CSR Performance and the Readability of CSR Reports: Too Good to be True?

Zhihong Wang*, Tien Shih Hsieh, Joseph Sarkis

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

39 Citations (Scopus)

Abstract

Using a manually collected sample of 331 corporate social responsibility (CSR) reports issued by US public companies, we examine the relationship between the CSR performance and the readability of CSR reports. We adopt three indices – Fog, Kincaid, and Flesch – to measure the readability of CSR reports and draw upon two databases – ESG and KLD – to measure CSR performance from both environmental and social perspectives. The results show a significant positive relationship between CSR performance and the readability of CSR reports, indicating that companies with stronger CSR performance are more likely to have CSR reports with higher readability. Further, the association of the readability of CSR reports with social performance is stronger than with environmental performance. This study helps investors more comprehensively evaluate the CSR information disclosed on CSR reports. Our results also point to the importance of regulating the narrative disclosure of CSR information, especially social performance.

Original languageEnglish
Peer-reviewed scientific journalCORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL MANAGEMENT
Volume25
Issue number1
Pages (from-to)66-79
Number of pages14
ISSN1535-3958
DOIs
Publication statusPublished - 04.07.2017
MoE publication typeA1 Journal article - refereed

Keywords

  • 512 Business and Management
  • readability
  • corporate social responsibility
  • corporate responsibility reports
  • environmental
  • social
  • greenwashing

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