Valuation of Corporate Social Responsibility Report Article

Valuation of Corporate Social Responsibility Report - Article Example One of the first findings of the investigation in regards to how Lithuanian companies report social responsibility was that there is a great variation in the content, volume, and indicators disclose by different companies. This can be a problematic issue because investors are not able to compare the information from different companies in a consistent matter. One of the greatest attributes of the financial statements used in the United States by public firms is that they are all prepared in the same manner. Another issue with the practices of Lithuanian companies in regards to social responsibility reports is that very few companies share the information with their shareholders. The culture in this country does not value the importance of social and environmental factors. Most scientists analyze the content of CSR reports separate from reports that illustrate financial information. I believe that this practice might be flawed because the use of a sound corporate social responsibility strategy can greatly impact the behavior of the customers of the company. For instance, Starbucks Cafe is selected by many coffee drinkers over the competition due to its support of green practices such as its use of Fair Trade Coffee. The four main issues included in the CSR report are human rights and human resources, product design and development, environmental protection, and community. The lack of generally accepted principles makes CSR not easily measurable. The firm’s reputation is closely connected to its social responsibility practices. Companies that undermine CSR aspects such as the community can have devastating public relation problems. Back in the late 1990’s Nike Corporation’s reputation hit an all-time low after the revelation of the sweetshops scandal. Many companies use CSR disclosure as an instrument for advertising purposes. On many occasions, CSR information is fragmented in the annual reports, websites, and other company reports. There is a lack of investigations related to valuation methodologies of social information. The GRI framework is an effective methodology used by many Spanish companies to report social information. The GRI is a long-term multi-stakeholder, international process whose mission is to develop and disseminate globally applicable sustainability reporting guidelines. Non-financial reporting provides information regarding ethical, environmental and social aspects. The essential aim of social reporting is to create a social transparency system for responsible decision making. Other names used for CSR disclosure documents are social progress reports, social responsibility reports, social reports, and sustainability reports. CSR philosophies should be integrated into all company activities in order to increase the efficiency of the firm. Some elements that help companies achieve better CSR results are good stakeholder management and leadership, prioritizing CSR needs, coordination with governmental a gencies, and regulations. Empirical studies showed that in Italy firm stock prices are not affected by the release of CSR reports even if firms pay close attention to social responsibility practices because the Italian financial market is not efficient and transparent. In the United States, CSR reports have the greater impact in investor decisions and ultimately in the prices of common stocks.

Free Trade and Poor Countries Essay Example | Topics and Well Written Essays - 1500 words

Free Trade and Poor Countries - Essay Example This is an ideal situation where each country would be able to export those goods at cheap rates which are difficult to be manufactured there. However, when taxes are levied, a country A might import goods from country B and make them available in the local markets at cheap rates; but country A cannot export any goods to country B as B might have levied high tariffs for export. When high taxes are in practice, the development of one country might prosper who have the ability to produce more and export it around but do not need any imports. On the other hand, trade of developing countries looking for trade outside gets hampered. It has been observed that the average income of developing countries has been more for countries with lower trade barriers. Even though free trade gives trading opportunities to developing countries, it is not alone sufficient for development. The Department for International Development (DIFD) in UK believes that the least developed countries (LDCs) should even reform their internal trade institutions and develop stable economic situation. Also, if free trade is allowed then the local manufactures of developing countries suffer loss as their goods do not find a marker due to imported good being available at same prices. Therefore, LDCs need to create market incentives so as to gain the local market space in their home markets. Let us refer to a case study related to free trade. In January 1994, Mexico and US entered North American Free Trade Agreement (NAFTA). Mexico did not benefit at all from this agreement as its markets went into the hands of US without any gains falling in Mexico's hands. This happened because US did not open their markets as it would lead to more competition and less profit for US. They preferred to buy into nations in the form of investment. Similarly, Canada also signed FTA with US in 1988. Since then more than 10,000 companies have been taken over by US corporations. "Over 85 per cent of Canada's exports now go to the US, and about 70 per cent of Canada's international trade is handled by US corporations," was said by David Orchard of Canada. As a result, Canada is the most foreign-owned developed nation. Thus we can say that free trade is alone not sufficient for development of any nation. At present what the poor countries want is not foreign goods in their market only. More than that, they need opportunities to export their products in the outside market. Since most poor countries have abundance of labor-intensive products and agricultural products, they need markets where they can export these without facing too much competition and high tariffs. The developing or least developed countries find it difficult to expand their world trade mainly because of the tariffs applicable in most parts of the world. Average tariffs on LDCs have been reduced marginally. However, still the average tariff on agricultural products is as high as 40%. With such tariffs applicable in most countries, LDCs are finding it difficult to expand their trade in these countries. Apart from tariffs, there are also non-tariff barriers which affect LDCs more. There might be quotas which can restrict a country to trade in a developed country. Health and safety hazards also play a role. Since LDCs have labor oriented products, the products