Abstract
Purpose: Corporate social responsibility (CSR) reporting has been problematic because of the lack of authenticity and legitimacy in CSR initiatives. Greenwashing and various corporate scandals have occurred, which have further diminished the relevance of CSR and the reporting thereof. In the South African context, although companies listed on the Johannesburg Stock Exchange Top 40 index (Johannesburg Stock Exchange [JSE] T40) report on their CSR considerations, the reporting lacks coherence and is often not underpinned by definite conceptual frameworks, which results in differentiation and inconsistency in CSR reporting. Given the role of these corporates in assisting the government to redress some of the social injustices and environmental issues, it is important to craft a coherent CSR reporting framework for the JSE T40.
Design/methodology/approach: The study followed a constructivist qualitative research approach with a generic qualitative research design. Furthermore, the study used content analysis, in-depth interviews, focus group and thematic analysis.
Findings/results: The coherent CSR reporting framework for the JSE T40 was crafted with four key themes, namely Pillars of coherent CSR reporting, industry requirements, decolonise CSR, and culminate diverse views.
Practical implications: The framework aims to support the JSE T40 to better report on the CSR considerations, enable them to systematically communicate and evaluate the impact of their CSR initiatives.
Originality/value: The application of coherent CSR reporting can aid in addressing socio-economic inequalities, global warming, corporate governance scandals, and greenwashing by increasing corporate responsiveness and responsibility. Therefore, the aspirations of the National Development Plan, African Union’s Agenda 2063 and Sustainable Development Goals (SDGs) can be attained through CSR.
Keywords: Corporate social responsibility (CSR); CSR reporting; CSR reporting framework; JSE Top 40 listed companies.
Introduction
Literature contends that corporate social responsibility (CSR) is an important commitment by corporates to contribute towards the society (Al-Dah et al., 2018; Stevenson & Marintseva, 2019). This is performed through their strategic commitment to engage in environmental, social, and governance (ESG) initiatives (Al-Dah et al. 2018; Stevenson & Marintseva, 2019). However, CSR has been side-lined because of the window dressing of CSR initiatives, which results in the authenticity and legitimacy of these initiatives being disregarded (Hopkins, 2005; Van der Walt 2018).
Overlooking CSR reporting ignores the relevance thereof. Firstly, CSR reports outline how a corporate deliberately meets its commitment towards social responsibility and evaluates its CSR commitment (Stevenson & Marintseva, 2019). Secondly, CSR reporting aids to map a systematic approach to manage CSR activities, and classifies risks and opportunities concerning CSR, thereby advancing an increase in the competitiveness of the company (Maitreyee et al., 2019; Moravcikova et al., 2015). Thirdly, CSR reporting depicts, on an annual basis, the level of CSR initiatives in a country and aids governments to systematically observe the assistance of companies concerning CSR (Sharma et al., 2020). Lastly, there are intangible benefits gained by corporates that reflects in their balance sheets and shareholder value gained, which gains corporates’ access to new markets and consumers (Adu-Yeboah et al., 2023; Sampong et al., 2021). However, in an earlier study, Matemane et al. (2022) lamented that CSR reports contain large amounts of information, which do not translate to tangible gains from ESG. In other words, South African corporates must be better established and aligned in their CSR practices and ensure that they form part of their daily operations.
The focus of this article is on the CSR reporting of the Johannesburg Stock Exchange (JSE) top 40 listed companies (JSE T40). The JSE T40 companies are the largest and represent various industries (such as consumer products, mining, apparel and textile products, iron and steel, telecom, and insurance and banking) in the economy. Furthermore, these companies have the highest market capitalisation on the JSE. Therefore, these companies contribute significantly to the economy of South Africa (SA) (JSE, 2019). In addition, given the size of JSE T40 companies, they are supposed to be leaders in how they uphold CSR reporting. Thus, the JSE T40 companies are important in ensuring that other companies in SA adequately report on their CSR considerations. Previous studies collectively found that among JSE listed companies, a selected few thoroughly and invariably report on their CSR considerations (Deloitte, 2012; Ernst & Young, 2012). Lastly, the study by Shuro and Stainbank (2014) showed that the extent of CSR reporting was higher among mining companies when compared to other companies in other industries. This denotes that there is a disparity in terms of CSR reporting among the JSE T40.
Concerning the above notion of CSR reporting being overlooked and invariable reporting, CSR reporting is disregarded by corporates and other stakeholders because of a lack of consistency in the CSR conceptual frameworks and application (Hopkins, 2005; Van der Walt 2018). Researchers have outlined that the lack of consistency in the CSR conceptual frameworks and application results in incomparable annual CSR reports (Hopkins, 2005; Siew et al., 2013; Stevenson & Marintseva, 2019). Also, this results in an inability to compare CSR reports across industries and other companies. As a result of this dearth in CSR frameworks, which are mostly not based on sound conceptual frameworks (Hopkins, 2005; Siew et al., 2013; Stevenson & Marintseva, 2019), the research question for this qualitative study was what would be a coherent CSR reporting framework for the JSE T40 companies? The research objectives were to compare and analyse the existing CSR reporting frameworks in order to determine coherence with a CSR conceptual framework and to develop a CSR reporting framework for companies listed on the JSE T40, based on a sound CSR conceptual framework.
Literature review
Corporate social responsibility reporting in sub-Saharan Africa
Corporate social responsibility reporting in sub-Saharan Africa is essential because of CSR initiatives being important in assisting countries attaining Sustainable Development Goals (SDGs) (Tilt et al., 2021). In particular, El-Bassiouny and El-Bassiouny (2019) highlight the need for corporates to contribute towards CSR in developing countries. This was asserted by the research of Bradly and Ganesh (2019). Pointedly, corporates are expected to assume the role of supplying socially desirable public goods and services because of government failure (Bradly & Ganesh, 2019). Thus, corporates have a key role to play by contributing through CSR.
Although corporates are tasked by the government and civil society to play a key role through CSR, many sub-Saharan countries have limited financial infrastructure resulting in a lack of systematic analysis of CSR and subsequent reporting (Rampersad & Skinner, 2014). A similar perspective of limited financial infrastructure is conveyed by El-Bassiouny and El-Bassiouny (2019), although their postulation specifies this for developing countries, of which sub-Saharan countries are included. Notably, the stringency of accounting standards varies in developed and developing countries because of the disparate economic environments.
Referring to the limited financial infrastructure in sub-Saharan countries, the exception in the region is SA (Balcilar et al., 2018). Notwithstanding that SA has the largest stock market in Africa, it also has one of the highest Gini coefficients in the world (JSE, 2019; World Bank, 2019). Thus, CSR initiatives are crucial towards bridging the wealth gap between the rich and poor.
However, the CSR reporting international standards, principles, and frameworks are not fit for purpose in Africa (Rampersad & Skinner, 2014). Thus, they must be adapted for useful and effective CSR, and subsequent CSR reporting. A later study by Tilt et al. (2021) on CSR reporting in sub-Saharan Africa asserted the notion of Rampersad and Skinner (2014) that international frameworks are not fit for purpose in Africa. Painstakingly, the findings of Tilt et al. (2021) highlighted the fact that global frameworks such as Global Reporting Initiative (GRI) and International Integrated Reporting Framework (IIRF) need to be re-examined to consider the local nuances of the region. This can be done by determining certain indicators, which target the SDGs and meet the key social needs of the region.
Affirming the notion by Tilt et al. (2021) that CSR has a role in meeting SDGs is the study by Matemane et al. (2022). Particularly, SDGs can be attained through concerted efforts of CSR initiatives by improving the ESG performance of a corporate. This can be done through integrating an executive’s compensation with the CSR plans (Matemane et al., 2022).
A lack of underpinned corporate social responsibility reporting frameworks
Various guidelines and frameworks such as the Business in the Community (BiTC), Business Ethics 100, AccountAbility (AA) Rating, and GRI have been crafted to measure, and perhaps curtail business exploitation of the past from occurring again on larger scales. Unfortunately, the guidelines and frameworks result in measures that are complex (Hopkins, 2005; Sawhny, 2008; Siew et al., 2013; Van der Walt 2018). Also, because of the complexity of the CSR guidelines and frameworks, what is measured becomes blurred (Stevenson & Marintseva, 2019).
The above-mentioned guidelines are, however, inconsistent in terms of highlighting the real CSR contribution of business, and cause inconsistency in CSR assurance. The major contributor is that they lack the necessary conceptual framework, which is key in aligning the future of sustainability (Ackers & Eccles, 2015). This illustrated the need for this study to develop a CSR reporting framework based on a conceptual framework (Ackers & Eccles, 2015; Hopkins, 2005; Sawhny, 2008; Siew et al., 2013; Stevenson & Marintseva, 2019; Van der Walt 2018).
Previous studies, including those by Hopkins (2005), Sawhny (2008), Siew et al. (2013), only investigated the measurement of CSR and the reporting tools. The major findings from these studies were a lack of coherent and definite conceptual frameworks supporting CSR reporting. These inefficiencies in CSR conceptual frameworks permit differentiation and inconsistency in CSR reporting. Table 1 summarises findings on lack of the use of conceptual frameworks to underpin CSR reporting that affirms the need for development of a CSR reporting framework, which stems from a conceptual framework.
| TABLE 1: Findings of lack of the application of conceptual frameworks in corporate social responsibility reporting frameworks. |
In a study performed later than that of Hopkins (2005), Sawhny (2008), and Siew et al. (2013), the research of Sifa and Tshiunza (2020) affirms the major findings of the aforementioned studies concerning the lack of definite conceptual frameworks for CSR reporting. Specifically, Sifa and Tshiunza (2020) extend the major findings of Hopkins (2005), Sawhny (2008), Siew et al. (2013) by expressing that in addition to measurement systems for CSR reporting lacking a systematic conceptual basis, there are no explicit definitions of concepts and indicators (summation of findings highlighted in Table 1). These major findings and postulation further asserted the need to develop a CSR reporting framework. However, it extended the scope of the framework to be coherent and promote consistency in reporting.
In consideration of the findings of Hopkins (2005), Sawhny (2008), and Siew et al. (2013) concerning the measurement of CSR and CSR reporting tools, Van der Walt (2018) studied CSR reporting in small and medium-sized enterprises (SMEs) from a business size perspective. The study highlighted the fact that there was a low indicator disclosure rate among SMEs. The reason was that the GRI framework was too complex, time-consuming, and costly. Although the study of Van der Walt (2018) did not offer a framework-specific for SMEs, it outlined a gap for a CSR reporting framework with a concise and coherent set of indicators.
Outline of selected existing corporate social responsibility frameworks
The landscape of CSR reporting in the sub-Saharan African context was discussed in the earlier section. Given that this study focused on the SA context, the CSR reporting frameworks utilised in this study to craft a coherent CSR reporting framework include the GRI, International Organisation for Standardization 26000 (ISO 26000), United Nations Principles for Responsible Investing (PRI), and IIRF.
The rationale for opting for the above frameworks was the following:
Firstly, the GRI was one of the CSR frameworks observed by Forstater et al. (2010) to systematically align and improve CSR reporting among corporates in sub-Saharan Africa. Furthermore, in the 2020 KPMG survey of 5200 large companies in 52 countries (where SA was also included), the GRI was the most popularly used CSR reporting framework (KPMG 2020).
Secondly, regarding the ISO 26000, the standards are able to help all types of corporates to translate global best practices of CSR regardless of the corporate’s industry and size (ISO 26000, 2021). Hence, the relevance of the standards for JSE listed corporates when considering the SA context. In addition, the ISO 26000 standards were identified as the most commonly used CSR standards (KPMG, 2020).
Thirdly, for the PRI, the focus is on investors to advocate for CSR through investing in corporates which incorporate environmental, social, and corporate governance in their strategy, operations, and reporting. Thus, the principles are key for the JSE T40 given that they require institutional investors who are signatories to the PRI to invest in their companies. Moreover, since the PRI began in 2006 it has grown significantly with the signatories having over 80 trillion US dollars of total assets under management in 2019 compared to 5 trillion US dollars of total assets under management in 2006 (United Nations PRI, 2021).
Fourthly, with reference to the IIRF, when considering the 2020 KPMG survey, 70% of large corporates made reference to the IIRF in their annual reports, which integrated both financial and CSR reporting (KPMG, 2020). In addition, Tilt et al. (2021) underscored the relevance of the GRI and the IIRF in increasing the recognition of CSR and integrated reporting in the sub-Saharan region. Hence, the importance of considering IIRF as a framework used by the JSE T40.
The foundational theories for CSR and the reporting thereof discussed in this study are the agency, legitimacy, and stakeholder theories.
Agency theory
The agency theory emphasises the relationship between the agents (executives) and the principals (owners) (Aguilera & Judge 2014). The agents are unfortunately self-serving and do not have similar interests of their principals (Kaunda & Pelser, 2023). From an SA perspective, according to Sampong et al. (2018), the conflict between the interests of executives and shareholders is sufficiently aligned through corporate governance instruments such as the King codes (King I to IV). Moreover, alignment to the King codes has developed the outlook of CSR for corporates in SA. However, in a study conducted earlier to that of Sampong et al. (2018), authors Kiyanga et al. (2016) negated the view that alignment to prescripts of corporate governance such as corporate reporting is sufficient in dealing with the agency theory conflict. Particularly from a CSR perspective, Kiyanga et al. (2016) contend that the corporate reporting required by the agency theory is insufficient.
Legitimacy theory
The legitimacy theory comprises the continuous attempt of corporates to ensure that they are perceived to be upholding society norms and boundaries (Susith & Stewart, 2014). In other words, companies ensure that the social contract between themselves and society is intact. Nevertheless, in ensuring that the social contract is intact, CSR initiatives may be perceived as window dressing (Friedman, 1970; Siew et al., 2013). Negating the view that CSR is a window dressing exercise, Bonsu (2018) emphasised that corporates create legitimacy by using CSR as a strategic framework. This is performed by using philanthropic initiatives that build validity with external stakeholders such as customers and the community.
Unfortunately, the CSR reporting may be distorted by corporates. In particular, the study by Chu et al. (2013) showed that in order to legitimise themselves in society, companies recorded positive and neutral news in their annual and CSR reports. The study by Matemane et al. (2022) supported the findings of Chu et al. (2013), which substantiated that corporates aimed to legitimise their actions through CSR reporting. However, in their quest to legitimise their actions in society, corporates obfuscate information and issue CSR reports with greenwashing. This retracts the benefits of CSR, which would uplift the innovative proficiency of the corporate for it to gain a competitive advantage (Matemane et al., 2022).
Stakeholder theory
The study by Bonsu (2018) posits that the traditional concept of business focus for only shareholders (Parmar et al., 2010) is flawed. Thus, a broader focus and emphasis on other stakeholders who affect the business is significant in proper CSR implementation.
Through stakeholder inclusivity, stakeholders may debate on how resources are used towards sustainable and new ways of using these resources (Delautre & Abriata, 2018). This debate leans on the notions of the legitimisation theory that is of the view that business must meet the expectations of society. This is based on the social contract that a business has with all stakeholders (Delautre & Abriata, 2018; Susith & Stewart, 2014).
Given that there are limitations in the above-mentioned theories, this study opted for an integration of the agency, legitimacy, and stakeholder theories (Susith & Stewart, 2014). This is integral in consideration of King II, III, and IV reports in the SA context as JSE listed companies are to align with the prescripts of the codes. Moreover, from an SA perspective, the study by Sampong et al. (2018) prescribed the need to augment the theoretical views in relation to CSR given that a single theory might be insufficient. The integration is weaved in this study’s framework and this is depicted in Figure 5.
Methodology
Research approach and design
This study applied a constructivist qualitative research approach and the general qualitative research (GQR) strategy. Qualitative research has gained traction and greater acceptance in the past 50 years. This is because of a realisation that scholars need deeper insight to investigate complexities of social phenomena. This is not offered by quantitative research (Jahja et al., 2021). With the evolution of qualitative research, there has been increased debate on the major foundational research designs, that is, phenomenology, ethnography, and ground theory not fitting neatly to answer certain research questions (Kahlke, 2014).
With certain research problems not fitting within the foundational research designs, GQR emerged as an approach. The GQR was relevant for this study given that it aims to derive rich description of data that can be captured through various stages of data collection (Frechette et al., 2020; Percy et al., 2015). In this study, multiple data-collection stages were used. In other words, the researcher integrated the secondary data (content analysis of existing frameworks) and primary data (thematic analysis of interviews and focus groups) into a final CSR reporting framework, thereby meeting the requirements of GQR (Frechette et al., 2020).
Research method
The primary data were collected through in-depth interviews and focus groups. In-depth qualitative interviews comprehensively capture the opinions and experience of participants on a topic (Guion et al., 2011). Given the need to extract in-depth insight from CSR experts, this study used in-depth interviews (Taylor et al., 2016).
The second data-collection tool used in this study was focus groups. A focus group is a semi-structured conversation with a group with the aim of investigating a particular topic (Tong et al., 2007). A focus group consisting of CSR experts who participated in the interviews was used to establish the credibility of the drafted framework. The focus group was conducted through two sessions to accommodate the schedules of the experts and a smaller group per session encouraged engagement of all participants in the session (Fusch & Ness 2015).
Sampling
Purposive sampling
Given that the JSE T40 list changes constantly because of fluctuations in the share price and market capitalisation of the companies, the list posted on the 15th of April 2021 was selected. There is no significance attached to the date. The selected date was the day on which the list was requested by the researcher from the JSE to determine which companies to approach for the study.
This study used purposive sampling as it is a technique in which a sample of individuals is selected based on a specific criterion (Kabir, 2016). The specific criterion for participants is related to their extensive knowledge and experience in CSR reporting. This is because in purposive sampling a particular attribute of the sample is chosen to support the reason for selecting a particular group of interest (Fouché et al., 2021; Jahja et al., 2021).
The specific criteria included senior managers and board members from the JSE T40, CSR practitioners, academia, and representatives from non-profit organisations (NPOs). Participants who contributed to the in-depth interviews were also invited to participate in the focus group phase of the study to validate the formulated CSR reporting framework.
Previous studies have used experts to craft frameworks. Firstly, an updated conceptual framework for CSR practices in pharmaceutical companies was the main contribution of the research of O’Riordan and Fairbrass (2014). The authors aimed to fill the gap of study by O’Riordan and Fairbrass (2008) which solely used secondary data by gaining input from senior business executives and applying a comparative case study approach using mixed methods. Secondly, in a later study to determine the state of sustainability in sub-Saharan Africa, authors Tilt et al. (2021) conducted interviews with seven senior sustainability managers of financial companies from Botswana, Kenya, and Nigeria. The authors found limitations in the small number of interviews and that a wider spectrum was required to gain a deeper understanding of the state of sustainability. Therefore, in this study a higher sample size and an array of CSR experts was sought to gain deeper insights.
Sample size and participants of the study
The sample size of this qualitative research study was 21 participants for the in-depth interviews and six participants for the focus group. The degree of knowledge and expertise the purposive participants have in CSR reporting made this sample size sufficient. This selection was based on the recommendations of Guest et al. (2006), Fusch and Ness (2015), and Hennink et al. (2016) who suggested that for a study to reach saturation, the sample size should be at least 12 participants for interviews and at least 6 for focus groups.
The participants of this study are depicted in Figure 1. The study anonymised the identity of the participants by using pseudonyms. The key used in this study was for instance, academics who are experienced in CSR were denoted with the letter ‘U’ followed by a number to distinguish each participant accordingly. The numbering shows the sequence in which the participants in the group were interviewed. For example, U1 is the first participant who was interviewed in the University Group.
Data analysis methods
The researcher analysed secondary data through content analysis and primary data through thematic analysis. Particularly, content analysis was used to analyse the existing CSR reporting frameworks while thematic analysis was used to analyse the input from in-depth interviews and the focus group. Furthermore, a computer-assisted qualitative data analysis software (CAQDAS) called Atlas.Ti Version 22.2.0 was used to analyse the transcripts from the in-depth interviews and focus groups.
The synopsis of the structure of the interview and focus group data analysis is presented further in the text.
Synopsis of the structure of interview and focus group data analysis
The literature review is what formed the basis of the interview guide. For instance, in terms of the studies by Hopkins (2005), Sawhny (2008), Siew et al. (2013), the major findings from these studies depicted that there was lack of coherent and definite conceptual frameworks that support CSR reporting. This permitted differentiation and inconsistency in CSR reporting.
In addition, in line with the above narrative on the literature review being relevant to the interview guide, Hopkins (2005) proposed a CSR conceptual framework, which CSR reporting frameworks may use as a basis for their framework. Lastly, the interview guide was based on the findings of Sifa and Tshiunza (2020), which proposed the need for consideration of the extent of explicit definitions of concepts and indicators in the current CSR frameworks. Thus, the relevant findings of the studies by Hopkins (2005), Sawhny (2008), Siew et al. (2013), and Sifa and Tshiunza (2020) were incorporated in the interview guide. Hence, the researcher analysed the CSR experts’ insights through these aspects from the literature.
The thematic analysis of the in-depth interviews was to identify the in-depth insights from the participants on how best to develop a CSR reporting framework that promotes coherent reporting. The researcher worked independently, applying convergent thinking based on the data which was attained through the thematic analysis. Furthermore, the relevance of existing CSR reporting frameworks as a basis was incorporated, in order to develop the proposed CSR reporting framework. Then the study established the trustworthiness of the framework through credibility by gaining feedback from CSR experts through a focus group. The feedback was used to make adjustments, which resulted in the final CSR reporting framework for JSE T40.
Data analysis
During the process of analysing thematic data from the in-depth interviews, the researcher read through printed transcripts, then highlighted and observed emerging codes on printed transcripts. As part of the process, some of the codes were reviewed as more participants were interviewed. This was followed by capturing the codes onto Atlas.Ti. The capturing of codes onto Atlas.Ti resulted in the researcher reviewing the codes again by rethinking some of the codes and aligning them. This shows that the processes of familiarising, and searching, reviewing, and describing themes are intertwined (Vaismoradi et al., 2013). Through constant iteration of codes, eventually themes were drafted.
The core theme and subthemes that were derived through analysing the data from the in-depth interviews are discussed next.
The core theme and subthemes derived from the analysis of in-depth interviews
Based on the sorting process, the core theme, Theme 1: Pillars of coherent CSR reporting was derived. The subthemes are Theme 2: Industry requirements, Theme 3: Decolonise CSR, and Theme 4: Culminate diverse views. The illustration of the final theme and subthemes of the new framework are illustrated in Figure 2.
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FIGURE 2: Core theme and subthemes of coherent corporate social responsibility reporting for Johannesburg Stock Exchange Top 40. |
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The rationale for deciding on the core theme and subthemes is presented in Table 2.
The themes supported by the participants notions are tabulated in Figure 3.
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FIGURE 3: Themes supported by participants’ notions. |
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Data analysis of focus group discussions
To validate the proposed framework, focus group discussions were conducted with the same group of CSR experts who participated in the in-depth interviews. The reason is that these CSR experts had already given their input on drafting the framework; hence, they were the suitable participants to validate the framework. The two sessions of the focus group were transcribed by the researcher. During the transcription, the key aspects underscored by the CSR experts were highlighted. The transcripts were then loaded onto Atlas.Ti to further analyse the data. The researcher then read through the transcripts to derive the areas required for validation and referred to the field notes for further insights. Furthermore, through this process, the data on Atlas.Ti were coded in order to derive themes that emerged during the discussions.
The thematic analysis conducted was to synthesise the views of the CSR experts for the purpose of validating the proposed framework by categorising the key views of the experts into codes.
Ethical considerations
Ethical clearance to conduct this study was obtained from the Milpark Research Committee [No. DBA 2021/06/001).
Discussion and findings
Final coherent corporate social responsibility reporting framework for the Johannesburg Stock Exchange T40
In presenting the coherent CSR reporting framework for JSE T40 the following points were underscored. The International Financial Reporting Standards (IFRS) Foundation’s International Sustainability Standards Board (ISSB) is in the process of creating globally accepted consolidation CSR standards (IFRS Foundation, 2022a). However, this process will still take time, presumably at least 10 years, to finalise and reach the consensus to ratify the standards. This is as a result of the comprehensive and transparent process of the IFRS Foundation in drafting standards (IFRS Foundation, 2022b).
Importantly, JSE T40 currently uses a combination of existing CSR reporting frameworks to draft their CSR reports (Davids & Kitcat 2022). Therefore, as far as the researcher is aware through this study, the gap for a coherent CSR reporting framework for JSE T40 consolidated through existing CSR reporting frameworks was filled. Furthermore, the AccountAbility Stakeholder Engagement Standard was used as well to consolidate the proposed framework given that it aids organisations to evaluate, craft, and implement an integrated stakeholder approach (AccountAbility 2015). In summation, the acknowledgement of the ISSB process and use of existing CSR reporting frameworks as a basis for suggested indicators and criteria substantiates the proposed CSR reporting framework for JSE T40, especially for scholars and practitioners in the know, as it will provide a clear ‘road map’ for JSE T40 to follow in their reporting practices.
Noteworthy is the first notion that this coherent CSR reporting framework is not about detailed indexing. However, the coherent CSR reporting framework aims to align CSR reporting in JSE T40 to support coherent reporting among these companies. Secondly, the framework was drafted to be coherent by basing it on a framework suggested by Hopkins (2005). This addressed the gap identified, that is, lack of coherent CSR reporting frameworks based on conceptual frameworks. Thirdly, it is a broad framework, which may be used by CSR practitioners and academicians to create CSR reporting standards for the JSE T40. Finally, given the gaps found in the GRI, ISO2006, and IIRF, this study suggested that CSR practitioners and researchers use a combination of the existing CSR reporting frameworks to draft meaningful and relevant indicators, which will support coherent CSR reporting.
Figure 4 tabulates in synthesis format, the final coherent CSR reporting framework for the JSE T40, comprising the following:
- The definition of CSR and CSR reporting
- The objective of the framework
- Elements to be included when reporting on CSR
- Themes and description of respective theme
- Suggested indicators and criteria. Herein, for example, the suggested indicator which is enumerated as say, ‘1.1’, has its corresponding criteria as ‘1.1.1’.
- After each of the suggested indicators and criteria, there is a reference bracketed to each of the applicable existing CSR reporting frameworks, which were consulted to craft the suggested indicators and criteria. For instance, for suggested indicator 1.1 Strategy alignment for contextual and meaningful CSR reporting on material issues, there is specific reference to the following applicable existing CSR reporting: (AccountAbility, Commitment, and Integration; IIRF 4E Strategy and resource allocation; GRI 101).
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FIGURE 4: Coherent corporate social responsibility reporting framework for Johannesburg Stock Exchange Top 40. |
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FIGURE 4 (Continues…): Coherent corporate social responsibility reporting framework for Johannesburg Stock Exchange Top 40. |
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FIGURE 4 (Continues…): Coherent corporate social responsibility reporting framework for Johannesburg Stock Exchange Top 40. |
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FIGURE 4 (Continues…): Coherent corporate social responsibility reporting framework for Johannesburg Stock Exchange Top 40. |
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FIGURE 4 (Continues…): Coherent corporate social responsibility reporting framework for Johannesburg Stock Exchange Top 40. |
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Alignment of final framework with the Hopkins model
Given that the basis of this study was the fact that existing frameworks fail to support coherent reporting through lack of underpinning of CSR conceptual frameworks, the final coherent CSR reporting framework aligned with the suggested conceptual framework of Hopkins (2005) as presented in Table 3.
| TABLE 3: Final framework’s alignment with the Hopkins model. |
Table 3 forms part of assessing whether the findings of the research are in accordance with the literature review. A similar assessment is conducted in the next section.
Alignment of theories with themes of the final framework
A study can assess the literature review after the findings to ascertain whether the final framework aligns with the literature review to ensure dependability of the findings. The main aspects of the findings are highlighted further in the text and are aligned with what was underscored in the literature review.
Corporate social responsibility theories in the form of the agency, stakeholder, and legitimacy theories were integrated because of the gaps identified in this study in understanding CSR reporting from one theoretical underpinning. The integration of the theories is relevant given that the themes of the coherent CSR reporting framework related to the various theories. Thus, this means that the final framework is inclusive of the theoretical underpinnings for CSR reporting.
The alignment is mapped in Figure 5 with:
- the first column indicating the various theories;
- the second column indicating the aligned theme in the final framework;
- the third indicating the description of the alignment.
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FIGURE 5: Alignment of theories with themes in the final framework of the study. |
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Limitations
Although this research offers meaningful insights into CSR reporting for the JSE T40, there are limitations including observations made during the study, which propose that additional research is required to tackle these limitations. Firstly, the final coherent CSR reporting framework for JSE T40 is not sector-specific. Although the study gained the insight from CSR experts from the JSE T40 representing various sectors, future research can add to the framework by developing a sector-specific coherent framework for the JSE, similar to the GRI series for specific sectors. Secondly, as previously stated, the study was conducted during the process of collating various frameworks to establish a global CSR framework by the IFRS Foundation. However, given that SA is a developing country and has its specific challenges, the coherent reporting framework is relevant to align reporting, which will reduce inconsistency in CSR reporting, CSR assurance, enable user comparability, and improve monitoring and evaluation. Thus, future research in considering the work towards standardising CSR reporting can use this framework to compare whether the global framework is being developed based on a conceptual framework and/or supports the themes of the final framework of this study. Thirdly, the inclusion of traditional leaders, informal and formal institutions, indigenous knowledge systems, and considering the diversity of employees formed part of the key considerations for corporates under decolonise CSR. Hence, the relationship between CSR and these concepts can be further unpacked for corporates to understand the interdependencies involved. Additionally, the use of indigenous knowledge systems as part of the solutions for the corporate to consider can be researched on how to best harness these.
Conclusion and practical implications
Corporate social responsibility reporting is an important requirement for corporates on the JSE T40 to meet given the JSE requirements to align with King IV. Additionally, the rise in advocacy and demand for accountability from investors, civil society organisations (CSOs), consumers, and society at large has increased focus towards ESG. Thus, internal and external stakeholders are eager to be appraised on which key material risks and opportunities the corporate is addressing through their CSR initiatives embedded in their overall strategy and operations. However, the merits of CSR are not optimally gained and reported on because of the lack of CSR reporting frameworks, which are underpinned by sound conceptual frameworks.
In light of the above, this article presented previous research findings, which showed that the JSE listed companies do produce CSR reports but not in a consistent way to improve stakeholder relevance and legitimacy of CSR. The researcher applied a constructivist qualitative research approach and the GQR strategy in this study to gain deeper insight from the purposefully chosen CSR experts. The primary data derived from in-depth interviews and focus groups were assessed through thematic analysis. These data, including the literature review, provided the final CSR reporting framework with four themes.
The framework comprises a definition of CSR and CSR reporting; the objective of the framework; four themes, namely Pillars of CSR reporting, Industry requirements, Decolonise CSR, and Culminate diverse views. Furthermore, each theme is supported by suggested indicators and criteria for the JSE T40.
The practical implications of this study are that it contributes to CSR reporting for the JSE T40 by advancing a framework, which supports coherent reporting. This will be of specific interest to employees responsible for CSR in JSE companies, CSR practitioners, academics, investors, consumers, and other stakeholders such as the Institute of Directors Southern Africa (IoDSA) and CSOs who expect CSR reporting to improve ESG in tandem with the aspirations of the Agenda 2063 and SDGs. The following recommendations are made. Firstly, inclusion of CSR in strategy and KPIs. As CSR is part of the DNA of the corporate, it is essential for it to be understood accordingly across the organisation. The JSE T40 managers must consider including CSR as part of their business environment scanning and strategy formation.
Secondly, CSR reporting is not an annual event. The corporate must ensure through its managers that specific employees, who can be so-called ‘CSR champions’, are responsible for collating and reporting on the CSR initiatives on at least a quarterly basis. The suggested indicator and criteria 1.4 under Theme 1 of the framework, in Figure 4, suggest focus areas in accordance with ensuring accountability of certain individuals for coherent CSR reporting.
Thirdly, context is key in CSR reporting. The developing country context is key when the JSE T40 drafts their CSR strategy or aligns their strategy considering CSR. Managers and the board of the corporate when drafting the CSR strategy can consider Theme 3: Decolonise CSR of the framework. Lastly, the role of the social and ethics committees in CSR reporting needs to be elevated. It was apparent in the study that the SEC’s role was minimal in upholding a CSR culture and ensuring robust CSR reporting. Thus, increased sensitisation on the relevance of CSR can be addressed through appointing knowledgeable and experienced individuals in CSR to be part of the committee. Additionally, institutions such as IoDSA may elevate and improve the role of the SEC by offering structured CSR training programmes for board members and managers.
In conclusion, the findings of this study support CSR reporting for the JSE T40 considering the context of the environment in which these corporates operate. Given that there are both internal and external stakeholders who consume the CSR reports of the JSE T40, their reporting needs to be holistic and not targeted only towards investors (Al-Dah et al. 2018; Masoud 2017).
Hence, the relevance of stakeholder inclusivity that are advocated for by King IV and echoed through Theme 4: Culminate diverse views. The relevance of CSR is increasingly important because of the coronavirus disease 2019 (COVID-19) pandemic, reduction in economic growth, climate change, lack of corporate governance, social unrest, high unemployment, and inequality. The application of coherent reporting can aid in addressing socio-economic inequalities, global warming, corporate governance scandals, and greenwashing by increasing corporate responsiveness and responsibility. Therefore, the aspirations of the National Development Plan, Agenda 2063 and SDGs can be attained through CSR.
Acknowledgements
This article is partially based on the author’s thesis entitled ‘Corporate Social Responsibility (CSR) Reporting in South Africa: Developing a Coherent CSR Reporting Framework for Companies Listed on the JSE Top 40 Index’ towards the degree of Doctor of Business Administration in Business Administration Milpark Business School, South Africa on January 2023, with supervisor Dr. Jane Usher and co-supervisor Dr. Jacques van Zyl.
Competing interests
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Authors’ contributions
N.D. was responsible for writing, data collection, methodology, and analysis. J.V.U. and J.v.Z. were responsible for supervision and contributed to shaping the article to ensure that the ideas are properly presented.
Funding information
This study did not receive any specific grant from any funding agency in the public, commercial, or not-for-profit sectors.
Data availability
The data that support the findings of this study are available from the corresponding author, N.D., upon reasonable request.
Disclaimer
The views and opinions expressed in this article are those of the authors and are the product of professional research. It does not necessarily reflect the official policy or position of any affiliated institution, funder, agency, or that of the publisher. The authors are responsible for this article’s results, findings, and content.
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