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The effects of reporting frameworks and a company’s financial position on managers’ willingness to invest in corporate social responsibility projects

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  • Yasheng Chen
  • Johnny Jermias
  • Jamal A. Nazari

Abstract

This study examines how companies’ voluntary adoption of a particular CSR framework affects their managers’ decision‐making, especially when they are faced with a dilemma whereby maximising environmental benefits means a reduction in financial returns. The results show that investment in CSR projects is significantly higher when companies report under a stand‐alone CSR reporting framework, as this framework provides the opportunity to highlight the benefits of CSR investment. In contrast, an integrated reporting framework encourages disclosure of benefits and costs, whereas the financial statement framework limits disclosure of CSR activities, and both result in lower investment in CSR projects.

Suggested Citation

  • Yasheng Chen & Johnny Jermias & Jamal A. Nazari, 2021. "The effects of reporting frameworks and a company’s financial position on managers’ willingness to invest in corporate social responsibility projects," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 3385-3425, June.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:2:p:3385-3425
    DOI: 10.1111/acfi.12706
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