Verifiability and truth: Corporate social reporting in mining in China

Abstract

This research is to investigate 2011 corporate social reporting (CSR) of the mining companies listed on the Shanghai index. The research question is following: “Is the CSR of the mining companies verifiable and is what they report possibly untrue?”. The study analysed 17 companies (out of 33 mining companies listed on the Shanghai index) that produced corporate social reports in 2011. The reports were analysed as to activities highlighted are symbolic or substantive. Such activities were then cross-analysed as to their being positive or negative. Of the 17 companies only two reports were audited and thus by determined as being verified. The finding is that most of the companies reported on symbolic positive activities (possibly true but without substance) and a few companies reported on substantive positive activities (truths). However, these truths result from resolving issues that these companies have themselves created. Only one companies disclosed substantive negative activities that resulted in serious financial penalty and imprisonment for the management whereas most of the others did not disclose any negative. The mining sector is chosen for analysis as it represents one of the older and dirtier industries in China. The paper builds on the scepticism contained in the CSR literature.