The Relationship of CSR Performance and Voluntary CSR Disclosure Extent in the German DAX Indices

Abstract

Empirical studies present mixed evidence on the relationship of CSR performance and CSR disclosure extent, thus spurring academic ambiguity as legitimacy- and voluntary disclosure theory provide competing explanations. By applying content analysis to 144 voluntary GRI reports of listed firms in Germany from 2015 to 2018, I construct environmental and social disclosure indices to capture the reports’ disclosure extents. The contents are extracted from the corresponding GRI content indices in order to mitigate potential coding errors. ESG scores are used as a third-party measure to proxy environmental and social performance. I propose that this approach could be more suitable to address the challenge within the literature concerning methodological heterogeneity. The results show a positive relationship of environmental performance and environmental disclosure, but no relationship of social performance and social disclosure. Hence, there is evidence for an at least partial performance driven reporting behavior as companies seem to signal their superior environmental performance via more extensive disclosure, as predicted by voluntary disclosure theory. This evidence supports the idea of tightening Directive 2014/95/EU.

Reimagining Corporate Social Responsibility in the Era of COVID-19: Embedding Resilience and Promoting Corporate Social Competence

“…Much of the pre-COVID-19 interdisciplinary research on CSR and corporate law has emphasised the importance of mandatory CSR and proposed a regulatory framework enforced by corporate law and governance mechanisms [13][14][15]. However, scholars have made few attempts to differentiate between ex ante and ex post CSR law approaches.…”

Does Green Finance Policy Contribute to ESG Disclosure of Listed Companies? A Quasi-natural Experiment from China

“…Companies with better CSR performance are more likely to publish more CSR reports (Uyar et al 2020). Environmental performance is positively related to environmental disclosure, while social performance is not related to social disclosure (Danisch 2021). It has also been found that environmental performance is negatively related to environmental disclosure (Doan and Sassen 2020).…”

Can the innovation in sustainability disclosures reflect organisational sustainable development? An integrated reporting perspective from China

“…Among the sustainability accounting literature, some of them have explored the relationship between sustainability reporting practices and sustainability performance. Based on a sample of German listed firms, Danisch (2021) finds that environmental performance is associated with environment reporting practices. Danisch (2021) believes that firms with good environmental performance use high environment reporting practices to signal their superior quality in environment protection.…”

“…Based on a sample of German listed firms, Danisch (2021) finds that environmental performance is associated with environment reporting practices. Danisch (2021) believes that firms with good environmental performance use high environment reporting practices to signal their superior quality in environment protection. Al‐Tuwaijri et al (2004) explore the relationship between environmental performance and environment reporting practices in the American context in 1994 and a positive relationship is identified.…”

“…This present study makes such a distinction (how firms react in IR practices when they perform excellence in three aspects of sustainability), and thus contributes to sustainability reporting and IR literature. Fourth, the mixed evidence on the relationship between sustainability performance and SD practices provided by previous empirical sustainability reporting studies spurs academic ambiguity (Danisch, 2021; Hummel & Schlick, 2016). However, this relationship is scarcely explored in the Chinese context, leaving a gap in the literature.…”