CSR Reporting Substantiveness and Third-party Raters' Perception: the Mechanisms of Report Modification and Comprehensiveness

In the situation where the rapid adoption of CSR reporting practice is accompanied by troubling reporting quality and information asymmetry, stakeholders increasingly rely on third-party ratings to comprehend firms’ CSR disclosure quality. Drawing on the elaboration likelihood model, we illustrate that although firms increasingly enrich their CSR reports with new information, the mechanism of how third-party raters would perceive such engagement is mixed. While the form-based report comprehensiveness that extends a consistent gesture of stakeholder communication can trigger favorable evaluation. We further found that third-party ratings can be affected by firms’ contextual
non-CSR information raters choose to bechmark firms’ reporting performance. The findings raise concerns for third-party assessment validity and accountability.