Consequences of CSR reporting regulations worldwide: a review and research agenda

Abstract

PurposeThis study reviews research that examines economic and behavioural consequences of CSR reporting regulations. Specifically, the authors evaluate the impact of CSR reporting regulations on (1) reporting quality, (2) capital-markets and (3) firm behaviour.Design/methodology/approachThe authors first describe the stated objectives and enforcement level of CSR reporting regulations around the world. Second, the authors review over 130 archival studies in accounting, finance, economics, law and management that examine consequences of the regulations.FindingsThe stated objectives and enforcement of CSR reporting regulations vary considerably across countries. Empirical research finds no significant changes in reporting quality and generally concludes that CSR reporting continues to be ceremonial rather than substantive after the regulations – consistent with corporate legitimation and “greenwashing” views. In contrast, growing evidence shows both positive and negative capital-market and real effects of the regulations. Overall, the findings from this review indicate that, on balance, there remains a significant number of questions on the net effects of CSR reporting regulations.Originality/valueThe authors offer a comprehensive review of the literature examining consequences of CSR reporting regulations. The authors identify apparent tensions in studies assessing different outcomes after the regulations: between symbolic reporting and positive capital-market outcomes; between profitability and CSR; and between CSR and the welfare of non-shareholder groups. Additionally, we highlight differences in the scope and stated objectives of CSR regulations across countries, with the regulations often reflecting socio-economic development and national interests of implementing countries. Collectively, our review indicates that institutional details are crucial when considering the design or consequences of CSR reporting regulations and/or standards.

The evolution and determinants of corporate social responsibility (CSR) disclosure in a developing country: extent and quality

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Pursuing Big Issues in Covid-World Accounting Research

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“…Financial information alone seems unable to explain value relevance, leading to the need for sustainability disclosures (Paolone et al, 2021). This is corroborated by the growing number of regulatory initiatives, established in many countries, to mandate sustainability reporting and define its methodologies (Haji et al, 2022). While in the past the value relevance of this practice was questioned due to inconsistent and sometimes contradictory results (Berthelot et al, 2012;Cardamone et al, 2012;Carnevale et al, 2012), nowadays investors are more interested in carefully reviewing business reports for sustainability issues, and they expect companies to communicate their sustainability practices transparently and consistently (IOSCO, 2020).…”