Corporate social responsibility reports (CSR) are a key tool for regulating and monitoring sustainability activities. This research is making them more reliable.
The problem
Corporate social responsibility reports (CSR) are an increasingly important way for companies to achieve transparency, and a key tool for both investors and policymakers regulating and monitoring sustainability activities. Unfortunately, there is significant concern and allegations that companies may be greenwashing and that the CSR reports are unreliable. However, there is surprisingly little direct empirical evidence of the degree of unreliability.
The research
This research provides the first direct analysis of the scale of unreliable information in CSR reports by examining the frequency and magnitude of restatements or revisions of CSR reports for errors for the Global Fortune 250 (the largest 250 companies by revenue). The team has found that 39% of G250 CSR reports include one or more line-items that had an error and that there is a bias in the error toward overstatement. The bias is likely more related to changes in measurement technologies, rather than deliberate bias, and points to the evolving nature of sustainability reporting.
The impact
Findings from Restatement of CSR Reports: Frequency, Magnitude, and Determinants will help investors better judge the reliability of CSR reports and inform regulators and auditors on ways to enhance the reliability of CSR reporting.
Department: Accounting
Area: Corporate reporting and sustainability
Researchers
Sustainable Development Goals
We align our research activity with the United Nations' Sustainable Development Goals (SDGs).