COMPANY CHARACTERISTICS IMPACTING ON DISCLOSING OF CSR INFORMATION Hanna Arhe

CSR AND CSR REPORTING CSR CSR REPORTING A way to inform stakeholders about companies’ CSR activities and investments for CSR issues Increasing stakeholder interest in ethical issues of business and production  Trend towards reporting more about environmental and social aspects of business Benefits: Company image and reputation Employee motivation, retention and recruitment Cost savings Positive effects on sales and market share CSR-related risk reduction or management Frameworks (e.g. Global Reporting Initiative (GRI)) Differencies between companies’ practices in CSR disclosing

RESEARCH QUESTIONS How can a design framework for analysing CSR disclosing be created? Do the company characteristics contribute on CSR reporting practices? Are there differences between service sector and industrial sector?

DESIGN FRAMEWORK FOR CSR REPORTING

DATA AND HYPOTHESES DATA 50 biggest Finnish companies in 2013 (Talouselämä) Data consists of CSR data and company data Company characteristics are collected on company websites and search engines on the Internet CSR information is gathered through annual reports, CSR reports and sustainability reports HYPOTHESES Hypotheses are formed based on earlier academic literature H1: Visibility affects to CSR disclosing H2: Firm profitability has an effect on CSR disclosing H3: Amount of shareholders is related to CSR disclosing H4: Firm size is affecting to CSR disclosing H5: Industry membership affects to CSR disclosing

METHODOLOGY 5 VARIABLES DESCRIBING CSR REPORTING CSRREP1 and CSRREP2 (CSR reports) ENVIR, SOC and SUMWOR (Amount of keywords) CONTENT ANALYSIS Abdolmohammadi (2005): “The main premise of the content analysis is that the frequency with which a unit of analysis appears in a text indicates the importance of the unit” Unit of analysis in this thesis is term Based on GRI (G3) indicators CORRELATION ANALYSIS Relation between company characteristics and CSR reporting Testing various samples: 1.Total sample 2.Total sample excluding financing sector 3.Industrial companies 4.Service companies 5.Service companies excluding financial sector

RESULTS According to correlation tables visibility, profitability, shareholder structure, industry and firm size are related to CSR disclosing (signifinact values) Without financing sector there are more indicators showing correlation, especially profitability indicators PROFITABILITYSHAREHOLDERFIRM SIZE roamarginprofSHARE2lemplass < < < <.0001

FINDINGS HYPOTHESES: H1: Visibility affects to CSR disclosing Many signifcant indicators Correlation is not very strong, varying from 0,2463 to 0,4811 H2: Firm profitability has an effect on CSR disclosing Total sample: correlation 0,3057 (p-value 0,0698) Without financing sector: more correlations (range 0, ,37108) H3: Amount of shareholders is related to CSR disclosing Without financing sector: significant correlations (range 0, ,45617) H4: Firm size is affecting to CSR disclosing Correlation range: 0,2677 – 0,4542 Excluding the financing sector: more significant and stronger correlations (biggest correlation value 0,61995) H5: Industry membership affects to CSR disclosing Correlation range: 0, ,4303 FINDINGS: All the company indicators in this study correlate with CSR reporting The correlation is relative weak CSR reporting and firm characteristics are linked to each other Any specifc characteristics impacting strongly CSR disclosing cannot be distinguished Correlation analysis cannot be used for causal links, which means that it cannot be argued which variable was the effect for the other variable There were differences (especally in profitability correlations) when analysing total sample and sample excluding financing sector The profitability measurements should be selected according to industry sector Due to small sample the more in-depth industry categorisation is not possible. In future, would be interesting to focus in one industry sector.

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