Does social and environmental reporting nurture trust and stakeholder engagement and reduce risk?

Solomon, Jill 2005. Does social and environmental reporting nurture trust and stakeholder engagement and reduce risk? [Working Paper]. Cardiff Working Papers in Accounting and Finance, Cardiff: Cardiff University.

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Abstract

A number of theoretical lenses have been used to explain voluntary social and environmental reporting (SER) including legitimacy theory, stakeholder theory and political economy theory. Recent theoretical work in the SER area suggests that the risk society theory presents an appropriate alternative theoretical framework. According to the risk society theoretical framework, risks have evolved from manageable, identifiable, insurable risks into imperceivable, uninsurable, high consequence risks. Many high consequence risks relate directly to corporate behaviour in the social, ethical and environmental domain, such as global warming. The risk society framework is also characterised by a general decline in trust in institutions and organisations. This paper contributes to the SER literature by providing empirical evidence to support a risk society theory of voluntary SER. By engaging directly with 24 corporate social responsibility managers within UK listed companies, we show that risk is driving them to produce voluntary SER. The paper provides empirical evidence that SER is emerging as a mechanism for reducing risk and anxiety, through the nurturing of trust relationships between companies and their stakeholders. The interviews reveal that building and maintaining trust in shareholder and stakeholder relationships is a primary motivation for SER and that SER is a means of engaging in dialogue with the company’s stakeholders. Companies are, from a risk society perspective, implementing SER as a risk management mechanism. We also find from the interviews that voluntary SER is motivated far more by its link with financial performance, through reputation enhancement, than by a genuine desire to enhance social justice.

Item Type:	Monograph (Working Paper)
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance
Publisher:	Cardiff University
Date of First Compliant Deposit:	30 March 2016
Last Modified:	05 Oct 2015 12:37
URI:	https://orca.cardiff.ac.uk/id/eprint/77679

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