Responsible Investment and the Disclosure of ESG Information …
453
2.2 CSR and ESG Disclosure and Measurement Models
According to Scalet and Kelly (2010) the ESG movement has progressed over the
decades, ranging from the analysis of a concept of responsibility to the development
of specific measurement tools for assessing responsibility. The evaluation process
requires the creation and collection of data, evaluation standards and a process of
applying the data to the standards for the creation of specific classifications. Over
the decades since the ESG deployment, several models have been developed with a
focus on dissemination, implementation and measurement, some of them are listed
below.
An analytical model, developed by Marques-Mendes and Santos (2016), allows a
study of the strategic orientation of companies that adopt Corporate Social Responsibility CSR. This is made through the analysis of different types of integration of
CSR into business strategies; different CSR strategic maturity levels; and the path
needed to be followed by a company to achieve its full development as well as predict
which initiatives have the greatest contributions to this end.
CSR continuity model assesses the level of corporate social responsibility. It is a
multi-level hierarchy of criteria, which allows the stated corporate actions to be put
on a “scale” of social responsibility (Nowosielska-Rojek 2014).
Hanke and Stark (2009) propose a conceptual framework for development of
CSR strategies, based on considerations of legitimacy and sensemaking/sensegiving
in companies. In this regard, the framework provides strategic options for classifying
the CSR of the companies or their engagement.
In Singh et al. (2009), they provide an overview of twelve sustainability assessment
methodologies and indices applied in the practice of policies. They conclude by
stating that although there are several efforts to measure sustainability, only a few
of them have a holistic approach that considers environmental, economic and social
aspects.
Delai and Takahashi (2011) developed an ESG model based on eight known
sustainability measurement initiatives, which are: Indicators of Sustainable Development of the Commission on Sustainable Development (CSD); Dashboard of Sustainability; Barometer of Sustainability; GRI; IChemE; Dow Jones Sustainability
Index (DJSI).
The sustainability disclosure reference model developed by Ching et al. (2016)
is based on the models and requirements of four sustainability indices: Dow Jones
Sustainability Index, Index of Business Sustainability ISE, Frankfurt STOXX and
Financial Times FTSE ESG. Its structure consists of three levels: Dimensions (Environmental, Social, Economic and Corporate Governance), Themes and Subtopics.
All of these models facilitate the implementation of the CSR/ESG and the investor
decision-making process, but one has to be aware that unlike financial performance
indicators, that are well-defined and well-structured, such as return on assets and
return on investment, the sustainability performance indicators are quite heterogeneous. There may still be some trade-offs between the different metrics chosen,
such as in cases where investors decide to reward certain companies that adopt new
453
2.2 CSR and ESG Disclosure and Measurement Models
According to Scalet and Kelly (2010) the ESG movement has progressed over the
decades, ranging from the analysis of a concept of responsibility to the development
of specific measurement tools for assessing responsibility. The evaluation process
requires the creation and collection of data, evaluation standards and a process of
applying the data to the standards for the creation of specific classifications. Over
the decades since the ESG deployment, several models have been developed with a
focus on dissemination, implementation and measurement, some of them are listed
below.
An analytical model, developed by Marques-Mendes and Santos (2016), allows a
study of the strategic orientation of companies that adopt Corporate Social Responsibility CSR. This is made through the analysis of different types of integration of
CSR into business strategies; different CSR strategic maturity levels; and the path
needed to be followed by a company to achieve its full development as well as predict
which initiatives have the greatest contributions to this end.
CSR continuity model assesses the level of corporate social responsibility. It is a
multi-level hierarchy of criteria, which allows the stated corporate actions to be put
on a “scale” of social responsibility (Nowosielska-Rojek 2014).
Hanke and Stark (2009) propose a conceptual framework for development of
CSR strategies, based on considerations of legitimacy and sensemaking/sensegiving
in companies. In this regard, the framework provides strategic options for classifying
the CSR of the companies or their engagement.
In Singh et al. (2009), they provide an overview of twelve sustainability assessment
methodologies and indices applied in the practice of policies. They conclude by
stating that although there are several efforts to measure sustainability, only a few
of them have a holistic approach that considers environmental, economic and social
aspects.
Delai and Takahashi (2011) developed an ESG model based on eight known
sustainability measurement initiatives, which are: Indicators of Sustainable Development of the Commission on Sustainable Development (CSD); Dashboard of Sustainability; Barometer of Sustainability; GRI; IChemE; Dow Jones Sustainability
Index (DJSI).
The sustainability disclosure reference model developed by Ching et al. (2016)
is based on the models and requirements of four sustainability indices: Dow Jones
Sustainability Index, Index of Business Sustainability ISE, Frankfurt STOXX and
Financial Times FTSE ESG. Its structure consists of three levels: Dimensions (Environmental, Social, Economic and Corporate Governance), Themes and Subtopics.
All of these models facilitate the implementation of the CSR/ESG and the investor
decision-making process, but one has to be aware that unlike financial performance
indicators, that are well-defined and well-structured, such as return on assets and
return on investment, the sustainability performance indicators are quite heterogeneous. There may still be some trade-offs between the different metrics chosen,
such as in cases where investors decide to reward certain companies that adopt new