Enhancing the Role and Effectiveness of Corporate Social Responsibility (CSR) Reports: The Missing Element of Content Verification and Integrity Assurance
- 1.8k Downloads
Corporate Social Responsibility (CSR) reporting by large corporations has witnessed phenomenal growth over the last two decades. The voluntary nature of these disclosures, however, has led to inconsistencies in reporting formats, treatment, and inclusion of various contextual elements, and a lack of robust measures pertaining to the quality and accuracy of the reports’ content. Efforts to address these drawbacks such as Global Reporting Initiative and ISO 26000 have proven unsatisfactory due to their primary emphasis on process for creating CSR reports without similar attention on measurement criteria to ensure robust implementation, or verify accuracy of information. This paper attempts to fill this gap in the literature. It uses a new framework—called the CSR-Sustainability Monitor®—of analyzing and evaluating the contents of CSR reports in a manner that allows for a single report to be compared with any other single group, and groups of reports based on industry, country-of-origin, and similar other groupings. Using data from the CSR reports of 614 large corporations worldwide, this study analyzes the character and scope of integrity assurance contained in these CSR reports. The analysis is further extended to explore some external factors that would explain variations in the assurance decision and the quality of integrity assurance in these reports.
KeywordsCSR reports CSR-S Monitor Sustainability reporting Integrity assurance Analytical and scoring frameworks Corporate social responsibility Corporate reputation, transparency, public trust, credibility
Funding for this project was provided by the Weissman Center for International Business, and is gratefully acknowledged.
- Aguilar, J., Caspary, G., & Seiler, V. (2011). Implementing EITI at the sub national level: Emerging experience and operational framework. The World Bank, Extractive Industries for Development Series #23. World Bank, Washington, DC. Retrieved from http://eiti.org/files/Implementing%20EITI%20at%20subnational%20level.pdf.
- Ballou, B., Heitger, D. L., & Landes, C. E. (2006). The future of corporate sustainability reporting: A rapidly growing assurance opportunity. Journal of Accountancy, 202(6), 65–74.Google Scholar
- Chow, C. W. (1982). The demand for external auditing: Size, debt and ownership influences. The Accounting Review, 57(2), 272–291.Google Scholar
- CPA Australia. (2004). Triple bottom line—A study of assurance statements worldwide. Melbourne: CPA Australia.Google Scholar
- Delmas, M. A., & Toffel, M. W. (2011). Institutional pressures and organizational characteristics: Implications for environmental strategy. In P. Bansal & A. J. Hoffman (Eds.), The Oxford handbook of business and the natural environment (pp. 231–247). Oxford: Oxford University Press.Google Scholar
- European Commission. (2014, April 15). Non-financial reporting. Retrieved August 15, 2014, from EU Single Market thematic website on EUROPA from http://ec.europa.eu/internal_market/accounting/non-financial_reporting/index_en.htm
- Federation of European Accountants. (2014, June). EU Directive on disclosure of non-financial and diversity information by certain large undertakings and groups. Retrieved August 15, 2014, from FEE Factsheet, June 2014 issue: http://www.fee.be/images/Factsheet_EU_Directive_NonFinancial_Information_1406.pdf
- Gallup. (2014). Business and industry sector ratings. http://www.gallup.com/poll/12748/business-industry-sector-ratings.aspx
- Giglio, L., & Sethi, S. P. (1997). Gaining competitive edge in international markets: A measurement of the “country of origin” effect on the performance of multinational corporations. Business and the Contemporary World, 9, 743–760.Google Scholar
- Governance, & Accountability Institute, I. (2014, June). Flash report: 72 % of S&P 500 companies now publishing sustainability/responsibility reports|Sustainability update. Retrieved from http://ga-institute.com/Sustainability-Update/2014/06/03/flash-report-72-of-sp-500-companies-now-publishing-sustainability-responsibility-reports/.
- Grein, A., Sethi, S. P., & Tatum, L. G. (2010). A dynamic analysis of country clusters, the role of corruption, and implications for global firms. East-West Journal of Economics and Business, 13(2), 33–60.Google Scholar
- GRI. (2013). Regulating for a more sustainable future: New Norwegian CSR regulation entered into force. Retrieved August 15, 2014, from GRI website: https://www.globalreporting.org/information/news-and-press-center/Pages/Regulating-for-a-more-sustainable-future-New-Norwegian-CSR-regulation-entered-into-force.aspx
- GRI. (2014). GRI and ISO 26000: How to use the GRI guidelines in conjunction with ISO 26000. Retrieved January 15, 2015, from GRI website: https://www.globalreporting.org/resourcelibrary/How-To-Use-the-GRI-Guidelines-In-Conjunction-With-ISO26000.pdf.
- Gujarati, D. N. (2003). Basic econometrics (4th ed.). New York: Mc-Graw Hill.Google Scholar
- International Auditing and Assurance Standards Board (IAASB). (2003). ISAE 3000 (Revised). Assurance engagements other than audits or reviews of historical financial information. New York: IFAC.Google Scholar
- International Auditing and Assurance Standards Board (IAASB). (2010a). International Framework for Assurance Engagements (Framework). In Handbook of international quality control, auditing, review, other assurance, and related services pronouncements, part II. New York, NY: The International Federation of Accountants.Google Scholar
- International Auditing and Assurance Standards Board (IAASB). (2010b). International Standards on Assurance Engagements ISAE 3000: Assurance Engagements Other than Audits or Reviews of Historical Financial Information. In Handbook of international quality control, auditing, review, other assurance, and related services pronouncements, part II. New York, NY: The International Federation of Accountants.Google Scholar
- Kiron, D., & Kruschwitz, N. (2015). Sustainability reporting as a tool for better risk management. MIT Sloan Management Review, 56(4), 1–8.Google Scholar
- Kolk, A., & Perego, P. (2010). Determinants of the adoption of sustainability assurance statements: An international investigation. Business Strategy and the Environment, 19(3), 182–198.Google Scholar
- KPMG. (2008). KPMG international survey of corporate sustainability reporting. Available at http://www.kpmg.com
- Moratis, L., & Cochius, T. (2011). ISO 26000 the business guide to the new standard on social responsibility. Sheffield: Greenleaf Publishing.Google Scholar
- Perego, P. M. (2009). Causes and consequences of choosing different assurance providers: An international study of sustainability reporting. International Journal of Management, 26(3), 412–425.Google Scholar
- Pflugrath G, Roebuck P, Simnett R (2011) Impact of assurance and assurer’s professional affiliation on financial analysts’ assessment of credibility of corporate social responsibility information. Auditing: A Journal of Practice & Theory 30(3):239–254.Google Scholar
- Sethi, S. P. (2005). The effectiveness of industry-based codes in serving public interest: the case of international council on mining and metals. Transnational Corporations, 14(3), 55–99.Google Scholar
- Sethi, S. P., & Emelianova, O. (2011). Kimberley process certification scheme (KPCS): A voluntary multigroup initiative to control trade in conflict diamonds Globalization and self-regulation: the crucial role that corporate codes of conduct play in global business (pp. 213–248). New York City: Palgrave Macmillan.Google Scholar
- Sethi, S. P., & Schepers, D. H. (2011). United Nations global compact: An assessment of ten years of progress, achievements, and shortfalls. Globalization and Self-Regulation (pp. 249–275). New York: Palgrave Macmillan.Google Scholar
- Tucker, J. W. (2010). Selection bias and econometric remedies in accounting and finance research. Journal of Accounting Literature, Winter, 29, 31–57.Google Scholar
- Weissman Center for International Business. (2014). The CSR-Sustainability monitor. (Tech. Rep.). Weissman Center for International Business. Retrieved from http://zicklin.baruch.cuny.edu/centers/weissman/professionals/publications/sethi-csr-monitor