CSR reporting practices and the quality of disclosure: An empirical analysis

By Giovanna Michelon, Silvia Pilonato, Federica Ricceri. 2015

1,038 citations recorded by the source corpus.

Research on CSR disclosure points to an increasing lack of completeness and decreasing amount of credibility in the information reported, as well as concerns about overall reporting practices. The aim of this paper is to investigate the (ab)use of three CSR reporting practices: the use of stand-alone reports, assurance, and reporting guidance. These practices may be the outcome of a substantive approach to CSR undertaken to carry out duties of accountability to stakeholders, or conversely they could represent symbolic actions intended to portray corporations as genuinely committed to CSR. Thus, we investigate the use of these three practices in relation to disclosure proxies that capture the quality of disclosure along three different yet complementary dimensions: the content of the information disclosed (what and how much is disclosed), the type of information used to describe and discuss CSR issues (how it is disclosed) and the managerial orientation (the corporate approach to CSR). We find that, on average, companies that use these practices do not provide a higher quality of information, which we interpret as evidence of a symbolic use of these practices. Nevertheless, for those companies providing performance-related disclosures, we obtain limited evidence indicating that disclosures by GRI followers are more likely to be balanced, comparable and precise. Overall, our evidence supports increasing scepticism about the use of CSR reporting practices as tools used to enhance perceived accountability.

Subfields: Accounting, Information Systems and Management, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/f9a827ce1f89d58f52d496f87e3f0e19949b49a8

How researchers see this paper

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In Accounting

1. Yasser Eliwa
2. H. Al‐Shaer
3. Ahmed Saleh

In Information Systems and Management

1. Yasser Eliwa
2. H. Al‐Shaer
3. Ahmed Saleh

In Strategy and Management

1. Yasser Eliwa
2. H. Al‐Shaer
3. Ahmed Saleh

Citations in the corpus

• Sustainability reporting quality and post‐audit financial reporting quality: Empirical evidence from the UK (2020, background): “This study examines the UK context, which is characterised by high institutional pressures (Jensen & Berg, 2012; Michelon, Pilonato, & Ricceri, 2015) and increasing levels of mandatory social and environmental requirements (Romero et al., 2019; Zorio, García-Benau, & Sierra, 2013).”
• Saying more with less? Disclosure conciseness, completeness and balance in Integrated Reports (2017, neutral): “…strategy, similarly to the obfuscation strategies detected in narrative disclosures examined in financial accounting (cf. Merkl-Davies and Brennan, 2007) and sustainability/environmental reporting studies (e.g. Arena et al., 2015; Cho et al., 2010; Michelon et al., 2015; Plumlee et al., 2015).”
• CSR Disclosure in Polish-Listed Companies in the Light of Directive 2014/95/EU Requirements: Empirical Evidence (2017, neutral): “Nowadays, companies already report about CSR activities on a voluntary basis, but research on sustainable disclosure [47] has pointed to an increasing incompleteness in the information reported.”
• ESG practices and the cost of debt: Evidence from EU countries (2019, methodology): “Also, Michelon et al. (2015) find that UK listed firms tend to dilute information in their CSR stand-alone report with other pieces of irrelevant information, portraying the firm as CSR committed and camouflaging important items of its disclosure.”