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The Credibility of CSR Reports in Europe. Evidence from a Quantitative Content Analysis in 11 Countries.

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When it comes to corporate social responsibility (CSR) reports, skepticism and mistrust toward companies often prevail among both stakeholders and scholars. However, the overall content quality of CSR reports has only sparsely evoked researchers’ attention. Therefore, this paper focuses on the credibility of CSR reports, based on both human and software-enhanced quantitative content analysis of 237 CSR reports from 11 European countries. Credibility is conceptualized as a multilayered construct along CSR and communication theories, filling the theory void in the field. The influence of contextual (e.g., industry), format, and firm-level (e.g., size) factors on reporting credibility is also investigated. The results show that European CSR reports do not score high on credibility, leaving much room for improvement. The study finds that it is standardization and content that matter most for reporting credibility; external influences are secondary, at best. To be considered credible, CSR reports must first be understandable to their readers; in addition, credibility involves truth, sincerity, and stakeholder specificity. Voluntary standardization affects CSR reporting credibility positively, whereas regulation does not yet have the same positive effect. Based on the empirical results of the content analysis, we present a new two-phase-model of reporting credibility. For practice, we suggest that companies focus on the contents of their reports to render them more credible. To raise credibility levels consistently, policy makers can create a level playing field in CSR reporting regulation, as already initiated by several countries.
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The credibility of CSR reports in Europe. Evidence from a
quantitative content analysis in 11 countries.
Irina Lock, Università della Svizzera italiana
Peter Seele, Università della Svizzera italiana
Unedited version!
For correct citations or quotations please see the original
publication in the journal!
Reference
Lock, I., & Seele, P. (2016). The credibility of CSR (corporate social
responsibility) reports in Europe. Evidence from a quantitative
content analysis in 11 countries. Journal of Cleaner Production, 122,
186-200.
DOI: 10.1016/j.jclepro.2016.02.060
Abstract
When it comes to corporate social responsibility (CSR) reports,
skepticism and mistrust toward companies often prevail among
both stake
holders and scholars. However, the overall content
quality of CSR reports has only sparsely evoked researchers'
attention. Therefore, this paper focuses on the credibility of CSR
reports, based on both human and software-enhanced quantitative
content analysis of 237 CSR reports from 11 European countries.
Credibility is conceptualized as a multilayered construct along CSR
and communication theories, filling the theory void in the field. The
influence of contextual (e.g., industry), format, and firm-level (e.g.,
size) factors on reporting credibility is also investigated. The results
show that European CSR reports do not score high on credibility,
leaving much room for improvement. The study finds that it is
standardization and content that matter most for reporting
credibility; external influences are secondary, at best. To be
considered credible, CSR reports must first be understandable to
their readers; in addition, credibility involves truth, sincerity, and
stakeholder specificity. Voluntary standardizatio
n affects CSR
reporting credibility positively, whereas regulation does not yet
have the same positive effect. Based on the empirical results of the
content analysis, we present a new two-phase-model of reporting
credibility. For practice, we suggest that companies focus on the
contents of their reports to render them more credible. To raise
credibility levels consistently, policy makers can create a level
playing field in CSR reporting regulation, as already initiated by
several countries.
Keywords
CSR/sustainability reporting; Credibility; Content analysis;
Reporting quality
1. Introduction
Credibility is central to every kind of communication, whether personal interaction, political
speeches, or companies communicating their role and responsibilities in society. Companies have
communicated ever more information regarding their corporate social responsibility (CSR), even
though this has not led to more goodwill on the side of stakeholders, but to more mistrust (Waddock
and Goggins, 2011). Stakeholders often view CSR communication as strategic in nature and thus not
credible (Elving, 2012; Illia et al., 2013). Such criticism surfaces particularly in one of the most
prominent tools for companies to communicate about their CSR, sustainability, and corporate
citizenship1 achievements: CSR reports. Just as credibility is central to everyday communication
(Jackob, 2008), it is also central to this communication tool. Hence, this article endeavors to analyze
whether CSR reports are credible.
CSR reports have received considerable scholarly attention in recent years and most research has
focused on the emergence of CSR reporting (Marimon et al., 2012; Hahn and Kühnen, 2013), firm
characteristics such as size, country, or industry regarding CSR reporting (Chen and Bouvain, 2009;
de Villiers et al., 2014b; Fifka, 2013), and its impact on financial figures (Ioannou and Serafeim,
2014b; Cheng et al., 2014; Fifka, 2013). Far too little attention has been paid to the quality of these
reports and very little is known about the contextual factors that affect reporting quality (Hahn and
Kühnen, 2013). Nonetheless, CSR reports have been harshly criticized for lacking credibility (Dando
and Swift, 2003), being pseudo-transparent (Coombs and Holladay, 2013), and being poor in quality
1 Throughout this paper, ‘CSR reporting’ is used as an umbrella term for non-financial, sustainability,
corporate citizenship, or corporate responsibility-labeled reports. In the corporate world, these terms are used
interchangeably, although there has been a trend toward ‘sustainability’ in CSR report titles (Gatti and Seele, 2014).
In academia, these concepts are defined differently, which becomes obvious when comparing definitions of
sustainability (Dyllick and Hockerts, 2002) with the multitude of CSR definitions (van Marrewijk, 2003). In this
journal, however, studies so far have referred to ‘sustainability reporting’ (Hahn and Kühnen, 2013; Roca and Searcy,
2012), ‘non-financial disclosure’ (Skouloudis et al., 2014), or as in this case ‘CSR reporting’ (Dong et al., 2014). This
showcases that researchers all contribute to advancing knowledge in the field, but by using different labels.
(Milne and Gray, 2013), despite voluntary standardization. Hence, CSR reports are accused of
deepening the credibility gap (Dando and Swift, 2003; MacLean and Rebernak, 2007) and threatening
companies’ legitimacy in society instead of facilitating dialogue with stakeholders adding to
corporate greenwashing (Seele and Gatti 2015). The central goal of this paper is to tackle the issue of
CSR reporting quality in terms of CSR report credibility. CSR reports’ credibility is analyzed and
investigated with respect to how extensively content, format, firm-level, and contextual factors affect
reporting credibility. To accomplish this, credibility is conceptualized and operationalized along
communicative action theory (Habermas, 1984). Furthermore, by applying a European perspective,
this paper examines whether mandatory reporting regulations render CSR reports more credible and
investigates the role of voluntary reporting standardization in this respect.
Data were collected in the 11 economically most powerful European countries, sampling CSR reports
from corporations of these countries’ leading stock indices. Quantitative content analysis was applied
using human as well as software coding. The present study has operationalized, for the first time, CSR
reporting credibility as a multilayered concept using political CSR and communicative action theory
(Scherer and Palazzo, 2011; Habermas, 1984). The resulting data were analyzed with multiple
regression models and other parametric statistics. The findings indicate that CSR reports are credible
at a mediocre level, leaving much room for improvement in terms of reporting quality. Credibility in
CSR reports was achieved through contents and standardization, while external factors were
secondary to reporting quality in this sample. Hence, the impact of reports’ length, their format in
terms of stand-alone or combined reports, the size of the firm, its reporting experience, the regulatory
context, and the company's industry on credibility resulted less important. On a conceptual level,
understandability is found to be a precondition for credibility in CSR reports, before truth, sincerity,
and appropriateness can be addressed to lead to reporting credibility.
This study makes an original contribution to several important areas: It is one of the first studies to
deliver empirical evidence on the issue of credibility in CSR reporting. Second, it provides a two-
phase-model of CSR reporting credibility and thus contributes to filling the gap in theory in the field
(Hahn and Kühnen, 2013). Third, it provides new insights into the impact of mandatory regulation of
CSR reporting on reporting quality and the role of voluntary standards. Fourth, it presents
suggestions for how companies can make their CSR reports more credible to maintain legitimacy
with stakeholders.
The paper proceeds as follows: After a literature review that outlines the applied theories and
develops the hypotheses, a methods section provides details on sample selection, operationalization,
and data analysis. The following section reports the empirical results, which are in consequence
discussed against existing literature. Finally, the conclusions part presents the theoretical, practical,
and policy implications along with limitations of the study.
2. Literature Review
CSR reporting is one of the most effective tools for communicating CSR; it encompasses both codes
of conduct and online reporting (predominantly CSR reports). These reports are defined as discrete,
independent corporate editorial works that provide information about CSR (Biedermann, 2008).
Thus, CSR reports are a formalized means of communication (Schaltegger et al., 2006) that may take
the form of stand-alone reports or integrated publications that combine economic, social, and
environmental information in one annual report (Daub, 2007).
Currently, CSR reports are harshly criticized for their contents and lack of credibility (Coombs and
Holladay, 2013). Companies have extensive leeway in choosing what to report, which has led to
diverse topics being included in CSR reports. Therefore, the reports are said to address few
stakeholders, to “cherry pick” elements of news despite standardization (Milne and Gray, 2013, p.
17), and to be self-laudatory public relations publications (Seele and Knebel, 2015). This low
credibility has challenged stakeholders’ trust in the tools and the practice, resulting in a credibility
gap (Dando and Swift, 2003) between companies and stakeholders with regard to CSR reporting. This
gap, following - amongst other factors such as general cynicism toward CSR (Illia et al., 2013) - from
inconsistencies between CSR activities and what is reported (Basu and Palazzo, 2008), has led
stakeholders to question the moral legitimacy of corporations in society (Claasen and Roloff, 2012).
This comes at a time when corporations’ license to operate is put on the spot by corporate hypocrisy
(Wagner et al., 2009) and stories of scandals such as the Rana Plaza factory fire have hit the news.
2.1. Moral Legitimacy and Habermasian Communicative Action Theory
The basic assumption in this paper is that CSR reports can re-establish moral legitimacy by being
credible tools that facilitate communication and thereby bridge the credibility gap. According to the
political notion of CSR, this moral legitimacy is established and maintained through deliberative
discourse, a form of communication that is based on reaching consensus in a Habermasian sense
(Scherer and Palazzo, 2011). This CSR theory holds that the nation state’s power is declining, giving
rise to private actors such as transnationally operating corporations. It views multinational
corporations as important actors in efforts to resolve global public issues through voluntary self-
regulation. Corporations’ legitimacy is constituted through moral legitimacy. It is based on
deliberation between stakeholders and corporate actors that leads to consensus (Scherer and
Palazzo, 2011), following deliberative democracy theory (Habermas, 1996). Such deliberative
discussions, ideally, happen in situations of ideal speech, where the “unforced force of the better
argument” (Habermas, 2002, p. 96) leads all actors to agree on an issue. To arrive at such a situation,
four validity claims must be redeemed by the discourse participants (Habermas, 1984):
Truth (objective truth of the statements made)
Sincerity (also translated as truthfulness: subjective truth of the propositions, the speaker is
honest about what he/she says)
Appropriateness (also translated as rightness: the message is appropriate in its context,
sender and recipient agree to the same social context) of communication
Understandability (also translated as intelligibility or comprehensibility: degree of
comprehensiveness of the message, clarity)
In his later writings, Habermas regarded understandability as a precondition for communication
rather than a redeemable claim (Zinkin, 1998). In this study, however, it is considered a crucial
element of ideal speech and thus explicitly studied. Hence, the four claims are interrelated constructs
that together constitute the multilayered concept of credibility.
Accordingly, deliberative communication of CSR helps corporations establish and maintain their
legitimacy-based license to operate. From a political-normative perspective on CSR communication,
communication is rational if it is credible (Seele and Lock, 2015) and credibility is an outcome of
reporting quality (Perera Aldama et al., 2009). If CSR reports are credible tools, they can facilitate
ideal speech and deliberation between companies and stakeholders and thus help build up moral
legitimacy. The credibility of European CSR reports is therefore analyzed and the influence of content,
format, firm-level, and contextual factors is addressed. Thus, the overarching research question (RQ)
tackled by this article is: Are CSR reports credible?
2.2. Factors Influencing CSR Report Credibility
Much research on the emergence and characteristics of CSR reports has been ongoing. However, the
quality of CSR reports is still under-investigated (Hahn and Kühnen, 2013), with few exceptions
(Adnan, 2009). To the authors’ knowledge, no research has thus far been conducted on the credibility
of CSR reports, although their lack of credibility has been much criticized (Milne and Gray, 2013). In
addition to content-related factors, format, firm-level, and contextual factors are also likely to
influence the credibility of CSR reports, as described by the hypotheses below.
The contents of CSR reports are decisive for credibility. Standards are used to determine reporting
contents, and most companies in Europe rely on the Global Reporting Initiative’s (GRI’s) guidelines
for CSR reporting (Brown et al., 2009), which are considered the best option available for companies
to use in reporting on CSR issues (Marimon et al., 2012). A big advantage of such CSR reporting
standards is thus the operationalization of the fuzzy term (de Colle et al., 2014). Although the GRI has
been criticized for representing work-in-progress (Milne and Gray, 2013) and for being a challenge
for reporting (Knebel and Seele, 2015), it is the backbone of most voluntary and mandatory
regulatory attempts (Rufflet et al., 2014). This is underscored by the fact that ever more companies
report according to the GRI (Marimon et al., 2012) and that it supports transparency in reporting
(Fernandez-Feijoo et al., 2014). The guidelines come in the form of three subsequent sets (G3, G3.1,
and G4) of general reporting indicators applied by the companies in the sample. To further
standardize CSR reports, GRI also offers sector-specific supplementary reporting material (the so-
called sector supplement, for instance, for the financial services industry), which are additional
reporting indicators that can be reported voluntarily by companies to target industry-specific topics.
Moreover, until introduction of the most recent guideline G4, GRI offered a self-referencing
application-level check that could receive (upon payment) official confirmation by the GRI.
Companies could self-classify into three categories of reporters ranging from A to C, with A being the
best. Furthermore, a report marked with a “+” indicated external assurance. Although assurance is
not necessarily an indicator of objectivity (Milne and Gray, 2013), it may have a positive impact on
credibility (Dando and Swift, 2003; Simnett et al., 2009). If assured, GRI’s best-in-class reports
(Lozano, 2013) could obtain an “A+” grade. In fact, Fernandez-Feijoo et al. (2014) used the
application level as one variable for reporting transparency. In the G4 guidelines, the application-
level check is replaced by the “materiality matters check,” which is a paid service by the GRI checking
the materiality of the report. With regard to credibility, standardization along GRI guidelines and
their supplements and features leads to these hypotheses:
H1a. CSR reports using standardized reporting guidelines from the GRI
(G3, G3.1, G4) are more credible than those without.
H1b. The more the guidelines are used (in terms of a sector supplement),
the more credible is the CSR report.
H1c. CSR reports with high application levels (or materiality matters
check) are more credible than those without.
A recent trend in CSR reporting has been to integrate non-financial information into annual financial
reports (Searcy and Buslovich, 2014), which is a first step toward integrated reporting (International
Integrated Reporting Council - IIRC, 2011). This development initiated in South Africa in 2009 and
has since spread to Europe. France has even made financial and non-financial reporting mandatory
for large enterprises (de Villiers et al., 2014a). Companies engaging in integrated reporting were
found to have improved the quality of the reported data and developed more positive stakeholder
relationships (IIRC, 2014). The most prevalent form of integrated reporting is the “combined report,
which companies nonetheless label “integrated report,” where CSR information is integrated into the
annual financial report as a separate section. This represents one first step toward integrated
reporting (IIRC, 2011). Integrated reports are said to explain a company’s performance more broadly
(Frias-Aceituno et al., 2013) and are considered a “new reporting paradigm that is holistic” (Adams
and Simnett, 2011) and thus meant to arrive at all-round credibility (Kolk, 2004). Such "combined
reports" are usually longer than stand-alone publications, because they also contain financial
information. Currently, the length of CSR reports varies widely, as do the contents (Roca and Searcy,
2012). Reports' length was investigated with regard to the UK and Finland finding big variations
within the national samples (Fifka and Drabble, 2012). Boiral (2013) analyzed CSR reports for their
disclosure of real-life sustainability issues and found that length of report does not necessarily mean
broader coverage of topics. However, so far reports’ length was not analyzed regarding quality of
reporting. Building on previous research claiming that integrated reporting leads to positive
outcomes for the firm (Kolk, 2004; IIRC, 2011; Adams and Simnett, 2011; Frias-Aceituno et al., 2013),
it is hypothesized:
H2a. A positive relationship exists between CSR reports’ length and their
credibility.
H2b. Combined reports are more credible than stand-alone reports.
CSR reporting research has also examined firm-level characteristics such as size, age, and experience
in reporting. Studies have almost unanimously confirmed that the size of a firm has a positive
influence on its reporting (Hahn and hnen, 2013; Fifka, 2013; Skouloudis et al., 2014), its
likelihood of reporting (de Villiers et al., 2014b; Frias-Aceituno et al., 2014), and the quantity of
disclosure (Albertini, 2014). In this vein, it is hypothesized that this also holds for reporting
credibility:
H3. The bigger the firm (in terms of employees and turnover), the more
credible its CSR report.
For the French case, Albertini (2014) found that reporters experience a learning curve over the years:
Disclosure of CSR-related topics becomes more precise over time. The older the firm, the more
experience it has in business, and the longer it has reported on CSR issues, the more practice it has
acquired. Hence, it is assumed:
H4. The more experienced the firm (in terms of age and reporting
experience), the more credible its CSR report.
Several contextual effects influence CSR reporting. Cultural differences in reporting in terms of the
company’s country of origin exist in Europe and elsewhere (Fifka, 2013), in terms of CSR reporting
developments (de Villiers et al., 2014a), CSR disclosure on the web in developing countries
(Wanderley et al., 2008), CSR adoption (Marimon et al., 2012), likelihood of integrated reporting
(Jensen and Berg, 2012), assurance of reporting (Simnett et al., 2009), or level of reporting (Van der
Laan Smith et al., 2005). However, again the relationship between quality of reporting and company
domicile is under-researched (Hahn and Kühnen, 2013), with the exception of a few studies that have
reported differences on the country level (Lock and Seele, 2015; Vormedal and Ruud, 2009).
The trend toward regulation of non-financial disclosure has also reached Europe, exemplified by the
recently passed directive of the European Commission mandating that large companies report on
CSR issues (EU, 2014). Following Ioannou and Serafeim’s (2014a) classification, comprehensive CSR
reporting legislation mandates that publicly traded companies report on environmental, social, and
governance issues2. This is consistent with the EU directive and the GRI approach. Legally enforced
CSR reporting is a new research field that has seen some pioneering work (Hahn and Kühnen, 2013).
Albertini (2014) found that regulation in the chemicals industry elicited companies’ environmental
engagement in France. Legal regulation of CSR reporting also promoted the adoption of standards
such as the GRI guidelines (Marimon et al., 2012). For China and South Africa, non-financial
disclosure increased when laws were passed and this regulation had a positive effect on companies’
financial position (Ioannou and Serafeim, 2014a). Hence, a similar effect for reporting credibility is
expected:
H5. CSR reports from countries with legally mandated CSR reporting
regulations are more credible than CSR reports from countries without
such legislation.
Sector-level differences are a main determinant of CSR reporting (Fifka, 2013). Sweeney and
Coughlan, for instance, observed a “clear industry effect in reporting of CSR” (2008, p. 120).
Researchers have found in particular that firms with a high impact on the environment reach higher
2 In this sample, such legislation is in place in France, Spain, and the Netherlands. The Dutch sample
comprises only 19 reports and thus could not be used for statistical significance tests. For more information on the
French law, visit:
http://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000022470434&categorieLien=id. For more
information on the Spanish reporting regulations, refer to:
http://www.empleo.gob.es/es/sec_trabajo/autonomos/economia-soc/resposocempresas/legislacion/index.htm.
levels of CSR reporting because they are forced to respond to stakeholder pressure (Hahn and
Kühnen, 2013) and, as evident in the extractive industries, adhere more tightly to CSR standards
(Raufflet et al., 2014). In fact, environmentally sensitive industries such as extraction, energy,
forestry, chemicals, construction materials, and steel report more on CSR (Branco and Rodrigues,
2008; Jenkins and Yakovleva, 2006; Fifka and Drabble, 2012). Thus, it is hypothesized that this also
holds for reporting credibility:
H6. Credibility levels differ according to the impact of the company on the
environment. Environmentally sensitive industries’ reports are more
credible than less sensitive sectors’ reports.
3. Method
As in many studies on CSR reporting (Fifka, 2013), a quantitative content analysis (Riffe et al., 1998;
Campbell, 2003) from a population comprising the leading 320 stock-listed companies from the 10
biggest countries by gross domestic product (GDP; World Bank, 2012) in the EU and Switzerland
(Table 1) was conducted to represent the most powerful economies in Europe. European companies
were chosen as a sample to reflect current CSR reporting practices in one of the most important
markets worldwide (World Bank, 2015). The diversity of the European market is unique and in the
light of mandatory CSR reporting provides an interesting field of study as it combines regulated and
unregulated national legislations in one market. The final sample consisted of 237 CSR reports in the
English language (74.06% of the population) that were downloaded from the internet or obtained
directly from the companies; 88.2% are from 2013 and the others are from 2011, 2012, and 2014.
This variance exists because companies have different publication routines; some publish a report
every year, others bi- or triennially. The most recent reports as of summer 2014 were collected.
Table 1. Countries and stock market indices of the population and sample.
Human as well as software coding was applied
(details below). The codebook comprised 11
content, 17 formal, and 62 GRI indicator
variables3 (see appendix B.). To pre-test the
codebook and refine the selected categories of
variables in an inductive process, 25 CSR reports
from the same sample but from previous years
were coded in three consecutive rounds, each
followed by consensus sessions with the coders
and the study’s authors. Three independent coders from three different European national
backgrounds who were not involved in the conceptualization of the codebook coded a sample of 237
CSR reports in summer 2014, summing to 613 coding hours; 27 different industries were
represented by these reports (see appendix A.). The coders’ objectivity and reliability were checked
regularly by six intercoder reliability tests. Three reliability tests were performed on the pre-test
sample to validate the codebook and apply changes. The other three rounds were performed on the
final codebook during the coding process (Table 2), resulting in an aggregated and reliable value of
87.04 using the Holsti formula. These figures were calculated using the online tool ReCal (Freelon,
2010).
3 The codebook is available from the authors upon request.
Country
Index
Popu-
lation
Sample
Austria
ATX
20
10
Belgium
BEL20
20
12
France
CAC
40
36
Germany
DAX
30
28
Italy
FTSE MIB
40
28
Netherlands
AEX
25
19
Poland
WIG
20
8
Spain
IBEX
35
28
Sweden
OMX
30
22
Switzerland
SLI
30
22
United
Kingdom
FTSE 30
30
24
Total
---
320
237
Table 2. Intercoder reliability measured over four rounds.
Method
Round 4
Round 5
Round 6
All
Rounds
No. of coders
3
3
3
3
No. of variables
31
(content)
93 (31 content,
62
completeness)
93 (31 content,
62
completeness)
217
No. of cases
10
10
18
38
Content
Holsti
88.93
85.16
89.24
88.08
Completeness
Holsti
-
80.21
87.78
85.04
Overall
Holsti
88.93
82.94
88.27
87.04
Reliability tests other than Holsti or percentage agreement could not be applied because most of the
codebook is conceptualized as nominal variables with binary codes. As Krippendorff’s alpha, Scott’s
pi, or Cohen’s kappa only produce meaningful results with scale data, they could not be computed for
this study (Krippendorff, 2013). Balance and readability analyses were performed using two
software packages, QDA Miner/Wordstat and Flesh. SPSS was used for statistical analyses.
The four validity claims were operationalized through relevant CSR reporting literature (Reynolds
and Yuthas, 2008; Morsing et al., 2008) and with the help of the GRI G3.1 reporting guidelines (GRI,
2011; Table 3), consistent with other studies on CSR reports (de Villiers et al., 2014b; Skouloudis et
al., 2014; Lozano and Huisingh, 2011; Dong et al., 2014; Mosene et al., 2013). Each validity claim
resulted in a summative scale ranging from 0 to 10. Credibility was then calculated as the mean of all
four constructs (no weighting applied between the four), also resulting in a range from 0-10.
The objective truth of statements in the reports is measured by the form and extent of assurance
(Dando and Swift, 2003; Reynolds and Yuthas, 2008), the accuracy of the indicators and the
completeness of the covered performance, and the standards used (GRI, 2011; Lozano, 2013). The
honesty and truthfulness associated with a CSR report sincerityis tested by looking at the
materiality of the topics covered (Hahn and hnen, 2013). This includes six categories: impacts,
values, risks, prioritized material topics, goals, scope, and boundary of report (GRI, 2011). In addition,
the level of stakeholder engagement (Searcy and Buslovich, 2014), subdivided into stakeholder
inclusiveness and dialogue (GRI, 2011; Ramos et al., 2013), and the implementation of relevant
management systems (Windolph et al., 2014) constitute the sincerity dimension. Appropriateness is
operationalized as the degree to which specific “expert” stakeholders (Morsing et al., 2008) are
addressed, hence, the level of stakeholder specificity for three elite stakeholder groups: investors,
employees, and non-governmental organizations (NGOs; Morsing et al., 2008, p. 105). The core
indicators of the GRI G3.1 guidelines that address the three stakeholder groups were selected and
their level of fulfillment in reporting was used as a measure. Understandability refers to how
comprehensible the report is to readers, not only in terms of how readable it is, but also in style and
tone. It is measured along the sub-dimensions of style, which refers to the timeliness of the
publication and its accessibility, and tone, which refers to the reports readability and the distribution
of positive and negative language (balance; Lock and Seele, 2015; GRI, 2011). Readability was
measured with the Flesch-Kincaid Reading Ease index using the software package Flesch. Balance of
language was calculated with the text analysis software QDA Miner/Wordstat and the Wordstat
sentiment dictionary that classifies words into positive versus negative. Table 3 provides an
overview of the constructs and measured variables.
Table 3. Operationalization of the study’s constructs and measured variables.
Truth
Sincerity
Appropriateness
Understandability
Sub-
dimension
Variables
Sub-
dimension
Vari-
ables
Sub-
dimension
Vari-
ables
Sub-
dimension
Vari-
ables
Assurance
V19, V20,
V21, V22
Materiality
V26
Investors
(EC1, EC2,
EC3, EC4,
SO4, SO7,
SO8)
V93
Style:
Timeliness
V18
Complete-
ness
V93
Stakeholder
engagement:
Stakeholder
inclusivenes
s
V28
Employees
(LA1, LA2,
LA4, LA7,
LA8, LA10,
LA13, LA14)
V94
Accessibility
V14
Accuracy
V23, V24
Stakeholder
dialogue
V29
NGOs (4.12,
4.13, 4.15,
4.16, 4.17)
V95
Tone:
Balance
V16
Standards
V25
Management
system
V27
Readability
V17
4. Results: Credibility of CSR Reports
This chapter presents the empirical findings regarding the research question and hypotheses,
reporting results from multiple linear regression analyses, independent samples t-tests, correlation
statistics, and analysis of variance (ANOVA) tests.
4.1. Descriptive Statistics of the Sample and Validity Claims
To tackle the overarching research question of whether CSR reports are credible, summative scales
of the four constructs of truth, sincerity, appropriateness, and understandability were calculated
(range: 0-10; Table 4).
Table 4. Means and standard deviations of the four validity claims.
Truth
Sincerity
Appropriateness
Understandability
N
237
237
237
212
Mean (M)
5.16
6.78
6.71
4.82
Std. Dev.
(SD)
1.88
1.88
2.38
.66
Minimum
.40
.71
.00
1.26
Maximum
8.46
10.00
10.00
6.32
By summing up and dividing by four, an overall summative scale for credibility was established
(range: 0-10). Overall, the sampled CSR reports display a credibility mean of M = 5.74 (SD = 1.41, Min
= 1.27, Max = 8.2), which lies in the middle of the scale (0-10).
The single constructs that constitute credibility show diverse results for their respective means.
While sincerity and appropriateness levels lie above the sample mean (M = 6.78, SD = 1.88, and M =
6.71, SD = 2.38, respectively), truth falls below the mean at M = 5.16, SD = 1.88. Understandability has
the lowest mean, M = 4.82, SD = .66. Interestingly, no report scored the maximum for truth or
understandability and thus for credibility. No report achieved the maximum score for truth either,
which results from a lack of standards (assurance and general CSR-related standards) applied in the
reports.
The sampled CSR reports furthermore show the following descriptive characteristics relating to the
format of reporting, sector supplement, GRI guidelines used, and the application level check (see
Table 5).
Table 5: Descriptive statistics of the sampled CSR reports given in percentages.
Format
Sector
supplement
GRI guidelines
Application level
Stand-alone
Combine
d
Yes
No
Yes
No
Yes
No
Sampled
reports
(%)
74.26
25.74
28.27
71.73
85.23
14.77
64.98
35.02
4.2. Correlations and Reliability of the Credibility Dimensions
As assumed by communicative action theory (Habermas, 1984), the four measured dimensions of
credibility should correlate to provide a solid scale with adequate internal consistency (see Table 6).
Table 6. Correlations of the credibility dimensions.
Truth
Sincerity
Appropriateness
Sincerity
0.56**
Appropriateness
0.75**
0.54**
Understandability
0.1
0.14*
0.14*
*: Pearson correlation is significant at the 0.05 level (2-tailed).
**: Pearson correlation is significant at the 0.01 level (2-tailed).
The findings indicate a strong positive Pearson’s correlation coefficient between truth and
appropriateness (r(237) = 0.75, p < .01) and moderately positive correlations between truth and
sincerity (r(237) = 0.56, p < .01) and sincerity and appropriateness (r(237) = 0.54, p < .01).
Furthermore, weak positive correlations exist between sincerity and appropriateness (r(237) = 0.14,
p < .05) and appropriateness and understandability (r(212) = 0.14, p < .05; see Table 5). No significant
correlation between understandability and truth was found. Given that the correlations of
understandability across the other three constructs are weak or non-existent, understandability only
weakly contributes to the overall credibility score.
A reliability analysis served to further test and verify the weak contribution of understandability to
the total credibility scale. The four constructs were treated as a scale for credibility. Cronbach’s alpha,
including all four constructs, results in a moderate value of 0.75. However, if understandability is
deleted, Cronbach’s alpha would result in 0.84 over the remaining three items. These findings suggest
that the understandability dimension does not contribute significantly to the concept of credibility.
As a consequence, the validity claim of understandability is not considered a part of the credibility
concept and thus excluded.
The reliability of this new scale composed of truth, sincerity, and appropriateness is high, with a
Cronbach’s alpha of 0.82. As expected, the sample mean rises from M = 5.75 (old scale composed of
four claims) to M = 6.22 (new scale composed of three claims without understandability). All further
analyses are based on this new summative credibility scale (Table 7).
Table 7. Descriptive statistics of the new credibility scale.
Credibility
New Scale
N
237
Mean (M)
6.22
Std. Dev. (SD)
1.77
Minimum
.46
Maximum
9.17
4.3. Standardization and Credibility
Overall, the standardization of CSR reports is important to credibility. Several findings substantiate
this claim (Table 8).
Table 8. Summary of hypotheses H1a-c and results.
Hypothesis
Result
Test
H1a. CSR reports using standardized reporting guidelines from the GRI (G3, G3.1, G4)
are more credible than those without.
+
Multiple linear
regression (MLR) model
1
H1b. The more guidelines are used (in terms of a sector supplement), the more
credible is the CSR report.
-
H1c. CSR reports with high application levels are more credible than those without.
+
Standardization is hypothesized to lead to higher levels of reporting credibility. A multiple linear
regression model (MLR; model 1; method: forced entry) was performed with credibility as the
dependent variable (DV) and reporting guidelines, sector supplement, and application level as
independent variables (IV) to test hypotheses 1a, 1b, and 1c. Dummy coding was applied for the
categorical variables. The R2 of this model results in 0.49; thus, the IVs explained 49% of the variance
of credibility. The ANOVA resulted in F(11; 199) = 16.24; MS = 28.08 and is significant at p < .001.
The Durbin-Watson test results in 1.97. Variance inflation factors (VIFs) are all below the threshold
of 5 (Hair et al., 2010; Table 9).
Table 9: Results of the multiple linear regression analysis model 1.
Model 1
N
B
SE B
β
VIF
Sector supplement
67
-.28
.22
-.07
1.24
Application level A+
71
2.15
.37
.58***
3.66
Application level A
8
1.90
.60
.20***
1.42
Application level B+
28
1.51
.41
.29**
2.37
Application level B
23
.27
.43
.05
2.16
Application level C+
3
.13
.83
.01
1.17
Application level C
5
-1.34
.67
-.12*
1.28
Materiality matters
16
.62
.69
.06
1.62
Guideline G3.1
93
1.30
.41
.37**
4.91
Guideline G3
49
1.29
.43
.33**
4.43
Guideline G4
60
2.13
.51
.32***
2.09
***p < .001, **p < .01, *p < .05
Dummy coding results in significant values per category. As displayed in Table 8, second column (N),
only some categories include enough cases to perform meaningful statistical tests. Thus, the
presented findings are based on categories with N > 25 only (in bold). The results of MLR model 1
show that a high application level (A+ or B+) and reporting along one of the three GRI guidelines
affect credibility positively. The sector supplement, however, was not significant. Thus, H1a and H1c
are accepted while H1c is rejected.
4.4. Format, Firm-level, and Contextual Factors’ Influence on Credibility
How do format, contextual, and firm-level factors influence credibility? Table 10 summarizes the
findings.
Table 10. Summary of hypotheses H2-6 and results.
Hypothesis
Result
Test
H2a. A positive relationship exists between CSR reports’ length and their credibility.
+
MLR
model 2
H2b. Combined reports are more credible than stand-alone reports.
-
H3. The bigger the firm (in terms of employees and turnover), the more credible its
CSR report.
-
MLR
model 3
H4. The more experienced the firm (in terms of age and reporting experience), the
more credible its CSR report.
-
MLR
model 4
H5. CSR reports from countries with legally mandated CSR reporting regulations are
more credible than CSR reports from countries without such legislation.
-
T-test
H6. Credibility levels differ according to the impact of the company on the
environment. Environmentally sensitive industries’ reports are more credible than
less sensitive sectors’ reports.
-
ANOVA
It is hypothesized that length and reporting format influence the credibility of CSR reports positively.
A MLR (model 2; method: forced entry) with credibility as the DV and length of report and format as
IVs was tested. The coefficient of determination R2 is 0.198 and the regression results are significant
(F(2; 210) = 25.68, p < .001, MS = 67.31). The Durbin-Watson statistic for this model is 1.79 and the
VIF is below 5 for all IVs (Table 11).
Table 11. Results of the multiple linear regression analysis model 2.
Model 2
B
SE B
β
VIF
Format
-.320
.258
-.08
1.023
Length
0. 36E-005
.000
.45***
1.023
***p < .001, **p < .01, *p < .05
Model 2 showed that the length of a report positively influences the credibility levels of CSR reports,
while a similar effect was not found for reporting format. Hence, hypothesis 2a is accepted, while
hypothesis 2b is not.
Regarding firm-level characteristics (H3), size was measured by number of employees and yearly
financial turnover (see appendix C.). Including both variables as predictors of credibility, a MLR
(model 3; method: forced entry) was performed. The Durbin-Watson test was 1.67. The model
showed that IVs did not significantly affect (R2 = 0.002; employees: β = -0.03, t(2) = -0.46, p >.05, VIF
= 1.02; turnover: β = 0.04, t(2) = 0.62, p > .05, VIF = 1.02) the credibility of CSR reports; thus, H3 is
rejected.
Moreover, the more experienced a firm is in reporting on CSR, the more credible are its reports (H4).
The year of the first report of each company (first report) and the company age were measured.
Another MLR (model 4; method: forced entry) with age and first report as IVs and credibility as the
DV was estimated. Model 4 resulted in non-significance (Durbin-Watson = 1.70, R2 = 0.015; age: β = -
0.02, t(2) = -0.25, p >.05, VIF = 1.12; turnover: β = -0.05, t(2) = /1.79, p > .05, VIF = 1.12). Thus, H4 is
not supported.
Several contextual factors have an impact on CSR reporting, but do they also affect credibility?
Different credibility means between the reports of the sampled countries were found (see appendix
D.). It was assumed that the regulatory context of the country has a positive impact on the report’s
credibility (H5). Three countries in the data set mandate comprehensive CSR reporting: France,
Spain, and the Netherlands. Dutch reports could not be included in the test, since the sample amounts
to only 19 reports, which is below the generally agreed sample size required for statistical
significance tests (Hair et al., 2010). An independent samples t-test (t(106.40) = 1.10, p > .05) revealed
that reports from these two countries (M = 6.43, SD = 1.86) are not significantly more credible than
reports from countries without regulation (M = 6.14, SD = 1.74). When looking at the country level,
significant differences were found (ANOVA, F(4; 143) = 6.00, p < .01, MS = 17.09) between Germany,
France, the United Kingdom, Italy, and Spain4. Specifically, Bonferroni post hoc tests revealed that
Spanish CSR reports (M = 7.39, SD = 1.39) are significantly more credible than French (M = 5.68, SD
= 1.84, p < .01) and British reports (M = 5.79, SD = 1.7, p < .01). However, this result is inconclusive
because both France and Spain have mandatory CSR reporting laws; thus, H5 is rejected.
Finally, it was assumed that the sector’s environmental impact positively influences the credibility
levels of CSR reporting. Seventy-one reports stem from environmentally sensitive industries, 166
from less sensitive sectors. Although the mean credibility level of sensitive industries’ reports is
above the sample mean (M = 6.47, SD = 1.93), less environmentally sensitive industries’ reports
display an average of M = 6.11 (SD = 1.69). An independent samples t-test found that this difference
is not significant (p > .05); hence, H6 is rejected.
4 Swedish, Dutch, Swiss, Polish, Belgian, and Austrian reports were excluded from this analysis as their sample size is
smaller than 25.
5. Discussion
Theoretical papers on CSR reporting often suggest that CSR reports are not credible and are merely
a public relations exercise (Milne and Gray, 2013). Instead, the empirical findings indicate that
European companies’ CSR reports tend to be credible. Nevertheless, they have considerable room for
improvement: Levels of credibility are above the middle, which makes them mediocre rather than
good. However, companies face difficulties in reporting on their CSR, which arises because they must
increase awareness on the one hand and prevent skepticism on the other (Coombs and Holladay,
2013; Waddock and Goggins, 2011) and given that they must address a vast audience of multiple
stakeholders coupled with an array of topics. The credibility gap in CSR reporting that was
proclaimed more than a decade ago (Dando and Swift, 2003; McLean and Rebernak, 2007) is thus
still in place. To report more credibly and eventually bridge it, companies must focus on
standardization and on the contents of their reports. Secondary for reporting credibility are format-
, firm-level, and contextual factors.
5.1. Credibility of CSR Reports and Influencing Factors
Few factors have been found to influence reporting credibility. Voluntary standards aid in reaching
higher levels of reporting credibility. Standards codify and operationalize what many researchers
and practitioners still regard as a fuzzy and ill-defined concept, namely, CSR. However, an
exaggerated focus on standards might lead to a lack of creativity and render CSR reporting a tick-the-
box exercise (de Colle et al., 2014), as observed in the finding that the GRI guidelines and a high
application level increase credibility, while a sector supplement does not. This finding confirms
political CSR theory’s postulation that voluntary self-regulation, for instance, through the adoption
of reporting guidelines of the GRI, strengthens CSR’s impact and can help establish and maintain
moral legitimacy (Scherer and Palazzo, 2011).
The CSR reports in this sample varied in length, too (Fifka and Drabble, 2012). The findings show
that the lengthier a CSR report, the more credible it is, implying that the more content provided the
more qualitative it is. However, no indications were found that combined reports are more credible
than stand-alone reports, even though combined reports are usually longer than stand-alone
publications. Thus, integrated reporting in the form of combined reports did not have a significant
effect on reporting quality in this sample, even though it is deemed to provide a more “holistic”
picture of the company’s CSR efforts and therefore is supposed to lead to better quality (Adams and
Simnett, 2011; Kolk, 2004). This can be due to the fact that combined reports symbolize only a first
step towards a complete integration of financial and non-financial reporting (IIRC, 2011).
While the likelihood of reporting in an integrated fashion and the size of the firm showed to be related
positively (Frias-Aceituno et al., 2014), similar effects of firm size on reporting credibility were not
found in this sample. Although the size of the firm (in terms of number of employees and yearly
turnover) is important for the adoption of CSR reporting (Marimon et al., 2012) and for developments
in terms of quantity in a given context (de Villiers et al., 2014a), quality of CSR reports is not impacted
by size. Furthermore, companies with more experience in reporting did not result to also report more
credibly. Thus, first-time reporters can report as credibly as more experienced firms, implying that
reporting practice does not necessarily make credible reports.
When looking at contextual factors affecting reporting credibility, the importance of reporting
standardization and contents over external factors’ influences is even more pronounced. Neither the
sector nor the country and its regulatory context showed consistently significant effects on the
credibility of CSR reports in the sample. Even though companies from environmentally impactful
industries report more on CSR (Branco and Rodrigues, 2008; Jenkins and Yakovleva, 2006; Fifka and
Drabble, 2012), they do not report significantly more credibly.
Country-level differences (Fifka, 2013) as evident for the likelihood of integrated reporting (Jensen
and Berg, 2012), assurance of reporting (Simnett et al., 2009), or CSR reporting developments (de
Villiers et al., 2014a) were observable only at a descriptive level, resulting in diverse mean credibility
levels per country. Instead, the regulatory context did not impact reporting credibility. Mandatory
reporting of CSR did not consistently benefit reporting credibility, possibly because regulations’
effects depend heavily on the cultural and national context (Ioannou and Serafeim, 2014a).
In brief, for quality of reporting in terms of credibility, it is standardization and content that matter
most. External influences such as the reporting format, firm size, industry’s environmental impact,
and regulatory context are secondary, at best.
5.2. The Peculiar Role of Understandability
Another theoretical contribution emerges from the finding that understandability has a special role
in the credibility concept: It is a necessary precondition to enter discussions on credibility. This
empirical result is consistent with Habermas’s re-interpretation of the validity claim structure. In his
early writings, understandability is considered one of four validity claims of rational communication
(Zinkin, 1998). Later, he stated that “every speech-act as a whole can always be criticized as invalid
from three perspectives: as untrue […] as untruthful […] and as not right” (Habermas, 1992, p. 77).
Thus, understandability has a peculiar position among the four validity claims; it is considered a
precondition or basis for communication rather than a redeemable claim (Germonprez and Zigurs,
2009). Following Zinkin (1998, 459): “Habermas's point […] seems to be that the fact that there is
communication is itself the validation of a claim to intelligibility. If utterances were unintelligible,
there would just be no communication.This interpretation is controversial because it is known that
communication is more than the comprehensible use of language and that it entails, in interpersonal
communication, non-verbal factors such as gestures and facial expressions (Sperber et al., 1986). In
CSR reporting, this refers to images in the reports or design parameters, which were not measured.
Hence, Habermas’s assessment also holds with regard to communicational artifacts such as CSR
reports.
Understandability takes on a special role within the credibility concept, which empirically confirms
Habermas’s theory shift. Referring to theoretical constructs in CSR reporting, understandability is
thus regarded as a necessary precondition for CSR reporting that has to be in place (phase I) before
truth, sincerity, and appropriateness can be addressed in phase II. Thus, understandability can be
considered a necessary precondition for credibility of the entire spectrum (Seele and Lock, 2015) of
CSR communication. Only if all four claims are fulfilled, mutual understanding and thus credibility
can be reached. The two-phase-model of reporting credibility depicted in Figure 1 illustrates this
peculiar role of understandability.
Figure 1: The two-phase model of reporting credibility adopting the four validity claims of Habermas.
6. Conclusions and Limitations
It is challenging to translate ideal philosophical theory into practice, as this study attempted with
regard to Habermas. But in return results derived from this approach can also lead to theoretical
advancements: This study addressed the under-researched area of reporting quality and expanded
it by the concept of credibility, which, as shown, emerges from the contents of reports rather than
external factors. Conceptually, the study re-defined and operationalized credibility as a multi-
dimensional construct of reporting quality along communicative action theory and thus fills the
theory void in the field of CSR reporting. The findings indicate that all communicative actors must be
on the same page to engage in credible and valid communication. This can be achieved by
understandability as a precondition and quality of content as the main factor enhancing the
credibility of CSR reports. Being understood is the most important aspect, before only starting a
(possibly) credible communication act. Only after ensuring that they are being understood by their
stakeholders should companies strive to obtain high levels of truth (via standards and assurance),
sincerity (through stakeholder engagement and materiality), and appropriateness (through
stakeholder-specific communication), which together render a CSR report credible. That way, CSR
reports become crucial facilitators of understanding between companies and stakeholders, which
ultimately constitutes moral legitimacy and thus companies’ license to operate in society. On the
theoretical level of political CSR we hence suggest to strengthen the overall role of understandability.
Political CSR needs to acknowledge quality of content as specified above and understandability
before embarking on deliberatively addressing CSR issues. Furthermore, this study also confirms the
importance of voluntary standardization.
For companies, the findings imply that avoiding jargon and overly positive reporting and being clear,
concise, and objective are preconditions for credibility of CSR reports. Moreover, a focus on contents
rather than format or contextual factors and following standardized guidelines lead to higher levels
of reporting credibility. The fact that a company belongs to a specific industry or cultural context or
is of a particular size does not serve to explain low credibility in reporting.
For policy makers, this study showed that credibility levels of CSR reports are mediocre. Policy
makers might conclude that laws are needed to lift these levels. Although this study does not provide
consistent evidence that regulation leads to higher credibility of reports, it demonstrates with the
examples of France and Spain that different laws can have different impacts on credibility. Thus,
comprehensive regulation at a transnational level as proposed by the EU could be a useful move to
level the playing field in the market and raise the credibility of reporting.
The study’s findings, however, must be moderated at least in the following respects. The focus was
on publicly listed companies from the leading stock indices in the biggest European countries. Thus,
these findings are not generalizable to small and medium-sized companies.
Next, it would be interesting to monitor how the credibility of CSR reports develops over time,
particularly regarding development of mandatory reporting regulations in the European Union. A
cross-cultural comparison to other cultural areas such as the US or China would further be valuable.
Moreover, very diverse formats of CSR reports were observed during the study, including GRI-only
reports, summaries of stand-alone publications, and websites printed as PDFs and soldas CSR
reports. Mapping these different design developments and their impact on quality provides another
fruitful avenue for future studies.
Acknowledgments
The authors thank the coders of this study, Tanja Coray, Michele Fratin, and Alexandra Grammenou,
for their excellent work. Special thanks also to Uwe Hartung for helpful advice on the applied method
and Arthur Dubowicz for his constructive comments on an earlier version of this manuscript. The
authors also thank the Swiss National Science Foundation, which funded this research with grant no.
150296.
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Appendix
A. Sectors of the sampled CSR reports.
Environmentally
sensitive
industry?
Y/N (1/0)
Sector
Fre-
quency
0
Agriculture
1
0
Automotive
9
0
Aviation
2
1
Chemicals
12
0
0
Commercial services
Computers
2
1
0
Conglomerates
9
0
1
Construction
Construction materials
7
7
0
Consumer durables
2
1
Energy (and energy
utilities)
33
0
Equipment
4
0
Financial services
48
0
Food and beverage
12
1
Forest and paper
1
0
Health care products
6
0
Household and personal care
7
0
Logistics
2
0
Media
6
1
Metals products
5
1
Mining
9
0
Public agency
1
0
Real estate
4
0
Retailers
7
0
Techn. Hardware
4
0
Telecommunications
17
0
Tobacco
2
0
Tourism/Leisure
2
0
Other
15
N
237
B. Coding sheet.
FORMAL VARIABLES
ID
Variable
Coding rules
V1
Company
Open code
V2
Title
Open code
V3
Year
Open code
V4
Sector
Nominal
V5
Country
Nominal
V6
Size I: turnover
Open code
V7
Size II: no. employees
Open code
V8
Age of firm
Open code
V9
First report issued
Open code
V10
Format of report
Nominal: stand-alone or integrated
V11
Guidelines applied
Nominal: GRI G3, 3.1, 4, none
V12
Sector supplement
Nominal: sector supplement used with GRI
V13
Application level
Nominal: application level (A+, A, B+, B, C+, C, materiality matters)
V14
Accessibility
Table of contents, Electronic navigation helps in PDF, Chapter
headings close to page number, Imprint, Free download, PDF open,
GRI table
V15
Length of report
Open code: no. of words (software)
V16
Readability
Felsh-Kincaid Reading Ease Index (software): 0-100 points
V17
Balance
Amount of pos./neg. words in report (software): scale 0-10
CONTENT VARIABLES
ID
Variable
Coding rules
V18
Timeliness
Recent data used
V19
Assurance
Nominal: yes/no
V20
Type of assurance
Nominal: Internal, external, none
V21
Reach of assurance
Nominal: entire report, specific sections, not specified
V22
Assurance standards
Nominal: AA1000AS, ISAE3000, General national standard,
Sustainability national standard, Other, None
V23
Accuracy I
Nominal: section on methodology yes/no
V24
Accuracy II
Nominal: info on data measurement yes/no
V25
CSR Standards
Nominal: CDP (Carbon Disclosure Project), IFC (International Finance
Corporation), OECD Guidelines for Multinational Enterprises, UNGC
(United Nations Global Compact), ISO 9001, 14001, AA1000, None
V26
Materiality
Nominal: impacts, values, risks, goals, prioritization of topics, scope
and boundary of report
V27
Management system
Nominal: general CSR mngt, environmental mngt, social mngt,
health/safety mngt, no mngt system
V28
Stakeholder dialogue
Nominal: section of stakeholder dialogue
V29
Stakeholder
inclusiveness
Nominal: stakeholder description, dialogue, issues
GRI INDICATOR VARIABLES
V30-
V92
GRI Performance
indicators (core)
Scale 0-3: 0: not, 1: partially, 2: fully reported, 3: not applicable/not
material
V93
Completeness
Scale 0-10: percentage of reported performance indicators, rescaled
0-10
V94
Investors
Ordinal: amount and extent of indicators reported specific to
investors
V95
Employees
Ordinal: amount and extent of indicators reported specific to
employees
V96
NGOs
Ordinal: amount and extent of indicators reported specific to NGOs
C. Sampled companies and their number of employees and turnover figures.
Company
Country
No. of
employees
2013*
Turnover in
billion US
dollars 2013*
Lenzing
Austria
6700
2.729
Oesterreichische Post
Austria
24200
3.347
OMV
Austria
26900
59.357
Raiffeisen Bank International
Austria
59000
7.350
RHI
Austria
8100
2.530
Schoeller-Bleckmann Oilfield Equipment.
Austria
1600
0.637
Telekom Austria
Austria
16000
5.837
Verbund
Austria
3300
4.660
Wienerberger
Austria
13800
3.732
Zumtobel Group
Austria
7200
1.636
Anheuser-Busch InBev
Belgium
154600
444.000
Befimmo S.C.A.
Belgium
70
1.471
Bekaert SA/NV
Belgium
21800
44.000
Belgacom SA
Belgium
15700
87.000
BPOST
Belgium
28
33.000
Cofinimmo
Belgium
110 (2012)
0.3758
Delhaize Group SA
Belgium
160900
312.000
KBC Groep NV
Belgium
38200
106.000
Solvay SA
Belgium
29400
181.000
Telenet
Belgium
2100
23.000
UCB
Belgium
8700
47.000
Umicore
Belgium
10300
136.000
Accor
France
49119
7.730
Air Liquide
France
50250
21.278
Airbus Group
France
144061
82.055
Alcatel-Lucent
France
62311
20.100
Alstom
France
86125
27.947
AXA
France
157000
110.623
BNP Paribas
France
200000
54.139
Bouygues
France
128067
47.373
Cap Gemini
France
131430
13.921
Carrefour
France
363989
105.741
Compagnie de Saint Gobain
France
187726
57.957
Credit Agricole
France
149717
43.813
Danone
France
154941
29.373
Electricite de France (EDF)
France
155000
112.671
Essilor
France
55129
6.992
GDF Suez
France
147200
127.371
Kering
France
35786
17.696
Lafarge
France
54822
20.995
Legrand
France
33272
6.151
L'Oreal
France
77452
31.687
LVMH Group
France
114635
40.199
Michelin
France
111190
27.943
Orange
France
165488
57.464
Pernod Ricard
France
19000
11.263
Publicis
France
62553
9.590
Renault
France
121807
56.467
Safran
France
66289
20.699
Sanofi
France
112128
46.885
Schneider Electric
France
163033
32.718
Societe Generale
France
148324
33.685
Technip
France
38851
12.906
Total
France
98799
237.030
Unibail-Rodamco
France
1538
2.116
Valeo
France
74800
16.701
Veolia Environment
France
202800
31.853
Vivendi
France
46100
30.648
Adidas
Germany
50728
20.325
Allianz SE
Germany
148000
99.366
BASF
Germany
112206
103.081
Bayer AG
Germany
113200
56.433
Beiersdorf
Germany
16708
8.590
BMW Group
Germany
110351
105.501
Commerzbank
Germany
51399
12.765
Continental
Germany
177762
46.346
Daimler
Germany
274616
164.754
Deutsche Bank
Germany
98254
43.374
Deutsche Boerse
Germany
3811
2.998
Deutsche Lufthansa
Germany
118214
42.824
Deutsche Post
Germany
435285
77.898
Deutsche Telekom
Germany
228596
84.601
E.ON
Germany
62239
178.352
HeidelbergCement
Germany
52560
19.514
Henkel
Germany
46850
22.650
Infineon Technologies
Germany
26725
5.213
K+S
Germany
14421
5.519
LANXESS
Germany
17343
11.612
Linde
Germany
63487
23.290
Merck
Germany
38154
15.446
Munich Re
Germany
45000
70.417
RWE
Germany
66341
72.084
SAP
Germany
66572
23.216
Siemens
Germany
367000
103.267
Thyssen Krupp
Germany
156856
54.471
Volkswagen
Germany
572800
280.192
A2a
Italy
12626
7.728
Atlantia
Italy
13388
7.446
Autogrill
Italy
41646
6.446
Banca popolare dell'Emilia Romagna
Italy
11876
3.166
Banco Popolare
Italy
18038
5.000
Banco Popolare Milano
Italy
7846
2.000
Buzzi Unicem
Italy
10629
3.945
CNH Industrial
Italy
3853
3.740
Enel
Italy
71394
111.066
Eni
Italy
82289
160.123
FIAT
Italy
225587
119.822
Finmeccanica
Italy
63835
22.624
Generali
Italy
77000
86.242
Gtech
Italy
8583
4.229
Intesa Sanpaolo
Italy
93935
46.332
Mediolanum
Italy
4407
6.746
Pirelli & C
Italy
37979
8.772
Prysmian
Italy
19374
10.117
Saipem
Italy
48607
17.146
Snam
Italy
6045
5.307
STMicroelectronics
Italy
9464
1.986
Telecom Italia
Italy
65619
32.727
Tenaris
Italy
26673
10.905
Terna
Italy
3445
2.615
UBI Banca
Italy
18337
4.637
Unicredit
Italy
147864
32.853
Unipol
Italy
15000 (2012)
13.387
Yoox
Italy
714
0.628
Bank Polska Kasa Opieki SA
Poland
18900
25.000
Grupa LOTOS S.A.
Poland
5000
95.000
KGHM Polska Miedz SA
Poland
34500
83.000
Lubelski Wegiel Bogdanka
Poland
4000
0.632
Orange Polska S.A.
Poland
19900
44.000
PKN ORLEN
Poland
21600
0.333
Polskie Gornictwo Naftowe
Poland
31200
107.000
PZU (Powszechny Zaklad Ubezpieczen SA)
Poland
16800
52.000
Abengoa S.A.
Spain
24700
108.000
Abertis Infraestructuras
Spain
17100 (2012)
72.000
Acciona
Spain
34100
96.000
Amadeus
Spain
10500
43.000
Banco Popular Espanol SA
Spain
16000
54.000
Banco Sabadell
Spain
18100
58.000
Banco Santander SA
Spain
183000
566.000
Bankia SA
Spain
20400
51.000
Bankinter SA
Spain
4100
20.000
BBVA
Spain
109300
29.000
Bolsas y Mercados
Spain
700
0.422
Caixabank S.A.
Spain
31900
98.000
Enagas
Spain
1200
18.000
Ferrovial S.A.
Spain
66100
113.000
Fomento de Construcciones y Contratas
Spain
19500
96.000
Gamesa
Spain
6300
33.000
Gas Natural
Spain
15000
347.000
Iberdrola
Spain
30700
458.000
Inditex
Spain
128300
226.000
Indra Sistemas
Spain
38600
42.000
Jazztel
Spain
4100 (2012)
14.000
Mapfre
Spain
35600
301.000
Mediaset Espana Comunicacion S.A.
Spain
1300
11.000
Red Electrica Corporacion S.A.
Spain
1700
24.000
Repsol
Spain
30300 (2010)
776.000
Sacyr
Spain
23500
45.000
Tecnicas Reunidas SA
Spain
7900
39.000
Telefonica SA
Spain
126700
794.000
Alfa Laval
Sweden
16300
5.000
Assa Abloy
Sweden
42600
7.550
Atlas Copco
Sweden
41200
13.135
Boliden
Sweden
4800
5.372
Electrolux
Sweden
60800
16.991
Ericsson (Telefonaktiebolaget L. M. Ericsson)
Sweden
17900
35.565
Handelsbanken
Sweden
11500
5.655
Hennes & Mauritz (H&M)
Sweden
81100
19.644
Modern Times Group
Sweden
3400
2.201
Nokia Oyj
Sweden
55200
32.612
Nordea
Sweden
29400
13.615
Sandvik
Sweden
48000
13.677
Skandinaviska Enskilda Banken (SEB)
Sweden
17000
6.468
Skanska
Sweden
57100
21.247
SKF
Sweden
48400
9.914
SSAB
Sweden
8200
5.528
Svenska Cellulosa SCA
Sweden
34000
14.267
Swedbank
Sweden
14200
5.715
Swedish Match
Sweden
4400
1.963
Tele2
Sweden
6100
7.227
Teliasonera
Sweden
25300
15.928
Volvo
Sweden
94800
42.439
ABB Ltd
Switzerland
147700
419.000
Actelion
Switzerland
2400
20.000
Adecco SA
Switzerland
31000
269.000
Clariant
Switzerland
18100
68.000
Compagnie Financiere Richemont
Switzerland
29100
147.000
Credit Suisse Group AG
Switzerland
46000
27.000
Geberit
Switzerland
6200
23.000
Givaudan
Switzerland
9300
49.000
Holcim
Switzerland
70900
224.000
Nestle SA
Switzerland
333000
1044.000
Novartis
Switzerland
135700
602.000
Roche Holding AG
Switzerland
85000
545.000
Schindler
Switzerland
48200 (2012)
99.000
SGS S.A.
Switzerland
81900
65.000
SIKA
Switzerland
16300
58.000
Sonova
Switzerland
9500
22.000
Swiss Prime Sight
Switzerland
3100
1.000
SWISS RE
Switzerland
11600
29.000
Swisscom
Switzerland
20100
130.000
Syngenta
Switzerland
28100
147.000
UBS
Switzerland
60200
65.000
Zuerich Insurance Group
Switzerland
55000
70.000
Aegon
The Netherlands
24400
232.000
Akzo Nobel NV
The Netherlands
49600
208.000
ArcelorMittal
The Netherlands
11900
794.000
ASML
The Netherlands
10400
73.000
Corio
The Netherlands
600
1.000
Delta Lloyd NV
The Netherlands
5800
6.000
Gemalto
The Netherlands
10000
33.000
Heineken N.V.
The Netherlands
81000
267.000
ING Groep
The Netherlands
83700
239.000
Koninklijke Ahold
The Netherlands
222000
450.000
Koninklijke DSM N.V.
The Netherlands
24300
135.000
Koninklijke KPN
The Netherlands
23500
159.000
Koninklijke Philips N.V.
The Netherlands
116700
339.000
Reed Elsevier
The Netherlands
29000
99.000
Royal Boskalis Westminster Dredging
The Netherlands
11000
50.000
Royal Dutch Shell
The Netherlands
92000
4513.000
SBM Offshore
The Netherlands
8400
48.000
TNT Express
The Netherlands
53100
99.000
Wolters Kluwer NV
The Netherlands
19000
5.000
Angloamerican
United Kingdom
159000
29.342
Associated British Foods
United Kingdom
112652
21.529
Barclays
United Kingdom
139600
46.273
BG Group
United Kingdom
5536
19.547
BHP Billiton
United Kingdom
49496
70.079
BP
United Kingdom
83900
379.631
British American Tobacco
United Kingdom
89820
25.628
BT Group
United Kingdom
87800
30.435
Compass Group
United Kingdom
506699
28.360
Diageo
United Kingdom
28410
17.582
Glaxo Smith Kline
United Kingdom
99817
46.137
Glencore Xstrata
United Kingdom
200000
232.694
HSBC
United Kingdom
263000
65.880
Lloyds Banking Group ORD
United Kingdom
97869
30.430
Prudential
United Kingdom
47000
50.231
Reckitt Benckiser
United Kingdom
37100
16.547
Rio Tinto
United Kingdom
66331
52.752
Royal Bank of Scotland
United Kingdom
118600
32.442
SABMiller
United Kingdom
69947
17.084
Standard Chartered
United Kingdom
86640
18.901
Tesco
United Kingdom
391868
106.528
Unilever
United Kingdom
174000
68.675
Vodafone Group
United Kingdom
89000
63.819
WPP Group
United Kingdom
175000
18.147
*unless indicated differently in the table
D. The mean credibility levels of the studied CSR reports per country of origin.
Country
M
Austria
6.09
Belgium
4.67
France
5.67
Germany
6.54
Italy
7.09
Netherlands
6.42
Poland
5.34
Spain
7.39
Sweden
5.97
Switzerland
5.87
United Kingdom
5.79
... Having indicated the overarching importance of the perceived credibility of voluntary sustainability reporting (e.g., Lock & Seele, 2016) makes looking at the contradicting results between the work of Hsueh (2018) and the vast empirical literature all the more interesting. ...
... Misleading practices (e.g., greenwashing) have caused outside parties to doubt the sustainability information promulgated by organizations (Connors et al., 2017;Lock & Seele, 2016). Hence, for a sustainability report's content to be perceived as credible and, thus, for it to be successful, recipients need to adjudge the information source (i.e., the organization which publishes the report) trustworthy (Hovland, Janis, & Kelley, 1953;O'Reilly & Roberts, 1976;Perloff, 2010). ...
Article
This study takes a fresh look at the credibility of corporate communication in family firms, as compared to corporate communication in non-family firms, in voluntary sustainability reporting. In his pioneering work Hsueh (2018) discovered that family firms suffer from a credibility disadvantage in terms of their sustainability reporting efforts, from the point of view of external stakeholders. This is called the ‘credibility gap’. This finding however is in stark contrast to the superior trust attribution of external stakeholders towards family firms in the general family firm literature. Our replication study shows that indeed, family firms do not suffer from a credibility gap compared to their non-family firm counterparts. In fact, in our experimental extension we can show that family firms, when perceived as such, are considered to be benevolent, which in turn increases the credibility of their sustainability reporting from an external perspective. Thus, contrary to the original study by Hsueh (2018), we suggest that family firms have a credibility advantage over non-family firms when it comes to their sustainability reporting. Furthermore, our results suggest that this credibility advantage remains, even when tested with specific stakeholder roles (customers, job-seekers), and that it ultimately influences their interactions with the firm positively.
... Moreover, several studies mention that disclosing sustainability-related information in developing countries is in an early stage of adoption and commonly viewed as less credible (e.g., Lock and Seele, 2016;Buallay and Al-Ajmi, 2019). On that basis, the sample is partitioned into developed and developing groups, and the baseline regression is re-run for each group and total SR only. ...
... The efficacy of such mechanisms in the context of such countries has been questioned (West, 2006;Siddiqui, 2010;Khan et al., 2013), and is relatively weak due to high corruption index and concentrated ownership, weak standard and legal protection, political interference, weak institutional setup and external mechanism (Khan et al., 2013;Bae et al., 2018;Mahmood et al., 2018;Ullah et al., 2019). In turn, this could foster disclosing relevant information about the economic, environmental, and social dimensions of sustainability, where SR in developing countries is in an early stage of adoption (Alotaibi and Hussainey, 2016;Buallay and Al-Ajmi, 2019) and commonly viewed as less credible (Lock and Seele, 2016;Katmon et al., 2019). ...
Thesis
The current thesis seeks to enhance our understanding and the existing knowledge of the impact of corporate governance (CG) on sustainability reporting (SR) around the world. This is achieved by carrying out three distinctive, but intimately connected papers. These are: (i) an up-to-date systematic review of the current empirical research investigating the relationship between CG and SR; (ii) an examination of the influence of CG on total SR and separately on its three dimensions, and whether the influence differs between developed and developing countries; and (iii) whether the efficacy of the CG-SR nexus depends on sampling decision, and whether this relationship is significantly different between the financial and non-financial sectors. The first paper conducts a systematic literature review (SLR) of the relationship between CG and SR. The final sample includes 117 empirical studies conducted in over 50 countries from 2000 to 2019 and published in 72 scholarly journals. The paper finds that very few articles examine all three dimensions of SR (economic, environmental and social). The paper also shows that most previous studies are based on developing countries and exclude the financial sector from the investigation. Additionally, the majority of prior studies focus on the quantity of SR and apply single rather than multiple theoretical frameworks, with agency theory being the dominant theoretical lens. Moreover, the findings of the influence of board attributes frequently examined iv (size, independence, gender diversity, and CEO duality) are conflicting. Thus, this paper provides suggestions for future research on the CG-SR nexus. The second paper investigates the impact of CG, with a particular reference to board characteristics (i.e. board size, board independence, CEO duality, board gender diversity, and the existence of sustainability committee (SC)) on total SR practices and separately on each dimension (economic, environmental and social) based on stakeholder-agency theory. Using a sample of 370 firms from 50 countries (22 developed countries and 28 developing countries) in 2017 and a Global Reporting Initiative (GRI) standards-based disclosure index to measure the level of SR across various reporting mediums, the paper shows that the impact of several board characteristics differs by dimension. Then, the paper conducts further analysis by dividing the sample into developed and developing countries. The findings show that the relationship between some board attributes and total SR differs between developed and developing countries. Following similar analysis, and drawing on agency and resource dependence theories, the third paper conducts sector-based research of the CG-SR nexus. Specifically, this paper, first, explores whether the efficacy of several board mechanisms (i.e. board size, board independence, CEO duality, board gender diversity, board age, board tenure, and the presence of SC) on SR practices differs depending on sampling decision. Second, the paper examines the differences in the effect of these governance mechanisms on SR practices between financial and non-financial firms. Using data relating to 370 companies (104 from the financial sector and 266 from the non-financial sector) belonging to 50 countries in 2017 and a disclosure index based on GRI standards to quantify the SR activities, the paper finds that the chosen sample influences the relationship between some board characteristics and SR. Furthermore, the paper suggests that several board attributes affect SR practices in financial and non-financial sectors differently.
... give major credibility to non-financial reports, managerial and analytical tools should be adopted for gathering data and for assessing and measuring the sustainable performance (Lock & Seele, 2016). ...
... Firms have to be responsible for their activities and actions negatively affecting their CSP and thus on the SDGs and respond for these operations and halt them changing their strategy, and make a very clear and transparent disclosure on their sustainable performance focused on the SDGs. Also, "to steer our society toward a more sustainable future it is important that developments are measured" (Hoekstra et al., 2014, p. 6), but likewise as known data on the environmental and social sustainability in the CSP concept viewpoint are much less common than economic data for being regularly collected (Jones et al., 2017), and these data are not considered very clear and transparent, often lacking in credibility and validity (Lock & Seele, 2016), as well as these data make the CSP assessment more challenging because of the prevalent intangible resources to take into account and for being highly context dependent. In conclusion it should be useful and profitable to develop more studies of firms engaged with the SDGs where sustainability disclosure interventions might play a key role for improving and assessing the CSP, also because they provide basic information to develop and adopt effective CSP processes and practices for meeting the SDGs. ...
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This article investigates the role of accounting disciplines in assessing and fostering corporate social performance (CSP) of business organisations to meet the UN Agenda 2030. Drawing from legitimacy theory, this qualitative study analyses if and how non-financial reporting positively affects and fosters CSP practices and outcomes within the cruise industry. Specifically, using a case study methodology, a major cruise company has been analysed outlining its sustainable behaviour, through the manual content analysis of sustainability reports (2016-2017-2018), in achieving the sustainable development goals (SDGs) introduced by the UN Agenda 2030. The findings outline that the cruise company presents a clear sustainability and community orientation and adopts several initiatives, mostly focused on environmental and social issues, addressed to meet the 17 SDGs, where reputation and positive image have been recognised as the major antecedents in the perspective of CSP. This study contributes to the literature giving a broader and different reading of sustainability reporting as a "booster" of the CSP in meeting the SDGs and a further interesting application of the legitimacy theory, and offers managerial implications to systema-tise the content of non-financial reporting by improving the quality of disclosure to achieve the SDGs, with focus on CSP processes, outcomes and ways.
... The quality of data, disclosed in non-financial reporting is an important factor, influencing the effectiveness of decision-making process, in particular, at the level of individual stakeholder, at the state level, at the international level. The next directions for research can be find among scientific papers: factors of influence (Brammer & Pavelin, 2008;Cho & Patten, 2007); assessment of quality of non-financial reporting (De Beelde & Tuybens, 2015;Lock & Seele, 2016;Boiral, et.al., 2019); assessment of the level of non-financial data credibility (Cheng & Ren, 2019); relevance of non-financial reporting data (Rezaee & Homayoun, 2019;Hassan, et.al., 2020); specific industrial features and their impact on quality of non-financial reporting (Fonseca, 2010), etc. ...
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The article is devoted to highlighting of the results of scientific and practical research aimed at solving the problem of ensuring the comparability of enterprises' non-financial reporting data. The issues of current stage of non-financial reporting implementation are identified, including the lack of comparability of data disclosed in such reporting between companies, undustries and countries. These caused the difficulties with the monitoring of Sustainable Development Goals attainment. The results presented in the article is a part of the global overall countries’ case study of companies non-financial reporting practice in terms of SDGs’ attainment managed by UNCTAD. The ways and solutions to ensure the comparability of non-financial reporting data are suggested. The objective of the study is to determine the possility to align the company's core indicators with macro-indicators of SDGs attainment in appropriate areas. Case of Ukraine in the field of aggregation statistical data on progress in SDGs attainment and assessment of the private sector contribution to this process. The study was based on data from non-financial reporting of Ukrainian company for 2017-2018. This project was conducted in accordance with the requirements of the Guidance on core indicators for entity reporting on contribution towards implementation of SDGs, developed by ISAR-UNCTAD.
... Moreover, because of the distrust in the legitimacy of the self-assessed performance related to the ESG aspects, institutional investors are calling for mandatory ESG data disclosure [12,40,41] and auditing of ESG reports, based on global standards by external assurance providers, such as accounting or consulting firms [22]. The shift from voluntary to mandatory sustainability reporting emerged via the European Union (EU) Directive 95/2014, which enforces large companies to disclose sustainability data [31,42]. ...
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Institutional investors who commit to integrating environmental, social and governance (ESG) aspects into investment decisions require ESG data of sufficient quality. However, concerns have risen over a lack of quality in ESG data, as outlined by the Global Reporting Initiative. The lack of quality in ESG data deters institutional investors from using the data for investment decisions. This study outlines the ESG data reporting process and explores where in the process quality concerns emerge. Semi-structured interviews are applied with professionals involved in ESG data analysis and reporting of listed companies, a rating agency and institutional investors. The results show that current barriers to using ESG data include a lack of materiality, accuracy and reliability. Interviewees agree that access to data collected by governmental institutions is lacking, and that companies’ purchase of carbon credits raise questions about the reliability of ESG data. Companies hold contrasting views to the institutional investors on the useability of the data they disclose. The results enhance our understanding of the common and contrasting concerns about the lack of quality in ESG data. The results can be used as guide for companies, investors and regulators for actions to mitigate barriers related to the lack of quality in ESG reporting.
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Environmental, social, and governance (ESG) is an indicator that measures a company’s non-financial performance. Many firms have recently emphasized the importance of ESG. Ascertaining what topics are being discussed around ESG and how they change over time will contribute significantly to gaining insight into ESG. Using 73,397,870 text data scraped and refined from publicly available Twitter data, this study applied Latent Dirichlet Allocation (LDA) and the dynamic topic model (DTM) to ascertain the hidden structure of the ESG-related document collection and the topics being discussed. The study further conducts a sentiment analysis to examine the sentiment of the general public regarding ESG. Topic modeling shows that various topics regarding ESG are being discussed and evolve over time. Sentiment analysis shows that many people have neutral or positive sentiments toward ESG-related issues. This study contributes to exploring insights into ESG among the public and understanding public reactions toward ESG. We further conclude the study with a discussion of managerial implications and potential future research.
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Municipally owned enterprises (MOEs) are showing interest in sustainability reporting. To understand how institutional pressures influence non-financial disclosures, we undertook a multiple case study involving three comparable municipal water utilities from different contexts and applied the institutional logics perspective. The comparative approach demonstrates how their sustainability reporting is slightly sensitive to national institutional settings. The findings reveal how the market, state, community, and professions logics drive MOE disclosures. The analysis also suggests that MOEs disclose their commitment to social and environmental responsibilities and promote collaboration. Finally, Carroll's pyramid reveals how MOEs disclose the most economical content.
Article
The current research aims to evaluate the quality of work health and safety (WHS) disclosures by the top 100 companies listed on the Australian Securities Exchange (ASX100) with the view to determining whether mandatory WHS reporting may assist in improving health and safety standards. The 2018 and 2019 annual reports of ASX100 companies were analysed for WHS reporting of injury, illness, near misses and fatalities. Content analysis revealed that very few companies reported WHS metrics; however, companies in more hazardous industries reported more than those in less hazardous industries. Of the metrics that were reported, lagging rather than the more valid and predictive leading metrics were presented. Very few companies disclosed content related to the number of current or ongoing internal or external investigations of serious injury or near misses. These findings demonstrate a lack of reporting overall, as well as inconsistencies in the quality of WHS reporting across companies. Given that the primary purpose of WHS reporting is to improve standards to safeguard workers, the current work suggests that voluntary reporting provides inadequate protection. Mandatory WHS reporting of specific indices by publicly listed companies in their annual reports is proposed as a potential solution to improve and standardise reporting quality and quantity. This form of regulation would also ensure parity of information disclosure among firms and reduce information asymmetries. The need for and merit of standardised reporting, as well as how best to achieve this via policy and practice, are discussed.
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This chapter aims to deepen understanding of trends in corporate social responsibility reporting (CSRR) practices in Pakistan since the introduction of voluntary reporting guidelines in 2009 by the Securities and Exchange Commission Pakistan (SECP) and their updating in 2013. Quantitative content analysis was applied to CSRR for the chemicals, oil and gas, banking, cement, and manufacturing industries in Pakistan. The results were benchmarked to the guidelines issued on social and environmental aspects by the SECP. It was found that the reports issued by the highly polluting industries such as oil and gas, cement, and chemical industries reported significantly higher levels of information than the other sectors. The results indicate the appropriateness of industry-specific reporting and suggest, in line with local guidelines, that further standardisation is required to level the playing field of CSRR in Pakistan.
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Is greenwashing a concept describing companies using misleading communication or is it co-constructed in the eye of the beholder? By discussing the literature, we find that existing definitions of greenwashing overemphasize the strategic intention to mislead and do not incorporate unjust allegations. Then, by combining signaling theory with legitimacy theory, we frame the communication process of the greenwashing accusation and the emergence of a negative narrative caused by the accusation and its effect on legitimacy. Hence, in this paper we argue that greenwashing epistemologically is constituted in the eye of the beholder, depending on an external accusation. Following this view, the greenwashing accusation is understood as a distortion factor altering the signal reliability of green messages. Based on our conceptual analysis, we provide a conceptual framework introducing a new typology of case-based greenwashing (greenwashing, false greenwashing, potential greenwashing and no greenwashing) and the effects of these types on corporate legitimacy. Finally, we propose a revised definition of greenwashing as co-creation of an external accusation toward an organization with regard to presenting a misleading green message.
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This paper offers a critique of sustainability reporting and, in particular, a critique of the modern disconnect between the practice of sustainability reporting and what we consider to be the urgent issue of our era: sustaining the life-supporting ecological systems on which humanity and other species depend. Tracing the history of such reporting developments, we identify and isolate the concept of the ‘triple bottom line’ (TBL) as a core and dominant idea that continues to pervade business reporting, and business engagement with sustainability. Incorporating an entity’s economic, environmental and social performance indicators into its management and reporting processes, we argue, has become synonymous with corporate sustainability; in the process, concern for ecology has become sidelined. Moreover, this process has become reinforced and institutionalised through SustainAbility’s biennial benchmarking reports, KPMG’s triennial surveys of practice, initiatives by the accountancy profession and, particularly, the Global Reporting Initiative (GRI)’s sustainability reporting guidelines. We argue that the TBL and the GRI are insufficient conditions for organizations contributing to the sustaining of the Earth’s ecology. Paradoxically, they may reinforce business-as-usual and greater levels of un-sustainability.
Article
The sustainability problems of the production, distribution, and consumption of goods and services increasingly challenges the legitimacy of corporations. Corporate legitimacy, however, is vital to the survival of corporations in competitive environments. The literature distinguishes three strategies that corporations commonly employ to address legitimacy problems: adapt to external expectations, try to manipulate the perception of their stakeholders or engage in a discourse with those who question their legitimacy. This paper develops a theoretical framework for the application of different legitimacy strategies and suggests that corporations facing sustainability problems have to be able to activate all three legitimacy strategies, despite their inherent incompatibilities.
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Words and Deeds in an Era of Transparency and Accountability: Mind the GapThe Communication Paradox: Mind the GapStages of Corporate Citizenship and Communications StrategiesTough Demands from StakeholdersConclusion: Facing the Paradox of Communicating Corporate ResponsibilityReferences
Article
Purpose â–“ The purpose of this paper is to examine the status of non-financial reporting according to the Global Reporting Initiative (GRI) 3.1 A+ standard. By examining the comprehensiveness of the GRI performance in corporate non-financial reports classified as A+ the authors challenge the external assurance system imposed by GRI 3.1 A+ and discuss future directions for the application of GRI 4.0, particularly with regard to the standardized corporate reporting software language XBRL. Design/methodology/approach â–“ The authors applied a three-step-research design based on four literature-derived hypothesis and examined all 177 GRI 3.1 A+ reports (2012-13) by coding along 41 variables plus the 84 performance indicators of GRI 3.1 to test accessibility, ability to download, achievability, and the possibility to compare them to older reports. Findings â–“ The results indicate a lack of completeness of GRIâ–™s 3.1 key performance indicators in A+ assured reports, that is made possible due to the reporting flexibility and voluntariness of the guideline. The authors find that the average of disclosed core indicators is 77.66 percent. Single A+ reports disclose even fewer GRI core indicators that B+ reports, which challenges the validity of the assurance system of GRI 3.1. Research limitations/implications â–“ In this study the (core) indicators were taken as given by GRI 3.1; the quality of the indicators was not measured or weighted. Practical implications â–“ Implications may emerge for redesigning non-financial reporting guidelines. Social implications â–“ By critically indicating possible weaknesses of the GRI 3.1 guidelines the authors aim to contribute to a more transparent and effective non-financial reporting. Originality/value â–“ As an increasing number of contributions criticize the credibility of non-financial reporting and also GRIâ–™s role, the research for the first time provides empirical evidence of the shortcomings of CSR and sustainability reporting regarding comprehensiveness, accessibility, and comparability.