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Impact of corporate social responsibility disclosures on financial performance

- a Jordanian case study

Article in International Journal of Critical Accounting · January 2017

DOI: 10.1504/IJCA.2017.090585

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Int. J. Critical Accounting, Vol. 9, Nos. 5/6, 2017 433

Impact of corporate social responsibility disclosures

on financial performance – a Jordanian case study

Huthaifa Hazaima, Mary Low* and

Jackie Allen
Department of Accounting,
University of Waikato,
Hamilton, New Zealand
Email: huthaifa_acc@yahoo.com
Email: Mary.Low@waikato.ac.nz
Email: Jackie.Allen@waikato.ac.nz
*Corresponding author

Abstract: The purpose of this study is to explore the impact corporate social
responsibility (CSR) disclosure has on the financial performance of industrial
companies operating in Jordan. The study adopts a quantitative methodological
approach. Using a statistical analysis technique the study tests three developed
hypotheses. The study makes use of content analysis in order to extract data
about the independent variable (CSR disclosures). The dependent variable is
the average share price of companies in the sample. The total population is 67
industrial companies listed in Amman Stock Exchange (ASE), and the sample
comprises of 65 of these companies. The three hypotheses were declined
statistically and findings revealed a negative correlation between CSR
disclosures and the financial performance of industrial companies located in
Jordan.

Keywords: corporate social responsibility; CSR; disclosures; financial

performance; Jordan.

Reference to this paper should be made as follows: Hazaima, H., Low, M. and
Allen, J. (2017) ‘Impact of corporate social responsibility disclosures on
financial performance – a Jordanian case study’, Int. J. Critical Accounting,
Vol. 9, Nos. 5/6, pp.433–459.

Biographical notes: Huthaifa Hazaima is a PhD student in the Department of

Accounting at the University of Waikato, Hamilton, New Zealand. His research
topic is on sustainability education in the tertiary accounting curricula in
Jordan.

Mary Low is a Senior Lecturer in the Department of Accounting at the

University of Waikato, Hamilton, New Zealand. She is a chartered accountant
member of Chartered Accountants Australia, New Zealand and is a Fellow
CPA Australia member. She teaches in the area of financial and management
accounting, and research. Her research interests include financial reporting
issues, corporate governance, ethical issues in accounting and accounting
education.

Copyright © 2017 Inderscience Enterprises Ltd.

434 H. Hazaima et al.

Jackie Allen is a Lecturer in the Department of Accounting at the University of

Waikato, Hamilton, New Zealand. She is a chartered accountant member of
Chartered Accountants Australia, New Zealand. She teaches the accounting for
management and accounting information technology and systems papers. Her
research interests are in accounting education and CSR reporting disclosures.

1 Introduction

Corporate social responsibility (CSR) disclosure is not a new phenomenon. As early as

the 1980’s, organisations operating in developed countries have commenced to add
sections in their annual reports to disclose environmental and social information (Du
et al., 2010; Hilson, 2012; Oeyono et al., 2011). The purpose of this type of disclosure is
to provide information about how these organisations are helping to keep the
environment safe and helping their societies to flourish (Abu-Baker and Naser, 2000;
Berthelot et al., 2012).
Recent years have witnessed a significant increase in CSR disclosure by companies
(Berthelot et al., 2012; Deegan et al., 2002; García-Rodríguez et al., 2013; KPMG, 2008;
Milne and Gray, 2008). Companies are now providing more and more information to
stakeholders on the social and environmental impact of their activities, using both the
annual report and separate stand-alone reports to inform concerned stakeholders
(Berthelot et al., 2012; Du et al., 2010).
The rationales for doing so are many. Some have claimed that the increased
disclosure is necessary on ethical grounds, stating that CSR reports are important to users
interested in the ethical performance of companies (Abu-Baker and Naser, 2000; Doane,
2005; Wan-Jan, 2006). Others however, have justified it from a business perspective,
citing business benefits that can be yielded from CSR disclosure (Berthelot et al., 2012;
Cohen et al., 1997; Dahlsrud, 2008; Elijido-Ten, 2011; Feldman et al., 1997; Jones et al.,
2007; Karagiorgos, 2010; Klassen and McLaughlin, 1996; López et al., 2007; Reddy and
Gordon, 2010; Ruf et al., 2001). Interestingly, Sy and Tinker (2014) suggest that
accounting cannot be explained without its social elements which should include the
historical background of human organisations that explains the complex connections in
the struggles that underline capitalism. Furthermore, Sharma (2013) argues that “the
scientific approach in management practice underpins how moral failure shaped the
global financial crisis” (p.251) and that through the integration of Buddhist economics
and neoclassical economics theory, “a better understanding of the ‘right livelihood’ and
make people better citizen (sic)…” (p.260). The business case for providing this
information is that increased CSR disclosure results in a positive impact on a company’s
financial performance.
The rise of the business case for CSR has resulted in the emergence of the Dow Jones
sustainability index in the USA (López et al., 2007) and the FTSE 4 Good in the UK
(FTSE, 2014). These indices indicate that investors are willing to pay premium rates for
shares of companies which adopt CSR practices or are socially and environmentally
sustainable (Berthelot et al., 2012). As a result, the relationship between CSR and
financial performance is referred to as a strong positive relationship, if there is good
social responsibility-politics integration (Moneva et al., 2007).
 Impact of CSR disclosures on financial performance 435

However, CSR and CSR disclosure is often viewed as a Western phenomenon,

occurring in countries which have experienced technological revolution, have stronger
organisations, standards, regulations and appeal systems compared with those of
developing countries in Asia and the Middle East (Chapple and Moon, 2005).
Furthermore, research shows that it is the industrial companies operating in Western
countries that are more likely to disclose their CSR activities due to their sensitivity
towards the environment and society (Galani et al., 2012).
Considerable research into the impact of CSR disclosure on the financial performance
of companies operating in developed countries exists (Bebbington et al., 2008; Cohen
et al., 1997; Connelly and Limpaphayom, 2004; Fiori, Di Donato and Izzo, 2009;
Goukasian and Whitney, 2008; Jones et al., 2007; Karagiorgos, 2010; López et al., 2007;
McPeak and Tooley, 2008; Michelon, 2011; Mittal et al., 2008; Moneva et al., 2007;
Oeyono et al., 2011; Reddy and Gordon, 2010; Ruf et al., 2001; Siew et al., 2013; Soana,
2011). However, studies into the impact of CSR disclosure on companies financial
performance in developing countries, where CSR disclosure is still in its infancy, are
limited (Abu-Baker and Naser, 2000; Lund-Thomsen, 2004; Visser, 2008).
The purpose of this paper is to explore the impact CSR disclosure has on the financial
performance of industrial companies operating in Jordan. The objective is first, to assess
if companies which provide increased CSR disclosures experience an increase in share
prices over a period of time. Second, the paper examines if CSR disclosure has a greater
impact on industries perceived to be less environmentally friendly compared with
industries that are perceived to be more relatively environmentally friendly. Third, the
paper explores the impact of repeated annual disclosure, of the same CSR information, on
a company’s financial performance. This is to say that companies which have no new
achievements (disclosures) to discuss simply resort to repeating past CSR achievements
each year in their annual report.

2 Importance and contribution

Studies on CSR disclosure and the impact of CSR disclosure on the financial
performance of companies in developing countries are limited (Buys et al., 2011;
Uwuigbe and Egbide, 2012). Most studies in this area focus on CSR disclosure by
companies based in western developed countries (Uwuigbe and Egbide, 2012). Few
studies have focused on investigating the impact of CSR disclosure on the financial
performance of companies based in developing countries (see for example, Aras et al.,
2010; Crisóstomo et al., 2011).
CSR disclosure in developing countries such as Middle Eastern countries is still in its
infancy (Abu-Baker and Naser, 2000). It was found that very few companies operating in
developing countries such as Indonesia have provided their stakeholders with information
on the social and environmental impact of their activities (Oeyono et al., 2011). In the
Jordanian context, research in English focusing on CSR disclosure is also minimal (see
for example, Al-Olimat, 2013; Al-Shubiri et al., 2013). The companies that do disclose
provide very little information on CSR in their annual reports and any information that is
disclosed tends to provide greater coverage of the social impact of activities and less
information about the environmental impact (Abu-Baker and Naser, 2000). Industrial
companies who have the greatest impact on the environment tend to be the worst
436 H. Hazaima et al.

providing very little, if any, environment related CSR disclosure in their annual reports
(Rahahleh and Sharairi, 2008). Consequently, the lack of empirical research in this
domain demands greater attention by researchers. This study aims to address this gap by
focusing on companies based in Jordan. It is believed that the findings of this study will
enrich the literature about CSR disclosure in developing countries, specifically those
based in the Middle East.
The research method involves investigating the financial impact of CSR disclosure on
the average share price of industrial companies operating in Jordan, a Middle Eastern
country. The companies selected have a listing on the Amman Stock Exchange (ASE), a
strong financial market that contains with a market capitalisation of 19 billion Jordanian
Dinars or US$27 billion (ASE, 2012). Furthermore, the ASE has cross listing dealings
with the stock exchanges of Oman, Egypt, and Bahrain. Thus disclosure practices of
Jordanian companies provide a good example of corporate practices in other Arab
countries (Abu-Baker and Naser, 2000). The study conducted in 2000 by Abu-Bakar and
Naser shows that of a sample of 143 Jordanian companies found that most of these
companies provided very little CSR disclosure. Al-Shubiri et al. (2013) found that studies
into the type of Jordanian companies that provide CSR disclosure were more related to
factors such as the size of the firm and age of the firm. Firms maintaining growth and
firms that were highly leveraged tended to disclose more than others. By highlighting the
link between a company’s share price and its CSR disclosure, this paper aims to motivate
companies based in Jordan and the wider Middle East to invest more resources and
increase the quantity and quality of CSR in their annual reports. Finally, a number of
previous studies regarding to CSR have focused on the finance and banking sector
(Branco and Rodrigues, 2006). However, the industrial sector has not received much
attention (Mia, 2011). This gap provides the motivation for this paper to be conducted on
the industrial companies in Jordan.

2.1 Prior studies on CSR disclosure and firm financial performance

The impact of voluntary disclosure of CSR reports on the financial performance of firms
varies and the relationship between them is complex and unclear (Reddy and Gordon,
2010). However, some studies have investigated the strategies that can be used in order to
measure both the disclosure of CSR and the performance of companies. Research studies
refer to the measurement of CSR disclosures as corporate social performance (CSP)
(Karagiorgos, 2010). CSP is used to illustrate the expected relationship between CSR
information that is disclosed and the financial performance of companies, using financial
measures (Dennis et al., 2008). A problem however is that since most studies are unable
to represent CSP measures comprehensively, it may lead to a confused relationship
between both variables (Waddock and Graves, 1997). However, CSP can be measured
using different types of reports such as annual reports if it includes a section about CSR
information (which is used in this study), or stand-alone reports such as environmental
reports and social reports (Wood, 2010). In addition to this, according to Soana (2011),
CSP can be measured using different strategies such as content analysis (used in this
study), reputational measures, surveys conducted through questionnaires, ethical ratings,
and multi-dimensional indicators. Moreover, it is possible to translate the text in content
analysis into quantitative variables (Fiori et al., 2009).
Different measures can be used to evaluate the financial performance of organisations
while investigating its relationship with the disclosure of CSR. The financial performance
 Impact of CSR disclosures on financial performance 437

can be measured according to two angles. On one hand, financial performance can be
measured according to an accounting perspective, while on the other hand it can be
measured from a market view (the focus of this study) (Karagiorgos, 2010). Accounting
based-measures include; profitability, solvency, liquidity, and financial efficiency (Fiori
et al., 2009), whereas market-based measures include stock return and share price
(Bhagat and Bolton, 2008). One of the advantages of measuring financial performance
based on a market view is the ability to estimate the value of organisations that invest in
efforts to be socially responsible. However, it is sometimes not enough to rely purely on
market-based measures alone (Goukasian and Whitney, 2008). Nevertheless, to explore
the impact (if any) of the disclosure of CSR information on the financial performance of
companies, a variety of studies have been conducted using different methods and
indicators to measure both variables. One such study (Murray et al., 2006) examined the
relationship between social and environmental disclosure and the financial market
performance of large British organisations. No direct correlation was been found between
share returns and the disclosures of CSR. However, a notable positive long-term
relationship was found between the disclosure of both social and environmental reports
and financial performance reflected by the share returns.
Similarly, a study in Europe was conducted on a sample of two groups of 55
companies in order to investigate the impact of CSR practices on the financial
performance of these organisations. López et al. (2007) compared the first group of
companies which disclosed the social and environmental reports with another set that did
not disclose. The analysed results manifest a negative relationship between all variables
on the short-term. However, they have a belief that this negative relationship will go
through a self-correction process and thus automatically will change over time. López
et al. (2007) presented that the practices of CSR may have a positive impact on the
financial performance of a firm only if these practices combined with the strategic
decisions of the leaders of the entity. Regardless of the time span factor (long or short
term), and in line with the negative relationships found, a study conducted on a set of
selected environmentally friendly companies between 2005 and 2007 found that
organisations that do not invest in CSR efforts are more profitable (McPeak et al., 2010).
Michelon (2011) conducted an Italian comparative study to inspect whether the
reputation of organisations can be influenced by the disclosure of CSR information. The
study compares the level of disclosure of 57 components of the Dow Jones sustainability
index in 57 different organisations from different countries. The study assumes that a
high financial performance of a company is an indicator to a high level of reputation, and
thus it explores the relationship between the level of disclosure and the financial
performance. However, the results of the study demonstrate a negative relationship
between the disclosure of CSR and financial performance and thus a declined hypothesis.
The study also suggests that the motivation behind a large extent of disclosure is perhaps
competition and not financial performance (Michelon, 2011).
An Australian study conducted by Jones et al. (2007), using a sample of the best 100
organisations taken from the Australian Stock Exchange, explored the relationship (if
any) between CSR disclosure and the financial and market performance. The findings
indicate a negative relationship between the disclosure of CSR information and abnormal
returns taken as an indicator to high performance. Nevertheless, there is a statistically
positive correlation between CSR disclosure and other financial performance indicators
438 H. Hazaima et al.

such as cash flow ratios and capital expenditure. Thus CSR disclosure can positively
affect other different variables of financial performance.
It seems that the financial performance being measured by indicators can be highly
influenced by variables other than the disclosure of CSR information, and that the impact
of CSR disclosure on the financial performance becomes unclear (Jones et al., 2007). For
example, abnormal returns can be taken as an indicator to financial performance,
however, it is highly affected by the size of the firm and the nature of the industry
(Karagiorgos, 2010). More recent studies have come up with different findings. For
example, McPeak and Tooley (2008) found a positive direct relationship between
increased CSR disclosures and better financial performance. The study was conducted on
all companies that are members of the Dow Jones sustainability index. In line with this,
in an attempt to scrutinise the impact the voluntary disclosure of CSR information has on
the financial performance of listed companies in Greece, a study by Karagiorgos (2010)
was conducted. The study uses the stock return as an indicator to the financial
performance, and it reveals a strong positive relationship between variables. The study
also suggests a wider adoption to the practices of CSR amongst Greek organisations.
On the other hand, Reddy and Gordon’s (2010) study of 51 Australian listed firms
found positive relationships between CSR disclosure and the financial performance
reflected via their market returns. Moreover, another study refers to an existing positive
relationship between the disclosure of CSR information and the reputation of
organisations (Bebbington et al., 2008). Supporting these findings, a study by Elijido-Ten
(2011) examines the extent of CSR information disclosure in the top 100 organisations
listed in Australia between 2007 and 2008. It also investigates the impact of this
disclosure on the financial performance of these companies. The study reveals that the
disclosure rose in 2008 compared with the previous year. Furthermore, the companies
disclosing CSR information have better performance than those do not report.
Blazovich et al. (2013) conducted a study which used an external measure
(Newsweek’s ‘2010 green ranking’), that ranks 500 large organisations according to their
environmental responsibility to see if there is any impact of being green on the financial
performance. Results show that high green ranking is not significantly related to a better
financial performance of these companies. Nevertheless, this does not mean that being
green negatively affects the financial performance, since research also shows that some
clients and customers are more willing to make deals with more environmentally friendly
companies (Woolverton and Dimitri, 2010).
A South African study conducted by Buys et al. (2011) compares the financial
performance of organisations that disclose their CSR information and those that do not.
For this purpose, a sample selected from Johannesburg Stock Exchange (JSE) Ltd.
organisations, and the findings claim that all tested performance indicators show no proof
of an existing positive relationship; the financial performance of companies that disclose
CSR reports and those that do not disclose were alike. In line with this result, a study
conducted by Aras et al. (2010) explored the relationship between CSR disclosure and the
financial performance of the Istanbul Exchange 100 Index organisations between 2005
and 2007, revealed that there was no significant relationship between CSR disclosures
and the financial performance. The study also suggested that companies’ profitability was
more influenced by factors such as the size and risk level.
A Brazilian study also shows that there is no statistically significant relationship
between CSR disclosure and the financial performance of 78 non-financial Brazilian
companies between 2001 and 2006 (Crisóstomo et al., 2011). Moreover, Connelly and
 Impact of CSR disclosures on financial performance 439

Limpaphayom (2004) investigated the positive impact (if any) of environmental reporting
on the productivity and competitiveness as indicators of financial performance. This
study found that environmental reporting has no relationship with either productivity or
competitiveness and that the disclosure of environmental information has no negative
impact on profitability in the short-term. The study also revealed a non-linear positive
relationship between environmental reporting and market valuation.
Studies in English into the disclosure of CSR and financial performance of Jordanian
companies are few in number. A study of the impact of environmental disclosure on the
environmental performance of companies based in Aqaba, Jordan revealed that there was
no relationship between environmental disclosure and the level of profits but that
environmental disclosure has a relationship with both the company’s ability to obtain
credit and its competitiveness (Saleh et al., 2012). Another study into the potential causes
of a lack of CSR disclosure amongst Jordanian companies suggests that these companies
lack the scientific and practical qualifications necessary to publish environmental reports
(Al-Olimat, 2013). Furthermore, these companies lack the modern technology needed to
reduce the environmental impact of their activities (Al-Olimat, 2013). This suggests that
if companies know that they cannot improve their social and environmental performance
then they would probably avoid providing stakeholders with reports that show consistent
negative results with no improvement or even worsening performance. A reason behind
this is that managers think this may lead to negative perceptions amongst stakeholders
and thus lead to a deterioration in the firm’s financial performance (Al-Olimat, 2013).
The findings of prior studies on the impact of the disclosure of non-financial CSR
information on the financial performance of organisations are summarised in Table 1.
Table 1 Summary of studies from developed and developing countries

Authors Source of samples Findings

Buys et al. (2011) Johannesburg Stock Exchange No proof of a positive relationship.
Connelly and Thailand Institute of Directors’ 1 No link between CSR disclosure and
Limpaphayom Corporate Governance productivity and competitiveness.
(2004) Benchmarking Survey 2 No negative impact on the sort-term
profitability.
3 Nonlinear positive relationship
between CSR disclosure and market
valuation.
Aras et al. (2010) Istanbul Exchange 100 index No relationship between variables.
companies
Crisóstomo et al. Non-financial Brazilian No significant relationship between
(2011) companies variables.
Murray et al. British more considerable 1 No direct correlation between the
(2006) stand-alone firms disclosure and share returns.
2 A notable positive relationship on the
long-term.
López et al. European firms Negative relationship on the short-term.
(2007)
McPeak et al. Firms are members of the KLD Firms do not invest in CSR efforts are
(2010) more profitable.
440 H. Hazaima et al.

Table 1 Summary of studies from developed and developing countries (continued)

Authors Source of samples Findings

Michelon (2011) Dow Jones sustainability index Negative relationship.
– Italy
Jones et al. Top 100 firms – Australian 1 Negative relationship between the
(2007) Stock Exchange disclosure and abnormal returns.
2 Statistical positive relationship
between the disclosure and other
financial indicators such as cash flow
ratios and capital expenditure.
McPeak and Firms are members of the Dow Positive direct relationship.
Tooley (2008) Jones sustainability index
Karagiorgos Listed firms in Greece Strong positive relationship.
(2010)
Reddy and Australian listed firms Positive relationship.
Gordon (2010)
Elijido-Ten Top 100 Australian listed firms Positive relationship.
(2011)
Blazovich et al. 500 firms from Newsweek’s High green ranking is not significantly
(2013) ‘2010 green ranking’ related to a better financial performance.

3 Research methodology and methods

A quantitative methodological approach was used with data collected being subjected to
statistical analysis. However, at the data collection and analysis stage, the study collected
qualitative data on the independent variable CSR disclosure. The data was converted to
counted numbers of CSR achievements disclosed (CSRAD) and then subjected to
statistical analysis. This process was done using content analysis. The study has a sample
of 65 companies which forms the total population of the industrial sector of Jordanian
economy except of two companies that were excluded as explained in the sample
selection section of this study. Data was collected from annual reports for a number of
reasons. The publication of corporate annual reports is a statutory requirement and the
information is subject to audit and thus these reports contain data which is considered to
be credible and reliable for research. In contrast data uploaded on corporate websites is
often subject to revision and amendment. Secondly, this study is longitudinal and aims to
study the relationship between CSR disclosure and the financial performance of
companies over a period of time five years from 2008 to 2012. Again due to the legal
requirement to publish annual reports these documents are published regularly and are
readily available for data collection and analysis (Gray et al., 1995). Finally, annual
reports form a key mode of communication used to provide a comprehensive picture of a
company’s interests and concerns to its stakeholders (April et al., 2003; Guthrie and
Petty, 2000; Stanton and Stanton, 2002).
 Impact of CSR disclosures on financial performance 441

3.1 Development of hypotheses

This study aimed to answer the following research question:
x What is the impact the disclosure of CSR information has on the financial
performance of the industrial organisations located in Jordan?
This research question gave rise to three hypotheses which were developed and are
discussed below:

3.1.1 Hypothesis 1
Legitimacy theory indicates that companies have a social contract which requires that
they conform to the expectations of society. These social expectations put pressure on
companies to disclose CSR information in order to legitimise their presence in society. It
can be argued that CSR disclosure is designed to present the company in a good light in
order to avoid negative sanctions from society and to secure access to resources. Thus
companies which enjoy a good CSR reputation, acquired due to CSR disclosure,
experience better financial performance as reflected in an appreciation of their share
price. This leads to the development of the following hypothesis:
H1 Increases in CSR disclosure result in a greater positive impact on corporate
financial performance.

3.1.2 Hypothesis 2
Companies operating in certain industries are perceived to be less socially and
environmentally friendly than others. These industries often face relatively higher media
attention and greater criticism for the negative impact of their business operations.
Industries such as chemical industries are considered less environmentally friendly,
whereas other industries such as food and beverages industries are relatively
environmentally friendly. This may motivate such companies to disclose more CSR
information than other type of industries, which may result in a greater impact on their
financial performance. This leads to the development of the second hypothesis:
H2 The impact of CSR disclosure on corporate financial performance is greater for
companies based in types of industries perceived to be relatively less
environmentally and socially friendly.

3.1.3 Hypothesis 3
As noted in the data collection stage of this study, some Jordanian industrial companies
in the sample resorted to simply disclosing repetitive CSR information in successive
annual reports. These companies neither improve this information nor do they disclose
new CSR information. For example, one company disclosed in their annual report that
they have smoke free areas on their premises, celebrate the day of environment and have
442 H. Hazaima et al.

a direct connection to the fire department. Then they simply repeat this information in
each annual report over the five year period of data collection with no new information or
achievements provided. These companies represented a small but important segment of
the population that provided no new CSR information and resorted to repeating past
achievements.
Thus this study also tried to explore the impact of this repetition on the financial
performance of these few companies to see if these companies receive a negative
perception from stakeholders. Negative perceptions should lead to a negative impact on
average share price from year to year. Therefore, this leads to the development of the
following hypothesis:
H3 The repetition of CSR information disclosed from year to year (disclosing the same
information with no new disclosures) has a negative impact on corporate financial
performance.

3.2 Sample selection

The sample selected was taken from the ASE. The ASE comprised of 242 companies as
of 2012, and was divided into three main sectors – the financial, services and industrial
sectors. As the focus of this study is industrial companies the relevant population
comprised of 67 companies grouped under the industrial sector of the ASE. These
companies were further sub-divided into eleven industrial subsectors. These 67
companies represented those companies which had operated since 2008 until 2012. Thus
companies which were new entrants and companies which were delisted or liquidated
were excluded. The final sample was 65 companies operating in ten industrial subsectors
in Jordan. These 65 companies were then further sub-divided according to their relevance
for hypothesis testing. Thus for the purpose of the first hypothesis the sample consists of
only 52 industrial companies. This is because 13 companies, belonging to different
industrial subsectors, had provided repetitive CSR disclosures over the five-year period
and were analysed separately under the third hypothesis. For the purpose of analysing the
second hypothesis two industrial subsectors, chemical and food and beverages, were
used. These two industrial subsectors comprise of 15 companies, seven in the chemical
subsector and eight in the food and beverage subsector. For the purpose of testing the
third hypothesis, 13 companies from different industrial subsectors have been selected.
These companies were found to repeat the same CSR information in the annual reports
over the five year period. A total of 325 annual reports were analysed, covering 65
companies over the period from 2008 to 2012.

3.3 Data analysis

In order to test the first hypothesis data extracted from the content analysis about the
number of CSRAD, which represent CSR disclosure, over the five-year period was
collected and tabulated. Additionally, the average share price, representing company
financial performance, over the five-year period was collected and tabulated. This was
applied separately for each subsector in the sample, and then as a whole for the entire
industrial sector (the ten subsectors collectively). The rationale behind this was to detect
the relationship between the independent and dependent variables for the entire industrial
 Impact of CSR disclosures on financial performance 443

sector and for each subsector. The data is presented in a scatter diagram to assess the
trend in relationships between variables.

3.3.1 Data analysis and interpretation

The analysis aims to investigate the impact of the independent variable (number of
CSRAD) on the dependent variable (average share price – ASP) over the five-year period
(2008–2012). In order to investigate the impact of the two variables the mean of the
number of CSRAD and the average annual share price for all companies within the
sample over the five year was tested using the statistical technique of regression analysis.
The linear regression analysis tool in Excel was used to calculate multiple R, R2 and
standard error. Multiple R is the correlation between variables and it measures how two
variables move in relation to each other. R2 or the coefficient of determination or the
covariance is the proportion of variability in the dependent variable (Y) that is explained
by the independent variable (X). The standard error measures the variability of actual (Y)
values from predicted (Y) values (Ott and Longnecker, 2008). Moreover, the strength of
the relationship is based on R2 where the closer R2 is to 1 the stronger the relationship. R2
is always a number between 0 and 1. The data was plotted on a linear regression line and
scatter diagram for further analysis. From the direction of the linear regression trend line
and its equation on the scatter diagram it can be assessed if there is a positive correlation,
negative correlation or no relationship between the variables. These statistical tools were
used to highlight any correlation between the CSRAD and ASP at the industrial subsector
level.
In order to test the second hypothesis two industrial subsectors were identified for
comparison. The first was the chemical industrial subsector and the second was the Food
and Beverages industrial subsector. Each industrial subsector was analysed separately
following the same approach as that outlined for Hypothesis 1, however once the results
for each industrial subsector were obtained these were then compared against each other
to test Hypothesis 2. Chemical industries are perceived to be less environmentally
friendly, whereas food and beverages industries are perceived to be relatively more
environmentally friendly. According to this classification, the first cluster comprises four
industry sectors: electrical, engineering and construction, mining and extraction, and
pharmaceutical and medical. These subsectors were perceived to have a considerable
impact particularly on the environment. For example, the side-effect of pharmaceutical
and medical industries can be seen on the animals tested for the purpose of making
medicines. This is in addition to the use of mainly chemical materials for manufacturing.
Electrical industries also have a considerable impact in terms of the energy consumption.
The second cluster comprises four industry sectors: glass and ceramic, paper and
cardboard, printing and packaging, and textiles, leathers and clothing. The side-effect of
this cluster was considered minimal compared to the first cluster. The same analytical
process outlined for the first part of testing this hypothesis was used for the second part.
For the Hypothesis 3, 13 companies (operating in different industrial subsectors) were
found to be providing repetitive CSRAD over the five years period and were isolated for
analysis. The companies had not provided any new disclosures, which indicated that they
made any new achievements over the five year period. Thus the analysis approach
adopted for testing Hypotheses 1 and 2 could not be applied to Hypothesis 3. In order to
test Hypothesis 3 it was deemed rational to simply plot and view each companies average
share price over the selected period of time, without statistically looking for correlations
444 H. Hazaima et al.

between CSRAD and ASP. Thus by investigating the overall trend of the average share
price over the five years it was possible to assess if a company’s average share price was
increasing, decreasing or remaining constant. If the direction of the trend was negative it
is possible to assume that the negative movement of the dependent variable over five
years is due to repetitive CSRAD by the company. If it was positive then there was a
positive impact of repetitive CSRAD and if there was no trend then it was assumed that
there was no impact of repetitive CSRAD on ASP

3.4 Results and findings

H1 Increases in CSR disclosure results in a greater positive impact on corporate
financial performance.
The result of the statistical analysis for the subsector chemical industries, over the five
years period are shown in Figure 1

Figure 1 Chemical industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Chemicals 0.91 0.83 0.25 Negative (strong) No

The downward sloping line in the diagram shows that there is a negative correlation
between mean CSRAD and mean ASP. These results suggest that an increase in CSRAD
by companies operating in the chemical industries does not have a positive impact on
their share price. In fact the result shows that CSRAD actually has a negative impact on
the company’s share price. Thus it can be concluded that the results of the regression
analysis does not provide support for the first hypothesis.
The results of the statistical analysis for the subsector electrical industries are shown
in Figure 2.
The upward sloping line in the diagram shows a positive correlation between mean
CSRAD and mean ASP and suggests that an increase in CSRAD by companies operating
in the Electrical industries has a positive impact on their share price and it can be
concluded that the results of the regression analysis provide support for the first
hypothesis.
 Impact of CSR disclosures on financial performance 445

Figure 2 Electrical industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Electrical 0.93 0.87 0.30 Positive Yes

The results of the statistical analysis for the subsector engineering and construction
industries are shown in Figure 3.

Figure 3 Engineering and construction industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Engineering and 0.34 0.12 0.55 Negative (weak) No
construction

The downward sloping line in the diagram indicates that there exists a negative
correlation between mean CSRAD and mean ASP. These results suggest that an increase
in CSRAD by companies operating in the Engineering and Construction industries does
not have a positive impact on their share price. In fact the result shows that CSRAD
actually has a negative impact on the company’s share price. Thus it can be concluded
that the results of the regression analysis do not provide support for Hypothesis 1.
The results of the statistical analysis for the subsector food and beverages industries
are shown in Figure 4.
446 H. Hazaima et al.

Figure 4 Food and beverages industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Food and beverage 0.93 0.87 0.19 Negative (strong) No

The downward sloping line in the diagram indicates a negative correlation between mean
CSRAD and mean ASP. These results suggest that an increase in CSRAD by companies
operating in the Food and Beverages industries does not have a positive impact on their
share price and can be concluded that the results of the regression analysis do not provide
support for Hypothesis 1.
The result of the statistical analysis for the subsector glass and ceramic industries,
over the five years period are shown in Figure 5.

Figure 5 Glass and ceramic industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Glass and ceramics 0.78 0.61 0.14 Positive Yes

Figure 5 shows a strong positive correlation between the mean CSRAD and the mean
ASP because of the upward sloping line. However, R2 is weak and suggests that there
may be other external factors impacting upon the upward sloping line. These results
suggest that an increase in CSRAD by companies operating in the glass and ceramic
industries has a positive impact on their share price and it can be concluded that the
results of the regression analysis provide support for Hypothesis 1.
 Impact of CSR disclosures on financial performance 447

The result of the statistical analysis for the subsector Mining and Extraction
industries, over the five years period are shown in Figure 6.

Figure 6 Mining and extraction industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Mining and extraction 0.92 0.85 0.83 Negative (strong) No

These results show a strong negative correlation between the mean CSRAD and mean
ASP because of its downward sloping line. These results suggest that an increase in
CSRAD by companies operating in the mining and extraction industries does not have a
positive impact on their share price and it can be concluded that the results of the
regression analysis do not provide support for Hypothesis 1.
The result of the statistical analysis for the subsector paper and cardboard industries,
over the five years period are shown in Figure 7.

Figure 7 Paper and cardboard industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Paper and cardboard 0.68 0.46 0.36 Negative (weak) No

These results suggest that an increase in CSRAD by companies operating in the paper
and cardboard industries does not have a positive impact on their share price. In fact the
result shows that CSRAD actually has a negative impact on the company’s share price
448 H. Hazaima et al.

and thus it can be concluded that the results of the regression analysis do not provide
support for Hypothesis 1.
The result of the statistical analysis for the subsector pharmaceutical and medical
industries are shown in Figure 8.

Figure 8 Pharmaceutical and medical industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Pharmaceutical 0.66 0.44 0.44 Negative (weak) No
and medical

The downward sloping line exhibits a weak negative correlation, indicating that an
increase in CSRAD by companies operating in the Pharmaceutical and Medical industries
does not have a positive impact on their share price and it can be concluded that the
results of the regression analysis do not provide support for Hypothesis 1.
The result of the statistical analysis for the subsector printing and packaging
industries, over the five years period are shown in Figure 9.

Figure 9 Printing and packaging industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Printing and packaging 0.72 0.52 0.16 Negative (weak) No
 Impact of CSR disclosures on financial performance 449

These results suggest that an increase in CSRAD by companies operating in the printing
and packaging industries does not have a positive impact on their share price, CSRAD
actually has a negative impact on the company’s share price and thus it can be concluded
that the results of the regression analysis do not provide support for Hypothesis 1.
Figure 10 shows the results of the statistical analysis for the subsector textiles,
leathers and clothing industries over the five-year period.

Figure 10 Textiles, leathers and clothing industries (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Textiles, leathers 0.93 0.87 0.15 Negative (strong) No
and clothing

These results suggest that an increase in CSRAD by companies operating in the textiles,
leathers and clothing industries does not have a positive impact on their share price and
the results shows that CSRAD actually has a negative impact on the company’s share
price. It can be concluded that the results of the regression analysis do not provide
support for Hypothesis 1.
To test Hypothesis 1 for the total sample in this study, the data was collated and the
result of the statistical analysis for all types of industries over the five years period are
shown in Figure 11.

Figure 11 The total industrial sector (see online version for colours)

Industry sector Multiple R R2 Standard error Correlation Support for H1

Total sector 0.92 0.84 0.23 Negative No
450 H. Hazaima et al.

The results suggest that an increase in CSRAD by companies operating in all types of
industries (all subsectors) does not have a positive impact on their share price and overall
it can be concluded that the results of the regression analysis do not provide support
Hypothesis 1.

H2 The impact of CSR disclosure on corporate financial performance is greater for

companies based in type of industries perceived to be relatively less
environmentally and socially friendly.
In order to test Hypothesis 2, a comparison between chemical and food and beverages
industries was conducted. The results of the statistical analysis, over the five years period
(see Figure 12), shows that the impact of CSRAD on the ASP is slightly stronger in the
food and beverages industries than in the chemical industries. The regression analysis
shows R2 for the food and beverages industries is 0.866, whereas it is 0.829 in the
chemical industries. Figure 2 shows that both industries are characterised by downward
sloping lines indicating that there exists a negative correlation between mean CSRAD
and mean ASP for both industrial subsectors. These results suggest that an increase in
CSRAD does not have a stronger impact on ASP for companies operating in
environmentally and socially less friendly industries (such as the chemical subsector)
than for companies operating in environmentally and socially friendly industries (such as
food and beverages). Furthermore, the 0.037 difference in R2 is too insignificant to
indicate that environmentally and socially friendly companies have a greater impact on
the financial performance than those which are considered less environmentally and
socially friendly companies. Thus it can be concluded that the results of the regression
analysis does not provide support for Hypothesis 2. In fact, the results show that there is
no significant difference between both types of industries.

Figure 12 A comparison between chemical industries and food and beverages industries
(see online version for colours)

H3 The repetition of CSR information disclosed from year to year (disclosing the same
information with no new disclosures) has a negative impact on corporate financial
performance
 Impact of CSR disclosures on financial performance 451

Table 2 Movement of ASP over five years

Average share price

Description
2008 2009 2010 2011 2012
Mean CSRAD 4.62 4.62 4.62 4.62 4.62
Mean average share price 1.44 1.17 0.95 0.80 0.98

Figure 13 Mean average share price (see online version for colours)

The Mean CSRAD was fixed during the five-year period. However because the mean of
ASP was changing, it was not applicable to calculate a statistical relationship between
variables. This is because the statistical calculations give an R2 of zero thus indicating
that there was no relationship (correlation) between variables. The share price movement
over the five years period of time was negative (downward tracking). This implies that
perhaps one of the reasons that lead to this sharp downward trend in the mean ASP is due
to the consistency (repetitiveness) of the total number of CSRAD during the data
collection time frame. The rationale behind this interpretation is that this consistency is
considered obviously highly negative practices as no new or improved CSR information
was being provided. Another reason is that when the quantity of disclosure is fixed this
means the nature of disclosure (types of CSR information disclosed) are also fixed each
year and this produces a negative impact that may lead to this negative downward trend
in the share price of those companies.

4 Discussions and conclusions

The result of the analysis for the first hypothesis shows that overall there is strong
negative relationship between CSR disclosure and the financial performance of listed
Jordanian companies operating in the industrial sector of the economy. This result is
consistent with prior studies such as López et al. (2007) and Michelon (2011). However,
a more detailed analysis on the basis of industrial subsectors reveals a more complex
picture.
452 H. Hazaima et al.

Of the ten industrial subsectors eight showed a negative relationship between CSR
disclosure and firm financial performance whilst only two showed a positive relationship.
The two positive results include electrical and glass and ceramic industrial subsectors.
These positive results are consistent with prior studies such as Elijido-Ten (2011),
Karagiorgos (2010), McPeak and Tooley (2008), Murray et al. (2006) and Reddy and
Gordon (2010). Of the eight industrial subsectors that showed a negative relationship
between CSR disclosure and the financial performance, four showed a strong negative
relationship. The remaining four showed only a weak negative relationship. The four
industrial subsectors which showed a weak negative relationship include; engineering and
construction, paper and cardboard, pharmaceutical and medical and printing and
packaging industrial subsectors. The four industrial subsectors which showed a strong
negative relationship include; chemical, food and beverage, mining and extraction and
textiles, leathers and clothing.
The results of the findings suggest that there is support available for both studies
which argue for greater CSR disclosure and for studies that argue against greater CSR
disclosure. This is supported by the results show that there is a small minority of
industrial subsectors in which companies benefit from positive relationship between CSR
disclosure and firm financial performance. However, the overwhelming majority (80%)
of industrial subsectors support previous studies which are against increasing CSR
disclosure as it is simply a cost, and will have a negative result on the company’s bottom
line and ultimately financial performance (Scott, 2012).
Nevertheless it is possible that CSR may gain greater support in Jordan. It is possible
that over time the negative relationship will convert into a positive one. This argument is
supported by commentators who argue that over a long period of time say ten to 20 years
this situation will move towards self-correction and thus resulting in a positive
relationship between CSR disclosure and firm financial performance (López et al., 2007;
Murray et al., 2006). It is also possible that the results of the study already provide
evidence to support this claim. This is because of the eight industrial subsectors which
showed a negative relationship only four are strong negative whereas the remaining four
show a weak negative relationship. It is possible that these four industrial subsectors were
ago exhibiting a strong negative relationship ten years and that this has now reduced to a
weak negative relationship. It is possible that in the coming years these weak negative
results could translate into initially weak positive and then strong positive results.
Furthermore, the result of the analysis for the second hypothesis suggests that there is
no significant difference amongst industrial companies perceived to be less
environmentally and socially friendly than industrial companies perceived to be more so.
This result is consistent with Blazovich et al. (2013) whose results suggest that being
environmentally friendly does not necessary affect the financial performance of
companies. Nevertheless, prior studies such as de Villiers and Marques (2013) suggest
that companies in less friendly industry sectors (e.g., chemicals) are interested in
disclosing higher levels of CSR in order to have higher share price and thus improving
their financial performance. However, this is only if the country they operate within can
provide greater investor protection measures, and have higher levels of democracy, more
government effectiveness, higher quality regulations, and more press freedom. These
factors are not found in a country such as Jordan at least compared to developed
countries, which may influence the results of this study.
Finally, although the statistical analysis reveals no relationship between the variables
tested in Hypothesis 3, it is possible that companies providing repetitive CSRAD suffer
 Impact of CSR disclosures on financial performance 453

from a downward trend in their share price. While it is hard to explain the downward
trend in the share price merely as a result of the repetitive CSRAD, it is highly possible
that repetitive CSRAD is one of the factors that led to this downward trend. This is
because the share price of a company is significantly influenced by the investors view of
the entire annual report of a company (Berthelot et al., 2012). In the case of Jordanian
industrial companies, the CSR section forms a part of the annual report.
Overall, the three hypotheses in this study have been declined statistically. Firstly, the
relationship between the CSR disclosure and the financial performance of industrial
companies operating in Jordan is negative. However on a subsector level, it was statically
proven that 80% of these industrial subsectors have a negative correlation between the
CSRAD and ASP. Thus positive relationships form only 20% of the total sample.
Secondly, the study reveals that there is no significant difference between companies
perceived to be less environmentally and socially friendly and those who are friendlier.
This is because the statistical difference in R square (the correlation) between chemical
and food and beverages industries is only 0.037 which is considered too small to be
significant.
Thirdly, it is found that there is no statistical relationship between the repetitiveness
of CSRAD and the ASP. Nevertheless, the study justifies the sharp downward in the
share price during the given period due to the negative view of the investors toward these
repetitive CSRD. This is because the CSR section forms a part of the annual reports
which are the concern of those investors. Indeed, there are many factors can play a key
role in this downward trend therefore repetitiveness of CSRAD could be one of these
factors but not the only one. Table 3 summarises the results of this study.
Studies on CSR disclosure and the impact of CSR disclosure on the financial
performance of companies in developing countries are limited in number. Most studies in
this area focused on CSR disclosure by companies based in western developed countries.
Few studies have focused on investigating the impact of CSR disclosure on the financial
performance of companies based in developing countries. Meanwhile, CSR disclosure in
developing countries, such as Middle Eastern countries, is still in its infancy. Few
companies operating in developing countries have bothered to provide their stakeholders
with information on the social and environmental impact of their activities.
In the Jordanian context, research in English focusing on CSR disclosure is rare. The
companies that disclose provide very little information on CSR in their annual reports.
This information tends to provide greater coverage of the social impact of organisational
activities and less information about the environmental impacts. Industrial companies
who have the greatest impact on the environment tend to be the worst providing very
little, if any, environment related CSR disclosure in their annual reports.
The results of this study have declined all three hypotheses. The findings reveal that
first; the overall relationship between CSR disclosure and firm financial performance of
the Jordanian industrial sector is negative. Nevertheless, on a subsector level, two
subsectors have a positive relationship between variables. Second, the results of the
Hypothesis 2 do not support the argument suggesting that less environmentally friendly
organisations (due to a sensitive type of industry) may benefit financially from greater
CSR disclosure compared to those who are more environmentally friendly. Finally, the
negative relationship between the repetitiveness of CSR disclosure and financial
performance has not been proved statistically. However, this repetitiveness may be one of
454 H. Hazaima et al.

those factors that led to the sharp downward in the average share price over the given
period of time.
Table 3 Summary of results

Hypothesis tested Findings

Hypothesis 1
Chemical industries
Electrical industries
Engineering and construction
Food and beverages
Glass and ceramic industries
Mining and extraction industries
Paper and cardboard industries
Pharmaceutical and medical
industries
Printing and packaging industries
Textiles, leathers and clothing
Total industrial sector
Hypothesis 2
Chemical industries and food and
beverages
Cluster 1 and cluster 2
Hypothesis 3
The impact of repetitive of
CSRAD found in 13 companies
from different subsectors
R2 = 0.83, negative correlation, hypothesis declined.
R2 = 0.87, positive correlation, hypothesis accepted.
R2 = 0.12, negative correlation, hypothesis declined.
R2 = 0.87, negative correlation, hypothesis declined.
R2 = 0.61, positive correlation, hypothesis accepted.
R2 = 0.85, negative correlation, hypothesis declined.
R2 = 0.46, negative correlation, hypothesis declined.
R2 = 0.44, negative correlation, hypothesis declined.
R2 = 0.52, negative correlation, hypothesis declined.
R2 = 0.87, negative correlation, hypothesis declined.
R2 = 0.84, negative correlation, hypothesis declined.
No significant difference between both types of
industries. Hypothesis declined.
No significant difference between both clusters.
Hypothesis declined.
Statistically, no relationship between the repetitiveness
of CSRAD and ASP. However, it could be one of the
reasons behind the sharp downward in ASP over the
given period is the repetitive as it is obviously
considered bad practices.

This study has some limitations. First, the study focuses only on listed industrial
companies. CSR disclosure is perhaps just as important for non-listed companies, which
form an important part of the Middle Eastern economies, are not considered. Second, the
study takes into consideration only one country of Middle Eastern origin, namely Jordan.
While Middle Eastern countries share many similarities they also have unique political,
social and economic characteristics which distinguish them from one another. Thus the
application of research findings to other Middle Eastern countries and indeed developing
countries in general must be undertaken with care. Third, the study only counts the
number of CSRAD without giving weight to the types of disclosure or categorisation or
breaking up these disclosures into type (environmental, social, and economic). Thus
building a school is counted as one contribution, as is making a small financial donation
to an existing school. Finally, the study completely ignores external factors that have an
impact on the movement of share price of a company, and this is due to time constraints
at the time the research was undertaken.
The results of the analysis suggest that readers do not appear to study the CSR
information provided in the annual reports of companies with a great deal of attention.
 Impact of CSR disclosures on financial performance 455

Also companies can simply repeat past disclosures year in year out without any objection
or criticism from stakeholders. Therefore there is a need for investors and stakeholders to
carefully read the CSR disclosure provided to ensure that it is credible and not merely a
green wash. This way, companies that disclose more CSR information will benefit from
the attention of those investors and stakeholder, and companies that disclose less CSR
information will be motivated to increase their disclosure. Also it is better for companies
to attempt to adopt global standards of disclosure such as GRI guidelines. This will
organise the CSR section in their annual reports, and make them more comprehensive.
However, this step is costly and requires companies to make considerable effort.
For societal changes favouring greater focus on CSR to take place there needs to be
macro changes in Jordan first. These include greater attention by government and policy
makers, investors, media and environmental and humanitarian activists to critically
review corporate annual reports and the CSR information disclosed therein. It seems the
society in Jordan has more serious issues to pay attention to than what kind of practices
companies undertake. The society of Jordan perhaps looks for how to benefit from those
companies (i.e., improving their income) and thus they may have a tendency to ignore the
bad practices of these companies. In fact, Jordanian society is in need of those companies
and thus the power of control is not in the hand of society as legitimacy theory suggests.
These companies are strong enough even to control the media, and some political
positions. At this point the government should have a key role to protect the society and
environment as their authority is supposed to be much stronger than both the power of
these companies and the society’s authority. Moreover, media should have a key role
throwing light upon companies who have a serious negative impact on society and
environment due to their type of industry however strong are these companies.
In addition to this, the impact of the repetitiveness found in results is not the ultimate
reason behind the downward slope in the average share price in this study. Nevertheless,
prior studies reveal that monitoring and disclosure of new environmental policies and
their disclosure in annual reports contribute significantly to the creation of environmental
reputation which leads to an improvement in financial performance (Toms, 2002). The
repetitiveness in the size and type of CSR information is a good example of the poor
quantity and quality of the CSR section in annual reports which lead to a downward trend
in financial performance. This shows that Jordanian industrial companies are perhaps
able to manipulate the CSR section of their annual reports smoothly and easily. This
shows the weakness of critics who should increase the awareness of the importance of the
CSR practices and disclosure within a company. Those critics are investors, society and
other stakeholders who have a key role according to the legitimacy theory in monitoring
and encouraging companies to increase and diversify their CSR information disclosure.
Otherwise, these companies must face more pressure in order to improve the CSR section
in their annual reports.
To sum up, the study provides some recommendations. First, there is a need for
investors and stakeholders to carefully read the CSR disclosure provided to ensure that it
is credible and not merely a green wash. Second, there is a need for greater attention by
government and policy makers, investors, media and environmental and humanitarian
activists to critically review corporate annual reports and the CSR information disclosed
therein. Third, governments should have a key role to protect society and the
environment as their authority is supposedly much stronger than both the power of these
companies and the society’s authority. Fourth, media should have a key role throwing
456 H. Hazaima et al.

light upon companies who have a serious negative impact on society and the environment
due to their activities. Most importantly the awareness of the importance of CSR
practices and disclosure should be increased within a company if there is to be a better
understanding of the ‘right livelihood’ (Sharma, 2013) and citizenship among society.

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