Voluntary Corporate Research Articles

Operational Efficiency and Debt Cost: The Mediating Effect of Carbon Information Disclosure in Chinese Listed Companies

Voluntary corporate carbon information disclosure not only meets the carbon information needs of investors, but also enhances the legitimacy of organizations. Building a green image may increase the public consumption of products and be conducive to reducing the cost of debt. As a part of creditors’ assessment of debtors’ solvency, operational efficiency is the basic factor of debt cost reduction. By constructing the correlation between carbon information disclosure and operational efficiency, this paper attempts to test the mediating effect of carbon information disclosure in the relationship between operational efficiency and debt cost, so as to increase the understanding of the mechanism of action between carbon information disclosure and debt cost. Stepwise regression method and Bootstrap statistical method were used to test. The results show that the higher the operational efficiency, the lower the debt cost; the carbon information disclosure of enterprises in low-carbon industries has a significant partial mediating effect on the relationship between operational efficiency and debt cost while that of carbon-intensive industries is not significant. It verifies that the operating efficiency of low-carbon industry can affect the cost of debt through carbon information disclosure, and finds a significant correlation between carbon information disclosure and operating efficiency. This study broadens ways for enterprises in low-carbon industries to reduce debt costs, highlights the role of operational efficiency in various industries, and reveals favorable evidence in the positive value of carbon disclosure in low-carbon industries which in essence can better reflect the enthusiasm of enterprises in their own financing or the restrictive channels of enterprise carbon performance evaluation. This has implications for the research on how to promote the link between carbon information disclosure and debt cost of enterprises in high-carbon industries, which will help enterprises in the future to make carbon information transparency or voluntarily disclose carbon information. It is of great significance for regional and industrial enterprises to choose the disclosure system of voluntary or mandatory carbon information disclosure.

НЕФИНАНСОВАЯ ОТЧЕТНОСТЬ ЭКОНОМИЧЕСКИХ СУБЪЕКТОВ (НА ПРИМЕРЕ ОТЧЕТНОСТИ ОБ УСТОЙЧИВОМ РАЗВИТИИ ПАО «ФОСАГРО»)

The global problems of our time have an extremely important impact on the financial performance of companies. In this connection, the role of non-financial reporting is growing, and the activities of companies in the field of sustainable development are given increasing influence. Stakeholders are interested in the presence of non-financial reporting in the economic entity, since this factor is directly related to the successful operation of the company in the long term. The growing adoption of voluntary corporate accounting can be seen as an expression of a symbiotic transformation of traditional accounting that focuses on ways to expand existing practices and/or obtain new forms of reporting and accounting. The article considers the non-financial reporting of one of the most socially responsible companies - PJSC PhosAgro.

Voluntary corporate social responsibility reporting and assurance practices among United Nations Global Compact member companies

Voluntary corporate social responsibility reporting and assurance practices among United Nations Global Compact member companies

Managerial Extraversion and Corporate Voluntary Disclosure

Managerial Extraversion and Corporate Voluntary Disclosure

Greenwashing and public demand for government regulation

AbstractEnvironmental governance in many high-income democracies relies to some extent on self-regulation by the private sector. Yet, this policy mode is contested and proponents of top-down government regulation argue that voluntary corporate sustainability commitments remain shallow and rarely are more than greenwashing. I assess to what extent firms’ business conduct is subject to societal checks and balances, in particular, whether public support for regulation constitutes a control mechanism of corporate contributions to environmental goods. I rely on an original survey experiment (N = 2112) conducted with a representative sample of the Swiss voting population. The analysis shows that accusing firms of greenwashing reduces both citizens’ perceived effectiveness of self-regulation and perceived synergy of corporate profits and environmental protection. However, this attitudinal shift only translates into modest updates in respondents’ policy preferences. As a result, short-run shifts in public support for regulation are an unlikely societal control mechanism of business conduct.

Does it pay to be science‐based green? The impact of science‐based emission‐reduction targets on corporate financial performance

AbstractThe number of companies with highly ambitious carbon emission targets is increasing rapidly. So‐called science‐based emission‐reduction targets (SBTs) are aligned with the aim of the Paris Climate Agreement to limit global warming to below 2°C and preferably to 1.5°C. These voluntary corporate emission targets are substantially more challenging than companies’ prevailing reduction objectives, because climate science guides the target setting. By 2021, more than 2200 companies had publicly engaged in SBTs, covering more than a third of the global market capitalization. The number of participating firms has essentially doubled every year since the first SBTs in 2015. Despite this increased empirical relevance, the impact of SBTs on firm outcomes remains unclear. Notably, their effect on corporate financial performance (CFP) is unknown. The present study addresses this research gap by empirically examining the relationship between corporate carbon emission performance (CCP) and CFP of firms with SBTs from 2015 to 2020. The cross‐country panel comprises 2014 observations of 465 firms. Our findings indicate a positive association between CCP and CFP for firms engaging in SBTs, implying a positive relation between decarbonization efforts and financial results. We thereby advance research on the important question of when it pays to be green. On a practical level, we provide transparency on the effects of SBTs for managers and climate‐change advocates.

Does a Government Mandate Crowd Out Voluntary Corporate Social Responsibility? Evidence from India

ABSTRACTThis study investigates the implementation of a Government of India mandate that requires firms to spend at least 2% of their profits on corporate social responsibility (CSR). The results show that qualifying firms that voluntarily engaged in CSR before the mandate reduce their CSR spending afterward. Despite increasing advertisement expenditure likely to offset the lost signaling value of voluntary CSR, stock prices and operating performance of former voluntary CSR spenders who qualify under the law decline. Our results suggest that regulatory intervention in CSR can both diminish its signaling value and lead to a reduction in voluntary CSR spending.

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.

The Extent of Occupational Health Hazard Impact on Workers: Documentary Evidence from National Occupational Disease Statistics and Selected South African Companies’ Voluntary Corporate Social Responsibility Disclosures

This paper explores the potential of Corporate Social Responsibility disclosures in providing alternative information on the extent of occupational health hazard impact on workers, by selected South African companies operating within the manufacturing and utilities sectors amidst an absent national occupational disease surveillance system. An online internet search was used to retrieve publicly available national occupational disease statistics published between 2001 and 2020, and Corporate Social Responsibility reports of selected South African case companies, published between 2015 and 2020. Content analysis was used to analyse the retrieved documents for both descriptive and numeric data. The collection and reporting of occupational disease data in South Africa is inconsistent. Corporate Social Responsibility disclosures related to occupational health metrics vary between companies. Occupational disease incidence was the least reported of the social aspects in Corporate Social Responsibility disclosures, and/or were reported as a single statistic or combined into occupational safety incidence rates in some instances, obfuscating the true extent of the impact caused by occupational health hazards on workers. Furthermore, noise-induced hearing loss remains the most prevalently reported occupational disease, in general. Corporate Social Responsibility reports point to occupational health hazards requiring regulatory intervention, whilst also providing an alternative information source for occupational disease statistics.

A critical reflection on voluntary corporate non-financial and sustainability reporting and disclosure: lessons learnt from two case studies on integrated reporting

PurposeThis study aims to provide a critical assessment of developments in the field of voluntary corporate non-financial and sustainability reporting and disclosure (VRD). The assessment is grounded in the empirical material of a three-year research project on integrated reporting (IR).Design/methodology/approachAlvesson and Deetz’s (2021) critical management framework structures the arguments in this paper. By investigating local phenomena and the extant literature, the authors glean insights that they later critique, drawing on the empirical evidence collected during the research project. Transformative redefinitions are then proposed that point to future opportunities for research on voluntary organisational disclosures.FindingsThe authors argue that the mainstream approaches to VRD, namely, incremental information and legitimacy theories, present shortcomings in addressing why and how organisations voluntarily disclose information. First, the authors find that companies adopting the International IR Council’s (IIRC, 2021) IR framework tend to comply with the framework only in an informal, rather than a substantial way. Second, the authors find that, at times, organisations serendipitously chance upon VRD practices such as IR instead of rationally recognising the potential ability of such practices to provide useful information for decision-making by investors. Also, powerful groups in organisations may use VRD practices to establish, maintain or restore power balances in their favour.Research limitations/implicationsThe paper’s limitations stem directly from its aim to be a critical reflection. Even when grounded on empirics, a reflection is mainly a subjective effort. Therefore, different researchers could come to different conclusions and offer different lessons from the two case studies.Practical implicationsThe different rationales the authors found for VRD should make a case for reporting institutions to tone down any investor-centric rhetoric in favour of more substantial disclosures. The findings imply that reporting organisations should approach the different frameworks with a critical eye and read between the lines of these frameworks to determine whether the purported normative arguments are achievable practice.Originality/valueThe authors reflect on timely and relevant issues linked to recent developments in the VRD landscape. Further, the authors offer possible ways forward for critical research that may rely on different methodological choices, such as interventionist and post-structuralist research.

To delegate or not to delegate? On the quality of voluntary corporate financial disclosure

To delegate or not to delegate? On the quality of voluntary corporate financial disclosure

An international empirical study of greenwashing and voluntary carbon disclosure

Voluntary corporate environmental disclosure has increased significantly in the last decade. However, the increase in environmental disclosure has also been accompanied by the social questioning of its veracity. Previous studies have mainly focused on the determinant factors behind corporate decisions to disclose environmental data, with only limited consideration of both carbon performance and the veracity of the information disclosed. Based on an international sample of firms from 12 countries, this paper analyzes the impact of regulative pressures related to climate change on the likelihood of companies engaging in greenwashing. The results show that the number of regulations related to climate change negatively influences the propensity of firms to engage in greenwashing. Furthermore, firms in countries with stringent climate-related regulations are less likely to participate in greenwashing practices. This paper adds to the existing literature concerning greenwashing by demonstrating that institutional theory can deliver further insights into the explanation of corporate greenwashing behavior. This is the first study to incorporate international climate-related regulations into the analysis of corporate greenwashing. It also provides a new method for identifying greenwashing firms, based on their carbon performance and disclosure.

Inter-Firm Transfer of Environmental Disclosure in Global Supply Chains

This study investigates the inter-firm transfer of environmental disclosure, a voluntary corporate sustainable practice that improves transparency in global supply chains. Building on the liability of foreignness and organizational learning frameworks, we propose that the strength of the association between the multinational enterprise’s (MNE’s), i.e. buyer’s, disclosure and its foreign supplier’s environmental disclosures is systematically weakened by the cultural, administrative, geographic, and economic distances between the home countries of the firms involved, as these cross-country distances hamper the ability of buyers to efficiently share knowledge and to credibly lead by example. We also postulate that the buyer’s prior supply chain experience in the supplier’s country strengthens the association between buyer’s disclosure and supplier’s disclosure, because previous experience helps buyers to improve their ability to share their expertise and leverage their credibility. By assembling a unique panel dataset of 17,540 cross-border buyer-supplier relationships gathered from Bloomberg databases, we find evidence for the influence of different forms of cross-country distances and the buyer’s prior supply chain experience on the association between the environmental disclosures of buyers and those of their foreign suppliers. Our study contributes to literatures on corporate sustainability, international business, and supply chain management by extending the liability of foreignness concept to global supply chains, demonstrating the important role of supply chains in the inter-firm transfer of corporate sustainability practices.

Capital market liberalisation and voluntary corporate social responsibility disclosure: Evidence from a quasi‐natural experiment in China

AbstractThis paper investigates the impact of the Shanghai–Hong Kong Stock Connect (SHSC) scheme on voluntary corporate social responsibility (CSR) disclosure in China. Using a difference‐in‐differences (DiD) design, we find that companies that participate in the SHSC scheme are more inclined to voluntarily issue CSR reports. This effect is more pronounced for companies that have limited access to international markets and those with weak corporate governance. Additional analyses show that SHSC‐connected firms also produce higher quality CSR reports and achieve a better CSR performance. Our findings imply that capital market liberalisation promotes voluntary corporate disclosure for investors.

Nonfinancial Corporate Social Responsibility Reporting and Firm Value: International Evidence on the Role of Financial Analysts

Using a large international sample of 24,293 observations from 3,991 unique firms in 56 countries, we examine the role of financial analysts in the relationship between voluntary corporate social responsibility (CSR) reporting and firm value. We find that after controlling for firms’ CSR performance ratings and other factors, voluntary CSR reporting increases firm value in countries worldwide, and analysts strengthen the positive relationship between CSR reporting and firm value. More importantly, our results show that the positive role of analysts in the relationship between CSR reporting and firm value varies with country-level institutional characteristics, such as the level of investor protection, the development of capital markets and the analyst profession, and stakeholder orientation. Furthermore, the positive role of financial analysts varies according to CSR reporting characteristics, including CSR reporting assurance, choice of assurer, CSR reporting coverage, CSR reporting quantity, and length of CSR report. We also find that financial analysts can strengthen the positive association between CSR reporting and firm value for CSR disclosures published in all types of media (standalone, annual report-based, and web-based CSR disclosures). Overall, our results present global evidence that shows the important role of financial analysts in improving the valuation implications of voluntary CSR reporting.

Do Level of Audit Committee Independence and Types of Financial Expertise Affect Corporate Voluntary Disclosure: Evidence for an Emerging Economy

The aim of this study is report on the level of audit committee (AC) independence and different types of financial expertise and to empirically examine the effect of AC independence level and different types of AC financial expertise on corporate voluntary disclosure of Malaysian listed firms. Using multiple regression analysis on data drawn from annual reports of top 146 listed firms, the findings reveal that proportion of independent directors on audit committee, and totally independent audit committee members can lead to significantly a higher level of voluntary disclosure. Further, members with accounting expertise of AC are significantly associated with corporate voluntary disclosure. The findings of this study may be of interest to policy makers, regulators, shareholders and management as they could use them to understand and assess AC effectiveness and hence enhance the monitoring role of AC.

From Responsibility to Requirement: COVID, Cars, and the Future of Corporate Social Responsibility in Canada

The COVID-19 pandemic has caused significant impacts to the automotive manufacturing industry. Despite substantial financial uncertainty, disruptions to supply chains, and shutdowns of manufacturing operations, automotive firms supported crisis response efforts throughout the course of the pandemic. Drawing on interviews with all the consumer automotive manufacturing companies in Canada (Ford, General Motors, Honda, Stellantis, and Toyota) as well as the two largest global automotive parts suppliers operating in Canada (Linamar and Magna), we investigated whether voluntary corporate responses to COVID-19 will shape long-term corporate social responsibility programs or simply constitute one-off crisis management actions. Ultimately, we argue that while Canada’s pandemic response efforts have benefitted from the voluntary involvement of automotive manufacturing companies, the limited coordination between stakeholders underscores the need for greater public sector oversight of the relationship between society and the private sector. To ensure preparedness for meeting new challenges, such as climate change, we call for the era of voluntary corporate social responsibility programs to yield to a period of corporate social requirements.

Do voluntary corporate activities lead to reporting regulation? evidence from corporate social responsibility

ABSTRACT Governments and regulators often introduce reporting standards to encourage desirable corporate activities through increasing information quality. Firms that voluntarily take socially desirable activities directly benefit from these standards by being better able to distinguish them against rivals in the product market or with respect to investors. Using a cross-country panel dataset, we find that, at an annual frequency, Corporate Social Responsibility (CSR) reports increase the prevalence of voluntary CSR reporting standards, but little evidence that the converse is true. Thus, at least in the short-run, reporting standards act as an ex-post certification for firms with high CSR activity rather than as an ex-ante incentive for corporate behaviour.

Product Market Competition and Voluntary Corporate Social Responsibility Disclosures†

ABSTRACTThis study examines whether and how firms' voluntary forward‐looking nonfinancial disclosure, specifically their corporate social responsibility (CSR) disclosure, is associated with the intensity of product market competition (PMC). Despite the importance of the proprietary cost argument in explaining corporate disclosure incentives, there is little empirical evidence of the relationship between firms' proprietary cost concerns and their voluntary nonfinancial disclosure decisions. Using a reduction in industry‐level import tariffs as an exogenous shock to competition intensity, we find that the likelihood, frequency, and length of stand‐alone CSR reports decrease in response to heightened PMC. We also find that higher PMC intensity is associated with a reduced likelihood of CSR disclosure with external assurance, CSR disclosure in accordance with the Global Reporting Initiative guidelines, and CSR disclosure integrated with financial statements. Our results are robust to multiple alternative measures of PMC—namely, the level of nonprice competition, product similarity, and managers' perceptions of competition. Further analysis suggests that firms facing intense competition tend to commit more resources to advertising activities after reducing their CSR disclosure, presumably to mitigate the effect of this reduction. Overall, our findings suggest that proprietary cost concerns reduce firms' incentive to report their competition‐sensitive CSR activities.

Towards the Sustainability Enhancement: Identification of Impediments on Integrated Reporting

Integrated Reporting is an emerging corporate reporting model amongst the other voluntary corporate reporting practices. However, the impediments may hinder the adoption of integrated reporting practices, and it may be affected by organizational sustainability. Hence, this study aims to examine impediments that affect the adoption of integrated reporting practice and the impact of the adoption or non-adoption of integrated reporting on organizational sustainability. The study adopted a qualitative research approach. Based on the judgmental sampling method, the data was collected through 15 semi-structured interviews from the responsible officers of integrated reporting in public listed companies in Sri Lanka. Data from interviews was analysed using the directed content analysis. The results showed that impediments to integrated reporting practice have occurred through the international integrated reporting framework, external factors, and organizational factors. Furthermore, IR practices’ adoption reinforces the identification of sustainability issues and strengthens the integration of sustainability issues into strategies. These findings contribute to the literature on impediments of integrated reporting and organizational sustainability in the context of developing countries. These findings could be helpful to professional accounting bodies, regulatory bodies, and firms that need to mitigate the impediments to integrated reporting and enhance organizational sustainability. This paper adds to the limited available literature on the impediments of integrated reporting for the emerging economy. Moreover, this study is the first to reveal the impact of adoption/non-adoption of integrated reporting practices on organizational sustainability.