Doing Well by Reporting Good: Reporting Corporate Responsibility and Corporate Performance

Abstract

This article aimed to examine the impacts of reportingtype corporate responsibility activities (CRA-R) on corporate social and financial performance. Academic research has explored how varying attributes of markets, industry sectors and firms might shape corporate social and financial performance, but includes little effort to examine the impacts of different kinds of CRA on corporate performance. We build on debate about the value of firms' reporting activities related to corporate responsibility. Recent literature suggests that CRA-R is superficial marketing or "greenwashing." Despite this viewpoint, corporate reporting activities related to responsibility are rising. In order to solve this puzzle, this article explores the impact of CRA-R on corporate performance. First, drawing from the institutional perspective, we propose that CRA-R will positively impact corporate social performance (CSP) oriented toward secondary stakeholders.Second, combining the stakeholder-agency perspective and corporate responsibility literature, we motivate the hypotheses that CRA-R positively influences corporate financial performance (CFP). Empirical testing with a unique dataset of large US corporations selected in the Fortune 500 support the proposed hypotheses. In particular, both corporate social responsibility and Global Reporting Initiative (GRI) activities positively influence corporate environmental performance, and financial performance. In particular, GRI reporting is a strong indicator to impact both social and financial performance. Our findings indicate that CRA-R should not simply reflect shallow motivations, but deliver value to noninvestor stakeholders as well as investors.

Doing Well or Doing Good: The Relationship between Corporate Social Responsibility and Profit in Romanian Companies

“…Activities such as donations are equated with community investment and waste management costs are assimilated to environmental protection expenditures. Thus, non-financial reporting plays an increasingly important role and aims to increase transparency and performance [16,17], as well as to encourage companies to adopt a more sustainable business strategy [18].…”

Assessing UNGC pharmaceutical signatories stakeholders using big data

“…They found that firm performance was positively related to the extent of economic benefits as a result of participating in the UNGC. Lee and Maxfield () analyze the impacts of reporting corporate responsibility activities (CRA‐R) on corporate social performance (CSP) and corporate financial performance (CFP). Using a dataset of U.S. corporations selected in the Fortune 500 their empirical evidence suggests that CRA‐R impacts CSP for secondary stakeholders and also CFP.…”

Machiavellianism, stakeholder orientation, and support for sustainability reporting

“…The quality of sustainability reports and their association with financial performance appears more questionable. As noted by Lee and Maxfield (, p. 577), much recent literature has concluded that corporate sustainability reporting is little more than “superficial marketing,” and recent studies suggest that the link between CSR reporting and financial performance may be relatively weak. For instance, Kaspereit and Lopatta () found a positive association between environmental performance and financial performance, but the link between environmental reporting and financial performance was weaker and its significance depended on model specification.…”

“…These early studies provided important insights into managers' attitudes towards sustainability reporting, and the prescriptions offered appeared reasonable at the time. However, recent studies have concluded that corporate sustainability reports are little more than superficial window dressing (e.g., Lee & Maxfield, ). Consequently, we feel that research addressing fundamental questions regarding the determinants of practicing managers' attitudes towards sustainability reporting is clearly called for (cf.…”