What influences the choice of Baltic public companies to declare CSR reporting standards?

Abstract

<p>In recent years, there has been a growing emphasis among companies on corporate social responsibility (CSR) and its disclosure. They apply various standards for this purpose. The CSR disclosure practice differs across countries with some companies openly declaring CSR reporting standards, while others do not. Stakeholders need insights into the traits of companies that choose to disclose CSR reporting standards. This research seeks to identify the factors that influence public companies in the Baltic region to declare CSR reporting standards. The study measures the decision of Baltic public companies to declare CSR reporting standards. Data on these decisions is gathered through a content analysis of non-financial reports of companies. Independent variables include company visibility, financial performance, and market expectations, with the data sourced from the Bloomberg database. Logistic regression models are employed for the analysis. The results of the study showed that only half of the companies disclosed their CSR reporting standards. Estonian companies preferred GRI standards, while Lithuanian companies favoured both GRI and UNGC. Due to the limited sample size of Latvian public companies, with only two included in the analysis, drawing meaningful conclusions regarding their CSR reporting preferences is not feasible. Larger companies, those in "heavy industry," and companies with higher earnings per share but lower return on assets and capital expenditures were more likely to declare CSR standards. Market expectations had no influence on the choice of CSR standards. However, companies using GRI standards shared similar traits with age and market expectations also playing a role – particularly younger and higher market-value. These findings align with legitimacy, stakeholder, and signalling theories, and provide several implications. Investors are encouraged to prioritize transparency in CSR reporting, regulators should consider standard usage trends, policymakers should address CSR disclosure in smaller companies, and industry-specific factors could prompt managers to reconsider their approach to CSR reporting.</p>