An Evaluation of the Quality of Corporate Social Responsibility Reports by Some of the World’s Largest Financial Institutions
- 1.7k Downloads
This study investigates the variations in the quality and comprehensiveness of 104 corporate social responsibility (CSR) reports published by the world’s largest financial institutions in 2012. Using a novel measure of CSR report quality, we examine the impact of certain national, legal, and firm-level factors that might explain differences in the overall quality and extent of coverage of various issues in these reports. Our findings show that legal factors and CSR environment in a firm’s country of headquarters play an important role in firms’ CSR reporting quality. Common law countries exhibit systematically higher overall CSR reporting quality than code law countries. Countries with higher CSR standards, policies, and regulations in place also produce significantly higher quality CSR reports. Firm size, on the other hand, has no major impact on the overall quality of CSR reports. In further analysis of the individual aspects of CSR disclosures, namely environment, philanthropy, bribery and corruption, and integrity assurance, we document that larger firms report at a higher quality on philanthropy and bribery and corruption. Bribery and corruption is reported at a higher quality in countries with common law tradition, high-quality legal regimes, and high CSR standards and regulations in place. We also observe higher quality integrity assurance in common law countries. CSR-minded countries and countries with low-quality legal environment also report on philanthropy at a higher quality. Finally, we offer guidelines for companies toward improving the quality of their reports, and suggestions for scholars and researchers for further avenues of research.
KeywordsCorporate social responsibility (CSR) reports Environment social and governance (ESG) CSR monitor Global financial institutions Country-of-origin effect (EOC) GRI ISO 26000 Bribery and corruption Philanthropy
The funding for this project was provided by the Weissman Center for International Business and is gratefully acknowledged.
- AccountAbility. (2005). National Corporate Responsibility Index. AccountAbility: London http://www.accountability.org/about-us/publications/responsible-4.html.
- Attig, N., Boubakri, N., El Ghoul, S., &Guedhami, O. (2014). Firm internationalization and corporate social responsibility. Journal of Business Ethics, 1–27.Google Scholar
- Berthelot, S., Cormier, D., & Magnan, M. (2003). Environmental disclosure research: Review and synthesis. Journal of Accounting Literature, 22, 1–44.Google Scholar
- Eccles, R. G., & Krzus, M. P. (2010). One report: Integrated reporting for a sustainable strategy. New York: Wiley & Sons.Google Scholar
- For Global Reporting Initiative (GRI), please see: Global Reporting Initiative (2014), GRI and ISO 26000: How to use the GRI Guidelines in conjunction with ISO 26000. https://www.globalreporting.org/resourcelibrary/How-To-Use-the-GRI-Guidelines-In-Conjunction-With-ISO26000.pdf.
- Governance, & Accountability Institute, I. (2014). 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/.
- Gujarati, D. (2003). Basic econometrics. New York: McGraw-Hill.Google Scholar
- Hibbitt, C. J. (2004). External environmental disclosure and reporting by large European companies: An economic, social, and political analysis of managerial behaviour. Rozenberg Publishers.Google Scholar
- International Integrated Reporting Council (IIRC). (2011). Towards integrated reporting: Communicating value in the 21st century. New York, NY: IIRC.Google Scholar
- International Organization for Standardization (ISO). (2010). ISO26000 Guidance Standard on Social Responsibility, Reference No. ISO 26000, Geneva.Google Scholar
- Jensen, J. C., & Berg, N. (2012). Determinants of traditional sustainability reporting versus integrated reporting. An institutionalist approach. Business Strategy and the Environment, 21(5), 299–316.Google Scholar
- KPMG, Center for Corporate Governance in Africa, Global Reporting Initiative, & United Nations Environment Programme. (2013). Carrots and sticks: Sustainability reporting policies worldwide—today’s best practice, tomorrow’s trends. Retrieved from https://www.globalreporting.org/resourcelibrary/carrots-and-sticks.pdf.
- Moratis, L., & Cochius, T. (2011). ISO 26000: The business guide to the new standard on social responsibility. Sheffield: Greenleaf Publishing Limited.Google Scholar
- Murphy, C., & Yates, J. (2009). The international organization for standardization (ISO): Global governance through voluntary consensus. New York: Routledge.Google Scholar
- Watts, R., & Zimmerman, J. (1978). Towards a positive theory of the determination of accounting standards. The Accounting Review, 53, 112–134.Google Scholar
- Weissman Center for International Business. (2014). The CSR-Sustainability monitor. (Tech. Rep.). Weissman Center for International Business. Retrieved from http://www.csrsmonitor.org.
- Willis, A. (2010). Integrated reporting in a disconnected world? The macro measurement challenge. The landscape of integrated reporting. Reflections and next stops, 22–24.Google Scholar