Quality of CSR Reporting: Mandatory or Voluntary Reporting?

Annkatrin Mies, Peter Neergaard

Research output: Chapter in Book/Report/Conference proceedingBook chapterResearchpeer-review


In 2014, the European Union (EU) adopted the non-financial reporting Directive (2014/95/EU) making the disclosure of certain non-financial topics mandatory for large listed companies. They are required to report on policies, actions and outcomes regarding their environmental impact, social and employee matters, impact on human rights and corruption. Denmark introduced mandatory corporate social responsibility (CSR) reporting already in 2009, while Germany had no specific legislation on CSR reporting before 2017. Some authors allege that regulation positively impacts CSR reporting, while others argue that the voluntary nature of CSR reporting is essential (Romolini, Fissi, & Gori, 2014). Critics of mandatory reporting claim that non-financial reporting should develop bottom-up, as mandatory one-size-fits-all solutions are inappropriate given the differences among companies (ICC, 2015). The aim of this chapter is to evaluate the effect of legislation on reporting quality by comparing Denmark with a long tradition for mandatory reporting and Germany introducing mandatory rather recently. However, a rich body of literature exists on factors impacting CSR reporting other than legislation. These are among others: firm size, ownership structure, industrial sector and culture (Hahn & Kühnen, 2013.)The chapter applies a content analysis of 150 CSR reports from German and Danish listed companies between 2008 and 2017 from four different industrial sectors. The chapter finds that mandatory reporting improves overall report quality by lifting the quality floor, yet, without lifting the quality ceiling. Size is important as improvements in reporting are largest in small and medium-sized companies. Companies in environmentally sensitive sectors tend to disclose more relevant environmental information than companies in less sensitive sectors. Both culture and ownership structure has a moderating effect on report quality.
Original languageEnglish
Title of host publicationGovernance and Sustainability
EditorsDavid Crowther, Shahla Seifi
Number of pages30
Place of PublicationBingley
PublisherEmerald Group Publishing
Publication date2020
ISBN (Print)9781800431522
ISBN (Electronic)9781800431515, 9781800431539
Publication statusPublished - 2020
SeriesDevelopments in Corporate Governance and Responsibility


  • Disclosure
  • Dialogue
  • Development
  • Size
  • Isomorphic pressure
  • Longitudinal study

Cite this