Corporate Social Responsibility Reporting in Financial Institutions: Evidence from Euronext (original) (raw)
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Corporate social responsibility and environmental reporting in controversial industries
European Business Review, 2013
We survey the growing theoretical literature on the motives for and welfare effects of corporate greening. We show how both market and political forces are making environmental CSR profitable, and we also discuss morally-motivated or altruistic CSR. Welfare effects of CSR are subtle and situation-contingent, and there is no guarantee that CSR enhances social welfare. We identify numerous areas in which additional theoretical work is needed.
Corporate Social Responsibility Reporting and Organizational Stigma: The Case of “Sin” Industries
Journal of Business Research, 2015
We examine corporate social responsibility (CSR) reporting strategies by focusing on stigmatized firms belonging to the alcohol, tobacco, gambling, nuclear energy and firearm sectors. These are often described as "sins" due to their perceived deviation from broadly-endorsed standards. We employ a sample of 109 U.S. listed "sin" firms for a seven-year period (2003-2009) and control with another set of 109 similar-sized, non-"sin" firms for the same period. We find that "sin" firms are more prone to issuing standalone CSR reports. We also demonstrate that a greater risk of litigation by third parties increases the likelihood of a "sin" firm instigating CSR reports, while variations in ownership structure do not. By drawing upon literature on organizational stigma, we argue that CSR disclosures constitute an integral part of "sin" firms' strategic goal to distract attention from their controversial activities, lessen the negative consequences of stigmatization and neutralize the impact of litigation proceedings.
Corporate Social Responsibility Reporting in China: An Overview and Comparison with Major Trends
Corporate Social Responsibility and Environmental Management, 2012
We examine the sustainability reporting activities of companies in controversial industries, e.g., alcohol, firearms, for-profit prisons, gambling, tobacco, marijuana and payday loans. For each industry we identify its controversial social problemthe "elephant in the room." We then examine whether the company issued a sustainability report in the last three years and, if so, how the report dealt with the firm's controversial social issue. Compared to two non-controverisal sectorsgrocery stores and department/discount storescompanies in controversial industries publish sustainability or CSR-type reports at a lower rate (28% versus 43%). We also find significant differences in how the two groups of companies allocate space in their CSR reports. We categorize pages in the reports as dedicated to social and community efforts or environmental issues. The non-controversial companies devote significantly more of their reports to environmental issues than do controversial companies. The controversial companies have a higher ratio of their reports dedicated to social and community activities relative to environmental activities. This result is consistent with firms in controversial industries using social and community actions to attain legitimacy by taking actions that offset the social ills inherent in their core business. It also suggests that these companies believe that doing good in one arena substitutes for harm done elsewhere, This notion of offsetting harm with good deeds elsewhere becomes problematic if the people harmed are from vulnerable
Imitate or differentiate? Evaluating the validity of corporate social responsibility ratings
2008
Although there is 2trillioninportfoliosusingsociallyresponsibleinvesting(SRI)criteria,itremainsunclearhowtomeasure"socialresponsibility."WeexplorecompetingtheoreticalperspectivesthatexplainthelevelofconvergentandpredictivevalidityacrossSRIratingsproducedbycompetingsocialraters.Whilesomepriorliteraturepredictslowconvergentvalidityduetodesirefordifferentiation,otherworkpredictshighconvergentvaliditydrivenbyhightruevalidityorbyneo−institutionalistforcesthatrewardimitation.Wefindthattheseratingshavelowcorrelationsandthatfirmswithhighandlowsocialratingsareequallylikelytobelaterembroiledinscandals.In2005,professionalfundmanagersinvestedatleast2 trillion in portfolios using socially responsible investing (SRI) criteria, it remains unclear how to measure "social responsibility." We explore competing theoretical perspectives that explain the level of convergent and predictive validity across SRI ratings produced by competing social raters. While some prior literature predicts low convergent validity due to desire for differentiation, other work predicts high convergent validity driven by high true validity or by neo-institutionalist forces that reward imitation. We find that these ratings have low correlations and that firms with high and low social ratings are equally likely to be later embroiled in scandals. In 2005, professional fund managers invested at least 2trillioninportfoliosusingsociallyresponsibleinvesting(SRI)criteria,itremainsunclearhowtomeasure"socialresponsibility."WeexplorecompetingtheoreticalperspectivesthatexplainthelevelofconvergentandpredictivevalidityacrossSRIratingsproducedbycompetingsocialraters.Whilesomepriorliteraturepredictslowconvergentvalidityduetodesirefordifferentiation,otherworkpredictshighconvergentvaliditydrivenbyhightruevalidityorbyneo−institutionalistforcesthatrewardimitation.Wefindthattheseratingshavelowcorrelationsandthatfirmswithhighandlowsocialratingsareequallylikelytobelaterembroiledinscandals.In2005,professionalfundmanagersinvestedatleast2 trillion with some consideration of "corporate social responsibility" in mind. 1 The huge amount of capital under the banner of socially responsible investing (SRI) has drawn considerable attention from scholars, activists, managers, and policymakers. Some advocates of corporate social responsibility praise SRI, believing that it can direct capital towards the most responsible firms while penalizing firms with poor social performance. At the same time, skeptics argue that the organizations that rate the social performance of enterprises, referred to as "raters" in our study, cannot truly discern which 1 Social Investment Forum 2005 Report. This socially conscious segment is almost 10% of the total of funds managed by professional investors. At the same time, many of these investors screen only for tobacco, while we consider funds with a broader set of criteria in this paper. 3 These are the five Calvert sub-scores, but all of the ratings we examine include items that fall within all five of these broad categories.
The Institutionalization of Corporate Social Responsibility Reporting
Business and Society, 2016
This article received the Best Paper Finalist award from Business & Society journal in 2017. Paper was recognized at the 2017 Academy of Management Meeting in Chicago. This article presents a three-stage model of how isomorphic mechanisms have shaped corporate social responsibility (CSR) reporting practices over time. In the first stage, defensive reporting, companies fail to meet stakeholder expectations due to a deficiency in firm performance. In this stage, the decision to report is driven by coercive isomorphism as firms sense pressure to close the expectational gap. In the second stage, proactive reporting, knowledge of CSR reporting spreads and the practice of CSR reporting becomes normatively sanctioned. In this stage, normative isomorphism leads other organizations to look to CSR reporting as a potential new opportunity for achieving the firm's goals. In the third stage, imitative diffusion, the defensive reporters together with the proactive reporters create a critical mass of CSR reporters that reaches a threshold at which the benefits of CSR reporting begin to outweigh any costs due to mimetic isomorphism. The study finds support for the model in an examination of Fortune 500 firms from 1997 to 2006.
Seeking Legitimacy Through CSR: Evidence from Controversial Industries
Social Science Research Network, 2015
Controversial industry sectors, such as alcohol, gambling, tobacco, and firearms, have suffered organizational legitimacy problems for a long period of time around the world. This paper examines whether corporate social responsibility (CSR) activities reduce the level of risk for firms in controversial industry sectors in an attempt to seek organizational legitimacy. We argue that managers in controversial industries are motivated to actively engage in risk management to combat negative publicity and gain organizational legitimacy. Using data covering 32 countries, this study finds that both the systematic and total risk for firms in controversial industry sectors are generally higher than those for firms in conventional industry sectors due to their harmful image. We then show that controversial industry firms' engagement in CSR initiatives and policies has a substantial risk-decreasing effect, and that might increase the probability of obtaining and maintaining the social license to operate. The documented effect of CSR on firm risk, however, is more pronounced for firms in Europe and North America than in the Asia-Pacific region, suggesting differential CSRrisk association in different region. These results are significant and robust even after potential endogeneity problems are mitigated. We interpret that our results are supportive of the "harmful image", "social license to operate" and "differential recognition" explanations.
The Academy of Management …, 2009
Despite differences of opinion about the efficacy of corporate social responsibility, there is a general consensus among academics, policy makers, and practitioners that corporations operate with a social sanction that requires that they operate within the norms and mores of the societies in which they exist. In this article I argue that the notion of a socially responsible corporation is potentially an oxymoron because of the naturally conflicted nature of the corporation. This has profound implications for our understanding of corporate social responsibility, what we view as the relevant issues relating to it, and how we investigate its role and impact.