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CSR Rating Agencies: What is Their Global Impact?

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Abstract

In the last two decades, there has been a pronounced growth of CSR rating agencies that assess corporations based on their social and environmental performance. This article investigates the impact of CSR ratings on the behavior of individual corporations. To what extent do corporations adjust their behavior based on how they rank? Our primary finding is that being dropped from a CSR ranking appears to do little to encourage firms to acknowledge and address problems related to their social and environmental performance. Specific rankings appear not to have a widespread effect of influencing firms to acknowledge negative CSR events and publicly present plans and actions to address them. Whether firms are well or poorly ranked, they appear to focus on and publicly discuss their “positive” CSR activities. We discuss the wider significance of these results as well as the overall significance of CSR rankings for a global economy. Key wordscorporate behavior-corporate social performance-corporate social responsibility-CSR ratings-rating agencies-SRI-sustainability

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... Apesar dos esforços empreendidos pelas empresas quanto à divulgação de informações sobre sua atenção aos aspectos ambientais, sociais e de governança, a crescente e forte demanda informacional dos diferentes stakeholders suscitou o surgimento de avaliações externas de ASG de empresas por parte de agências de avaliação. Essas agências disponibilizam avaliação externa de ASG das empresas levando em conta os diferentes aspectos relacionados às perspectivas ambientais, sociais e de governança, visando mensurar o desempenho ASG de diferentes organizações (Scalet & Kelly, 2010). ...
... A avaliação realizada por esse tipo de agência tem a vantagem de ser uma avaliação externa que, a priori, é esperada que seja imparcial e baseada em metodologia adequada e segura, levando em conta todas as facetas do ASG (Freitas & Crisóstomo, 2021). Assim, presume-se que seja uma avaliação que melhor informa aos stakeholders a respeito do nível de preocupação da empresa com práticas ambientais, sociais e de governança, como também pode beneficiar as empresas com a divulgação do avanço dos seus atributos ambientais, sociais e de governança, sinalizando seu interesse com questões ASG que podem contribuir para mitigação de riscos e criação de valor (Scalet & Kelly, 2010). Neste contexto, diferentes métricas e índices de ASG têm sido propostos (Freitas & Crisóstomo, 2021). ...
... Empresas que têm suas práticas voltadas aos aspectos ASG, tendem a reduzir seus riscos, uma vez que têm uma maior preocupação com o relacionamento com seus diversos stakeholders e com o meio ambiente, reduzindo a possibilidade de comportamento oportunista da empresa e, assim, transmitindo para os investidores a ideia de que a empresa tem uma conduta ética ao estabelecer sua conduta e políticas estratégicas (Scalet & Kelly, 2010;Yu & Zhao, 2015). Esta sinalização de um comportamento ético parece ser, de fato, bem-sucedida no mercado brasileiro de acordo com os achados desta pesquisa que está em sintonia com aqueles de outros mercados (Chen & Xie, 2022;Li et al., 2018;Yoon et al., 2018;Zhao et al., 2018) e, vale mencionar, no sentido das proposições da Teoria Stakeholder. ...
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A preocupação das empresas com as questões Ambientais, Sociais e de Governança (ASG) têm-se tornado relevante para a sociedade. Em função disto, parece que empresas têm passado a dar atenção a estas ações tentando incorporá-las à sua estratégia. Tem sido sugerido que um melhor padrão de ASG da empresa, além de contribuir para aprimorar a gestão, é capaz de gerar sensibilidade favorável dos stakeholders da empresa, e, assim, favorecer seu desempenho. Este trabalho tem como objetivo investigar a influência do engajamento em práticas ASG sobre o desempenho das empresas brasileiras. Para tanto, foi usada uma amostra de 685 observações anuais de 85 empresas listadas na B3 que são avaliadas pelo CSRhub Consensus ESG Ratings. Como proxy para ASG, foi utilizada a avaliação do CSRhub e a presença no ISE. Como proxy para desempenho, adotou-se o desempenho financeiro (ROA e ROE) e o valor de mercado da empresa foi medido pelo Q de Tobin. Estimação de modelos forneceram resultados que indicam haver, no Brasil, uma melhoria de desempenho da empresa que adota mais elevado padrão de ASG. Os resultados são robustos às duas proxies para ASG e às três proxies para desempenho da empresa. Estes achados indicam que, de fato, ASG parece ser capaz de melhorar a gestão da empresa e, em paralelo, de gerar uma sensibilidade positiva de seus stakeholders, o que favorece o ciclo virtuoso entre preocupação da empresa com seus stakeholders e seu desempenho.
... First, positive ESG ratings can lead to various capital market benefits for highly-rated firms, including enhanced competitive advantages (Porter and Kramer 2006;Scalet and Kelly 2010;Flammer 2015), increased social capital and trust (Lins et al. 2017), attracting new institutional investors (Dyck et al. 2019), improved perceived credibility in voluntary disclosure (Dhaliwal et al. 2011), and ultimately, a better public image and financial performance (Grappi et al. 2013;Radhakrishnan et al. 2018). Building on these studies, we posit that firms covered by ESG rating agencies, compared to those without such coverage, have stronger incentives to cultivate a positive ESG reputation by avoiding ESG-related misconduct, thereby reducing the risk of regulatory enforcement and reputational damage. ...
... 8 Consistent with this view, Christensen (2016, page 378) argues that "what gets measured gets managed." ESG rating agencies tends to attract considerable media interest and garners a greater level of public attention due to the growing interest of the public in firms' ESG performance (Scalet and Kelly 2010). As a result, managers are likely to be concerned about committing corporate misconduct, especially when that misconduct is related to ESG dimensions, and the firms are covered by ESG rating agencies. ...
... When communicating about CSR activities, many companies follow the same strategy. Various studies show that companies publish mainly positive sustainability information [5][6][7]. Hereby, they attempt to distract the recipients of the information from their irresponsible behavior [8]. However, there could be a risk in communicating only positive sustainability information [9]. ...
... When communicating about CSR activities, many companies publish mainly positive information [5][6][7]. On the one hand, the disclosure of exclusively positive information would not be surprising. Therefore, the observer's expectations are met [27]. ...
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When communicating their CSR (Corporate Social Responsibility) activities many companies predominantly release positive information. However, relying solely on positive information holds potential risks. Brands are consequently confronted with the dilemma of whether to exclusively disclose positive details about their environmental CSR activities (i.e., one-sided messages) or opt for voluntary disclosure of positive and negative information (i.e., two-sided messages). Existing literature distinguishes moderately and highly relevant types of negative information. However, prior research has predominantly overlooked the investigation of highly relevant negative CSR information. Therefore, our primary objective is to explore the impact of two-sided messages encompassing highly relevant negative CSR information in comparison to one-sided messages. We conducted four online experiments in two countries with different brands (study 1 (Germany, Mercedes-Benz, n = 457); study 2 (Germany, Porsche, n = 431); study 3 (USA, Mercedes-Benz, n = 468) and study 4 (USA, Tesla, n = 465)). The results reveal that two-sided messages with the disclosure of highly relevant negative CSR information lead to negative effects in comparison to one-sided messages with only positive information. Consequently, brands should exercise caution in communicating highly relevant negative CSR aspects. Our findings offer notable theoretical insights and practical implications.
... Adam & Shavit (2008) demonstrated that due to the limited membership lists of sustainability indices, these indices fail to provide sufficient incentives for most excluded companies to invest in CSR. Subsequently, Scalet & Kelly (2009) found that most companies have made minimal efforts to publicly acknowledge or address the negative factors that contributed to their exclusion from prominent CSR league tables. ( Clementino & Perkins, 2020) Using a large sample of U.S. companies, Chatterji and Tofel (2010) observed that firms receiving low environmental evaluation scores improved their performance (e.g., reducing company-wide toxic pollution) more effectively than their peers with higher initial scores. ...
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This study explores the integration of Environmental, Social, and Governance (ESG) principles into corporate practices, focusing on the methodologies used for their evaluation and the factors influencing their adoption. Through a qualitative and comparative analysis of European and Saudi Arabian contexts, the research examines how companies align their strategies with ESG requirements in diverse regulatory and cultural environments. Data is drawn from established ESG rating agencies, corporate sustainability reports, and case studies, allowing for a thorough investigation of internal and external evaluation processes and their implications for ESG scores. The study identifies key challenges in ESG implementation, including ambiguities in definitions, resource disparities, sector-specific considerations, and resistance due to cost or unfavorable ratings. It also highlights the role of legal and regulatory frameworks, such as the ESG Disclosure Guidelines introduced by the Saudi Capital Market Authority and global standards like the Global Reporting Initiative (GRI), in shaping corporate ESG practices. Recommendations emphasize the need for standardized evaluation criteria, targeted support for smaller enterprises, and stronger legal frameworks to promote transparency and compliance. The findings contribute to a deeper understanding of ESG dynamics and provide actionable insights for advancing corporate sustainability on a global scale.
... In addition, some investors are willing to pay a premium for stocks of sustainable businesses (Dhaliwal et al., 2011;Matsumura et al., 2014;Plumlee et al., 2015;Richardson & Welker, 2001). However, investors, and particularly private investors, largely use third-party ratings to identify sustainable businesses, although these ratings are susceptible to greenwashing (Scalet & Kelly, 2010;Windolph, 2011). This is why the Taxonomy Regulation introduces government-backed, mandatory, and standardized metrics, which present a unique measure of a company's sustainability (Hummel & Bauernhofer, 2024;Moneva et al., 2023). ...
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The European Union's Taxonomy Regulation establishes standardized sustainability metrics and makes disclosure mandatory for many companies, aiming to channel investment into sustainable business. These metrics compete with voluntary third‐party sustainability ratings in influencing investors. Using an online vignette study, we examine how green revenue, as an exemplary standardized metric, interacts with a traditional third‐party rating to influence investors. We find that green revenue influences investors, but sustainability ratings have an incremental effect, both if green revenue is low and if it is high. Hence, sustainability ratings remain relevant for companies and investors. Our findings contribute to the literature on real effects of reporting regulation and have important implications for mangers and regulators.
... ESG analyses are based on sustainability assessments and are produced by rating agencies to assess the organization's performance. This evaluation results in ratings, thus forming ESG ratings, which aim to provide useful information to stakeholders (Scalet and Kelly, 2010). ...
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The literature highlights an increase in interest in information on sustainability and CSR policies and highlights an increase in the number of sustainable and responsible investments. Although there are already studies that analyse the impact of ESG on Stakeholders, but more work must be carried out in this area.
... Cho et al. (2015) noted that contemporary sustainability reporting often fails to provide information relevant to company valuation, primarily driven by concerns regarding corporate legitimacy. Scalet and Kelly (2010) observed that companies tend to highlight positive initiatives while omitting negative events. Some authors found that most companies either do not explain how SDGs are implemented or fail to focus on key SDGs, instead using them to label various existing activities. ...
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Purpose Despite the rising trend of sustainable developmental goals (SDGs) incorporation into sustainability reporting, there remains a gap in understanding the role of SDG disclosure (SDGD) in the relationship between sustainability and financial performance. Thus, this study aims to investigate the relationship between sustainability performance and the level of SDGD; the relationship between sustainability performance and financial performance; and the link between the level of SDGD and financial performance. Design/methodology/approach Conducted in Italy, the analysis involves manual collection of sustainability reports from company websites for the fiscal years from 2019 to 2022, followed by textual analysis to identify SDG-related content disclosed in nonfinancial reports. Financial and nonfinancial data from Orbis and LSEG databases are used for regression analysis on panel data. Findings Findings align with existing literature, emphasizing the partial mediator role played by the level of SDGD in the relationship between sustainability performance and financial performance, measured by return on equity. In addition, the study suggests that there is a positive relationship between sustainability performance and the level of SDGD and a positive relationship between the level of SDGD and financial performance. Originality/value This study contributes to a deeper understanding of how SDG disclosures function within the broader nexus of sustainability performance and financial outcomes. Findings from this study provide empirical support for the argument that SDGD is not merely a regulatory compliance tool but also a strategic asset that can enhance a firm’s financial performance.
... The publication of ESG scores for companies provides an opportunity for companies to share their sustainability practices with their stakeholders and the public, while also contributing to the investment of individual and institutional investors in company shares (Scalet and Kelly, 2010). It has also been found that companies with high ESG scores in sustainability indices have lower risk levels and are more resilient than other companies during periods of economic instability (Ferriani and Natoli, 2020). ...
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This study aims to analyze the relationship between environment, social and governance (ESG) scores and firm performance of the companies in the BIST Sustainability Index. The individual environment, social and governance scores, and the firm performance dataset of the 62 companies in the BIST Sustainability Index for the year 2022 are analyzed by applying multiple regression analysis. Two models are formed to analyze this relationship by using net profit margin as the indicator of profitability and earning per share as the indicator of firm value of the representation of firm performance. The results show that there is a positive relationship between environment score and profitability, whereas there is a negative relationship between social score and profitability. Additionally, it is found that there is a positive relationship between social score and firm value.
... The ESG rating disagreements can be caused by various understandings or differences in ESG performance composition, measurements, weight, and scope of information. This can also be attributed to data inconsistency, peer group selection, or the divergence of data inference and marking (Berg et al., 2022;Kotsantonis & Serafeim, 2019;Scalet & Kelly, 2010). However, this disagreement involves varied interpretations of different information sets (Cookson & Niessner, 2020). ...
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The ESG ratings have been focused in response to the requirements for green development. However, the uncertainty created by ESG disagreements has caused market participants to question their reliability. This study empirically examines how ESG disagreements affect stock price crash risk based on data from Shanghai and Shenzhen A-share listed companies. We find that ESG disagreement significantly reduces stock price crash risk and that this relationship is largely driven by environmental disagreement. The mechanism analysis suggests that ESG disagreement increases media attention, subsequently leading to a reduction in stock price crash risk. Additional analysis shows that the driving effect of environmental disagreement is more significant in non-heavy-polluting industries. Positive environmental protection policies help reduce stock price crash risk.
... U podstaw budowania przejrzystości leży założenie, że wartość przedsiębiorstwa jest wypadkową jej finansowych i niefinansowych komponentów, a nieuwzględnianie aspektów środowiskowych w działalności organizacji w długim okresie prowadzi do materializacji negatywnych efektów finansowych 31 . Częste jednak nadawanie priorytetu istotności finansowej w decyzjach publikacyjnych przedsiębiorstw generuje ryzyko wystąpienia takich zjawisk jak greenwashing czy window dressing strategy, będących wyrazem konformizmu i ulegania presji otoczenia 32 . Wobec prawdopodobieństwa materializacji powyższego ryzyka, jak również w związku z wynikami badań potwierdzającymi praktyczne wykorzystanie publikowanych informacji w decyzjach inwestycyjnych 33 , liczne przedsięwzięcia naukowe skupiły się na wyjaśnianiu zasadności standaryzacji działań publikacyjnych. ...
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... CSR measurements usually focus on measuring the impact of business on its natural and social environment (Scalet & Kelly, 2010). On the other hand, CSV measurement should focus on CSV efforts and impacts, capturing business strategy and not only externalities generated by companies (Laudal, 2018). ...
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Creating shared value (CSV) is a strategic approach that links economic value creation with social and environmental contribution. Despite the popularity of the concept, a clear approach to the construct and its measurement needs further research. This study analyzes and proposes the factors that condition the development of social/environmental strategies by companies that influence shared value strategies and their effects on social, environmental, and economic benefits. The analysis of the literature complemented by a qualitative analysis has allowed us to justify the construct and its dimensions. We propose a conceptual model that considers the main dimensions of the concept and formulate, pending verification, a measurement instrument for CSV strategies.
... The above factors are the basis for investment decisions and drive the choice of investors in terms of which companies to finance through equity or debt. To improve the interpretability of ESG, specialised companies (including rating agencies) have started to provide measures and proxies for ESG behaviour, publishing ESG ratings or ESG scores that convey the level of sustainability of companies and the degree of accountability of these companies on ESG aspects [23,24]. ...
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Artificial intelligence methods, based on machine learning models, are rapidly changing financial services, and credit lending in particular, complementing traditional bank lending with platform lending. While financial technologies improve user experience and possibly lower costs, they may increase risks and, in particular, the model risks that derive from inaccurate credit rating assessments. In this paper, we will show how to reduce such model risks, using a S.A.F.E. statistical learning model, which improves: Sustainability, taking environmental, social and governance factors into account; Accuracy, building a model which maximises predictive accuracy; Fairness, merging ESG scores from different data providers, improving their representativeness; Explainability, clarifying the relative contribution of each ESG score to predictive accuracy.
... Management implications are the ability for the analyst to provide additional information on the impact of firms on the environment. In fact, according to previous research, managers tend to disclose only positive information (Scalet & Kelly, 2010). In this sense, sustainable development reports are not a guarantee of effective management practices of socio-environmental issues implemented by the company (Pizzi, 2018). ...
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... La relazione tra le tematiche e i cluster concettuali permettono di favorire una lettura completa della realtà europea. Le diverse tematiche possono essere collocate all'interno di un macrogruppo che, da un lato deve valutare la creazione di valore, e questo è possibile attraverso gli SDGs e indicatori di performance comuni, dall'altro valutare e mappare gli impatti sul contesto tenendo in considerazione elementi di CSR (Scalet & Kelly, 2010) anche attraverso la teoria del cambiamento (Brescia & Calandra, 2020;Esposito et al., 2021). Le tematiche inoltre possono essere distinte in buone pratiche e indicazioni o indicatori specifici volti a rappresentare la responsabilità sociale del turismo. ...
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Chapter
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199034, Российская Федерация, Санкт-Петербург, Университетская наб., д. 7-9. Тел. +7 (985) 727-55-44. 7-9 Universitetskaya nab., St. Petersburg 199034, Russian Federation. Phone +7 (985) 727-55-44. Аннотация. Актуальность исследования об-условлена недостаточным знанием о ESG-по-вестке российских компаний, особенно тех, ко-торые оцениваются рейтинговыми агентствами как самые рискованные с точки зрения вклада в экологию. В статье рассматривается оценка ме-ждународными рейтинговыми агентствами ESG-трансформации российских нефтегазовых ком-паний. С одной стороны, оценка рейтинговых агентств играет важную роль посредника между компаниями и инвесторами. С другой стороны, такая оценка является инструментом провер-ки правильности выбранного курса со стороны самих компаний, инструментом бенчмаркинга. В связи с высокой концентрацией производства в отрасли выборка включает только шесть рос-сийских компаний. Четыре из шести компаний имеют среднеотраслевые ESG-рейтинги по срав-нению с крупнейшими международными компа-ниями. Были проанализированы уровни корре-ляции значений ESG-рейтингов для двадцати крупнейших международных компаний нефтега-зовой отрасли, которые показали высокую сте-пень связи. Существенными положительными факторами в определении места в рейтингах иг-рают добровольное участие компании в анкети-ровании, подготовка отчетности в соответствии с GRI-стандартами и качество системы управ-ления рисками. Включение в международные санкционные списки негативно сказывается на ESG-рейтингах компании. Abstract. The relevance of the research is due to insufficient knowledge of ESG agenda of Russian companies, especially those that are rated of the highest risk to the environment. The paper provides an assessment of the ESG transformation of Russian oil and gas companies given by the major international rating companies. On one hand, rating agencies play an important role as an intermediary between companies and investors. On the other hand, such assessment is a tool for validation of the chosen course by the companies themselves, in other words a benchmarking tool. Due to the high concentration of production in the Russian oil and gas industry the sample includes only six companies. Four out of six companies have average ESG ratings in comparison with the largest international companies in the same industry. The author has analyzed the correlation levels of ESG ratings for the twenty largest international oil and gas companies, which showed a high degree of connection. Voluntary participation in the assessment process of the rating agencies, preparation of financial reports in accordance with GRI standards and quality of the risk management system play important roles in the placement of companies in ESG ranking. Inclusion of companies in the international sanctions list negatively affects their ESG ratings. Ключевые слова: устойчивое развитие; ESG; рейтинговые агентства; нефтяная отрасль; ESG-инвестиции; нефинансовая отчетность; капита-лизация; санкции.
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This paper interprets managerial perceptions of corporate social disclosure (CSD) presence and absence through the lens of organisational legitimacy theory. Evidence from in-depth semi-structured interviews with 29 senior managers in 27 Irish public limited companies is presented. It is one of the few studies to use interview-based evidence in attempts to understand the motivations for CSD and responds to calls for more empirical work of this nature in the CSD literature. The paper extends and interrogates the use of legitimacy theory to infer motivations for CSD by presenting a narrative which contemplates conceptions of legitimacy as both a process and a state while endeavouring to understand the motives for CSD. In this manner, the paper furnishes a more complex, complete, and critical story of the motives for CSD. The perspectives suggest that while CSD may occasionally form part of a legitimacy process, ultimately this is misguided as it is widely perceived as being incapable of supporting the achievement of a legitimacy state. Consequently, for many managers, the continued practice of CSD is deemed somewhat perplexing. The paper reflects on the implications of these findings for future CSD research and practice.
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This paper serves as an introduction to this special issue of Accounting, Auditing & Accountability Journal; an issue which embraces themes associated with social and environmental reporting (SAR) and its role in maintaining or creating organisational legitimacy. In an effort to place this research in context the paper begins by making reference to contemporary trends occurring in social and environmental accounting research generally, and this is then followed by an overview of some of the many research questions which are currently being addressed in the area. Understanding motivations for disclosure is shown to be one of the issues attracting considerable research attention, and the desire to legitimise an organisation’s operations is in turn shown to be one of the many possible motivations. The role of legitimacy theory in explaining managers’ decisions is then discussed and it is emphasised that legitimacy theory, as it is currently used, must still be considered to be a relatively under-developed theory of managerial behaviour. Nevertheless, it is argued that the theory provides useful insights. Finally, the paper indicates how the other papers in this issue of AAAJ contribute to the ongoing development of legitimacy theory in SAR research.
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We suggest that financial analysts have an incentive to follow the stocks of socially responsible companies, because such stocks meet the growing demands and psychology of the investment community, who want to combine the usual investment goals with social responsibility. Socially responsible investors prefer to hold stocks of companies they perceive as socially responsible or of high quality. Financial analysts then help brokers' marketing efforts by supplying investors with more analysis for stocks of socially responsible or high-quality companies. Using scores from Fortune surveys on perceptions of community and environmental responsibility as a measure of social responsibility and Fortune survey measures of quality as a measure of company quality, we find evidence that stocks of socially responsible and high-quality companies are indeed followed by more financial analysts. The positive relationship among social responsibility, company quality, and analyst following remains significant even after controlling for the effects on analyst following of firm size, share price, the volatility of stock returns, and market-to-book value of equity.
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In this paper, we propose to replace "corporate social responsibility" with "company stakeholder responsibility." This is not just semantics, but a new interpretation of the very purpose of CSR. "Company" signals that all forms of value creation and trade and all businesses, from start-ups to large publicly held corporations, need to be involved. "Stakeholder" suggests that the main goal of CSR is to create value for key stakeholders and fulfill our responsibilities to them. And "Responsibility" implies that we cannot separate business from ethics. We will argue that taking a stakeholder approach to business is ideally suited to integrate business, ethics, and societal considerations. Stakeholder theory is about value creation and trade - it is a managerial theory about how business works. It asks both business and ethics questions about each stakeholder relationship.
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This article studies the idea of Corporate Social Performance (CSP) from a critical perspective using empirical elements derived from analysis of year 2000 ARESE data. ARESE is the French first mover social rating agency providing quantified data about the Social Performance of French companies. The paper starts out by reviewing leading CSP models and discussing problems inherent to the measurement of this construct before going on to present and analyse ARESE data - whose suitability for existing models will be discussed.
Chapter
Any serious attempt to research impacts of corporate sustainability performance on corporate financial performance has to follow a consistent and thorough research agenda. The research agenda is described in this article. The description may serve as blueprint for any research effort in the SRSI area that is geared towards creating value added, and not just towards serving value sets. If corporate sustainability orientation and performance can be shown to impact corporate financial performance, a gradual and persistent integration of SRSI research into mainstream investment analysis could evolve. But without any sound evidence, if not proof, that there is indeed a link between corporate sustainability performance and corporate financial performance SRSI research will not be able to serve the investment industry at large. The research and investment approach described in the article lists and addresses a set of recommendations for SRSI research on how to serve the investment industry at large.
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Social screening of investments calls not only for investment policy and criteria, but also for information about companies, their policies, practices and performance. The Global Reporting Initiative (GRI) and its June 2000 Sustainability Reporting Guidelines have the potential to significantly improve the usefulness and quality of information reported by companies about their environmental, social and economic impacts and performance. The GRI aims to develop a voluntary reporting framework that will elevate sustainability reporting practices to a level equivalent to that of financial reporting in rigour, comparability, auditability and general acceptance. This will be a welcome and efficient supplement to the questionnaires, interviews, press releases, media reports and other sources of information traditionally used for screening in investment decision making – social/ethical and mainstream. The Dow Jones Sustainability Group Index, the Jantzi Social Index and the Innovest EcoValue''21 analytical platform, together with the SRI community, are all likely to benefit from GRI-style sustainability reports. One of the GRI''s key challenges is to accommodate the broad variety of disclosure needs and expectations of a wide range of report users and company stakeholders. To maximize the usefulness of the GRI Guidelines, report users, including the SRI community, need to be engaged in the process of developing and refining the Guidelines over time. The GRI Guidelines are emerging as an important instrument in enabling companies to communicate with their stakeholders about performance and accountability beyond just the financial bottom line.
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This papers attempts to bridge business ethics to corporate social responsibility including the social and environmental dimensions. The objective of the paper is to suggest an improvement of the most commonly used corporate environmental management tool, the Life Cycle Assessment (LCA). The method includes two stages. First, more phases are added to the life-cycle of a product. Second, social criteria that measure the social performance of a product are introduced. An application of this “extended” LCA tool is given.
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This study compares the Internet (corporate web pages) and annual reports as media of social responsibility disclosure (SRD) and analyses what influences disclosure. It examines SRD on the Internet by Portuguese listed companies in 2004 and compares the Internet and 2003 annual reports as disclosure media. The results are interpreted through the lens of a multi-theoretical framework. According to the framework adopted, companies disclose social responsibility information to present a socially responsible image so that they can legitimise their behaviours to their stakeholder groups and influence the external perception of reputation. Results suggest that a theoretical framework combining legitimacy theory and a resource-based perspective provides an explanatory basis for SRD by Portuguese listed companies.
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The purpose of this investigation is to extend earlier research on the relationship between corporate social and financial performance. The unique contribution of the study is the empirical analysis of a sample of companies from the banking industry and the use of Community Reinvestment Act ratings as a social performance measure. The empirical analysis solidly supports the hypothesis that the link between social and financial performance is positive.
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The socially responsible investment industry (SRI) is slowly changing from a screening, avoidance paradigm to a comprehensive paradigm that seeks to affect corporate behavior. Credible rating systems are a key component of this sea change. Reliable and recognizable social and environmental metrics are critical to this progress. The Total Social Impact (TSI) rating approach is a new social metric scheme based on a comprehensive rating of stakeholder issues. This paper describes the evolution of SRI ratings and the role that TSI hopes to play in affecting business behavior by promoting principled business leadership.
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This paper explores the feasibility and desirability of Corporate Social Responsibility (CSR). We identify CSR with creation of public goods or curtailment of public bads. Using a model with profit-maximizing firms, the paper shows that there is a direct parallel between CSR and traditional models of private provision of public goods. Indeed, firms that use CSR will produce public goods at exactly the same level as predicted by the standard voluntary contribution equilibrium for public goods. We compare CSR with government provision and charitable provision, discussing when CSR by private for-profit firms could have a comparative advantage in dealing with public goods provision.
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Based upon an empirical study of CSR policy and practices across a number of multinational companies, we explore some of the underlying reasons why CSR reporting seems to have a low impact on business decision making and, through a validated framework linking CSR to business and social outcomes, we make recommendations for change.