The Paradox of Corporate Social Responsibility Reporting: A Literature Review on the Gap Between CSR Commitments and Corporate Misbehavior
CSR reporting, corporate misbehavior, greenwashing, stakeholder engagement, reporting standards.
DOI:
https://doi.org/10.70142/jbl.v1i3.13Keywords:
CSR Reporting, corporate misbehavior, greenwashing, stakeholder engagement, reporting standardsAbstract
This qualitative literature review explores the paradox of Corporate Social Responsibility (CSR) reporting, highlighting the gap between corporate commitments and actual behavior. The review synthesizes recent research, revealing that CSR disclosures often serve as tools for legitimacy rather than genuine accountability. Issues such as greenwashing and inconsistent reporting standards undermine the credibility of CSR reports, limiting their impact on corporate behavior. The review emphasizes the importance of stakeholder pressure in enhancing accountability and calls for standardized reporting frameworks to improve transparency. Despite the widespread adoption of CSR reporting, significant challenges remain in aligning disclosures with authentic corporate practices. This study underscores the need for concerted efforts from companies and regulators to ensure that CSR reporting promotes ethical business conduct.
References
Adams, C. A., & Abhayawansa, S. (2022). Connecting the COVID-19 pandemic, environmental, social and governance (ESG) investing and calls for ‘harmonisation’ of sustainability reporting. Critical Perspectives on Accounting, 82, 102309.
Ahmed, D., Demers, E., Hendriksen, J., Joos, P., & Lev, B. (2023). Are ESG ratings informative about companies’ socially responsible behaviors abroad? Evidence from the Russian invasion of Ukraine. Accountability in a Sustainable World Quarterly, forthcoming. Retrieved June 4, 2023, from
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4151996
Akerlof, G. A. (1970). The market for “lemons”: Quality uncertainty and the market mechanism. The Quarterly Journal of Economics, 84(3), 488–500.
Akbar, S., & Deegan, C. (2021). Analysis of corporate social disclosures of the apparel industry following crisis: An institutional approach. Accounting & Finance, 61(2), 3565–3600.
Al-Tuwaijri, S. A., Christensen, T. E., & Hughes, K. E. (2004). The relations among environmental disclosure, environmental performance, and economic performance: A simultaneous equations approach. Accounting, Organizations, and Society, 26(5–6), 447–471.
Bebbington, J., Larrinaga, C., & Moneva, J. M. (2008). Corporate social reporting and reputation risk management. Accounting, Auditing & Accountability Journal, 21(3), 337–361.
Boell, S. K., & Cecez-Kecmanovic, D. (2015). On being 'systematic' in literature reviews. Journal of Information Technology, 30(2), 161-173.
Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77-101.
Cho, C. H., & Patten, D. M. (2007). The role of environmental disclosures as tools of legitimacy: A research note. Accounting, Organizations and Society, 32(7–8), 639–647.
Christensen, D. M. (2016). Corporate accountability reporting and high-profile misconduct. The Accounting Review, 91(2), 377–399.
Christensen, H. B., Hail, L., & Leuz, C. (2021). Mandatory CSR and sustainability reporting: Economic analysis and literature review. Review of Accounting Studies, 26(3), 1176–1248.
Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2008). Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society, 33(4–5), 303–327.
De Villiers, C. J., & Alexander, D. (2014). The institutionalisation of corporate social responsibility reporting. The British Accounting Review, 46(2), 198–212.
Dhaliwal, D. S., Li, O. Z., Tsang, A., & Yang, Y. G. (2012). Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure. The Accounting Review, 87(3), 723–759.
Dowling, J., & Pfeffer, J. (1975). Organizational legitimacy: Social values and organizational behavior. The Pacific Sociological Review, 18(1), 122–136.
Dube, S., & Zhu, C. (2021). The disciplinary effect of social media: Evidence from firms’ responses to Glassdoor reviews. Journal of Accounting Research, 59(5), 1783–1825.
Einwiller, S. A., Carroll, C. E., & Korn, K. (2010). Under what conditions do the news media influence corporate reputation? The roles of media dependency and need for orientation. Corporate Reputation Review, 12(4), 299–315.
European Commission (EC). (2021). Corporate sustainability reporting. Retrieved May 31, 2021, from https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting/non-financial-reporting_en.
Fiechter, P., Hitz, J. -M., & Lehmann, N. (2022). Real effects of a widespread CSR reporting mandate: Evidence from the European Union’s CSR Directive. Journal of Accounting Research, 60(4), 1499–1549.
Gough, D., Oliver, S., & Thomas, J. (2012). An introduction to systematic reviews. Sage.
Hahn, R., & Lülfs, R. (2014). Legitimizing negative aspects in GRI-oriented sustainability reporting: A qualitative analysis of corporate disclosure strategies. Journal of Business Ethics, 123(3), 401–420.
Harjoto, M. A., & Jo, H. (2011). Corporate governance and CSR nexus. Journal of Business Ethics, 100(1), 45–67.
Hoi, C. K., Wu, Q., & Zhang, H. (2013). Is corporate social responsibility (CSR) associated with tax avoidance? Evidence from irresponsible CSR activities. The Accounting Review, 88(6), 2025–2059.
Ioannou, I., & Serafeim, G. (2017). The consequences of mandatory corporate sustainability reporting. The Oxford Handbook of Corporate Social Responsibility, Vol. 2, Oxford University Press.
Kim, E. H., & Lyon, T. P. (2011). Strategic environmental disclosure: Evidence from the DOE’s voluntary greenhouse gas registry. Journal of Environmental Economics and Management, 61(3), 311–326.
Kumandang, C., & Hendriyeni, N. (2021). Corporate Social Responsibility, Corporate Governance dan Manajemen Laba pada Perusahaan Manufaktur di Indonesia Tahun 2015-2019. Journal of Management and Business Review, 18(2), 193-208. https://doi.org/10.34149/jmbr.v18i2.273
Kumandang, C., Hendriyeni, N.S., 2021. Do awarded companies have fewer earnings management practices?. 1st Edition ISBN9781003196013: CRC Press.
Mahoney, L. S., Thorne, L., Cecil, L., & LaGore, W. (2013). A research note on standalone corporate social responsibility reports: Signaling or greenwashing? Critical Perspectives on Accounting, 24(4–5), 350–359.
Mattingly, J. E., & Berman, S. L. (2006). Measurement of corporate social action: Discovering taxonomy in the Kinder Lydenburg Domini ratings data. Business & Society, 45(1), 20–46.
Merkl-Davies, D. M., & Brennan, N. M. (2007). Discretionary disclosure strategies in corporate narratives: Incremental information or impression management? Journal of Accounting Literature, 26, 116–194.
Moneva, J. M., Archel, P., & Correa, C. (2006). GRI and the camouflaging of corporate unsustainability. Accounting Forum, 30(2), 121–137.
Plumlee, M., Brown, D., Hayes, R. M., & Marshall, R. S. (2015). Voluntary environmental disclosure quality and firm value: Further evidence. Journal of Accounting and Public Policy, 34(4), 336–361.
Reitmaier, C., Schultze, W., & Vollmer, J. (2024). Corporate responsibility and corporate misbehavior: Are CSR reporting firms indeed responsible? Review of Accounting Studies. https://doi.org/10.1007/s11142-024-09850-8
Snyder, H. (2019). Literature review as a research methodology: An overview and guidelines. Journal of Business Research, 104, 333-339.
Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–374.
Torraco, R. J. (2005). Writing integrative literature reviews: Guidelines and examples. Human Resource Development Review, 4(3), 356-367.
Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence‐informed management knowledge by means of systematic review. British Journal of Management, 14(3), 207-222.
Wajong, B. E. R., Irawan, D., Wylen, & Bernarto, I. (2020). Persepsi Karyawan pada CSR, Keterlibatan Karyawan, dan Kepemimpinan Etis pengaruhnya terhadap Kreatifitas Karyawan. Jurnal Administrasi Bisnis, 10(2), 72–79. https://doi.org/10.35797/jab.v10.i2.72-79
