of 266 firm-year observations were generated, comprising 140 and 126 observations for 2019 and 2020, respectively.FindingsThe results indicate that the frequency of board meetings and foreign directors on the board significantly influence CSR expenditure before and during COVID-19. Board independence had a significant positive association with CSR expenditure before COVID-19 but insignificantly positive during it. However, board size and gender diversity do not influence CSR expenditure before and during COVID-19.Research limitations/implicationsThe study used secondary data from the annual reports to compare the impact of board attributes on the CSR expenditures of listed firms in Nigeria between 2019 and 2020.Practical implicationsProviding effective CSR regulations and incentives could motivate or mandate the board of directors to incur CSR expenditure within the company’s financial capacity for society’s welfare, particularly under challenging times like COVID-19.Social implicationsEncouraging firms to incur more CSR expenditures to their ability will contribute to poverty alleviation and improve socio-economic development.Originality/valueThis study is one of the few that investigated the effects of board characteristics on CSR expenditure for the welfare of the poor and the needy. Besides, it uniquely focused on comparing the results before and during COVID-19.

An Empirical Study on Issues and Challenges of Corporate Social Responsibility Activities in India

Corporate social responsibility (CSR) is a management idea where companies incorporate their socio-environmental problems into their operations and maintain good relations with its stakeholders. Recently government of India has implemented new CSR regulation. The Companies Act of 1956 was repealed and the Companies Act of 2013 was enacted in its place. Section 135 of the companies Act of 2013, a new section of the new act, set certain provisions on corporate social responsibility for entities doing business in India, which resulted in a significant change in the creation, administration, and governance of companies. India has been the first country among all other nations to mandate the requirement to engage in CSR activities and to disclose it under the Companies Act of 2013. This signals the commencement of a new era in India's corporate social responsibility. All organizations that qualify for CSR requirements will be required to spend 2% of revenues on CSR within a specified time frame or turn this money over to government-run entities. In the present time of Covid-19 outbreak, the Indian government motivating Indian entities to give some assistance to the community. According to a circular of March 23, 2020 Ministry of Corporate Affairs, All Covid-19 related expenditure would be considered as CSR expenditure. In this study, researcher has made an effort to study the present scenario of CSR, including CSR practices followed by companies during a pandemic and the issues and challenges related to CSR, including making suggestions as to how these challenges can be resolved.