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CSR reporting and corporate performance: the role of strategic emphasis

Ruba Hamed (Department of Accounting, College of Business, Alfaisal University, Riyadh, Saudi Arabia)
Jan Smolarski (Department of Accounting, College of Business, Alfaisal University, Riyadh, Saudi Arabia)
Wasim Al-Shattarat (Department of Accounting, Gulf Financial Centre, Gulf University for Science and Technology, Hawally, Kuwait)
Basiem Al-Shattarat (Department of Accounting, Prince Sultan University, Riyadh, Saudi Arabia)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 26 December 2024

73

Abstract

Purpose

This study aims to investigates the impact of newly implemented regulations on corporate social responsibility (CSR) reporting on company performance. It also seeks to understand the value relevance of CSR reporting after implementing the regulation and how strategic emphasis can either mitigate or enhance these relationships.

Design/methodology/approach

The study uses a sample of UK-listed companies on the London Stock Exchange, specifically those included in the FTSE All-Share index, from 2006 to 2020. The final data set consists of 2,385 firm-year observations. This study used a quantitative approach to examine the main hypotheses.

Findings

The findings indicate that mandating CSR reporting has a beneficial influence on a company’s future performance. Furthermore, mandatory CSR reporting enhances the performance of the company when the company’s strategy emphasises value appropriation rather than value creation. In addition, mandatory CSR reporting has value relevance as it provides valuable information to evaluate the market value of companies, and this link strengthens when a company enhances its strategic emphasis.

Practical implications

The findings of this study indicate that policymakers should enhance CSR regulations to motivate firms to strategically integrate CSR, thereby boosting both financial and social value. Implementing standardised reporting metrics would enhance transparency, while companies that view CSR as a strategic asset may experience increased market value and greater stakeholder trust.

Social implications

Examining mandatory CSR promotes transparency and stakeholder engagement, potentially driving innovation and informing effective CSR policies.

Originality/value

This study fills several gaps in the literature about mandated CSR reporting in a developed market, how a company’s strategic approach to mandatory CSR reporting can influence its financial performance and stock price, and whether a company’s exposure to its customer base affects mandatory CSR reporting.

Keywords

Acknowledgements

The authors would like to thank Prince Sultan University for their support.

Citation

Hamed, R., Smolarski, J., Al-Shattarat, W. and Al-Shattarat, B. (2024), "CSR reporting and corporate performance: the role of strategic emphasis", Sustainability Accounting, Management and Policy Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/SAMPJ-04-2024-0348

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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