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The Sunday Paper – The Effect of Mandated CSR Disclosure on the Pollution Levels of Publicly-Traded Chinese Firms

China is only one of four countries that require (some but not all) companies to produce CSR reports. The others, Denmark, Malaysia and South Africa are minnows by comparison.

In 2012 China heaved aloft 8.1bn tons of greenhouse gasses, over 50% more than it’s closest rival in the pollution game the U.S. It’s estimated that up to 1.7m deaths each year in China, or 17% of the total, are in some way related to atmospheric pollution. Anything that can be done therefore to reduce China’s environmental impact matters hugely not only to the citizenry of China but for all of us.

In the paper highlighted this week Professor Jeffrey Gramlich and doctoral student Li Huang, both from Washington State University, set out to see if requiring firms to produce CSR reports lowered their environmental impact ratio (IR). The study was made possible by the fact that since 2008 China has mandated CSR reporting for some, but not all, listed companies creating a natural control group for comparison.

In short; it works. Companies required to produce CSR reports, on average, lowered their IR by nearly 9%. That’s a huge impact and the study should provide grist for others who would like to see the adoption of CSR reporting in their locales.

The chart here, extracted from the paper, shows the improvement in IR between firms required to report and those in the control. Q.E.D. I think?IR Improvement

You can access the paper in full via the following link Pollution and CSR Reporting.

Happy Sunday

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