Do companies reduce CSR disclosures during recessions?
Pinto, S. and de Villiers, C. (2012). Do Companies Reduce CSR Disclosures during Recessions? Paper to be presented at 11th Australasian Centre on Social and Environmental Accounting Research (A-CSEAR) Conference, University of Wollongong, Wollongong, NSW, 2-4 December 2012.
Permanent Research Commons link: https://hdl.handle.net/10289/6820
Purpose: We investigate trends in prevalence and volume of CSR disclosure by the top 50 New Zealand listed companies from 2005 to 2010, i.e. from before until after the initial impact of the global financial crisis (GFC). Design/methodology/approach: We examine the annual reports of each of the companies between the years 2005 and 2010, as well as company websites for standalone CSR reports. We count the number of pages of any social and environmental disclosures in annual reports and in standalone reports for each year and use this data to assess whether overall trends can be discerned. We compare CSR disclosure trends with changes in business confidence. Findings: Our results reveal a general upward trend in CSR disclosures over the six-year period. The number of companies disclosing in their annual reports and standalone reports increased from 2005 to 2007. However, during the initial drop in business confidence in 2008 (brought on by the GFC), CSR disclosures in annual reports and standalone reports remained consistent overall with 2007. Companies operating within industries more prone to public scrutiny or those industries more sensitive to the social and environmental impacts of corporate operations actually increased their CSR disclosures, whereas other companies decreased their disclosure for an overall constant level. The upward trend resumed in 2009, but when business confidence again suffered in 2010, overall annual report CSR disclosures decreased, whereas overall standalone report disclosure continued the upward trend. In sum, during times of reduced business confidence, companies in non-environmentally-sensitive and non-socially-sensitive industries appear to buck the overall trend towards increased CSR disclosures. Originality: Many studies conclude that there is an upward trend in CSR disclosures over time. Other studies examine the impact of particular events on disclosure. However, we are not aware of any study that examines the impact of the initial phase of the GFC on the overall upward trend in CSR disclosures, i.e. whether companies subjugate CSR in favour of more pressing business priorities during times of reduced business confidence.
Copyright 2012 The Authors.
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