Corporate social responsibility disclosure on Twitter: Signalling or greenwashing? Evidence from the UK
Marian H. Amin
School of Business, The Knowledge Hub Universities, New Administrative Capital, Cairo, Egypt
Search for more papers by this authorHeba Ali
Faculty of Management Technology, German University in Cairo, Cairo, Egypt
Search for more papers by this authorCorresponding Author
Ehab K. A. Mohamed
Faculty of Management Technology, German University in Cairo, Cairo, Egypt
Correspondence
Ehab K. A. Mohamed, Faculty of Management Technology, German University in Cairo, New Cairo City, Cairo 11835, Egypt.
Email: [email protected]
Search for more papers by this authorMarian H. Amin
School of Business, The Knowledge Hub Universities, New Administrative Capital, Cairo, Egypt
Search for more papers by this authorHeba Ali
Faculty of Management Technology, German University in Cairo, Cairo, Egypt
Search for more papers by this authorCorresponding Author
Ehab K. A. Mohamed
Faculty of Management Technology, German University in Cairo, Cairo, Egypt
Correspondence
Ehab K. A. Mohamed, Faculty of Management Technology, German University in Cairo, New Cairo City, Cairo 11835, Egypt.
Email: [email protected]
Search for more papers by this authorAbstract
This study aims at exploring and investigating whether disclosure of corporate social responsibility (CSR) on Twitter signals true CSR performance or merely is a greenwashing tool to conceal and compensate for inferior CSR performance. Based on a sample of 167,908 tweets posted by the constituents of the FTSE 350 Index, topic modelling—a natural language processing technique based on unsupervised learning—is utilized to identify CSR disclosure on social media. Our empirical evidence based on several regression models shows association between firms' CSR performance and disclosure, which supports the signalling story, and hence, casts doubt on the greenwashing behaviour among UK firms on social media. Our findings suggest several implications for researchers, shareholders, and practitioners as the relation between CSR disclosure on influential, widely reached platforms such as social media and CSR performance carries important indications about the credibility of the content of such disclosure, the extent to which it reflects actual CSR performance, and hence its usefulness for all stakeholders interested in CSR. The true motive behind CSR disclosures can greatly influence how stakeholders perceive such information and the extent to which they can rely on it for decision making purposes.
CONFLICT OF INTEREST
We confirm that this manuscript has no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Open Research
DATA AVAILABILITY STATEMENT
The data that support the findings of this study are available from the corresponding author upon reasonable request.
REFERENCES
- Ahmed, A., Monem, R. M., Delaney, D., & Ng, C. (2017). Gender diversity in corporate boards and continuous disclosure: Evidence from Australia. Journal of Contemporary Accounting & Economics, 13(2), 89–107.
- Albitar, K., Abdoush, T., & Hussainey, K. (2022). Do corporate governance mechanisms and ESG disclosure drive CSR narrative tones? International Journal of Finance & Economics, 1–15. https://doi.org/10.1002/ijfe.2625
- Arayssi, M., Jizi, M., & Tabaja, H. H. (2020). The impact of board composition on the level of ESG disclosures in GCC countries. Sustainability Accounting, Management and Policy Journal, 11(1), 137–161.
- Badayi, S., Matemilola, B., An, B. A., & Wei Theng, L. (2021). Does corporate social responsibility influence firm probability of default? International Journal of Finance & Economics, 26(3), 3377–3395.
- Blankespoor, E., Miller, G. S., & White, H. D. (2014). The role of dissemination in market liquidity: Evidence from firms' use of twitter. The Accounting Review, 89(1), 79–112.
- Blei, D., Ng, A., & Jordan, M. (2003). Latent Dirichlet allocation. Journal of Machine Learning Research, 3, 993–1022.
- Brammer, S., & Pavelin, S. (2008). Factors influencing the quality of corporate environmental disclosure. Business Strategy and the Environment, 17(2), 120–136.
10.1002/bse.506 Google Scholar
- Buallay, A., Hamdan, R., Barone, E., & Hamdan, A. (2020). Increasing female participation on boards: Effects on sustainability reporting. International Journal of Finance & Economics, 27(1) 1–14.
- Chijoke-Mgbame, A. M. (2021). Corporate social responsibility in the UK. In Current global practices of corporate social responsibility, CSR, sustainability, Ethics & Governance (pp. 399–417). Springer.
10.1007/978-3-030-68386-3_19 Google Scholar
- Chiu, T., & Wang, Y. (2015). Determinants of social disclosure quality in Taiwan: An application of stakeholder theory. Journal of Business Ethics, 129(2), 379–398.
- Cho, H., & Patten, M. (2007). The role of environmental disclosures as tools of legitimacy: A research note. Accounting, Organizations and Society, 32(7–8), 639–647.
- Clarkson, P., Li, Y., Richardson, G., & Tsang, A. (2019). Causes and consequences of voluntary assurance of CSR reports: International evidence involving Dow Jones sustainability index inclusion and firm valuation. Accounting, Auditing & Accountability Journal, 32(8), 2451–2474.
- Clarkson, P. M., Li, Y., Richardson, G. D., & Vasvari, F. P. (2008). Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations and Society, 33(4–5), 303–327.
- Clarkson, P. M., Overell, M. B., & Chapple, L. (2011). Environmental reporting and its relation to corporate environmental performance. Abacus, 47(1), 27–60.
- Cormier, D., Aerts, W., Ledoux, M. J., & Magnan, M. (2010). Web-based disclosure about value creation processes: A monitoring perspective. Abacus, 46(3), 320–347.
- Cormier, D., & Magnan, M. (2015). The economic relevance of environmental disclosure and its impact on corporate legitimacy: An empirical investigation. Business Strategy and the Environment, 24(6), 431–450.
- Culnan, M. J., McHugh, P. J., & Zubillaga, I. (2010). How large US companies can use twitter and other social media to gain business value. MIS Quarterly Executive, 9(4), 243–259.
- De Villiers, C., & Marques, A. (2016). Corporate social responsibility, country-level predispositions, and the consequences of choosing a level of disclosure. Accounting and Business Research, 46(2), 167–195.
- De Villiers, C., Naiker, V., & Van Staden, C. J. (2011). The effect of board characteristics on firm environmental performance. Journal of Management, 37(6), 1636–1663.
- De Villiers, C., & Van Staden, C. J. (2006). Can less environmental disclosure have a legitimising effect? Evidence from Africa. Accounting, Organizations and Society, 31(8), 763–781.
- Delmas, M. A., & Burbano, V. C. (2011). The drivers of greenwashing. California Management Review, 54(1), 64–87.
- Dorminey, J. W., Dull, R. B., & Schaupp, L. C. (2015). The effect of SEC approval of social media for information dissemination. Research in Accounting Regulation, 27(2), 165–173.
10.1016/j.racreg.2015.09.007 Google Scholar
- Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. The Journal of Law and Economics, 26(2), 301–325.
- Garcia, A., Mendes-Da-Silva, W., & Orsato, R. (2017). Sensitive industries produce better ESG performance: Evidence from emerging markets. Journal of Cleaner Production, 150, 135–147.
- Gerged, A. M., Albitar, K., & Al-Haddad, L. (2021). Corporate environmental disclosure and earnings management—The moderating role of corporate governance structures. International Journal of Finance & Economics, 1–22. https://doi.org/10.1002/ijfe.2564
- Guidry, R. P., & Patten, D. M. (2010). Market reactions to the first-time issuance of corporate sustainability reports. Sustainability Accounting, Management and Policy Journal, 1(1), 33–50.
10.1108/20408021011059214 Google Scholar
- Hu, D. J. (2009). Latent Dirichlet allocation for text, images, and music. University of California.
- Jame, R., Johnston, R., Markov, S., & Wolfe, M. C. (2016). The value of crowdsourced earnings forecasts. Journal of Accounting Research, 54(4), 1077–1110.
- Jizi, M. (2017). The influence of board composition on sustainable development disclosure. Business Strategy and the Environment, 26(5), 640–655.
- Khaled, R., Ali, H., & Mohamed, E. (2021). The sustainable development goals and corporate sustainability performance: Mapping, extent and determinants. Journal of Cleaner Production, 311, 1–10.
- Khan, M. T., Al-Jabri, Q. M., & Saif, N. (2021). Dynamic relationship between corporate board structure and firm performance: Evidence from Malaysia. International Journal of Finance & Economics, 26(1), 644–661.
- Khan, M., Halabi, A., & Samy, M. (2009). Corporate social responsibility (CSR) reporting: A study of selected banking companies in Bangladesh. Social Responsibility Journal, 5(3), 344–357.
10.1108/17471110910977276 Google Scholar
- Lee, L. F., Hutton, A. P., & Shu, S. (2015). The role of social media in the capital market: Evidence from consumer product recalls. Journal of Accounting Research, 53(2), 367–404.
- Lindblom, C. K. (1994). The implications of organizational legitimacy for corporate social performance and disclosure. Critical Perspectives on Accounting Conference, New York.
- Lokuwaduge, C. S., & Heenetigala, K. (2017). Integrating environmental, social and governance (ESG) disclosure for a sustainable development: An Australian study. Business Strategy and the Environment, 26(4), 438–450.
- Mahoney, L. S., Thorne, L., Cecil, L., & LaGore, W. (2013). A research note on standalone corporate social responsibility reports: Signaling or greenwashing? Critical Perspectives on Accounting, 24(4–5), 350–359.
- Miller, G. S., & Skinner, D. J. (2015). The evolving disclosure landscape: How changes in technology, the media, and capital markets are affecting disclosure. Journal of Accounting Research, 53(2), 221–239.
- Miner, G., Elder, J., IV, Fast, A., Hill, T., Nisbet, R., & Delen, D. (2012). Practical text mining and statistical analysis for non-structured text data applications. Academic Press.
- Nuseir, M., & Qasim, A. (2021). Investor relations in the era of social media: Systematic literature review of social media as a strategic corporate disclosure tool. Journal of Financial Reporting and Accounting, 19, 1985–2517.
- Olatubosun, P., & Nyazenga, S. (2019). Greenwashing and responsible investment practices: Empirical evidence from Zimbabwe. Qualitative Research in Financial Markets, 13(1), 16–36.
- Oliveira, J., Azevedo, G., & Silva, M. (2019). Institutional and economic determinants of corporate social responsibility disclosure by banks: Institutional perspectives. Meditari Accounting Review, 27(2), 196–227.
- Patten, D. (2002). The relation between environmental performance and environmental disclosure: A research note. Accounting, Organizations and Society, 27(8), 763–773.
- Pitrakkos, P., & Maroun, W. (2019). Evaluating the quality of carbon disclosures. Sustainability Accounting, Management and Policy Journal, 11(3), 553–589.
- Prado-Lorenzo, J. M., & Garcia-Sanchez, I. M. (2010). The role of the board of directors in disseminating relevant information on greenhouse gases. Journal of Business Ethics, 97(3), 391–424.
- Roberts, R. W. (1992). Determinants of corporate social responsibility disclosure: An application of stakeholder theory. Accounting, Organizations and Society, 17(6), 595–612.
- Salama, A., Anderson, K., & Toms, J. (2011). Does community and environmental responsibility affect firm risk? Evidence from UK panel data 1994-2006. Business Ethics: A European Review, 20(2), 192–204.
- Sarhan, A. A., Ntim, C. G., & Al-Najjar, B. (2019). Board diversity, corporate governance, corporate performance, and executive pay. International Journal of Finance & Economics, 24(2), 761–786.
- Schmitz, J., & Schrader, J. (2015). Corporate social responsibility: A microeconomic review of the literature. Journal of Economic Surveys, 29(1), 27–45.
- Siano, A., Vollero, A., Conte, F., & Amabile, S. (2017). More than words: Expanding the taxonomy of greenwashing after the Volkswagen scandal. Journal of Business Research, 71, 27–37.
- Sinclair-Desgagne, B., & Gozlan, E. (2003). A theory of environmental risk disclosure. Journal of environmental Economics and Management, 45(2), 377–393.
- Suttipun, M. (2012). Triple bottom line reporting in annual reports: A case study of companies listed on the stock exchange of Thailand (SET). Asian Journal of Finance & Accounting, 4(1), 69–92.
10.5296/ajfa.v4i1.1289 Google Scholar
- Torelli, R., Balluchi, F., & Lazzini, A. (2019). Greenwashing and environmental communication: Effects on stakeholders' perceptions. Business Strategy and the Environment, 29(2), 407–421.
- Trinkle, B. S., Crossler, R. E., & Bélanger, F. (2015). Voluntary disclosures via social media and the role of comments. Journal of Information Systems, 29(3), 101–121.
- Uyar, A., Karaman, A. S., & Kilic, M. (2020). Is corporate social responsibility reporting a tool of signaling or greenwashing? Evidence from the worldwide logistics sector. Journal of Cleaner Production, 253, 1–13.
- Wang, Z., Hsieh, T. S., & Sarkis, J. (2018). CSR performance and the readability of CSR reports: Too good to be true? Corporate Social Responsibility and Environmental Management, 25(1), 66–79.
- We are social (2020), Digital 2020: 3.8 Billion People Use Social Media, available at: https://wearesocial.com/uk/blog/2020/01/digital-2020-3-8-billion-people-use-social-media/. Accessed on 20 September 2020.
- Yoon, B., Lee, J. H., & Byun, R. (2018). Does ESG performance enhance firm value? Evidence from Korea. Sustainability, 10(10), 3635.