Do corporate social responsibility (CSR) reports provide shareholders Essay - 5

Do corporate social responsibility (CSR) reports provide shareholders and stakeholders with useful information on corporate soci - Essay Example the material costs relating to regulatory compliance. In the developed countries i.e. United States, Canada, and Australia among other countries, there has been a growing need for CSR reporting i.e. because of the stakeholders’ pressure and increased public awareness. Company’s shareholders, stakeholders and CSR reporting One of the key reasons why companies prepare the CSR reports is to offer useful information to the shareholders and stakeholders. This information translates into enhanced environmental and social conditions, because of the fact that stakeholders rewards the top performing corporations and punish the poorly performing corporate. Many investors and consumers are demanding environmental and social accountability amongst the companies, which has put pressure on them to execute CSR reporting. There has been a growing number of CSR reporting certifications i.e. ISO and SA8000 certifications, which reflects the growing need for reporting. They provide proof that CSR reporting offers valuable information to shareholders, and the companies’ stakeholders. Many companies view CSR reporting as an investment move as opposed to a cost. They conduct research relating to their stakeholders’ needs and report to them (Tschopp, 2012). ... Stakeholders including the customers, suppliers, employees, the government and other regulators all have an interest in the companies’ operations. The key goal of CSR reporting is to help the stakeholders understand how the companies affect their environmental, economic, and social circumstances (Merkl-Davies & Brennan, 2011). Another key reason why companies report on their social responsibility is to grow the shareholder’s wealth. Many companies include the CSR reporting in their annual financial reporting. This contributes towards building the shareholder wealth. For example, a company that reports about its social responsibility reflects its accountability to the public. These markets the company to the investors thus growing the demand for its stock. The high demand for the company’s stock translates into the growth in the shareholders’ wealth (KPMG, 2008). All companies feel that they are accountable to their stakeholders and, therefore, they recogni ze the responsibility by performing CRS reporting. The ethics branch of the stakeholder theory states that stakeholders have intrinsic rights, which the companies should not violate. According to the theory, even if the company does not benefit economically by getting involved in social responsibility activities, it should still participate and report for the benefit of all the stakeholders (Mahoney, 2013). Different stakeholders are interested in different types of information from the CSR reporting. For example, the consumers are concerned about the quality of the goods that the companies are offering in the market. They would like to know if the products would meet their needs and boost their health. Consumers would shun products that