Determinants of voluntary CSR disclosure: empirical evidence from Germany

Abstract

Currently, companies spend a great deal of effort on Corporate Social Responsibility (CSR) disclosures. CSR disclosure relates to the provision of information on companies' environmental and social performance. From an economic perspective, companies might disclose this information to avoid or decrease potential political costs. We construct a CSR disclosure index based on the Global Reporting Initiative (GRI) guidelines. Using content analysis, we analyze 130 listed German companies' CSR disclosures (470 firm-year observations) to investigate the determinants of these voluntary disclosure activities. Our results show that, consistent with the political cost theory, German companies' disclosures of all CSR issues are affected by their visibility, shareholder structure, and relationship with their US stakeholders. In addition, higher profitability is associated with more environmental disclosures. Finally, size and industry membership affect the amount of CSR disclosure.

A Comparative Review on Company Specific Determinants for Sustainability Reporting in United Kingdom (UK) and Malaysia

“…This paper extends prior research on the effect of company-level determinants in explaining voluntary CSR disclosure practices (Lan, et al, 2013;Gamerschlag et al, 2011). The study will address two fundamental research questions: 1) What are the company-specific characteristics associated with corporate social responsibility (CSR) disclosures?…”

“…Despite the increased CSR awareness among Malaysian companies and noteworthy efforts to go beyond the standard industry and Bursa Malaysia reporting requirements, the quality of CSR disclosures within Malaysian annual reports is dismal to the normal scope of corporate financial reporting (MaSRA, 2013). Previous studies have suggested the importance of company-specific characteristics as proxies in inducing their disposition and responsiveness in disclosing additional CSR information voluntarily (Lan et al, 2013;Gamerschlag et al, 2011;Siegel and Vitaliano, 2007;Orlitzky et al, 2003). Thus, this study seeks to determine the pre-existing influence of company-level variables on the level of sustainability reporting preceding the transitional implementation period of the G4 Sustainability Reporting Guidelines in 2014 and 2015. In addressing the internal organisational factors of sustainability reporting, extensive literature search indicated dearth of quantified measures on board experience as an antecedent to CSR disclosure levels.…”

“…Although the G4 framework is a useful reference in homogenising corporate social responsibility (CSR) disclosures across global market sectors, many sustainable reports are still inconsistent and reactive in nature (Jagd, 2015;Fortainer et al, 2011;PwC's Sustainability Reporting, 2008). The inconsistency in levels of non-financial CSR disclosures is predicated on the polarizing prioritisation of the "stakeholder versus shareholder" approaches in addressing societal issues (Freeman and Moutchnik, 2013), the cost of disclosing information voluntarily (Gamerschlag et al, 2011;Kytle and Ruggie, 2005;LaFond and Watts, 2008), and, the varying interpretations of the recommended guidelines.…”

The Relationship Between Board Characteristics and Environmental Disclosure: Evidence from Turkish Listed Companies

“…Guthrie and Abeysekera (2006) and Gamerschlag et al (2011) emphasize that selection of a "unit of analysis" presents another critical issue in the process of measuring the extent of environmental disclosure through content analysis. In this respect, Holsti (1969) p. 116 defined recording unit as "the specific segment of content that is characterized by placing it into a given category" (Holsti 1969).…”

“…In this respect, Holsti (1969) p. 116 defined recording unit as "the specific segment of content that is characterized by placing it into a given category" (Holsti 1969). As the number of words in a recording unit has the advantage of being categorized more easily (Damak-Ayadi 2010) and needs less subjective judgment by the researcher (Gamerschlag et al 2011), the extent of environmental disclosures is measured by counting the number of words related to the environmental disclosure. Table 2 summarizes the measurement of the independent variables used in this study.…”