The Social Dimension in Corporate Responsibility Reporting of Largest European Food Retailers

Abstract

The increased interest towards corporate responsibility (CR) has lead into increased reporting of corporate responsibility by the companies. Instead of merely trusting the companies, the stakeholders demand proofs on the level CR. However, the measures of CR are still evolving and especially the measures of social dimension of CR need attention. The most relevant form of CR depends on the industry and the geographical scope, and for this study, European food retailing is chosen. Retailing has a major effect on consumers’ life and food has an impact of human’s health. In addition, retailing is a major employer and the European retailers have similar characteristics. In Europe, the history of social dimension of corporate responsibility is somewhat similar due to European Union. The purpose of the study is to analyse how appropriate are the measures of social dimension in the leading European food retailers’ CR reports. The research question is divided into sub questions: • How do the measures of social dimension of CR meet reliability? • How do the measures of social dimension of CR meet validity? • How do the measures of social dimension of CR meet comparability? The purpose of the study was approached through theories on stakeholders, retailing, social dimen- sion of CR, process of measuring the social dimension of CR, CR reporting and criteria for appro- priate measures of CR. The research questions were answered by analyzing corporate responsibility reports from four large European retailers publishing a report, namely Carrefour S.A., Tesco, Metro AG and Ahold. Eight reports from each company were analysed thoroughly and additional four re- ports published by them were coded using content analysis. For the analysis, frameworks and deci- sion rules were developed using the theories presented in the study. The main findings of this study are that there are only 9 appropriate measures out of 1 870 analysed ones: majority of the measures are not appropriate enough, i.e. similarly valid, reliable and compa- rable. This result supports the statement that a reliable measure usually suffers from low validity to stakeholders, since an issue easy to measure is usually indifferent to the stakeholder group. It is also concluded, that the ideal type of a measure is something that has both its aim and compliance com- municated. For companies, the main focus in developing measures of social dimension of CR should be on developing more valid indicators. External verification is another necessary step for the companies in order to increase the reliability of the reports as well as the trust of the stakeholders. Comparability between companies needs improvement, and this gained by developing standards for industries in cooperation with the companies reporting social dimension of CR.