Corporate social responsibility and environmental reporting in controversial industries

Abstract

Purpose-Over the last few decades, corporate social responsibility (CSR) has received a large amount of attention in research and in practice. As a response to the growing awareness of and concern about social and environmental issues, an increasing number of companies are proactively publishing their CSR-related principles and activities. The overall research question of this study is derived from legitimacy theory and is aimed at elucidating the relationship between industry sector and CSR communication. The paper aims to discuss these issues. Design/methodology/approach-The empirical examination encompasses a sample that includes the annual reports of all German DAX-30 companies from 1998 to 2009. First, based on a content analysis, categories of CSR-related communication are defined. Second, these categories are used in a quantitative analysis with a longitudinal perspective to evaluate the hypothesis that companies in controversial industries communicate their CSR more intensely than companies in non-controversial industries. Findings-The qualitative study leads to a category system that accounts not only for CSR-related activities but also for CSR philosophies and motives as the normative basis of CSR communication. The quantitative results support the hypothesis that companies in controversial industries are more active in CSR communication than companies in non-controversial industries. Originality/value-Existing studies analysing CSR communication activity have been largely inconsistent and often use unsystematic approaches in choosing industries for comparison. Therefore, in this study, to overcome some of these deficiencies, a combination of quantitative and qualitative approaches addresses the concept of controversial industries.

Marine conservation finance: The need for and scope of an emerging field

“…An example of corporate social responsibility for marine conservation would be a large retailer buying and selling sustainably-harvested seafood using the Marine Stewardship Council scheme (Gulbrandsen, 2009). Despite evidence of 'green washing' whereby companies market themselves as environmentally responsible without changing practices to minimise negative impacts, there are many examples of corporate social responsibility reducing environmental impacts (McWilliams et al, 2006;Dahl, 2010;Wan and Walker, 2012;Nalband and Al-Amri, 2013;Pomering et al, 2013;Reider-Gordon et al, 2013;Kilian and Hennigs, 2014;Lam, 2014). Another type of business sits at this place of the spectrum: businesses that pass the 'negative screening' requirements of the growing number of 'socially-responsible investment' funds because they have 'less bad' social and environmental practices (Lydenberg and Grace, 2014).…”

Be bad but (still) look good: Can controversial industries enhance corporate reputation through CSR initiatives?

“…For example, from a finance lens, Jo and Na () show that stakeholders in CIs may perceive CSR as unethical, which could backlash and increase firm risk. Accounting research has reported that stakeholders in these sectors have greater informational needs, making companies more prone to disclose CSR reports (Grougiou et al, ; Kilian & Hennigs, ). Cai et al () argue that better social performance increases firm value, but Rodrigo, Duran, and Arenas () hint otherwise because stakeholders differ due to market‐level (business‐to‐business or business‐to‐consumer) or institutional factors (developed or emerging nation).…”

“…In controversial contexts, Grougiou et al (), Kilian and Hennigs (), and Toppinen and Korhonen‐Kurki () conceptually suggest that these companies are more prone to publish CSR reports to gain a reputational edge. This insight is essential, as legitimacy theory has been one of the main frameworks to explain non‐financial disclosure: these documents are an explicit CSR‐related activity in response to information‐seeking stakeholders, so that these parties can certify that the entity's actions are proper in terms of societal expectations, norms, values, and so on (Cho, Michelon, Patten, & Roberts, ; Deegan, ).…”

“…This insight is essential, as legitimacy theory has been one of the main frameworks to explain non‐financial disclosure: these documents are an explicit CSR‐related activity in response to information‐seeking stakeholders, so that these parties can certify that the entity's actions are proper in terms of societal expectations, norms, values, and so on (Cho, Michelon, Patten, & Roberts, ; Deegan, ). Hence, if CIs are increasingly engaging in CSR reporting because it is considered a legitimate initiative, and as Grougiou et al (), Kilian and Hennigs (), and Toppinen and Korhonen‐Kurki () suggest as a byproduct it might improve their reputation, then it is possible to posit (see Figure ) that:…”

Corporate Citizenship, Social Responsibility, and Sustainability Reports as “Would-be” Narratives

“…Business corporations carry out sustainability/social responsibility/citizenship practices for various motives: value-driven motives (connected to corporate culture), stakeholder-driven motives (responsiveness to stakeholders' claims and expectations) and performance-driven motives (increasing financial performance) (Kilian and Hennigs 2014). However, safeguarding corporate image/reputation and avoiding environmental disasters are certainly very important motives (Özçelik et al 2015).…”