Corporate Responsibility and Sustainability
Research Symposium on Corporate Social Responsibility (CSR) and Sustainability
Date: Friday, November 22, 2024
Time: 12:45PM – 2:00PM
Location: SB255
Schedule:
- 12:45PM-1:00PM: Light refreshment and socializing
- 1:00PM-2:00PM: Research paper session
- Conclusion of the symposium.
Sustainability Assurance and Materiality: Insights from Auditors
Authors: Natalia Kochetova (Saint Mary’s University); Eva A. Litlabø (NHH Norwegian School of Economics)
Abstract: Sustainability assurance (“SA”) is growing and becoming more regulated. In this context, we investigate audit firms’ SA practice and auditors’ SA materiality judgments. We interviewed 23 audit practitioners and audit technical experts in Norway about their experiences in SA and expected future developments. We find that audit firms are enhancing their firm guidance and quality management systems to guide SA performance. A structured materiality process from the guidance, similar to financial statement audits, is applied in practice. However, auditors rely extensively on professional judgment, particularly for qualitative disclosures and other distinctive features of sustainability reporting. Due to forthcoming regulatory change which includes mandatory SA in Europe, audit firms are building sustainability-related capacity and competence, and new challenges are expected in the assurance engagements. Our study offers implications for auditors and regulators and identifies opportunities for future research.
Scale and Scope: Investigating the Idiosyncrasy of CSR Strategies
Authors: Xiaoyu Liu (Saint Mary’s University) and Hao Lu (Saint Mary’s University)
Abstract: Current research on corporate social responsibility (CSR) mainly treats CSR as an aggregated concept of scale, i.e., overall performance, while neglecting the relative distribution of a firm’s efforts among different stakeholders to achieve this CSR scale, i.e., the scope of CSR performance. However, incorporating CSR scope into the measurement of CSR performance is important as it reveals the idiosyncratic nature of CSR strategies and provides further explanation about how firms achieve social legitimacy and greater financial benefits. This paper contributes to the theorization of CSR by treating it as a two-faceted concept involving both scale and scope, and measuring it using a performance matrix. We test our hypotheses using a sample of firms in the US retail industry between 2000 and 2015. Our results suggest that older firms tend to be strategic in achieving a higher CSR scale by only satisfying limited stakeholders (i.e., low scope), whereas firms with a higher intangible-to-tangible asset structure tend to underperform across a broad range of CSR dimensions. Although firms with a broad CSR scope are more likely to achieve financial benefit from a high CSR scale, this positive effect is observed only in younger firms or firms with lower intangible-to-tangible asset ratios. Considering CSR as a matrix of idiosyncratic strategies provides significant practical implications for managers by offering guidance on how the choice of CSR strategies influences the achievement of corporate objectives.
Influence of AI on Corporate Social Responsibility: Some Initial Evidence
Authors: Reihaneh Kolivandi (Saint Mary’s University) and Ashraf Al Zaman (Saint Mary’s University)
Abstract: In this paper, we investigate the relationship between Artificial intelligence (AI) and corporate social responsibility (CSR). Using data for firms from the US, we find a positive relationship between AI use and overall CSR performance. The dual benefit of AI in enhancing corporate performance and CSR is significant. This finding is robust to the inclusion of fixed effects and various control variables. In investigating the mechanism driving this outcome, we find that “employee relation” category of our CSR measures is important. To effectively operationalize AI, firms recruit and retain employees endowed with high levels of human capital requiring significant expenses from the firm. Continuous investment in these employees’ professional and personal well-being leads to improved CSR performance.