Harmonization in CSR Reporting

Abstract

Abstract• This paper focuses on MNEs' corporate social responsibility (CSR) reporting, which previous studies have found to exhibit strong country-of-origin effects. It examines whether MNEs' adherence to global standards (as adopted by e.g. ILO, OECD, UN, ISO) is associated with smaller cross-country differences and less country-of-origin effects in CSR reporting, and whether stringency of standards' enforcement mechanisms affects reporting harmonization.• To test our hypotheses, we collected data on 25 CSR items for a sample of firms consisting of the top 250 firms listed in the Fortune Global list, using ordered logistic regression analysis.• We find evidence for upward harmonization in reporting for those MNEs that adhere to global CSR standards. Stricter enforcement mechanisms did not result in stronger harmonization.• Our findings imply that global standards and guidelines do not only increase the overall level of CSR reporting, but are also associated with a harmonization of CSR activities of firms from different countries, thus reducing the role that domestic institutions (including legislation and societal concerns) play in shaping CSR practices. Implications for research and practice are discussed.

On the effectiveness of private transnational governance regimes—Evaluating corporate sustainability reporting according to the Global Reporting Initiative

“…Fortanier, et al, 2011). Any of these three possibilities may lead to greater volatility for the emerging governance system.…”

“…The sustainability reporting literature has shown that sector affiliation is a significant explanatory variable for the likelihood of a company producing social and environmental disclosures as well as the length of these disclosures (Bowen, 2000;Cormier & Magnan, 1999;Halme & Huse, 1997;Neu, Warsame, & Pedwell, 1998) (for recent overviews see Fifka, 2013;Fortanier, Kolk, & Pinkse, 2011). Based on these insights from the literature, we thus hypothesize that industry pressures will shape corporate engagement with CSR challenges; we would expect that different industries will reveal differences in the extent to which they address social and environmental challenges.…”

“…To a certain extent, the absence of sector-or country-specific CSR profiles may be the result of an "upward harmonization" caused by the GRI Guidelines as well as other global standards and guidelines in the context of sustainability reporting and CSR more generally (Fortanier, et al, 2011). However, it should be noted that, on average, companies in the sample still only reported on 57% of all GRI indicators, i.e.…”

“…Along these lines, country-level differences in non-financial reporting have been identified in terms of the likelihood of reporting (Halme & Huse, 1997;Kolk, 2010), report content (Baskin, 2006;Chapple & Moon, 2005;Kolk, 2005) or the likelihood of assurance (Kolk & Perego, 2010). To an extent, these differences stem from country-level differences in reporting legislation (Guthrie & Parker, 1990;Kolk, Walhain, & Van de Wateringen, 2001); yet, the salience of specific pressure groups (Neu, et al, 1998;Van der Laan Smith, Adhikari, & Tondkar, 2005) as well as underlying cultural and institutional contexts (Fortanier, et al, 2011;Kolk, 2005) have also been shown to result in country-level differences in sustainability reporting. In line with such arguments in the literature, we would expect to be able to identify differences in sustainability reporting depending on the geographic context from which a company hails.…”

Does the Institutional Environment Affect CSR Disclosure? The Role of Governance

“…On the one hand, there are some studies that assume this influence by focusing only on one institutional environment (Gallego et al, 2014;Kuo, Yeh, & Yu, 2012;Michelon et al, 2015;Paul et al, 2006, Prado et al, 2009 or by controlling its effect in multinational samples (Alon, Lattemann, Fetscherin, Li, & Schneider, 2010;Chen & Bouvain, 2009;Fortanier, Kolk, & Pinkse, 2011).…”