Received: 6 August 2020 Revised: 14 February 2021 Accepted: 28 February 2021

DOI: 10.1002/csr.2137

RESEARCH ARTICLE

The application of corporate social responsibility (CSR) actions

for mitigation of environmental, social, corporate governance
(ESG) and reputational risk in integrated reports

Mariusz Karwowski | Monika Raulinajtys-Grzybek

Department of Management Accounting,

Collegium of Business Administration, Warsaw
School of Economics, Warsaw, Poland
Correspondence
Mariusz Karwowski, Department of
Management Accounting, Collegium of
Business Administration, Warsaw School of
Economics, aleja Niepodległosci 162, 02-554
Warsaw, Poland.
Email: mkarwo@sgh.waw.pl
Abstract
Many studies stress the importance of understanding actions within sustainable
development to prevent risks brought by companies. Environment, social factors, cor-
porate governance (ESG) as well as reputation are even more important risk factors.
In turn, companies can take corporate social responsibility (CSR) actions to avoid ESG
and reputational risk. The aim of the article is to analyze the role of CSR in risk miti-
gation. The study includes content analysis of integrated reports in terms of reporting
information on both risk and CSR activities such as stakeholder engagement or envi-
ronmental policy. The companies most often indicate governmental risk, followed by
social risk. The most common CSR actions are those related to social impact. Despite
the fact that the analyzed database of over 120 integrated reports is not fully homo-
geneous, the conducted research shows a statistically important correlation in cate-
gorization of risks and CSR actions. Both statistical analysis and analysis of the
content of reports confirms that companies identify their ESG and reputational risks
and use CSR actions to mitigate them.

KEYWORDS
corporate social responsibility (CSR), environmental, environmental policy, integrated reports,
reputational risk, risk avoidance, social and corporate governance (ESG) risk, stakeholder
engagement, sustainable development

1 | I N T RO DU CT I O N Numerous research attempts to operationalize the reasons why

Corporate social responsibility (CSR) has received much attention both
from researchers and practitioners. As a result, most of large companies
perform CSR actions and communicate them through different channels,
including business reports. Interestingly, Muñoz-Torres et al. (2018)
noticed that there is still no consensus over the definition of CSR. In
broader meaning it is a response to the specific demands of largely exter-
nal stakeholders (Lock & Seele, 2015). European Commission (2001)
defined it more specifically as “a concept whereby companies integrate
social and environmental concerns in their business operations and in
their interactions with their stakeholders.” This way companies are sup-
posed to reflect their triple bottom line, consisting of financial, social, and
environmental performance (Lock & Seele, 2015).
companies decide for CSR, which is generally perceived as a set of
actions of economic, social, and environmental concern that go
beyond what is required by law (Doh & Guay, 2006; McWilliams &
Siegel, 2001; van Marrewijk, 2003). The behaviors of companies in
this area are a manifestation of the legitimacy theory, a social contract
between the organization and the society (or community) in which it
operates, built on the basis of culture, belief system, and values.
Under this contract, organizations should comply with societal expec-
tations and norms while they conduct their operations. They also
need to take all measures necessary to ensure that their activities are
perceived to be appropriate with the societal expectations of various
stakeholders (Mio et al., 2020). Firms seeking to gain or maintain legit-
imacy use communication strategies, including disclosures in financial

1270 © 2021 ERP Environment and John Wiley & Sons Ltd. wileyonlinelibrary.com/journal/csr Corp Soc Responsib Environ Manag. 2021;28:1270–1284.

KARWOWSKI AND RAULINAJTYS-GRZYBEK
reports (Ortas et al., 2015). Kouloukoui et al. (2019) observed that
there is a growing disclosure of social and environmental information
via different forms and communication channels. This communication
between organizations and their stakeholders is a primary motive of
the legitimacy theory, which has been used in various research in
order to support the reasons that motivate companies to invest in
social and environmental disclosure without any legal force. So, when
it comes to seeking an explanation for the adoption of certain corpo-
rate disclosure mechanisms, this theory is one of the most used. After
the implementation of law in this area, such as Directive 2014/95/EU
of the European Parliament and of the Council as regards disclosure
of non-financial and diversity information by certain large undertak-
ings and groups, the legitimacy theory maintained its relevance (Mio
et al., 2020).
Many scholars assert that CSR is beneficial not only to society,
but to the firms themselves (Porter & Kramer, 2002). Research on the
reasons for CSR actions shows that companies in better financial
standing are more willing to adopt CSR (Campbell, 2007), and on the
other hand CSR can improve firm's reputation, limit the reputational
risk and maintain the legitimacy (Babiak & Trendafilova, 2011; Gar-
dberg & Fombrun, 2006; Heikkurinen, 2010; Lin et al., 2016; Melo &
Garrido-Morgado, 2012; Utting, 2005). Some research proves that
there can be direct or indirect impact on financial performance (Ali
et al., 2017; Hsu & Chen, 2015; Walker & Mercado, 2015), as well as
on different categories of business risks (Godfrey et al., 2009; Lin
et al., 2016).
Much attention in the literature is also paid to the maturity of
CSR actions. Academics are relatively consistent in their approach to
modeling CSR maturity. The maturity models are linear and have grad-
ual character (Ainsbury & Grayson, 2014; Maon et al., 2010; Mirvis &
Googins, 2006; Zadek, 2004). Figure 1 presents stages of CSR
maturity.
According to this model, in the initial stage the company is defen-
sive towards CSR, denying, or dismissing it. More mature approach
presents engagement, usually related to legal compliance and “win-
dow-dressing” to some extent. At that stage, the company is highly
determined by institutional factors which drive its performance. Fur-
ther step includes risk mitigation and opportunity maximization. In this
stage companies start identifying their social, environmental, and eco-
nomic impacts and seeking to minimize the material negative impact,
F I G U R E 1 Stages of CSR maturity.
Source: own work based on (Ainsbury and Grayson, 2014; Głuszek, 2018)
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1271
as well as maximize the positive. The highest level of maturity moves
company's perspective beyond their own interest to the overall cor-
porate citizenship.
The focus of our research is whether companies take CSR actions
for the purpose of risk mitigation and opportunity maximization –
expecting to improve their financial standing. In other words, we want
to check if studied companies have gone to higher CSR maturity
stage, meaning that CSR is treated as a risk management tool and not
only as their legal obligation.
Our study is inspired by the fact, that companies such as British
Telecom or Nike declare that they choose CSR projects based on the
list of main risks (Kytle & Ruggie, 2005; Runhaar & Lafferty, 2009).
However, some existing studies show a disconnection between
thoughts and actions of many companies regarding CSR (Kiron
et al., 2013). Rehman et al. (2020) stated that CSR's impact on firm
risk is comparatively inconclusive and underexplored and further
explorative studies are needed in this area (cf. Kouloukoui
et al., 2019). Furthermore, our paper examines which risk area is per-
ceived as mostly influenced by CSR actions. We concentrate on envi-
ronmental, social, and governance (ESG), as well as reputational risk
(further ESG&R risk), as these risks can be influenced by CSR actions.
The aim of the research is to analyze the role of CSR in risk miti-
gation. The objectives of the research are as follows: (1) to analyze
and categorize the main areas of CSR actions; (2) to analyze the risk
profile of companies; (3) to study the impact of CSR actions on corpo-
rate risk. We use business reports as they remain the most reliable
source of information about companies' CSR activities (Chapple &
Moon, 2005).
The issue of the role of CSR in risk mitigation is certainly interest-
ing. Even though much research has been carried on CSR, the empiri-
cal research on risk disclosure is almost nonexistent. We make
attempts to fill this gap, by providing evidence of the factors influenc-
ing the CSR actions. This study adds to CSR-related literature as it
provides evidence on the role of CSR engagement in risk mitigation.
To our knowledge this is the first global research analyzing whether
companies take CSR actions in the areas where they identify major
ESG&R risks.
The remainder of the paper is structured as follows: first it pre-
sents the literature insights related to CSR actions and their impact on
the risk profile and specific risk categories. Later, it presents the

1272
research design, followed by an exploratory study of CSR and risk dis-
closure based on the entire sample of organizations with headquarters
all over the world applying the integrated reporting framework in the
latest available reports. The research methodology includes the pre-
sentation of a map of the CSR actions as well as risks reported, which
is then used to analyze any correlation between those variables.
Finally, the paper presents the discussion of the results.
2 | LITERATURE REVIEW
Risk has been of considerable interest in the economic literature since
the beginning of the 1920s, when a basic distinction between the risk
and the uncertainty was made. The risk, in contrast to uncertainty,
refers to those events which are in some way predictable and statisti-
cally calculable. At the beginning of the 1990s, the term of risk man-
agement became important, because of the need of larger
accountability and control framework (Quarchioni & Trovarelli, 2013).
Because the information needs of company's stakeholders change –
as they desire more than just traditional financial information – a
growing interest in the “risk” topic is observed. Nielsen and
Lund (2014) highlight that, as a reaction to the financial crisis begin-
ning in 2008, analysts, investors and banks seem to be demanding
more information that will allow them to understand the risks the
company faces, and reliable information about their management.
Moreover, more mature risk management practices and disclosures
are positively correlated with higher profitability (Wen & Yap Kiew
Heong, 2017). The risk influences company's financial performance,
since it enables the company to allocate scarce resources in a more
efficient manner (cf. Naseem et al., 2020).
Risk management is the application of policies and procedures to
the tasks of identifying, analyzing and assessing risks, determining the
degree of exposure to risk that companies can accommodate
(Francis & Armstrong, 2003) and actions that those charged with gov-
ernance have carried out to influence the strategic direction of the
company (Rivera-Arrubla et al., 2017). Risk management aims to pro-
tect the company value, this way making the business sustainable
over time (Bertinetti & Gardenal, 2016; Buckby et al., 2015).
Power (2009) stated that nowadays an increasingly relevant part of
risk management is about identifying potential impacts that threaten a
company and about providing a framework for building resilience and
the capability for an effective response that safeguards the interests
of its stakeholders, reputation, brand and value creating activities. The
ways in which resilience is conceived and operationalized within com-
panies, and its influence on risk management strategies, deserve more
attention (Quarchioni & Trovarelli, 2013).
There are numerous categorizations of risk in the literature. Social
responsibility is often set together with sustainability risk, also named
ESG risk. Sustainability risk refers to environmental, social and gover-
nance events or conditions (Cheasty, 2019). Other authors concen-
trate on environmental and social risks (Shea & Hutchin, 2018; Truant
et al., 2017; Zhang et al., 2017) – but their definition of social risk
incorporates what is termed governance risk.
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KARWOWSKI AND RAULINAJTYS-GRZYBEK
Environmental risk is “actual or potential threat of adverse effect
on living organisms and the environment by effluents, emissions,
wastes, resource depletion, etc., arising out of an organization's activi-
ties” (Mishra & Sarkar, 2017). It is the area which received much
attention from scholars, as also confirmed by the literature
(e.g., Ferreira et al., 2010; Fischer & Sawczyn, 2013), often divided
into two major types: risk related to the transition to a lower-carbon
economy and on the other hand risk related to the physical impact of
climate change (Truant et al., 2017). It can be effectively mitigated
throughout CSR actions, for example, sustainable use and protection
of water and marine resources, transition to a circular economy, waste
prevention and recycling, pollution prevention control and protection
of healthy ecosystems (Cheasty, 2019). Based on disclosed informa-
tion in the GRI reports, Kouloukoui et al. (2019) stated that via this
information, it is possible to assess the intensity of greenhouse gas
emissions arising from the production process, to estimate regulatory
and competitive risks to which companies are exposed, and to identify
the strategies to cope with climate change adopted by the organiza-
tions. Similarly, Muñoz-Torres et al. (2018), based on the criteria that
are used by ESG rating agencies to evaluate corporate sustainability
performance, indicated that emissions and the climate change are the
key issues tackled in the environmental pillar, together with protec-
tion of biodiversity.
Social risk is a global phenomenon, with direct implications for soci-
ety, depending on the cultural, political, and economic context in which it
occurs. Nowadays it comprises such topics as equality, social cohesion,
social integration, working conditions, community health, safety, and
security, involuntary or forced resettlement. Muñoz-Torres et al. (2018),
based on the criteria that are used by ESG rating agencies to evaluate
corporate sustainability performance, indicated that diversity, human
rights, nondiscrimination and promotion of equality are the most relevant
in the social domain. Lock and Seele (2015) focused on fair treatment of
employees, human rights, and ethical issues in this field, while
Lupu (2019) stated that the main sources of social risks are labor-market
instability, social relations of communities, and political transformations.
Rehman et al. (2020) divided social obligations into four broad categories
that a socially responsible organization would like to perform: legal, eco-
nomic, philanthropic, and ethical responsibilities. It was underlined that
socially responsible investors tend to avoid investments in stocks that
are considered to be socially undesirable thus increasing the risk of such
industries. Rehman et al. (2020) also indicated that CSR activities depict
the social preferences of an organization in order to show good behav-
iors and also capture the efforts of the business to deal with certain
externalities. Also McDonnell et al. (2015) suggested that firms adopt
such management devices as structures or practices meant to help a firm
manage and promote its social image. These social management devices
may entail increased disclosure, which can empower internal and exter-
nal monitors by providing them with easier access to information about a
firm's social activities. For example, firms that issue a CSR report increase
attention to social issues within the firm and also provide information
about where the firm's social priorities lie. This information may stake-
holders allow to more easily point to behavioral aberrations or areas in
which the firm needs to improve.

KARWOWSKI AND RAULINAJTYS-GRZYBEK
Governance risk results from management structures, employee
relations, remuneration of relevant staff, tax, and legal compliance. It
includes topics such as anti-bribery and corruption practices, and
compliance to relevant laws and regulations. Muñoz-Torres
et al. (2018), based on the criteria that are used by ESG rating agen-
cies to evaluate corporate sustainability performance, indicated that
prevention of corruption and bribery, and transparency are the most
relevant in the governmental domain. Murè et al. (2020) noticed that
financial penalties increase board's member expertise, and particularly
banks will have to set up governance systems, adequate internal con-
trols, as well as to develop appropriate long-term analyzes within their
business's strategies. In this perspective, ESG factors should be
involved in the compliance processes in order to modify companies'
strategies with the aim to guarantee long-term value creation.
ESG risks might impact other risk domains, including operational
risk, regulatory risk, or financial risk. Monitoring and analyzing these
risks should be considered within company strategy and thus should
help companies manage their performance (Maniora, 2017).
Poor behavior in relation to ESG induces one more category of
the risk – the reputational risk, which can be the most important
motive for corporations to report on issues of social responsibility
(Frederiksen, 2018; Unerman, 2008). Company's reputation and repu-
tational risk have been investigated by several studies
(e.g., Dion, 2013; Graafland, 2018; Truant et al., 2017). According to
them portraying companies in a positive light is a key tool for improv-
ing company's reputation across multiple areas (cf. Graafland, 2018),
and CSR initiatives can help to mitigate reputational risk (Coombs &
Holladay, 2015). Murè et al. (2020) clarified that receiving penalties is
detrimental for reputation, therefore it's necessary to improve it
through the adoption of ESG practices. While, Di Tommaso and
Thornton (2020) concluded that there is a trade-off between reducing
risk-taking and company's value.
In summary, generally, it is believed that involvement in CSR
activities by the firm is one of the ways through which a firm builds its
reputation and engagement in CSR activities is important for improv-
ing the image and reputation of a firm among its stakeholders. The
good reputation of a firm earned through its CSR activities will not
only lead to positive evaluations from stakeholders but will also have
a positive impact on firm profitability as customers generally prefer to
buy products of firms that are socially responsible. Moreover, satisfied
and loyal customers resulting from firm CSR engagement will help
mitigate firm risk particularly in economic downturns when the firm
depends on a loyal customer base. On the other hand, firms having
bad reputations will suffer the most during economic downturns
(Rehman et al., 2020).
The issue of pressure of customers on companies was also
included in the article of McDonnell and King (2013). The authors
explored the extent to which firms targeted by consumer boycotts
strategically react to defend their public image by using expressions of
the organization's commitment to socially acceptable norms, beliefs,
and activities. Results suggest that boycotted firms increase their
prosocial claims activity significantly when a possible boycott receives
more media attention, especially in case of the firm with a higher
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1273
reputation, or engaged in more prosocial claims before the boycott.
The authors also demonstrated that firms fall back on their
established impression management strategies when they face a repu-
tational threat and will increase these previously perfected perfor-
mances as the threat increases. McDonnell et al. (2015) continued
their project, exploring whether and how corporations become more
receptive to social activist challenges over time. They argued that
when firms are chronically targeted by social activists, they respond
defensively by adopting strategic management devices that help them
better manage social issues and demonstrate their normative appro-
priateness. These defensive devices have the incidental effect of
empowering independent monitors and increasing corporate account-
ability, which in turn increase a firm's receptivity to future activist
challenges. Their findings suggest that activism and increased CSR
reinforce one another through a feedback cycle of activist activity and
increased receptivity to activists, mediated by the adoption of social
management devices.
Managing ESG&R risks and a framework within which companies
can engage with local communities and legitimize their operations is
able thanks to CSR programs (cf. Keenan et al., 2019). In the above
context Jo and Na (2012) found that the top management of
U.S. firms in controversial industries (such as alcohol, tobacco, gam-
bling) is, in general, risk averse and that their CSR engagement helps
their risk management efforts. CSR engagement negatively affects
firm risk, and the effect of risk reduction is more economically and
statistically significant in controversial than in non-controversial
industry firms. Parast and Adams (2012) suggested the implementa-
tion of CSR in the petroleum industry is economically driven. Thus,
engaging in CSR allows a company to maximize shareholder value,
improve its reputation, and ensure its long-term viability. Investors
and regulators pay attention to firm CSR activities in formulating their
investment strategies and regulation policies. Nguyen and
Nguyen (2015) investigated the link between CSR and risk for US
firms. Consistent with existing results, the authors found that CSR
concerns relating to diversity and employee relations increase the risk
to shareholders. More interestingly, the authors showed that CSR
strengths relating to diversity and employee relations are also associ-
ated with higher risk.
Mishra and Sarkar (2017) explored CSR as an integrated and
strategic tool to mitigate risk in hazardous sector with a focus on
oil and gas sector in India. The development of better and more
sophisticated CSR programs represents a response to the changing
expectations of governments, non-government organizations and
neighbors. According to Shad et al. (2019) sustainability reporting
practices help oil and gas industry to minimize social and political
costs and to form long-term relationship with the relevant stake-
holders, reduce risks of heavy environmental and labor compliance,
attract new and maintaining best talents, building enterprise image
and reputation, and broadening the customer base and loyalty.
This is in line with Badía et al. (2020), who evidenced that indus-
tries as well as regions differ in terms of concrete CSR opportuni-
ties and risks and may influence the relationship between CSR and
financial performance.

1274
Orlitzky and Benjamin (2001) found that risk is negatively corre-
lated with corporate social performance. According to them, firms
with proactive CSR anticipate and reduce potential sources of busi-
ness risk, such as governmental regulation, labor unrest, or environ-
mental damage. Bouslah et al. (2013) found that employee diversity
positively affects a firm's risk, whereas community (diversity)
strengths negatively (positively) affect a firm's risk. Oikonomou
et al. (2012) also showed that social (e.g., generous giving, employ-
ment of the disabled) and environmental strengths (e.g., pollution
prevention, recycling, alternative fuels) are less negatively related to
financial risk than social (e.g., investment controversies, workforce
reduction) and environmental concerns (e.g., hazardous waste, sub-
stantial emissions) are positively related to financial risk. Ayadi
et al. (2015) found that firms with higher CSR performance exhibit
higher level of risk taking than those with lower CSR performance.
In particular employee relations, product characteristics and diver-
sity dimensions of CSR are positively related with risk taking
measures.
Kytle and Ruggie (2005) developed a conceptual framework for
companies to manage the emerging social risks they encounter as
they go global, and of the contribution of CSR programs to managing
those risks. According to Story and Trevor (2006), many organizations
use established risk management techniques and audits as a means of
demonstrating their CSR activities. Hsu and Chen (2015) included a
wide variety of CSR activities such as support for local businesses or
charities, firm reputation, social engagement, environmental responsi-
bility, brand perception, ethics, development of recycling programs,
minority, and female representation on the board of directors, product
quality, illegal politicking, fair dealings with customers, and sustainabil-
ity practices.
Based on empirical results Rehman et al. (2020) concluded that
CSR activities have a positive effect on firm performance whereas on
the firm risk it is negative. More specifically, the results indicated four
important outcomes:
1. CSR positively impacts firm performance.
2. CSR positively effects firm reputation, which partly mediates CSR-
performance relationship.
3. CSR negatively affects firm risk.
4. There is a partial influence of CSR on firm risk when the mediation
of firm reputation is implied.
In the literature there is a vigorous debate regarding the shift
from moral and normative CSR approaches to a strategic CSR per-
spective. Specifically, some firms may target their customers by utiliz-
ing certain CSR activities. In this view, strategic CSR is an opportunity
rather than a cost because there are points of intersection between a
firm and society. If these intersection points are identified, then the
firm can work out a risk-reducing proposition of strategic CSR that is
unique for its customers and that can increase the market appeal to
its customers. Where a social issue intersects with its core business,
then this is a social issue where corporate shared value can be created
(Jo & Na, 2012).
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KARWOWSKI AND RAULINAJTYS-GRZYBEK
3 | DA T A A N D M E T H O D O L O G Y
A sample of business reports has been examined and analyzed. The
sample is selected from all companies that published an integrated
report online. Integrated reporting acknowledges the need for a wide
perspective on risk as well as CSR and constitutes an appropriate
source of information on company's risk as well as CSR (Eccles &
Armbrester, 2011; Kannenberg & Schreck, 2018; Truant et al., 2017),
because they are created based on so called “integrated thinking” and
one of the guiding principles for this reporting is connectivity of infor-
mation (IIRC, 2013).
We have examined a complete database of integrated reports
uploaded at http://examples.integratedreporting.org/, which is the
only large database of integrated reports that we could find online. It
included 124 reports of companies with headquarters all over the
world, together with the specification of both the region and the
branch that we further took for analyses. We performed a search in
December 2020–January 2021 and took the most up-to-date reports
for the analysis. Table 1 provides a breakdown of the sample
composition.
The integrated reports were produced by companies from
different:
1. branches, the most from: financial services (29 companies), indus-
trials (21), basic materials (15), consumer services (11), and con-
sumer goods (10),
2. regions, the most from: Africa (53 companies1), Europe (40), and
Asia (21).
About one third of integrated reports were assured externally
(42 companies), and for additional one fourth at least some non-
financial parts of the report were assured (31). In total, about 60% of
the reports had their integrated reports assured by the external assur-
ance company, which usually was the auditing company.
We have analyzed the content of the reports with a focus on two
elements: (1) ESG&R risks and (2) CSR actions. The content analysis
was conducted by a team of two experts, each of whom first assessed
individually, and then a discussion was conducted to form the final
assessment. We have listed all risks and grouped them to the follow-
ing categories:
1. environmental (E),
2. social (S),
3. governmental (G),
4. reputational (R),
5. others.
The last category included risks such as financial or credit risk, which
were further excluded from the analysis as not directly influenced by
CSR actions. If a risk was assigned to a certain category, 1 point has
been given to that category. In several cases a risk was related to
more than one category (e.g., social and reputational), and then points
were divided evenly among all categories – in practice these were two
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KARWOWSKI AND RAULINAJTYS-GRZYBEK 1275

TABLE 1 Research sample

No. of
No. Company Industry Region Year External assurance Currency Revenue (m) Assets (m) employees
1. ABSA Financial services Africa 2019 Partly ZAR 80,000 1,400,000 38,472
2. Adapt IT Technology Africa 2017 No ZAR 994 1086 670
3. Aegon Financial services Europe 2017 No EUR 32,973 396,291 28,318
4. Ahold Delhaize Consumer goods Europe 2019 Yes EUR 66,260 41,490 380,000
5. Air Traffic and NS Industrials Africa 2014 Partly ZAR 1293 1863 332
6. Airports Company of SA Consumer services Africa 2014 No ZAR 27,987 7127 2819
7. Anglo Platinum Basic materials Africa 2017 Yes ZAR 65,670 80,814 27,559
8. AngloGold Ashanti Basic materials Africa 2016 Partly USD 4085 7153 28,507
9. ArcelorMittal Industrials Europe 2014 Yes ZAR 34,852 33,026 9029
10. ArcelorMittal SA Basic materials Africa 2016 No USD 56,791 75,142 199,000
11. Arguden Governance Professional serv. Europe 2016 Yes TRY 1 no data no data
12. Asahi Group Consumer goods Asia 2014 No JPY 1,444,200 1,250,800 15,749
13. Aspen Pharmacare Healthcare Africa 2016 Partly ZAR 35,600 104,300 10,000
14. Aspiag Service Consumer goods Europe 2016 Yes EUR 1798 771 7450
15. Astellas Healthcare Asia 2016 No JPY 1,372,706 1,799,338 17,217
16. Auditor General SA Public sector Africa 2017 Yes ZAR 2977 1359 3483
17. Aveng Basic materials Africa 2019 Partly ZAR 12,282 25,676 11,544
18. BAE Systems Industrials Europe 2017 Yes GBP 18,322 4784 83,200
19. Bankmecu Financial services Australasia 2012 No USD 188 2837 341
20. Barclays Africa Financial services Africa 2017 Partly ZAR 30,581 1,165,067 41,703
21. Barloworld Industrials Africa 2016 Yes ZAR 66,547 46,022 20,786
22. British American Tob. Consumer services Europe 2017 Yes GBP 20,292 141,038 55,000
23. British Land Financial services Europe 2017 Partly GBP 589 13,467 650
24. Broadband Infraco Public sector Africa 2016 Partly ZAR 452 1558 168
25. Browns and Company Consumer goods Asia 2017 Yes ZAR 22,648 66,055 9688
26. BT Group Telecommunications Europe 2017 No GBP 24,082 6875 106,400
27. Capricorn Financial services Africa 2017 No NAD 1591 42,921 2107
28. Cbus Public sector Australasia 2017 No USD 8509 40,154 4000
29. Cemex Industrials N.America 2017 Partly USD 13,672 28,885 40,000
30. Central Energy Fund Utilities Africa 2014 No ZAR 21,556 44,127 360
31. CPA Australia Professional serv. Australasia 2019 Yes USD 173 255 554
32. Crest Nicholson Real estate Europe 2016 No GBP 1413 997 849
33. Crown Estate Real estate Europe 2018 Partly GBP 15,886 17 404
34. DBS Financial services Asia 2019 No USD 15,592 578,946 28,000
35. DBSA Financial services Africa 2016 No ZAR 10,132 82,346 461
36. Dellas Industrials Europe 2016 No EUR 18 35 124
37. Denel Industrials Africa 2014 No ZAR 4588 8089 6555
38. Dentsu Consumer services Asia 2017 Yes JPY 4,924,933 3,155,230 55,843
39. DIMO Industrials Asia 2019 Yes INR 38,017 29,300 1906
40. DSM Healthcare Europe 2017 Yes EUR 8632 12,802 21,054
41. Duchy of Cornwall Real estate Europe 2017 No GBP 35 1048 100
42. enBW Utilities Europe 2017 Yes EUR 21,974 38,785 21,352
43. EOH Holdings Technology Africa 2016 No ZAR 12,762 13,189 8083
44. Eskom Utilities Africa 2017 Yes ZAR 177,136 710,009 47,658
45. Eurazeo Financial services Europe 2016 No EUR 965 1698 5522
46. Exxaro Basic materials Africa 2018 Yes ZAR 25,400 65,100 6500

(Continues)
 15353966, 2021, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/csr.2137 by Universidade Do Estado Do Rio De Janeiro, Wiley Online Library on [25/08/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
1276 KARWOWSKI AND RAULINAJTYS-GRZYBEK

TABLE 1 (Continued)

No. of
No. Company Industry Region Year External assurance Currency Revenue (m) Assets (m) employees
47. FMO Financial services Europe 2019 Yes EUR 215 9412 601
48. FNB Namibia Financial services Africa 2017 Partly NGN 5022 37,810 2300
49. Fresnillo Basic materials Europe 2016 No USD 1906 4290 4570
50. Garanti Financial services Europe 2019 Partly TRY no data 428,600 18,784
51. Generali Financial services Europe 2019 Yes EUR 94,635 514,574 71,936
52. Go-Ahead Consumer services Europe 2017 No GBP 3481 1617 29,074
53. Gold Fields Basic materials Africa 2017 Yes USD 2761 6620 6268
54. Grieg Seafood Consumer goods Europe 2019 Yes NOK 8935 8274 861
55. Halfords Consumer services Europe 2017 No GBP 1095 776 11,201
56. Hammerson Financial services Europe 2014 Yes GBP 206 7643 445
57. Hulamin Industrials Africa 2016 Partly ZAR 10,099 6956 1934
58. Iberdrola Utilities Europe 2017 No EUR 29,215 106,706 30,591
59. IDC Industrials Africa 2014 Yes ZAR 20,021 138,593 828
60. IDLC Finance Financial services Asia 2016 No BDT 5167 79,359 1099
61. Illovo Sugar Basic materials Africa 2012 Yes ZAR 9173 11,411 12,474
62. Implats Platinum Basic materials Africa 2016 No ZAR 36,841 73,481 52,012
63. ING Financial services Europe 2016 Yes EUR 498 60,579 54,737
64. Intercontinental Hotel Consumer services Europe 2017 No USD 1784 3175 12,213
65. Itaú Unibanco Financial services S. America 2017 No BRL no data 1,435,000 99,332
66. Itochu Corporation Basic materials Asia 2015 No JPY 5,591,400 8,560,700 no data
67. JSC TVEL Utilities Europe 2014 Yes RUB 137,962 133,120 25,169
68. JSW Steel Industrials Asia 2019 Partly INR 848 1149 12,599
69. KiwiRail Industrials Australasia 2016 No NZD 694 995 3400
70. Konica Minolta Industrials Europe 2016 No JPY 810,137 976,370 43,332
71. Kumba Iron Ore Basic materials Africa 2019 Yes ZAR 64,285 66,941 12,217
72. Larsen & Toubro Technology Asia 2019 Partly INR 898 1257 293,662
73. Lloyds Banking Group Financial services Europe 2017 Partly GBP 10,912 812,109 67,905
74. Lendlease Real estate Australasia 2017 Yes AUD 16,659 20,854 12,000
75. Liberty Holdings Financial services Africa 2016 Partly ZAR 62,744 421,890 9792
76. Life Healthcare Group Healthcare Africa 2016 Partly ZAR 17,497 16,404
77. Marks & Spencer Consumer goods Europe 2017 Yes GBP 10,600 8293 85,209
78. Marui Group Consumer services Asia 2016 No JPY 245,867 730,126 6000
79. Mediclinic Healthcare Europe 2017 Yes GBP 2749 no data 32,625
80. Meridian Energy Utilities Australasia 2017 Yes NZD 2319 8665 950
81. Mitsubishi Corporation Basic materials Asia 2016 Yes JPY 6,925,582 14,916,256 68,247
82. Mitsubishi Heavy Ind. Industrials Asia 2019 No JPY 4,078,000 5,142,723 80,744
83. Mitusi & Co Financial services Asia 2016 No JPY 4,759,700 10,910,500 43,611
84. Mondi Industrials Europe 2019 Yes EUR 7268 8540 1700
85. MTN Group Telecommunications Africa 2019 No ZAR 151,460 302,311 19,288
86. Nampak Limited Industrials Africa 2016 No ZAR 19,139 24,104 6678
87. Nedbank Financial services Africa 2019 Partly ZAR 30,167 1,143,349 29,403
88. Novo Nordisk Healthcare Europe 2016 No DKK 112 97,539 42,446
89. Omron Corporation Healthcare Asia 2016 Yes JPY 833,600 683,300 37,709
90. Peoples Leasing & Fin. Financial services Asia 2019 No INR 38,356 185,933 2329
91. Pretoria Portland Cement Industrials Africa 2014 No ZAR 9039 no data 3017
92. Redefine Properties Real estate Africa 2016 Yes ZAR 6500 79,812 no data
 15353966, 2021, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/csr.2137 by Universidade Do Estado Do Rio De Janeiro, Wiley Online Library on [25/08/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
KARWOWSKI AND RAULINAJTYS-GRZYBEK 1277

TABLE 1 (Continued)

No. of
No. Company Industry Region Year External assurance Currency Revenue (m) Assets (m) employees
93. Royal Bafokeng Plat. Basic materials Africa 2017 Yes ZAR 3499 22,145,400 8372
94. Rosneft Oil and gas Asia 2017 No RUB 6,014,000 12,227,000 302,100
95. Road Accident Fund Financial services Africa 2015 Partly ZAR 66 7367 2555
96. Sage Technology Europe 2014 Yes GBP 1307 2148 12,975
97. SAICA Professional serv. Africa 2016 Partly ZAR 323 330 199
98. Sanford Consumer goods Australasia 2017 Partly NZD 478 820 1717
99. Santova Professional serv. Africa 2017 Yes ZAR 315 896 323
100. Sanlam Financial services Africa 2015 Partly ZAR 85 675 14,711
101. SASOL Basic materials Africa 2020 No ZAR 190,367 479,162 31,001
102. Swaziland Sugar Consumer goods Africa 2015 No SZL 4108 1252 no data
103. Standard Bank Financial services Africa 2019 No ZAR 110,461 2,275,589 50,691
104. Sasria Financial services Africa 2017 Partly ZAR 2125 7097 74
105. South African Airways Consumer services Africa 2014 No ZAR 30,266 16,093 11,491
106. Stafer Industrials Europe 2016 No EUR 11 20 62
107. Stockland Financial services Australasia 2013 Partly NZD no data 14,070 1736
108. Strate Financial services Africa 2017 Yes ZAR 435 587 134
109. Talawakelle Tea Estates Consumer goods Asia 2018 Partly INR 4009 4490 7136
110. Tata Steel Industrials Asia 2019 No INR 1,590,895 2,335,824 32,984
111. Telkom Telecommunications Africa 2020 Partly ZAR 43,043 61,386 15,099
112. Thai Oil Group Oil and gas Asia 2019 Yes THB 362,179 283,445 1637
113. Transnet Consumer services Africa 2017 Partly ZAR 65,478 351,635 58,828
114. Truworths Consumer goods Africa 2017 No ZAR 19,858 16,139 14,594
115. TSKB Financial services Europe 2016 No TRY 773 24,000 319
116. Tsogo Sun Consumer services Africa 2015 Yes ZAR 11,343 24,632 12,800
117. United Utilities Utilities Europe 2020 No GBP 1859 14,044 5000
118. Vodacom Telecommunications Africa 2017 Partly ZAR 81,278 81,138 7589
119. Vodafone Telecommunications Europe 2011 Yes GBP 45,884 151,220 83,862
120. Waco International Industrials Africa 2016 Partly ZAR 4756 4109 3727
121. Wilderness Consumer services Africa 2015 No BWP 945 916 2436
122. Wipro Technology Asia 2020 No INR 528,836 653,064 180,000
123. Yara International Industrials Europe 2019 No NOK 2107 78,351 16,000
124. York Timbers Basic materials Africa 2019 Partly ZAR 1601 5206 no data

Source: Own work.

or three categories. Then we ranked the ESG&R categories by the
number of risks classified to see the significance of those categories
to the company. Category with the largest number of risks was given
the first rank, which means that it is reported most frequently. The
categories with lower number of risks were ranked second, third and
fourth. If two categories got the same number of points – meaning
the same frequency of risk – the same rank has been given to them. If
two categories were ranked first, then no second rank was given at
all. Additionally, if no risks were classified to a certain category –
fourth rank was given.
The same has been done for the CSR actions. They were grouped
to the following categories:
1. environmental (E),
2. social (S),
3. governmental (G),
4. reputational (R).
If a CSR action was assigned to a certain category, 1 point has
been given to that category, and points were divided evenly if
action was related to more than one category. We ranked the
ESG&R categories by the number of CSR actions classified using
the same rules for ranking as for risks. Then the consistency
between the ranking of risk categories and CSR categories was
checked.

1278
F I G U R E 2 Number of risks and CSR actions reported.
Source: Own work [Colour figure can be viewed at
wileyonlinelibrary.com]
We took the total number of ESG&R risks and CSR actions men-
tioned in the report as the point of reference. We link the total num-
ber of risks or CSR actions in a specific area (E, S, G or R) with the
importance of this area for the company, which to some extent is a
methodological limitation. However, in most reports we did not find a
risk map with significance of risks as well as any gradation of CSR
actions by their importance.
We measured the consistency between categories of risk and CSR
actions by calculating the absolute difference between the ranks given.
For example, 0 difference in environmental category means that the
same rank was given to risk and CSR actions regarding this area.
In the second stage of our research we took companies with high
consistency between categorization of risks and CSR actions and per-
formed a content analysis to give examples of specific CSR actions
that are taken to minimize ESG as well as reputational risk.
4 | RESULTS
Figure 2 shows the total number of ESG&R risks and CSR actions
reported.
The abscissa of Figure 2 shows the number of risks included in
the integrated reports. Companies differ according to the total num-
ber of risks reported. The median total number of ESG&R risks
reported was 5 (x = 4.99, σ = 2.31), with the minimum of 1 and the
maximum of 14. 6% of companies did not report any ESG&R risk in
their reports and were not included in further statistics. The average
total number of risks was highest for companies operating in the Oil
and gas branch (x = 8, σ = 5.66) and Consumer goods (x = 6.31,
σ = 4.13) and lowest for Real estate (x = 4.03, σ = 1.26) and Healthcare
(x = 3.71, σ = 1.38). The standard deviation within individual branch-
based groups indicates the lack of homogeneity. Some companies
from the same branch report large number of ESG&R risks whereas
others report much smaller numbers. No regularity was found for the
region where the company is located.
The ordinate of Figure 2 shows the number of CSR actions
included in the integrated reports. Companies also differ according to
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KARWOWSKI AND RAULINAJTYS-GRZYBEK
the total number of CSR actions reported. The median number was
5.5 (x = 5.71, σ = 2.77), with the minimum of 1 and the maximum of
16. 4% of companies did not report any CSR actions in their reports
and were not included in further statistics. The average total number
of risks was highest for companies operating in the Consumer goods
branch (x = 7.07, σ = 4.02) and Industrials (x = 7.06, σ = 3.28) and low-
est for Real estate (x = 4.90, σ = 1.75) and Utilities (x = 4.86, σ = 2.87).
In terms of number of CSR actions no regularity was found neither in
terms of the branch not the region.
A comparison of the totals shows whether companies that report
risks more frequently are at the same time more likely to take socially
responsible actions. The line in Figure 2 represents the function y = x,
that is, the points where the number of risks is the same as the num-
ber of CSR actions reported.
The total number of ESG&R risks is moderately correlated
with the number of CSR actions. The correlation is also confirmed
by the rho Spearman correlation coefficient at the level of 0.658
(significant at the level of 0.01; Shapiro–Wilk test showed that
the variables are not normally distributed). Global values indicate
the proportionate importance of risk and CSR communication.
From the point of view of assessing whether CSR activities are
aimed at risk mitigation, it is necessary to assess the consistency
of risk and CSR communication within individual categories. The
rho Spearman correlation coefficients are as follows: 0.801 for
environmental risk and CSR actions, 0.697 for social, 0.584 for
governmental, and 0.501 for reputational (all significant at the
level of 0.01).
Table 2 shows which category of ESG&R risks (part A) and CSR
actions (part B) were reported most frequently by companies. It also
presents the absolute difference between the ranks (part C).
For most of the companies, governmental risk was reported most
frequently – 52% companies reported most risk sources in that cate-
gory. This category was especially important for companies operating
in following branches: Healthcare (86%), Utilities (86%), Telecommuni-
cations (80%). 53% African and 40% European companies ranked this
risk first.
44% companies ranked social risk most frequently. This risk got
the first rank for following branches: 80% of Real estate companies,
62% of Industrial, 60% of Basic materials. 50% European, 45% African,
and 38% Asian companies ranked this risk first – high share of
European representation should be noted here.
Environmental risk was ranked first for 15% companies, with a
high representation of Oil and gas branch (50%, but only 2 companies
are in the sample), as well as Consumer goods, Utilities, and
Healthcare. This risk was ranked first by 24% Asian, and 18%
European companies.
Reputational risk was ranked first for only 8% companies, among
others 25% of companies in the Professional services branch, and
20% in the Consumer goods branch.
According to the examined reports social actions were performed
most frequently in 56% of companies (this type of actions was ranked
as a first). 28% of companies ranked this action as a second. The larg-
est representation of companies ranking social actions first were in
 15353966, 2021, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/csr.2137 by Universidade Do Estado Do Rio De Janeiro, Wiley Online Library on [25/08/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
KARWOWSKI AND RAULINAJTYS-GRZYBEK 1279

T A B L E 2 Frequency of risk categories, CSR actions in studied TABLE 2 (Continued)

reports and the difference [Color table can be viewed at
wileyonlinelibrary.com] Part A Part B Part C

Risks CSR actions Difference

Part A Part B Part C
No. E S G R E S G R E S G R Total
Risks CSR actions Difference
44. 1 3 1 4 1 1 3 4 0 2 2 0 4
No. E S G R E S G R E S G R Total
45. 4 1 3 1 4 1 3 2 0 0 0 1 1
1. 1 1 3 3 2 3 1 4 1 2 2 1 6
46. 3 2 1 4 3 1 2 4 0 1 1 0 2
2. 3 1 3 4 1 1 3 4 2 0 0 0 2
47. 4 3 1 2 2 2 1 2 2 1 0 0 3
3. 1 1 1 1 1 1 3 4 0 0 2 3 5
48. 4 3 1 2 4 1 2 3 0 2 1 1 4
4. 4 1 2 3 4 1 2 4 0 0 0 1 1
49. 2 1 3 4 2 1 3 4 0 0 0 0 0
5. 3 2 1 4 3 2 1 4 0 0 0 0 0
50. 2 1 4 3 2 1 4 3 0 0 0 0 0
6. 4 1 3 2 4 1 3 2 0 0 0 0 0
51. 2 4 1 2 2 4 1 4 0 0 0 2 2
7. 3 1 3 4 2 1 2 4 1 0 1 0 2
52. 3 1 2 4 4 1 2 3 1 0 0 1 2
8. 4 1 3 2 4 1 2 4 0 0 1 2 3
53. 3 1 2 4 3 1 2 4 0 0 0 0 0
9. 2 1 4 4 1 2 3 4 1 1 1 0 3
54. 2 3 1 3 1 3 2 4 1 0 1 1 3
10. 4 4 4 4 4 4 4 4 0 0 0 0 0
55. 4 2 3 1 4 1 3 2 0 1 0 1 2
11. 4 4 1 2 4 2 1 2 0 2 0 0 2
56. 1 1 1 4 3 1 2 4 2 0 1 0 3
12. 4 4 4 4 1 2 3 4 3 2 1 0 6
57. 1 2 4 3 1 2 4 3 0 0 0 0 0
13. 3 2 1 4 2 1 2 4 1 1 1 0 3
58. 3 4 1 2 1 2 4 4 2 2 3 2 9
14. 2 1 2 2 3 1 2 3 1 0 0 1 2
59. 4 2 3 1 4 2 1 1 0 0 2 0 2
15. 2 2 1 2 2 3 1 4 0 1 0 2 3
60. 2 4 2 1 3 1 2 3 1 3 0 2 6
16. 4 1 3 3 4 1 1 3 0 0 2 0 2
61. 2 1 3 4 2 1 3 4 0 0 0 0 0
17. 4 1 2 4 4 2 4 1 0 1 2 3 6
62. 4 1 1 4 3 1 2 4 1 0 1 0 2
18. 4 2 1 4 4 2 1 3 0 0 0 1 1
63. 1 3 1 3 2 1 2 4 1 2 1 1 5
19. 4 4 4 4 1 2 4 3 3 2 0 1 6
64. 4 3 1 2 4 2 1 4 0 1 0 2 3
20. 3 3 1 2 2 4 1 2 1 1 0 0 2
65. 3 3 1 2 4 2 1 4 1 1 0 2 4
21. 3 1 2 4 3 1 1 3 0 0 1 1 2
66. 2 2 1 4 2 1 4 4 0 1 3 0 4
22. 4 2 1 3 4 2 1 3 0 0 0 0 0
67. 3 3 1 1 3 3 1 1 0 0 0 0 0
23. 1 1 1 4 1 1 3 4 0 0 2 0 2
68. 1 1 3 4 1 1 3 4 0 0 0 0 0
24. 4 2 1 3 4 2 1 3 0 0 0 0 0
69. 4 4 4 4 4 4 4 4 0 0 0 0 0
25. 2 1 4 2 2 1 4 3 0 0 0 1 1
70. 2 1 4 4 2 1 4 4 0 0 0 0 0
26. 4 1 2 4 4 2 1 4 0 1 1 0 2
71. 3 2 1 4 3 2 1 4 0 0 0 0 0
27. 4 2 1 4 4 1 2 3 0 1 1 1 3
72. 4 2 1 2 2 1 4 4 2 1 3 2 8
28. 4 1 1 3 3 2 1 4 1 1 0 1 3
73. 4 2 1 4 4 2 1 4 0 0 0 0 0
29. 2 2 1 4 2 1 3 4 0 1 2 0 3
74. 2 1 2 4 2 1 2 4 0 0 0 0 0
30. 1 4 1 4 1 4 2 4 0 0 1 0 1
75. 4 1 1 4 4 1 1 4 0 0 0 0 0
31. 4 2 3 1 4 1 4 2 0 1 1 1 3
76. 4 2 1 4 4 2 1 4 0 0 0 0 0
32. 4 4 1 4 4 2 1 4 0 2 0 0 2
77. 3 1 2 4 4 1 4 2 1 0 2 2 5
33. 3 1 1 3 3 1 2 3 0 0 1 0 1
78. 4 4 1 2 2 1 2 4 2 3 1 2 8
34. 3 3 2 1 3 3 2 1 0 0 0 0 0
79. 4 1 1 4 4 2 1 3 0 1 0 1 2
35. 4 2 1 3 4 2 1 3 0 0 0 0 0
80. 4 4 2 1 2 1 4 3 2 3 2 2 9
36. 4 1 4 4 4 1 2 3 0 0 2 1 3
81. 4 4 4 4 4 4 4 4 0 0 0 0 0
37. 3 1 2 4 3 1 2 4 0 0 0 0 0
82. 4 2 1 4 4 1 1 4 0 1 0 0 1
38. 4 1 1 3 4 1 2 3 0 0 1 0 1
83. 4 4 4 4 2 1 3 4 2 3 1 0 6
39. 4 1 2 2 4 1 3 2 0 0 1 0 1
84. 2 4 1 4 2 1 3 4 0 3 2 0 5
40. 1 1 4 4 4 2 1 4 3 1 3 0 7
85. 4 4 4 4 4 4 4 4 0 0 0 0 0
41. 2 1 4 4 4 1 4 4 2 0 0 0 2
86. 2 1 2 4 1 1 3 4 1 0 1 0 2
42. 2 4 1 3 1 1 3 3 1 3 2 0 6
87. 1 1 1 4 2 1 3 4 1 0 2 0 3
43. 4 4 4 4 3 1 2 3 1 3 2 1 7
(Continues)
(Continues)
 15353966, 2021, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/csr.2137 by Universidade Do Estado Do Rio De Janeiro, Wiley Online Library on [25/08/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
1280 KARWOWSKI AND RAULINAJTYS-GRZYBEK

TABLE 2 (Continued) Real estate (80%), and Basic materials (73%) branches. There were no
significant differences among the regions.
Part A Part B Part C
Governmental actions were ranked first by 37% of companies,
Risks CSR actions Difference and another 23% ranked them second. The largest representation of
No. E S G R E S G R E S G R Total companies ranking governmental actions first were in Public sector
88. 4 4 1 4 4 2 1 3 0 2 0 1 3 (100%), Telecommunications (80%), and Healthcare (71%) branches,

89. 1 1 1 4 1 1 1 4 0 0 0 0 0
as well as companies located in Africa (45%).
16% of companies reported environmental actions most fre-
90. 1 1 3 3 2 1 3 4 1 0 0 1 2
quently, with a high representation of companies from Utilities (57%),
91. 4 1 2 4 4 1 2 3 0 0 0 1 1
Oil and gas (50%), and Consumer goods (40%) branches as well as
92. 2 1 2 4 2 1 3 4 0 0 1 0 1
companies located in Asia (33%).
93. 2 1 4 4 2 1 3 4 0 0 1 0 1
CSR actions aimed at boosting company's reputation ranked first
94. 2 4 1 3 2 3 1 4 0 1 0 1 2
for 5% of companies, among other operating in Utilities (14%), and
95. 4 2 1 3 4 2 1 3 0 0 0 0 0 Financial services (10%).
96. 4 2 1 2 4 2 1 2 0 0 0 0 0 Further we compared the ranks that each category has been
97. 4 1 1 2 4 2 1 3 0 1 0 1 2 granted for risks and CSR actions to see the consistency between cate-
98. 1 2 4 3 1 2 4 3 0 0 0 0 0 gorization of risks and CSR actions (Table 2 part C). We operationalized
99. 4 1 4 4 4 1 4 4 0 0 0 0 0 it by calculating the absolute difference between the ranks.
100. 4 1 1 4 4 1 1 4 0 0 0 0 0 Lower difference means higher consistency. The difference for
101. 4 1 2 3 3 1 2 3 1 0 0 0 1 every risk-CSR pair could take the value from 0 to 3. In our sample

102. 1 1 4 4 4 1 4 4 3 0 0 0 3
there were theoretically 496 such pairs (E, S, G and R pair for all
124 companies), but for four companies neither risks nor CSR actions
103. 3 4 1 2 2 4 1 2 1 0 0 0 1
were named in the report. For 64% pairs the difference was 0, which
104. 4 2 1 4 4 1 1 4 0 1 0 0 1
means that the rank was identical for risk and CSR action. In 20%
105. 4 2 1 4 4 2 1 4 0 0 0 0 0
cases the difference was 1, which means relatively low difference. In
106. 2 1 2 2 2 1 2 2 0 0 0 0 0
11% cases the difference was 2, which is a relatively high difference,
107. 4 4 1 4 4 1 1 1 0 3 0 3 6
and in 6% cases the difference was 3, which means the biggest
108. 4 2 1 4 4 1 4 1 0 1 3 3 7 difference.
109. 1 3 2 4 1 3 2 4 0 0 0 0 0 The total difference for a company (including all categories) could
110. 4 2 1 2 1 3 1 4 3 1 0 2 6 theoretically be in the range from 0 to 12 (assuming e.g., risk in all cat-
111. 4 2 1 4 4 2 1 4 0 0 0 0 0 egories was reported with equal frequency and no CSR actions were
112. 1 1 4 4 1 1 4 3 0 0 0 1 1 reported), but in our sample it ranged from 0 to 10. Perfect consis-
113. 2 2 1 4 2 2 1 4 0 0 0 0 0 tency (no difference) was spotted for 31% of companies. Very high
114. 4 4 4 1 4 1 4 4 0 3 0 3 6 consistency (difference of 1–2) was spotted for 33% of companies.

115. 1 1 3 3 1 1 3 3 0 0 0 0 0
Relatively high consistency (difference of 3–4) was obtained for 17%
of companies, and for another 12.5% of companies the consistency
116. 4 2 1 4 4 2 1 4 0 0 0 0 0
was relatively low (difference of 5–6). Very small consistency (differ-
117. 3 2 1 4 3 2 1 4 0 0 0 0 0
ence of 7–10) occurred for only 6.5% companies.
118. 4 4 1 2 4 4 1 4 0 0 0 2 2
Branches with highest consistency are Oil and gas and Real estate
119. 4 4 1 2 2 1 4 4 2 3 3 2 10
(100% of companies with very high and better), Consumer services
120. 4 1 2 4 4 1 4 4 0 0 2 0 2
(45% of companies of perfect consistency and 73% with very high
121. 4 2 1 4 4 4 4 4 0 2 3 0 5 and better), and Professional services (75% of companies with very
122. 4 2 1 4 4 2 1 4 0 0 0 0 0 high and better). The region with the highest representation of com-
123. 3 1 2 4 3 1 2 4 0 0 0 0 0 panies with perfect or very high consistency is Africa (72%).
124. 4 4 1 4 4 4 1 4 0 0 0 0 0

where (part A and B):

1 First rank 5 | DI SCU SSION
2 Second rank
3 Third rank The ESG area, as well as the company's reputation, play important role

4 Fourth rank
in integrated reports, both with regard to risk identification and
socially responsible activities. Most of the researched companies
Source: Own work. reported both information on risk as well as undertaken CSR actions.

KARWOWSKI AND RAULINAJTYS-GRZYBEK
The scope of information reported varied among companies. Some
regularity can be spotted in relation to ESG&R risk profile and the
branch in which the company operates, especially in terms of govern-
mental and environmental risks.
Governmental risk was mostly noted by companies operating in
highly regulated markets, with high public expectations for legal com-
pliance (such as healthcare) or highly dependent on licenses, permits
or tariffs (such as utilities and telecommunications). Political uncer-
tainty was also frequently mentioned, which can explain the high per-
centage of African companies.
Environmental risk ranked high for companies operating in bra-
nches such as oil and gas and utilities that are dependent on natural
resources or weather conditions. We have looked through other
branches to spot companies producing and selling agricultural prod-
ucts – some were categorized as consumer goods and some as basic
materials. In most of these companies, environmental risk ranked first
or second.
In most reports, the ESG&R risk and CSR actions sections were
easy to identify, although in some cases the reports were still domi-
nated by financial data related to the achieved profitability. In some
reports, presented CSR activities were directly related to individual
risks – in these companies, perfect consistency in presentation of the
risks and CSR actions was most often achieved.
When analyzing the entire database, a significant convergence
between the presented categories can be found - both by analyzing
the correlation coefficients and the ranks assigned to individual risk
categories and CSR actions. High correlation coefficients may indicate
CSR maturity of companies, that has gone beyond legal compliance to
risk mitigation and opportunity maximization stage (stage III in CSR
maturity model presented on Figure 1).
In practice, correlation between risk and CSR may be reverse –
the literature mentions foremostly motivation to taking actions as a
result of a reputational risk (e.g., Lin et al., 2016). The research does
not exclude that such a phenomenon may have occurred in the
researched companies. It should be noted, however, that reputational
risks and CSR actions were ranked as least important.
Correlation does not have to mean causation, so further examples
of risk categories and socially responsible activities are indicated. The
most frequently reported risks relate to the governmental area and
this significance is not correlated with either the industry in which the
company operates or its location. The risks reported in this area can
be grouped into the following sets:
1. political uncertainty and corruption
2. compliance with regulations
3. robust corporate governance
4. cyber security.
The companies undertook various socially responsible activities in
this area. These activities can be associated in many cases with spe-
cific governmental risks. In some reports, individual actions were indi-
cated as mitigating specific risk. The most frequently reported
activities included the development of strategies and frameworks to
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1281
guarantee compliance with the regulations, as well as the appointment
of appropriate bodies to ensure corporate governance and risk man-
agement. Cooperation with key regulators and decision makers, aimed
at mitigating political risk, was also indicated. As part of the fight
against corruption, both procedural measures and raising anti-fraud
awareness were indicated. Many companies implement cyber security
procedures and systems.
The second most popular risk category was social. At the same
time, activities in this area were most often reported by companies.
The most common risks were:
1. manpower availability
2. talent recruitment and retention
3. work safety
4. impact on the local society.
CSR actions described in the reports concerned procedures of
retaining and developing talents, as well as maintaining sound labor rela-
tions and taking safety initiatives appropriate to the conducted activity.
Activities focused on the local community included communication with
local stakeholders, empowering communities as well as including sus-
tainable perspective in decision making in the whole logistics chain, for
example, to put pressure on suppliers to act socially responsible.
As part of the environmental risk, the most frequently indicated
were climate changes and environmental constraints of company's
activities. Actions taken in this area were related to the reduction of
water consumption, CO2 emissions and broadly understood green
production. The level of impact of CSR actions depends on the activi-
ties of the companies and it can certainly be greater the greater their
environmental footprint.
Reputational risk relates to the perception of the company by its
surroundings and the influence of the public opinion on the con-
ducted activity. As part of the activities in this regard, stakeholder
engagement, surveys, appropriate communication, and PR strategy
were mentioned.
In the case of reports presenting data on risk and CSR together,
for example in the form of a table, greater consistency was observed
in the information presented. CSR activities were referred to as “risk
mitigation steps,” which underlines the company's awareness of the
relationship between the activities undertaken and risk management.
In some reports, these areas are presented in separate parts of the
report. Usually in such cases, the presented CSR activities were less
directly related to the risks. One solution observed in some of the
reports was the use of the capital dimension from the IIRC framework
as a common denominator when presenting risks and CSR actions.
For each type of risk, the capitals it concerns were indicated. CSR
actions were classified in the same way.
6 | SUMMARY
Constant, unpredictable changes in the surroundings indicate the
legitimacy of monitoring the risk. An indispensable element of

1282
managing risk is also the undertaking various initiatives and actions
aimed at ESG area as well as boosting the company's reputation.
Contemporary expectations of stakeholders towards companies
include detailed information on risk, as well as risk management steps.
This type of information has become crucial for the assessment of the
company by its stakeholders. Such information can be provided by an
integrated report, which is a source of data not only regarding differ-
ent risks, but also data on the CSR actions. According to the assump-
tions of integrated reporting, risk analysis should allow for a
comprehensive assessment of the company's ability to create value,
understood not only as achieving economic goals, but also fulfilling
social interests, and taking into account the environmental aspects of
the business. Thus, this report should present information about the
company's impact on the society and the environment.
The aim of the research was to analyze the role of CSR in risk mit-
igation. The surveyed companies reported both information on risk as
well as undertaken CSR actions. For most of the studied companies,
governmental risk was reported most frequently, followed by social
risk, whereas CSR actions concentrated mainly in the social category.
The conducted research has shown a correlation between variables
studied as well as consistency the importance of certain categories of
risk and CSR actions. The total number of ESG&R risks is moderately
correlated with the number of CSR actions, both in total as well as bro-
ken down into categories. Additionally, for over 60% companies a very
high or perfect consistency has been observed for the ranking of cate-
gories of risks and CSR actions. In other words, if a certain ESG&R risk
category ranked first, in the majority of studied companies the same
category ranked first or second in terms of CSR actions.
The content analysis of the reports confirms that CSR actions match
the identified risks. Additionally, in several reports they have been
referred to as “risk mitigation steps.” Most companies implement actions
that can be directly linked with specific risks and aimed at minimizing
them. Sixty percent of reports are subject to external assurance, which
may be treated as confirmation of the credibility of this information.
The empirical results reported herein should be considered in the
light of their main limitations, namely the fact that the number of risks
and CSR actions may not reflect their actual importance to the
company.
ORCID
Mariusz Karwowski https://orcid.org/0000-0003-1301-5888
Monika Raulinajtys-Grzybek https://orcid.org/0000-0002-2451-
8061
ENDNOTE
1
High representation results from the longest history of integrated
reports in this region.
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How to cite this article: Karwowski M, Raulinajtys-Grzybek M.
The application of corporate social responsibility (CSR) actions
for mitigation of environmental, social, corporate governance
(ESG) and reputational risk in integrated reports. Corp Soc
Responsib Environ Manag. 2021;28:1270–1284. https://doi.
org/10.1002/csr.2137