Law, Society, and Industrial Justice.

As public concern over greenwashing has grown in the last two decades, academic research has increased correspondingly, and there is now a substantial body of research addressing issues related to greenwashing. In this paper, we therefore review and analyze greenwashing research, to provide an evaluation of trends and progress in the field and a synthesis of the empirical and conceptual results presented in existing studies. Our main finding leading to our theory contribution is the criticism raised in greenwashing research that the entirely voluntary CSR (Corporate Social Responsibility) approach facilitates the diffusion of greenwashing. The voluntary idea of CSR is still prevalent in the CSR literature and appears to be a grey-zone that creates space for misleading ‘green’ communication. Consequently, we propose that greenwashing could be better prevented with a combination of voluntary and mandatory aspects. The new paradigm should promote creative and effective corporate CSR initiatives, while at the same time design the limits and the rules for their accomplishments and communication, as firms would risk breaching legislation when overstretching CSR messages.

/pdf/grey-zone-in-greenwash-out-a-review-of-greenwashing-research-3on0orb6qb.pdf

Grey zone in – greenwash out. A review of greenwashing research and implications for the voluntary-mandatory transition of CSR

The absence of consensus on what should constitute Corporate Social Responsibility has inhibited consistent CSR legislation around the world. This paper poses a fundamental question on what should constitute CSR and what should be the nature of CSR regulation? By constructing the boundaries of CSR, the paper offers scope for consistently developing CSR regulation around the world. It construes CSR as consisting of business relation and impact relation, and demonstrates that these are intertwined with legal responsibilities of business and, consequentially, with accountability. It accomplishes this by establishing the obligatory nature of responsibilities using the lens of ethical and legal jurisprudence. This new approach towards CSR recasts it as an obligatory responsibility that is linked to accountability. Furthermore, the framework provides a foundation for consistent development of CSR regulation across different countries that can lead to effective discharge of corporates’ social responsibilities.

/pdf/corporate-social-responsibility-and-accountability-a-new-46c0boy1zv.pdf

Corporate social responsibility and accountability: a new theoretical foundation for regulating CSR

Since 2016, the European context has been characterised by the introduction of the Directive 95/2014/EU on mandatory non-financial reporting. The Directive has been transposed in the Italian context through the Legislative Decree 254/2016. However, following evidence previously collected from other jurisdictions, a high degree of scepticism by academics still characterises the debate on the effectiveness of this form of regulation. In fact, the literature highlights that the effects of a mandatory approach to non-financial reporting are limited to an increase in the annual quantity of information provided and not by an effective organizational change. Therefore, the contribution of our paper is twofold: a gap analysis between the overall degree of non-financial reporting quality between the years 2015 and 2017 and an empirical analysis, factors of which have impacted on the quality of non-financial reports prepared in 2017.

https://www.mdpi.com/2071-1050/12/1/92/pdf

The Non-Financial Reporting Harmonization in Europe: Evolutionary Pathways Related to the Transposition of the Directive 95/2014/EU within the Italian Context

Mandatory corporate social responsibility in India and its effect on corporate financial performance: Perspectives from institutional theory and resource‐based view

Although the literature on corporate social responsibility (CSR) has discussed the scope and meaning of CSR extensively, confusion still exists regarding how to define the concept. One controversial issue deals with the changing legal status of CSR (i.e., the voluntary vs. mandatory nature of the concept). Based on a review of CSR definitions and meta-studies on CSR definitions, we find that the majority of definitions leans toward voluntary CSR. However, some recent regulatory amendments toward mandatory CSR have called into question the established idea of CSR as merely a managerial tool of self-regulation. In this paper, we juxtapose the evolution of CSR in India against the scholarly literature discussing voluntary-versus-mandatory CSR to understand the recent shift toward a new conceptualization of CSR as a form of co-regulation that includes elements of both voluntary and mandatory regulation. The Indian Companies Act 2013 (Section 135) is a remarkable example in that it replaced an older version from 1956, taking a bold step toward the integration of voluntary and mandatory aspects in the application of CSR. We present practical implications of the Indian case for businesses and discuss implications for CSR theory development; we particularly consider the evolution of the business and society relationship from a voluntary soft law approach to CSR to an increasingly hard law approach and transitory hybrid forms in-between like soft–hard law and hard–soft law.

Babitha Vishwanath

Papers

Are We Moving Beyond Voluntary CSR? Exploring Theoretical and Managerial Implications of Mandatory CSR Resulting from the New Indian Companies Act