1 Please find an attachment of the research dissertation assessment and write down the report based on the heading and subheading and followed the w
1 Please find an attachment of the research dissertation assessment and write down the report based on the heading and subheading and followed the words allocated to each heading.
2. please find the attachment of my research proposal report. it has the research topic, research question, and methodology. All the references you can check to get an idea about (introduction, literature review.
3 Please find the study report. My report will be exactly like these formats. Because I am replicating this report. The difference is that my country is New Zealand and the report I sent to you was done in the UK.
4. As mentioned in my research proposal report: I will be taking the 100 largest companies from New Zealand and CSR disclosure will be for the year 2019-2020 and the share prices will be for the same year 2019-2020. I am sending you the attachment of the KPMG report for 2019-2020. You can get a lot of information about the CSR disclosure of NZ companies for your Introduction and literature review.
5 to get the share price value for the NZX website for 2019-2020, or check the report I sent to you. Or maybe try Compustat Global Database.
6. I have a supervisor assigned to help me with this report, so every week you have to send me a draft of the work done to show to my supervisor. For example, one week, introduction, another week research question another week literature review, and so on.
If you can complete the report before 1st November that will be great.
The Influence of corporate social responsibilities disclosure on share prices of NZX top 50 companies
By
Rakesh Mishra, Student ID:1556698
ACTY9045: Research project (Research project proposal
Master of professional accounting (Unitec Institute of tech)
Research supervisor (Lakshan Attanayake)
Purpose statement and intended audiences
The aim of the report is to investigate the association between the level of corporate social responsibility (CSR) disclosure and share prices of the top 100 NXZ listed Companies( largest companies based on the revenue) in New Zealand (NZ) for the time period of 2019-2020
This report will examine the level of CSR disclosure for the largest 100 companies in New Zealand. Under that specific information regarding environmental matters, employees, and social and community issues are disclosed, so shareholders and investors will be the target audience of this report. In the last 10 years or so not only NGOs, communities, and employees participating interested in corporate responsibilities and sustainability issues, stakeholders and investors are increasingly aware that sustainability reports which are under non-financial information can have a good impact on the brand of the companies and protect its values. (KPMG, 2015) Therefore, stakeholders and investors are expecting companies to disclose the good quality of CSR, which is under the Global Reporting Initiative (GRI) or Integrated reporting (IR) framework. This report will examine how many companies in NZ are disclosing CSR under GRI guidelines and GRI 3 guidelines. GRI G3 permit companies to declare the extent to which they disclose CSR. (KPMG, 2017). Such a good quality report will help the stakeholders and investors to get useful and transparent information on the Companys Corporate social governance (CSG).
Philosophical world view:
The philosophical worldview for my proposed study would be the Post positivist worldview. In the post-positivist worldview, the research and assumption are more of quantitative nature than qualitative and are basically viewed as a cause and effect which is driven to assess the causes that influence the outcome. (W.J. Creswell, 2017)). My research collection information will be secondary, so it will be the quantitative approach. The data collected and analyzed will support or refute my research theory. My knowledge of research will be shaped by data, evidence, and rationale of the theory, but evidence can be refutable, and the conclusion of the report cannot be absolutely true. My research outcome will investigate share prices (high or low) based on the cause (which is the level of CSR disclosure by the NZX listed companies).
Research questions
The research question in the study is whether a higher level of CSR disclosure by large companies (NZX 50) in New Zealand (NZ) is associated with higher share prices.
Sub questions
What is the percentage of CSR disclosure of the top 100( largest) NZX listed companies?
Which measure of CSR index (Environmental, social, and governance) have been disclosed more, and which measures are disliked less?
How many firms in NZ are adopting the Global reporting initiative (GRI) framework or the Integrated (IR) Framework?
Hypothesis
H1 higher level of CSR disclosure is associated with a higher share price.
The Hypothesis of my research question will be an alternative or directional hypothesis because I will make predictions about an expected outcome based on previous research and studies. My outcome is that there will be higher share prices based on a higher level of CSR disclosure of the company and based on my finding if my alternative hypothesis is true then it will reject the null Hypothesis.
H2 Higher levels of CSR and higher share prices are associated strongly with the companies operating in an environmentally sensitive industry.
My expected outcome on H2 is that in companies operating in the environment-sensitive industry, the share prices will be higher if the CSR disclosure is higher too, which is an alternative Hypothesis. if my finding is true, it will reject the null hypothesis.
Literature Review
I have read about 13 articles and report on CSR disclosures and found out that there has been plenty of research done on CSR disclosures ad their impact on stock prices and other financial measures. This research has been done mostly in bigger economies like the US, The UK, Japan China, and India. There is research done on the smaller economy as well like New Zealand, Malaysia, and Singapore. The research done in the bigger economy was the Impact of Corporate social responsibility on stock price volatility The US banks (MTasnia, et al.2020) and there are some reports comparing two large economies like the United Kingdom and Japan, the effect of CSR disclosure on share prices in Japan and the UK (Bowerman & Sharma, 2016). Likewise, the impact of CSR disclosure on financial measures was done in Australia, China Malaysia, India, and a few other countries in Europe as well as Sweden and Germany. With regards to New Zealand, there was some research done recently and some quite a while ago that has talked about the disclosures and the determinants of CSR disclosure (Hackston & Milne, 1996). CSR disclosure and profitability in the banking sector of New Zealand (Cheshire & Bosman, 2017), and there was some research on NZ firms that operate in environmentally sensitive industries. The impact of Corporate Social responsibilities on the financial performance of industries (Patel & Hazaima, (2017). Few research has been done on the impact of CSR disclosure during the financial crisis (Samkin, et al, 2017) and corporate governance and corporate social responsibility synergies( Zaman,et al,2020).
After reviewing the articles and research reports from global firms and in New Zealand, I established that most of the NZ research has talked about CSR disclosure and its importance and why companies are doing it. some report has talked about the influence of CSR disclosure but has not taken a large number of firms from NZX listed companies. And few of the report has compared the impact on other global firms in Australia and Pakistan, but I establish a gap in the research about the level of CSR disclosure of the companies under the dimension of (Environmental, social, and governance) and how it influences the share prices of the firm, particularly the firms in NZ which are adopting the GRI framework to disclose their sustainability report. Also, there has been a gap in a recent study that didnt highlight the level of CSR disclosure in firms that operate in an environmentally sensitive industry and how stronger it is associated with financial measures. According to (KPMG, 2017) NZ firms are still behind on CSR disclosure compared to global firms. NZ firms disclosure was 52% in 2015 and it improve to 69% in 2017, which was encouraging to see the ranking improve but it still lowers the global average of 72% (KPMG, 2017). NZX has also recommended adopting the GRI framework to disclose best practicing reporting NZX has updated its corporate governance code to require more specific reporting around non-financial measures to enhance good quality reporting from 1 October 2017. (NZX 2018). With regards to following the GRI framework to disclose CSR, only 34 % of NZ firms are adopting the GRI framework to disclose sustainability reports. My study will focus on the companys level of disclosure under the dimension of (environmental, social, and governance) and the number of companies from the top 50 firms listed on NZX adopting GRI measures to disclose CSR and how it influence the share prices of firms which will also include the firms which are operating in climate-sensitive industries. According to Erica Miles, KPMG New Zealands Director of Sustainability 39% of New Zealand businesses acknowledge climate-related financial risks in annual or integrated reports compared to 69% in the UK, 64% in Japan, 60% in Australia, and 54% in the US. 55% of our biggest businesses are reporting carbon reduction targets vs 86% in Japan, 83% in the UK, 71% in the US, and 64% in Australia (KPMG, 2017)
The research project which I will commence has been done in the UK which is the influence of corporate social responsibility on share prices of firms: evidence form UK(De Klark ,et al, 2015). By replicating overseas studies utilizing the related sampling and measurement methods, this study will provide the benchmarks of sustainability report disclosure practise and how it the level of CSR disclosures is associated with share prices if Top NZ firms. Additional by using numerous measures of various variables, the strength of any relationship found can be thoroughly assessed.
Methodology/Research design
Based on evidence provided by prior research, it has mixed result of higher CSR disclosure led to higher share prices. For example, in the US the higher share prices are associated with higher share prices, whereas evidence of prior research done in Sweden and Australia were different, they were higher CSR disclosure associated with lower share prices. So, in this report will be examine the level of CSR disclosure of the top 50 NZX companies of NZ. For the period of 2015,2018,2020. The reason we choose these three years because the data of KPMG are available for these years for NZ supplement. Also, according to KPMG (2017) NZ is still lagging behind with Global companies in terms of level of DSR disclosure and the number of companies adopting GRI framework to disclose there CSR. So, by study the CSR disclosure and the Share prices of the top 50 companies for these 3 years, I will get good insight of the how NZ top companies of the level of CSR disclosure and the how they are improving in alternate years in both measures (level and adopting GRI measures). Also since climate change is important issues for NZ government as Ministry of environmental (NZ) has mandatory for the companies, firms who work in climate sensitive industries to mandatory disclose the CSR in environmental measures from 2023 to achieve their goal of carbon neutral free NZ in 20509 (Ministry of environment, 2020). I will also be taking CSR sample of industries falls under operate under climate sensitive area from top 50 firms in NZ. We will use the Modifies Ohlson (1995) model, three measures of CSR disclose and share prices of the firms for 2015,2017,2020. Research will be quantitative as I will test objective theories, I will examine relationships among measurable variables, survey instruments will use that produces number data.
Research design
Sample Data I will take the top 100 ( largest) companies listed in NZX based on revenue (Company included in the KPMG data set) and Annual reports of the companies chosen for the year (2019-,2020). Share price data will be collected from NZX websites for the same years. based on the data collected by KPMG(2020), I will three measures of CSR disclosure
Independent Variables of the Data
The measures (Dimension of CSR disclosure)
(Subcategories)
Environmental, social, and governance.
Identification of CSR index
(General environmental strategy, corporate management system, governance climate change, supply chain, stakeholder engagement, responsible investment assurance, disclosures. These categories include a total of 40 specific CSR disclosure practices. The composite measure is calculated by adding one for each of the 40 possibilities. Therefore, a higher number will indicate a higher level of CSR disclosure. (Marna de Clark, et al,2013)
GRI- the companies use GRI guidelines will an independent variable. the companies that disclose CSR using GRI guidelines have a higher quality of report (GRI, 2015) The company will be coded 1 for adopting GRI Guidelines and 0 for not using GRI Guidelines.
GRI Level A measure of the level of CSR disclosure based on the GRI G3 guideline. GRI G3 allows companies to declare the extent to which they disclose CSR, with A indicating that they disclose all 50 core indicators, B indicating that they disclose a smaller set of indicators, and C indicating even less disclosure (KPMG, 2008). The score of GRI level will be calculated from zero to 6 x (where A+ = 6, A = 5, B+ = 4, B =3, C+ =2, C =1, companies adopting the G2
guidelines 1 and companies that do not adopt the GRI guidelines 0). Hence, a higher
number shows a higher level of CSR disclosure. (Marna de Clark, et al,2013)
Control Variables: control variable will be the total assets and fixed assets of the top 50 chosen firms.
Dependent variable: Shares prices of the firm will be the dependent variable as they will have an impact of independent variable which are CSR disclosures.
Valuation Model: to evaluate the whether the higher shares prices are associated with higher level of CSR disclosure, I will use the Modified Ohlson (1995) Model. The Ohlson (1995) model is established on the principle that the market value of equity is a function of book value, accounting earning and other non-accounting information. The modified Ohlson (1995) is used by many capital market based accounting research as a foundation to assess the value of relevance of accounting information. (Barth and clinch ,2009, p.255)
MVE==BVE+1EARNS+
MVEb Market value of equity at time t, BVEt is the book value of equity t, EARNSt is the earning period t, and is the regression error.
The association between the share prices and /or market value of equity/book value and earnings is based on the analysis of the above equation (Barth and Clinch, 2009)
Our aim is to evaluate the relationship between CSR disclosure and the share prices of NZ companies. I will use the regression model by adding CSR disclosure the represent other non-accounting information.
Pi =+B1BVi+2Ei+3 CSR iP(it)- is the company (i) share price I on the last day of the month, three months after the end of the financial year
BVit- is the companys book value of the equity per share and is calculated at the end of the financial year as the difference between total assets and total liabilities. (Marna de Clark, et al,2013)
Eit is the companys(i) net year I, after tax and interest, scaled with the number of shares is issued on the last day of the month, three months after the end of the financial year. (Marna de Clark, et al,2013)
CSRit is a measure of the level of CSR disclosures and e is the regression error. I will use three measures of CSR disclosures and the above estimate equation separately, using three measures. (Marna de Clark, et al,2013)B3 will be the coefficient of CSR disclosures and based on H1, I expect it to be positively and significantly associated with share prices. I
I will perform Descriptive statistics for the Ohlson (1995) model with shares price as the dependent variable.
And regression results will be calculated with share prices as the dependent variable.
Limitations and Ethical consideration
The top 100( largest)NZX companies will be used for the study and are quantitative which means I will rely on secondary data and my results will be based on the quantitative analysis performed from data collected by the firms, so secondary data for CSR disclosures dont always portray true information of firms, so the evidence will be not conclusive so as the results. As there is a time limit for this report so the number of firms chosen is not high, so information from the firms will be limited and as the CSR disclosure for most of the firms is still not mandatory, so may not be able to collect the desired data for analysis.
My research study at Unitec will be performed in line with this policy and other applicable commonly recognized ethical standards and processes under the Unitec Research Ethic Committee (UREC). My research approach is quantitative where all the data will be secondary, not primary, so I would not require authorization from the UREC for my study.
Referencing
the APA 7th Referencing Style will be used for references.
I will provide an in-text citation in the in-text of my work that contains concise information about the source.
At the end of my work, I will give comprehensive information about the source in the form of a list of references or a bibliography.
References
Bahadar S, Zaman R, (2022). Covid-19 and CSR disclosure: evidence from New Zealand
https://www.emerald.com/insight/content/doi/10.1108/CAFR-03-2022-0017/full/htmBowerman S, Sharma UP, (2016). The effect of corporate social responsibility disclosures on share prices in Japan and the UK.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2722280Chand A, Kumar N, Kumar RR, Prasad S, (2022). Determinants of social and environmental accounting information disclosure: An analysis of top 50 firms in New Zealand.
https://www.inzeko.ktu.lt/index.php/EE/article/view/20819Cheshire K, Bosman R, (2017). Corporate social responsibilities and profitability: The New Zealand Banking sector.
http://researcharchive.wintec.ac.nz/6032/Creswell, J. W. (2017). Research design: Qualitative, quantitative, and mixed methods approach
De Klerk M, De Villiers C, Staden C, (2015). The influence of corporate social responsibility disclosure on share prices: evidence from the United Kingdom
https://www.emerald.com/insight/content/doi/10.1108/PAR-05-2013-0047Hackston D, Milne M, (1996). Some determinants of social and environmental disclosures in New Zealand companies
https://www.emerald.com/insight/content/doi/10.1108/09513579610109987Khan M, Lockhart JC, (2018). Institutional impacts on corporate social responsibility: a comparative analysis of New Zealand and Pakistan.
https://jcsr.springeropen.com/articles/10.1186/s40991-018-0026-3Nursimloo S, Ramdhony D, (2020). Influence of Board characteristics on TBL reporting.
https://www.emerald.com/insight/content/doi/10.1108/CG-06-2019-0187/full/htmlReddy K, Gordon L, (2010). The effect of sustainability reporting on financial performance: an empirical study using listed companies.
https://researchcommons.waikato.ac.nz/handle/10289/7658Samkin G, Villiers C, Pinto S, (2014). Corporate social responsibility disclosures during the global financial crisis: New Zealand evidence.
https://search.informit.org/doi/abs/10.3316/informit.911981961401545Tasnia M, Alhabshi J, Rosman R, (2020). The impact of social responsibility on stock prices volatility of the US banks: A moderating role of tax
https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2020-0020/full/htmUnitec Institute of Technology. (2016). Research ethics policy. Unitec
Zaman R, Nadeem M, Carrajal M, (2020). Corporate governance and corporate social responsibility synergies: Evidence from New Zealand
https://www.emerald.com/insight/content/doi/10.1108/MEDAR-12-2019-0649
