Corporate Social Responsibility Reporting: Exploring communications on water scarcity in large corporate organisations

Corporate Social Responsibility (CSR) reporting has increased significantly over recent years (Sethi et al., 2015) and has become an important mechanism by which companies demonstrate their accountability with respect to... [ view full abstract ]

Corporate Social Responsibility (CSR) reporting has increased significantly over recent years (Sethi et al., 2015) and has become an important mechanism by which companies demonstrate their accountability with respect to social and environmental issues, including their use of natural resources (Garcia-Sanchez et al, 2015). Concomitantly, water reporting is increasing within corporate reporting, however, the quality and style of reporting remains inconsistent across different firms. Often, it appears to be driven by operational efficiencies (Jones et al. 2014) with significant variations in levels of transparency on the extent of water risks to companies (Linneman et al. 2015). There is a shortage of studies which investigate corporate awareness and response to risks arising from water shortage, and the implications these might have for wider society. This is despite growing concerns about a water crisis which has led to the World Economic Forum to declare water scarcity the greatest threat to global prosperity in 2015.

This paper reports on work carried out as part of a RCUK funded project DRY (Drought Risk and You). We present emerging findings from a longitudinal content analysis of company annual reports, 2007-14, for FTSE 100 companies. These annual reports are a statutory requirement for UK listing, and the primary method by which corporations communicate with stakeholders. Our sample consists of 400 reports across 10 industrial sectors. Drawing upon existing literature, we created 8 pre-determined categories (each with 8 sub-categories covering risks to company operations, company policies, wider society, and regulatory requirements). Using content analysis, reports were codified, generating counts and measurements of water disclosures across these categories in the first instance. We then carried out further statistical analysis including: chi-squared tests, One-Way Analysis of Variance (ANOVA), and construction of logit regression models which allows , determining statistically significant differences in the number of disclosures across company sectors and themes. From these analyses, we find that companies with the highest level of water-based disclosures are in the consumer staples sector (e.g. breweries and tobacco firms); whilst telecommunications and utilities report the least. Companies report on activities that concern the relationship between water scarcity and company operations, and management tools to address this risk, yet do not pay as much attention to risks of water scarcity within their supply chains. Ongoing work integrates with qualitative and quantitative analysis to generate further insights into corporate recognition and responses to risks arising from water scarcity and better understand patterns across sectors.