CHAPTER 15
INTERNATIONAL CORPORATE SOCIAL REPORTING
Chapter Outline
1. Traditionally, companies have focused on economic aspects in external reporting.
However, in recent years there has been a growing global interest in CSR, based
on sustainable development.
2. Sustainable development requires new and innovative choices and ways of
thinking.
3. The meaning of CSR is derived from the notion of organizational societal
responsibility, which indicates that organizations should be accountable for
the social impact of their activities.
4. Organizational social responsibility has been explained in terms of theories
such as legitimacy theory and stakeholder theory. Stakeholder theory posits
that CSR is in response to the stakeholder demand for such information, while
according to legitimacy theory CSR is a means to deal with firms’ exposure
to political and social pressures.
5, CSR practices of companies are driven by many factors, including the level of
media attention to CSR, and cultural factors (for example, the attitude towards
information disclosure at national and organizational levels).
6. Climate change has implications for CSR practices of companies globally.
7. As a result of the attempts at dealing with climate change, some key concepts
have emerged, such as emissions trading, carbon footprints, carbon offsets,
carbon funds, carbon neutral, and carbon tax.
8. CSR disclosures are made on a voluntary basis in many countries.
9. There are mechanisms at the international level (e.g., Global Reporting
Initiative, Kyoto Protocol and European Union Emissions Trading Scheme) as
well as local level (e.g., Chicago Climate Exchange), to regulate CSR
practices by companies.
10.GRI’s fourth generation guidelines (G4) issued in 2013, represents a
standardized approach to reporting, encouraging the degree of transparency
and consistency that is required to make information useful and credible to
markets and society.
11.An increasing number of companies around the world are reporting and
assuring their emissions information. The recognition of the importance of CSR
is reflected in the extant Emissions Trading Schemes operating in Europe (the
European Union ETS), North America (the North American Regional
Greenhouse Gas Initiative and Alberta’s Climate Change and Emissions
Management Act), New Zealand (the New Zealand ETS) and Japan (Japan’s
Voluntary ETS). Also China has announced it will introduce emissions trading
progressively, commencing in a number of key cities and provinces including
Beijing, Shanghai and Guangdong, during the 12th Five Year Plan period (2011-
2015).
12.One of the difficulties in this area is trust. For example, if companies are not
telling the truth about what they have not reported, it will be difficult to trust
them that they are telling the truth about what they have reported.