Disentangling the nexus between CSR performance, GRI reporting and institutional environment: international evidence

Purpose This study aims to investigate whether companies partake in Global Reporting Initiative (GRI) adoption primarily for signaling purposes to demonstrate their superior corporate social responsibility (CSR) performance or for greenwashing purposes to obscure their inferior CSR performance. In addition, this research delves into the impact of the institutional context (i.e., environmental development, social progress and institutional governance) on the CSR performance-GRI reporting link. Design/methodology/approach This study examines the relationship between CSR performance and GRI reporting, using a sample derived from the Fortune Global 500 over the period between 2016 and 2023. The empirical models are based on rare events logistic regression (ReLogit) analysis. Findings The results of this study indicate that companies are inclined to publish GRI-based CSR reports as a manifestation of their commitment to CSR, thereby supporting the signaling hypothesis. Furthermore, the findings reveal that the association between CSR performance and GRI reporting is more pronounced in countries characterized by a strong institutional context, implying the significant role of the institutional environment in CSR transparency. Originality/value This research adds to the body of CSR literature investigating the link between CSR performance and GRI adoption, drawing on the arguments of signaling theory and greenwashing tendency. This study enriches prior literature, documenting that the institutional context significantly impacts companies’ motivation to engage in GRI reporting, thereby reducing the propensity for greenwashing behaviors.