Factors influencing the choice to declare CSR reporting stand-ards: Evidence from Baltic public companies

Research background: Recently, companies have been increasingly focusing on social responsibility and disclosure. They use a variety of standards to disclose their social responsibility. The prevalence of these practices varies between companies in different countries. In addition, some companies declare CSR reporting standards, while others do not. Stakeholders need to know the characteristics of companies that declare CSR reporting standards. Purpose of the article: This study aims to reveal the factors influencing the choice to declare CSR reporting standards in Baltic public companies. Methods: The choice to declare CSR reporting standards is measured by the fact of CSR reporting standards’ declaration and the choice of GRI. The data for dependent variables are collected from non-financial reporting of Baltic public companies by making the content analysis. Company visibility, financial performance, and market expectations are chosen as independent variables. Their data is obtained from the Bloomberg database. Logistic regression models are applied. Findings & value added: Only half of the companies surveyed disclosed the CSR reporting standards used. Estonian public companies prefer GRI standards, and Lithuanian public companies prefer GRI plus UNGC. CSR reporting standards tend to be declared by those public companies that are larger and operate in the “heavy industry” as well as have higher EPS and lower ROA and CAPI. Market expectations are irrelevant to the disclosure of CSR reporting standards. By contrast, GRI standards are used and disclosed by public companies with the same characteristics as those declaring the standards. Still, in this case, age and market expectations are also important factors. Younger and higher market-value companies tend to choose GRI standards. These results reflect managerial behavior based on legitimacy, stakeholder, and signaling theories. Our findings are important to investors, market regulators, policymakers, managers and shareholders.