Effect of Stakeholders’ Pressure on Transparency
of Sustainability Reports within the GRI Framework
Belen Fernandez-Feijoo •Silvia Romero •
Received: 23 September 2012 / Accepted: 10 May 2013 / Published online: 24 May 2013
ÓSpringer Science+Business Media Dordrecht 2013
Abstract Transparency is a quality of corporate social
responsibility communication that enhances the relation-
ship between the investors and the company. The objective
of this paper is to analyze if the transparency of the sus-
tainability reports is affected by the relationship of com-
panies in different industries with their stakeholders. If this
were the case, it would indicate that the pressure of sig-
niﬁcant stakeholders determines the required level of
transparency of the reports. We ﬁnd that the pressure of
some groups of stakeholders (customers, clients, employ-
ees, and environment) improves the quality of transparency
of the reports. We extend previous research by studying the
effect of stakeholder group pressure on transparency when
reporting sustainability. Our results show that transparency
is affected by ownership, along with size and global region.
Keywords Corporate social responsibility Global
Reporting Initiative Information system for sustainability
Stakeholders pressure Sustainability report
AS Assurance statement
CSR Corporate social responsibility
GRI Global reporting initiative
IA In accordance
SR Sustainability report
Corporate social responsibility (CSR) reporting is a com-
munication tool companies use to convey a transparent
image. It is also a tool available for managers to assess the
continuous improvement in non-ﬁnancial areas. Transpar-
ency is a concept linked in general to reporting, and in
particular to sustainability reports (SR) (Kaptein and Van
Tulder 2003). Organizations are continuously highlighting
the need of transparent reporting to stakeholders and to the
society in general (van Riel 2000). As part of the CSR
communication strategy, each company determines the
required level of transparency, which depends on the
pressure of speciﬁc stakeholders in the industry. For
example, oil companies were among the ﬁrst groups to
report on environmental issues, which labeled them as
cautious with the environment (Aerts and Cormier 2009;
Campbell 2003; Deegan and Gordon 1996).
Different perspectives have been used to study the
informativeness and transparency of SR. Among them, the
inﬂuence that industry has on CSR reporting has been
extensively approached (Fifka 2011). In most of the
reviewed studies the variable industry is used to identify
inter-sectoral differences, revealing higher CSR disclosures
in some industries over others (Sweeney and Coughlan
2008; Kolk and Perego 2010). In others, industry is used to
analyze the differences or analogies within a sector
(Campbell 2003; Morhardt 2010). Campbell (2006) high-
lights the effect of industry and its level of self-regulation
B. Fernandez-Feijoo S. Ruiz
Universidade de Vigo, Vigo, Spain
S. Romero (&)
Montclair State University, Montclair, NJ, USA
J Bus Ethics (2014) 122:53–63
on CSR reporting, and Amran and Haniffa (2011) propose
that the attitude towards CSR in a company will provoke a
mirror effect on other companies in the same industry.
Within the development of the stakeholder theory, Free-
man (1984) assesses the existence of a relationship between
ﬁrms and different groups besides the stockholders. He
posits that these stakeholders can almost always affect or be
affected by the actions of the ﬁrm. Furthermore, Carroll
(1991, 43) states ‘‘there is a natural ﬁt between the idea of
corporate social responsibility and an organization’s stake-
holders.’’ Hence, we can expect an effect on CSR due to the
strength and commitment of the main stakeholders in an
industry, and that is the purpose of this paper.
Our approach is novel due to the creation of four cate-
gories of industries based on the pressure of four main groups
of stakeholders (customers, employees, environment, and
investors), to study the relationship between these groups
and CSR transparency. Data were collected from the global
reporting initiative (GRI) database. The GRI is ‘‘a non-proﬁt
organization that promotes economic, environmental, and
social sustainability. GRI provides all companies and orga-
nizations with a comprehensive sustainability reporting
framework that is widely used around the world’’ (Global
reporting Initiative 2011). The information reported by
participating companies is accessible via the GRI website, in
a spreadsheet format. It includes companies in different
countries, with different sizes, and classiﬁed by industry. We
collected data from the whole set of companies in selected
countries located in different geographical areas and with
different cultural characteristics.
The paper is broken down into ﬁve sections after this
introduction. We start with the literature review, the pre-
sentation of our research hypotheses, the methodology, and
the results. The ﬁnal section covers the conclusions, the
research limitations and draws some lines for future
CSR Reporting and Transparency
Transparency is a key condition for CSR reporting (Global
reporting Initiative 2011; Kaptein and Van Tulder 2003;
Dubbink et al. 2008; Williams 2005), but, at the same time,
formal CSR reporting is a vehicle to improve transparency
(DeTienne and Lewis 2005; Quaak et al. 2007). In order to
develop a measure of CSR transparency, we focus our
literature review on previous research identifying charac-
teristics to qualify and quantify it. A summary of these
characteristics is presented in Table 1.
Among the literature and rules deﬁning transparency,
the GRI standards deﬁne several principles related to the
content of the report with the purpose of enhancing the
quality of the SR and its transparency. These principles are:
balance, comparability, accuracy, timeliness, clarity, and
reliability. Joseph (2012) highlights the importance of
having sustainability well-grounded not only on rules but
also on principles. These principles should recognize
transparency as a key feature. Williams (2005) deﬁnes
transparency using three properties: relevant, timely, and
reliable information. Dubbink et al. (2008) argue that
transparency enhances efﬁciency and innovation. They
identify three criteria for the evaluation of transparency
policies: efﬁciency (positively associated with quality of
information), freedom, and virtue. Only the ﬁrst of these
criteria is deeply analyzed in the paper, where the authors
identify procedural standards for measuring transparency in
Bushman et al. (2004) deﬁne transparency as the
availability of ﬁrm-speciﬁc information to those outside the
ﬁrm. They measure corporate transparency using three
components: corporate reporting, private information
acquisition and communication, and information dissemi-
nation. They disaggregate corporate transparency into two
factors: ﬁnancial transparency, understood as intensity and
timeliness of ﬁnancial disclosure, and governance trans-
parency, as intensity of governance disclosure. Using data
from several countries, the authors ﬁnd a correlation
between governance transparency and countries legal/
judicial regime, and between ﬁnancial transparency and
political economy. Bhat et al. (2006) use the measure
developed by Bushman et al. (2004) at a country level, and
conclude that governance transparency is signiﬁcantly
associated with analyst forecast accuracy, especially when
there is less ﬁnancial transparency and a weak level of legal
Looking at transparency representation, Dando and
Swift (2003) posit that increasing levels of disclosure per
se cannot be understood as more transparent reporting.
They argue that higher levels of transparency can be
associated with more conﬁdence on the organization’s
commitment to sustainability. This conﬁdence is achieved
though the existence of independent assurance rather than
increased level of disclosure. They ﬁnd that ‘‘responsive-
ness, learning, innovation, and performance improvement
are critical links between transparency and accountability’’
(2003, 199). They also point out the importance of devel-
oping standards to fulﬁll the need for transparent and
trustable information, coinciding with Christensen (2002).
Fombrun and Rindova (2000) observe communication with
stakeholders as the right way to achieve transparency.
Eccles et al. (2012) analyze the effect of sustainability of
corporate culture on the behavior and performance of ﬁrms.
They identify two groups of companies: those that have a
long time adoption of sustainability policy (high
54 B. Fernandez-Feijoo et al.
sustainability ﬁrms) and those that have not adopted such a
policy (low sustainability ﬁrms). Among other variables,
they measure transparency through the emphasis that
companies give to their non-ﬁnancial information com-
pared to the ﬁnancial information. This measure is calcu-
lated using the Bloomberg ESG disclosure score, Thomson
Reuters ESG disclosure score, non-ﬁnancial versus Finan-
cial keywords ratio, if sustainability report covers or not
global activities, Social data integrated in ﬁnancial reports,
and environmental data integrated in ﬁnancial reports.
They conclude that companies with a long time adoption of
sustainability policy are more transparent than those with
no sustainability policy.
The literature reviewed shows the inexistence of an
objective and unique way to measure transparency, but
reliability, communication intensity and timeliness are the
most often used.
Stakeholder Theory and CSR Reporting
Freeman (1984) popularized the concept of stakeholder to
introduce a new paradigm in strategic management. His
deﬁnition of stakeholder focuses on the inter relationship
between the organization and different groups, like cus-
tomers, employees, suppliers, shareholders, community,
environment, etc. Some implications of his theory are that
companies must manage their relationships with those
groups (Elijido-Ten et al. 2010), and that CSR reporting, as
a strategic tool, must consider key stakeholders (Nielsen
and Thomsen 2007). Snider et al. (2003) posit that stake-
holder theory is the adequate framework to evaluate CSR
reporting. In the same argumentation line, Ullmann (1985)
uses this theory to explain the quantity and quality of CSR
disclosure, and identiﬁes three dimensions: stakeholder
power, strategic posture, and economic performance.
Roberts (1992) used Ullmann’s model to explain social
responsibility disclosure, and found association between
the dimensions in the model and the levels of corporate
social disclosure. Prado-Lorenzo et al. (2009) analyze the
effect of shareholder power and disperse ownership struc-
ture on CSR disclosure. They use 99 CSR reports of non-
ﬁnancial Spanish ﬁrms quoted on the Spanish continuous
market. They ﬁnd that CSR reporting is associated with
certain stakeholders (government and creditors), and with
the strategic attitude of the ﬁrm. Prado et al. use a measure
of CSR reporting, named ‘‘practices in corporate social
reporting’’ (PCSR). This measure is broken down into three
components: validation, information disclosed, and GRI
format. Validation is linked to certiﬁcation and veriﬁcation,
information disclosed identiﬁes ﬁrms that do not follow a
recognized standard model, and GRI format is related to
the presentation of CSR report in accordance with GRI
guidelines, but without certiﬁcation. They ﬁnd that the
presence of the dominant shareholder has a positive effect
on the adoption of GRI guidelines. They conclude that the
effect of stockholder power is very limited in relation to
Industry and CSR Reporting
During the last decades of the previous century, the
industries most frequently studied were those that were
environmentally sensitive, because of their higher levels of
disclosure. Deegan and Gordon (1996) analyze if
Table 1 Principal contributions to transparency in SR
Reference Goal Characteristics
SR quality and transparency Balance, comparability, accuracy, timeliness, clarity, and reliability
Dubbink et al.
Transparency in social reports Completeness, inclusivity, relevance/evolution, comparability, comprehensibility/
clarity, timeliness/evolution, public disclosure, veriﬁability, external veriﬁcation,
impartiality, attention for sustainability, process governance, organizational
embedment, consistency, continuous improvement, and information quality/
Williams (2005) Organizational transparency through
Relevant, timely and reliable information.
Bushman et al.
Corporate transparency reporting Financial disclosure intensity, governance disclosure intensity, accounting
principles, timeliness of ﬁnancial disclosure, and audit quality of ﬁnancial
Dando and Swift
Transparent reporting for
Existence of independent assurance, existence of standards
Transparent reporting for
Eccles et al. (2012) To measure transparency Nonﬁnancial versus ﬁnancial keywords ratio; sustainability report covers global
activities; social data integrated in ﬁnancial reports; and environmental data
integrated in ﬁnancial reports
Effect of Stakeholders’ Pressure 55
environmental disclosure is correlated with certain indus-
tries, as well as the changes in disclosure practices during
the period 1980–1991. Using a sample of 25 ﬁrms from
Australia, they ﬁnd an increase in voluntary CSR reporting
in that period. This change in CSR reporting coincides with
the increase on the number of members in the main envi-
ronmental groups of pressure (e.g., Greenpeace). Their
results support the view that environmental disclosure is
used to legitimize the operation of the ﬁrms in sensitive
environmental industries. Other authors use the concept
‘‘high-proﬁle industries‘‘ as a broader concept than envi-
ronmentally sensitive sectors. They apply this deﬁnition to
those sectors where companies have public pressure, con-
sumer visibility, high level of political risk, or concentrated
intense competition (Paten 1991; Roberts 1992; Hackston
and Milne 1996).
Sweeney and Coughlan (2008) use the content in annual
and CSR reports of 28 FTSE4Good ﬁrms of different
sectors, to identify the primary and secondary stakeholder
in each industry. They ﬁnd that in ﬁnancial services, the
primary stakeholders are the employees, and the secondary
is the community. In Pharmaceutical-medicals, the primary
stakeholder is the community, and the secondary are the
employees. They found no main group of interest in
Pharmaceutical-health and beauty and Retail. For Tele-
communication, the primary stakeholders are the customers
and the secondary are the employees. Finally, the envi-
ronment is the primary stakeholder for Automobile and Oil
and Gas, with no clear evidence on the secondary
Using 267 corporations from the Stockholm Stock
Exchange and all state-owned corporations, Tagesson et al.
(2009) ﬁnd a correlation between industry and quantity of
some types of disclose. They ﬁnd that the raw material
industry provides more environmental information; the
consumer goods industry discloses more information rela-
ted to ethical issues; the IT industry discloses very little
information in general, and that the ﬁnancial industry dis-
closes the least information about human resources. Similar
results are presented in Gamerschlag et al. (2011) using
data from 20 big listed companies in Germany for the
period 2005–2008. They ﬁnd that companies under pres-
sure of environmental groups disclose more environmental
information; those in the consumer industry and energy
supplying industries disclose more in all CSR issues, and
companies in the services sector disclose less information.
Based on a sample of 50 US ﬁrms excluding ﬁnancial
services, investment funds and trust, Holder-Webb et al.
(2009) ﬁnd differences in frequency and intensity of the
CSR reporting in the ﬁve industries identiﬁed. They ﬁnd
that Pharmaceutical companies disclose more frequently
and intensively with respect to community, also to diversity
and human resources. This result is explained by the fact
that this is an R&D intensive industry and its main stake-
holder is their human capital. In terms of frequency, CSR
reporting in manufacturing companies is oriented toward
health and safety. The most relevant matter in the SR of
ﬁrms engaged in production of intellectual property is
related to employees. In the case of companies in the
extractive natural resources, as agriculture, forestry or
petroleum, and natural gas, the SR is focused on environ-
Previous research found a relationship between industry
and CSR reporting (Alali and Romero 2012; Andrikopou-
los and Diakidis 2007; Brennan and Hourigan 2000; Kolk
and Perego 2010; Simnett et al. 2009). Other studies found
a relationship between some industries and the pressure of
speciﬁc stakeholders (Adams et al. 1998; Deegan and
Gordon 1996; Hackston and Milne 1996). Also, Prado-
Lorenzo et al. (2009) applied stakeholder theory to ﬁnd
evidence of the relationship between the content of the SR
and the ﬁrm membership to a particular industry in which
there is strong pressure from one or more stakeholders.
Extending that literature, we analyze how the pressure
of the stakeholders affects the transparency of CSR
reporting. Our research question asks if the pressure of the
primary stakeholders in an industry affects the levels of
transparency of companies in that industry. To test it, we
categorize industries using the institutional perspective of
legitimacy, and the stakeholder theories (Sweeney and
Coughlan 2008; Branco and Rodrigues 2008). With this
criterion, we distinguish four categories: environmentally
sensitive industries; companies in industries well-known by
consumers, which were labeled in literature as ‘‘Consumer
proximity’’ industries (Branco and Rodrigues 2008);
industries with high-investor pressure; and industries with
The hypotheses are therefore stated as follows:
H1 Companies in environmentally sensitive industries
present CSR reports with higher levels of transparency than
companies in non-environmentally sensitive industries
H2 Companies in industries with high consumer prox-
imity present CSR reports with higher levels of transpar-
ency than companies in industries with low consumer
H3 Companies in industries with high pressure from
investors present CSR reports with higher levels of trans-
parency than companies in industries with low pressure
H4 Companies in industries with high pressure from
employees present CSR reports with higher levels of
56 B. Fernandez-Feijoo et al.
transparency than companies in industries with low
We collected data from all the CSR reports registered in
GRI from the different countries selected for our study. The
information includes companies with different sizes, and
classiﬁed by industry. We collected data between 2008 and
2010, when the G3 standard was applicable, although some
ﬁrms continued presenting their reports with the G2
guidelines. We selected this period because it includes a
large number of SR, when compared to previous years. The
sample, described in Table 2, includes selected countries,
chosen due to their location in different geographical areas
and with different cultural characteristics (data accessed on
August 24th 2011). 50.9 % of the companies in the sample
are listed in stock exchange markets. The data are classiﬁed
in 38 industries and four geographical regions by GRI.
Our sample includes data from the GRI reports because
it is considered to be the main framework for sustainability
reporting (Brown et al. 2009; Dentchev 2004; Manetti and
Becatti 2009; Nikolaeva and Bicho 2011). The GRI data-
base includes the date when the report was added to the list;
name of the organization; report title; publication year;
guidelines followed (G1, G2, G3); application level (in G3:
Undeclared, A, B, C, with or without AS); status (decla-
ration level); country; OECD membership; region; sector;
report address. Among these variables, application level,
declaration level, and existence of AS can be linked to the
quality of the reports (Fonseca 2010; Ferna
et al. 2012).
The application level deﬁnes the extent of coverage of
the GRI reporting framework. The G2 standard (which was
used until 2008) deﬁnes three levels—from best to worst—
In accordance (IA), Content index and Reference only. The
G3 standard, which was used in our sample frame,
identiﬁes—from best to worst—A, B, and C. Companies
reporting with the highest application levels (IA and A)
provide more information.
The declaration level indicates if the application level is
certiﬁed by a third party, checked by GRI, or self-declared;
hence, the ﬁrst two categories imply that an independent
veriﬁcation about the application level exists.
The content of the SR may or may be not assured by a
third party that issues an AS, since this attestation is not
mandatory; therefore, this is a mechanism of credibility
and transparency for the stakeholders. It represents the
answer to the demands from stakeholders and reinforces
the reliability of the companies and the GRI (Grushina
Many characteristics of the variable transparency were
reported in previous research, as discussed in the literature
review. These characteristics can be classiﬁed in different
groups, which deﬁne our selection of variables. First of all,
there are some characteristics that are intrinsic to the
requirements of the GRI, for example standardization and
comparability, which are present in all the submissions and
hence, do not discriminate. Second, there is a group of
characteristics with no data available in the GRI database,
for example timeliness and audit quality of ﬁnancial dis-
closure, which can therefore not be included in the model.
Finally, there is a third group of characteristics with data
available and discrimination characteristics, which are
included in our model.
Based on the aforementioned discriminating character-
istics, the dependent variable ‘‘Transparency’’ is obtained
using a dimension reduction with a Principal component
analysis from the following four variables:
1. Frequency of CSR reporting: Measures how many
times (in percentage with respect to the total possible)
each company presented a SR during the period of
evaluation. Publishing CSR reporting is used as criteria
of transparency in Dubbink et al. (2008). Frequency of
the report may also be used as an indicator of
disclosure intensity, which is related to corporate
transparency as well (Bushman et al. 2004). Higher
frequency of SR is linked to higher communication
and the nonﬁnancial versus ﬁnancial keywords ratio;
both of them linked with transparency of the SR
(Fombrun and Rindova 2000; Eccles et al. 2012). This
variable varies between 0 and 1.
2. Level of application: This variable is a proxy for
completeness, relevance/evolution and public
Table 2 Sample description
Country NRegion and %
United States of America 242 North America (23.1)
Denmark (15); Finland (36);
Germany (88); Norway (19);
Portugal (40); Spain (229);
519 Europe (49.6)
Brazil 160 South America (15.3)
Japan 126 Asia (12)
Total 1,047 (100)
Countries and regions
Effect of Stakeholders’ Pressure 57
disclosure, linked to transparency (Dubbink et al.
2008). According to Eccles et al. (2012), a high level
of application means more communication of global
activities, which is linked to SR transparency. It
measures the number of times each company presents
IA or A level, maximum level for both G2 and G3
guidelines, respect to the number of SR presented. The
value of this variable varies between 0 and 1.
3. Declaration of the level: This variable is considered as
a proxy for reliability and veriﬁability, both linked to
transparency (Global reporting Initiative 2011; Dubb-
ink et al. 2008). It indicates how many times, with
respect to the number of SR presented, the level of
application is veriﬁed by a third party or checked by
the GRI. It does not involve veriﬁcation of content.
The variable varies from 0 to 1.
4. Assurance of SR: The existence of an independent
assurance is a mechanism of credibility and transpar-
ency (Kaptein and Van Tulder, 2003; Dubbink et al.
2008; Williams 2005; Bushman et al. 2004 and Dando
and Swift 2003); hence, the inclusion of AS makes the
SR more transparent. This variable is measured by the
number of times that a company presents an AS of the
SR respect to the number of SR presented. The
assurance engagement implies a veriﬁcation of the SR
content. Its value ranges from 0 to 1.
The result of the Principal component analysis is presented
in Table 3[Kaiser–Meyer–Olkin (KMO) 0.702 and sphere-
city Bartlett’s test signiﬁcance 0.000].
The principal component analysis deals one component,
which measures the Transparency of the reports. We use
the output variable from the statistic process to represent
our dependent variable, which ranges from -0.98304 to
We collected data about the industry of each company from
the GRI database, which identiﬁes 38 different sectors.
Given that our focus is not on the industry but on the
relationship between stakeholders and industry, we further
create four dichotomist variables considering the possible
pressure on each sector of four groups of stakeholders
(customers, employees, environment, and investors) as
a. Customer proximity industries: This variable adopts a
value of 1 if the company belongs to an industry well-
known for the general public as a consumer of its
products or services. It includes energy utilities,
ﬁnancial services, food and beverage products, health-
care, household and personal products, retailers, tele-
communications, textiles and apparel, waste
management, and water utilities. These industries were
proposed by Sweeney and Coughlan (2008) and
Branco and Rodrigues (2008). We include in this
classiﬁcation other industries meeting the same crite-
ria: commercial services, consumer durables, media,
tobacco, tourism/leisure, toys, and universities as well.
For all the other industries the variable adopts a value
b. Employee-oriented industries: We deﬁne this variable
using size of a company as proxy for pressure from the
employees (Aldama et al., 2009; Ellis, 2009; Haski-
Leventhal, 2012; Wei et al., 2009). Huang and Kung
(2010) assess that in reference to environmental
disclosure, employees in large companies are, in
general, more organized and it is more likely that
their opinions will be considered at a managerial level.
As these authors afﬁrm, the larger the number of
employees, the higher degree of transparency they will
demand. GRI ranges company size in three categories:
1, small and medium; 2, big; and 3, multinational. Our
variable assumes a value of 1 if the company has high
pressure from employees, meaning that it is a big or
multinational company, and 0 for small and medium
c. Environmentally sensitive industries: This variable
adopts a value of 1 if the activities of the company
have an important impact on the environment (extrac-
tive or high pollution industries), following Tagesson
et al. (2009), Gamerschlag et al. (2011) and Branco
and Rodrigues (2008). These industries are: agricul-
ture, automotive, aviation, chemical, construction,
construction materials, energy, energy utilities, forest
and paper products, logistics, metal products, mining,
railroad, waste management, and water utilities. For all
the other industries the variable adopts a value of 0.
d. Investor-oriented industries: This variable adopts a
value of 1 if the company is in an industry with high
level of pressure from their investors (Collins, 2010).
It includes industries in which more than 50% of
companies are traded in the stock exchange. We
include ﬁnancial services as well, because it includes
cooperatives and savings companies that are not
Table 3 Principal component analysis
% Frequecy 0.434
% Assurance 0.861
% GRI_plus_3p 0.821
% LevelA_IA0810 0.799
Extraction method: principal component analysis
1 components extracted
58 B. Fernandez-Feijoo et al.
traded, but have the pressure of the partners (Chih
and Chen 2010). This industries are: automotive,
aviation, chemicals, computers, conglomerates, con-
struction, construction materials, consumer durables,
energy, energy utilities, ﬁnancial services, healthcare
products, household and personal products, media,
metals products, real estate, retailers, technology
hardware, telecommunications, textiles and apparel
and toys. For all the other industries the variable
adopts a value of 0.
The model includes three control variables. The variable
region indicates the geographical area of the company. It
adopts a value of 1 if North America; 2 if Europe; 3 if South
America and 4 if Asia. Kolk and Perego (2010), Adams
(2002), Kolk (2008) and Wilmshurst and Frost (2000) found
a positive correlation between country and CSR reporting.
Similarly to Monteiro and Aibar-Guzma
´n(2010), we use
the variable quoted which adopts a value of 1 if the com-
pany is traded in the stock exchange, and 0, otherwise.
Finally, following Fifka (2011), we included the variable
size. This variable is deﬁned based on the GRI classiﬁcation
and adopts a value of 0 for small and medium, and 1 for
large and multinational companies.
The tests of the hypotheses search if the pressure of dif-
ferent groups of stakeholders has an effect on transparency.
Following Prado-Lorenzo et al. (2009), we test the con-
tribution of both the independent and the control variables,
to the explanation of transparency, the dependent variable.
Four linear regressions are run:
Regression 1 :
T¼a0þa1CPI þa2Reg þa3Quo þa4Size þei
where Tis transparency; CPI is consumer-proximity
industries; Reg is region; Quo is quoted variable; and
Size is size.
Regression 2 :
T¼a0þa1EOI þa2Reg þa3Quo þei
where Tis transparency; EOI is employee-oriented
industry; Reg is region and Quo is quoted variable.
Regression 3 :
T¼a0þa1ESI þa2Reg þa3Quo þa4Size þei
where Tis transparency of SR; ESI is environmentally-
sensitive industries; Reg is region; Quo is quoted variable;
and Size is size.
Regression 4 :
T¼a0þa1IOI þa2Reg þa3Quo þa4Size þei
where Tis transparency; IOI is investor-oriented industry;
Reg is region; Quo is quoted variable and Size is size.
The results for the control of collinearity are presented
in Table 4. The explanatory power of the models increases
from 27 to 50 %, when the independent variables are added.
The result of the test of the hypotheses is included in
Table 5. All four hypotheses are supported, indicating that
there is a positive and signiﬁcant effect of the main stake-
holders in an industry on the levels of CSR transparency.
This result holds for the four groups of stakeholders.
Table 4 Collinearity control
Model 1 Model 2 Model 3 Model 4
Beta Sig. Beta Sig. Beta Sig. Beta Sig.
Constant 0.121 0.257 0.033 0.769 -0.016 0.884 -0.079 0.490
Reg -0.084 0.013 -0.076 0.024 -0.081 0.015 -0.081 0.015
Quo -0.303 0.000 -0.286 0.000 -0.347 0.000 -0.350 0.000
Size/EOI 0.248 0.009 0.234 0.014 0.186 0.051 0.164 0.086
CPI – – 0.163 0.009 0.150 0.015 0.217 0.001
IOI – – – – 0.226 0.001 0.201 0.003
ESI – – – – – – 0.182 0.008
0.27 0.33 0.44 0.50
F 9.662 0.000 9.662 0.000 9.583 0.000 9.206 0.000
Effect of Stakeholders’ Pressure 59
The signiﬁcance reported in Table 5is 0.06 or better (2
tailed) for all the variables. However, since our tested
hypotheses are directional, the level of signiﬁcance is 0.03
The positive sign of the coefﬁcients shows that the four
groups of stakeholders (customers, employees, environ-
ment, and investors) affect positively the transparency of
sustainability reporting, hence the higher the pressure, the
higher the level of transparency.
Regression 1 shows that the membership to a well-
known-by-consumer industry increases the level of trans-
parency of the CSR reports. The public perception of
companies CSR and its effect on consumer behavior has
been extensively studied in marketing (Battacharya and
Sen 2004; Becker-Olsen et al. 2006; Klein and Dawar
2004; Mohr et al. 2001; Sen et al. 2006; Sen and Bhat-
tacharya 2001). Given that there is a reported demand on
CSR, companies in industries with closer proximity to
customers may be trying to improve their brand image by
increasing the transparency of their reports.
The positive correlation between the pressure of
employees and CSR reporting transparency is tested in
Regression 2. Our result conﬁrms that the larger the
number of employees, the higher degree of transparency
they will demand, according to Huang and Kung (2010).
Given that companies with greater pressure of the
employees are larger, they have resources to provide
reports on sustainability more often and with higher levels
Regression 3 conﬁrms that companies in environmen-
tally sensitive industries present higher levels of transpar-
ency in their SR, as found in previous studies (Alali and
Romero 2012; Araya 2006). This increase in the levels of
transparency might result from the desire to mitigate the
public perception of the greater impact on the environment
the industry has.
Finally, companies with high pressure from investors
present CSR reports with higher transparency, as shown in
the results from regression 4. This result indicates the
existence of pressure from the ﬁnancial markets to increase
the conﬁdence level of investors by increasing the levels of
Our results indicate that investors as well as employees
have the highest level of inﬂuence in CSR reporting
transparency as stakeholders, while environment presents
the lowest one. The four regressions also show the signif-
icance of all control variables, region, size, and quoted. The
coefﬁcient for quoted is negative, indicating that after
controlling for size and region, quoted companies are less
transparent than those not publicly traded. This result is
Table 5 Test of hypotheses Unstand. coefﬁcients Stand. coefﬁcient TSig. (2 tail)
B Std. error Beta
(Constant) 0.033 0.111 0.294 0.769
CPI 0.163 0.062 0.081 2.636 0.009
Reg -0.076 0.033 -0.069 -2.266 0.024
Quo -0.286 0.065 -0.143 -4.394 0.000
Size 0.234 0.095 0.080 2.474 0.014
(Constant) 0.121 0.106 1.133 0.257
EOI 0.248 0.095 0.085 2.611 0.009
Reg -0.084 0.033 -0.077 -2.500 0.013
Quo -0.303 0.065 -0.151 -4.668 0.000
(Constant) 0.099 0.107 0.928 0.354
ESI 0.120 0.064 0.058 1.885 0.060
Reg -0.086 0.033 -0.079 -2.573 0.010
Quo -0.314 0.065 -0.157 -4.826 0.000
Size 0.233 0.095 0.080 2.451 0.014
(Constant) 0.062 0.107 0.582 0.561
IOI 0.236 0.067 0.115 3.529 0.000
Reg -0.088 0.033 -0.081 -2.655 0.008
Quo -0.365 0.067 -0.183 -5.459 0.000
Size 0.196 0.095 0.067 2.056 0.040
60 B. Fernandez-Feijoo et al.
revealing because most of the research is done using traded
companies due to the easiest availability of the data.
However, this result might be produced by the composition
of the sample. Europe has the largest number of companies,
and also this region has the lowest rate of quoted compa-
nies (32.4 %). We have found no references to previous
research comparing public and private companies.
The variable region adopts a value of 1 if North
America; 2 if Europe; 3 if South America and 4 if Asia.
The signiﬁcant and negative relationship shows that com-
panies in the ﬁrst two regions are more transparent than
companies in the last two regions. This result is consistent
with the evolution of CSR reporting in these regions
showed in KPMG (2008). As expected, size has a signiﬁ-
cant and positive effect on transparency.
Discussion and Conclusions
In this paper, we analyze the effect that the pressure of
stakeholders in an industry has on CSR transparency. We
collect data from 1,047 companies from the GRI database,
for the period 2008–2010. The sample includes data from
companies that are listed and not listed in the stock
exchange. Data are initially classiﬁed in 38 industries and
four geographical regions by GRI. The dependent variable
Transparency is the result of a Principal component anal-
ysis test on four variables: frequency of SR in the period,
application level of GRI guide, external declaration for the
application level, and existence of AS. Transparency is
tested using four variables deﬁned as the result of the
industry categorization that reﬂects the existence or not of
stakeholder pressure. The four categories are: impact on
customers, employees, environment, and investors. We
include in the analysis three control variables: region,
quoted, and size.
Industry is usually reported as affecting CSR disclosure,
especially in industries with environmental impact. We
conﬁrm that effect in the environmental variable, but we
contribute to previous knowledge by including other cate-
gories of stakeholders that are usually not considered. In
fact, our results support that environmental-sensitiveness
has less inﬂuence on CSR transparency than investors and
employees. This result extends to consumers as well. Our
results suggest the importance of external pressures as a
driver for transparency in CSR reporting.
In this paper we consider CSR transparency in different
countries, chosen by the importance of their CSR reporting
according to GRI standards. Some of these countries are
developed (e.g., USA and Japan), others are considered
environmentally conscious (e.g., Sweden and Finland),
Brazil is a growing economy, and Spain has had a huge
development of CSR in recent years. Other companies are
in developing countries. We select this mixture to try to
obtain a global overview of the reporting practices, rec-
ognizing that the no inclusion of more countries may be
considered as a limitation of the paper.
Future research can be focused on the theoretical justi-
ﬁcation of our result considering approaches such as
stakeholder theory and legitimacy theory, to understand the
role that stakeholders play on information systems for
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