The Ethical Foundations for CSR

Frederiksen, Claus Strue; Nielsen, Morten Ebbe Juul

doi:10.1007/978-3-642-40975-2_2

Cited by 15 publications

(10 citation statements)

References 9 publications

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“…CSR performance allows managers to gain greater commitment from stakeholders and increase their loyalty (Melo and Garrido-Morgada, 2012;Flammer, 2015). Frederiksen and Nielsen (2013) report that CSR performance is also viewed as legitimate signals of corporate ethical behavior and can generate positive capital. It reflects the underlying moral character of a firm acting as a good citizen and signals its commitment to trustworthiness, integrity and non-opportunistic behavior.…”

Section: Corporate Social Responsibility Performance and Cost Of Debtmentioning

confidence: 99%

CSR performance and the cost of debt: does audit quality matter?

Bacha

Ajina

Saad

2020

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Purpose This study aims to shed light on the effect of corporate social responsibility (CSR) on the cost of debt. It also investigates whether audit quality affects the cost of debt incurred by socially responsible firms. Design/methodology/approach Based on a sample of French non-financial companies over the period 2005 to 2016, this paper uses panel data regressions. This paper re-estimates the model using Newey-West standard errors and the weighted-least-squares method. For further robustness, this paper runs instrumental variable regressions using the two-stage instrument variable method (two-stage least square). Findings The results show a negative relationship between CSR performance and the cost of debt, suggesting that financial institutions are likely to apply preferential costs for socially responsible firms. Financial institutions reward socially responsible companies as they recognize the potentiality of CSR to reduce firm risk and enhance its reputation. The findings also show that the perceived audit quality, along with CSR performance, are relevant to banks in the pricing of debt. The incremental audit quality, attributable to audits by the Big 4 auditors, decreases the cost of debt for CSR firms. Big 4 auditors are expected to, simultaneously, play information and insurance roles, thereby enhancing the firm risk profile. The results are robust to alternative audit quality measures (i.e. audit fees). Practical implications This study has important implications for managers and banks. Managers will be able to understand the effect of CSR on financing costs with relevant implications for strategic financing planning. Firms are also encouraged to signal their commitment to maintain a high-level quality reporting and reduce agency costs through their expenditure in auditing (i.e. hiring a large well-known audit firm). Moreover, this study sensitizes banking institutions to encourage the concept of socially responsible finance and consider soft information (i.e. involvement in societal issues, corporate citizen, trustworthiness, integrity and non-opportunistic behavior), as part of the credit decision-making and debt pricing process. Originality/value This study extends the literature on CSR and the cost of debt. Unlike prior studies, this paper focuses on the debt-pricing effects of audit quality for CSR firms. Audit quality is deemed to be an important governance feature that is likely to constraint opportunistic behaviors (i.e. CSR diversion) and play information and insurance roles to lenders. Audit quality (perceived or real), along with CSR performance, are associated with lower costs of debt.

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Section: Corporate Social Responsibility Performance and Cost Of Debtmentioning

confidence: 99%

CSR performance and the cost of debt: does audit quality matter?

Bacha

Ajina

Saad

2020

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“…As the underlying motivations and mechanisms that justify the integration of sustainable development principles into corporate strategies shape and guide decision-making, they also need attention. The literature analysing the motivations and drivers is both diverse and has received contributions from various different authors (Argandon ˜a, 2011;Bansal and Roth, 2000;Baumgartner, 2014;Ditlev-Simonsen and Midttun, 2011;Dummett, 2006;Frederiksen and Nielsen, 2013;Lozano, 2015;Maximiano, 2007). This theoretical framework was, thus, developed to identify the underlying rationales and motivations for companies to strategically integrate the SDGs, aggregating the justifying logics into three macro-categories:…”

Section: Theoretical-conceptual Frameworkmentioning

confidence: 99%

“…According to Lozano (2015), it is the very attitudes and behaviours of managers that make up the strongest driver for the integration of corporate sustainability. Frederiksen and Nielsen (2013) understand that the ethical approach to corporate social responsibility (CSR) is more reasonable than any instrumental or hybrid approaches that attempt to combine instrumental and ethical approaches. However, Schuler et al (2017) note that corporate sustainability management studies have tended to favour the instrumental rationale for the adoption of sustainability policies in recent decades and within the scope of the means to maximise the social value and wealth generated for shareholders.…”

Section: 2mentioning

confidence: 99%

“…According to the economic rationale, the motivations underlying corporate sustainability derive from striving for business gains and greater competitiveness based on the principles of innovation and seeking to lead the sector within a fundamentally instrumental orientation (Frederiksen and Nielsen, 2013). The business case for CSR emerged along with the institutionalisation of the concept and the general awareness of its importance, deemed to have potentially positive impacts on the financial and non-financial performances of organisations.…”

Section: Economic Rationalementioning

confidence: 99%

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The adoption of sustainable development goals by large Portuguese companies

Santos

Bastos

2020

SRJ

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Purpose Two years on from the launch of the United Nations 2030 agenda, this study aims to approach just how and why large Portuguese companies are incorporating the sustainable development goals (SDGs) into their strategies. This sets out a theoretical framework for priority levels of management and the key rationales and motivations towards the adoption of the SDGs by companies within the scope of identifying logical and mutual connections. Design/methodology/approach The proposed theoretical framework applied an empirical, qualitative study approach, deploying content analysis of the semi-structured interviews carried out. Findings The results convey how the responding companies are using the different management models identified for integrating the SDGs, with the strategic and operational facets of greatest relevance. There are various key reasons put forward in justification of this involvement, in particular highlighting the understanding of the 2030 agenda as an ethical and social contract followed by concerns over managing stakeholders. The results demonstrate that these main motivations influence the management level at which the SGDs undergo integration, yet they do not determine the type of integration. Research limitations/implications The analysis of a limited number of companies and the fact that the semi-structured interviews were made with a single representative, which correspondingly reflects how the responses received convey the understandings, visions, values and responsibilities of these interlocutors. Originality/value This provides one of the first studies contributing towards understanding how and why businesses are aligning with the SDGs. At the conceptual level, this proposes a theoretical framework for analysing the underlying logics and the levels of integration into business management and how both can be interconnected. In practical terms, this clarifies how business management strategies may leverage the integration of the 2030 agenda as a mechanism for implementing corporate sustainability.

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“…We start the discussion with the ethical approach that advocates firms to view their obligations toward nature and society as a primary concern and find ways to evolve uncompromising attitude of businesses to uphold this to be a central tenet of existence, simply because "this is the right things to do" (normative view). Even though this view might not always lead to a win-win situation for firms, especially when the outcome(s) of any strategy or opportunity is/ are stacked against the economic ones that might have to be sacrificed to pursue environmentally oriented ones, still firms are expected to align their actions and decisions to maximize the overall well-being of everyone concerned [14]. Not only this is impractical from a pragmatic standpoint, such an ideology would have limited impact to bring in a calculative aspect that accounting in general is associated to.…”

Section: Contemporary Developments Within the Critical Accounting Thementioning

confidence: 99%

Greening Accounting: An Inevitable Link to Help Firms Connect with Sustainability

Debnath¹

2017

Accounting and Corporate Reporting - Today and Tomorrow

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The last decade has seen developments challenging the abilities of managerial accounting theories in supporting firms with environmental conscious decision-making that are grounded in the expanded accountability of firms toward nature and society. Critical theorists have argued that the shortcomings of the accounting theories to interpret the impacts of business activities on nature have its origin in the missing accounting standards, under-defined contractual boundaries, and the absence of a valid numéraire (monetary equivalency). In this chapter, the author posits that these shortcomings are a legacy of the economic paradigm within which the accounting frameworks operate and would remain so, unless a paradigm change evolves to handle environmental-related considerations on its own, even if it means rewriting rules to generate accounting interpretations of business activities. Instead of offering a methodological solution, this chapter ideates how having "environment" as integral to the accounting paradigm would enable firms in evaluating, accounting, and reporting environmental performance transparently and improve flow of information to help management face sustainability-related challenges better.

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The Ethical Foundations for CSR

Cited by 15 publications

References 9 publications

CSR performance and the cost of debt: does audit quality matter?

CSR performance and the cost of debt: does audit quality matter?

The adoption of sustainable development goals by large Portuguese companies

Greening Accounting: An Inevitable Link to Help Firms Connect with Sustainability

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