Companies Should Be Required to Provide Accurate CSR Reports

Normativity and Legitimacy of CSR Disclosure: Evidence from France In this article (published in 2015) by Jean-Noel Chauvey and colleagues the theme is about companies in France following (or not following) laws about disclosure of corporate social responsibility. The law requires companies to give information to stakeholders on the environmental and social impacts of their activities. In 2001 France was one of the very few countries that passed a law requiring corporations to report their actions regarding corporate social responsibility (CSR). But by 2003, only 35% of French corporations were following the law completely.

The article goes on to review the different levels of cooperation with the law; are corporations being honest and open -- or are they dishonest? On page 791 the authors explain that "poor compliance" by companies could be explained because the law was too vague and it did not spell out punishment for corporations that didn't follow the law (Chauvey, 791).

The authors explain that in trying to determine how good the CSR reporting has been, what is important is not just "how much" and "what" the companies are reporting, but the "quality of the information" is very important (Chauvey, 792). Chauvey and colleagues investigated the compliance of 120 companies in 2004, and of the 117 that did file a report, 26 did not provide any specific information on their CSR activities. So it is clear that not every company is following the law.

The authors of this article gave a number grade to the CSR reports based on averaging the quality (or lack of quality) of what was reported. For example, when it comes to being able to verify what was reported, the 2004 reports only got a mean score of 2.21 (out of a possible 5); when it comes to environmental disclosures, the 2004 reports only got 2.42 (out of 5) (Chauvey, 797).

Regarding the CSR reports for the year 2010, they were better than the CSR reports from 2004, and by 2012 the CSR disclosures have become more complete but "quality remains low" (Chauvey, 800). Effect of Financial Reporting Quality on Sustainability Information Disclosure This article (Martinez-Ferrero and colleagues), is about companies' CSR reports (on social, environmental, and financial information). Many companies have caused problems for the planet and for society because of poor environmental and social practices.

There is a need for companies to produce financial reports, but those reports have had a "weakness" because they failed to provide important information about the social and environmental aspects of a company's behavior (Martinez-Ferrero, 2015). So, there needs to be more information than just finances; good CSR reports address a company's relations with suppliers, customers, and the workforce and those good reports should include information about "social contributions, public safety, (and) safety and health in the workplace" (Martinez-Ferrero, 46).

Meanwhile, the authors explain that those companies that provide "high quality financial information" tend to be more ethical (Martinez-Ferrero, 45). The companies with verifiable financial disclosures also seem to be more responsible when it comes to social issues. The article provides information on two theories that help to understand whether a company is providing an honest and complete CSR report.

The Stakeholders Theory holds that the way in which a company "generates sustainable wealth is determined by their relations to different relevant groups of stakeholders" -- but not the society that they serve (Martinez-Ferrero, 47). The Legitimacy Theory on the other hand links the social interests with business interest, which means this theory expects a company to think wider than just financial goals; this theory says that the interests of all, not just stakeholders, should be taken into consideration.

In its conclusion, the article states again that companies that provide the highest quality of financial information are " .. less inclined to carry out unethical actions" and less apt to get involved in "EM" (earnings management, which means manipulating financial data through creative accounting procedures). Effects of quality and corporate social responsibility on loyalty.

This article (by Chomvilailuk and Butcher) makes it clear that when a company (in this case, a bank in Australia) is socially responsible, and customers know it, it has "significant effects on purchase intention and positive word of mouth" (Chomvilailuk, 2014). This paper is in part about customer loyalty when it comes to perceptions of CSR by a bank; the CSR categories relating to this research are philanthropy, business practices, or product-related issues. The article explains that typically, when customers size up corporate abilities, they do it based on " ..

service quality, trust, and value"; and this article seeks also to find out how good corporate social responsibilities influence the loyalty of customers. The authors are not saying that CSR will become more important to customer loyalty than a bank's corporate abilities, but it is worth exploring how impactful CSR is and will be. There is lots of evidence in Europe (UK Ethical Corporation) and Asia (CSR Forum) that countries are encouraging their businesses to be ethical and socially responsible.

The article reports on several existing studies that find positive relationships between companies that are known for CSR and customers' belief in those companies. Other studies though have found "mixed results" when CSR is the only variable studied in regards to a customer's loyalty. Still, on page 942 the authors point out that when a company put out an advertisement with a "cause-related marketing message" included in the ad, that ad brought more favorable attitudes towards the company than the same ad without the cause-related message.

In other words, people respond when they know a company is trying to help a community group, whether it is homelessness or hunger-related campaigns (Chomvilailuk, 942). Consumers will respond when they know that a corporation is reaching out to help others. While the authors of this article have not found a previous study that directly links a company's CSR to consumer loyalty, their study showed customers can become loyal if they believe that the corporation really is sincere about reaching out to the community.

Regulating Quality in CSR Reporting in Australia Writers Mia Rahim and Victor Vicario explain that there is no question that CSR helps society, but as to what is the best way of making CSR reporting better, that answer is not available yet (the article was written in December, 2015, in the New Zealand Universities Law Review). The fact is that if corporations are left on their own to report their CSR, with no regulations or laws to guide them, they may neglect to do a good job reporting CSR (Rahim, 2015).

What the writers in this article believe is that government should "ensure" that all corporations report their CSR "in a scientific manner," and that way the consumers in the market can compare what one corporation is doing in a positive way, with what another corporation is trying to do as well.