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Abstract

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

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... Support from the community for company activities can reduce legal costs from potential complaints and shutdown demands. According to Stakeholder Theory, studies by [11], [10], [12], on the impact of green accounting on company performance show that green accounting positively influences financial performance. ...
... Managers will disclose information about CSR practices in the company's annual report to gain financial and nonfinancial benefits [24]. [12] suggested that data imbalance can be lessened by revealing CSR data related to the company's CSR practices. CSR disclosure demonstrates the firms commitment to social and environmental responsibility, thus leading stakeholders to perceive the company as a good corporate entity [12]. ...
... [12] suggested that data imbalance can be lessened by revealing CSR data related to the company's CSR practices. CSR disclosure demonstrates the firms commitment to social and environmental responsibility, thus leading stakeholders to perceive the company as a good corporate entity [12]. [25] found that profitable companies tend to provide or signal more information as a sign of the company's performance and prospects, which is then responded to by shareholders with an increase in the company's value. ...
... Indeed, most works between 1973 and 2013 recalled corporate social responsibility (CSR) to name reports about NFI (Erkens et al., 2015). In addition, the different naming was also intended to signal the different focus of documents prepared by companies to communicate primarily socio-environmental issues, to highlight the distinction from the actual corporate annual report, and to emphasize corporate communication provided without precise regulatory guidance (Thorne et al, 2014). However, the term "sustainability reporting," where adopted, seemed to be understood in very general terms, with no clear convergence of meaning and/or common framework. ...
... One strand of research has long argued that the annual report is an excellent means of communication even for NFI (Farneti & Guthrie, 2009). Another strand of research has long argued that CSR disclosure makes use of stand-alone documents that can take many forms, but usually take the form of reports, whether voluntary or mandatory, that are nonetheless annual (Thorne et al., 2014). Indeed, the two strands are not in opposition because the literature shows that there has been a real evolution of such reporting pertaining to NFI, starting from the increased information disclosed in annual reports to the preparation of independent and specific reports, the number of which is constantly growing (Buhr, 2002;Cho et al., 2015b;Michelon et al., 2015;Milne & Gray, 2007). ...
... If there is a divergence between corporate and community values, the company will risk losing its legitimacy. Voluntary disclosures can contribute to the strengthening of corporate image (Thorne et al., 2014), demonstrating a newfound realignment of values desirable to stakeholders even in the aftermath of a corporate scandal (Bellucci et al., 2021;Blacconiere & Patten, 1994). Indeed, scandals have the potential to erode corporate legitimacy because they generate the perception of corporate irresponsibility and/or dishonesty, resulting in reputational damage. ...
Chapter
The evolution and corporate awareness of non-financial disclosure and sustainability reporting have notably increased in recent years, as emphasized in the academic literature. In order to examine how the academic literature has dealt with non-financial disclosure and sustainability reporting, a systematic literature review has been carried out by searching relevant publications in the Scopus database and following a consecutive-steps approach of analysis. The results of the literature review subsequently conducted are divided into paragraphs, indicating the issues most considered. These concern: the designation and media of sustainability disclosure; the need to disclose both significant and reliable information about the materiality assessment process carried out upstream by the organization; the function and motivation of sustainability reporting, recalling the different theoretical approaches that support them; the relationship between disclosure and corporate performance; the commitment of providing both quantitative and qualitative information through sustainability reports, highlighting also the increasing relevance of assurance.
... Researchers concentrate on the organization's motivations (definite and underlying motivations) to implement CSR reporting, and its effects on CSR outcomes (Hur & Kim, 2017;Thorne et al., 2014;Li et al., 2019). Howard-Grenville (2005) emphasizes that external pressures can only partially explain the different corporate reactions to CSR development. ...
... The external ones: social atmosphere, understanding social needs, international CSR standards, government incentives, and collaboration with NGOs. Lu, Ye et al. (2018) focus on the external factors that drive strategic CSR development, whereas other scholars (Jensen & Berg, 2012;Thorne et al., 2014) are more concentrated on the internal factors. ...
... Each semi-structured interview focuses on three topics: willingness to publish a CSR report, internal and external factors that influence voluntary reporting choices, and integrated report and sustainability report comparison (Kim et al., 2012;Thorne et al., 2014). ...
Article
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CSR reports are communication tools, appropriate for informing stakeholders of the CSR practices conducted by organizations. This article aims to explore the reasons why complex organizations have adopted on purpose the CSR report to meet their needs and to discover why they have chosen to adopt the integrated report as an alternative to the sustainability report. This study is based on an explanatory case study of two healthcare organizations that have exactly implemented Integrated Reporting (IR), instead of Sustainability Reporting. The research method used is the field study. This work points out how organizations create and use CSR reports, even if they are not mandatory. If the IR looks like a “managerial innovation”, there is always a risk that the diffusion of these tools could simply be the latest popular trend, followed by internal or external proponents, rather than a rational decision-making process. The study has implications for the policymakers, the organizations, and their integrated report. The policymakers can understand if this tool can be useful for the organizations, to promote internal CSR. The study contributes to literature about the willingness to publish CSR reports, as an expression of the internal and external factors that influence voluntary reporting choices.
... Small firms have characteristics that can help promote the internal implementation of social and environmental responsibility practices in central business activities but may constrain external communication about those activities (Baumann-Pauly et al., 2013). Another important factor explaining the low level of SER in SMEs is the lack of mandatory reporting requirements for such firms (Dias et al., 2019;Thorne et al., 2014). ...
... The key motivations for voluntary reporting of SER, according to the study by Dobbs and van Staden (2016) conducted in New Zealand, were community concerns and shareholder rights. Thorne et al. (2014) provided insight into Canadian companies' motivations for voluntary reporting, finding that, in line with a stakeholder perspective, firms adopt SER in response to pressure to communicate with their stakeholders. ...
... The literature has shown that there are co-existing motivations for SER (Mahmood & Uddin, 2021). It should also be highlighted that previous research suggests that the country where the firm is located has a significant effect on SER and that there is a set of characteristics that may influence the likelihood of it adopting SER, such as capital intensity, planned strategies or the attitudes of senior managers (Thorne et al., 2014). In this respect, it should be noted that corporate governance, a subject currently of major interest in all types of companies, is the structure based on which the tool of CSR enables the functioning of a more sustainable form of business (Zubeltzu-Jaka et al., 2018). ...
Article
This study aims to add to the knowledge on the motivations driving SMEs in Spain to engage in voluntary social and environmental reporting (SER). We apply inductive content analysis to information sourced from interviews with SME owner‐managers, complemented with CEO letters. While the paper confirms that there are several co‐existing motivations for SER in SMEs, inconsistencies are identified between the information disclosed in the two aforementioned sources. Overall, stakeholder engagement seems to be the most important motivation for reporting. Contrary to what the literature to date has shown about the relevance of SME owner‐managers' personal values when it comes to disclosing social and environmental information, our findings suggest that individual beliefs and values are not the main factor driving SER. Results also show industry and firm size are determinants of motivations for SER. The study thus contributes to the literature on this underexplored topic by providing insights into the motivations for SER in SMEs. An understanding of these motivations is pivotal to help policymakers focus their efforts on implementing appropriate institutional reforms in this emerging field.
... Second, prior studies (e.g., Dhaliwal et al., 2011Dhaliwal et al., , 2012Jiao, 2010;Wang & Li, 2016) note that a major challenge for examining the effects of CSR disclosure on firm value is reverse causality. For instance, firms with better financial performance can invest more in CSR and have better CSR performance, leading to more CSR disclosure (McGuire et al., 1988;Thorne et al., 2014). Our examination of market reaction to acquisition announcements can mitigate endogeneity issues, especially reverse causality, because M&As are largely unanticipated events for the market (Deng et al., 2013). ...
... 6 Voluntary CSR disclosure can also signal to stakeholders that the firm has confidence in its CSR performance and help firms build a trustworthy and socially responsible image (Dhaliwal et al.,3 For example, Bekier et al. (2001) Thorne et al. (2014) find that over 75% of CEOs in their survey decide to disclose CSR report to signal to stakeholders that the company thinks highly of social responsibility and stakeholders' interests, 6 For instance, Baosteel Group Corporation's 2008 Corporate Social Responsibility Report states: "For many years, Baosteel has always considered "truly undertaking corporate social responsibility" as a principle to advance merger and reorganization, and has made great efforts to realize the harmony of economic efficiency, environmental protection and social benefits." (p. ...
... Supporting this view, Bachmann and Ingenhoff (2016) find that CSR disclosers can gain legitimacy even when stakeholders are highly skeptical in terms of perceived persuasion intent. In addition, previous studies provide evidence that CSR disclosure can help managers manage the most influential stakeholders to gain their support (e.g., Thorne et al., 2014). Furthermore, previous studies emphasize the significant influence of ex-ante perceptions of the integration process on the key stakeholders' support in the post-acquisition period (e.g., Cording et al., 2014;Ellis et al., 2011;Graebner, 2004). ...
... This is sometimes done by companies for the purpose of increasing investors and attracting a positive reputation for themselves (Verrecchia, 1983). Mahoney (2012) and Thorne et al. (2014) asserts that the release of corporate social responsibility is one of the ways of signalling mandatory information from the company's activities that are obligatory according to laws and regulations of government and regulatory bodies. Toms (2002) has also recommend that the exposure of environmental policies and monitoring in annual reports adds meaningfully to the formation of a company's environmental reputation since financial performance has no effect on environmental reputation. ...
... This means that it is through voluntary disclosure that companies reveal some of their information to investors in order to make them believe that they are better than their counterparts, it also gives them a better reputation (Verrecchia, 1983). The signalling theory is appropriate in situations where companies are competing for resources and recognition (Thorne et al., 2014). ...
Article
Full-text available
This study examined the different accounting theories and how they applied to corporate social responsibility (CRS). The accounting theories are stakeholder theory, social contract theory, legitimacy theory and signalling theory. These theories were explained and discussed from a corporate social responsibility point of view, this was done by identifying the conditions that best suits these theories. From the review done on these theories, the stakeholders theory applied to corporate social responsibility by explaining that a company is not just responsible to shareholders but to other groups of people who are affected or are been affected by the activities of the company and at that they should be responsible to them as well. The social contract theory pointed out that there is an invisible contract between the business enterprise and society and the contract contains some indirect obligations to be performed by the business organisation to the society and these obligations can be show cased through the corporate social responsibility report. This means that whether the company likes it or not the wellbeing of the society is part of their responsibility. The legitimacy theory expects that organisations should be legit in their business operations. They should always provide corporate social responsibilities activities to the society in which they operate, as it is through that means they will be obtaining approval to continue operations in that society and finally the signalling theory explains that there is a reward for reporting corporate social responsibility information voluntarily to the capital market, because the reported information could motivate investors and potential investors to invest in the company.
... The research interest in information related to corporate social responsibility (CSR) dates back to the 1980s when companies started publishing separate CSR reports; initially, to defend themselves against the early external pressures about their activities' environmental and social impacts and then to cope with reporting standards and regulations (Andrew and Baker, 2020;Thorne et al., 2014). ...
... The content and quality of non-financial reports, and their compliance with non-voluntary reporting standards, have been widely investigated (Velte and Stawinoga, 2017). Some studies address the relationships between this reporting practice and the achievement of social results (Thorne et al., 2014), finding positive effects (Gray et al., 1996), whilst others -based on signaling and greenwashing theories-argue that the higher the levels of sustainability performance the higher the companies' inclination to disclose social and environmental results (Clarkson et al., 2011). In this scenario, scholars have started to pay increasing attention to the value relevance (VR) of non-financial information (NFI), variously referred to information provided in addition to traditional financial reporting. ...
Article
The paper aims to contribute to understanding the value relevance of compre-hensive disclosure, covering different types of information provided in addi-tion to traditional financial reporting. This research is based on an initial sam-ple of 361 documents available on the Scopus database as of December 2022. The study adopts a bibliometric analysis based on the similarity visualization technique on a final sample of 179 articles using the VOSViewer software, and it also performs a content analysis on a subsample of 49 articles. The study mapped and clustered research networks, providing a systematic literature overview. A steady increase of interest in the topic investigated has been observed in re-cent years, driven by the growing attention investors and other users deserve on the role of extended information in disclosing how the firm creates value. The network analysis reveals the existence of four main research streams re-ferring to the following topics: Intangibles, Intellectual Capital Disclosure (ICD) and corporate reputation; ESG and Sustainability disclosure; Environ-mental disclosure and capital market effects; Integrated Reporting and Value Creation. Results highlight prominent research fields and emerging trends, which calls for in-depth consideration of the value relevance of comprehen-sive disclosure within the academic and political space. This article adds to prior research on the topic investigated, combining quantitative and qualita-tive methods to systematize literature. In contrast to other review publications that rely primarily on specific reporting tools, our study refers to different types of reports, providing a systematic picture of the state of the art and fu-ture directions of literature on the value relevance of non-financial infor-mation.
... Some authors underline how CSR reporting is affected by the size of the companies, showing that SMEs attach less importance to CSR than larger companies (Hou and Reber, 2011;Tzeng et al., 2010). Various elements of CSR reports in SMEs have been explored, such as the preference of large enterprises to publish their CSR report as a standalone document rather than SMEs, because they are more susceptible to external control (Thorne et al., 2014); the benefit of integrating CSR and intangible assets (i.e., intellectual capital) in the Italian context, characterized by a high presence of SMEs (Nardo and Veltri, 2013); and the factors that push small businesses to adopt CSR reports (Goetz, 2010). Corazza (2019) emphasizes that CSR by Italian SMEs is managed more effectively through integrated management systems employing formalized and standardized processes. ...
... In this second research area, several critical considerations have emerged. Firstly, some studies highlight that the size dimension of companies is a relevant aspect of CSR reports, taking into account the vulnerability to external controls (Thorne et al., 2014). Academics also stress the necessity of providing incentives to engage SMEs more actively and raise awareness of the importance of CSR reports (Goetz, 2010). ...
Article
Purpose. The aim of the research is to analyse the current state of the art of the debate on sustainability reporting practices tailored specifically for SMEs. Design/methodology/approach. We applied a systematic literature analysis using Scopus and Web of Science as leading databases in searching studies. The initial sample was composed of 85 articles. After the screening process, we selected a final sample of 33 papers that we investigated under the lens of Alvesson and Deetz (2000) providing insights , criticisms and transformative redefinition. Findings. We retrieved three research areas: (i) IR and SMEs; (ii) CSR reporting and SMEs; (iii) SDGs reporting , circular economy and SMEs. Our results highlight the pros and cons of the adoption of these sustainability reporting models by SMEs, offering critical issues and future avenues. Practical and Social Implications. This study provides both theoretical and practical implications. The theoretical implications refer to its contribution to advancing the research field by providing valuable insights for future investigations. From a practical standpoint, this study can serve as a catalyst for SME managers to embrace sustainability reporting models. Originality of the study. The originality of this study derives from the first-time to draft what are sustainability reporting practices in SMEs. This paper is directed to academic and practical communities. 105
... <Insert Table 4 Giannarakis et al 2014;Iyer and Lulseged, 2013), two studies in Canada (Thorne et al., 2014;Ben-Amar and McIlkenny, 2015), one study in Mexico (Arena et al., 2020), and one study in a multi-country context (Gomez and Garcia, 2020).  Africa. ...
... Andrikopoulos et al. (2014) show that large European financial firms disclose more sustainability information. Thorne et al. (2014) conducted some interviews in Canada revealing that companies that issue sustainability reports are bigger than those that do not. Nuskiya et al. (2021) report that firm size is positively related to corporate environmental disclosure in SRI Lanka. ...
Article
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Sustainability reporting has been widely acknowledged as a crucial corporate sustainability practice and recently received increasing attention from regulators, standard‐setters, practitioners, and researchers. Motivated by the abundance of work, and the variety of theoretical perspectives and existing evidence, this paper explores how the research on sustainability reporting determinants has developed over time and what is known and not known about this topic. To address this question, we conducted a systematic literature review of articles on sustainability reporting determinants published in ABS‐ranked journals between 2002 and 2021. Building on Lozano et al. (2015) framework of corporate sustainability theories, our findings provide an updated overview of factors driving sustainability reporting and the determinants still under debate. Furthermore, to fill existing gaps and inspire future research developments, findings suggest further work focus on non‐listed companies, environmentally sensitive industries, underexplored geographical areas, and qualitative methods. Finally, the paper has implications for managers and policymakers.
... Andrew y Baker (2020), citando a Vinnari y Laine (2013), afirman que durante la década de los noventa, la presentación de informes de RSC y de información social y medioambiental de forma anual ofreció a las empresas un espacio para defenderse de la creciente presión social para que las firmas se hicieran cargo de sus impactos sociales y medioambientales. De esta forma, lo que comenzó como un conjunto idiosincrático de prácticas de información fue ganando consistencia a medida que las empresas respondían a nuevas directrices y, finalmente, a la normativa (Thorne et al., 2014). ...
Thesis
Full-text available
The present research conducts an analysis of the evolution of Corporate Social Responsibility (CSR) and sustainability in the Spanish print press between 2018 and 2022, specifically in reference to the private sector. Through an extensive documentary review and a content analysis of over 4,000 journalistic articles, the relationship of these concepts and their impact in the field of corporate communication is examined. The results partially contradict the hypothesis of conceptual tension between CSR and sustainability, proposed by certain academic spheres, showing that this tension is not manifested in the studied media context. Furthermore, an evolution in sustainability is observed, from a predominantly environmental approach to a more generic view when referring to or associated with private companies. Finally, a significant decrease in the presence of CSR in the print press over recent years is observed in the context of the private sector. With these findings, this study aims to contribute to a deeper understanding of the relationship between CSR and sustainability, as well as to provide insight into the evolution of both concepts given their relevance to face global social challenges.
... To rule out the possibility that shareholders can obtain firms' ESG information from sources other than the NFR agencies covering their firms, we control for several other variables indicating (1) whether a covered firm has an ESG committee (ESG_ COMMITTEE), (2) whether a covered firm's voluntary ESG information disclosure is accompanied by external assurance (ASSURANCED), (3) whether a covered firm issues stand-alone ESG reports (STAND_ALONE), (4) the intensity of media coverage (MED_COV). Studies suggest that investors can obtain firms' ESG information from these sources (Thorne, Mahoney, and Manetti 2014;Cohen and Simnett 2015;Adhikari 2016;Chen et al. 2016;Byun and Oh 2018). ...
Article
Research Question/Issue This paper examines whether the coverage of nonfinancial rating (NFR) agencies affects corporate dividend policy. Research Findings/Insights We argue that dividend payout may decrease (increase) if NFR agencies provide information that reduces (increases) shareholder–manager agency (shareholder–stakeholder) conflict. We find that the coverage by an NFR agency is followed by an increase in dividends. This result is more pronounced for firms with more influential shareholders, poorer financial performance, and greater ESG commitment. We corroborate our findings using the acquisitions of NFR agencies and the expansion of NFR agencies' coverage as two main exogenous shocks. Lastly, our results hold for both US firms and non‐US firms. Theoretical/Academic Implications Collectively, this paper supports that the ESG ratings made available by NFR rating agencies following their rating coverage increase shareholder–stakeholder conflict to a greater extent than its effect on reducing shareholder–managers agency conflict. Practitioner/Policy Implications Our paper delivers critical insights to regulators striving to comprehend the functions of NFR agencies within the capital market more effectively. Such an understanding can further support their efforts to formulate new guidelines suitable for the burgeoning and swiftly evolving industry of NFR agencies.
... On the other hand, contrasting results are found in other research. Some studies reported no significant relationship between foreign ownership and CED (Walden and Schwartz, 1997), while others reported a negative relationship (Thorne et al., 2014), suggesting that foreign owners may focus more on financial returns than environmental disclosure. Given the mixed findings and the growing importance of foreign investment in developing economies, it is necessary to examine the role of foreign ownership in influencing CED in the context of Bangladesh. ...
Article
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Nowadays investors are measuring the performances of a business organization not only based on their operating efficiency but also fulfilling their social responsibility. At least the investors need to know whether the activities of the business have any adverse impact on the society and environment. This study explores the accountability of the business from the social and environmental context. This empirical study tends to investigate the nature of the ownership structure that influences the environmental disclosure of a business entity. Based on the sample of fifty-five DSE-listed textile companies, this study used multiple regression to assess the causal relationship between the ownership structure and corporate environmental disclosure. Moreover, this cross-sectional study also considers the agency theory and stakeholder theory to explain the relationship between the ownership structure and environmental disclosure. The findings indicate that corporate environmental disclosure is positively influenced by foreign ownership and institutional ownership whereas director ownership and public ownership have no significant association with the environmental disclosure. These insightful results challenge conventional assumptions and highlight the need for a nuanced understanding of the factors that drive environmental reporting practices in the context of an emerging economy. The main contribution of this article lies in its provision of empirical evidence from an emerging economy, Bangladesh, which helps in understanding sustainable practices in a global context. Additionally, it aids in developing effective corporate governance policies and strategies tailored to similar emerging economies by recognizing the role of ownership structures in influencing environmental accountability. These findings further assist policymakers, managers, and other sustainability advocates in understanding how different ownership structures affect corporate environmental disclosure.
... Second, we contribute to the literature on the determinants of CSR reporting (e.g., Cormier et al. 2005; Thorne et al. 2014) by identifying prior misbehavior across the broad range of CSR dimensions as an additional determinant of CSR reporting. Knowledge about what motivates voluntary CSR reporting is increasing but still limited (e.g., Hahn and Luelfs 2014;Huang and Watson 2015). ...
Article
Full-text available
We investigate whether firms that proclaim a commitment to corporate social responsibility (CSR) by CSR reporting indeed internalize such a commitment and behave more responsibly. We analyze the association of the issuance and quality of voluntary CSR reports with the occurrence, number, and severity of corporate misbehaviors, both preceding and subsequent to CSR reporting. We find a significantly positive association of CSR reporting with our measures of prior and future misbehavior. The results are corroborated by a quasi-natural experiment around the Rana Plaza disaster where we find that the signatories of an accord for better working conditions have significantly higher prior and future misbehavior relative to non-signatories and firms unaffected by the exogenous shock. Our results are in line with legitimacy theory implying that, on average, the firms’ proclaiming commitment to CSR is not a signal of internalized commitment but more likely serves greenwashing and impression management purposes.
... From a stakeholder theory perspective, a key motivation for sustainability reporting is to enhance corporate image and manage the interests of key stakeholders (Beske et al., 2020). By publishing sustainability reporting, companies respond to stakeholders' demands to examine their social and environmental performance (Thorne et al., 2014). Snider et al. (2003) posit that stakeholder theory is the adequate framework to evaluate the quantity and quality of corporate social responsibility (CSR) reporting. ...
Article
Abstract Purpose This paper aims to investigate how integrated reporting quality (IRQ), as well as comprehensive disclosure score (CDS) (i.e. incorporating integrated and sustainable reporting quality), impacts value creation differently between companies operating under mandatory versus voluntary adoption of these reporting frameworks. Design/methodology/approach The sample comprises 1,195 firm-year observations (international data set) from 2018 to 2022, which are divided into groups based on mandatory vs voluntary adoption of the international integrated reporting framework (IIRF) and Sustainability Accounting Standards Board (SASB). Furthermore, regression analysis is used in the analyses. Findings The findings revealed a significant and positive relationship between IRQ and value creation on a global scale. In addition, unlike voluntary adoption of the IIRF, mandatory adoption of it showed a significant and positive relationship between IRQ and value creation. Furthermore, an increase in the CDS had a greater impact on value creation compared to IRQ. Finally, in contrast to companies with voluntary adoption of both IIRF and SASB, companies with mandatory adoption of them exhibited a significant and positive relationship between these reports and value creation. Practical implications The findings have practical implications for various stakeholders. First, by enhancing the awareness and understanding of integrated reporting and sustainability reporting among users, these results can facilitate more informed economic decision-making and enable a more accurate assessment of a company's potential for value creation. Second, these findings can contribute to the development of more effective and tailored reporting guidelines that align with the nuances of value creation dynamics in different contexts. Ultimately, this research can lead to improvements in reporting practices and regulatory frameworks, benefiting both companies and their stakeholders. Social implications The study's social implications are significant as it offers insights into the global debate surrounding the adoption of the IIRF and the objectives of the merger involving the Value Reporting Foundation and the International Financial Reporting Standards Foundation. The findings provide a concrete basis for evaluating the value of adopting the IIRF and inform discussions on the future of reporting standards and practices. Originality/value Furthermore, it stands as one of the pioneering endeavors to investigate the value creation aspects of CDS. These unique aspects make a substantive contribution by expanding the frontiers of knowledge in the realm of corporate reporting and financial implications, offering novel insights and opportunities for further research in this crucial domain.
... Another CSR-focused governance mechanism used to oversee the impact of CSR is the issuance of standalone CSR reports (Derchi, Zoni, and Dossi 2021). These reports are also referred to as "sustainability reports," "citizenship reports," or "environmental reports" in the literature and are distinct from annual reports as they specifically focus on CSR issues and are not mandatory under reporting standards (Thorne, Mahoney, and Manetti 2014). These reports serve as signals of a firm's commitment to CSR, thereby alleviating information asymmetry between managers and other stakeholders (Al-Tuwaijri, Christensen, and Hughes Ii 2004;Christensen 2016;Dhaliwal et al. 2011;Dhaliwal et al. 2012). ...
Article
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Research Question/Issue The study examines whether CSR‐focused governance mechanisms (CSR committees, standalone CSR reports, and CSR contracting) operate as complements or substitutes for each other in mitigating CSR decoupling. Research Findings/Insights The study finds that CSR‐focused governance mechanisms diminish CSR decoupling and enhance CSR credibility in UK firms. In addition, the simultaneous presence of CSR committees and standalone CSR reports has a complementary effect in mitigating CSR decoupling. Conversely, the combinations of CSR committees and CSR contracting as well as standalone CSR reports and CSR contracting exhibit a substitute relationship. These impacts remain consistent when categorizing CSR decoupling into underreporting and overreporting. During the financial crisis of 2008–2009, the complementary relationship between CSR committees and CSR reports remained consistent, although the substitution between CSR committees and CSR contracting, and CSR reports and CSR contracting, is only observed after the crisis. Theoretical/Academic Implications The study innovatively contributes to the agency theory literature by adopting a bundle corporate governance approach while focusing on specific CSR governance mechanisms to address agency issues. It empirically shows that complementary combinations of CSR‐focused governance mechanisms signify a marginal benefit in reducing CSR decoupling, leading to a reduction in agency costs. Practitioner/Policy Implications The study offers several implications. First, it helps firms create ideal combinations of different CSR‐focused governance mechanisms that provide superior marginal benefits. Second, firms' stakeholders, especially the investors, could identify the usefulness of adopting CSR‐focused governance mechanisms in CSR reporting. Finally, it could also attract regulators' attention toward the weaker aspects of the existing corporate governance code regarding CSR.
... However, the companies which communicate specific information to potential investors to project themselves as they perform better than their counterparties in the market to attract investments and improve their reputation (Verrecchia, 1983). Further, the companies which are competing for resources, the signaling theory works even better in this situation (Thorne et al., 2014). Besides, the theory aims to convey the signal to the intended audience through corporate reporting (Connelly et al., 2011;Mahoney, 2012). ...
... Short-term focus due to economic pressure [58] Reputational-risk-influenced decisions [27,28,31,59,60] Powerful-stakeholder-influenced decisions [26,61,62] Fear of revealing excessive information [63] Data-based challenges Data acquisition, treatment, and validation cost [64,65] Data normalization challenges [66,67] Inconsistent reporting by firms [1,67] Lack of historical data availability, missing data [66,67] Methodological challenges ...
Article
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The ascent of environmental, social, and governance (ESG) reporting has established itself as a global standard in financial markets, reflecting a paradigm shift toward corporate sustainability. Despite this, persistent concerns surround the quality of ESG reporting and its tangible impact on Sustainable Development (SD). To address the imperative transition toward a broader SD agenda within the ESG reporting framework, this study delves into contemporary issues and challenges associated with ESG reporting. It emphasizes the scarcity of interdisciplinary expertise across diversified fields, which is a crucial element for establishing robust reporting mechanisms capable of encompassing the multifaceted nature of sustainability. To address this, ESG reporting should extend beyond its company-centric focus, adapting traditional accounting systems to more effectively incorporate evolving ESG disclosure demands. This adjustment will facilitate a transparent portrayal of environmental and social impacts. The Social and Environmental Accounting (SEA) framework presents a structured approach to facilitate this transformation. This study underscores key SEA aspects that will shape future research, including enhancing data accuracy, standardizing sustainability metrics, evaluating the influence of ESG reporting on stakeholders, and refining disclosure formats.
... Perusahaan dituntut untuk melakukan pengungkapan informasi lingkungan atau environmental information disclosure (EID) agar dapat diketahui secara luas (Cho & Patten, 2013;Hassan & Guo, 2017;Acar & Temiz, 2020). Evolusi pengungkapan informasi lingkungan telah menjadi topik global selama tiga dekade terakhir (Gray et al., 1995;Thorne et al., 2014). ...
Article
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This study aims to determine whether there are differences in the environmental information disclosure in different industries and whether environmental performance and profitability are determinants of environmental information disclosure in different industries, namely environmentally sensitive industries and environmentally insensitive industries. This research is comparative-quantitative research. The research sample is companies listed on the Indonesia Stock Exchange that publish sustainability report and annual report year 2021 and participate in PROPER period 2020. The research model is analyzed and tested using difference test and Partial Least Square with the Structural Equation Model (PLS-SEM). Research data is secondary data sourced from company sustainability reports and annual reports as well as PROPER publication by the Ministry of Environment and Forestry. Study results found that there is no difference in environmental information disclosure in different industries, environmental performance is a determinant that has a positive effect on environmental information disclosure in environmentally sensitive industries, environmental performance is not a determinant of environmental information disclosure in environmentally insensitive industries, profitability is a determinant that has a negative effect on environmental information disclosure in environmentally sensitive industries, and profitability is a determinant that has a negative effect on environmental information disclosure in environmentally insensitive industries. Abstrak Penelitian ini bertujuan untuk mengetahui apakah terdapat perbedaan pengungkapan informasi lingkungan pada industri yang berbeda serta apakah kinerja lingkungan dan profitabilitas merupakan determinan pengungkapan
... Therefore, sustainability banking is an approach in the banking system with the aim of supporting the green development of the company. Legitimacy theory can illustrate how companies strategically influence stakeholders' perceptions about their performances (Bowen, 2019;Gómez-Carrasco et al., 2021;Patten and Guidry, 2010;Thorne et al., 2014). Legitimacy is the circumstance in which an entity's value system is considered compatible with that of society. ...
... Our literature review indicates past studies have predominantly adopted an institutional perspective (DiMaggio and Powell, 1983) to explain firm sustainability reporting behaviours (Michelon et al., 2015;Thorne et al., 2014). According to institutional theory, there are three types of institutional pressures that promote homogeneity in organisational practices: coercive (arising from regulatory bodies and key resource providers/influencers), mimetic (imitate competitors and other industry leaders) and normative (professional bodies policies) (DiMaggio and Powell, 1983). ...
Article
Purpose This paper aims to assess the cumulative evidence on the determinants of sustainability assurance (SA) reports and the choice of assurance provider quality. It addresses the contradictory and inconsistent findings of past studies conducted over the past two decades. Design/methodology/approach The authors undertake a meta-regression analysis that enables systematic, comparative assessment of the variables associated with the choice of SA and the type of assurance provider. The authors undertake a chronological analysis with the aim of identifying systematic differences in the empirical evidence across distinct time periods. Findings The results indicate that there is very little evidence to support many of the expected associations between commonly studied predictor variables (namely, measures based on agency and corporate governance conceptions) and the choice of SA and the assurance provider type. As a result, research on this topic does not make as effective a contribution as might be expected. There is, however, a time period difference. The authors find results from studies using company data prior to 2010 are significantly different from those using post-2010 data. The results indicate the decision to publish SA to be significantly associated with companies in the oil industry and utilities, and larger organisations where agency costs tend to be higher. Obtaining assurance from a higher-quality provider is found to be associated with companies in environmentally sensitive industries and in stakeholder-oriented countries. Practical implications The study shows that as yet there is not sufficient evidence to support expected results. Users of the research should be aware of this, and researchers should know that more work is needed. The authors suggest researchers take greater care in the choice and comparability of variable measurement and expand the conceptual base when selecting predictor variables. Social implications Companies need to be more transparent and accountable to critical stakeholders such as report users and regulators, and the latter should be more aware that the organisational practice of SA and choice of service provider have changed over time and are increasingly open to agency and other cultural biases. Originality/value To the best of the authors’ knowledge, this is the first study to apply meta-regression techniques for understanding the body of literature on SA and provider choice.
... The latent variable CE Management Strategy (CEMS) was measured as a reflective first-order construct, with 7 items (Baumgartner, 2014;Bettley & Burnley, 2008;Gallardo-Vázquez & Sanchez-Hernández, 2014). CR variable is evaluated as a first-order construct made up of 7 items, based on previous literature (Bhimani et al., 2016;Thorne et al., 2014;Windolph et al., 2014;Hapsoro & Husain, 2019). ...
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Awareness about the circular economy as a sustainability paradigm is growing globally, being the agri-food sector one of the most significant industries moving towards circular operations. The natural resource-based view theory can provide a basis to analyze organizational resources and capabilities allowing a clear definition of circular economy strategies and performance. How accounting and reporting can leverage these concepts, is being debated currently at the academic level. In this context, this study examines to what extent Argentinian agri-food organizations use circular reporting to translate circular economy strategy into better performance. Survey data were collected from 238 agri-food Argentinian organizations and analyzed using partial least squares structural equation modeling (PLS-SEM). General results show that a natural resource-based circular economy strategy positively affects performance and circular reporting has a significant indirect effect on environmental and economic performance, through the improvement of natural resource-based circular economy strategies.
... Studies like (Buallay, 2019;Conca et al., 2021;Esteban-Sanchez et al., 2017;Moneva & Ortas, 2008;Sassen et al., 2016) examine European firms. Whereas, Thorne et al. (2014) have studied Canadian companies ESG and firm performance. Velte (2017) investigates ESG disclosure and firm performance of German firms. ...
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We verify the effect of ESG disclosures on firm performance using NSE 500 index listed companies spanning from 2010 to 2020. The study employs a method‐of‐moments quantile regression approach to test whether ESG disclosures lead to superior firm performance. We find evidence that environmental, social, and governance disclosures positively influence firm performance. Higher quantiles of ESG disclosures are associated with better market performance (Tobin's Q), and the same lead to lower profitability (ROA). The present study suggests that companies aspiring to improve their financial performance may pay more attention to ESG disclosure practices.
... However, motivations behind CSR engagement continue to be debated. According to both the stakeholder and legitimacy perspectives, the purpose of CSR engagement is to manage pressures from stakeholders and regulators (Adams 1999;Caron and Turcotte 2009;Thorne, Mahoney, and Manetti 2014), to meet moral obligations of businesses and social expectations (Roberts 1992;Donaldson and Preston 1995;Gibson 2000), or to enhance organizational trustworthiness (Greenwood and Van Buren 2010). 19 Accordingly, CSR engagement can be considered a legitimizing tool and a public relations exercise (Cho and Patten 2007;Cho, Roberts, and Patten 2010;Thomas and Lamm 2012). ...
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The regulatory reform of internal controls (ICs) in China mandates that certain firms incorporate corporate social responsibility (CSR) engagement into ICs and issue IC reports. Using a staggered difference-in-differences research design, we find that IC effectiveness has worsened following this reform, but this deterioration is partially mitigated when mandated firms report their CSR engagement. Additional analyses demonstrate that this deterioration is further lessened when CSR reports are prepared in accordance with Global Reporting Initiative reporting guidelines or assured by external auditors and when firms spend more on CSR activities. Finally, cross-sectional analyses suggest that CSR engagement mitigates the deterioration in IC effectiveness more in non–state-owned enterprises and in firms that have better financial performance, lack political connections, or are located in regions with higher market development or social trust. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M4; M48.
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Understanding the determinants of sustainability reporting is critical for improving sustainability reporting frameworks. This study systematically reviewed 154 papers published between 2000 and 2020 in Accounting, Business, and Management journals on sustainability reporting determinants. Key sustainability reporting determinants identified include corporate governance, owner/manager attributes, managerial perceptions, and firm-specific variables. Other interesting findings revealed a notably strong geographic bias, with most studies focused on developed countries and large firms, with limited attention to developing countries and small- and medium-sized enterprises (SMEs). Additionally, there is a growing trend toward Triple Bottom Line (TBL) reporting, which addresses the economic, social, and environmental dimensions of sustainability reporting, reflecting a growing scholarly attention to the interlinkages among these dimensions, though some studies lacked a theoretical framework. Lastly, many studies from developing countries, especially in Asia and Africa, were published in non-ranked journals, highlighting quality concerns. This study offers valuable insights and directions for future research while encouraging a more holistic approach to sustainability reporting.
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Le présent article procède à un examen approfondi des facteurs déterminants de la divulgation de la Responsabilité Sociale des Entreprises (DRSE) dans les pays développés et en de développement, en s'appuyant sur une analyse de 89 articles de recherche empiriques. Nous avons effectué des recherches méthodiques dans diverses bases de données, telles que SCOPUS, EBSCOhost, Web of Science, Science Direct, Wiley Online Library et Google Scholar, en utilisant une série de mots-clés. Par conséquent, notre recherche s'est limitée aux études empiriques publiées en anglais et a exclu les livres, les chapitres de livres et les actes de conférences..L'étude révèle que les caractéristiques de l'entreprise, notamment la taille, le secteur d'activités, la performance financière et les mécanismes de gouvernance d'entreprise ; jouent un rôle important dans la détermination de la DRSE. Dans les pays développés, les préoccupations des principales parties prenantes telles que les régulateurs, les actionnaires, les créanciers, les investisseurs, les écologistes et les médias sont considérés comme très déterminantes pour influencer les pratiques de divulgation d'informations sur la RSE. À l'inverse, dans les pays en développement, la DRSE est principalement motivée par des parties prenantes telles que les acheteurs internationaux, les investisseurs étrangers, les médias internationaux et les organismes de réglementation internationaux. De plus, contrairement à leurs homologues des pays développés, les entreprises des pays en développement perçoivent relativement peu de pression de la part du public pour divulguer des informations en matière de RSE. This article provides an in-depth examination of the determinants of corporate social responsibility disclosure (CSRD) in developed and developing countries, based on an analysis of 89 empirical research articles. We conducted systematic searches of various databases, such as SCOPUS, EBSCOhost, Web of Science, Science Direct, Wiley Online Library and Google Scholar, using a series of keywords. Consequently, our search was limited to empirical studies published in English and excluded books, book chapters and conference proceedings. The study reveals that company characteristics, including size, industry sector, financial performance and corporate governance mechanisms, play an important role in determining of CSR disclosure. In developed countries, the concerns of key stakeholders such as regulators, shareholders, creditors, investors, environmentalists and the media are considered to be very important in influencing CSR disclosure practices. Conversely, in developing countries, CSRD is primarily driven by stakeholders such as international buyers, foreign investors, the international media and international regulators. In addition, unlike their counterparts in developed countries, companies in developing countries perceive relatively little public pressure to disclose CSR information.
Article
This study examines the relationship between financially material content in corporate social responsibility (CSR) reports and the decision usefulness of these reports. Utilizing sustainability disclosure standards and a machine learning topic modeling algorithm, a firm‐specific quantitative measure of financially material content in CSR reports is developed. It is hypothesized that firms providing greater amounts of financially material CSR content enhance their information environment, which enables analysts to make more accurate earnings predictions. The findings confirm a positive relationship between the extent of financially material CSR content disclosed and analyst forecast accuracy. This research demonstrates the effectiveness of using machine learning to identify financially material content within unstructured voluntary disclosures and contributes to the literature on the financial materiality of CSR activities and their related disclosures.
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Corporate social responsibility (CSR) is a popular topic among scholars and business professionals alike. While previous literature has investigated the relationship of CSR and corporate performance extensively, longitudinal research on the CSR reporting practices using a comparative approach remains limited. The current study examines CSR disclosures uncovered within annual reports of the companies representing different industries in the United States. The contribution is twofold. First, the study compared the CSR topics disclosed by the food & beverage and energy sectors and upfolded their similar patterns and different emphases. Second, the study examined the dynamics of CSR reporting practices over 8 consequent years in these industries. A mixed method approach was used in this study, combining topic modeling through the Latent Dirichlet allocation (LDA) and complementary content analysis. The empirical analysis was conducted on the CSR disclosures from the annual reports released by six international U.S. organizations (three companies per industry sector) over the period from 2013 to 2020. The results showed that for both industries the social aspect of CSR was significantly reported. Nevertheless, the uncovered topics differed between sectors. Regarding the dynamics of CSR topics, both business sectors revealed variability of CSR aspects covered in the annual reports over the 8 years. Overall, this research sheds light on the relevance of addressing specific topics in CSR reporting as well as how to disseminate information about these topics in the annual reports.
Chapter
Third sector organisations, in particular not-for-profit ones, in opposition to organisations operating in the public or private sectors, are often perceived as guided by charity and benevolence when interacting with their stakeholders. But in order to succeed in their mission, organisations such as NGO’s, foundations, charities, or similar, need people and resources to pursuit their social agendas. But it is not common to discuss not-for-profit organisations’ corporate social responsibility towards the market (including their reporting duties), towards the environment, labour standards, or even towards their contributions to the communities from where they gather the resources used to pursue their social mission. It is often perceived that business organisations, in their pursuit for profit, may negatively impact their stakeholders, while not-for-profit organisations do not. But is this always (or ever) the case? In the attempt to shed light on the answer to this question, the duties imposed to not-for-profit organisations’ decision-makers are going to be critically reviewed under Portuguese Law. This comparison will allow us to understand if Portuguese Law, as a case study, is fit for the purpose of regulating the action of not-for-profit organisations’ managers in a way that resonates with the legitimate expectations of the communities where these organisations operate.
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Purpose This literature review aims to present the thematic and intellectual structure of sustainability in banking literature. Design/methodology/approach A systematic literature review and manual content analysis of 158 studies from the Web of Science and Scopus databases has been conducted. Findings The study reveals three major themes: conceptualization of sustainability, measurement of sustainability performance and communication of sustainability. The review provides future research directions regarding the quality of reporting, the contribution of sustainable banking toward achieving sustainable development goals, the use of primary data for analyzing sustainable banking initiatives and distinctions in the concepts of sustainability in banking. Originality/value Since the beginning of the century, the literature on sustainability in banking has been prolific but heterogeneous and fragmented. Reviews have been restricted to niche areas. This review addresses the lack of a unifying paradigm for sustainability in banking literature.
Article
Purpose The Sustainable Development Goals (SDGs) provide a blueprint for UN member states to achieve prosperity and peace. A resilient construction industry should positively contribute to the achievement of all SDGs. Yet it is currently unclear if the industry helps or hinders SDG achievement. This research aims to explore if the industry is positively engaging with all SDGs. Design/methodology/approach This research is split into two phases. The first is an objectivist Qualitative Content Analysis (QCA) of sustainability reports from the ten leading UK contractors to identify direct and indirect SDG references. The second research phase adopts a subjectivist ontological position consisting of twenty-one semi-structured interviews with a range of construction industry project-based professionals. Narrative analysis is used to structure the interview questions and analyse the data gained. Findings Many SDGs are excluded from sustainability reports, and where discussed, only some are engaged with substantially. The SDG knowledge held by construction professionals is reduced further still, and SDG progress is rarely measured. The ambiguity surrounding the SDGs enables discrepancies between reporting and professional perceptions. There is also a lack of regard for fellow contractor collaboration through fear of reduced competitive advantage. Originality/value This paper addresses a gap in the literature between contractor SDG knowledge and action. This serves as a platform for future research agendas regarding how the SDGs can be better understood and actioned in a construction management context. For industry, inconsistencies between organisational sustainability reporting and the knowledge and awareness of staff are exposed, due to the lack of collaborative practices currently adopted.
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The book provides a comprehensive exploration of the evolution in sustainability reporting and non-financial disclosure from three perspectives: regulatory, literary, and empirical. We discuss the variety of international frameworks, standards, and regulations aimed at promoting and standardizing sustainability reporting; we offer a systematic review of academic literature on sustainability reporting and non-financial disclosure; we examine the concept of materiality in sustainability reporting and provide empirical insights into the quantity and quality of materiality disclosures in sustainability reporting across the globe.
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The concluding chapter serves as a comprehensive summary of the book, offering a discussion of significant insights and contributions to both research and practice. It systematically highlights the primary benefits derived from the book, emphasizing its pivotal role in enhancing comprehension of the ongoing academic discourse on sustainability reporting and tracking the evolutionary trajectory of regulation. Additionally, the section delves into the research implications, presenting potential avenues for further exploration and scholarly inquiry. It extends its focus to the practical applications of the insights, underlining their relevance in real-world corporate settings. The chapter concludes by providing insightful suggestions for the future evolution of sustainability reporting practices and research, serving as a roadmap for continued advancements in this dynamic field.
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This study tries to determine how the regulatory environment of the nation interacts with company governance to affect the amount of pengungkapan lingkungan. The research uses quantitative methods (panel data regression). Data was obtained from a database of 109 ASEAN public companies during 2012-2020. The results demonstrate that: (1) Higher environmental disclosures is more likely to occur in firms with great corporate governance (β = 0,002; p-value<0,05). (2) Likewise, if the company operates in a country with supportive state governance (β = 0,008; p-value<0,1). (3) Corporate and state governance work together (complementary) regarding environmental disclosures (β = 0,000; p-value<0,1). The research contributes evidence on the association connecting corporate governance and agency theory and supports it, the state and environmental disclosures. The study emphasizes the significance of environmental disclosures in combating climate change as well as ASEAN's low level of awareness and compliance. The study findings provide further insight by interacting corporate and state governance which are the two main considerations for environmental disclosure. Keywords:ASEAN; Agency Theory; Corporate Governance; Country Governance; Environmental Disclosures.
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Ecological psychology regards culture as a response to the demands of the environment. As rice farming in history has significantly influenced the formation of human cultural consciousness, we investigate how the rice culture of a chairperson’s birthplace affects a firm’s CSR activities. Our main finding reveals a positive and significant correlation between a chairperson’s rice culture and CSR activities. Further analysis demonstrates that this positive relationship is particularly pronounced in private firms and family firms. We also examine the incremental effect of individual management heterogeneity and find that the positive relationship is strengthened when the chairperson has a shorter tenure or higher level of education. Additionally, more developed regions help enhance this positive relationship. To address the endogeneity concerns, we adopt an instrumental variable approach and exogenous event analysis based on chairperson turnover. The results are robust to a set of additional tests. Overall, our findings document the benefits of a chairperson’s rice culture in developing countries like China and reveal how this benefit is priced into CSR performance.
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The 2030 Agenda for Sustainable Development ascribes specific roles to business organisations and has reinvigorated the discussions on the link between multinational corporations and international development. SDG 8 aims to promote economic growth and decent work, and thus establishes an explicit connection to the Decent Work Agenda of the ILO. Despite its current relevance, international business research on the links between MNCs and sustainable development has largely ignored the topic of decent work. This chapter analyses the incidence and extent of corporate commitment to decent work and sustainable development, as measured through word frequency analysis and text-mining methods, drawing on annual reports and sustainability reports published in 2010 and 2020 of MNCs listed on the DAX-40 stock market index. The chapter seeks to explore the incidence and variation in decent work- and sustainability-related corporate reporting across companies, and the changes in decent work and sustainability reporting over time.
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This study investigates whether and how the intensity of social distancing from the Coronavirus disease 2019 (COVID-19) pandemic influences the corporate social responsibility (CSR) disclosure index. An empirical examination is carried out based on data from the Shanghai Stock Exchange from 2020 to 2022. CSR disclosure indexis measured by the percentage of CSR-related press releases from the total press releases published on a certain day. The intensity of the COVID-19 pandemic is measured by the daily confirmed cases among the population in China. This research uses the two-stage least squares regression model to alleviate the endogeneity issues. Findings reveal a reverse correlation between the intensity of the COVID-19 pandemic and the CSR disclosure. The results are consistent and robust to endogeneity tests and sensitivity analyses. Findings support the stakeholder–agency theory and indicate that Chinese managers tend to satisfy the shareholders' interests rather than those of other broad stakeholders. Moreover, Chinese managers tend to choose short-term survival rather than long-term development in times of social distancing.
Article
Purpose The purpose of this study is to explore the effect of managerial ability on voluntary environmental, social and governance (ESG) disclosure and assurance. By focusing on managerial ability, this study provides a more nuanced understanding of the factors influencing a firm’s ESG disclosure and assurance practices. This study contributes to a relatively unexplored area of study regarding the role of top management in promoting ESG reporting. Design/methodology/approach This study draws on a sample of publicly listed firms from 2014 to 2019 in Taiwan and applies the data envelopment analysis method to measure managerial ability. Heckman’s (1979) two-step model is used to estimate the primary models to prevent the results from being affected by possible bias because of self-selection. Findings The empirical evidence suggests that managerial ability is positively related to voluntary ESG disclosure and intention to seek third-party assurance of the report. Overall, managerial ability determines whether a firm will use voluntary ESG disclosure and assurance as a corporate strategy to respond effectively to stakeholders’ needs. The findings are robust after using alternative measures of managerial ability. Practical implications Investors and other stakeholders keen on seeking ESG information offered by companies could find the findings of this study valuable. By better comprehending how managerial competence impacts voluntary ESG disclosure and assurance, stakeholders may be better equipped to hold companies responsible for their ESG disclosure practices and make informed investment decisions. Social implications In the ESG decision-making process, managers with better abilities have a higher tendency to use voluntary disclosure and assurance as a part of the company’s sustainable policy. Originality/value Unlike previous studies of the determinant factors of ESG disclosure, which mainly explore factors at the national or corporate level, this study focuses on factors at the individual level (i.e. managerial ability) to fill the gap in the literature. This study also presents empirical evidence that corroborates the idea that managerial competence can influence not only ESG disclosure but also the voluntary assurance of ESG information.
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Information asymmetry, agency problems and disclosure are important aspects of modern capital markets. This research aims to measure the extent of Strategic Management Accounting (AMS) disclosure and examine the influence of the independent board on the level of AMS disclosure. This research uses proprietary cost and cost of capital as moderating variables. This research uses data from 545 manufacturing companies listed on the Indonesia Stock Exchange from 2016 - 2020. This research uses multiple linear regression with panel data to test the influence of independent boards on the level of AMS disclosure. In addition, this research uses Moderated Regression Analysis to test the role of proprietary costs and cost of capital as moderating variables. The research results show that independent boards have a positive effect on AMS disclosure when there is a trade-off between the benefits and costs of AMS reporting for shareholders. Keywords: Independent Boards; SMA Disclosure; Proprietary Cost; Cost of Capital
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While corporate social responsibility (CSR) has played an increasingly important role in corporate decision-making, the role of CSR disclosure in a firm's investment activities remains poorly understood. This study investigates the impact of CSR disclosure on mergers and acquisitions (M&As), which are pivotal investment activities. We find that firms disclosing voluntary CSR reports experience significantly stronger market reactions to M&A announcements than those that do not disclose such reports. Specifically, acquisitions by voluntary CSR disclosers achieve 1.2% higher returns upon acquisition announcements, leading to a substantial increase in shareholder value. Our findings are consistent across a series of robustness tests. Additional analyses suggest that the positive market reactions are especially tied to voluntary disclosures concerning the protection of employees and customers, and that the quality and financial materiality of voluntary CSR disclosures amplify positive market responses. We also find that voluntary CSR disclosers exhibit better long-term post-acquisition market and operational performance. Collectively, our findings suggest that voluntary CSR disclosures bolster acquisition returns by mitigating stakeholder resistance. Additionally, by leveraging the unique conditional CSR disclosure regulation in China and using a staggered DID design, we observe a diminished market reaction for acquirers following mandatory CSR disclosures. Overall, this research provides new insights into the contrasting effects of voluntary and mandatory CSR disclosures, emphasizing the vital role of effective stakeholder CSR communication in the success of M&As. Free share link:https://onlinelibrary.wiley.com/share/author/GHIVHJPNPEH4FDV7UHGW?target=10.1111/jbfa.12768
Article
This paper provides a theoretical framework and empirical support for an examination of corporate financial performance (CFP) from the perspective of an effect that is analogous to corporate social responsibility (CSR) advertising. We propose that not all companies are capable of “doing well by doing good.” Through an analytic model, we identify three key elements for determining a company's CSR advertising‐analogous effect on CFP: the incremental margin (gross profit rate), the sales–CSR elasticity and sales demand in the market (market share). By re‐examining the equivocal relationship between CSR and CFP based on a sample of publicly held US companies from 1991 to 2018, we document that companies in the best position to undertake CSR activities (with gross profit rates, sales–CSR elasticities and market shares above the industry medians) have a superior advertising‐analogous effect to other companies. Moreover, our empirical results show that companies in the best position to undertake CSR activities face less severe agency problems when they conduct more CSR activities than other companies. Finally, in a test of whether regular advertising expenditures and CSR devotion could jointly enhance current CFP, the results show that the positive joint effect is more pronounced for companies in the best position to undertake CSR activities than for other companies.
Article
Purpose This study uses a multi-level framework to systematically summarize and synthesize the empirical literature on determinants of sustainability disclosure. Design/methodology/approach This review study is based on 159 empirical studies examining determinants of sustainability disclosure and published in Charted Association of Business Schools (CABS) ranked journals over the last 40 years. Findings Companies are experiencing multi-level pressures for sustainability disclosure. Macro-level variables include political, legal, social-cultural and international pressures. Meso-level factors include customers' concerns, shareholders’ and investors' demands, industry-level variables and media coverage. Micro-level factors include the firm-level governance mechanisms, executives' reporting attitude and role of sustainability promoting institutions. Unlike in developed markets, companies in developing markets feel minimal public pressure for sustainability disclosure but rather are influenced by international NGOs, the media and international buyers. Multi-level and multitude of pressures for sustainability disclosure explains the widely observed differences between studies. Originality/value This research presents the most extensive systematic review of the extant sustainability disclosure literature and is the first study to group determinants into micro-, meso- and macro-level components using multi-level analysis.
Book
Monografia porusza temat sprawozdawczości w zakresie zrównoważonego rozwoju praktykowanej, najpierw dobrowolnie, a obecnie pod wpływem przepisów wynikających z Dyrektyw Komisji Europejskiej obligatoryjnie, przez spółki w Polsce i na świecie. Opracowanie dotyczy teorii, standardów, przepisów i praktyki ujawnień tych informacji w zakresie zrównoważonego rozwoju w raportach rocznych spółek oraz ich ewolucji na przestrzeni lat. Praca ta ma w założeniu stanowić platformę do dyskusji nad szczegółową systematyką informacji ujawnianych w raportach dotyczących zrównoważonego rozwoju w obszarach: teoretycznym (podjętej próby określenia pojęć podstawowych w zakresie raportowania zrównoważonego rozwoju na podstawie badań), praktycznym (polegającym na wskazaniu standardów i prawodawstwa regulujących ten rodzaj raportowania) oraz normatywnym (polegającym na próbie stworzenia systematyki raportowanych informacji przez polskie spółki).
Article
Purpose Corporate social responsibility (CSR) remains a prevalent topic for businesses worldwide, especially for those operating in developing countries. The attention on small and medium-sized enterprises' (SMEs') CSR engagement in developing countries has been neglected, although SMEs play a vital role in socio-economic development in African countries like Kenya. This paper aims to conceptualize the relationship between the SME manager's values, ethics, emotional commitment to long-term socio-economic development and the firm's CSR practices. Design/methodology/approach The authors conducted seven semi-structured interviews with Kenyan and German SMEs located in Nairobi. A deductive-inductive analysis approach was chosen, confirming previous findings and contributing new ideas to the International Business (IB) literature. Findings This paper develops a concept linking the values and beliefs of the SME manager with the firm's CSR practices in developing countries via the manager's emotional commitment to local long-term socio-economic development. The Kenyan managers tend to show a higher degree of emotional commitment, which the authors explain by two drivers: (1) philanthropic, self-motivated driver and (2) expectation-based, environment-motivated driver. The authors' findings add to the literature on SMEs' CSR engagement in developing countries by looking at the individual level of analysis. Originality/value This paper develops a concept linking the values and beliefs of the SME manager with the firm's CSR practices in developing countries.
Chapter
Environmental, social, and governance (ESG) has been prevalent over the past two decades and is a relatively new concept for investors and companies. Investors and companies increasingly prioritise ESG in their decision-making due to responsible investment and the growing social and environmental problems, such as modern slavery, unsustainable consumption, and climate change. Policymakers and regulators developed related policies and regulations to assist local companies align with ESG initiatives. The development of ESG practice in Asia is still at the initial stage compared to Western countries. Asian countries show different levels of ESG implementation due to heterogeneous institutional backgrounds. The policymakers, market regulators, and listed companies have taken a series of measures to incorporate ESG into corporate strategies, such as voluntary or mandatory ESG reporting standards, to create a transparent, accountable, and favourable market with low risk for different stakeholders. A number of theories are adopted to explain the motivations of ESG reporting. This chapter will provide a general overview of how ESG originated and evolved in investment decisions, introduce particular well-adopted global ESG reporting standards, and how regional regulators and listed companies in response to this global trend.KeywordsEnvironmental social and governance (ESG)SustainabilityMaterialityTask force on climate-related financial disclosures (TCFD)Global reporting initiatives (GRI)
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Offered here is a conceptual model that comprehensively describes essential aspects of corporate social performance (CSP). The three dimensional model address major questions of concern: (1) What is included in the definition of CSR? (2) What are the social/stakeholder issues the firm must address? and (3) What is the organization's strategy/mode/philosophy of social responsiveness. The first dimension is the source of the original four-part definition of CSR originated: economic, legal, ethical, and discretionary (later termed philanthropic). It was later presented at the CSR Pyramid (1991).
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This paper analyzes how national institutional factors affect the adoption of the international environmental management standard ISO 14001, using a panel of 139 countries from 1996 to 2006. The analysis emphasizes that during the emerging phase of the standard, the potential lack of consensus within the constituents of the national institutional environment concerning the value of a new standard could send mixed signals to firms about the standard. The results show that in the early phase of adoption, regulative and normative forces within the institutional environment can work against each other. Results also show that regulative or coercive forces play a relatively more important role in the early phase of adoption of the standard than in the subsequent phases of diffusion. In the later phases of diffusion of ISO 14001, normative forces, such as the diffusion of other management standards, as well as factors related to trade, play a more important role. Because of the similarities between environmental management standards and corporate social responsibility standards, this study can help identify some of the challenges for diffusion of ISO management standards in the area of social responsibility.
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Management system standards, also called meta‐standards, have been adopted by an increasing number of organizations across the world. Although these management system standards are based on the same type of management principles and institutional arrangements, the literature remains scattered, with diverse studies focused on specific standards and published in various journals. The main objective of this paper is to analyse the academic research on meta‐standards through an integrative review intended to shed light on the main conclusions and substantial advances made in this area. This integrative review focuses more specifically on the two main meta‐standards which have been adopted by more than 1.3 million organizations worldwide: ISO 14001 and ISO 9001. The paper contributes insights into the main streams of the literature and current knowledge gaps to be addressed in future research on the various issues related to meta‐standards: global governance, diffusion processes, motivations, benefits of adoption and impacts on performance, internalization, integration, consultancy and auditing.
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Offered here is a conceptual model that comprehensively describes essential aspects of corporate social performance. The three aspects of the model address major questions of concern to academics and managers alike: (1) What is included in corporate social responsibility? (2) What are the social issues the organization must address? and (3) What is the organization's philosophy or mode of social responsiveness?
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This chapter empirically examines factors associated with the environmental disclosures made by Canadian manufacturing firms in their 1993 annual reports. Existing studies suggest that corporate environmental information is value-relevant and that firms may disclose such information in a strategic fashion. This study examines the extent to which voluntary disclosure theory can explain corporate disclosure of general and financial environmental information. We find that firms with more news media coverage of their environmental exposure, higher pollution propensity, and more political exposure are more likely to disclose general environmental information. These findings are consistent with the predictions of the voluntary disclosure literature. We also find that disclosure of financial information about corporate environmental impact is influenced less by voluntary disclosure factors than is general disclosure.
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In this paper we explore how multinational corporations (MNCs) adopt assurance practices to develop and sustain organizational accountability for sustainability. Using a panel of Fortune Global 250 firms over a period of ten years, we document the diffusion patterns of third-party assurance of sustainability reports. We specifically investigate how evolving auditing practices, namely diversity of assurance standards and type of assurance providers, shape the quality of sustainability assurance statements. The results illustrate great variability in the adoption of assurance practices in the formative stages of this novel market. Our descriptive analysis indicates the relevance of external institutional pressures as well as internal resources and capabilities as underlying factors driving the adoption of assurance. Our evidence also suggests that several MNCs project a decoupled or symbolic image of accountability through assurance, thereby undermining the credibility of these verification practices. The paper contributes to the emerging literature on international accountability standards and emphasizes the need to enhance theory-based, cross-disciplinary knowledge related to auditing and accountability processes for sustainability.
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Offered here is a conceptual model that comprehensively describes essential aspects of corporate social performance. The three aspects of the model address major questions of concern to academics and managers alike: (1) What is included in corporate social responsibility? (2) What are the social issues the organization must address? and (3) What is the organization's philosophy or mode of social responsiveness?
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This paper investigates the extent to which certification auditing can contribute to the realization of organizational accountability for sustainable development. A theoretical framework based on a critical analysis of financial and ISO auditing practices is proposed to shed light on the misconceptions, paradoxes and rational myths underlying the institutionalization of auditing practices in the area of corporate sustainability. As such, this paper casts doubt on the imagery of impartiality, rigor and accountability projected by organizations through discourses of certification. It also illustrates the pertinence of studying the auditing function from a cross-disciplinary viewpoint, and of paying attention to the processes by which auditing travels from one discipline to another. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.
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ISO 14001, released in 1996, provides the basic framework for the establishment of an Environmental Management System (EMS) that can be audited and certified. ISO is not only an acronym for the International Organization for Standardization, but is also a term that refers to its Greek meaning: ‘equal.’ The main rationale for the creation of ISO 14001 was that its worldwide acceptance should facilitate international trade by harmonizing otherwise diffuse environmental management standards and by providing an internationally accepted blueprint for sustainable development, pollution prevention, and compliance assurance. However, the implementation of ISO 14001 varies significantly across the globe. A significant number of firms have adopted ISO 14001 in Western Europe and Asia. In December 1999, 52% of the 14,106 ISO 14001 certified facilities were located in Western Europe and 36% in Asia. On the contrary, very few American companies have adopted this voluntary standard. U.S. certified facilities accounted for only 4.5% of the total of ISO 14001 certified facilities in the world in December 1999. The U.S. institutional environment seems acting as a deterrent to ISO 14000 adoption as U.S. companies are fearful of the certification process which lays their performance open to public scrutiny. The opposite is true in Europe, where governments have encouraged the adoption of environmental management standards by setting up a trusted certification system and providing technical assistance to potential adopters. This paper offers a conceptual framework to analyze this variation in adoption rates. It is proposed that the regulatory, normative and cognitive aspects of a country's institutional environment greatly impact the costs and potential benefits of ISO 14001 adoption and therefore explain the differences in adoption across countries. The analysis is supported by data collected from a phone questionnaire to 140 firms in Europe and a questionnaire mailed to 152 firms in the U.S.
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The globalization process has foregrounded ethnic discrimination as an increasingly important area of law around the world. Allowing a better understanding of the issue of ethnic discrimination and inequality, this book offers a comparative analysis of legislation impacting ethnic equality in various Anglophone countries. It demonstrates that it is possible to achieve equality at both national and international levels. A compelling historical analysis of the North American Free Trade Agreement and the European Union Treaty is provided together with a detailed examination of diversity and the law. The book will interest practitioners and others interested in ethnic legal issues.
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This study reports the results of a behavioral experiment examining whether financial analysts from Australia, the United States, and the United Kingdom perceive a difference in the credibility of stand-alone corporate social responsibility (CSR) reports depending on whether they are assured, and the type of assurance provider (professional accountants versus sustainability consultants). We further examine whether the perceived credibility differs for financial analysts from the different countries and whether results hold for companies from different industries. The overall results show the credibility of a CSR report is greater when it is assured and when the assurer is a professional accountant. While assurance increases the credibility of the information in each of the three countries included, the relative impact is context-specific. Information is perceived to be more credible when a company is from an industry where assurance is more commonplace, and by financial analysts from the United States when the assurer is a professional accountant. Financial analysts from Australia and the United Kingdom perceive little difference in the enhanced credibility provided by the different assurance providers. Data Availability: Contact the first author about the availability of the data.
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While many sociologists have noted that organizational legitimacy is important for organizational survival, legitimacy has been infrequently empirically examined. This paper presents a conceptual framework in which organizational legitimacy is defined as the congruence between the values associated with the organization and the values of its environment. Challenges to organizational legitimacy and responses to these challenges are illustrated in a discussion of the American Institute for Foreign Study. Corporate philanthropic contributions, the composition and size of boards of directors, and the content of annual reports and other organizational communications are presented as efforts on the part of organizations to achieve legitimacy. The focus on processes of organizational legitimation can be used in analyzing a variety of organizational behaviors that are components of organization-environment interaction.
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The main purpose of this exploratory analysis is to understand whether, based on evidence gathered from international best practices selected among corporations which adopt the Global Reporting Initiative guidelines in sustainability reporting (SR), stakeholders are significantly consulted and involved—as international literature would indicate—by assurance providers, during assurance processes of SR. We aim at verifying if this practice—known as stakeholder assurance—is in fact widespread in SR assurance by carrying out empirical research, through content analysis, into a sample of 161 assurance statements of international corporations, in order to test characteristics of any stakeholder assurance implemented.
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Various rationales have been advanced to explain the phenomenon of corporate social reporting. Among these has been legitimacy theory which posits that corporate disclosures are made as reactions to environmental factors and in order to legitimise corporate actions. This paper reports the results of an historical analysis of social disclosures in 100 years of annual reporting by a dominant corporation in the Australian mining/manufacturing industry. A variable but significant pattern of social reporting is identified and compared with an earlier study of social reporting by US Steel. The results of this study fail to confirm legitimacy theory as the primary explanation for social reporting in the Australian case.
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The decision to disclose social information in annual reports is a voluntary one. A positive model of the factors that may influence firms' decisions to disclose social information is proposed. It is hypothesised that the decision may be affected by (a) social performance, (b) political visibility, (c) financial variables, and (d) economic performance. It is found that the decision to disclose social information is well explained by the model and that the key explanatory variables are social performance and political visibility.
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Purpose The paper attempts to determine whether market participants see value in the corporate choice to begin publishing a standalone sustainability report. It also seeks to investigate whether differences in market reactions are associated with the quality of the sustainability report. Design/methodology/approach The paper uses standard market model methods to isolate the unexpected change in market returns in the period surrounding the announcement of the release of a first‐time sustainability report. Findings The paper finds, on average, no significant market reaction to the announcement of the release of the sustainability reports. However, in cross‐sectional analyses, it is found that companies with the highest quality reports exhibited significantly more positive market reactions than companies issuing lower quality reports. These results hold when we control for firm size and membership in socially exposed industries. Research limitations/implications The paper examines only the US firms and the measure of quality is based on an assessment of the extent to which reports provide disclosures recommended by the Global Reporting Initiative. The sample is also relatively small. Finally, the analysis examines perceived value for only one potential stakeholder group – shareholders. Future research could address any of these shortcomings. Practical implications The evidence suggests that companies seeking value from their sustainability reporting need to carefully consider the quality of their presentations. Originality/value The finding that quality of sustainability reporting is important to investors provides valuable evidence to support improvements in the implementation of sustainability accounting and reporting.
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Takes as its departure point the criticism of Guthrie and Parker by Arnold and the Tinker et al. critique of Gray et al. Following an extensive review of the corporate social reporting literature, its major theoretical preoccupations and empirical conclusions, attempts to re-examine the theoretical tensions that exist between “classical” political economy interpretations of social disclosure and those from more “bourgeois” perspectives. Argues that political economy, legitimacy theory and stakeholder theory need not be competitor theories but may, if analysed appropriately, be seen as alternative and mutually enriching theories from alternative levels of resolution. Offers evidence from 13 years of social disclosure by UK companies and attempts to interpret this from different levels of resolution. There is little doubt that social disclosure practice has changed dramatically in the period. The theoretical perspectives prove to offer different, but mutually enhancing, interpretations of these phenomena.
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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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Researchers have reported a positive, negative, and neutral impact of corporate social responsibility (CSR) on financial performance. This inconsistency may be due to flawed empirical analysis. In this paper, we demonstrate a particular flaw in existing econometric studies of the relationship between social and financial performance. These studies estimate the effect of CSR by regressing firm performance on corporate social performance, and several control variables. This model is misspecified because it does not control for investment in R&D, which has been shown to be an important determinant of firm performance. This misspecification results in upwardly biased estimates of the financial impact of CSR. When the model is properly specified, we find that CSR has a neutral impact on financial performance. Copyright © 2000 John Wiley & Sons, Ltd.
Article
A broad literature has emerged over the past decades demonstrating that firms’ environmental strategies and practices are influenced by stakeholders and institutional pressures. Such findings are consistent with institutional sociology, which emphasizes the importance of regulatory, normative and cognitive factors in shaping firms’ decisions to adopt specific organizational practices, above and beyond their technical efficiency. Similarly, institutional theory emphasizes legitimation processes and the tendency for institutionalized organizational structures and procedures to be taken for granted, regardless of their efficiency implications. However, the institutional perspective does not address the fundamental issue of business strategy necessary to explain the persistence of substantially different strategies among firms that are subjected to comparable levels of institutional pressures. In this chapter, we present current research arguing that such firms adopt heterogeneous sets of environmental management practices despite facing common institutional pressures because organizational characteristics lead managers to interpret these pressures differently.
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The decision to disclose information concerning a firm's environmental liabilities is modeled as a sequential game involving the firm, a capital market, and outside stakeholders who can impose proprietary (political) costs on the firm. A partial disclosure equilibrium is derived in which firms reveal information strategically, maximizing the share‐value net of expected political costs. Inherent uncertainty regarding the existence and size of the liabilities creates a setting where outsiders are uncertain if management is informed about these liabilities, so firms can plausibly withhold “bad news”, that is, they do not disclose liabilities that exceed a threshold level. Three novel hypotheses are that a firm is more likely to disclose as (1) its pollution propensity increases, (2) outsiders' knowledge of its environmental liabilities increases, and (3) the risk of incurring proprietary costs decreases. Empirical support is found for the hypotheses, based on the accounting disclosures made by sample firms selected from the records of the Ontario Ministry of the Environment and Energy. Improved accounting and auditing standards for environmental disclosure would build on at least three implications of the study: To the extent that inherent uncertainty leaves managers with discretion as to what to disclose, the partial disclosure equilibrium result suggests that not all firms will comply with disclosure standards. Publishing broad environmental performance indicators for companies in nonaccounting outlets would increase public awareness of a manager's private information endowment, making voluntary accounting disclosures of the liabilities more likely. If a significant decline in stakeholder tolerance of pollution occurs, the expected proprietary costs of disclosing increase, and companies become less likely to disclose.
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Firms are increasingly under pressure from stakeholders to incorporate the triple-bottom line of social, environmental and economic responsibility considerations into operations and supply chain management strategies. This research uses content analysis software that performed centering resonance analysis to examine corporate communication to stakeholders through corporate social responsibility (CSR) reports. The intent is to determine how supply chain strategies factor in to the triple-bottom line of 100 socially and environmentally responsible global companies. This research compares and contrasts the influential words in the CSR reports of firms from a range of industries, sizes and geographical regions. The content analysis revealed ten themes that provide a snapshot of how top global companies integrate and improve the triple-bottom line in internal operations and external supply chains. Findings indicated that while institutional pressure is the major driving force behind strategy development for all of the industries studied, companies emphasize different facets of social, environmental and economic responsibility upstream and downstream in supply chains based on industry, size and geographic location. The analysis revealed unique insights regarding corporate communications that other methodologies would not find.
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This paper explores the factors associated with voluntary decisions to assure social, environmental and sustainability reports. Since the market for assurance services in this area is in its formative stages, there is a limited understanding of the demand for this emergent non-financial auditing practice, which is evolving rapidly across different countries. Drawing from extant literature in international auditing and environmental accounting, we focus on a set of country-level institutional factors to explain the adoption of sustainability assurance statements among an international panel of 212 Fortune Global 250 companies for the years 1999, 2002 and 2005. Consistent with our expectations, our results provide evidence that companies operating in countries that are more stakeholder oriented and have a weaker governance enforcement regime are more likely to adopt a sustainability assurance statement. Further, the demand for assurance is higher in countries where sustainable corporate practices are better enabled by market and institutional mechanisms. Our exploratory findings also indicate that the likelihood of choosing a large accounting firm as assurance provider increases for companies domiciled in countries that are shareholder oriented and have a lower level of litigation. We conclude the paper by suggesting three directions of research in the area of sustainability assurance that have relevant academic and practical implications. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment.
Article
This study examines how both the level and the nature of environmental information voluntarily disclosed by Australian firms relate to their underlying environmental performance. Disclosure is scored using an index developed by Clarkson et al. (2008) based on Global Reporting Initiative (GRI) Guidelines and the environmental performance measure is based on emission data available from the National Pollutant Inventory (NPI). The sample consists of 51 firms that reported to the NPI in both 2002 and 2006. The findings are as follows. First, descriptive statistics indicate that while there was modest improvement in disclosure between 2002 and 2006, the highest disclosure score obtained was just slightly in excess of 50% of the maximum available based on the GRI Guidelines. Second, the results consistently indicate that not only do firms with a higher pollution propensity disclose more environmental information; they also rely on disclosures that the GRI views as inherently more objective and verifiable. Taken together, these results suggest that concerns regarding the reliability of voluntary environmental disclosures in the Australian context remain valid and thereby potentially signal a need for both enhanced mandatory reporting requirements and improved enforcement. In this regard, our study also informs regulatory policy on mandatory disclosures of environmental performance.
Article
Corporate Social Responsibility (CSR) has existed in name for over 70years. It is practiced in many countries and it is studied in academia around the world. However, CSR is not a universally adopted concept as it is understood differentially despite increasing pressures for its incorporation into business practices. This lack of a clear definition is complicated by the use of ambiguous terms in the proffered definitions and disputes as to where corporate governance is best addressed by many of the national bodies legislating, mandating, or recommending CSR. This article explores the definitions of CSR as published on the Internet by governments in four countries (United Kingdom (UK), France, the United States, and Canada). We look for a consensus of understanding in an attempt to propose a more universal framework to enhance international adoption and practice of CSR using the triple bottom line. Our results concur with the findings of both national and international bodies and suggest that both within and among the countries in our study there exists no clear definition of the concept of CSR. While there are some similarities, there are substantial differences that must be addressed. We present a number of proposals for a more universal framework to define CSR. Keywordscorporate social responsibility–definition–United Kingdom–France–United States–Canada
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This article contributes to the growing scholarship on the topic of assurance services for sustainability reports. We first synthetically illustrate the main international standards for the implementation of assurance services regarding the subject documents. The second part of our article is an empirical analysis of reports drawn up on the basis of the current Global Reporting Initiative 2006 guidelines, and looks at how effectively these standards have been implemented, analyzing the different typologies of assurance statement.
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This paper traces the development of corporate citizenship as a way of framing business and society relations, and critically examines the content of contemporary understandings of the term. These conventional views of corporate citizenship are argued to contribute little or nothing to existing notions of corporate social responsibility and corporate philanthropy. The paper then proposes a new direction, which particularly exposes the element of "citizenship". Being a political concept, citizenship can only be reasonably understood from that theoretical angle. This suggests that citizenship consists of a bundle of rights conventionally granted and protected by governments of states. However, the more that governmental power and sovereignty have come under threat, the more that relevant political functions have gradually shifted towards the corporate sphere – and it is at this point where "corporate" involvement into "citizenship" becomes an issue. Consequently, "corporate citizens" are substantially more than fellow members of the same community who cosily rub shoulders with other fellow citizens while bravely respecting those other citizens'' rights and living up to their own responsibility as corporations – as the conventional rhetoric wants us to believe. Behind this relatively innocuous mask then, the true face of corporate citizenship suggests that the corporate role in contemporary citizenship is far more profound, and ultimately in need of urgent reappraisal.