Fig. 1

Three Relationships Between the Cost of CSR Reporting and the Quality of CSR Reporting. Figure 1 illustrates three prospective relationships between the cost associated with the CSR reporting activity and the quality of CSR reporting. All three relationships are conceived as parabolic in nature, intended to illustrate an initial decline in the depth of reporting as the cost of CSR reporting increases. These added costs are associated with an increase in the quantity of narrative matter – stories, illustrations, stakeholder profiles, etc. These narratives may be informative, but their unstructured nature inhibits comparative performance assessments within the firm over time, and in relation to rivals. Parabola A illustrates a gap between the Y-axis and the Y asymptote, illustrative of a barrier to initiating CSR reporting. Parabola A also features a gap between the vertex and the X-axis, which represents the minimum reporting quality level. Parabola B is a dilation of the original parabola, reflecting a reduction of the barriers of entry to CSR reporting. This would be illustrative of a mandatory reporting regime, where firms are legislatively compelled to produce a CSR report. Parabola C is associated with both mandatory reporting and a higher quality level of reporting, as would be expected from the implementation of specific reporting methods, similar to what is required in the disclosure of a firm’s annual report. This is represented by an upward vertical translation of Parabola B