The Consumer's Impact on Reporting Quality: A Content-analysis of Danish CSR-Reports

Rasmus Garbers Foghsgaard & Johann Høj Pedersen

Student thesis: Master thesis


In 2009, the Danish Business Authority introduced the comply or explain model, which made Corporate Social Responsibility (CSR)-reporting mandatory for certain companies and created a beneficial research environment to study CSR. There are different quality frameworks for CSRreporting, which means the reports vary in length and quality. Thus, there is a need for evaluating the quality of CSR-reports. CSR is closely connected to stakeholder theory and consumers are seen as a primary stakeholder, which motivates a study focused on this particular stakeholder group. In this thesis, differences in Danish consumer-focused companies’ (CFCs) narrative quality patterns in CSRreports are investigated. Specifically, the narrative quality patterns are found through content analysis and subsequently applied in a multiple regression. Two frameworks are used as quality patterns: Sustainability Worldviews and Disclosure Quality. Sustainability Worldviews consist of five stages ranging from very weak to very strong sustainability. The Disclosure Quality is determined by the Length, Readability, Tone, Horizon- and Numerical content of the reports. Keyword frequencies and characteristics in the reports are used to determine scores in each of the categories of the frameworks. A high keyword count relative to the total wordcount gives a report a high score in a category. These scores are then used as dependent variables in a multiple regression and tested against companies’ presence in a consumer-focused industry. The combination of content- and statistical analysis focusing on consumer-focused industries is a contribution to the literature, as it uses an alternative method to analyze the quality of CSR-reports in an area calling for more attention. The results indicate a higher reporting quality in CFCs based on the narrative quality patterns. In the Sustainability Worldviews, the results show a positive relationship between Stage 5, very strong sustainability, and CFCs. The results also indicate a higher Disclosure Quality, as there is a positive relationship between CFCs and Readability, Length and Horizon-content. Together, the findings suggest that stakeholder pressure from consumers is more important compared to other stakeholders but also open a palette of other possible explanations. This calls for further research focusing on why CFCs might report of higher quality. This study also contributes with a method to validate the quality of reporting. Here, future research could aim to refine the analysis of quality in CSR-reporting by considering additional aspects of CSR-reporting narratives or by further developing the measures used in this study by applying them on different samples.

EducationsMSc in Applied Economics and Finance, (Graduate Programme) Final Thesis
Publication date2019
Number of pages147
SupervisorsYanlei Zhang