Voluntary Corporate Social Responsibility Disclosure

Abstract

This article recommends that the U.S. Securities and Exchange Commission (SEC) not regulate corporate social responsibility (CSR) disclosure. Accounting disclosures, whether voluntary or regulated, increase transparency and credibility for all companies. Regulated disclosure increases costs and results in few gains; thus, this article recommends against CSR disclosure regulation. Varying definitions of CSR and nonuniform disclosure make CSR project analysis difficult for investors and analysts. This article presents a model that defines CSR items such as organizational size, CSR project size, amount invested in the project, and what standard companies use for CSR definition and reporting for easy voluntary disclosure. Based on a review of the literature, this article recommends that CSR disclosure stay voluntary. The model suggests allowing SEC oversight in the collection and verification of information but not regulating CSR disclosure. This article suggests that the SEC issue a CSR “seal of approval,” increasing firm values, stock prices, and firm legitimacy.

Does persistence explain ESG disclosure decisions?

“…This study contributes to the literature on the adoption of corporate ESG disclosure strategies (Bansal & Roth, 2000;Brammer & Pavelin, 2008;Delmas & Toffel, 2008;Doshi, Dowell, & Toffel, 2013;Gamerschlag, Moller, & Verbeeten, 2011;Huang, 2013;Rodriguez & LeMaster, 2007;Sharma, 2000;Sharma, Pablo, & Vredenburg, 1999;among others). The results show that persistence in management's approach to ESG disclosure, as proxied by managerial tenure, plays an important role in inhibiting more complete, transparent disclosures.…”

“…For each turnover and match firm, I compute the change in ESG score and the contemporaneous change in firm characteristics from the fiscal year before the turnover to the fiscal year of the turnover, (t − 1) → t, from the fiscal year before to the fiscal year after, (t − 1) → (t + 1), and from the fiscal year before to two fiscal years after, (t − 1) → (t + 2). All specifications include fixed effects for fiscal year of the change and industry using Fama and French (1997) 2013; Rodriguez & LeMaster, 2007;Sharma, 2000;Sharma et al, 1999; among others). The findings by Lewis et al (2014) suggest that manager characteristics affect a firm's likelihood to 'acquiesce to institutional pressures' to initially disclose environmental information.…”

Does context matter for sustainability disclosure? Institutional factors in Southeast Asia

“…In the light of several corporate scandals and the financial crisis, diverse groups of stakeholders have argued for more active governmental actions in relation to SD to mitigate the high level of distrust towards companies' self-regulatory behaviours . Despite criticism against the implementation of hard regulations (Adams & Frost, 2007;Overland, 2007;Rodríguez & LeMaster, 2007), mandatory disclosure (MD) is expected to impose additional regulatory pressures on firms (Wang, Tian, Fan, & Luo, 2017), allow non-financial stakeholders to increase their demands and potentially enable transfer of wealth from shareholders to other stakeholder groups .…”

Exploring stakeholders’ dialogue and corporate social responsibility (CSR) on Twitter

“…Despite the lack of consensus on how to define the term (Bartlett;Devin, 2011;Carroll, 1999;Scherer;Palazzo, 2007), it is widely accepted that CSR has redefined the relationship between business and society through its attempt to strike a balance between business development and social as well as environmental aspects. CSR initiatives are voluntary in nature LeMaster, 2007) and intended to enhance the relationship between an enterprise and its audience. CSR must be integrated into the corporate strategy (Porter;Kramer, 2006) and strengthen the business strategy of the enterprise.…”