Corporate Social Responsibility Reporting

Umra Mohammad Baig & Jens Anselmo Skydsgaard

Student thesis: Master thesis

Abstract

The purpose of this thesis is to examine, why challenges arise when reporting about corporate social responsibility (CSR), and how these challenges affects the corporations and investors. These challenges emanate from corporations increasingly engaging in CSR-activities, based on increasing demand from society, therefore requiring high quality data to ensure credibility. The current regulations for CSR-reporting is vague and confusing, which makes it difficult for corporations to approach a correct compilation of the CSR-report. The focus of the thesis has been large Danish companies covered by the Danish statements act ยง99a, and institutional investors. To better understand, why challenges arise, we look at both corporations and investors. To understand the challenges, we analyzed known sustainability investing strategies, and corporations were analyzed by using neo-institutional theories. Greenwashing and information asymmetry were identified as critical challenges, for both corporations and investors. The reason why challenges arise, originates from decoupling corporations, caused by vague regulations, and therefore lack of high-quality data and comparability. This was further confirmed by the analysis of the 100 largest Danish companies, where risk and materiality assessments were the main explanations behind the lack of data and compatibility. We suggest a solution to solve the previously mentioned challenges, based on our interview with CSRspecialist Birgitte Mogensen and scientific articles. The solution contains an implementation of 2 legislative measures in the Danish statements act, this will specifically require corporations to include ESG-key figures in the annual report. CSR-information, including the ESG-key figures, must be applied on the concept of double materiality, introduced by the EU Commission in the updated guidance for non-financial reporting in 2019. The above mentioned solution will, in our opinion, result in a more transparent, comparable, and trustworthy CSR-reporting. Therefore, mitigating challenges, such as decoupling, greenwashing and information asymmetry. Thus, benefiting corporations and all the stakeholders, in terms of economic advantages and sustainable developments.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2020
Number of pages133