Multiple global CSR pronouncements and CSR harmonisation in Europe

Abstract

Purpose: Past literature reveals strong country-of-origin effects in corporate social responsibility (CSR) reporting. The purpose of this study is to examine whether use of multiple CSR frameworks/standards/guidelines (hereafter, CSR pronouncements) mitigates this, that is, promotes harmonisation of CSR reporting. Design/methodology/approach: A sample of 2,443 firms-year observations is drawn from 16 European countries to test voluntary CSR reporters. Findings: These tests provide evidence that upward harmonisation in CSR reporting increases as firms apply more CSR pronouncements. The results of this study suggest that use of multiple global CSR pronouncements reduces selective reporting and promotes harmonisation of CSR reports. These results are robust after controlling for endogeneity arising from omitted variables and reverse causality. Practical implications: These findings should be of interest to preparers and users of CSR reports, as well as to regulators, standard-setters and academics. Originality/value: To the best of the authors’ knowledge, this is the first research to examine harmonisation of CSR reporting considering multiple CSR pronouncements in longitudinal data. The multiple CSR pronouncements setting should provide in-depth understanding of CSR reporting and fill the gap in the literature that tends to focus on a single CSR pronouncement. These findings should be of interest to preparers and users of CSR reports, as well as to regulators, standard-setters and academics.