Communicating about corporate social responsibility: A comparative study of CSR reporting in Australia and Slovenia

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Abstract

This paper examines how two countries on opposite sides of the world, Australia and Slovenia, are addressing corporate social responsibility (CSR) reporting issues. The authors see reporting as an important communication tool or channel which can ensure greater corporate transparency and enable a better engagement with multiple stakeholders. The paper aims to provide a review and a comparison of the CSR guidelines and reporting standards in both countries by which this communication is guided. In both countries, reporting is largely voluntary and appears to be driven by market pressures. However, differences appear in national culture as a driver with product, management and financial considerations influencing Australian reporting whereas Slovenian reporting is shaped by employee, community and environmental concerns. From Australian and Slovenian perspectives it seems to be important to increase reporting incentives in both countries and to connect and compare them to global reporting requirements.

Introduction

Societal expectations about the responsible role of business in society are on the increase and the recent research on corporate social responsibility discourse shows that there have been developments of a variety of instruments that aim to improve, evaluate and communicate socially responsible practices. Academics consider the notion of corporate social responsibility has been in existence since the 1950s, proliferating in the 1970s (Carroll, 1999) and gaining increasing currency in the 1990s and the new millennium (De Bakker, Groenewegen, & den Hond, 2005). Likewise, reporting on environmental and social matters has been prevalent for several decades with further growth over the past decade or so (Deegan, 2002).

Reporting on the corporate social responsibility (CSR) activities of an organization forms an integral part of this discourse. CSR reporting is a key tool for communication with stakeholders about an organization's CSR activities. As such it forms a central charter for public relations in communicating and creating mutual understanding, managing potential conflicts (Grunig, 1989) and to achieve legitimacy (Aldrich & Fiol, 1994).

Communication of an organization's social impact is important, and disclosing true and relevant information about corporate behaviour can have benefits for stakeholders, organizations and society. Although societal demands and expectations can be traced all over the globe, organizations are responding to these demands in a variety of manners. One influence on CSR reporting is country (Hooghiemstra, 2000).

The focus of our paper is on examining how two quite different countries, Australia—a Western market economy in the Asia-Pacific region with Asia and the USA as major markets, and Slovenia—a small country that has recently made the transition from socialism and become a part of the European Union, are addressing CSR reporting issues. The paper aims to provide a review and a comparison of the influences on the CSR guidelines and reporting standards in both countries. In addition, it aims to show that reporting standards in both countries could connect and contribute to Global Reporting Initiatives.

The issues of CSR and CSR reporting are becoming important not only at national levels but at the global level as well. National pressures are becoming global, and global business as a whole is facing different market and institutional pressures to be socially responsible and to report on socially responsible practices. By our comparative study of two countries in different world regions, we aim to incorporate the richness of the CSR reporting debate. The comparison of CSR reporting instruments in different countries is interesting from at least two points of view. First, the question arises as to whether the Global Reporting Initiative (GRI), which continues to make inroads as the presumptive standard for global companies, can become a unique model of reporting against a diversity of national concepts of reporting. Second, such comparative studies can give an overview of the state of CSR reporting in different parts of the world that seem geographically and culturally distant but are, simultaneously, the marketplace for the same global companies.

Section snippets

Stakeholder and legitimacy theories as frameworks

Whereas classical notions of an organization's social responsibilities centred on short-term profit making (Friedman, 1970), alternative views focus on the reciprocal responsibilities between business and society, and with a range of stakeholders (Freeman, 1984). Stakeholder theories (Freeman, 1984) suggest that there is a wide range of groups in the social environment that an organization can affect, and that these groups have legitimate claims on the organization due to concepts in agency and

Corporate social responsibility and CSR reporting

Several definitions of CSR can be found in the literature (De Bakker et al., 2005). Arguably the most cited is Carroll (1979, p. 500) who stated that the “social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that society has of organizations at a given point of time”. Perhaps a somewhat narrower definition, was introduced by Whetten, Rands, and Godfrey (2001), who viewed CSR as “societal expectations of corporate behaviour: a behaviour that

Global instruments of CSR reporting

Establishing a common global framework of CSR reporting is clearly a desirable goal, and there have been several attempts to do so (Owen, 2003). The Global Reporting Initiative (Hopkins, 2003, Owen, 2003), developed in cooperation with the United Nations Environment Program (UNEP), is particularly well established. The mission of GRI, an independent organization based in Amsterdam, is to develop and disseminate globally applicable Sustainability Reporting Guidelines to enable organizations to

Method

In this paper, we use so-called cross-national comparative research to observe the phenomena of CSR reporting across two countries: Australia and Slovenia. We employ the practice of contextualization with the two countries as the frame of reference. In our study, the context serves as an important explanatory variable. The comparative study is often used in explorative research to detect and explain the differences between (and similarities among) the objects of research. Here, we adopt the

The state of CSR in Australia and Slovenia

Australia is a stable, democratic society of 23 million people. Its system of government is based on the liberal democratic tradition, with institutions and practices that reflect British and North American models but that are uniquely Australian. With one of the most stable economic, political and social environments in the Asia-Pacific region, and with resources and sophisticated manufacturing capabilities, Australia's economy is one of the strongest in the developed world. Japan, the United

Discussion

In a global economy with increasing expectations of transparency and accountability of all types of organizations, organizational decisions about adopting corporate social responsibility and CSR reporting to meet stakeholder needs and expectations are complex. Coming to common understandings of what those expectations are is evolving through a range of global and regional standards, codes and guidelines. As others have shown, country, type of industry and size of industry have an impact on

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