The Virtuous Circle of Corporate Social Performance and Corporate Social Disclosure

Abstract

Previous literature in the field of corporate social responsibility investigates whether corporate social performance can be seen as a determinant of corporate social disclosure or, conversely, if corporate social disclosure is a determinant of corporate social performance. The aim of this paper is to join these two streams of research in a unique theoretical model, which can demonstrate that there is a mutual interaction between performance and disclosure. This can result, in the long run, in a virtuous circle where higher social performance generates future higher social disclosure and this determines higher future social performance and so on. An analytical model has been adopted to demonstrate the research hypothesis. Gathering data from the portfolios of the European Socially responsible funds (SRFs) listed on the Morningstar platform in 2010, the study analyzed 160 social reports published by 80 companies during 2008 and 2009. Findings, by demonstrating the non-one-way relationship between social performance and social disclosure, confirm the existence of a mutual influence between the results gained in different CSR areas and the capability to control and communicate such performance. In this way, the paper provides not only theoretical insights, but also practical implications for managers that are required to put in place responsive and effective initiatives towards the increasing pressure exerted by the internal and external environments in which they operate.

Environmental, social, and governance and company profitability: Are financial intermediaries different?

“…Indeed, the growing concern for environmental problems is driving banking institutions to adopt sustainability measures in terms of environmental strengths; thus, this result is encouraging in terms of expected profitability as well as global development. In line with the best practices adopted within companies worldwide, the major confirming the virtuous cycle as in Gangi and D'Angelo (2016) and Waddock and Graves (1997). From a theoretical perspective, given that the sample is only composed of U.S. companies, we are not able to understand differences resulting by a cross-country sample construction and draw universal conclusion for different legislative frameworks worldwide.…”

“…In line with the best practices adopted within companies worldwide, the major banking institutions have been working for some years now to reduce their ecological footprint and to promote environmental awareness (e.g., the top five U.S. banks in terms of market capitalization- confirming the virtuous cycle as in Gangi and D'Angelo (2016) and Waddock and Graves (1997). In line with the best practices adopted within companies worldwide, the major banking institutions have been working for some years now to reduce their ecological footprint and to promote environmental awareness (e.g., the top five U.S. banks in terms of market capitalization- confirming the virtuous cycle as in Gangi and D'Angelo (2016) and Waddock and Graves (1997).…”

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“…Therefore, when there is a food scandal or just a simple concern, consumers begin to beware of the effectiveness of regulations and the mentioned lack of information turns into a lack of trust. For these reasons, consumers are more and more asking for additional information regarding CSR policies employed especially by big players in the food sector, in order to open the aforementioned black box and better orient their consumption habits, with evident effects on the importance of CSD (Gangi & D'Angelo, 2016) and of reputation.…”

“…The statistical analysis includes the use of linear regression models (OLS) to analyse relations between the environmental performance (ENV) and the intellectual capital (IC). According to the purpose of the paper and to previous research (Gangi & D'Angelo, 2016;Nelling & Webb, 2008)…”

“Make” or “Buy” the Choice of Governance Modes for Corporate Social Responsibility Projects from a Stakeholder Management Perspective

“…This aspect contributes to make the analysis more objective and consistent with the message that the companies have sought to communicate through their social disclosure (Gangi & D'Angelo, 2016).…”