Corporate social responsibility (CSR) performance and stakeholder engagement: Evidence from the quantity and quality of CSR disclosures

Abstract

With increasing stakeholders' demand for information on corporate social responsibility (CSR) performance and a growing number of firms issuing standalone CSR reports, this study examines the relation between CSR performance and the quantity and quality of CSR disclosures. Drawing on signaling and political legitimacy theories of information disclosure and using a US sample of 2774 standalone CSR reports from 2003 to 2015, we find better CSR performing firms issue longer CSR reports and provide incremental information in their CSR reports relative to their annual financial reports. Furthermore, the textual content in their CSR reports is less focused on short-term issues, reflecting higher disclosure quality. In contrast, poor CSR performing firms tend exhibit lower disclosure quality as their CSR reports use more uncertain words. Our study contributes to the understanding of how CSR performance affect stakeholder engagement through the characteristics of textual content in standalone CSR reports.

What affects the quality of sustainability report texts? Evidence from China

“…However, in China, quality standards for sustainability reports are relatively vague and difficult to measure directly, as there is no standardized form of disclosure, making it difficult to evaluate the quality of sustainability reports and posing a significant challenge to improving the effectiveness of government regulation (Koh et al, 2022; Rauf et al, 2020; Rauf et al, 2021; Usman, 2020). We have developed a set of indicators to evaluate the quality of sustainability reports, using textual analysis to judge the comprehensiveness, objectivity and reliability of sustainability report texts.…”

“…However, there is currently no standardized form of disclosure for sustainability reports, and their quality criteria are relatively vague, making assessing the quality of sustainability reports difficult (Koh et al, 2022; Rauf et al, 2020; Rauf et al, 2021; Usman, 2020). The majority of available studies have used data on CSR ratings from third‐party organizations to indirectly judge the quality of sustainability reports (Brooks & Oikonomou, 2018; Fatemi et al, 2018; Khan et al, 2021; Liao et al, 2018; Rauf et al, 2021; Zhang & Chen, 2019).…”

Sustainability reporting scholarly research: a bibliometric review and a future research agenda

“…This cluster is likely to focus on the theoretical underpinnings of SR (e.g., Diouf and Boiral 2017 ; Hahn and Kühnen 2013 ; Hahn and Kühnen 2013 ; Hörisch et al 2020 ). Finally, the red-colored cluster includes keywords such as “stakeholders,“ “stakeholders’ engagement,“ “sustainability assurance,“ global reporting initiatives,“ and ‘corporate sustainability.“ This cluster is likely to explore research related to quality, assurance, and stakeholders engagement in SR (e.g., Boiral et al 2019 ; Simoni et al 2020 ; O’dwyer et al, 2011 ; Bellucci et al 2019 ; Stocker et al 2020 ; Koh et al 2022 ).…”

“…Besides, the quality of information is better when a firm produces separate sustainability reports or integrated reports than when sustainability information is disclosed in the annual reports. Furthermore, Koh et al ( 2022 ) reveal that the quality of the sustainability report of a firm is a positive function of its sustainability performance. Academic scholars highlight the issue of assurance of sustainability reports.…”

Corporate social responsibility and circular economy from the perspective of consumers: A cross‐cultural analysis in the cosmetic industry

“…In addition to generating profit, they must behave ethically, respecting the law (Wang et al, 2016). CSR encompasses a set of policies and practices integrated into the operations and decision‐making process of companies, comprising aspects of business ethics, community and environmental concerns, and human rights (Koh et al, 2022).…”