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More disclosure=better CSR reputation? An examination of CSR reputation leaders and laggards in the global oil and gas industry



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Christopher J. Hughey
Adam J. Sulkowski
This paper contributes to the scholarship of CSR and sustainability reporting by testing whether greater
data availability about companies leads to their having better CSR reputations and possibly CSR
performance. The authors begin with a brief literature review to develop the hypothesis that greater data
availability may be correlated with having a positive CSR reputation. The authors choose the international
energy industry as a focus, since these companies were early adopters of sustainability reporting and
have the potential to have widespread and either very good or very bad reputations. Leaders and
laggards in terms of perceived CSR performance within this industry are identified using scores
generated by CSR Hub, a reputation aggregation service. A regression test is performed and the results
indicate a significant positive relationship: the more data is available about a company in the international
oil and gas industry, the better its CSR reputation tends to be. Since this study only considers availability
of data, and not the quality or content of information, the key finding appears consistent with the old
adage that “any publicity is good publicity.” The authors also share some observations about the
characteristics of the reputational leaders and laggards and their reputations across various aspects of
CSR. For example, consistent with previous findings, CSR reputation leaders are found to be older and
larger, while laggards are newer and smaller. The authors conclude with a discussion of implications for
managers and scholars and potentially fruitful future veins of inquiry.
Keywords: Corporate Social Responsibility (CSR), Oil and Gas Industry, Energy Industry, International
Business, Corporate Governance, Sustainability, Sustainability Reporting, Disclosure, Reputation
Thousands of companies around the world, including a majority of the Global Fortune 500, voluntarily
report on their environmental, societal, and economic impacts (Scott, 2000). The practice is alternatively
known as corporate social responsibility (CSR) reporting, sustainability reporting, citizenship reporting,
triple bottom line (TBL), or environmental, societal, and governance (ESG) reporting (Sulkowski and
White, 2009).
While the practice of sustainability reporting is growing rapidly, the practice and its benefits are
imperfectly understood by practitioners and scholars. The perceived CSR performance of companies is
also growing in importance, as various stakeholders continue to take a greater interest in the
environmental, economic, and societal impacts of companies in which they may invest, or for which they
may work, or from which they may buy.
This paper contributes to the scholarship of CSR and sustainability reporting by testing whether greater
data availability leads to companies having better CSR performance ratings in the international energy
industry. The authors show that having more data available results in companies, at a minimum, having
better CSR reputations. Because the study did not discriminate based on the quality or positive vs.
negative nature of the data available, it appears that the volume of data alone impacts reputation. This
interpretation is consistent with the old adage that “any publicity is good publicity.” If one accepts
performance ratings to be reflective of actual performance, then one may further conclude that greater
disclosures and visibility are leading to better mitigation of negative impacts and an increase in positive
impacts. The authors also document observations of some characteristics of leaders and laggards in
terms of CSR reputations in this industry. The paper concludes with a discussion of implications for
managers and researchers.
The origins of the term corporate social responsibility in scholarly literature date back to the 1950s (Caroll,
1999). Since then, perceptions of CSR have evolved. The concept of CSR can be defined in many ways.
One common definition is "actions that appear to further some social good, beyond the interests of the
firm and that which is required by law" (McWilliams and Siegel, 2001). As stated above, sustainability
reporting (also known as CSR reporting) is the practice of reporting a company’s environmental, societal,
and economic impacts; it is sometimes known as ESG (environmental, societal, and governance)
Corporate reputation has been defined as the perceived capacity of a firm’s ability to meet stakeholders’
expectations(Waddock, 2000), or the perceived stakeholders’ opinion of a firm which depends on the
extent to which the expectation of those stakeholders is met” (Fombrun and Shanley, 1990). Some have
suggested that a firm’s reputation is composed both of its own actions and the status of those actions
relative to the actions of others, which set the expectations of the firm’s stakeholders (Bertels and Peloza,
Soppe et al. (2011) offer an excellent summary of the theoretical framework and a model for gauging
CSR reputation. Siltaoja (2006) points out that there is no single “right” set of criteria for CSR reputation.
Both Fombrun (1998) and Lewis (2001) suggest that CSR reputation is comprised of the following criteria:
(1) environmental impacts, (2) treatment of employees, (3) financial performance, (4) product quality, and
(5) quality of management or organizational issues. To this list of criteria that they hold in common,
Fombrun (1998) adds (6) community involvement, while Lewis (2001) adds (6) customer service and (7)
social responsibility. Schultz et al., (2001) and others have offered variations on what comprises CSR
The concept of disclosing data on CSR-related issues gained traction in the mid 1990’s through the work
of John Elkington (1994 and 1998). Clarke and Gibson-Sweet (1999) suggest that companies are
motivated to publish CSR performance data by the strategic need to manage their reputation and
legitimacy. Ullmann (1985) offers a model for predicting such CSR activities based on a stakeholder
theory of strategic management. Some have been critical of CSR reporting, arguing that it does not lead
to better conduct, but rather that the exclusive aim and outcome is to manage reputation (Moneva et al.,
2006; Gnepa, 2005). Others articulate variations upon this central theme of data disclosure being
motivated by a desire to legitimize management decisions and heighten the company’s image as socially
and environmentally responsible (Eden, 2000). Empirical studies show that “measures of stakeholder
power, strategic posture, and economic performance are significantly related to levels of corporate social
disclosure” (Roberts, 1992). Hasseldine et al. (2005) confirmed that CSR disclosures positively impact
As of the second decade of the 2000s, there is a nascent consensus among researchers that there is a
positive relationship between the publicized CSR activities of a company and its financial performance
and value. Tsoutsoura (2004) found a positive relationship between financial performance and CSR
activities in 500 companies worldwide over a five year period. Rossi (2009) found that the firms
comprising the Bovespa Corporate Sustainability Index (ISE) are traded at a premium. While not every
study proves such a connection (Wu et al. 2010), the weight of empirical evidence suggest CSR activities
and financial performance are positively related (Van Beurden and Gössling, 2008). Findings to the
contrary typically cite to out-of-date data (Van Beurden and Gössling, 2008). A review of 52 scholarly
articles found the same consensus, and further concluded that CSR reputation was the means by which
CSR activity boosts financial performance (Orlitzky et al., 2003).
Executives agree that there is a link between reporting on their CSR activities, managing CSR
reputations, and ultimately company performance and value, as evidenced by the popularity of
sustainability reporting. In 2011, KMPG researched the sustainability reporting practices of the largest
100 companies (N100) in each of 34 countries (KPMG, 2011). This resulted in the following list of the
percentage of the N100, by country, that reported on CSR activities: UK (100%), Japan (99%), South
Africa (97%), France (94%), Denmark (91%), Brazil (88%), Spain (88%), Finland (85%), United States
(83%), Netherlands, (82%) Canada (79%), Italy (74%), Sweden (72%), Hungary (70%), Portugal (69%),
Nigeria (68%), Mexico (66%), Switzerland (64%), Slovakia (63%), Germany (62%), China (59%), Russia
(58%), Australia (57%), Bulgaria (54%), Romania (54%), Ukraine (53%), South Korea (48%), Singapore
(43%), Taiwan (37%), Greece (33%), Chile (27%, New Zealand (27%), India (20%), Israel (18%). To
summarize: over 50% of the N100 in 26 out of the 34 countries in the study reported on CSR activities.
Its 2011 study was the latest of three surveys by KPMG that also surveyed executives about their
motivations for sustainability reporting. The percentage of executives at the largest 250 companies in the
world (the Global Fortune 250) who chose “reputation or brand” as a motivation for sustainability reporting
grew from 27% (KPMG, 2005) to 55% (KPMG, 2008) to 67% (KPMG, 2011). Other prominent drivers of
sustainability reporting included “employee motivation”, encouraging “innovation and learning” and
“access to capital or shareholder value”. The rise of “reputation or brand” from the seventh most
commonly chosen response (KPMG, 2005) to the most popular response (KPMG, 2011) reflects a
widespread and growing conviction among executives that CSR data disclosure impacts reputation.
Based on the foregoing literature review and data, the following hypothesis is proposed:
H1: Greater availability of CSR data about a company leads to having a better CSR reputation.
Conversely, the null hypothesis is that there is no significant CSR reputation difference between
companies based on the availability of data on their CSR performance.
To test their hypothesis, the authors used the CSR Hub performance rating tool, available online at CSR Hub’s objective is “to provide consistent ratings of Corporate Social Responsibility
(CSR) performance for as broad a range of companies as possible. As described on the company’s
website: [o]ur search system allows CSRHUB users to find and compare the ratings of companies in
different industries and countries. Both consumers and businesspeople can use this information to make
economic decisions, look for employees or jobs, organize buycotts and boycotts, and make purchasing or
supply chain decisions.
It is vital to stress that the authors do not offer any conclusions or observations as to whether CSR Hub’s
tool is indicative of actual CSR performance of companies. Regardless of whether or not CSR Hub’s
ratings reflect realities of comparative CSR performance, the authors simply used its ratings as a fair
indicator of CSR reputations.
To elaborate: inherently, judging CSR performance involves choices by the judging entity: what data to
consider, how many sources to reference, what metrics to use, how much weight to assign to certain
aspects of CSR performance, and many other decisions about which reasonable and informed experts
may disagree. The creators of CSR Hub, as described below, acknowledge this.
Access to CSR Hub was purchased and the authors have no financial stake or any other vested interest
in or sense of loyalty to CSR Hub or its founders that would undermine their objectivity in carrying out the
present study.
The authors chose CSR Hub because it is the most comprehensive CSR information aggregation tool
that could be identified: the methodology of CSR Hub ratings uses 125 sources of CSR information, with
the largest contribution of data coming from aggregating five of the eight leading Environmental, Social,
and Governance (ESG) research firms. The CSR Hub source database also includes information from
publishers, non-governmental organizations (NGOs), and three government agencies. Using a proprietary
system for mapping and normalizing this broad range of information, CSR Hub provides ratings on
around 5,000 companies in 65 countries.
The 125 CSR information sources referenced by CSR Hub use different metrics to assess CSR
performance (e.g., money donated to charity vs. hours volunteered by employees), produce different
results (“Top 50” rankings vs. numerical scores vs. symbols like “+” and -“), track different industries,
cover different geographic regions, evaluate at the product, subsidiary, or parent company level, and
update their analyses at different time intervals,
CSR Hub’s proprietary system endeavors to remove bias and inconsistency by mapping to a central
schema (over two million data elements are assigned to 12 subcategories of CSR performance),
converting data to numerical scales, normalizing to adjust for detected biases among sources,
aggregating (weighting sources for credibility and value, generating ratings at 12 subcategory levels, and
then further consolidating these ratings to four main category levels), and, finally, trimming approximately
1,500 ratings when there is inadequate information. CSR Hub further states that it researches each rated
company and determines its appropriate category of industry. The result is a database of hundreds of
companies, searchable by industry or other characteristics, with overall CSR performance ratings ranging
from 0 to 100, with 100 being the ideal. Again, the authors emphasize that, for the purpose of this study,
the score is taken, at a minimum, as being indicative of widespread overall CSR reputation.
The authors used CSR Hub’s default weight-of-importance assigned to the four main categories of CSR
performance (community, governance, employees, and environment). CSR Hub offers the option of either
using the default user profile (and its weights-of-importance) or customizing a personal profile that reflects
a user’s own personal convictions as to the comparative importance of different aspects of CSR
performance (for example, some users may find environmental issues to be more important than social
issues, or visa-versa). If a user chooses to raise the importance, for example, of environmental impacts,
this would change the weights of certain factors and alter the final ratings of companies.
The authors started by selecting the international oil and gas extraction industry as a focus because they
were among the first to regularly publish reports on their environmental impacts starting in the 1980s
(Patten, 1991), and therefore there is a potentially great abundance of data available about these
companies. Also, the companies have a large potential to have widespread and either very good or very
bad reputations. On the one hand, some major industry members are easily to isolate and vilify for their
role in a carbon-intensive energy economy that contributes to global climate change. On the other, they
have enormous resources to advertise whatever steps they may be taking to improve engines, fuel
blends, and negative side effects of production, transportation, refinement, and distribution. In the human
rights arena, fossil fuel companies have been castigated for their working relationships with murderous
dictatorships (as in Nigeria and Burma), yet, again, have the resources to make and publicize
humanitarian and charitable donations. To mention one more (but by no means the only other) basis for
notoriety, the safety performance of the fossil fuel industry occupies headlines after a fiasco such as the
2010 Deep Water Horizon offshore drilling platform disaster and subsequent oil spill in the Gulf of Mexico.
The subsequent positive and negative aspects of efforts to arrest damage and make amends have the
potential to ruin or burnish a company’s CSR reputation.
For a dataset, the authors chose the 190 companies classified as being in the oil and gas extraction
industry by CSR Hub. Their respective CSR scores were retrieved from CSR Hub’s database on
November 1, 2011. To better be able to make some observations about the reputational outliers, the 35
companies with the best overall CSR rating in this dataset and the 35 companies with the worst overall
CSR rating were identified. Among those 70 companies, the authors then further identified those at the
extremes, as defined by being at least 10 points below (among the worst) or 10 points above (among the
best) the subset’s average overall score. This brought the total number of companies in the dataset to 53.
This identification of CSR “leaders” and “laggards” is consistent with the methodology employed by
Jenkins and Yakovleva (2006) in their analysis of CSR disclosures based on case studies of ten mining
The authors further excluded a few companies for the following reasons. Oil Sands Quest (Canada) and
OGX (Brazil) were excluded because they had zero revenue, as both are still in the exploration-only
phase. Petrohawk was excluded because it is a wholly-owned subsidiary of Billiton. Parallel Petroleum
was excluded because it is privately held by an asset management company, meaning key financial data
was unavailable. Franco-Nevada was excluded because they are primarily focused on gold mining, not oil
and gas. Addax Petroleum was excluded because it is a wholly-owned subsidiary of Sinopec. Finally,
China Blue Chemical and Bill Barrett Corporation were excluded because they only were referenced by
two data sources.
After this scrutiny and screening, a final dataset of 45 companies remained, 25 being outliers with
extremely good reputations and 20 being outlines with extremely bad reputations.
The analysis of the data indicates a significant positive relationship: the reputational scores of the
companies in the dataset are strongly correlated to the amount of data on each company. On average,
the twenty-five companies with the best reputations are associated with over four times as many data
sources as the twenty companies with the worst reputations. The relationship appears to be causal.
Multiple R
R Square
Adjusted R Square
Standard Error
Significance F
t Stat
X Variable
It is important to acknowledge the limitations of this study. First, the study relies upon the methodology of
CSR Hub in generating scores that the authors have accepted as broadly representative of, at the least,
company CSR reputations. Second, the total sample size of 45 is not a large dataset.
Nonetheless, the results suggest that more data being available about a company in the international oil
and gas extraction industry will cause its CSR reputation to be better. The converse is also true.
Depending on whether one accepts that CSR Hub’s methodology and scores are also indicative of actual
CSR performance, one may also conclude that the more data is available about such a company, the
better will be its actual performance, and vice-versa.
Might it be true that the twenty CSR laggards are in fact not such bad companies, but rather that they are
just not reporting information or are under-researched? The authors are not inclined to believe that these
negative CSR performance scores are utterly baseless, because the authors deliberately excluded any
company associated with fewer than three data sources (and, to begin with, CSR Hub’s methodology
claims to eliminate results that are based on an inadequate number of sources). There is publicly
available data concerning all the companies in the dataset that stakeholders, opinion leaders, and
analysts use to judge CSR performance and upon which the CSR reputations are based.
To produce the graph below, the authors grouped the 45 companies in the dataset into groups of five
companies each, starting with the twenty-five CSR leaders, represented by the numbers one through five
(the best five) and moving down the dataset through the laggards, represented by the numbers six
through nine (the worst five). Clearly, the CSR score and number of data sources trend downwards
together, though not completely smoothly.
Blue line on Y-axis = CSR score of each of nine 5-company subsets compared to the dataset average
Red line on Y-axis = average number of data sources related to companies in each 5-company subset
X-axis: 5-company subsets (from 1 = best of leaders, to 9 = worst of laggards)
One might speculate that there are differences in terms of the composition of the CSR leader and laggard
cohorts based on company nationality, or the country with which they are primarily associated. Among the
twenty-five companies with the best reputations, only one (Petroleo Brasileiro of Brazil) was primarily
associated with an emerging economy. By contrast, the twenty laggards include three companies from
developing countries. However, U.S. and Canadian companies are twice as well represented in the
cohort of the twenty companies with the worst reputations than among the twenty-five best. Therefore, it
seems that this study does not support generalizations regarding the likelihood of developing vs.
developed market companies being leaders or laggards in terms of CSR reputation or performance.
However, two observations about the two cohorts merit further discussion and future research: CSR
reputation leaders are older and larger than the laggards. The leaders have been in existence for an
average of seventy years, while on average the laggards have been in existence for only twenty years.
While it is more common to measure company size by their market capitalization, the authors compared
the companies based on revenue per annum in U.S. dollars, because sales are more indicative of the
scale of operations than equity markets’ valuation of their worth. The CSR reputation leaders were, on
average, much larger than the laggards - by a factor of thirty. All but one of the CSR reputation leaders
were multi-billion dollar companies and the group as a whole had an average annual revenue stream of
over 92 billion dollars. By contrast, the twenty laggards were much smaller companies with average
revenue of just 3 billion dollars.
The positive relationship between measures of CSR performance and the age and size of companies has
been documented by previous empirical studies (e.g. Wei et al., 2011; Wagner et al., 2002; Waddock and
Graves, 1997; Henriques and Sadorski, 1996). The theoretical model for such an effect is based on the
reality that larger firms are generally more publicly visible and therefore have more to gain if they are
seen to be conducting business responsibly (Wei et al., 2011). The larger the firm, the more susceptible it
may be to public scrutiny by third parties (such as news media, business analysts, and stakeholder
NGOs), and hence larger firms may feel more external pressure to actually perform better in terms of
CSR. Conversely, the worst offenders may not just seem worse because they disclose less; perhaps they
are worse actors partly as a result of being less noticed. With fewer people and groups scrutinizing them,
smaller companies may feel less pressure to improve their CSR performance and hence may be
comparatively less responsible with regard to impacts on the environment and society.
On this issue the authors would like to proffer a provocative postulation. One might speculate that these
results reveal a phenomenon analogous to the concept of the environmental Kuznets curve (the
controversial theory that people accept the degradation of their environment during early stages of
economic development, but later demand a better environment to accompany their improved lifestyles
(Stern, 2004). Is it possible that something similar occurs among stakeholders in organizations? Are
shareholders, entrepreneurs, employees, clients, neighbors, and activists who otherwise demand more in
term of CSR conduct from a large and established company such as Shell or BP willing to turn a blind eye
in the case of smaller companies? Could lower CSR expectations for newer, smaller companies be based
on the idea that CSR is a luxury they cannot afford during early stages of development? This would be
consistent with the phenomenon of bolting-on CSR activities rather than building CSR into core
business activities; perhaps stakeholders and managers delay having higher expectations of
responsibility with the assumption that a company can always reactively address CSR later in the lifecycle
of the enterprise.
Aside from the differences in company characteristics, there are differences in CSR scores between and
among the CSR reputation leaders and laggards that merit discussion. First, as illustrated below, the
twenty-five leaders are better in all of the four major aspects of CSR performance (community,
governance, employees, and environment), than the twenty laggards. The widest gulf between the
leaders and laggards was in the environmental aspect, where there was a twenty-nine point gap between
the groups’ respective averages. The smallest difference was a nineteen point gap between the leader
and laggard cohorts’ community scores.
Zero on the y-axis = respective average score of 190 companies in the oil and gas extraction industry
The second observation about CSR scores is that the companies not just the average of the cohorts of
CSR reputation leaders and laggards are clearly differentiated and either score very well across all
aspects of CSR performance or do very badly across all categories. No company among the twenty
laggards achieved a score over 48 in any category, while no company in the top twenty-five had a score
under 48 in any category. The third observation about CSR scores is that the twenty-five CSR leaders
demonstrated much less variation across the four categories of reputational performance (community,
governance, employees, environment), with a standard deviation of just under four. Among the twenty
companies with the worst reputations, the standard deviation across the four categories was more than
five. Therefore, the study supports the proposition that CSR leaders tend to be consistently positive in
terms of various aspects of their environmental, societal, and governance reputations (and, possibly, CSR
activities) while laggards tend to have not only much lower, but also greater variation in their low
performance across various aspects of CSR reputation (and, possibly, CSR activities).
Finally, it is vital to note that this study focused on the volume of data that was available about each CSR
leader and laggard. The study did not identify the quality or the type of data related to companies.
Similarly, this study was blind as to whether positive vs. negative information or narratives were
communicated. Some of the largest players in the oil and gas extraction industry experience a glut of
negative media exposure and stakeholder scrutiny. As mentioned above, some have had to communicate
about calamities such as the Deep Water Horizon oil drilling platform accident and disastrous aftermath in
the Gulf of Mexico. Others, such as Halliburton, have recently grappled with voluminous negative publicity
surrounding practices such as hydraulic fracturing in the U.S. that may endanger human health. The
controversial exploitation of the Canadian tar sands is another issue about which large companies such
as Shell have had to communicate. Regardless, there appears to be a near perfectly positive relationship
between the availability of data about companies and their CSR reputations. Further, the largest
companies which tend to attract the most negative publicity are found to be CSR reputation leaders.
The results may therefore be interpreted as an example of the old adage that “any publicity is good
publicity” (which has not been conclusively attributed to any one individual) and are possibly even
consistent with the notion of “succès de scandale” (success from scandal). The concept originated during
the Belle Époque in Paris at the turn from the 19th to 20th century when artists (including Oscar Wilde,
Edouard Manet, Igor Stravinsky, and Richard Strauss) leveraged shocking negative news into fame and
success. Similarly, contemporary celebrities (such as Hugh Grant, Charlie Sheen, Madonna, and Paris
Hilton) have demonstrated that “any press is good pressby profiting from notoriety for shocking
behavior. Perhaps a key implication of this study’s findings (including but not necessarily limited to
corporations) is that visibility and transparency regardless of the nature or quality of conduct may
ultimately have a positive impact on reputation. Further studies such as content analyses of sustainability
reports and news stories related to CSR leaders and laggards could further substantiate this possibility. It
may also be possible that it is not solely data availability, but rather the masterful corporate
communication strategies of large companies with superior resources that allow them to be CSR leaders
regardless of whether they must grapple with disasters or have positive information to communicate.
The key contribution of this study to the fields of CSR and sustainability reporting is the finding that
increased availability of data about a company results in, at the least, better CSR reputations for
companies in the international oil and gas extraction industry. If one assumes aggregated reputational
scores to reflect actual CSR performance, then one could further conclude that increased availability of
data leads to improved CSR conduct. Among oil and gas extraction companies, older and larger
companies tend to be among the leaders in terms of CSR reputation while CSR laggards are smaller and
newer. This is consistent with existing theoretical frameworks and previous findings of empirical studies.
Further, the leaders and laggards are clearly differentiated by a large gap in CSR reputational scores
across all four major aspects of CSR (community, governance, employees, and environment), but
especially in terms of reputation for conduct related to the environment. CSR leaders in this industry tend
to be perceived as more consistently good across all four aspects of CSR performance, while CSR
laggards tend to have greater variation in their negative scores across the four aspects of CSR
performance. Finally, the authors point out that the study took into account only the amount of data
available about each company, not the quality or whether it communicated positive or negative facts and
narratives. Given that it is just the volume of available data that appears to positively impact reputation,
the results appear consistent with the old adage that: “any publicity is good publicity”. The implications of
this study for managers are that greater disclosures related to CSR will likely improve a firm’s CSR
reputation and that transparency may possibly even lead to better conduct. For scholars, this study
suggests several fruitful veins of future research. This study could be repeated using data from other
industries, using different measures of CSR reputation and conduct, over varying periods of time, and by
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Christopher J. Hughey earned his undergraduate degree in languages and international studies from the
Universitetet i Bergen (University of Bergen, Norway) in 1995. He is currently Project Executive at
Viewpoint Construction Software. He can be reached on
Adam J. Sulkowski is an Associate Professor of Law and Sustainability at Babson College. He earned his
JD and MBA at Boston College in 2000. He is recipient of several awards for teaching, research and
service excellence. While at the University of Massachusetts (Dartmouth), he mentored MBA students to
produce the first GRI-guided sustainability report by a university anywhere in the world to achieve an A
level of compliance with the premier global standard for reporting on CSR performance.
... Companies have numerous reasons for concentrating on CSR and sustainability, such as obtaining greater value, better performance (Hameed et al., 2016), and improved productivity and competitiveness (Hughey and Sulkowski, 2012;Boulouta and Pitelis, 2014;Gomez-Trujillo et al., 2020), which will help reduce costs and increase the company's value. Firms can adopt CSR to improve cost leadership strategies. ...
... Moreover, caring about product responsibility as a growing concern of consumers may spur customer demand and improve revenues. Overall, cost leadership's positive association with CSR supports prior evidence that companies gain numerous advantages by implementing CSR practices, such as improved productivity and competitiveness (Hughey and Sulkowski, 2012;Boulouta and Pitelis, 2014;Gomez-Trujillo et al., 2020) and greater value and better performance (Hameed et al., 2016), which will help reduce costs and increase competitive position. ...
Purpose-This study aims to examine the effect of corporate social responsibility (CSR) adoption on differentiation and cost leadership strategies and how governance structure moderates this CSR-strategy relationship. Design/methodology/approach-The study data were retrieved from Thomson Reuters for non-financial firms between 2013 and 2019, and a fixed-effects panel regression analysis was executed. Findings-The results indicate that CSR fosters cost leadership strategy but weakens differentiation strategy. This result supports the value generation school for cost leaders but also confirms the agency theory perspective for differentiators. Moreover, the governance structure does not moderate the relationship between a firm's CSR engagement and its business strategy, which implies a lack of corporate policies that concurrently consider both its CSR investment and strategies. Research limitations/implications-The findings of this study imply that cost leaders can integrate CSR practices into their business strategy and use their CSR engagement to increase their competitive position by stimulating cost efficiency and creating greater turnover. On the contrary, for differentiators, there is a trade-off between environmental and social engagement and business strategies. Thus, they are advised to enrich their unique product development abilities through the integration of environmental and social practices and reinforce their competitive position by addressing stakeholders' interests. The practical implication of the moderation analysis is that there is no rooted corporate policy behind the connection between CSR and firm strategy for both cost leaders and differentiators, which constitutes a missing link. Originality/value-The findings of this study are of critical importance for firms, offering justification for the integration of two vital perspectives: social and environmental sustainability and financial sustainability. The moderating effect of governance performance tests the upper echelon's role in maintaining both sustainability perspectives concurrently and strengthening the legitimacy of the firms in society. Although maintaining a business strategy is important for shareholders' interests, pursuing a social and environmental sustainability strategy is crucial for meeting the expectations of all stakeholders.
... They can also be considered as those standards, guidelines, agreements and strategies that companies may follow in order to gain the confidence of their main stakeholders (Streimikiene et al., 2009;Soana, 2011). Disclosure of the practices of environmental, social and institutional governance through sustainability reports can be considered as a proactive issue that public shareholding companies can adopt within their business (Hughey and Sulkowski, 2012;Drempetic et al., 2020). ...
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This study aimed to demonstrate the impact of strategies integration of environmental, social and corporate governance strategies (ESG) on operational and reputational risks: a literature review for insurance companies listed on the Amman Stock Exchange. where the study population consisted of 22 Jordanian insurance companies, while the sample consisted of 8 companies, and one was excluded due to the lack of data, and based on the descriptive analytical approach, the study reviewed many previous studies related to its subject, and using the method of content analysis for annual reports and disclosures issued by Major insurance companies during the period 2020-2021, where a survey list was designed to measure the extent of the research companies' commitment to environmental, social and corporate governance strategies. The study concluded with many results, perhaps the most prominent of which is the presence of disclosure about social responsibility activities in the annual reports, and that all companies focused in their activities on providing donations and support to the local community and supporting education and health issues during the Covid pandemic period
... Evidence that includes this information is referred to as CSR, sustainability, corporate responsibility, and triple bottom line reports, without significant differences among these terms. Companies consider CSR a significant tool to manage external appearances and control their reputation among customers, employees, and others, which affects their legitimacy (Hughey & Sulkowski, 2012). CSR annual report is a useful technique for enhancing a company's relationship with stakeholders, as many investors, environmental teams, and governments have primarily relied on the annual report to obtain companies' financial and non-financial information (Kuo, et al., 2016). ...
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Accept Date: 16 April 2022 Nowadays, corporate social responsibility (CSR) has a significant role in the airline industry. The purpose of the present paper is to prioritize the factors influencing CSR in the airline industry. The present study prioritizes the factors influencing CSR in Iran's airline industry by using criteria importance through inter-criteria correlation (CRITIC) and Complex proportional assessment (COPRAS) to find the best airline among five Iranian airlines in Iran in 2021. Factors influencing this study include 4 main criteria and 15 sub-criteria. The results show that energy consumption is the most influential factor among influence factors, and airline 3 obtained the first rank. The present study helps airline managers to improve the performance of CSR by influencing factors in the airline industry.
... The general evaluation metric is computed as the arithmetic mean of the four categories' scores, thus varying between 0 and 100. It is noteworthy that the use of the CSRHub to assess firm CSR performance is increasing in the international literature (Arminen, Puumalainen, Pätäri, & Fellnhofer, 2018;Bouvain, Baumann, & Lundmark, 2013;Hughey & Sulkowski, 2012;Kang & Fornes, 2017;Mohamed & Salah, 2016, Vaia, Bisogno, & Tommasetti, 2017Westermann, Niblock, & Kortt, 2019). ...
... According to some researchers, a relationship exists between company size and information disclosure (Gao et al., 2005;Gray et al., 1995;Hahn & Kühnen, 2013;Hou & Reber, 2011;Naser et al., 2006;Siregar & Bachtiar, 2010). Age and size of the organisation greatly influence the availability of data (Hughey & Sulkowski, 2012). ...
The last two decades have seen a gradual shift in the reporting practices of the corporate sector across the globe. Besides reporting the standard financial statements, there is increased emphasis on qualitative reporting particularly issues related to governance, sustainability and society, popularly referred to as environmental, social and governance (ESG) reporting ( Griffin & Sun, 2018 ). In this regard, sustainability issues are being more aggressively addressed by the firms. This study aims at identifying and empirically examining the antecedents that influence the relationship between ESG disclosures of organisations and its corporate financial performance (CFP). The study uses a sample of BSE-200 companies and employs multiple regression technique to ascertain the ESG–CFP relationship. The results obtained show that ESG and CFP are negatively related, and the control variables have a significant impact on this association. The study provides insights from the perspective of an emerging economy and contributes to both the managerial decision-making and policy formulation. It also paves the way for future research.
... It contributes to a better understanding of the specific characteristics of energy industry in terms of ESG-related policies. Arguments for choosing energy industry start with the pioneering sustainabilityoriented activities (Hughey & Sulkowski, 2012) and relay on the increasing importance conferred by researchers and scientific journals' editors, overtime (Soytas et al., 2017;Patari et al., 2014;Lu et al., 2014), as highlighted by Lungu et al. (2019). ...
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Research Question: Is there an association between ESG factors disclosure and the firm's value for the companies acting in energy sector? Motivation: Identifying whether a connection exists between the ESG factors disclosure and firm's value is a current and much debated matter, with a focus on the presentation of non-financial information. The necessity of demonstrating the existence of an association is based on the inclusion of non-financial information in the company's corporate reporting combined with financial information. Non-financial information presents the long-term prospects of a company and is focused on the value creation process, as opposed to financial information which is limited to historical data and short-term goals such as profit maximisation. In order to describe the value creation process, the company is analysed from different stakeholders' points of view (customers, suppliers, employees, local community, government, environments activists, etc.) and the interdependencies created between the company and these stakeholders. Therefore, by choosing to present a more holistic view of a company, the management of the company may attract new capital from investors by showing that there is a positive association between ESG factors and firms' value (Sadiq et al., 2020; Wong et al., 2020). Idea: This paper assesses the possibility of an association between ESG factors and firm's value by developing two linear regression models. Environmental, social and governance disclosure associated with the firm value. Evidence from energy industry Vol. 20, No. 1 57 Findings: The main findings of the research is that there is an association between ESG factors disclosure and firm's value, and based on the type of the connection (positive or negative), companies may include aspects regarding non-financial information, namely ESG factors, which could attract new capital. Contribution: This paper contributes to the previous research conducted on the disclosure of ESG factors and its influence on firm's value by showing that there is an association between ESG factors disclosure and the value of the company. The evidence obtained based on the two research models applied to the dataset may persuade the management of the companies to include non-financial information in their corporate reporting.
Amidst the growing emphasis on sustainable development, there is an emerging trend of companies actively pursuing the transition towards sustainability. This shift is driven by various factors, including heightened societal scrutiny and a greater focus on environmental, social, and governance (ESG) considerations. As a result, companies are increasingly acknowledging the significance of incorporating sustainable practices into their operations to align with the expectations of the capital market. This paper investigates the association between ESG disclosures and stock price crash moderated by corporate governance (board size, independence, and gender diversity) for Saudi firms. Using a fixed effects regression method, we find that the coefficient of ESG is significant and negative (−0.0043 for NCSKEW and − 0.0006 for DUVOL) indicating a positive influence of ESG in diminishing stock price crash. The results also show that corporate governance positively and significantly moderate the ESG‐stock price crash risk. As additional analyses, we find a significant negative relationship between each aspect of ESG including social responsibility, environmental activities and governance practices and stock price crash risk. Moreover, the pandemic COVID‐19 has a dampening effect on the ESG‐stock price crash association. To ensure the validity of these conclusions, dynamic GMM models were employed to tackle any potential endogeneity issues, making the results even more robust. Our findings highlight that improving corporate sustainability positively impacts the stability of companies' stock prices. This study provides valuable insights and perspectives from the context of Saudi Arabia and offers theoretical and managerial implications that are relevant for policymakers and investors.
The present study aims to ascertain how corporate social responsibility (CSR) can be used to establish and maintain citizen health within African cities. The COVID-19 pandemic has been hailed the worst crisis in years and has led to unprecedented challenges for the entire world. There is a positive element of the pandemic—the efforts taken by communities to help one another. Companies have also engaged in this practice, but little is known about how CSR can be used to establish and maintain healthy communities, especially within the African context. The study adopts a five-stage systematic literature review approach simultaneously to draw new conclusions; development of research questions, relevant data search, test data eligibility, data extraction and data analysis. Using the case of the Asian Tech giant Huawei, this research justifies the need for healthy and resilient cities in Africa while discussing the CSR initiatives of Huawei and their contribution to the formation of healthy and resilient cities and communities in Africa. The study also outlines how CSR initiatives from the private sector in the selected countries contribute to the fight against the COVID-19 scourge in a reactive manner. The recommendations are important for multitude reasons. They offer opportunities for the African states to create healthy cities using CSR in the face of the COVID-19 pandemic. As a result, adherence to the preceding recommendations can assist in the development of stronger company relations within the local community, even as they seek to serve the needs of the same population.KeywordsAfricaCorporate social responsibilityCOVID-19Healthy citiesInitiatives
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The question of whether females tend to act more ethically or risk-averse compared to males is an interesting ethical puzzle. Using a large sample of US firms over the 1992–2014 period, we investigate the effect that the gender of a chief executive officer (CEO) has on earnings management using classification shifting. We find that the pre-Sarbanes–Oxley (SOX) Act period was characterized by high levels of classification shifting by both female and male CEOs, but the magnitude of such practices is, surprisingly, significantly higher in firms with female CEOs than in those with male CEOs. By contrast, our results suggest that following the passage of the punitive SOX Act, classification shifting by female CEOs declined significantly, whilst it remained pervasive in firms with male CEOs. This suggests that the observable differences in financial reporting behavior between male and female CEOs seem to be because female CEOs are more risk-averse, but not necessarily more ethically sensitive than their male counterparts are. The central tenets of our findings remain unchanged after several additional checks, including controlling for alternative earnings management techniques, corporate governance mechanisms, CEO and chief financial officer characteristics and propensity score-matching.KeywordsFemale CEOsEarnings qualityClassification shifting
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This article traces the concept of corporate social responsibility (CSR) from its post WWII beginnings in popularity up through the end of the 1990s. The article focuses on definitions or understandings of the concept/construct. It does not focus on actual company practices during this time as they were quite varied. (This article has been ranked #1 most read in the Business and Society journal for years now).
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Many studies have investigated the relationships among environmental management, financial performance and other firm attributes. Their results are inconsistent and contested. Most of the empirical studies to date are in the context of developed countries rather than developing countries. This study fills this gap by providing an empirical examination of the relationships among environmental management, firm value and other firm attributes in the Chinese context. In addition, this study is the first study of Chinese firms to use panel data analysis methods in the examination of the impact of environmental management on firm value. The results of panel data analysis show that environmental management has no significant impact on firm value. Pearson tests show that prior financial performance does not affect the level of environmental management. Rather, firm size is shown to be positively correlated with the level of environmental management.
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This paper presents the findings of a qualita- tive field study undertaken with senior manag- ers responsible for their firm ' s corporate social responsibility (CSR) activities to explore the interaction between a firm ' s reputation for CSR and the actions of its industry peers; the actions of its industry; and the actions of other firms in its local geographic community. Examining this phenomenon from an institu- tional perspective, we seek to explain how and why CSR norms become institutionalized both within and across industries. Specifically, we develop a model to explain the diffusion of CSR norms; a process that we argue results in slowly ratcheting expectations over time. We propose that firms in sensitive industries face and respond to higher stakeholder expectations for CSR. In response, elite firms operating in the same geographic community across a range of industries take cues from the firms operating in industries with higher expectations for CSR. Thus, norms for CSR are established among the elite firms within a geographic community rather than within industries. These norms are then diffused within industries through mi- metic forces. This creates a cycle whereby the general diffusion of these norms creates a new expectations gap for firms in high visibility industries. Their subsequent response will launch another cycle and, over time, raise expectations for CSR for all firms in the geographic region regardless of industry. Corporate Reputation Review (2008) 11, 56 - 72. doi: 10.1057/crr.2008.1
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Most theorizing on the relationship between corporate social/environmental performance (CSP) and corporate financial performance (CFP) assumes that the current evidence is too fractured or too variable to draw any generalizable conclusions. With this integrative, quantitative study, we intend to show that the mainstream claim that we have little generalizable knowledge about CSP and CFP is built on shaky grounds. Providing a methodologically more rigorous review than previous efforts, we conduct a meta-analysis of 52 studies (which represent the population of prior quantitative inquiry) yielding a total sample size of 33,878 observations. The meta- analytic findings suggest that corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility is likely to pay off, although the operationalizations of CSP and CFP also moderate the positive association. For example, CSP appears to be more highly correlated with accounting-based measures of CFP than with market-based indicators, and CSP reputation indices are more highly correlated with CFP than are other indicators of CSP. This meta-analysis establishes a greater degree of certainty with respect to the CSP-CFP relationship than is currently assumed to exist by many business scholars.
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We outline a supply and demand model of corporate social responsibility (CSR). Based on this framework, we hypothesize that a firm's level of CSR will depend on its size, level of diversification, research and development, advertising, government sales, consumer income, labor market conditions, and stage in the industry life cycle. From these hypotheses, we conclude that there is an "ideal" level of CSR, which managers can determine via cost-benefit analysis, and that there is a neutral relationship between CSR and financial performance.
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In contrast to most studies of reputation ranking systems, this paper discusses the constitutive aspects of such systems. It analyzes the mechanics used to construct them, thus making their procedures the object of research. Based on a study of a Danish ranking system similar to the Fortune system, the authors suggest that reputation is sticky over time in spite of shifting ranking criteria and fragile statistical methods. We show that the ongoing development of an increasingly complex measurement system paradoxically becomes `more of the same' and thus creates sticky reputation for large and visible companies.Corporate Reputation Review (2001) 4, 24-41; doi:10.1057/palgrave.crr.1540130
From the sustainable development policies of far-sighted governments to the increasing environmental awareness—and cynicism—of consumers, a range of pressures is being brought to bear on business to improve its environmental performance. This article traces the development of some of those pressures, highlighting industries in the firing line, and examining some of the concerns of consumers. It looks at the ways in which companies can turn the environment game into one in which they, their customers, and the environment are all winners. It also explores the rapidly expanding area of corporate environmental reporting, including forms of environmental disclosure, target audiences, and leading exponents of the field.