IDEAS home Printed from https://ideas.repec.org/a/eee/spacre/v19y2016i1p142-153.html
   My bibliography  Save this article

Measuring corporate social responsibility using composite indices: Mission impossible? The case of the electricity utility industry

Author

Listed:
  • Paredes-Gazquez, Juan Diego
  • Rodriguez-Fernandez, José Miguel
  • de la Cuesta-Gonzalez, Marta

Abstract

Corporate social responsibility is a multidimensional concept that is often measured using diverse indicators. Composite indices can aggregate these single indicators into one measurement. This article aims to identify the key challenges in constructing a composite index for measuring corporate social responsibility. The process is illustrated by the construction of a composite index for measuring social outcomes in the electricity utility industry. The sample consisted of seventy-four companies from twenty-three different countries, and one special administrative region operating in the industry in 2011. The findings show that (1) the unavailability of information about corporate social responsibility, (2) the particular characteristics of this information and (3) the weighting of indicators are the main obstacles when constructing the composite index. We highlight than an effective composite index should has a clear objective, a solid theoretical background and a robust structure. In a practical sense, it should be reconsidered how researchers use composite indexes to measure corporate social responsibility, as more transparency and stringency is needed when constructing these tools.

Suggested Citation

  • Paredes-Gazquez, Juan Diego & Rodriguez-Fernandez, José Miguel & de la Cuesta-Gonzalez, Marta, 2016. "Measuring corporate social responsibility using composite indices: Mission impossible? The case of the electricity utility industry," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 19(1), pages 142-153.
  • Handle: RePEc:eee:spacre:v:19:y:2016:i:1:p:142-153
    DOI: 10.1016/j.rcsar.2015.10.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1138489115000357
    Download Restriction: no

    File URL: https://libkey.io/10.1016/j.rcsar.2015.10.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Paolo Paruolo & Michaela Saisana & Andrea Saltelli, 2013. "Ratings and rankings: voodoo or science?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(3), pages 609-634, June.
    2. Salvati, Luca & Zitti, Marco, 2009. "Substitutability and weighting of ecological and economic indicators: Exploring the importance of various components of a synthetic index," Ecological Economics, Elsevier, vol. 68(4), pages 1093-1099, February.
    3. Bouten, Lies & Everaert, Patricia & Van Liedekerke, Luc & De Moor, Lieven & Christiaens, Johan, 2011. "Corporate social responsibility reporting: A comprehensive picture?," Accounting forum, Elsevier, vol. 35(3), pages 187-204.
    4. Navarro Alvarado, Patricia & Hinojosa Palafox, Jesus Fernando & Vazquez Ruiz, Miguel Angel, 2011. "Comparative study of sustainability of the electrical power industry in Mexico and its northern border region," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4726-4731.
    5. Grupp, Hariolf & Mogee, Mary Ellen, 2004. "Indicators for national science and technology policy: how robust are composite indicators?," Research Policy, Elsevier, vol. 33(9), pages 1373-1384, November.
    6. Ioannis Ioannou & George Serafeim, 2012. "What drives corporate social performance? The role of nation-level institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(9), pages 834-864, December.
    7. Olivier Boiral, 2013. "Sustainability reports as simulacra? A counter-account of A and A+ GRI reports," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 26(7), pages 1036-1071, September.
    8. MaryAnn Reynolds & Kristi Yuthas, 2008. "Moral Discourse and Corporate Social Responsibility Reporting," Journal of Business Ethics, Springer, vol. 78(1), pages 47-64, March.
    9. Gray, Rob & Gray, Sue, 2011. "Accountability and human rights: A tentative exploration and a commentary," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 22(8), pages 781-789.
    10. Andrea Pérez & Ignacio Rodríguez del Bosque, 2013. "Measuring CSR Image: Three Studies to Develop and to Validate a Reliable Measurement Tool," Journal of Business Ethics, Springer, vol. 118(2), pages 265-286, December.
    11. Escofier, B. & Pages, J., 1994. "Multiple factor analysis (AFMULT package)," Computational Statistics & Data Analysis, Elsevier, vol. 18(1), pages 121-140, August.
    12. Francesca Giambona & Erasmo Vassallo, 2014. "Composite Indicator of Social Inclusion for European Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 116(1), pages 269-293, March.
    13. Ye Cai & Hoje Jo & Carrie Pan, 2012. "Doing Well While Doing Bad? CSR in Controversial Industry Sectors," Journal of Business Ethics, Springer, vol. 108(4), pages 467-480, July.
    14. World Bank, 2012. "World Development Indicators 2012," World Bank Publications - Books, The World Bank Group, number 6014.
    15. Rovere, Emilio Lebre La & Soares, Jeferson Borghetti & Oliveira, Luciano Basto & Lauria, Tatiana, 2010. "Sustainable expansion of electricity sector: Sustainability indicators as an instrument to support decision making," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 422-429, January.
    16. Horton N. J. & Lipsitz S. R., 2001. "Multiple Imputation in Practice: Comparison of Software Packages for Regression Models With Missing Variables," The American Statistician, American Statistical Association, vol. 55, pages 244-254, August.
    17. Steven Scalet & Thomas Kelly, 2010. "CSR Rating Agencies: What is Their Global Impact?," Journal of Business Ethics, Springer, vol. 94(1), pages 69-88, June.
    18. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
    19. Stamford, Laurence & Azapagic, Adisa, 2011. "Sustainability indicators for the assessment of nuclear power," Energy, Elsevier, vol. 36(10), pages 6037-6057.
    20. Onat, Nevzat & Bayar, Haydar, 2010. "The sustainability indicators of power production systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 3108-3115, December.
    21. Afgan, Naim H. & Carvalho, Maria G. & Hovanov, Nikolai V., 2000. "Energy system assessment with sustainability indicators," Energy Policy, Elsevier, vol. 28(9), pages 603-612, July.
    22. Gallego Carrera, Diana & Mack, Alexander, 2010. "Sustainability assessment of energy technologies via social indicators: Results of a survey among European energy experts," Energy Policy, Elsevier, vol. 38(2), pages 1030-1039, February.
    23. Milorad Kovacevic & Clara García Aguña, 2010. "Uncertainty and Sensitivity Analysis of the Human Development Index," Human Development Research Papers (2009 to present) HDRP-2010-47, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    24. Laurens Cherchye & Willem Moesen & Nicky Rogge & Tom Puyenbroeck, 2007. "An Introduction to ‘Benefit of the Doubt’ Composite Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 82(1), pages 111-145, May.
    25. Aaron K. Chatterji & David I. Levine & Michael W. Toffel, 2009. "How Well Do Social Ratings Actually Measure Corporate Social Responsibility?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 125-169, March.
    26. Van den Bossche, Filip & Rogge, Nicky & Devooght, Kurt & Van Puyenbroeck, Tom, 2010. "Robust Corporate Social Responsibility investment screening," Ecological Economics, Elsevier, vol. 69(5), pages 1159-1169, March.
    27. M. Saisana & A. Saltelli & S. Tarantola, 2005. "Uncertainty and sensitivity analysis techniques as tools for the quality assessment of composite indicators," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(2), pages 307-323, March.
    28. Sean Valentine & Seong-Hyun Nam & David Hollingworth & Callie Hall, 2014. "Ethical Context and Ethical Decision Making: Examination of an Alternative Statistical Approach for Identifying Variable Relationships," Journal of Business Ethics, Springer, vol. 124(3), pages 509-526, October.
    29. Plischke, Elmar, 2010. "An effective algorithm for computing global sensitivity indices (EASI)," Reliability Engineering and System Safety, Elsevier, vol. 95(4), pages 354-360.
    30. Evans, Annette & Strezov, Vladimir & Evans, Tim J., 2009. "Assessment of sustainability indicators for renewable energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(5), pages 1082-1088, June.
    31. Adaeze Okoye, 2009. "Theorising Corporate Social Responsibility as an Essentially Contested Concept: Is a Definition Necessary?," Journal of Business Ethics, Springer, vol. 89(4), pages 613-627, November.
    32. Giuseppe Munda, 2008. "Social Multi-Criteria Evaluation for a Sustainable Economy," Springer Books, Springer, number 978-3-540-73703-2, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rachita Gulati & M. Kabir Hassan & Vincent Charles, 2024. "Developing a New Multidimensional Index of Bank Stability and Its Usage in the Design of Optimal Policy Interventions," Computational Economics, Springer;Society for Computational Economics, vol. 63(4), pages 1281-1325, April.
    2. Nomeda Dobrovolskienė & Anastasija Pozniak & Manuela Tvaronavičienė, 2021. "Assessment of the Sustainability of a Real Estate Project Using Multi-Criteria Decision Making," Sustainability, MDPI, vol. 13(8), pages 1-19, April.
    3. Liliana Ruiz Acosta & David Andrés Camargo Mayorga & Mauricio Becerra Fernández, 2019. "Proposal of a Social Responsibility Indicator Model Based on Systems Dynamics," Proceedings of the 14th International RAIS Conference, August 19-20, 2019 003LR, Research Association for Interdisciplinary Studies.
    4. Xiyan Gu & Yingjun Zhu & Jingxia Zhang, 2023. "Toward sustainable port development: an empirical analysis of China’s port industry using an ESG framework," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
    5. Sitara Karim & Norlida Abdul Manab & Rusmawati Binti Ismail, 2019. "Legitimising the Role of Corporate Boards and Corporate Social Responsibility on the Performance of Malaysian Listed Companies," Indian Journal of Corporate Governance, , vol. 12(2), pages 125-141, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Salvatore Greco & Alessio Ishizaka & Menelaos Tasiou & Gianpiero Torrisi, 2019. "On the Methodological Framework of Composite Indices: A Review of the Issues of Weighting, Aggregation, and Robustness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 61-94, January.
    2. Poinssot, Ch. & Bourg, S. & Ouvrier, N. & Combernoux, N. & Rostaing, C. & Vargas-Gonzalez, M. & Bruno, J., 2014. "Assessment of the environmental footprint of nuclear energy systems. Comparison between closed and open fuel cycles," Energy, Elsevier, vol. 69(C), pages 199-211.
    3. Mainali, Brijesh & Silveira, Semida, 2015. "Using a sustainability index to assess energy technologies for rural electrification," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1351-1365.
    4. Liu, Gang, 2014. "Development of a general sustainability indicator for renewable energy systems: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 611-621.
    5. Berjawi, A.E.H. & Walker, S.L. & Patsios, C. & Hosseini, S.H.R., 2021. "An evaluation framework for future integrated energy systems: A whole energy systems approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    6. Anuja Shaktawat & Shelly Vadhera, 2021. "Risk management of hydropower projects for sustainable development: a review," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 45-76, January.
    7. Kumar, Deepak & Katoch, S.S., 2014. "Sustainability indicators for run of the river (RoR) hydropower projects in hydro rich regions of India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 101-108.
    8. Colla, Martin & Ioannou, Anastasia & Falcone, Gioia, 2020. "Critical review of competitiveness indicators for energy projects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 125(C).
    9. Luthra, Sunil & Mangla, Sachin Kumar & Kharb, Ravinder K., 2015. "Sustainable assessment in energy planning and management in Indian perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 58-73.
    10. Akber, Muhammad Zeshan & Thaheem, Muhammad Jamaluddin & Arshad, Husnain, 2017. "Life cycle sustainability assessment of electricity generation in Pakistan: Policy regime for a sustainable energy mix," Energy Policy, Elsevier, vol. 111(C), pages 111-126.
    11. Streimikiene, Dalia & Balezentis, Tomas & Krisciukaitienė, Irena & Balezentis, Alvydas, 2012. "Prioritizing sustainable electricity production technologies: MCDM approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 3302-3311.
    12. Tahseen, Samiha & Karney, Bryan W., 2017. "Reviewing and critiquing published approaches to the sustainability assessment of hydropower," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 225-234.
    13. Milica Maricic & Jose A. Egea & Veljko Jeremic, 2019. "A Hybrid Enhanced Scatter Search—Composite I-Distance Indicator (eSS-CIDI) Optimization Approach for Determining Weights Within Composite Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(2), pages 497-537, July.
    14. Mostafa Shaaban & Jürgen Scheffran & Jürgen Böhner & Mohamed S. Elsobki, 2018. "Sustainability Assessment of Electricity Generation Technologies in Egypt Using Multi-Criteria Decision Analysis," Energies, MDPI, vol. 11(5), pages 1-25, May.
    15. Tommaso Luzzati & Bruno Cheli & Gianluca Gucciardi, 2017. "Communicating the uncertainty of synthetic indicators: a reassessment of the HDI ranking," Discussion Papers 2017/228, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    16. Goldrath, T. & Ayalon, O. & Shechter, M., 2015. "A combined sustainability index for electricity efficiency measures," Energy Policy, Elsevier, vol. 86(C), pages 574-584.
    17. Koray Altintas & Ozalp Vayvay & Sinan Apak & Emine Cobanoglu, 2020. "An Extended GRA Method Integrated with Fuzzy AHP to Construct a Multidimensional Index for Ranking Overall Energy Sustainability Performances," Sustainability, MDPI, vol. 12(4), pages 1-21, February.
    18. Greco, Salvatore & Ishizaka, Alessio & Tasiou, Menelaos & Torrisi, Gianpiero, 2019. "Sigma-Mu efficiency analysis: A methodology for evaluating units through composite indicators," European Journal of Operational Research, Elsevier, vol. 278(3), pages 942-960.
    19. Giuseppe Coco & Raffaele Lagravinese & Giuliano Resce, 2020. "Beyond the weights: a multicriteria approach to evaluate inequality in education," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(4), pages 469-489, December.
    20. Cantone, Giulio Giacomo & Tomaselli, Venera, 2024. "On the Coherence of Composite Indexes: Multiversal Model and Specification Analysis for an Index of Well-Being," MetaArXiv d5y26, Center for Open Science.

    More about this item

    Keywords

    Composite index; Corporate social responsibility (CSR); CSR evaluation; Electricity utility industry; Social dimension; Índice sintético; Responsabilidad Social Corporativa (RSC); Evaluación de la RSC; Industria eléctrica; Dimensión social;
    All these keywords.

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:spacre:v:19:y:2016:i:1:p:142-153. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/intelligence .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.