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The objective of this paper is to analyse the mandatory social and environmental reporting in France. Extra-financial reporting requirements brought by Grenelle II Act affects all companies in France. It involves the material extension of reporting obligations; all companies with over 500 employees are required to issue a yearly “social and environmental report”, since 31st December 2013. There are 42 information that companies must report spanning social (employment, labour relations, health and safety), environmental (pollution, and waste management, energy consumption); and societal categories (social impacts, relations with stakeholders, human rights). These reports are subject to verification by an independent third party.
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Procedia - Social and Behavioral Sciences 229 ( 2016 ) 206 – 213
Available online at www.sciencedirect.com
1877-0428 © 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the International Conference on Leadership, Technology, Innovation and Business Management
doi: 10.1016/j.sbspro.2016.07.130
ScienceDirect
5th International Conference On Leadership, Technology, Innovation And Business Management
The Mandatory Social and Environmental Reporting: Evidence from
France
Idil Kaya
a
*Galatasaray University, Istanbul, 34349, Turkey
Abstract
The objective of this paper is to analyse the mandatory social and environmental reporting in France. Extra-financial reporting requirements
brought by Grenelle II Act affects all companies in France. It involves the material extension of reporting obligations; all companies with over 500
employees are required to issue a yearly “social and environmental report”, since 31st December 2013. There are 42 informatio n that companies
must report spanning social (employment, labour relations, health and safety), environmental (pollution, and waste management, energy
consumption); and societal categories (social impacts, relations with stakeholders, human rights). These reports are subject to verification by an
independent third party.
Social and environmental disclosures requirement reflects the content of the main international guidelines on sustainability reporting (ISO 26000,
Global Compact, Guiding Principles of Human Rights and Business, the OECD Guidelines for multinational corporations, Global Reporting
Initiative). The main advantage of mandatory reporting is the creation of standardized and comparable measures that enable benchmarking and best
practices.
© 2015 Kaya. Published by Elsevier Ltd.
Peer-review under responsibility of the International Conference on Leadership, Technology, Innovation and Business
Management.
Keywords: Sustainability reporting; Social and environmental reporting in France; Mandatory reporting
1. Introduction
Social and environmental reporting issues are often referred to as sustainability reporting or Corporate Social
Responsibility (CSR) reporting. This reporting is based on the social, environmental and governance information.
Sustainability reporting has traditionally been voluntary; however, governments and stock exchanges around the world
are increasingly imposing mandatory reporting requirements. The International Survey of Corporate Responsibility
Reporting 2015 by the KPMG audit firm shows that around three quarters (73 percent) of 4500 companies across 45
countries (the top 100 companies in each of the 45 countries -N100) companies now report on corporate responsibility,
a small rise from 2013 (71 percent). This stabilization suggests that future growth in this reporting is likely to occur in
smaller increments unless driven by mandatory reporting legislation. In KPMG’s view over time, it is likely N100
reporting rates will reach the 90-95 percent levels currently seen among the world’s 250 largest companies. What will
change the game is the introduction of more regulation requiring companies to report non-financial information.
* Corresponding author. Tel.: 533-423-6260 ; fax. +90-212-258-2283 .
E-mail address: ikaya@gsu.edu.tr
© 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the International Conference on Leadership, Technology, Innovation and Business Management
207
Idil Kaya / Procedia - Social and Behavioral Sciences 229 ( 2016 ) 206 – 213
In 2015 eight countries with a corporate responsibility reporting rate of 90 percent or above have mandatory
reporting requirements: India, Indonesia, Malaysia, South Africa, UK, France, Denmark and Norway. In some
countries, reporting legislation has been introduced by governments (including France, Indonesia, and South Africa)
and in others by stock exchanges (such as in Brazil, Malaysia and Singapore). Requirements may cover a broad range
of social, environmental and governance areas (as in Denmark, France and South Africa), or have a specific target such
as GHG emissions (the UK), conflict minerals (the US), or social responsibility (India) (KPMG, 2015).
At international level, Global Reporting Initiative (GRI) published Sustainability Reporting Guidelines, as an
attempt to codify best reporting practice. Several frameworks of social information disclosure have been also proposed
worldwide to satisfy stakeholders' information needs. In 2000, the United Nations launched Global Compact's ten
principles in the areas of human rights, labour, the environment and anti-corruption enjoy universal consensus. The
principles are derived from the Universal Declaration of Human Rights; the International Labour Organization's
Declaration on Fundamental Principles and Rights at Work; the Rio Declaration on Environment and Development;
and the United Nations Convention against Corruption. The UN Global Compact asks companies to embrace, support
and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the
environment and anti-corruption (www.globalcompact.org).
In 2006, The UN Global Compact and the GRI have united in a strategic alliance aimed at undertaking advocacy
and other partnership efforts to encourage companies and corporate responsibility organizations to support the
synergistic platforms of the Compact and the GRI. While the UN Global Compact covers citizenship
“implementation” through its 10 universal principles in the areas of human rights, labour standards, the environment
and anti-corruption, the GRI’s new “G3” Sustainability Reporting Guidelines provide guidance on transparency and
how to report on performance results (www.globalcompact.org ).
In 2010 the standard ISO 26000 was launched. It provides guidance, rather than requirements on how businesses
and organizations can operate in a socially responsible way. This means acting in an ethical and transparent way that
contributes to the health and welfare of society. It cannot be certified to unlike some other well-known ISO standards.
Instead, it helps clarify what social responsibility is (www.iso.org).
In this paper we analyze the mandatory social and environmental reporting in France as a good example of
regulation. Social and Environmental Reporting requirements brought by Grenelle II Act affects all companies in
France. It involves the material extension of reporting obligations; all companies with over 500 employees are required
to issue a yearly “social and environmental report”, since 31st December 2013. There are 42 information that
companies must report spanning social (employment, labour relations, health and safety), environmental (pollution,
and waste management, energy consumption); and societal categories (social impacts, relations with stakeholders,
human rights).
2. Literature Review
Disclosures on the corporate initiative and responsibility to assess the company's effects on the environment and
impact on social welfare received attention from a wide range of academic study. Various theoretical perspectives
explain unregulated reporting practices. In the perspective of legitimacy theory and the associated notion of social
contract, corporate responsibility disclosures practices may be related to a desire to increase the legitimacy of a
company. Threats to a firm’s legitimacy do entice the firm to disclose more social responsibility information (Deegan
and Unerman, 2006; Patten, 1992). The findings of Chelli, Richard and Durocher study (2014) show a significant and
enduring improvement in the quality and quantity of environmental disclosure from 2001 to 2011. Even in the absence
of penalties for non-compliance, the NRE law stimulated a stark and positive lasting change in the way that French
companies account for their environmental information. These findings are consistent with the institutional view of
legitimacy theory whereby legislation provides corporate managers with a representation of relevant audiences’
perceptions about social and environmental reporting, prompting them to comply with the law to ensure organizational
legitimacy.
Managerial and positive version of stakeholder theory predicts that management is more likely to focus on the
expectations of powerful stakeholders. Under this perspective management would be expected to provide an account
of social and environmental activities to these stakeholders. The accountability model of Gray, Owen and Adams
(1996) proposes that organisations have many responsibilities, and every organizational responsibility comes a set of
rights for stakeholders, including rights to information. The institutional theory perspective assumes that managers
208 Idil Kaya / Procedia - Social and Behavioral Sciences 229 ( 2016 ) 206 – 213
will develop or adopt social and environmental reporting practices because of a variety of institutional pressures. The
reputational risk management perspective assumes that reputation of any organization has an economic value, and
managers will use voluntary reporting practices such as sustainability reporting to seek to protect and enhance the
value and income-generating potential of organisation’s reputation among its economically powerful stakeholders
(Deegan and Unerman, 2006).
Positive Accounting Theory predicts that particular social and environmental activities, and their related disclosure,
would only occur if they had positive wealth implications for the management involved. Unerman and O’Dwyer
(2004) propose that risk communication strategies are designed to counter the negative predictions of future outcomes
which are promoted by many activists from outside the business world, and also by competing business. The
perspective taken is that for a business entity to be socially responsible it must minimize or ideally eliminate its
negative environmental impacts; and it must act in conformity with societal expectations (Deegan and Unerman,
2006).
Companies are increasingly disclosing sustainability information and there is an increasing demand for
accountability on the social, environmental and societal matters of the companies. This demand forces the companies
to report much more on aims and intentions on actual actions and performance. Therefore companies should report
comprehensively by providing information on their (i) aims and intentions, (ii) actions and (iii) subsequent
performance concerning different sustainability issues (Bouten et al., 2011).
There are various requirements in high-quality reporting. Reporting equally on social, environmental and societal
aspects; making the economic dimension of sustainability concrete; and showing the integration of sustainability into
the overall corporate strategy and giving an overview on relevant management systems are some of them.
Transparency in these areas provides the basis for constructive dialogue and critical monitoring of corporate
developments (Gebauer and Hoffmann, 2009).
According to Kolk (2008), the increased call for transparency comes from two different angles, which most
recently have started to show some overlap. On the one hand, accountability requirements in the context of corporate
governance have expanded, and are starting to sometimes cover staff-related, ethical aspects (such as codes) as well.
On the other hand, separate from the more traditional governance framework, sustainability reporting has emerged.
While originally focused primarily on the environment, the scope has broadened to frequently also include
ethical/social issues, usually employee and community matters, the organisational structure in place to control all this,
and financial aspects. This means that these two rather distinct channels of accountability not only show some
(potential) convergence in terms of topics, but also in targeting broader audiences.
Pedersen at al. (2013) analysis concluded that government regulation has an impact on CSR reporting practices.
CSR reporting is not only determined by individual and firm specific factors, but is also influenced by coercive
pressures from the regulatory environment. The analysis indicates an element of mimetic isomorphism in addition to
the impacts from the coercive governmental pressures.
According to Crawford and Williams (2010) there has been an increase in demand for more mandatory reporting
for corporations. Mandatory reporting presents several advantages such as the creation of standardized and comparable
measures that enable benchmarking and best practices. On the other hand critics argue that while establishing
mandatory reporting is a true challenge for legislating bodies, it can also encourage counter-productive efforts such as
the investment of resources in the research of loopholes and by-passes (Crawford and Williams, 2010; Hess, 2007).
3. Mandatory Social and Environmental Reporting in France
Reporting is an important communication tool which can ensure greater corporate transparency and enable better
engagement with stakeholders. Social and environmental reports currently issued by listed companies depict
information on additional dimensions of corporate performance that are not accounted for within financial data
(Bassen and Kovacs, 2008). The models used for disclosure vary between countries, though are most often a question
of emphasis. Thus some models prioritize the environment while others highlight labour issues (Oliveira et al., 2009).
According to KPMG (2015) regulatory pressure is the common denominator. Mandatory reporting requirements are
prompting the highest corporate responsibility reporting rates worldwide. When regulation is introduced, companies
tend to respond and corporate responsibility reporting rates are seen to increase rapidly.
The first priority of French government policy in support of CSR, launched in the early 2000s, was to establish a
legal framework for social and environmental transparency on the part of enterprises. The dynamic that emerged from
the social and political consensus reached at the keynote national conference known as the Grenelle Environment
Forum and national conferences held at the end of 2012 further confirmed this priority, supplementing it with schemes
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in the field of socially responsible investment, voluntary initiatives by private actors, local and regional initiatives and
various consultation and action campaigns (-, 2013b).
Since 2001, French legislation has required large companies to provide non-financial reports regarding social,
environmental and societal aspects. New Economic Regulation (NRE) Act introduced the obligation for all listed
French companies to include information within their annual reports on a series of social and environmental impacts
on their activity (Delbard, 2008). Around 30 topics were identified. These prescriptions were designed mainly to
ensure security, through transparency, for shareholders. It marked a significant change in that it allowed shareholders
and other stakeholders (including rating agencies) to better assess the overall performance of companies. No provision
concerning sanctions was included in the NRE Act (-, 2012). In 2011 France was placed 4th in the world in terms of
extra-financial reporting among large companies, jumping within three years from 59% to 94% in terms of the number
of companies reporting on environmental, social and governance topics (KPMG, 2011). According to the Report of
Ministères des Affaires Etrangères (-, 2012) this was a clear consequence of the implementation of the 2001 NRE Act
and of the announcement of further extensions to legal reporting obligations.
In 2009 and 2010, the French Parliament adopted two laws named the Grenelle Acts: the Grenelle 1 Act, in August
3, 2009 and the Grenelle 2 Act, in July 12, 2010. This legislation made the production of an annual report on CSR
matters for all large companies with activities in France mandatory. Provisions for implementing these laws were
adopted by the government in April 2012.
The Preparatory Document for the French National Plan for the Development of Corporate Social Responsibility (-,
2013c) states that “CSR is an economic, social and environmental global societal matter for France, as the impact of
corporate activities on the environment and on societies knows no border. The national policy supporting CSR is part
of the more general framework reference of France’s policy for the mainstreaming of sustainable development issues.
It contributes to three challenges of the 2012-2013 national sustainable development strategy in particular: sustainable
consumption and production, and international challenges in terms of sustainable development and world poverty”.
The International Survey of Corporate Responsibility Reporting 2013 by the KPMG audit firm thus showed that
France was in first place worldwide in terms of nonfinancial reporting by large companies, with the number of
companies reporting their environmental, social and governance with almost 100 percent reporting rates (59% in 2008,
and 94% in 2011). In 2013, regulatory requirements have driven reporting to its highest levels in France, Denmark and
South africa. In KPMG 2015 Survey France takes the sixth place in sustainability reporting and the first place
worldwide in terms of percentage corporate reports with assurance. 96 % of large companies in France have their
sustainability information independently assured. External assurance of these reports is still voluntary in most
countries, with just France and South africa pioneering a mandatory approach among the 41 countries surveyed by
KPMG (2015).
3.1 French Legislation on Social and Environmental Reporting: Section 225 of the Code Grenelle II
Section 225 of the “Grenelle II” Act requires that companies have to provide details in their annual reports "on how
they take into account the social and environmental consequences of their activity and their social commitments in
favour of sustainable development."
According to the report on The French legislation on extra-financial reporting: built on consensus, the
implementation decree was published on April 26, 2012 and amends Section 225-102-1 of the Commercial Code with
several notable innovations (-, 2013a):
1. It widens the array of companies required to submit reports mandatorily, using several criteria: in short, by the
31st of December 2013, all companies with over 500 employees will be subject to these reporting requirements.
2. It broadens the amount of information required: there are now over 40 topics that companies must report on,
divided into three themes: Social (employment, labour relations, health and safety…); Environmental (pollution waste
management, energy consumption…); Commitments to sustainable development (social impacts, relations with
stakeholders, human rights…). The list of subjects reflects the content of the main international guidelines on
sustainability reporting (ISO 26000, Global Compact, Guiding Principles of Human Rights and Business, the OECD
Guidelines for multinational corporations, Global Reporting Initiative).
3. For each required topic, no specific indicators are proposed, thus providing companies with the liberty to select
those most relevant to them.
4. A “comply or explain” approached is proposed: companies can choose to omit information on subjects non-
relevant to their activity, but must instead provide an explanation for why they chose not to disclose this information.
210 Idil Kaya / Procedia - Social and Behavioral Sciences 229 ( 2016 ) 206 – 213
5. According to the decree, a company’s report should disclose all actions taken by the company and its
subsidiaries.
6. It states that a company’s report must be subject to verification by an independent third party (appointed by the
executive director or chief executive), which must be accredited by Cofrac (French Committee of accreditation) or by
any other accreditation body signatory to the multilateral recognition agreement established by the European
coordination of accreditation bodies. This third party must then prepare a report certifying the quality of the
company’s reporting and provide a “reasoned opinion” on the accuracy of information provided, and also (as
mentioned above) on the explanations given by the company for any omitted data. There is still no legal sanction to
noncompliance.
On the preparation and transition period many organizations (public, independent, unions…) are compiling and
publishing reference guides and practical advice manuals, not only to provide tools for companies that need to
establish and implement a CSR policy in the first place, but also to help companies prepare and fulfil their reporting
obligations. “Guide to CSR Reporting” a document produced by MEDEF, the French union of employers and business
owners, provides a full overview of the current (or soon to be implemented) regulations and offers practical guidance
and advice on how to comply with them. It also shows how French reporting requirements can be crosscut with
international reporting standards such as ISO 26000, the Global Compact, the OECD Guidelines for Multinational
Enterprises, GRI, EFFAS (-, 2012).
3.2 Sustainability Information According to Code Grenelle II
All French companies with over 500 employees are required to issue a yearly “social and environmental report”
within their annual report, since 31st December 2013. There are 42 topics that companies must report. Among the 42
topics, twenty-nine are subject to the publication requirement, regardless of the size of the entity, while the remaining
thirteen topics relate only to listed companies. The topics are the measures of sustainability reporting which are
performance indicators in the area of social, environmental and societal matters. The examples of social indicators are
employment, work organization, health and occupational safety, training and education, diversity and equality of
opportunities. The environmental indicators are about the materials, energy, water consumption, nature and
biodiversity, control of greenhouse gas emissions and waste management. The category of societal indicators focuses
on the relations with external groups, human rights, elimination of discrimination, freedom of association, elimination
of forced or compulsory labour and effective abolition of child labour.
According to Bassen and Kovacs (2008), indicators of CSR offer a fast, condensed overview over a businesses’
actual performance on extra-financial matters. Indicators have three basic functions: control, communication and
improvement. Indicators help the managers and employees of a company to measure and therefore manage and control
the resources under their responsibility. Furthermore, indicators communicate performance to internal staff and
management as well as external stakeholders. Finally, they enable performance improvement as they identify the
differences between the actual and target state.
Social information reflects the employment conditions, work organization, labour relations, health, diversity and
equal treatment. Social information to disclose according to the Code Grenelle II is presented in Table 1.
Table 1. Social Information According to the Code Grenelle II.
Information
Topics
a) Employment
The total workforce and workforce broken down by gender, age and religion
Hiring of employees and redundancies
Compensation and its evolution
b) Work organization
Working hours
Absenteeism (*)
c) Labour relations
Organization of social dialogue
Outcome of the collective agreements
d) Health and safety
Health and safety conditions at work
Outcome of the collective agreements signed with trade
unions regarding occupational health and safety
Frequency and seriousness of incident and occupational diseases*
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e) Training
Training policies
Total training hours
f) Equal treatment
Policies and measures promoting gender equality
Policies and measures taken to promote the employment and integration of disabled persons
Policies and actions taken to prevent discrimination
g) Promotion and enforcement of the
International Labor Organization’s basic
conventions*
Respecting freedom of association and collective bargaining (*)
Elimination of discrimination in employment and occupation (*)
Elimination of forced or compulsory labour (*)
Effective abolition of child labour (*)
* Disclosure requirements applying only to listed companies (which have to report on all the other indicators as well).
Environmental information content reflects the company’s general environmental policy, pollution and waste
management, sustainable use of resources, actions against the climate change and actions to protect the biodiversity.
Environmental information to disclose according to the Code Grenelle II is presented in Table 2.
Table 2. Environmental Information According to the Code Grenelle II.
Information
Topics
a) General environmental policy
Company efforts to take into account environmental issues and, where appropriate,
assessments or environmental certifications
Employee training programs on environmental protection
Resources devoted to prevention of environmental risks and pollution
Financial provisions for environmental risks (*)
b) Pollution and waste
management
Measures to prevent, reduce, or compensate for air, water, and soil emissions severely
affecting the environment
Measures to prevent, recycle, and dispose of waste
Taking into account noise and other forms of pollution
c) Sustainable use of resources
Water use and water supply based on local constraints
The consumption of raw materials and measures taken to improve their efficiency
Energy consumption, measures to improve energy efficiency, and percentage of renewable
energy used
Land use (*)
d) Climate change
Greenhouse gas emissions
Adaptation to climate change impacts (*)
e) Protection of biodiversity
Measures taken to preserve or enhance biodiversity
* Disclosure requirements applying only to listed companies (which have to report on all the other indicators as well).
Societal information reflects the impact of the company’s territorial, economic and social activity, external
relations, fair operating practices and human rights. Societal information to disclose according to the Code Grenelle II
are presented in Table 3.
Table 3 Societal Indicators According to the Code Grenelle II
Information
Topics
a) Impact of the company’s territorial,
economic and social activity
Employment and regional development
Neighboring and local populations
b) External relations with
individuals or organizations
interested in the company’s
activities
Opportunities for dialogue with these individuals or organizations
Corporate philanthropy
c) Subcontracting and suppliers
Taking into account social and environmental issues in purchasing policies
Importance of subcontracting and integration of CSR in
the relationships with suppliers and subcontractors (*)
d) Fair operating practices (*)
Actions implemented to prevent any kind of corruption (*)
Measures implemented to promote consumer health and safety (*)
e) Human rights
Other actions promoting human rights
* Disclosure requirements applying only to listed companies (which have to report on all the other indicators as well).
212 Idil Kaya / Procedia - Social and Behavioral Sciences 229 ( 2016 ) 206 – 213
ORÉE (2014) network published with the support of the Ministry of Ecology, a study on the second year
application of the new regulation on sustainability reporting. This report covers all listed companies and all unlisted
enterprises over 2000 employees and € 400 million turnover or balance sheet in 2013 fiscal year. This report reveals
that the CAC 40 data were a more systematic and more accurate than those of the SBF 120, which themselves have
been better informed than those of unlisted companies. Indeed, listed companies perform this exercise for many years
whereas 2013 has been the first extra-financial reporting period for non-listed companies. Despite the difficulties of
obtaining their management reports, the unlisted companies have made disclosures on the 42 items (while the decree
obliges them to publish information on 29 subjects), which shows their goodwill and commitment this new approach.
Conversely, six non-listed companies of the 20 in our sample have not applied the device and do not publish any
social information, environmental and social management in their report, or that of their parent company. The study
finding reveals that social data are those that are most disclosed. This can be explained by a more entrenched practice
of social reporting, since in France the introduction of social audit dates 1977. The environmental data come next,
societal data are those for which the unjustified non - disclosure was more important, whether on the part of listed and
unlisted companies. The Report concludes that the reporting system from the article L 102-1 225 of the Commercial
Code has undoubtedly helped companies improve the communication of extra-financial information, and stresses a
need for clarification of the subjects and homogenization of the methods.
KPMG (2014) Actual and Future Tendency on CSR Strategy and Communication Report reveals that in 2014,
100% of the CAC 40 groups have published the information required. Among which 79% have included all of these
information in the management report as required by law. Over 60% of the Groups publish a table match for easier
reading CSR themes required. 94% of the Groups publish methodological information in their annual report to provide
the reader with basic information on the definition, collection and feedback of information. Only 6% of the Groups
refer the reader to a methodological note published on their website. CSR part of the 2013 Reference Document has
increased by 50 %. Groups spend an average of nearly 50 CSR pages to information published in their reference
document, an increase of 50 % from the previous year. The social component is usually the most detailed and includes
between 11 and 20 pages. The environmental and societal aspects include on average between 5 and 10 pages.
Statistical indicators on social and environmental aspects are increasingly important but there is significant increase in
the societal section. Quantitative information are more numerous on social and environmental aspects with generally
between 10 and 20 indicators presented on each component (against less than 10 on the flap societal). The year 2013 is
marked by a boom on quantitative information provided on the societal section. 2/3 of Groups use quantitative
societal information.
4. Conclusion
Moves towards sustainability development require companies to report on their social, environmental and
governance performance. Sustainability reporting should provide information to enable others to assess how
sustainable an organization’s operations are. CSR initiatives can emerge entrepreneurial will and CSR reporting has
traditionally been voluntary; however, in France corporate responsibility is legislative and regulatory.
In KPMG’s view, the trend for companies to include more corporate responsibility information in annual financial
reports is driven by two factors: firstly, corporate responsibility information is increasingly perceived by shareholders
as relevant for their understanding of a company’s risks and opportunities, and secondly, stock exchanges and
governments are issuing requirements for companies to report on CR data in annual reports. Experts expect to see a
proliferation of such legislation over the next five years. Non-financial reporting will become required business
practice (KPMG, 2015). However in international level there are still difficulties in comparing between companies and
tough to incorporate into forecasts and giving the stakeholders a more transparent view of the company’s performance,
potentially enabling them to make more informed decisions.
The French legislation on the extra-financial reporting would be a good example of regulation in consideration of
the harmonization and convergence on reporting standards. There are 42 topics that companies must report on, divided
into three themes: Social (employment, labour relations, health and safety…); Environmental (pollution waste
management, energy consumption…); Commitments to sustainable development (social impacts, relations with
stakeholders, human rights…). The list of subjects reflects the content of the main international guidelines on CSR
reporting (ISO 26000, Global Compact, Guiding Principles of Human Rights and Business, the OECD Guidelines for
multinational corporations, Global Reporting Initiative). Among the 42 topics, twenty-nine are subject to the
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Idil Kaya / Procedia - Social and Behavioral Sciences 229 ( 2016 ) 206 – 213
publication requirement, regardless of the size of the entity, while the remaining thirteen topics relate only to listed
companies. The findings of the ORÉE (2015) and KPMG (2015) reports show that the new legislation has deniably
helped improved the non-financial corporate communications.
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... Although sustainability reporting is commonly used to describe the self-reporting of CSR-related activities [68], it is still optional in most countries [69]. Therefore, voluntary disclosure theory also offers another theoretical explanation for corporate SDG disclosures [70]. ...
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This paper develops the multiple-theoretical framework of legitimacy, stakeholders, and voluntary perspective to assess the adoption of Vietnamese listed firms to the 17 United Nations’ Sustainable Development Goals (SDGs). The paper’s primary objective is to use content analysis to discover the status quo of the SDGs practices of the largest 100 Vietnamese listed firms on the two biggest Vietnamese stock exchanges (Ho Chi Minh Stock Exchange–HOSE and Hanoi Stock Exchange–HNX). By drawing a unique framework, the paper contributes to the extant literature review of SDG-related research. Our research framework enables corporate decision-makers significantly access corporate SDG adoptions and the implementation process. With the direct pressure of stakeholders, high environmental sensitivity industries are keen on disclosing SDG-related information. Notwithstanding, the findings reveal that Vietnamese listed firms indicate “green talks” in their corporate reporting rather than “green actions”. Thus, our findings encourage firms to engage in SDGs through substantive sustainability strategies and need greater attention from governments, practitioners, and policymakers.
... Overall, the results are consistent with equity markets perceiving net costs (benefits) for firms with weak (strong) non-financial performance and disclosure around key events surrounding the mandatory disclosure of non-financial information. Kaya (2016) by analyzing the environmental and social mandatory disclosure of non-financial information under the French Grenelle II Act confirmed that this mandatory regulation helps the company move towards sustainable development, thereby helping investors and partners evaluate the sustainability of the company. In addition to the studies on the effects of non-financial disclosure, a number of studies mention the willingness of organizations to change in relation to the disclosure of non-financial information. ...
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... A growing institutional and societal pressure is exerted on firms to decrease their greenhouse gas emissions (El-Deeb and Halim, 2020). Since 2001, France has been engaged in decreasing climate change impacts through economic mandatory regulations such as the Nouvelles régulations économiques that require the reporting of social and environmental information in the annual reports of listed firms (Kaya, 2016). Later, France refined its national environmental policies through the implementation of the Grenelle I (2009) and II (2010) laws. ...
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... Amaechi and Nwankwoeke (2017) provided empirical evidence that businesses today face significant Social and Environmental Disclosure (SED) challenges that pose risks to their potentials to achieve sustainable growth. There is need to treat SED as fundamentals rather than alternative data in published annual reports (Kaya, 2016). Aside from the Nigerian Stock Exchange (NSE) that charged listed firms in Nigeria to make known their social and environmental commitments alongside their financials in their published annual reports, some regulatory bodies were also established to ensure compliance with firm's disclosure of SEI. ...
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Social and Environmental Disclosure has been at its adoption phase in Nigeria despite the trend of disclosure practices by firms around the world. As a step towards addressing this shortcoming, the paper examined Board characteristics and their effects on Social and Environmental Disclosure in Nigeria. Mixed theoretical approach was deployed in explaining relationship between board characteristics and Social and Environmental Disclosure. Companies were graded on their Social and Environmental Disclosure performance using the Global Reporting Initiative (GRI) Index. For a period of seven years (2012-2018), data were obtained from the published Annual Reports of fifty (50) selected environmentally sensitive enterprises listed on the website of the Nigerian Exchange Group as of 2019. Panel corrected Standard Error (PCSE) regression was found appropriate in testing the hypotheses. Board size, board expertise, board independence and board gender diversity were found to be positive and significant to Social and Environmental Disclosure. The study concluded that Board Characteristics impact Social and Environmental Disclosure and further recommends that listed firms should comply adequately with corporate governance requirements related to Board Characteristics to ensure that Social and Environmental Disclosure is not compromised.
... Since the NFR Directive entered into force, a growing body of literature examines its theoretical, practical, and policy implications (Korca and Costa, 2021). However, most empirical studies on the Directive conducted so far refer to individual countries and only consider or predict effects for specific EU Member States ( Cerne et al., 2017;Dumitru et al., 2017;Georgieva, 2017;Gregor, 2017;Hąbek and Wolniak, 2016;Hoffmann et al., 2018;Hummel and R€ otzel, 2019;Kaya, 2016;Malecki, 2018;Popescu and Banta, 2019). Other studies compare the aforementioned effects of the Directive across two countries (e.g. ...
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The adoption of the UN Sustainable Development Goals until 2030 served as an impulse for development and implementation of regulatory legal acts aimed at environmental protection in the Russian Federation, including appropriate fnancial mechanisms. The task of reducing level of air pollution is highlighted in the UN program documents as one of the priorities. The most problematic in terms of air pollution in Russia are 12 cities, seven of which have ferrous metallurgy enterprises. The problems of ecological development of large industrial centers remain (despite the implementation of the state program of the Russian Federation “Environmental Protection” since 2012, and the national project “Ecology” since 2019) introduction of a quota system for pollutant emissions substances, determination of the list of compensatory measures and creation of the federal information system for atmospheric air quality monitoring. In cities such as Krasnoyarsk and Novokuznetsk, the average actual annual concentration of some pollutants, which are highly toxic and carcinogenic substances of I and II hazard classes, exceeds the permissible maximum by 5 – 6 times. We have analyzed content of the reports of the specialized state authorities at the regional level on state and protection of environment. It is concluded that there is no unity of methodological approaches to presentation of analytical information on state and quality of atmospheric air in reports, as well as untimely publication of the reports themselves. The fact of inertia of the institutional environment was revealed in terms of including irrelevant norms in the adopted legal acts, and as a consequence – emergence of expenditure obligations of budgets, without real need for them. It was established that large enterprises of ferrous metallurgy (Chelyabinsk Metallurgical Plant PJSC (Mechel) and Krasnoyarsk Metallurgical Plant LLC), operating in cities with very high levels of air pollution, did not draw up corporate non­fnancial reporting in the GRI format.
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Purpose This research project aims to investigate how country contexts pressure firms for greater reporting activity and to explore the impact of these pressures on disclosure quality. Design/methodology/approach A theoretical lens is used to based on the three pillars of institutions: regulative, normative, and cultural in order to assess qualitatively how strong each pillar is reflected in creating a context with regard to disclosure, and then to compare two disclosure ratings' reports – that of the Carbon Disclosure Project (CDP) and that of CERES – to provide a quantitative comparison of disclosure quality. Findings Expecting that countries with higher regulative pressures, such as France, will lead to a “minimum‐requirement” type of disclosure, while countries with more liberal markets, such as the USA, will present higher quality disclosure, counter‐theoretical evidence was found in the results, indicating that French firms exhibit higher quality disclosure than US firms on average. Research limitations/implications The findings, although derived from a small sample limited to the banking sector, point to the possibility that higher reporting quality is more closely linked to normative and cultural pressures, and that these pressures appear to be more important in stronger regulatory contexts. Originality/value The results inform the public policy literature, seeking to explore the effectiveness of self‐regulation in face of increasing mandatory requirements. The paper also contributes to the disclosure literature, by establishing a relationship between disclosure quality and institutional context, and to the institutional theory literature by inscribing the study within the nascent stream of empirical papers in search of a methodology to compare institutional contexts across countries and their impact on firms' reporting activities.
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Purpose The aim of this paper is to investigate the corporate social responsibility (CSR) policy orientations in the Euopean Union (EU) by focusing on the specific case of the French legislation on compulsory sustainability reporting for publicly‐listed companies. Design/methodology/approach The approach is mostly exploratory and based on secondary literature review as well as empirical classroom work on reporting. Findings This exploratory paper provides findings about the relevance of the French law, thus highlighting some critical aspects of sustainability reporting practices. It also raises the broader issue of the consistency of the European CSR approach. Research limitations/implications This research needs to be completed by field studies on sustainability reporting practices both in France and in all EU members. Practical implications This paper may help firms improve their sustainability reporting practices. Originality/value There have been hardly any papers on the impact of the French NRE law so far. Another original feature is the issue raised about the somewhat unclear links between environmental legislation and CSR policy in the EU. The paper provides a case for regulation in CSR, showing the possible positive impacts on corporate behavior.
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This study develops a content analysis framework that provides information on the comprehensiveness of corporate social responsibility (CSR) reporting, an important aspect of social and environmental accountability. Comprehensive reporting, as defined here, requires three types of information for each disclosed CSR item: (i) vision and goals, (ii) management approach, and (iii) performance indicators. The feasibility of the framework to assess the comprehensiveness of CSR reporting is demonstrated using the 2005 annual reports of a sample of publicly traded Belgian companies. The content analysis reveals a low level of comprehensive reporting. This finding complements those of prior studies on the completeness of CSR reporting and, therefore, feeds the debate regarding the extent to which CSR reporting can be considered a mechanism for discharging social and environmental accountability.
Purpose – The paper seeks to adopt an institutional view of legitimacy to examine how a sample of French companies reacted to the introduction of the “New Economic Regulations” in French law in 2001 requiring that publicly listed companies disclose environmental information. Design/methodology/approach – The approach used in the paper is both quantitative and qualitative. A content analysis of environmental disclosure provided in annual reports, environmental reports and web sites by 26 French companies listed in the CAC 40 is performed throughout the period 2001-2011. Findings – The findings of this study show a significant and enduring improvement in the quality and quantity of environmental disclosure from 2001 to 2011. Even in the absence of penalties for non-compliance, the NRE law stimulated a stark and positive lasting change in the way that French companies account for their environmental information. These findings are consistent with the institutional view of legitimacy theory whereby legislation provides corporate managers with a representation of relevant audiences' perceptions about social and environmental reporting, prompting them to comply with the law to ensure organizational legitimacy. Originality/value – Social and environmental reporting studies generally adopt a strategic view of legitimacy to examine how organizations use social and environmental reporting to respond strategically to legitimacy threats. This study provides early empirical evidence about the relevance of institutional legitimacy theory in explaining environmental reporting.
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Purpose The purpose of this paper is to introduce a long‐time report evaluation project of the Institute for Ecological Economy Research (IÖW) and the business network “future – verantwortung unternehmen ”. Design/methodology/approach On a regular basis, the IÖW/future‐Ranking evaluates the content and communicative quality of sustainability and CR reports of Germany's 150 largest companies. The project provides a platform where stakeholder expectations concerning corporate responsibility and transparency are synthesised into a comprehensive catalogue of reporting requirements. These criteria have to be met by the companies to reliably show sustainability commitment. Findings The evaluation of the reports not only makes the sustainability reporting practice of companies comparable and transparent to the public. The set of criteria itself also serves as a reporting framework for companies and thus enhances directional certainty about corporate contributions to sustainable development. It is itself subject to a periodic evaluation and adaptation by means of dialogue and feedback processes with representatives from industry, politics and NGOs. Practical implications The paper discusses the process of ranking and the possibilities for future developments in this. Originality/value The process described has had little academic exposure and so the paper provides an original insight into a practical subject which has academic interest.
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This paper analyses how large Danish companies are responding to new governmental regulation which requires them to report on corporate social responsibility (CSR). The paper is based on an analysis of 142 company annual reports required by the new Danish regulation regarding CSR reporting, plus 10 interviews with first‐time reporting companies and six interviews with companies that failed to comply with the new law. It is concluded that coercive pressures from government have an impact on CSR reporting practices. Further, the analysis finds traces of mimetic isomorphism which inspires a homogenisation in CSR reporting practices. Finally, it is argued that non‐conformance with the new regulatory requirements is not solely about conscious resistance but may also be caused by, for example, lack of awareness, resource limitations, misinterpretations, and practical difficulties. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.