Standalone Corporate Social Responsibility Research Articles

Mandatory CSR disclosure and analyst forecast properties: Evidence from a quasi-natural experiment in China

Based on a quasi-natural experiment that mandates a subset of listed firms to issue standalone corporate social responsibility (CSR) reports, we examine whether mandatory CSR disclosure improves analysts’ information environment. We focus on two properties of analysts’ earnings forecasts: forecast error and forecast dispersion. We find that the mandatory issuance of standalone CSR reports is related to less forecast error and less dispersed forecasts, and the effect varies with the firm-level information environment and province-level marketization. Additional tests show that the improvement in forecast properties is mainly driven by CSR reports that i)are of high quality and ii)contain more long-term-oriented information than other CSR reports. Our findings provide evidence that mandatory CSR disclosure plays an important informational role for financial analysts.

Determinants of voluntary CSR reporting reliability – evidence from Canada

PurposeThe purpose of this study is twofold: to examine the reliability of voluntary corporate social responsibility reporting (CSRR) to determine whether users can rely on the information released by corporations and to examine the determinants of CSRR reliability in a voluntary context.Design/methodology/approachThis study analyses the information included in a sample of 190 standalone corporate social responsibility (CSR) reports issued by Canadian corporations listed on the Toronto Stock Exchange S&P/TSX Composite Index from 2016 to 2018.FindingsThe results of this study show that CSR reports lack reliability. The determinants identified (image, corporate governance and financialisation) partially explain the quality of the information disclosed. As well, the results suggest that corporations may attempt to manipulate users’ perception through their disclosures.Practical implicationsTThis study provides a greater understanding of the current state of CSRR in a voluntary context. It offers further insights into the strategies corporations use to manage impressions through CSR disclosures.Social implicationsThis study provides further empirical data as to current shortcomings of voluntary CSRR and the potential benefits of further regulation.Originality/valueFew studies have specifically focused on the reliability of CSRR and its determinants in a voluntary context.

Lie of the weak: Inconsistent corporate social responsibility activities of Chinese zombie firms

This study investigates the differences between zombie firms and non-zombie firms in corporate social responsibility activities such as reporting, disclosure and fulfillment. Using Chinese listing company data collected from 2009 to 2016, we apply a three stage model with a double Heckman correction to deal with potential self-selection/endogeneity bias and to measure the differences consistently. We found that zombie firms are less willing to release standalone corporate social responsibility reports than non-zombie firms. Among companies that release standalone corporate social responsibility reports, the corporate social responsibility disclosure of zombie firms is at least not worse than non-zombie firms, but the corporate social responsibility fulfillment is significantly lower. We conclude from this gap between disclosure and fulfillment to the hypocritical behavior of zombie firms, due to the absence of control in corporate social responsibility. We suggest that government should enhance supervision over zombie firms’ corporate social responsibility activities and subsidies towards them in order to lower their economic damage. Supplementary analyses provide some clues concerning the heterogeneity of inconsistence in term of external support characteristics, ownership and censorship which require further studies.

Organizational Slack, Corporate Social Responsibility, Sustainability, and Integrated Reporting: Evidence from Korea

This paper examines whether organizational slack is associated with firms’ voluntary disclosure of corporate social responsibility (CSR), sustainability, and integrated reporting. This is an empirical research study using archival data based on a sample of public firms listed on the Korea Exchange from 2005 to 2016. We manually collected CSR reports, sustainability reports, and integrated reports (IRs) that were published during our sample period. We found that human resource slack was highly related to the publication of corporate social responsibility, sustainability, and integrated reports. Firms initiating such disclosure in their industry groups were likely to have slack in permanent employees as well as financial slack. Additionally, integrated reporting, which is a recent improvement in the delivery of financial and non-financial information, was positively associated with an excess number of regular employees. This study provides evidence that slacks in regular employees are related to a greater degree of voluntary disclosure via standalone CSR or sustainability reporting as well as integrated reporting. These findings suggest that slacks or excess human resources play a crucial role in voluntary corporate disclosure.

Authoritarian state, global expansion and corporate social responsibility reporting: The narrative of a Chinese state-owned enterprise

This case study examines why stand-alone Corporate Social Responsibility (CSR) reporting has been initiated in a Chinese state-owned enterprise (SOE). Chinese SOEs have been pioneering CSR reporting since the mid–2000 s and extant literature interprets its development as no more than a consequence of government interventions. However, there is a dearth of qualitative evidence illuminating the subtle interrelationships between the global, national and internal organisational dynamics mediating CSR reporting initiative of Chinese SOEs within the authoritarian state. To fill this gap, we provide a nuanced multi-level institutional analysis of the drivers underlying the initiation of CSR reporting within the case examined.

Evolution of corporate reporting: From stand-alone corporate social responsibility reporting to integrated reporting

Both financial and corporate social responsibility (CSR) reporting are bound by global constraints. A common trait among the reporting systems is a growing movement toward comparability and accountability. Global pressures initially motivated the push toward stand-alone CSR reporting and now toward integrated reporting. Integrated reports (IR) include financial, economic, governance, and social information in one report. In the United States, integrated reporting is voluntary and only a small number of companies have issued IRs to date. This report provides a history of CSR reporting and then examines whether the non-financial economic, governance and social indicators identified in prior literature as being of interest to retail investors (Cohen et al. 2011) are disclosed in the pioneering U.S. IRs. Descriptive results indicate the initial IRs cover predominately indicators of economic and social performance with little focus on governance. Further analysis indicates that the IRs examined do not, as a rule, provide the information most highly desired by investors (i.e. market share, executive compensation, and product safety). This study provides a baseline for companies preparing IRs and for regulators (i.e. SEC, FASB) in the context of determining future disclosure regulations.

Corporate Social Responsibility Report Narratives and Analyst Forecast Accuracy

Standalone corporate social responsibility (CSR) reports vary considerably in the content of information released due to their voluntary nature. In this study, we develop a disclosure score based on the tone, readability, length, and the numerical and horizon content of CSR report narratives, and examine the relationship between the CSR disclosure scores and analyst forecasts. We find that CSR reporters with high disclosure scores are associated with more accurate forecasts, whereas low score CSR reporters are not associated with more accurate forecasts than firms who do not issue CSR reports. The findings are robust to controlling for firm characteristics including CSR activity ratings and financial narratives. The findings are driven by experienced CSR reporters rather than first-time CSR reporters. Together, our findings suggest that the content of CSR reports helps to improve analyst forecast accuracy, and this relationship is more pronounced for CSR reports with more substantial content.

Does assurance on CSR reporting enhance environmental reputation? An examination in the U.S. context

The issuance of standalone corporate social responsibility (CSR) reports11 The reports are issued under a variety of differing names including, for example, citizenship, social responsibility, and ...

An exploratory analysis of managerial perceptions of social and environmental reporting in China

Purpose – This paper aims to determine the perceptions of managers in China with respect to the pressures for, and the purposes of, social and environmental reporting (SER) in the Chinese context. Design/methodology/approach – The authors interviewed 14 managers from nine different state-owned enterprises, all headquartered in Beijing. Interviews were conducted during 2009, the height of the period of growth in standalone corporate social responsibility (CSR) reporting in China. The authors assess the perceptions of the managers from a neo-institutional perspective. Findings – The findings indicate that, similar to reporting in more Western economies, managers perceive that a variety of coercive, normative and mimetic pressures interplay to influence SER in the Chinese context. The managers perceive peer institutions as exerting the greatest pressures for reporting and, surprisingly, indicate that the government, rather than exerting coercive pressures for SER, instead is seen as playing a facilitating role. The findings also reveal that the managers almost uniformly see the purpose of the reporting as a tool of image enhancement, particularly with respect to the general public. However, in contrast to studies of organizational response to institutional change in other settings, the authors find little non-conformity. Research limitations/implications – The findings suggest neo-institutional arguments for CSR reporting appear to hold, even in China’s socialist market economy. Practical implications – The finding that managers see CSR reporting as being largely about image enhancement may help to explain the low quality of disclosure documented in other studies. Social implications – Improving CSR disclosure in China would appear to require more mandated pressure from, particularly, governmental powers. Originality/value – This is the first study to explore via in-depth interviews the perceptions of managers in China to the evolving practice of standalone CSR reporting.

The rise and fall of stand-alone social reporting in a multinational subsidiary in Bangladesh

Purpose – The purpose of this paper is to examine the underlying drivers for the development and subsequent discontinuation of stand-alone corporate social responsibility (CSR) reporting in a multinational subsidiary in Bangladesh. Design/methodology/approach – The research approach employed for this purpose is a case study using evidence from a series of in-depth interviews conducted during the period 2002-2010. Interview data are supplemented by examining other sources of information including annual reports, stand-alone social reports and relevant newspaper articles during the study period. Findings – It appears that the stand-alone CSR reporting process was initiated to give the subsidiary a formal space in which to legitimise its activities in Bangladesh where both tobacco control regulation and a strong anti-tobacco movement were gaining momentum. At the start of the process in 2002 corporate interviewees were very receptive of this initiative and strongly believed that it would not be a one off exercise. However, in the face of subsequent significant national policy shifts concerning tobacco control, irreconcilable stakeholder demands and increasing criticism of the CSR activities of the organisation at home and abroad the process was brought to an abrupt end in 2009. Research limitations/implications – The paper has a number of implications for policy makers concerning the future prospects for stand-alone social/sustainability reporting as a means of enhancing organisational transparency and accountability. In addition the paper discusses a number of theoretical implications for the development of legitimacy theory. Originality/value – Using the lens of legitimacy the paper theorises the circumstances leading to the initiation and subsequent cessation of CSR reporting in the organisation concerned. As far as the authors know this is the first study which theorises and provides significant fieldwork-based empirical evidence regarding the discontinuation of stand-alone social reporting by a multinational company operating in a developing country. Thus, it extends previous desk-based attempts at using legitimacy theory to explain a decrease (or discontinuity) in CSR disclosures by de Villiers and van Staden (2006) and Tilling and Tilt (2010).

Market Reactions to the First-Time Disclosure of Corporate Social Responsibility Reports: Evidence from China

We examine whether investors value the disclosure of first-time standalone corporate social responsibility (CSR) reports, and whether market valuations differ between government-controlled and privately controlled firms. Using a matched sample of Chinese publicly listed firms, we find that CSR initiators have higher market valuations than matched CSR non-initiators, and CSR initiators controlled by the central and local governments have lower market valuations than CSR non-initiators and CSR initiators controlled by private shareholders. Additional analyses demonstrate that CSR initiators with high CSR reporting quality and perceived credibility have higher market valuations than CSR initiators with low CSR reporting quality and medium or low perceived credibility of CSR reporting. We do not find convincing evidence that CSR mandate, litigation risk, and prior stock returns affect market reactions to CSR reporting. Overall, we find that the market values standalone CSR reports, and that CSR reporting quality and perceived credibility are important factors in market valuation.

Standalone Corporate Social Responsibility Reporting in China: An Exploratory Analysis of its Relation to Legitimation

While the practice of standalone corporate social responsibility (CSR) reporting in China grew substantially over the mid-2000s, assessment of the disclosure included in the reports is quite limited. In an attempt to fill that void, we explore in this study whether differences in information provision through the standalone reports appear to be related to legitimacy factors. Based on a sample of 60 large companies with standalone reports issued for 2011–2012, we find that differences in the extent of social and environmental disclosure are positively related to firm size and membership in socially exposed industries, but negatively associated with status as a state-owned enterprise. In addition, we document that these relations appear to relate more strongly to disclosure of data and impact information as opposed to information on programmes and initiatives. Overall, our results suggest that CSR reporting in China, as in more developed Western economies, appears to be more about legitimation than meaningful disclosure of social and environmental performance.

Motivations for issuing standalone CSR reports: a survey of Canadian firms

Purpose– The purpose of this paper is to provide insight into the companies’ motivations to issue or not issue voluntary standalone corporate social responsibility (CSR) reports in the Canadian context.Design/methodology/approach– The authors realized a questionnaire survey that asked Canadian companies why they do or do not issue standalone CSR reports, what their motivations and costs are, and the extent to which they comply with GRI guidelines.Findings– The results show that larger firms issue standalone CSR reports. As larger firms have more political visibility and are subject to greater external scrutiny than smaller firms (Watts and Zimmerman, 1986), the findings indicate that firms primarily issue standalone CSR reports in response to external scrutiny by stakeholders, which is consistent with a stakeholder perspective. The survey also identifies that ancillary motivations for Canadian firms for issuing standalone CSR reports are consistent with legitimacy and signalling perspectives.Research limitations/implications– The authors acknowledge that the generalizability of the findings is limited due to the sample being situated within a single national context. The inferences drawn from such a sample in Canada may not be applicable to other countries with different national institutional contexts. In addition, the small size of the sample may limit the generalizability of the findings. The authors also did not specifically consider the quality of the CSR reports in the study. Finally, the work may be affected by the inherent weaknesses associated with survey research, including the inherent bias of the individuals responding to the survey.Originality/value– The research adds to the growing body of research on voluntary CSR disclosures, with particular reference to the Canadian context.

A research note on standalone corporate social responsibility reports: Signaling or greenwashing?

Abstract Over the past two decades, more and more U.S. firms are voluntarily issuing costly standalone Corporate Social Responsibility (CSR) Reports. Nevertheless, firms’ motivations for issuing standalone CSR Reports are not clear. In this paper, we consider two different explanations: signaling and greenwashing. The first explanation, signaling, proposes that firms use standalone CSR Reports as a signal of their superior commitment to CSR, which suggests firms with stronger social and environmental records will be more likely to issue standalone CSR Reports as compared to those without. The second explanation, greenwashing, proposes that firms use standalone CSR Reports to pose as “good” corporate citizens even when they do not have stronger social and environmental records. To provide insight into these explanations we compare the CSR performance scores of firms that issue CSR reports to those firms that do not. We control for firm size, leverage, profitability and industry. We find that firms that voluntarily issue standalone CSR Reports generally have higher CSR performance scores, which suggests that firms are using voluntary CSR Reports to publicize stronger social and environmental records to stakeholders.

Environmental Disclosure Strategies in the Canadian Resource Sector from 1995 to 2008

This study examines the environmental disclosure strategies of Canadian resource companies during the period 1985 to 2008. The research questions whether disclosure decisions reflect signalling or legitimization strategies by studying the relation between the companies’ environmental disclosure and their actual environmental performance, and by examining the nature of changes in disclosure when seven environmental reporting regulations are introduced over this period. We use non-parametric tests, ANCOVA and charts to examine the types and quantities of information disclosed and changes in these over time. We find evidence of signalling behaviour, but we also find that as reporting regulations increase, companies shift information out of the annual report and into standalone corporate environmental and social responsibility reports which have, during the study period, no independent auditor involvement.

White Tigers, Zoos and Sustainability Reporting: A Cynical Reflection

This essay reflects on the growing trend of standalone corporate social responsibility reports. And although several recently published studies seem to suggest that at least some users of the reports find value in them, particularly when they are deemed to be of higher quality, I offer an argument that in their current voluntary state, the practice may be more harmful than beneficial.

Nonfinancial Disclosure and Analyst Forecast Accuracy: International Evidence on Corporate Social Responsibility Disclosure

ABSTRACTWe examine the relationship between disclosure of nonfinancial information and analyst forecast accuracy using firm-level data from 31 countries. We use the issuance of stand-alone corporate social responsibility (CSR) reports to proxy for disclosure of nonfinancial information. We find that the issuance of stand-alone CSR reports is associated with lower analyst forecast error. This relationship is stronger in countries that are more stakeholder-oriented—i.e., in countries where CSR performance is more likely to affect firm financial performance. The relationship is also stronger for firms and countries with more opaque financial disclosure, suggesting that issuance of stand-alone CSR reports plays a role complementary to financial disclosure. These results hold after we control for various factors related to firm financial transparency and other potentially confounding institutional factors. Collectively, our findings have important implications for academics and practitioners in understanding the function of CSR disclosure in financial markets.Data Availability: The data are publicly available from the sources identified in the paper.

Impact of Assurance and Assurer's Professional Affiliation on Financial Analysts' Assessment of Credibility of Corporate Social Responsibility Information

SUMMARYThis study reports the results of a behavioral experiment examining whether financial analysts from Australia, the United States, and the United Kingdom perceive a difference in the credibility of stand-alone corporate social responsibility (CSR) reports depending on whether they are assured, and the type of assurance provider (professional accountants versus sustainability consultants). We further examine whether the perceived credibility differs for financial analysts from the different countries and whether results hold for companies from different industries. The overall results show the credibility of a CSR report is greater when it is assured and when the assurer is a professional accountant. While assurance increases the credibility of the information in each of the three countries included, the relative impact is context-specific. Information is perceived to be more credible when a company is from an industry where assurance is more commonplace, and by financial analysts from the United States when the assurer is a professional accountant. Financial analysts from Australia and the United Kingdom perceive little difference in the enhanced credibility provided by the different assurance providers.Data Availability: Contact the first author about the availability of the data.

The Content of Corporate Social Responsibility Information: The Case of Greek Telecommunication Sector

The aim of this study is to illustrate what and how stand-alone Corporate Social Responsibility (CSR) reports and web information provide to readers. These characteristics are recorded in predetermined schemes. The study focuses on the telecommunication sector, especially on fixed and mobile telephony and internet access providers in the Greek market. In all, five companies that provide CSR reports are identified. Their characteristics are categorized by four main predetermined dimensions, namely: type of communication, context, indicators and distinctions. The content analysis technique is selected as it is widely accepted and used in the field of CSR report research. The analysis indicates that three annual reports are almost similar in all dimensions and sub-dimensions. All of the companies publish their management systems certifications and awards and both Greek and English information versions exist; however, there are contradictory results in the dimension of indicators, the sub-dimensions of report guidelines and stand-alone reports. The value of the paper is to promote the standardization of CSR report.

Environmental Disclosure in the Canadian Resource Industry - The Impact of Reporting Regulations

This study examines environmental reporting by Canadian mining and oil & gas companies in their annual reports and stand-alone Corporate Social Responsibility (CSR) reports over a 24-year period from 1985 to 2008. It investigates whether environmental disclosure strategy is driven by economic considerations or legitimization efforts. Therefore, the investigation involves examining the relationship between the companies’ environmental disclosures, measured using a disclosure score derived from the Global Reporting Initiative guidance, and their actual environmental performance, measured by emissions reported to the Canadian government’s National Pollutant Release Inventory. We find evidence that companies with good environmental performance are using disclosure for signaling purposes, when regulation is ignored. The study examines the impact on environmental disclosure levels and content of different types of disclosure regulations introduced over this period. Disclosure changes around the time each new regulation is introduced indicate that increases in disclosure focus largely on information related to the credibility of company information. We also see that once the companies introduce standalone CSR reports, much of the increase in disclosure was shifted out of the annual report and into the CSR document where it was no longer subject to auditor oversight.