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

February 2016
Journal of Cleaner Production 122(3)

DOI:10.1016/j.jclepro.2016.02.060

Authors:

University of Amsterdam

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.

. Operationalization of the study's constructs and measured variables. Truth Sincerity Appropriateness Understandability

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The two phase model of reporting credibility adopting the four validity claims of Habermas (p.8)

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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 Kühnen, 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

Belgium

BEL20

France

CAC

Germany

DAX

Italy

FTSE MIB

Netherlands

AEX

Poland

WIG

Spain

IBEX

Sweden

OMX

Switzerland

SLI

United

Kingdom

FTSE 30

Total

---

320

237

Table 2. Intercoder reliability measured over four rounds.

Method

Round 4

Round 5

Round 6

All

Rounds

No. of coders

No. of variables

(content)

93 (31 content,

completeness)

93 (31 content,

completeness)

217

No. of cases

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 – sincerity – is tested by looking at the

materiality of the topics covered (Hahn and Kühnen, 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 report’s 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

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

237

212

Mean (M)

5.16

6.78

6.71

4.82

Std. Dev.

(SD)

1.88

2.38

.66

Minimum

.40

.71

.00

1.26

Maximum

8.46

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

Yes

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*

*: 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

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

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

SE B

VIF

Sector supplement

-.28

.22

-.07

1.24

Application level A+

2.15

.37

.58***

3.66

Application level A

1.90

.60

.20***

1.42

Application level B+

1.51

.41

.29**

2.37

Application level B

.27

.43

.05

2.16

Application level C+

.13

.83

.01

1.17

Application level C

-1.34

.67

-.12*

1.28

Materiality matters

.62

.69

.06

1.62

Guideline G3.1

1.30

.41

.37**

4.91

Guideline G3

1.29

.43

.33**

4.43

Guideline G4

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

SE B

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 “sold” as 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

Agriculture

Automotive

Aviation

Chemicals

Commercial services

Computers

Conglomerates

Construction

Construction materials

Consumer durables

Energy (and energy

utilities)

Equipment

Financial services

Food and beverage

Forest and paper

Health care products

Household and personal care

Logistics

Media

Metals products

Mining

Public agency

Real estate

Retailers

Techn. Hardware

Telecommunications

Tobacco

Tourism/Leisure

Other

237

B. Coding sheet.

FORMAL VARIABLES

Variable

Coding rules

Company

Open code

Title

Open code

Year

Open code

Sector

Nominal

Country

Nominal

Size I: turnover

Open code

Size II: no. employees

Open code

Age of firm

Open code

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

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

1.471

Bekaert SA/NV

Belgium

21800

44.000

Belgacom SA

Belgium

15700

87.000

BPOST

Belgium

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

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

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

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This study analyses the impact of mandatory Corporate Social Responsibility reporting on the Gini coefficient of Central European countries: a measure of income inequality in society (SDG-10), where CSR reporting is mandatory for a subset of listed firms. The ordered logit regression model indicates that mandatory CSR reporting significantly helps mitigate income inequality in society. Additionally, it is revealed that CSR reporting affects the Gini coefficient through green finance and green innovation, while other variables, such as financial constraints, financial reporting quality, and sustainable beta, are identified as partial channel mediators. The findings highlight the need for companies to strategically address CSR initiatives as an overarching business strategy to respond to stakeholder theory. Overall, the research provides important contributions to practitioners seeking increased social and organizational outcomes which will help stakeholder needs and add great value to the body of literature concerning CSR reporting and the income inequality paradox.

Sustainability reporting quality on corporate reputation: the role of political and military connections

Article

Full-text available

Apr 2025

Sustainability reporting, a tool for gaining and maintaining legitimacy, plays a crucial role in shaping the company's reputation. This study aims to examine the role of the board of commissioners and directors, who have political affiliations and military backgrounds, in enhancing the impact of sustainability reporting quality on a company's reputation. This study was conducted on 111 companies listed on the Indonesia Stock Exchange for the 2016–2022 period, with dynamic panel data unbalanced with observations of 389. The generalised method of moment (GMM) is the analysis technique used. We conduct robustness tests by comparing reputation with another measurement, specifically market capitalisation. The study's findings show that political connections strengthen the influence of sustainability reporting quality on reputation. Meanwhile, military connections weaken the influence of sustainability reporting quality on reputation. This research model is robust because the test results, which replace reputation measurement with market capitalisation, show the same results.

An Investigation of Hospital Buildings Maintenance Management in Malaysia. Pg 20- CCC2021-Proceedings v1.0

Conference Paper

Full-text available

Mar 2025

The research investigated the determinants of maintenance of hospital buildings.

Enhancing corporate performance through strategic SDG disclosure: an assessment of depth and breadth of sustainability information

Article

May 2025

Purpose This paper aims to investigate how the integration of sustainable development goals (SDGs) into corporate sustainability strategies affects corporate performance. It introduces a new measurement – effectiveness of SDG information – based on depth and breadth, to evaluate how detailed and varied SDG-related disclosures impact corporate performance. The study also examines the mediating role of corporate sustainability performance (CSP) in this relationship. Design/methodology/approach This research examines a sample of Fortune 500 companies. Using a dedicated SDGs vocabulary, a content analysis of the firms’ sustainability reports was performed to measure the effectiveness of SDG information in terms of depth and breadth. In addition, a longitudinal quantitative analysis with regression models was conducted to test the mediating effect of CSP. Findings The paper provides empirical insights into how the effectiveness of SDG information positively impacts corporate performance and the role of CSP as a mediator. It suggests that firms should develop a sustainability strategy that considers both the volume and variety of SDGs. Research limitations/implications The research has significant conclusions, but further investigation is needed to enhance understanding from qualitative perspectives. The study focuses on Fortune 500 companies, and future research could explore smaller companies’ commitment to the SDGs. Practical implications The paper includes implications for developing effective SDGs disclosures, balancing depth and breadth of information. It highlights the importance of comprehensive sustainability strategies for improving corporate performance. Originality/value This document addresses the need to identify methods for measuring corporate commitment to the SDGs and its impact on creating corporate value. It introduces innovative metrics—depth and breadth of SDGs information—as proxies for assessing the effectiveness of SDG-related disclosures and their influence on corporate performance.

Sustainability report credibility and market performance of Brazilian companies

Article

Full-text available

Jan 2025

Does ESG Report Tone Influence ESG Rating Divergence ? Evidence From China

Article

Apr 2025
J Int Financ Manag Account

Tone, as a key linguistic feature of corporate narrative disclosures, plays a crucial role in shaping information users' evaluation of firm performance. However, whether and how the tone in ESG (Environmental, Social, and Governance) reports influences rating agencies' assessments of firms' ESG performance remains underexplored. Using data from Chinese listed firms between 2018 and 2022, we explore the impact of ESG report tone on ESG rating divergence. Our findings indicate that positive expressions in ESG reports worsen the divergence in ESG ratings, particularly in the environmental ratings. Conversely, negative expressions in ESG reports enhance consistency in rating outcomes. Heterogeneity tests reveal that greater positive expressions in ESG reports exacerbate rating divergence only when firms' ESG reports exhibit low credibility, as indicated by mandatory disclosure, low readability, and high media pressure. In contrast, the impact of negative statements in ESG reports on consistency in rating outcomes is unaffected by the credibility of ESG reports. Our study contributes to the existing literature on the relationship between ESG report textual quality and ESG rating divergence in emerging markets.

Sustainability Education in the UK Construction Industry: Are Universities Preparing Construction Professionals for a Sustainable Future?

Chapter

Apr 2025

Board Gender Diversity, Female Expertise, and Female Internationalization: Exploring Influences on the Readability of Sustainability Reporting

Article

Mar 2025

This study investigates how female representation on boards and CSR committees, along with expertise and internationalization, influences the readability of sustainability reports. Using a dataset of Spanish firms from 2018 to 2022, the results show that a greater female presence on sustainability committees reduces lexical complexity in reports. The findings also reveal that female industry expert directors enhance report readability, while female support specialist directors do not. Furthermore, female education and international business experience positively impact readability by lowering linguistic complexity. These results underline the importance of female representation on boards and highlight how the experience, expertise, and internationalization of female directors are critical factors in improving the clarity of sustainability reporting.

A Literature Analysis of Sustainability Reporting Quality

Article

Mar 2025

The research aims to map the status of the sustainability reporting quality (SRQ) field through a systematic literature review, highlighting its factors, exploring the theories on which sustainability reporting quality studies are based and identifying new research trends. Based on the concept of quality as compliance with the reporting principles, the research was conducted through a systematic literature network analysis (SLNA) method, combining systematic literature review (SLR) and bibliometric network analysis (BNA) methodologies. We analysed 325 papers published from 1990 to 2024 through VOSviewer and R‐studio Bibliometrix package and extracted from the Scopus database. The results of the analysis detailed the leading papers and journals and discussed the four theme clusters identified through the keywords co‐occurrence analysis: assurance, content in different sectors, corporate governance and stakeholders engagement, and sustainability regulation; highlighted also the main future research and put forward the main theories in the field under study. The results of the study have implications for academia, providing a wide state of the research about the SRQ, for the policymakers and regulators, highlighting criticism, need and lacks, and for the management, allowing them to know the best practices for drawing up a high‐quality sustainability reporting. The SRQ has to be improved for the right sustainability management, to correctly inform stakeholders and to contribute to sustainable development.

Credibility effects

Article

Full-text available

Jan 2008

Nikolaus Jackob

Greenwashing Revisited: In Search of a Typology and Accusation-Based Definition Incorporating Legitimacy Strategies

Article

Full-text available

Feb 2017
Bus Strat Environ

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.

W(h)ither Ecology? The Triple Bottom Line, the Global Reporting Initiative, and Corporate Sustainability Reporting

Article

Full-text available

Jun 2013
J BUS ETHICS

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.

Managing Legitimacy in Complex and Heterogeneous Environments: Sustainable Development in a Globalized World

Article

Mar 2013
J MANAGE STUD

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.

Corporate Social Responsibility and Access to Finance

Article

Jul 2012

ReCal: inter-coder reliability as a web service

Article

Jan 2010

D.G. Freelon

Toward a critique of the theory of meaning

Article

Jan 1992

J. Habermas

Multivariate data analysis. Prentice Hall

Article

Jan 2009

The Paradoxes of Communicating Corporate Social Responsibility

Chapter

Sep 2011

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

Quo vadis GRI? A (critical) assessment of GRI 3.1 A+ non-financial reports and implications for credibility and standardization

Article

Apr 2015
Corp Comm Int J

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.

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

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