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Article
Publication date: 19 December 2017

Khaled Saadaoui and Teerooven Soobaroyen

This paper aims to analyse the similarities and differences in the methodologies adopted by corporate social responsibility (CSR) rating agencies.

Abstract

Purpose

This paper aims to analyse the similarities and differences in the methodologies adopted by corporate social responsibility (CSR) rating agencies.

Design/methodology/approach

The authors gather secondary and primary evidences of practices from selected agencies on the methodologies and criteria they rely upon to assess a firm’s CSR performance.

Findings

The authors find not only evidence of similarities in the methodologies adopted by the CSR rating agencies (e.g. the use of environment, social and governance themes, exclusion criteria, adoption of positive criteria, client/“customised” input, quantification) but also several elements of differences, namely, in terms of the thresholds for exclusion, transparent vs confidential approach, industry-specific ratings and weights for each dimension. Drawing from Sandberg et al.’s (2009) conceptualisations, the authors tentatively argue that this mixed picture may reflect competing organisational pressures to adopt a differentiation approach at the strategic and practical levels whilst recognising, and incorporating, the “globalising” tendencies of the CSR business at the terminological levels.

Social implications

Although these data are based on a relatively small number of agencies, the findings and analysis convey some implications for users of CSR ratings and policymakers, particularly in light of the recent Paris 2016 Agreement on Climate Change and the increased emphasis on the monitoring of social, environmental and governance performance.

Originality/value

The authors contribute to the literature by highlighting how key intermediate rating organisations operationalise notions of CSR.

Details

Sustainability Accounting, Management and Policy Journal, vol. 9 no. 1
Type: Research Article
ISSN: 2040-8021

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Book part
Publication date: 12 March 2020

Marco Masip

Despite all the attempts developed so far to measure corporate social performance in the last decades, a standard metric for it is still missing. In this work, the author…

Abstract

Despite all the attempts developed so far to measure corporate social performance in the last decades, a standard metric for it is still missing. In this work, the author tries to understand why is this the case. To do so, the author has reviewed 69 relevant metrics developed in the literature since the 1970s until today, covering approaches based on social, reputational, and environmental ratings, as well as several others constructed ad hoc by reputated scholars. The author analyzes each of them through a double optics, checking if they meet the minimum requirements to be considered standard and truly social. The research reveals that the main factor that prevents such a standard is the lack of truly social orientation of the existing metrics.

Details

Non-Financial Disclosure and Integrated Reporting: Practices and Critical Issues
Type: Book
ISBN: 978-1-83867-964-4

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Article
Publication date: 2 April 2021

Olivier Boiral, David Talbot, Marie-Christine Brotherton and Iñaki Heras-Saizarbitoria

The purpose of this paper is to explore the practices, challenges and ethical issues underlying the fabric and dissemination of corporate sustainability ratings.

Abstract

Purpose

The purpose of this paper is to explore the practices, challenges and ethical issues underlying the fabric and dissemination of corporate sustainability ratings.

Design/methodology/approach

Based on 36 semi-structured interviews with sustainability rating practitioners, the study shows the trade-offs, ethical judgments and customizable aspects involved in rating practices, which cannot rely only on formal and predefined methods.

Findings

In contrast with the official optimistic rhetoric about the rationality and rigor of sustainability rating methods, agencies face serious challenges in the measurement and comparison of performance in this area, particularly in terms of the aggregation of scattered and fuzzy indicators, commercial pressures and the availability, materiality and reliability of the information collected. Despite these concerns, sustainability ratings do appear to be useful in improving corporate responsiveness and increasing investor awareness of the complex and difficult-to-measure aspects of nonfinancial reports.

Practical implications

Rating agencies should collaborate to set up common indicators that would be easier for firms to produce and should better separate their sustainability rating production activities from other services they offer to companies (e.g. consultancy).

Originality/value

This study contributes to the literature on the measurement and promotion of corporate sustainability by analyzing rating practices through the lens of moral fictionalism, which here refers to the human tendency to build ethical judgments on fictional but convenient and useful representations.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 3 December 2018

Sita deliyana Firmialy and Yunieta Anny Nainggolan

This study aims to focus on developing the sustainability reporting index (SRI) with combined perspectives from varied social rating agencies, along with integrated…

Abstract

Purpose

This study aims to focus on developing the sustainability reporting index (SRI) with combined perspectives from varied social rating agencies, along with integrated combined perspectives from academics experts and Indonesian companies.

Design/methodology/approach

The first section discusses the theoretical framework along with the sustainability challenges faced by companies in Indonesia. The second section develops the methodology of the study to measure the SRI by considering practical and theoretical perspectives, starting from the identification of initial disclosure, selecting the final disclosure and developing the hierarchical framework. Lastly, the third section confirms the validity of the study’s framework by the exploratory factor analysis method and its comparability by comparing the content analysis result of the study with the Kinder–Lydenberg–Domini (KLD) method. The content analysis was used to analyze annual reports, sustainability reports and companies’ websites based on indicators found in the resulted model.

Findings

The main finding is the SRI framework (SRIF) of the study, which is built on the basis of the stakeholder relationship theory and is focused on three main dimensions (social, economic and environmental). Specifically, the framework consists of 17 indicators and 93 sub-indicators. On the basis of factor analysis method, it can be safely said that the study’s SRIF is quite valid. The high score of correlations between the SRIF and KLD results at the composite and dimension levels, along with the statistically significant results show that the study’s SRIF results and KLD results are fairly similar.

Research limitations/implications

The present study has its limitation as it only gathers data from publicly available reports issued by the firms (secondary data). Owing to time limitation, primary data are not collected. However, this is also the strength of this research as it will allow investors to replicate the study’s methodology to measure companies’ sustainability.

Practical implications

The study is useful to organizations and statutory bodies toward finding a replicable method to measure the Indonesian companies’ social performance. In addition, the study also introduced the usefulness of the qualitative program Atlas TI to perform content analysis, the exploratory factor analysis method to ensure validity and comparability by comparing it to the KLD methodology, which is known globally as the most widely accepted methodology to measures social performance. Lastly, this study will provide implications to the Government to ascertain the level of SRI reporting among the Indonesian public-listed companies.

Originality/value

The resulted framework in this study simultaneously considers social, environmental and economic factors in the context of companies in Indonesia, while previous researchers have constructed reporting index separately (i.e. Sumiani et al., 2007; Zhao et al., 2012). Especially in the context of Indonesia, there is no such index simultaneously focused on the three main dimensions, namely, social, environmental and economics. The current study tries to fill the gap by using the constructed SRI index based on three perspectives combined, namely, social rating agencies, academic theorist and Indonesian companies.

Content available
Article
Publication date: 1 September 2003

Michael Mainelli

Abstract

Details

Balance Sheet, vol. 11 no. 3
Type: Research Article
ISSN: 0965-7967

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Book part
Publication date: 2 September 2016

Christophe Revelli

The aim of this chapter is to propose a critical analysis of socially responsible investing (SRI) through debate and reconstruction. Our goal is therefore to try to…

Abstract

Purpose

The aim of this chapter is to propose a critical analysis of socially responsible investing (SRI) through debate and reconstruction. Our goal is therefore to try to understand how the definition of ethics in finance has steered SRI towards a financial approach where ethics is guided by finance.

Methodology/approach

This chapter proposes a two-point approach consisting of a meta-debate and development perspectives. Each approach is divided into three debates (ideological and philosophical, scientific and practical), which are interconnected.

Findings

The chapter concludes that the debate on mainstream SRI is necessary but should be re-discussed, as it is preventing in its current form the concept from developing and being grounded in real ethical values, sacrificing the individual ethics that should be driving investing decisions.

Originality/value

The chapter proposes to rethink the paradigm around SRI through a conceptual framework that re-inserts finance within ethics, where non-financial performance and impact investment should be at the centre of the scientific debates, leading to an SRI based on exclusion, the consideration of controversies and social impact measurement.

Details

Finance Reconsidered: New Perspectives for a Responsible and Sustainable Finance
Type: Book
ISBN: 978-1-78560-980-0

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Book part
Publication date: 7 October 2011

Frédérique Déjean, Marie-Astrid Le Theule and Bruno Oxibar

In France, a religious congregation created the first ethical fund in 1983. By the end of the 1980s, only two ethical funds were operating. During the second half of the…

Abstract

In France, a religious congregation created the first ethical fund in 1983. By the end of the 1980s, only two ethical funds were operating. During the second half of the 1990s, the number of SRI funds rose rapidly – only 7 were available in 1997, by December 2001 this number had jumped to 42 and then to 137 by the end of 2007. In 2010, almost 300 SR funds were available. During the period from end of 2001 to end of 2010, the percentage of total French mutual fund capitalization represented by SRI funds climbed from 0.12% to nearly 1% (www.novethic.fr). Despite the fact that this total amount remains modest, still all retail networks are now offering such funds.

Details

Finance and Sustainability: Towards a New Paradigm? A Post-Crisis Agenda
Type: Book
ISBN: 978-1-78052-092-6

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Article
Publication date: 9 February 2018

Xin Pan, Xuanjin Chen and Lutao Ning

Firms’ corporate social responsibility (CSR) behaviour is embedded in the institutional context. Under this logic, the purpose of this paper is to investigate the…

Abstract

Purpose

Firms’ corporate social responsibility (CSR) behaviour is embedded in the institutional context. Under this logic, the purpose of this paper is to investigate the institutional antecedents of CSR, especially how two sub-national institutions – regional institutional development and industry dynamism – and their interactions affect firms’ CSR.

Design/methodology/approach

The sample consists of 608 Chinese listed firms, with 2,694 observations made from 2009 to 2014. The data were collected from two sources. The CSR information was acquired from the CSR rating agency Rankins CSR Ratings, and the financial data from the China Stock Market and Accounting Research database. Panel ordinary least squares regression was used to test the hypotheses.

Findings

The empirical results indicate that firms located in advanced regional institutions and more dynamic industries are more likely to engage in CSR. Moreover, macro institution, termed as regional institutional development, positively moderates the relationship between micro institution in terms of industry dynamism and CSR.

Originality/value

Overlooking how the institutional environment influences CSR decisions limits understanding of firms’ CSR activities. This paper offers an institutional explanation of CSR and, in particular, investigates different levels of sub-national institutions and their interaction.

Details

Management Decision, vol. 56 no. 5
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 21 June 2013

Arup Roy and Chandana Goswami

The purpose of this study was to conduct a scientometric analysis of the body of literature contained in international peer‐reviewed journals, university publications…

Abstract

Purpose

The purpose of this study was to conduct a scientometric analysis of the body of literature contained in international peer‐reviewed journals, university publications, reports of development organizations and conference publications on the performance management of the microfinance institutions.

Design/methodology/approach

A total of 71 research papers (1995‐2010) published in international peer‐reviewed journals, reports of developmental organizations, university reports and international conference publications, which aim to provide insights into the assessment of the microfinance institutions, was reviewed. The review was done along different parameters, namely financial performance, social performance, outreach, sustainability, efficiency, productivity, institutional characteristics and governance.

Findings

Based on the literature review, a new conceptual model is proposed that focuses on the overall performance of the MFIs. The study also documents the various dimensions of the performance measurement of the MFIs done so far. It is expected that this study would help turn the attention of microfinance researchers, microfinance practitioners, and various rating agencies to the various dimensions affecting the overall assessment of microfinance institutions.

Research limitations/implications

Attempt was made to make the sample as inclusive and exhaustive as possible, but some research work may inadvertently have not found a place in this study.

Originality/value

A scientometric analysis of the MFI performance measurement is done in terms of longitudinal spread as well as geographical spread focusing the various performance dimensions of microfinance institutions.

Details

International Journal of Commerce and Management, vol. 23 no. 2
Type: Research Article
ISSN: 1056-9219

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Article
Publication date: 14 October 2014

Raj Aggarwal and Jerry Bohinc

The purpose of this paper is to present the three critical changes needed to reform the US health care system – these changes will drive cascades of other beneficial…

Abstract

Purpose

The purpose of this paper is to present the three critical changes needed to reform the US health care system – these changes will drive cascades of other beneficial changes. These three changes include the use of transparent market prices, alignment of incentives and systematic assessment and ratings of quality.

Design/methodology/approach

The paper used an analysis based on the literature on the comparison between non-market and market systems. The current US health care system is similar to the Soviet economic system, and the paper proposes moving it gradually to where it can respond to market-based signals.

Findings

The US health care system needs to adopt transparent and real pricing, independent quality assessment of health provider organizations and portable electronic patient records. These changes will lead to continuing cascades of innovation and improvement.

Research limitations/implications

The recommended changes will be opposed by vested interest groups, and so will be easier with regulatory guidance and encouragement. It would also be useful to protect against “regulatory capture” by interested parties during the change process.

Practical implications

Health care in the USA will gradually become better and cheaper. Health organizations will become more transparent. Regulators would have to set up and supervise private quality ratings agencies.

Social implications

Social implications of this paper include greater labor mobility and higher productivity, as well as increased competitiveness of the USA.

Originality/value

In spite of numerous writings on the subject, this issue has not been analyzed in this way. This paper is unique in the way in which it layouts the process of movement to a market-based system for the US health care system.

Details

Competitiveness Review, vol. 24 no. 5
Type: Research Article
ISSN: 1059-5422

Keywords

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