Distinct proposals for CSR reports, that have appeared recently, aim to enhance the communication between company and society by disclosing CSR actions. Internationally, initiatives such as the model proposed by the United Nations via Global Compact; the AccountAbility’s AA1000series, and the model proposed by the Global Reporting Initiative (GRI) can be mentioned (Gómez-Villegas & Quintanilla, 2012; Tschopp & Huefner, 2015). In Brazil, the Brazilian Institute of Social and Economic Analysis (Instituto Brasileiro de Análises Sociais e Econômicas – IBASE) proposed an interesting model for disclosing CSR; model that had relevant adherence by companies from 1996 to 2008 (Corrêa, Souza, Ribeiro, & Ruiz, 2012; Crisóstomo, Freire, & Vasconcellos, 2011).

Literature suggests that companies disclose CSR information for various reasons. On the one hand, they may seek to legitimize their activities by displaying a positive image to a broad spectrum of stakeholders (Archel et al., 2009; Deegan & Rankin, 1996; Quinche-Martín, 2014; Reverte, 2009). On the other hand, companies also try to respond to the stakeholders’ expectations concerning their actions, in the sense that they may contribute to society’s well-being (Morsing & Schultz, 2006; Quinche-Martín, 2014; Reynolds & Yuthas, 2008). CSR disclosure can also be a communication strategy that aims to provide answers for institutional pressures (Cuevas-Mejía, Maldonado-García, & Escobar-Váquiro, 2013; Young & Marais, 2012). Either of these motivations requires the CSR report to transmit information –in terms of volume and quality of presentation– that meets the demands of stakeholders and that allows them to properly assess the companies’ CSR action.

Regardless of the companies’ CSR disclosure report motivation or its format, it is important that it provides a release able to meet the information demands of their diverse stakeholders. In fact, the CSR report must transmit a good notion of the social and environmental impacts of each company’s activities, both when such impacts are positive and negative (Bouten et al. 2011; Gray, Kouhy, & Lavers, 1995). Therefore, the report disclosed by each company must be as complete, as well as comprehensible as possible, so that it effectively enables stakeholders to make a precise evaluation of its social responsibility. The question that has been proposed is to which degree do these reports in fact present the completeness, or comprehensiveness, needed for this external analysis process? (Adams, 2004; Archel et al., 2008; Bouten et al., 2011; Hopwood, 2009; Tschopp & Huefner, 2015; Unerman, 2000).

In this context, there has been a complaint that CSR reports tend to prioritize the disclosing of content regarding the companies’ objectives and intentions, leaving in a second place the publication of actions effectively carried out (Hopwood, 2009). This situation could occur due to an excess in the presentation of the companies’ plans and their intentions, which are developed to the detriment of space for disclosing effective actions –which may be actually little–. This possibility has created the need for disclosing effective CSR plans and sustainability actions, as well as the numbers and indicators related to them. This information about concrete actions gives more comprehensiveness to the report, making it more complete (Adams, 2004; Bouten et al., 2011; Robertson & Nicholson, 1996; Van Staden & Hooks, 2007).

Regarding the report’s comprehensiveness, the argument is that, in order to show effective CSR accountability, the information contained in the report must present a clear declaration of values, with their corresponding objectives, goals to be achieved, and report of progresses achieved (Adams, 2004; Robertson & Nicholson, 1996; Vuontisjärvi, 2006). Based on this argumentation, Bouten, Everaert, Van Liedekerke, De Moor and Christiaens (2011) suggest that, in order to show accountability on their social responsibility related actions in an effective way, companies must disclose complete, comprehensive or comprehensible information, which demands the presentation of three types of information for each revealed CSR item: (i) vision and objectives (VO); (ii) management approach (MA), and (ii) performance indicators (PI). The vision and objectives (VO) category includes information that signals each firm’s policy, goals, and values concerning the disclosed CSR item, which constitutes a first level of disclosure that Robertson and Nicholson (1996) call general rhetoric. The management approach (MA) category, in turn, describes the action or practice adopted by the company concerning certain CSR questions; category that corresponds to a second level of disclosure defined by Robertson and Nicholson (1996) as a specific effort. Finally, the performance indicators (PI) reflect the real CSR achievements, as they provide indicative measurements of the achievements, advances, or setbacks in each company’s performance regarding CSR-related matters (Bouten et al., 2011).

Some works started to examine the potential of the CSR reports as the means for disclosing social responsibility activities or actions that were executed by organizations. Examples of researches in this field are the ones that were conducted in the United Kingdom (Adams, 2004; Robertson & Nicholson, 1996) and in Belgium (Bouten et al., 2011; Vuontisjärvi, 2006). These studies verified that social responsibility reports do not show a high degree of comprehensiveness and depict a predominance of corporate rhetoric, in detriment of disclosing concrete actions and performance indicators regarding CSR.

An international research developed by KPMG about corporate reports shows that about 93% of the 250 largest companies in the world disclose reports of this nature and that there is also a tendency to conduct external auditing of these reports. In Brazil, the percentage of CSR reports submitted to external evaluation is 56%, while the global average is 38% (KPMG, 2013). In December of 2011, the São Paulo Stock Exchange (BM&FBovespa) issued an External Statement recommending the listed companies to indicate in the Reference Form whether they disclose Sustainability Reports or similar document, and where the report is available. If not, they must explain why they do not do it (BM&FBovespa, 2011). This rule, baptized Report or Explain, might have contributed to the increase from 45.31% to 66.29% in the accession of companies to the sustainability disclosure reports between May of 2012 and June of 2013 (KPMG, 2013). In the Brazilian market, studies about CSR reports found results in the same direction of increase in accession and in auditing of reports, as well as more compliance to quality standards (Corrêa et al., 2012; Crisóstomo, Prudêncio, & Forte, 2017).

The evolution of the quality and comprehensiveness of the information disclosed in CSR reports of Brazilian companies might not follow a linear path in accordance to the quantity of information disclosed. However, it is pertinent the proposition that the growth in the number of reports with good compliance to quality standards, such as the GRI guidelines and the external auditing of reports, are factors that strongly contribute to the quality and comprehensiveness of the disclosed information. This information makes for the proposition of a hypothesis about the evolution of the comprehensiveness degree of CSR reports in Brazilian companies.

Hypothesis 1: There has been an advance in the degree of comprehensiveness of CSR reports disclosed by Brazilian companies

Companies with a higher degree of concern with CSR and sustainability actions tend to give more importance to reports that disclose information of this nature, as a way to be more transparent and pursue image and reputation gains, as well as legitimacy of their activities (Adams, 2008; Bebbington, Larrinaga-González, & Moneva-Abadía, 2008a, 2008b). This broader importance must be reflected in the quality of the report, which includes its depth, completeness, comprehensibility, or comprehensiveness.

Market indices have been proposed to evaluate the degree of the firms’ concern with CSR and sustainability actions, such as the Dow Jones Sustainability Index (DJSI) of New York (USA); the FTSE4 Good of London (United Kingdom), and the JSE Socially Responsible Investment (SRI) Index of Johannesburg (South Africa) (Marcondes & Bacarji, 2010). In Brazil, there is the Corporate Sustainability Index (Índice de Sustentabilidade Empresarial – ISE), which has also been used as an indicator of the level of attention the company gives to social responsibility, and environmental and corporate sustainability issues.

The rationale is that companies that compose these indices would have a higher CSR and sustainability disclosure standard because of the competitive process that they go through in order to be members of the sustainability index in a certain year, and because of the higher degree of visibility they consequently have by composing the index. The proposal is that the ISE participation amplifies the market knowledge of each company commitment to sustainable development, equity, transparency, and accountability (BM&FBovespa, 2016). Under this argument, the ISE presence would grant each company a gain in image among its many stakeholders, thus facilitating the legitimacy achievement for its activities. In this context, there are results in Brazil that indicate that the ISE participation influences the voluntary disclosure of socio-environmental information (Braga, Oliveira, & Salotti, 2009; Machado, Macedo, Machado, & Siqueira, 2012; Murcia, Rover, Lima, Fávero, & Lima, 2008).

This line of thought suggests that companies that integrate the ISE index manifest more concern with the valorization of their institutional image and, in consequence, disclose CSR information in a more complete and comprehensive fashion, as formulated in hypothesis 2.

Hypothesis 2: The level of comprehensiveness of CSR information disclosed by companies that compose the ISE document is higher than that of other companies

The literature has suggested that firm ownership structure might have effects on the conflicts of interests that appear between each company’s main stakeholders –shareholder, manager, and creditor–. For instance, there are results that indicate the influence of the ownership structure on the companies’ value and performance (Allen & Phillips, 2000; Villalonga & Amit, 2006), as well on the companies’ dividend policy in many ways (DeAngelo, DeAngelo, & Skinner, 2008; Harada & Nguyen, 2011; López-Iturriaga & Crisóstomo, 2010). There is also evidence that certain traits of the ownership structure affect the companies’ investment policies and capital structure (Crisóstomo & Pinheiro, 2015; Goergen & Renneboog, 2001; Schiantarelli & Sembenelli, 2000). Considering that the ownership structure interferes in various company policies, it is plausible to suggest that it might also influence the CSR policy and its respective disclosure.

Besides the pressure from society for company social responsibility, owners and managers have started to contemplate the possibility of CSR being an important tool of legitimacy, as well as a source of improvement for each company’s image and reputation; all of which would be a motivating factor to carry out projects such as those that are proposed as able to create value (Chiu & Sharfman, 2011). Large controlling shareholders are very interested in firm legitimacy, reputation, and image improvement for each company, given their superior interest in creating value for each firm in the medium and long term, differently from minority shareholders, that might prioritize a more short-term perspective. In fact, under this argument of value-creation interest in the long term, through firm image and reputation improvement due to consistent CSR actions, there are results that confirm the positive effect of ownership concentration on each company’s CSR policy (Crisóstomo & Freire, 2015; Godos-Díez, Fernández-Gago, & Cabeza-García, 2012). Specifically, in regard to the CSR disclosure degree, there are results that indicate a positive effect of ownership concentration in hands of the government (Eng & Mak, 2003).

In Brazil, the strength of the main shareholder stands out as able to influence on company’s policies. The interest in company legitimacy as well as improvement of reputation and image is very much associated with the identity of the main shareholder, and this situation can make them prioritize CSR and its respective disclosure. It is intuitive to suggest that more social and sustainability actions for the company, motivated by a pursuit of legitimacy and reputation gain, may conduct to a higher disclosure degree on these actions, which would be associated to a broader comprehensiveness of the CSR and sustainability reports, as proposed in the following hypothesis.

Hypothesis 3: There is a positive relation between ownership concentration in hands of a controlling shareholder and the level of comprehensiveness on CSR reports

Society’s growing concern with environmental issues has put pressure on firm management so that, as an area of study, it brings awareness of these issues; and such management concern may also lead to improve other aspects of social responsibility. Environmentally sensitive sectors of the economy are those that involve a higher risk of environmental impact and, as such, are more susceptible to criticism and penalties regarding their activities (Reverte, 2009). This higher attention on these companies can foster a more intense social and environmental action from them, considering that they must be more aware in order to prevent environmental hazards and can also be seeking to conduct more social action in general, in the search for legitimacy and image improvement.

In Brazil, the Law 10165 of 2000, which deals with the National Environmental Policy, classified in its annex VIII the economic activities according to industry propensity to have environmental impact in three levels: low, medium, and high environmental impact potential. There are areas of the economic trade that are not classified in either of these levels. Previous studies noted that companies of more environmentally sensitive areas disclosed more social and/or environmental information, probably due to the higher visibility that these companies now have, and the need for adapting to more rigorous requirement standards concerning the relation with the natural environment (Bouten et al., 2011; Brammer & Pavelin, 2004; Crisóstomo, Souza, & Parente, 2012; Reverte, 2009).

From this discussion, it is plausible to propose that reports containing CSR information disclosed by companies from riskier industries would be more comprehensive than those of other companies with lesser potential for environmental impact, as expressed in the following hypothesis.

Hypothesis 4: CSR Reports disclosed by firms from sectors with higher environmental risk, according to the National Environmental Policy, present superior levels of comprehensiveness compared to reports from other companies

The Stakeholder theoretical framework proposes that there is a virtuous cycle between CSR and company performance, under the argument that CSR actions are able to create value to the company, since society has a positive sensibility for this type of corporative action (Baron, Harjoto, & Jo, 2011; Freeman, Wicks, & Parmar, 2004; Salazar, Husted, & Biehl, 2012; Waddock & Graves, 1997). The Slack Resource Theory, which proposes that a better financial performance generates more resources availability that can be directed to CSR, is an additional argument in favor of the aforementioned virtuous cycle between profitability and CSR. In turn, more CSR action requires more disclosure, which naturally has a cost that is more easily handled by companies with more profitability. This way, more profitability might allow for more complete and comprehensive CSR reports, as hypothesized bellow.

Hypothesis 5: Profitability positively contributes to the degree of comprehensiveness of CSR reports

Firm bigger size has been suggested as favorable for the CSR policy due to the higher availability of resources implied, either by infrastructure or money, for the execution of social policy. Furthermore, as the company grows, it gathers more visibility and interacts with a broader group of stakeholders, facing a greater demand for CSR, as well as for disclosure of these actions, which are of interest since they will contribute to improve its reputation and pursuit of legitimacy (Andrade, Bressan, Iquiapaza, & Moreira, 2013; Artiach, Lee, Nelson, & Walker, 2010; Lourenço & Castelo Branco, 2013; Orlitzky, 2001; Ullman, 1985; Ziegler & Schröder, 2010). In this sense, it is proposed the hypothesis that larger companies will invest more in the completeness and comprehensiveness of their CSR reports as a way to better meet society’s demands for information, as synthesized in the hypothesis that follows:

Hypothesis 6: The size of the company positively influences the comprehensiveness degree of its CSR reports

The data was analyzed through a qualitative and a quantitative approach. Initially, GRI reports were qualitatively analyzed. Then, a quantitative analysis was conducted, including a detailed description of the sample and the measurements used. After that, tests for the difference in means on the degree of comprehensiveness on CSR reports were run, and econometric models were estimated in order to assess the drivers for their degree of comprehensiveness on CSR reports.

The sample used is composed by 265 annual observations from 98 companies listed in BM&FBovespa that published social responsibility reports according to the GRI guidelines in the period from 2010 to 2013. Companies whose CSR reports were available for download in the GRI website until June 31^st, 2015, were included in the sample. The sample comprises an ample range of firm industries, which is important in such studies (Table 1).

Table 1 Table 1 Companies by economic activity Source: own work

The option for companies listed in the stock exchange was made because public companies have the ownership structure as a more relevant aspect. Besides, these companies tend to adopt broader and more comprehensive information disclosure policies in order to pursue reductions of informative asymmetry (Bouten et al., 2011; Branco & Rodrigues, 2008). Additionally, financial data are timely available and subject to auditing processes. Finally, the option for CSR reports that follow the GRI guidelines was made because of the worldwide recognition they have been attaining and the continuous increase of its use as a tool for communicating the companies’ responsible behavior before the stakeholders, as well as the structured format according to guidelines, principles, and indicators that allow for a more adequate analysis of the information about CSR performance in various dimensions (Brown, De Jong, & Levy, 2009; Nikolaeva & Bicho, 2011).

Table 2 shows the number of reports that disclose at least one information item (vision and objectives, management approach, or performance indicator) regarding CSR practices in each GRI sustainability dimension. Results show that CSR reports disclosed by Brazilian companies via GRI have a higher proportion of information disclosed than of non-disclosure for all sustainability dimensions. The less contemplated is the economic sustainability dimension, maybe due to the fact that companies might be prioritizing more specific social and environmental aspects of sustainability, which may be seen as the main objective of the report. It must be noted, in this sense, the highlighted number of reports with information about the dimension of labor practices and decent work (99.2%), and as well as environmental issues (97.7%).

Table 2 Table 2 Proportion of information disclosed in CSR reports for each GRI sustainability dimensions Source: own work

Table 3 presents the frequency of reported items of all GRI sustainability dimensions, and the type of information disclosed about each one. Results indicate that there is a higher proportion of disclosure for the three types of information (vision and objectives, management approach, performance indicator) when compared to non-disclosure. The higher proportion of information on the social and environmental performance indicator (PI) is worth mentioning, reaching 75.7%. That means a possible trend for the disclosure of concrete information on CSR.

Table 3 Table 3 Frequency of CSR items and type of information disclosed Source: own work

Table 4 contains the types of information disclosed for each sustainability dimension defined by the GRI. A positive result is that the largest proportion of the disclosed items (26.4%) presents the three types of information (VO, MA, and PI). 62.7% of the reports exhibits information containing two or three types of information (VO and MA; VO and PI; MA and PI; and VO, MA, and PI). Regarding disclosed information covered by only one type of information (VO or MA, or PI), information of the PI (performance indicators) type stands out in comparison to the other two, in the opposite direction of Belgian companies, that prioritize information about specific actions according to Bouten et al. (2011).

Table 4 Table 4 General vision of the types of information disclosed per GRI sustainability dimension Source: own work

The economic sustainability dimension presents a higher degree of comprehensiveness according to the proportion of items covered by information of two or three types, which corresponds to 71.7% (sum of VO and MA; VO and PI; MA and PI; and VO, MA, and PI), followed by the sustainability dimensions labor practices and decent work (66.6%), and environment (64.5%), in line with the results found by Bouten et al. (2011) in Belgium. Figure 2 shows the evolution of the types of information disclosed in CSR reports and its combinations during the period of 2010 to 2013.

Figura 2 Figura 2 Evolution of the types of information in the period of 2010 to 2013 Source: own work

It can be noticed from graphic 1 that the proportion of CSR items covered by information of three types (VO, MA and PI) had relevant and consistent growth during the analyzed period, in contrast to the decline, or maintenance, of items that present only one or two types of information. This denotes a trend of improvement in the comprehensiveness degree of CSR reports. Such evaluation is deepened using the comprehensiveness indices (IDCR1 and IDCR2).

Table 5 presents the descriptive statistics of the comprehensiveness index of CSR information per GRI sustainability dimension, measured by both metrics proposed (Equations 1 and 2). On the one hand, as seen in the panel A, the IDCR1 index considers comprehensive the item that incorporates the three types (VO, MA, and PI). On the other hand, as seen in panel B, IDCR2 takes into account items that contemplate information of two types (VO and MA; VO and PI; MA and PI) or of three types (VO, MA, and PI) for each item disclosed.

The higher proportion of items in some dimensions previously observed in table 4, is observed in the index for the comprehensiveness of CSR reports exhibited in table 5. In fact, the test for the difference in means (F) among the indexes in GRI sustainability dimensions shows that there are differences among the average index of each sustainability dimension. In reality, there are CSR sustainability dimensions more covered by the reports disclosed by Brazilian companies. As in the proportion of items disclosed, the economic, labor practices, and decent work, as well as environmental dimensions, seem to present superior degrees of comprehensiveness.

Table 5 Table 5 Average index for the degree of comprehensiveness of CSR report per GRI sustainability dimension Source: own work Note:

test F for the difference in means among GRI sustainability dimensions (Anova)

Data exhibited in table 6 indicates that the average degree of comprehensiveness of the information present in the Brazilian companies’ CSR reports (IDCR1 and IDCR2) has increased during the period. By both metrics used (IDCR1 and IDCR2), an average growth in the index for comprehensiveness of the reports can be observed along the period of study. The test F for the difference in means among the years (Anova) showed that indeed there is a difference in mean annual values of the index for comprehensiveness. The average degree of the index of comprehensiveness is actually superior in more recent periods.

Table 6 Table 6 Index for the degree of comprehensiveness of CSR reports per year measured by both comprehensiveness metrics (IDCR1 and IDCR2) Source: own work Note:

test F for the difference in means among the years (Anova)

In addition to the annual comparison, the degree of comprehensiveness of the reports was also compared between periods of two years using the t-test. The results confirm the superiority of the average index of comprehensiveness in more recent periods (Table 7).

Table 7 Table 7 Degree of comprehensiveness of CSR reports for every two years Source: own work Note:

t-test for the difference in means

Results exhibited in tables 6 and 7 support the proposition of hypothesis 1, that the degree of comprehensiveness of the CSR information disclosed by Brazilian companies has evolved throughout the years. This means that companies have developed in the direction of improvement of the quality of the information disclosed in their CSR reports. More than a natural evolution of the CSR disclosure process, it is possible that the aforementioned BM&FBovespa bulletin Report or Explain has been an additional factor for the increase in the degree of comprehensiveness of the information disclosed in the latest two-year period.

According to the hypotheses proposed, it was suggested that some firm attributes might interfere in the degree of comprehensiveness of the CSR report: company presence in the ISE index, existence of a major shareholder, high risk firm industry as established by the Law 10165 of 2000, as well as firm profitability and size. Table 8 brings an initial analysis by comparing the average index for the degree of comprehensiveness in CSR reports, measured by both metrics proposed (IDCR1 and IDCR2), between firms listed in the ISE index and non-participant firms. From these results, it can already be noted that, in fact, the index for comprehensiveness in CSR reports of the ISE firms is higher for both metrics used. This is a strong indicator that belonging to the ISE might actually be a factor that stimulates a higher completeness of the CSR report, as suggested by hypothesis 2 (Table 8: Panels A and B).

Table 8 Table 8 Comparison of the degree of comprehensiveness of reports from ISE-participant and non-participant companies Source: own work Note:

t-test for the difference in means

A comparative analysis of the average degree of comprehensiveness in CSR reports between companies with and without a major shareholder shows that this degree is higher for companies that have one major shareholder by both metrics used (Table 9: Panels A and B). This result points towards the direction of what was proposed in hypothesis 3, signaling that a controlling shareholder tends to invest more in CSR and in the respective disclosure, in order to gain reputation and improve firm image.

Table 9 Table 9 Degree of comprehensiveness of reports by type of propriety Source: own work Note:

T-test for the difference in means

Table 10 contains results of the comparison of comprehensiveness degree average in CSR reports between companies considered environmentally impactful according to the Law 10165 of 2000. It is noted that statistically there is no significant difference between the average degree of comprehensiveness in CSR reports from companies from riskier industries when compared to those not from high risk industries, as proposed by hypothesis 4.

Table 10 Table 10 Comparison of degree of comprehensiveness of CSR information between companies identified or not by the Law 10165 of 2000 Source: own work Note:

t test for the difference in means

The analysis of the specific index for the degree of comprehensiveness for the environmental issue –i.e., an index that considers the comprehensiveness of the report taking into account only the environment sustainability dimension– was done to deepen this analysis. Results shown in table 11 denote a higher degree of comprehensiveness of CSR reports for companies from environment riskier industries, as suggested by hypothesis 4.

Table 11 Table 11 Index for the degree of comprehensiveness in CSR report of environment sustainability dimension Source: own work Note:

T-test for the difference in means

Table 12 shows the results of the estimates of models proposed in equation 3 that have the degree of comprehensiveness of CSR reports as dependent variable. The findings go in the same direction as those obtained by the tests for the difference in means between company groups. First of all, it can be observed that the presence in the ISE index is a company attribute that has a very positive effect on the degree of comprehensiveness of CSR reports, as hypothesized. In fact, being listed in the ISE (D_ISE) seems to be able to stimulate a broader disclosure of CSR and sustainability actions, because of the company’s larger visibility and the search for gain on image and reputation, as well as to seek legitimacy, as suggested in hypothesis 2.

In this same line of argumentation about the objective, the ownership concentration held by the main shareholder is another attribute of the company that contributes to increase the degree of comprehensiveness of CSR reports, as proposed by hypothesis 2. This positive effect is observed with the use of the two proxies proposed, which are: the presence of a major shareholder (D_MAJOR) (Table 12: Models 1 and 3), and the proportion of ownership concentrated in hands of the main shareholder (CONC1) (Table 12: Models 2 and 4). A controlling shareholder, besides tending to have a long-term perspective in the company ownership, has his/her name very much associated with the company, which is a strong motivating factor to pursue gaining in image and reputation for the company as proposed under hypothesis 3.

As foreseen in hypothesis 4, the fact that the company is considered potentially aggressive to the environment according to the Brazilian environmental law (D_AMB) contributes positively for a higher degree of comprehensiveness in CSR reports. The fact that the firm is listed as a high environment risk company according to its sector actually seems to be a factor that stimulates –or even forces– the company to present CSR reports with a higher degree of comprehensiveness.

Also, as theoretically foreseen, firm size and profitability of the company has a positive influence on the comprehensiveness degree of CSR reports.

Table 12 Table 12 Models for explaining the degree of comprehensiveness of CSR reports in Brazil Source: own work Note:

models estimated by ordinary least squares with standard errors robust to heteroskedasticity. Coefficients exhibited with respective level of significance. ***, **, * denote statistical significance of the coefficients at 0.01, 0.05, and 0.1 levels.