Academic paper CSR priorities of emerging economy rms: is Russia a different shape of BRIC?

Lutz Preuss and Ralf Barkemeyer

Lutz Preuss is based at the School of Management, Royal Holloway University of London, Egham, UK. Ralf Barkemeyer is based at the School of Earth and Environment, Sustainability Research Institute, University of Leeds, Leeds, UK.

Abstract Purpose Against the backcloth of a growing geopolitical and economic importance of emerging economies, this paper seeks to ask whether emerging economy rms are willing to match their increased economic weight with greater social responsibility. Given a relative scarcity of research into CSR in Russia, particular attention is to be given to rms from that country. Design/methodology/approach The research question is examined through an analysis of differences between rms from industrialized nations, transition economies, and newly industrialized countries in terms of the breadth and depth of their sustainability reporting. This three-way comparison analyses corporate sustainability reporting according to the GRI G3 framework developed by the Global Reporting Initiative. Findings The rms in the sample display clear evidence of a divide between industrialized and emerging economies, with Russia occupying a middle position. Contrary to expectations, however, emerging economy rms outperform those from industrialized nations in their coverage of GRI indicators. Research limitations/implications These ndings leave open two possible conclusions: either emerging economy MNEs have leaped to the front in terms of addressing sustainability or they have been able to use GRI reporting as window-dressing to hide a dirtier reality. From a different angle, the strong evidence of a North-South divide in the sample also lends support to the national business systems approach to CSR. Originality/value The paper adds to a small but growing body of cross-national studies into CSR that go beyond OECD member countries. In particular, it constitutes one of the rst studies not only to tease out CSR priorities of large Russian rms but also to elucidate differences in terms of CSR priorities between newly industrialized countries and transition economies. Keywords Corporate social responsibility, Emerging economies, Russia, Corporate sustainability reporting, Global Reporting Initiative, Social responsibility, Industrialised economies Paper type Research paper

Introduction
One aspect of globalization that has become particularly salient in recent years is the rise of emerging economies. Sometimes referred to as BRICs for Brazil, Russia, India and China, they can be dened as countries that show both a rapid economic development and that have adopted government policies geared towards economic liberalization (Hoskisson et al., 2000). Their growth has altered the traditional balance of power between developed and developing nations in the political arena, as emerging economies clamor for a greater say in international political governance bodies (Hoogvelt, 1997). In the economic arena, multinational enterprises (MNEs) from emerging economies have started to vigorously challenge the hegemony of their industrialized nation rivals in the global markets for goods and services, capital and talent (Hoskisson et al., 2000; Cuervo-Cazurra, 2008). In 2010, the

The authors would like to acknowledge the nancial support of the German Federal Ministry of Education and Research (grant number 01UT1005) and the support of the International Research Network on Social and Environmental Aspects in Business and Management (SEABUS).

DOI 10.1108/14720701111159226

VOL. 11 NO. 4 2011, pp. 371-385, Q Emerald Group Publishing Limited, ISSN 1472-0701

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Forbes Global 2000 Index listed 585 emerging economy rms among the worlds 2000 largest rms, representing an 80 percent increase compared to the year 2007. Of these 585 rms, 318 were based in the BRIC countries. From a CSR point-of-view, these political and economic changes raise the question whether emerging economy rms are willing to match their increased economic weight with a greater responsibility for social, environmental and governance issues at home and in the global arena. Where they do, the follow-on question arises whether they develop their own CSR perspectives. Emerging economies can be classied into two groups: newly industrialized countries in Asia, Latin America and Africa on the one hand and transition economies of the former Soviet Union and China on the other hand (Bozyk, 2006; Hoskisson et al., 2000)[1]. The research subject of the paper then is a tri-partite comparison of the engagement of MNEs from industrialized, transition and newly industrialized economies with the CSR agenda. Despite being one of the largest emerging economies, Russia has received comparatively little attention in the CSR literature[2]. Hence, the paper will in particular examine whether companies from Russia set different CSR priorities to those from newly industrialized countries like Brazil, South Africa or India. Such potential differences are explored here with regard to an emerging global sustainability management practice, namely corporate sustainability reporting according to the G3 sustainability reporting guidelines by the Global Reporting Initiative (GRI).

CSR in emerging economies

CSR can be dened as a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (CEC, 2001, p. 6). The literature on CSR in emerging countries can be grouped along two main themes. On the one hand, scholars have stressed that, in broad terms, CSR is hardly a new idea for most emerging countries. Albeit often termed differently, there have been similar conceptualizations of business responsibilities towards society in many countries (Bloweld and Frynas, 2005; Prieto-Carron et al., 2006). Evidence is also emerging that emerging economy rms are setting CSR priorities that are different from those in industrialized nations (Chapple and Moon, 2005; Welford, 2005). On the other hand, scholars have pointed to the signicant isomorphic pressures that compel emerging country rms to engage with the CSR agenda. It is through mechanisms like supply arrangements and the requirements of nancial markets that emerging countries have become exposed to CSR (Garcia-Johnson, 2000). Hence, the current dissemination of CSR has often been portrayed as a Northern response to challenges regarding the role of business in society, i.e. one that is predominantly based on multinational enterprises from OECD member countries (Fox, 2004). In the context of corporate sustainability reporting, this North-South dynamic may also be reected in the extent to which different sustainability-related aspects are prioritized in reports from emerging economy and industrialized nation rms. Corporate sustainability reporting mirrors the general developments in CSR practice in that initially, sustainability reporting had largely been restricted to large OECD companies (Kolk, 2005a), but more recently a noticeable uptake of sustainability reporting among emerging economy rms has been observed. A range of previous studies have identied clear country-level differences in corporate sustainability reporting (Chen and Bouvain, 2009; Guthrie and Parker, 1990; Halme and Huse, 1997; Kolk, 2005b; Maignan and Ralston, 2002; Tschopp, 2005). In addition, country-level studies focusing on social and environmental disclosure practices in, e.g. Australia (Kelly, 1981; Trotman and Bradley, 1981), China (Peiyuan, 2005), Germany (Cormier et al., 2005), Singapore and Malaysia (Thompson, 2002), the US (Cowen et al., 1987) or the UK (Gray et al., 1995), have identied a range of country-specic contextual factors that have helped shaping sustainability reporting. This includes aspects such as country-specic legal frameworks (Gray et al., 1995; Guthrie and Parker, 1990), the level of maturity of sustainability reporting in a specic country (Peiyuan, 2005; Thompson, 2002) or the emphasis on specic sustainability-related aspects in a given context (Chen and Bouvain, 2009; Hackston and Milne, 1996; Kolk, 2005b).

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As the uptake of sustainability reporting among emerging economy rms is largely a very recent phenomenon, the vast majority of international comparative studies have exclusively focused on reporting among industrialized country rms. This paper goes beyond industrialized economy reporting and analyses priorities of emerging economy rms. Going back to the argument sketched out above, the central research question of this paper then is whether emerging economy rms have been able to set their own priorities in terms of the aspects that they address in their sustainability reports or whether they largely appear to replicate the structure and prioritizations of aspects found in the sustainability reports of their industrialized economy peers. Conceptually, these two perspectives on international differences in CSR and sustainability reporting can be captured through the tension between neo-institutionalist and national business system-based explanations of developments in modern capitalism. Neo-institutionalists stress that organizations need to maintain legitimacy within their societal contexts and therefore are subject to a range of mimetic, coercive and normative pressures (DiMaggio and Powell, 1983; Scott, 2001). Such pressures lead to the global convergence of a managerial practice such as CSR once it becomes recognized as best practice or as part of societal expectations regarding the companys conduct towards its stakeholders. Alternatively, the national business system (NBS) approach emphasizes the institutional environment within which rms operate to postulate a continued divergence among national approaches to capitalism (Hall and Skoskice, 2001; Whitley, 1999). From this perspective, one would therefore expect a continued divergence of business actors approaches to global issues like CSR that is inuenced by their respective national institutional environments. Based on the neo-institutionalist and NBS bodies of literature, we would expect our analysis of corporate sustainability reporting to reveal either of two trends or a combination of the two. On the one hand and in line with neo-institutionalist arguments we would expect there to be a great deal of similarities in CSR priorities between rms from industrialized, transition and newly industrialized countries: H1a. Sustainability reports from industrialized, transition and newly industrialized countries will show similar prioritizations of GRI sustainability dimensions as well as similar levels in terms of the overall number of GRI indicators addressed.

On the other hand and in line with national business systems thinking, we would expect to nd strong evidence of differences in CSR priorities between rms from the three groups of countries. Building on ndings regarding the level of maturity of sustainability reporting in industrialized and newly industrialized countries (Peiyuan, 2005; Thompson, 2002) as well as regarding the impact of context-specic problem structures (Chen and Bouvain, 2009; Hackston and Milne, 1996; Kolk, 2005b) and country-specic legal frameworks (Gray et al., 1995; Guthrie and Parker, 1990), we would expect to nd different generic patterns of sustainability reporting in industrialized, transition and newly industrialized economy rms, respectively: H1b. Sustainability reports from industrialized, transition and newly industrialized countries will differ in terms of prioritizations of the six GRI sustainability dimensions as well as the overall number of indicators addressed, revealing specic indicator proles.

CSR in Russia
Concerning the development of CSR in Russia, scholars have argued that there are distinctive characteristics of corporate social responsibility in Russian businesses (Soboleva, 2006, p. 88; see also Polishchuk, 2009; Kuznetsov et al., 2009). These result from the countrys history where a strong absolutist state rst the Tsarist and then the Soviet one held a tight grip on all aspects of social life. Hence alternative political activity which challenges established consensus is barely evident. In particular in the arena of environmental politics, there is a relative lack of active environmental NGOs in much of

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provincial Russia (Crotty and Crane, 2004). In economic terms, the transition to a market economy occurred through a particularly messy privatization process that was widely regarded as deeply unfair (Apressyan, 1997; Avtonomov, 2006; Kuznetsov et al., 2009). In structural terms, Russia has inherited from the Soviet Union an economy with a high concentration of production, where the economic welfare of a city may depend upon a single industry or even a single large enterprise (Polishchuk, 2009). In recent years, Russia has furthermore witnessed a far-reaching re-centralization of government powers, which has left sub-national levels of government in charge of economic development and social welfare but largely without the scal means to meet these responsibilities. In this situation, sub-national governments have come to rely on nominally voluntary corporate social investment which is ensured by threat of various economic sanctions (Avtonomov, 2006; Polishchuk, 2009). Such arguments are entirely in line with an NBS approach to explaining international differences in the evolution of CSR. At the same time, the transition process in Russia has also led to an internationalization of life styles, attitudes and knowledge once the Iron Curtain had fallen (Apressyan, 1997). In turn, Russian businesses have also become subject to the global isomorphic pressures that surround CSR. For example, 2004 saw the signing of the rst global framework agreement by a global trade union federation, a Russian trade union and a Russian company, namely by the International Federation of Chemical, Energy, Mine and General Workers Unions (ICEM), the Russian Oil, Gas and Construction Workers Union (NGSP) and OAO Lukoil (Soboleva, 2006). A survey of CSR practices in the 102 most successful companies in Russia found that consistency with long-term strategy was the most often mentioned selection criterion for CSR programs, having been referred to by 90 percent of the responding companies (Blagov, 2008, p. 26). In other words, the business case (Burke and Logsdon, 1996; Husted and Allen, 2007; Carroll and Shabana, 2010) has become the dominant motive for CSR in Russian rms too. This study thus concluded that the development of CSR in Russian business is generally aligned with global trends (Blagov, 2008, p. 12). Such a conclusion may be more indicative of the situation in the small number of large corporations, for example in the extractive industry, that occupy a strategic position in the Russian economy and hence a special relation with the state than for the average Russian rm (Kuznetsov et al., 2009). It is nonetheless an indication that CSR in Russia is at least in part driven by the isomorphic pressures highlighted by neo-institutionalist theory. Since Russian rms are exposed to the same global pressures as rms from newly industrialized economies without having had the head-start of industrialized countries, we would expect greater similarity between rms from Russia and newly industrialized economies, in particular when analyzed at sectoral level: H2. Divergence in terms of prioritizations of sustainability dimensions will be smaller between rms from Russia and newly industrialized economies than compared to rms from industrialized economies.

Methodology
The research question is examined through an analysis of the prioritization of sustainability-related aspects in corporate social and environmental reports. In this eld, the Global Reporting Initiative (GRI) has developed a series of guidelines, which are now in their third generation. As part of the GRI G3 guidelines, companies are expected to provide a set of standard disclosures in their sustainability reports. Among others, the GRI G3 framework comprises of 79 indicators in the categories economic performance, environmental performance and society performance, with the latter being broken up into the four subcategories labour practices and decent work, human rights, society and product responsibility. As companies are unlikely to either have the capacity to address all 79 indicators in their sustainability reports or to nd all of these indicators relevant for the specic sector they are operating in, they need to prioritize among these. The G3 guidelines give some assistance in that they dene 40 core indicators any company irrespective of sector afliation would be expected to report on and 39 additional indicators that may only

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apply to specic industries (see Table I). However, in practice companies are likely to only report on a narrower subset of these core and additional indicators. The sample for this study consists of all freely available GRI G3 sustainability reports (or nancial reports containing a dedicated sustainability section) that are available from the Corporate Register database for the selected sectors and countries. To identify sector-level impacts on the choice of indicators, the analysis was restricted to three sectors (mining and metals, oil and gas, utilities). The choice of sectors was determined by data availability among Russian companies as the focal point of this inquiry. Accordingly, the choice of industrialized economies to be included into the sample was determined by the availability of sustainability reports from the three sectors that were found to be most widespread in the Russian sample. The overall sample thus comprises of sustainability reports from six emerging economies Brazil, China (including Hong Kong), India, Russia, South Africa and South Korea and four developed economies Australia, Canada, the UK and the US. In total, the nal sample consists of 310 GRI G3 reports from ten countries (Table II). Utilities represents the largest sector within the sample (n 136), followed by extractive industries (111), and oil and gas (63). In terms of countries of origin, Brazil constitutes the largest subsample (n 64), followed by the US (47) and Australia (43). Overall, the sample consists of 139 reports from companies headquartered in developed economies, 130 based in developing economies and 41 based in transition economies. Coding was undertaken manually and focused on the analysis of the GRI content index companies are required to include in their sustainability report, listing all GRI G3 indicators that have been included in the report. Plausibility checks were carried out for all reports included in the sample; those reports that were found not to report on indicators that had been listed in the GRI content index were removed from the sample. The scoring scale consisted of 1: indicator fully addressed; 0.5: indicator partially addressed (as stated by the company in the GRI content index); and 0: indicator not addressed. Cases in which companies stated that a specic indicator was not material or not applicable were scored as 0. Exceptions are indicators EC4 (signicant nancial assistance received from Table I GRI G3 indicators
Total number of indicators Economic performance Environmental performance Society performance Labor practices and decent work Human rights Society Product responsibility 9 30 40 14 9 8 9 Core indicators 7 18 26 9 6 6 4 Additional indicators 2 12 14 4 3 2 5

Table II Sample summary

Extractive (mining, metals) Brazil China/HK India Russia South Africa South Korea Australia Canada UK USA Total 18 4 8 10 27 3 17 12 8 4 111 Oil and gas 4 6 2 10 3 5 3 11 4 15 63 Utilities 42 6 0 5 1 17 23 10 4 28 136 Total 64 16 10 25 31 25 43 33 16 47 310

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government) and EN28 (monetary value of signicant nes and total number of non-monetary sanctions for noncompliance with environmental laws and regulations), as not applicable can be expected to have a different meaning in this context (i.e. no nancial assistance received/no nes occurred) and was thus coded as 0. In an initial step, descriptive statistics are used to identify trends and patterns in the overall sample, focusing on sector-level and country-level patterns. As the focus of this paper is on identifying differences between groups within the overall sample, Mann-Whitney tests are conducted for each category of GRI indicators (economic; environmental; labor practices; human rights; societal; product responsibility). Following this general overview of countryand sector-level impacts on the content of sustainability reports, the analysis proceeds to describe those areas in which the priorities of Russian sustainability reports appear to differ from their international competitors. Comparing Russian priorities with those of the other emerging economies should consequently shed some light on the relative importance of global isomorphic and NBS-style factors in the evolution of CSR in Russia. The study has a number of limitations. To start with, the industrialized country sample could be biased as it consists entirely of English-speaking countries. Furthermore, limitations arise from the fact that we analyzed the GRI content index only rather than the full report: in the majority of cases, the reports include no external verication whether the indicators listed in the content index have actually been sufciently addressed in the report. Some companies, in particular Russian ones, present the information in their reports in a free format even where they claim to follow the GRI methodology (Blagov, 2008). As a result, the GRI content index may not cover the entirety of their CSR activities. Another potential limitation lies in the choice of sectors we were able to include in this study, as all three are highly polluting industries and may therefore not be representative of other sectors. As with previous studies into sustainability reporting, this study has a bias towards large companies, as larger companies are more likely to produce sustainability reports in the rst place. This may be a particular issue for Russia where, as was mentioned above, a small number of large rms enjoy a strategic position in the national economy that would not be typical for the average rm (Kuznetsov et al., 2009). Despite these limitations, we hope that the results we are about to present will give some insights into the global spread and country-level adaptation of CSR priorities.

Overall results
A rst look at the overall inclusion levels of the GRI indicators (Figure 1) shows that the average company included in the sample reports on 56.3 percent, i.e. 44.5 out of the 79 GRI G3 indicators. The most popular individual indicators are EC1 economic performance (89 percent), LA7 safety performance (87 percent), LA1 workforce (85 percent), and EN16 greenhouse gas emissions (81 percent). Furthermore, two main patterns emerge: rst, sector afliation does not appear to explain variation in the overall coverage of indicators. Coverage ranges from 53.6 percent (oil and gas) through 55.8 percent (utilities) to 58.5 percent (extractive). In contrast, clear country-level differences can be identied. Generally, a North-South divide can be observed with regard to the overall coverage of indicators. On average, industrialized country reports address a markedly lower number of indicators (50 percent) than their transition country (55.6 percent) and newly industrialized country peers (63.3 percent). The highest levels of coverage can be found among Indian (75.2 percent) and South Korean (73.9 percent) companies; the lowest level among companies based in the UK (46.0 percent) and the US (43.8 percent). In terms of overall coverage, Russian companies occupy a middle position with an average of 50.3 percent of all indicators addressed. This coverage is not only signicantly lower than that of China, the other transition economy; it is also the lowest level of coverage among all emerging economies. In order to identify the degree to which the distribution across the set of 79 indicators is similar between different country subsamples, a series of correlation analyses were conducted. As data appeared to be non-normally distributed, non-parametric tests were used. Table III shows Spearmans rank order correlation coefcients for comparisons between country subsamples. All of the relationships below were highly signicant at the

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Figure 1 Coverage of indicators

Total Extractive Oil and gas Utilities Transition economies China/HK Russia Newly industrialised economies Brazil India South Africa South Korea Industrialised economies Australia Canada UK USA 0% 56.3% 58.5% 53.6% 55.8% 55.6% 64.0% 50.3% 63.3% 59.8% 75.2% 58.2% 73.9% 50.0% 52.1 58.1% 46.0% 43.8% 10% 20% 30% 40% 50% 60% 70% 80%

p , 0.001 level[3]. The three columns on the right show correlation coefcients for pair-wise comparisons of country samples with overall industrialized economy, newly industrialized economy and transition economy samples. Again, a North-South divide emerges from the comparison of correlation coefcients: whilst country-to-country comparisons do not reveal a clear pattern, a comparison of country subsamples with the averages for industrialized, newly industrialized and transition countries shows that each of the four industrialized country subsamples are more highly correlated with the other three industrialized country subsamples than with the newly industrialized or the transition economy ones. Likewise, rms from newly industrialised and transition economies appear to be more similar to their peers from emerging economies than to the industrialized economy sample. Russian reporting priorities appear to be more similar to the newly industrialized economies (r s 0:838) when compared to industrialized economies (r s 0:499). One minor exception to the overall North-South pattern is that of the Chinese subsample as it shows comparatively low levels of correlation with any of the country subsamples as well as with both the industrialised (r s 0:600) and the newly industrialized country subsamples (r s 0:624).

Category-level patterns
A closer look at the extent to which the six sustainability dimensions prescribed by the GRI G3 Guidelines are addressed (Table IV) can serve to shed more light on the pattern identied above. Across the overall sample, it becomes apparent that labor (66.4 percent), economic (63.9 percent) and environmental performance indicators (58.3 percent) are addressed to a greater extent than indicators for society (54.7 percent), human rights (46.2 percent) and product responsibility (38.2 percent). This pattern is consistent for the industrialized, newly industrialized and transition economies subsamples. In all three of these subsamples, the product responsibility dimension is the least frequently addressed one. In terms of sectoral differences, a uniform pattern emerges in line with the overall coverage as identied above. Across all six sustainability dimensions, the extent to which indicators are addressed within the three sectors is very similar; the highest difference between sectors can be observed in the environmental dimension (Dcoverage7.4 percent) between extractive industries, and oil and gas. In contrast, clear differences can be identied in terms of country-level comparison. In ve out of six categories, Indian reports show the highest

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j
Brazil China/HK India Russia South Africa Australia Canada UK USA South Korea Industrialized countries Newly industrialized economies Transition economies xxx 0.458 0.630 0.495 xxx 0.563 0.718 xxx 0.517 xxx 0.670 0.600 0.487 0.499 0.753 0.506 0.802 0.624 0.637 0.838 0.839 0.808 0.762 n.a 0.459 n.a. 0.591 0.770 0.610 0.590 0.703 0.648 0.496 0.466 0.509 0.665 0.503 0.510 0.647 0.339 0.452 0.454 0.529 0.456 0.767 0.728 0.703 0.636 0.461 0.427 0.499 0.487 xxx 0.860 0.770 0.773 xxx 0.769 0.820 xxx 0.738 xxx 0.867 0.886 0.849 0.921 0.680 0.657 0.738 0.662 0.491 0.494 0.580 0.570

Table III Spearmans rank order correlation coefcients of country subsamples

Spearmans rho

Newly industrialized/transition economies Brazil xxx China/HK 0.594 xxx India 0.569 0.307 Russia 0.711 0.519 South Africa 0.686 0.500 South Korea 0.642 0.625

Industrialized economies Australia Canada UK USA

Table IV Category-level coverage in different sectors and countries

n 310 111 63 136 41 16 25 130 64 10 31 25 139 43 33 16 47 50.0 52.1 58.1 46.0 43.8 0.231 0.195 0.270 0.238 0.214 57.6 61.2 67.0 50.0 50.1 0.265 0.260 0.262 0.291 0.241 54.2 56.7 61.1 47.9 49.1 0.227 0.200 0.243 0.225 0.230 63.3 59.8 75.2 58.2 73.9 0.231 0.246 0.171 0.227 0.172 69.7 65.1 80.0 69.7 77.1 0.249 0.279 0.115 0.240 0.185 63.3 59.0 75.2 59.7 74.3 0.254 0.271 0.186 0.256 0.184 77.6 74.9 83.6 72.6 88.6 54.9 59.0 61.0 48.7 49.0 55.6 64.0 50.3 0.223 0.247 0.192 67.1 73.6 62.9 0.225 0.223 0.221 56.1 63.4 51.4 0.428 0.267 0.229 69.9 75.2 66.6 0.217 0.255 0.186 0.216 0.231 0.113 0.212 0.172 0.244 0.220 0.270 0.260 0.230 56.3 58.5 53.6 55.8 0.237 0.211 0.259 0.248 63.9 66.1 60.2 63.8 0.259 0.253 0.264 0.261 58.3 61.7 54.3 57.3 0.245 0.227 0.254 0.252 66.4 68.5 61.3 67.1 0.252 0.221 0.278 0.262 46.2 50.6 45.1 43.1 42.1 46.9 39.1 57.9 57.1 70.6 50.7 63.6 36.5 36.2 46.8 41.3 28.0

Total % SD

Economic % SD

Environmental % SD

Labor practices % SD

Human rights % SD 0.340 0.316 0.355 0.349 0.295 0.355 0.252 0.302 0.308 0.225 0.339 0.250 0.353 0.336 0.423 0.302 0.318

Society % SD 54.7 55.2 58.4 52.5 46.8 66.8 34.0 58.2 54.3 73.1 54.2 67.0 53.7 54.9 64.4 44.9 48.1 0.318 0.322 0.291 0.326 0.317 0.261 0.285 0.318 0.343 0.280 0.296 0.271 0.315 0.330 0.326 0.319 0.277

Product responsibility % SD 38.2 35.5 36.5 41.1 41.7 53.1 34.4 44.7 41.2 63.9 30.6 63.3 31.0 30.1 40.1 37.2 23.4 0.357 0.348 0.370 0.359 0.332 0.382 0.281 0.362 0.343 0.364 0.341 0.345 0.349 0.319 0.403 0.380 0.315

Total Extractive Oil and gas Utilities

Transition economies China/HK Russia

Newly ind. economies Brazil India South Africa South Korea

Industrialized economies Australia Canada UK USA

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coverage levels; at the other end of the spectrum, the lowest levels of coverage are found for companies based in the UK (economic, environmental and labor practice) and the USA (human rights and product responsibility). The only exception is that of Russian companies which show the lowest coverage levels in the society dimension. Overall, the highest averages can be identied in the South Korean and Indian subsamples (both labor practices); the lowest coverage levels are found in the US subsample (both human rights and product responsibility). In all six dimensions, newly industrialized economy rms score higher than their industrialized economy counterparts, with the highest differences in coverage in labor practices (Dcoverage 22.7 percent) and human rights (21.4 percent). Transition economies occupy a middle position in all six dimensions. However, Chinese companies consistently show higher coverage levels than their Russian peers, in particular in the dimensions product responsibility and society. For four of the six GRI categories, this difference is higher than 10 percent, culminating in the society indicators (Dcoverage 34.4 percent). From a Russian perspective, coverage appears to be particularly low in the human rights and society categories compared to the newly industrialized country subsample. To further investigate category-level divergences of the Russian subsample, Mann-Whitney tests were conducted between the Russian subsample and the industrialized economies as well as the newly industrialized economies (i.e. Brazilian, Indian, South African and South Korean company reporting). Interestingly, only the society dimension was found to have produced signicant differences in terms of the inclusion of indicators: Russian reports showed signicantly lower levels of coverage both compared to industrialized economies (U 11:00, p , 0.05, r 20:55) and to newly industrialized economies, respectively (U 9:50, p , 0.05, r 20:59). This pattern is further illustrated by a ranking of indicator dimensions as shown in Table V. Whilst a number of generic similarities can be identied across the overall sample (as for example the relative popularity of economic indicators and the general reluctance to report on product responsibility-related indicators), clear North-South differences can also be observed again. Among rms from newly industrialized and transition economies, the highest coverage levels can consistently be found in the category labor practices and decent work, followed by the economic dimension. In contrast, industrialized economy rms appear to focus on economic performance indicators and show a relative lack of attention to human rights indicators and in particular product responsibility indicators. One notable exception to this pattern is the Canadian subsample with a relatively high level of coverage of society indicators, whereas less emphasis is placed on labor practices and decent work. With one minor exception (Brazil in the case of human rights and society indicators), category-level ranks are identical across all newly industrialized countries. Whilst the two transition economies in the study generally follow the pattern identied for newly industrialized countries, two notable exceptions can be identied. First, the society dimension emerges as the least frequently addressed category among Russian companies. Second, Chinese companies appear to be more reluctant than their newly industrialized and Table V Ranking of indicator dimensions by coverage levels per country
Economic China/HK Russia Brazil India South Africa South Korea Australia Canada UK USA 2 2 2 2 2 2 1 1 1 1 Environmental 4 3 3 3 3 3 3 3 3 2 Labor practices 1 1 1 1 1 1 2 4 2 3 Human rights 6 4 4 5 5 5 5 5 5 5 Society 3 6 5 4 4 4 4 2 4 4 Product responsibility 5 5 6 6 6 6 6 6 6 6

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transition economy counterparts to report on human rights indicators. However, it should be noted that Chinese companies generally show high levels of coverage: absolute coverage of human rights indicators, albeit being the least popular category among Chinese rms, is still higher than in the Russian as well as in most of the industrialized economy subsamples (see Table IV). From a Russian perspective, one difference to reporting priorities identied in both newly industrialized and industrialized country samples is particularly striking, namely the markedly lower extent to which society indicators are addressed by Russian rms. However, low overall levels of coverage of this dimension are not uniformly distributed across the whole set of eight society performance indicators (see Table VI). Instead, in terms of community development, Russian engagement appears similar to that of industrialized economies, albeit clearly lower than that of newly industrialized countries. In an indirect fashion, the data hence lend some support to prior ndings regarding a central role of corporate philanthropy in Russian CSR (Polishchuk, 2009). However, the key difference between the Russian and both the industrialized and newly industrialized economy samples lies in the extent to which Russian companies address indicators related to corruption and anti-competitive behavior. Only 12 percent of Russian sustainability reports address indicator SO3 (anti-corruption training), in contrast to approximately half of all other reports from both industrialized and newly industrialized countries. Likewise, aspects such as corruption analysis (SO2), political donations (SO6) and nes for non-compliance (SO8) are very rarely addressed by Russian companies when compared to their peers. The data thus seem to be in line with the observation that, in Russia, the normal development of corporate social responsibility is hindered by the prevalence of informal, shadow economic relations and weak compliance with legal standards (Soboleva, 2006, p. 90).

Conclusions
Against the backcloth of the rise of rms from emerging economies, this paper tabled the question whether emerging economy rms have been able to develop their own perspectives on CSR as proponents of the national business systems approach would predict or whether these rms are subject to such strong isomorphic pressure that their CSR priorities become more or less identical to industrialized country ones as neo-institutionalists would not be surprised to nd. This is a timely question as the recent economic crisis has undermined condence in the western-dominated paradigm of economic governance. It also ts into a longer-standing line of argumentation that discussions regarding the role of business in society are not new to emerging economies (Bloweld and Frynas, 2005; Prieto-Carron et al., 2006). Neo-institutionalist arguments receive a boost from our nding that emerging economy rms have been very enthusiastic about the adoption of corporate sustainability reporting along the GRI guidelines. Recall that the countries with the highest coverage levels of GRI indicators are India and South Korea, whereas all the industrialized nations trail behind. As all of the sustainability reports in the sample have been produced in accordance to the GRI G3 guidelines and follow the structure that has been proposed in the guidelines, it becomes Table VI Coverage of society performance indicators
Russia (%) SO1 Community development SO2 Corruption analysis SO3 Anti-corruption training SO4 Actions taken in response to corruption SO5 Public policy development and lobbying SO6 Political donations SO7 Anti-competitive behavior SO8 Signicant nes for non-compliance 76 24 12 40 46 24 22 28 Industrialized economies (%) 77 44 56 43 67 56 52 36 Newly industrialized economies (%) 85 47 49 55 62 40 45 51

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clear that the GRI reporting guidelines themselves are a source of isomorphic pressure. In particular, convergence across the three different sectors is evident in our sample: the difference in overall coverage levels between our sectors amounted to a mere 4.9 percent. This seems to give further support to the argument that emerging economy rms engage with Western models of CSR rather than promote their own, probably driven by their continued dependence on Western export and nancial markets (Garcia-Johnson, 2000). Having said this, our ndings regarding prioritizations of sustainability dimensions as well as the overall extent to which indicators are addressed lend even stronger support to the national business systems approach as we found strong evidence of a North-South divide in our sample. The ndings thus provide evidence for H1b. The nature of the divide is particularly interesting as newly industrialized country rms clearly outperform industrialized country ones in their coverage of GRI indicators. Given the longer tradition of social and environmental regulation in industrialized countries as well as a more established role of civil society in enforcing corporate commitment to CSR (see Hoffman, 1999, for US data), we would have expected exactly the opposite, that rms from industrialized rather than newly industrialized countries would be in the lead. Our unexpected ndings leave open two possible interpretations: either newly industrialized country MNEs have indeed leaped to the front in terms of addressing social and environmental challenges or they have been able to use the GRI reporting framework as window-dressing that hides a dirtier reality. The results of our study furthermore show that Russia occupies a middle position between newly industrialized and industrialized countries, for example in terms of the overall number of addressed indicators, thereby conrming H3. Furthermore, the coverage of society performance indicators was strikingly lower among Russian rms than for rms from both newly industrialized and industrialized economies. At a rst glance, this result seems to contrast with the emphasis on social investment among Russian rms that the literature stressed (Polishchuk, 2009). At a second glance, this is no longer a contradiction as the Russian performance is in particular shaped by a low inclusion of indicators on corruption and anti-competitive behavior. One could go further and argue that the differences between Russia and China are so large as to call into question the utility of placing both in the joint category of transition economies as Hoskisson et al. (2000) did[4]. The argument between neo-institutionalist and national business systems approaches to the spread of international CSR cannot be settled within the connes of this paper. In the light of the limitations stated in the methodology section, future research could aim to cover a wider spread of sectors. As sustainability reporting according to the GRI framework is predominantly taken up by large rms, further research could also examine international differences in CSR priorities among smaller rms. The perhaps most pressing challenge for further research concerns the link between reporting and practice. One possibility might be to analyze corporate sustainability reporting in terms of whether it addresses internal or external stakeholders or whether it shows a compliance or beyond-compliance orientation (Williamson et al., 2006). Research along such lines might be able to shed new light on the question whether sustainability reporting reects real commitment or is merely window-dressing.

Notes
1. We acknowledge that none of the terms are without limitation. One might object, for example, that the term transition economies, while appropriate in the 1990s and early 2000s, may no longer describe the reality in Eastern Europe very well. However, we see value in subdividing emerging economies into those in Eastern Europe and those in Latin America, Africa and Asia. A key feature of the former the transition economies is the transformation of their centrally economies planned into market economies (IMF, 2000). The latter newly industrialized countries denote traditionally less developed countries which have made profound structural changes in their economies under conditions of a fast growth rate (Bozyk, 2006, p. 164). We would like to stress thus that we use the terms newly industrialized countries and transition economies in this paper merely for the academic purpose of distinguishing between the two groups of emerging market countries.

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2. A recent literature review on CSR in China identied 73 English-language articles in academic journals (Moon and Shen, 2010). By contrast, we found 11 articles discussing CSR and related topics in Russia. 3. This result is not entirely surprising. One would expect some form of generic pattern to emerge as a result of the inuence of core and additional indicators. Furthermore, there are indicators that most companies nd very easy to address (e.g. LA1 total workforce). 4. One key difference between Russia and China is the rather later industrialization of the latter. To give one indicator, as late as 1980 China accounted for only 5.2 percent of the global crude steel production, compared with 20.7 percent for the former USSR. By 2009, Chinas share had risen to 46.5 percent of total global production and that of Russia dropped to 4.9 percent (World Steel Association, 2011).

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About the authors

Lutz Preuss is on the faculty of the School of Management, Royal Holloway University of London, where he is Director of the MSc in Sustainability and Management. With interests in corporate social responsibility, sustainability, business ethics and the intermeshing of national business systems and CSR, his current research projects focus on perceptions of CSR by trade unions across Europe, on the contribution of innovation to corporate sustainability as well as on the management of trade-offs in sustainability. Lutz Preuss is the corresponding author and can be contacted at: Lutz.Preuss@rhul.ac.uk Ralf Barkemeyer is on the faculty of the Sustainability Research Institute, University of Leeds, where he is Lecturer in Corporate Social Responsibility. He mainly focuses on the interface of business, environment and society. In particular, he is interested in the impact of contemporary corporate social responsibility-related policies and practices in a developing country context. Furthermore, he is interested in the area of value-oriented approaches to measuring and managing corporate sustainability.

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