José M. Moneva

Corporate social reporting and reputation risk management

Purpose - The purpose of this paper is to explore the proposition that corporate social responsibility reporting could be viewed as both an outcome of, and part of reputation risk management processes. Design/methodology/approach - The paper draws heavily on management research. In addition, an image restoration framework is introduced. Findings - The concept of reputation risk management could assist in the understanding of corporate social responsibility reporting practice. Originality/value - This paper explores the link between reputation risk management and existing theorising in social accounting.

GRI and the camouflaging of corporate unsustainability

Abstract Sustainable development or sustainability concept has become increasingly relevant in corporate executives agenda after Brundtland Report was launched in 1987. Social and environmental accounting and reporting plays a relevant role in this context to analyse sustainability performance of the organizations. The Global Reporting Initiative (GRI) sustainability reporting guidelines were developed as a way of helping organizations to report on their environmental, social and economic performance and to increase their accountability. However, evidence from practice seems to show a different reality. Some organizations that label themselves as GRI reporters do not behave in a responsible way concerning sustainability question, like gas emissions, social equity or human rights.

Environmental disclosures in the annual reports of large companies in Spain

The objective of this paper is to analyse the environmental reporting practices found in the annual reports published by companies operating in Spain, as well as to determine the evolution of these practices during the period 1992–4, on the basis of stakeholder theory. In order to carry out this analysis, we have examined the annual reports of seventy large companies operating in industries considered to be sensitive for the environment. The reporting practices have been grouped into a number of categories, as follows: type of environmental reporting provided; sections of the annual report devoted to environmental reporting; corporate environmental policies and projects; natural environment protection activities and achievements; and disclosure of environmental data in the annual accounts. Finally, we have considered whether the fact that a company is quoted on the stock market, or that a parent company is foreign-based, or that it belongs to a regulated sector, are differentiating factors with respect to environmental reporting behaviour. The main conclusions are as follows: The environmental reporting of these sample companies has a fundamentally narrative character, although there has been an increase in both quantitative and financial reporting, as well as in the number of companies that are reporting. The factors analysed do not allow us to detect significant differences, except for whether the parent company is foreign-based. As a consequence, there is no significant evidence that during the period analysed the environmental reporting behaviour of Spanish company management has tried to satisfy their stakeholders.

Accountability and accounting regulation: the case of the Spanish environmental disclosure standard

Mandatory environmental reporting has been seen as a way of increasing accountability of organizations, regarding environmental issues. This paper is concerned with one standard, which requires all the Spanish companies to include environmental disclosures in their financial statements. From the survey of the rationale of the disclosure requirements we suggest that more sound environmental initiatives are obscured by an end-of-pipe emphasis. Additionally, from the research of the reporting activity of a sample of companies a low compliance level results, with roughly 80% of companies not providing any environmental information. In addition, those companies who are reporting some environmental information neglect those aspects of the regulation that are not in their interests to report. The interpretation of these findings, using the theoretical distinction between administrative and institutional reforms, leads us to conclude that the Spanish standard on environmental disclosure is insufficient to enable new accountability relationships and to empower stakeholders.

The corporate stakeholder commitment and social and financial performance

Purpose – To determine whether the strategic commitment of the company to its stakeholders is positively related to its social and financial performance.Design/methodology/approach – This paper analyses the mission statements and the sustainability reports, of a sample of 52 Spanish listed firms (70 per cent Madrid stock index capitalization). The vision, mission and values of the company will define its strategic stakeholder or shareholder orientation. In the process of evaluation of the social performance of the firm it is built a scale (strategic consistency index (SCI)) which considers the quality of the sustainability reporting using the GRI Guidelines. Some traditional financial and economic indicators are used to analyse the companys financial performance.Findings – Results show a not very high level of the stakeholder approach in Spanish companies, a high level of publication and quality of sustainability reports and, finally, a positive and not significant relationship between these variables an...

Sustainable supply chain and company performance

Purpose – This paper aims to investigate the link between a sustainable supply chain and companies’ financial performance (FP) and provide empirical evidence about the relationship between these two constructs. This link is an important, but still unclear, subject. Design/methodology/approach – Multivariate measures of sustainable supply chain performance and companies’ FP are used for Granger causality tests on a large, diverse sample of 3,900 companies in a time frame of eight years (2004-2011). Findings – Results indicate general bidirectional causality between sustainable supply chain performance and companies’ margins and revenue. However, the link between firms’ profitability and sustainable supply chain performance is unidirectional. In addition, the recent financial crisis altered this link between the studied constructs. Finally, a wide diversity in relationship patterns between sustainable supply chain performance and companies’ FP emerges when the full sample is divided into different geographi...

Are stock markets influenced by sustainability matter? Evidence from European companies

The emergence of ethical investment is a sign of the increasing interest of shareholders in the impact of corporate activities on sustainable development. The objective of this article is to analyse the relationship between the sustainable performance of a company and its financial performance measured by stock market value. Belonging to the Dow Jones Sustainability Index, disclosing a Global Reporting Initiative Sustainability Report and Sustainable Ratings are used as proxies for sustainability. This article is based on sustainability as a multivariate issue, and exploratory factor analysis is used to model the sustainability performance of a sample of European companies.

Sustainability stock exchange indexes and investor expectations: Multivariate evidence from DJSI-Stoxx

ABSTRACT This research sets out to assess the market reaction to events related to inclusion in and exclusion from the Dow Jones Sustainability Stoxx Index, which are associated with good and bad levels of Corporate Social Performance. The present work introduces a new effect—non-exclusion of the index—which reflects a corporate effort on maintaining higher levels of sustainability. An event study approach is applied with the aim of assessing market reactions to the announcement of changes in the index composition and the effective release to the market of the new sustainable equity index for an annual period. A novelty of this research is the use of a Multivariate Regression Model, with the purpose of mitigating some limitations identified in previous studies when «event clustering» is observed. The empirical analysis is focused on five years sliding window (2003–2007), a period with a relevant increase of the Socially Responsible Investment worldwide.

Do social and environmental screens influence ethical portfolio performance? Evidence from Europe

This work aims to test whether social and environmental screening processes could determine the financial performance of ethical or Socially Responsible Investment (SRI) strategies in the European context. We compare the risk-adjusted returns and systematic risk levels obtained by the two mainstream SRI equity indexes in Europe with those achieved by their official benchmarks. We find that, although these SRI indexes do not underperform their benchmarks in terms of risk-adjusted returns, they experience higher levels of risk. Additionally, the results show that higher screening intensity results in higher risk for the SRI indexes. Furthermore, the underperformance in terms of risk associated with the SRI indexes is worse in periods when there is a market downturn. This may indicate that SRI indexes are more sensitive to changes in the market cycle, because SRI indexes include companies that are more affected by market fluctuations.

PATENTES VERDES EN EL SECTOR MANUFACTURERO: EL IMPACTO DE LOS RECURSOS Y LAS CAPACIDADES DE LAS EMPRESAS

This paper, which is of interest to practitioners, will analyse companies in the manufacturing sector that hold Spanish and European environmental patents, linking the registered green patents with the economic and financial characteristics of the companies. Specifically, the relationship between green patents and the collaboration of companies with research and development (R&D) centres is analysed. The results of surveying an ad-hoc database comprising 1606 Spanish companies indicate that the ways in which the companies collaborate with R&D organisations can shed light on green patent holdings in the Spanish manufacturing companies.Moreover, the authors find that financial performance, age, and size are all significant factors in the development of green patents.