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CSR reporting of alcoholic beverage
companies: a qualitative analysis
MASTER THESIS
By Matthew Alger
2 | P a g e Abstract
3 | P a g e Contents
1.0 Introduction……… 4
2.0 Literature review………7
2.1 CSR……… 7
2.2 CSR in the alcoholic beverage industry ……….. 8
2.3 Impact of institutional context on CSR……….. 12
2.4 National Business Systems Theory……….. 14
2.5 Implicit Explicit CSR………. 16 2.6 CSR Reporting……….. 19 3.0 Methodology……….. 21 3.1 Data collection……….. 21 3.2 Data analysis………. 23 4.0 Findings………..26 4.1 Different issues………..26
4.1.1 Labour and human rights………27
4.1.2 Environment………..29
4.1.3 Health ………31
4.2 Implicit and explicit strategies……….32
4.2.1 Explicit………33
4.2.2 Implicit………...35
4.2.3 Linking the implicit explicit theory to national business system 37 4.2.4 Change in CSR over time………...39
5.0 Discussion and Conclusion……….43
6.0 References……….48
7.0 Appendices……… 53
7.1 Company reports used for analysis………53
7.2 Number of programmes reported on by each country………54
7.3 Original quotes from reports………55
7.4 Past reports………63
7.5 Alcohol labelling regulations………68
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1.0 Introduction
In countries all over the world, alcohol is responsible for many deaths. Alcohol consumption carries the risk of adverse consequences for people’s health, society and is the cause of injuries including road traffic accidents (World Health Organisation, 2018) With all these issues, the alcoholic beverages industry can be considered controversial. By causing such damage to society, the CSR strategies they choose to adopt are of huge importance in order to maintain a good reputation and show themselves to have concern for public health (Patani et al. 2012).
With large multinational companies making huge revenues, and sometimes contributing to environmental and social damage, it can be said that they have a duty to give back to society in the form of corporate social responsibility (CSR). The same can be said for alcoholic beverage companies who have an added incentive given the harm that alcohol can inflict on society. CSR can be defined as ‘context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance’ (Aguinis, 2011). Due to various stakeholder pressures, CSR becomes an important strategic issue.
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beverage companies is also used as a way of influencing government regulation (Savell et al., 2015)
In order to categorize the home country of the alcoholic beverage companies, existing theories will be used. One of these theories is national business systems presented by Whitley (1992;1999). National business systems are determined by several factors that influence the environment. Whitley refers to business systems as being patterns of economic organization that differ in the degree and mode of coordination of economic activities. This refers to the organization of and the relationship between providers and users of capital, customers and suppliers, competitors, companies in different sectors and employers and different kinds of employees. Whitley’s theory of the national business systems will therefore be used to categorize the home country of the alcoholic beverage companies.
The influences on CSR reporting have been explored by Adams (2002) who states that CSR reporting is influenced by corporate characteristics, general contextual factors and the internal context. The general contextual factors is related to the national business systems theory as they determine what the institutional environment will be like. The study that Adams (2002) undertook shows that all three factors have an influence over what is reported by companies. However, the level of influence from each factor determines whether the company will report more to do with social issues, environmental issues or ethical issues.
Following on from the theory of national business systems, Matten and Moon (2008) present the theory of implicit and explicit CSR. Explicit CSR refers to the actions that corporations take in the interest of society in the form of corporate policies, programmes and strategies. Implicit, CSR, however, refers to the role that formal and informal institutions play in the interests and concerns of society. This theory will be used to determine what kind of CSR policies are being reported.
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pressures, various cultural characteristics of each country will be examined along with the application of the national business systems theory (Whitley, 1992; 1999). To determine how the CSR of each company has been influenced, the number of
programmes for each issue will be examined. In addition to this Matten and Moon’s
(2008) theory of implicit an explicit CSR will be operationalized in order to categorize the type of CSR that is being adopted by the companies. There has been a lot of research that has highlighted the importance of CSR to alcoholic beverage companies (Babor and Robaina, 2013; Palazzo and Richter, 2005; McCambridge et al., 2018). This study will address a research gap in terms of how the institutional environment influences the CSR of companies in an industry that is responsible for damage to society in terms of public health. This is relevant to theory as it will highlight the mechanisms that influence CSR reporting but this will be applied to an industry where CSR plays a more prominent role.
The research question for this study will be:
How does the CSR reporting of alcoholic beverage companies differ according to the institutional environment?
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2.0 Literature Review
This section will review the literature relevant to the CSR reporting of alcoholic beverage companies. It will begin by presenting some perspectives on CSR followed by CSR in the alcoholic beverage industry specifically. Following on from this, theories relating to the impact of the institutional environment on CSR will be presented. Linked to the institutional environment, the national business systems theory (Whitley, 1992; Whitley,1999) will be presented. This theory will be used in the analysis as a way of categorising the countries of the alcoholic beverage companies. Matten and Moon’s (2008) theory of implicit and explicit CSR will then be presented. Matten and Moon (2008) link this to the national business systems theory. Finally, this section will conclude with a review of the literature surrounding CSR reporting- they key element to this study.
2.1 CSR
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countries and determine how stakeholder pressures influence the corporate social responsibility strategies they adopt.
The United Nations Decade of Education for Sustainable Development identify three sustainability issues that link to corporate social responsibility. These refer to society, the environment and the economy (United Nations,2005). Aspects of environmental issues include waste and water. Societal aspects include human rights, peace and human security. Economic aspects of CSR include poverty, corporate responsibility and accountability. CSR strategies of firms cover these aspects of sustainability. This study will show that the extent to which particular aspects are focussed on in the firms CSR strategies is dependent on the institutional environment and thus the stakeholder pressures they are exposed to (United Nations, 2005).
2.2 CSR in the alcoholic beverage industry
Research shows that what influences firm’s to engage in CSR is a complex issue (Kim et al., 2013). What needs to be investigated is whether the mechanisms surrounding CSR engagement are the same for firms that face prominent social issues. For this study, alcoholic beverage firms are being focused on. Investigating the CSR strategies adopted by alcoholic beverage companies should give a comprehensive insight into the way that the country of origin influences what is reported on. This is because alcoholic beverage companies will have to adopt a more extensive CSR strategy than other firms due to the social damage that they cause.
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that CSR is not ‘all or nothing’. Therefore even in firms where the product they produce can be deemed as unethical or damaging to society, they still have the capacity to undertake activities that can increase their corporate social performance. This shows how the issue of CSR is still relevant to alcoholic beverage companies and needs to be considered by managers in order to comply with stakeholders expectations. Grougiou et al. (2016) goes further than Lindorff et al. (2012) in explaining the relevance of CSR to alcoholic beverage companies. Grougiou et al. (2016) categorizes industries that cause harm to society as ‘sin’ industries. This includes the alcohol industry. They investigate the importance of CSR to ‘sin’ industries by comparing it to non-‘sin’ industries. They come to the conclusion that companies in ‘sin’ industries are more active in their CSR reporting. They argue that the likely reason for this is to draw attention away from the activities which cause social damage by focusing attention on positive aspects of their corporate strategy. They classify this as a defensive strategy. This makes the alcoholic beverage industry suitable to study the impact of the institutional environment on CSR reporting due to need for a defensive strategy being more significant than for firms in non-‘sin’ industries. However, what needs to be considered here is that this study only examines the CSR reporting of firms in ‘sin’ industries and not their actual CSR strategies. This is key to this study as only the reporting of CSR is being investigated. Grougiou et al. (2016) acknowledge that CSR reports may not reflect managers attitudes to certain issues.
Due to the limited literature on CSR in the alcoholic beverage industry, an insight into this can be gained by examining CSR in other industries such as tobacco and gambling (Palazzo and Richter, 2005; Babor and Robaina, 2013; Cai et al. 2011; Luo & Lam, 2016). Alcohol and tobacco can be viewed as similar industries due to the fact that they are both detrimental to public health. Also, alcohol and tobacco firms use similar CSR activities in order to benefit financially (Babor and Robaina, 2013). Palazzo and Richter (2005), Cai et al (2011) and Grougiou et al. (2016) all give an insight into how CSR reporting may be different for alcoholic beverage companies than other companies. They do this by examining the CSR of firms that have some sort of negative impact on society.
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The instrumental level refers to the firms skills that they use to produce their products and services.
The transactional level refers to the extent to which the firm complies with legal and moral rules within the environment they operate in and the extent to which their transactions are transparent.
The transformational level refers to the extent to which the firm compromises goals of the organization for the sake of the greater good of society.
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Further information surrounding the CSR of firms in ‘sin’- industries is presented by Luo and Lam (2016) who discuss the reasons why gambling firms may engage in CSR and acknowledge that CSR is of particular importance to the gambling industry due to the negative social impact is has on society. Reasons why such firms may engage in CSR is to improve their image and reputation. Secondly, another reason why firms in the gambling industry may engage in CSR is to enhance the loyalty of the workers and to increase worker retention (Luo and Lam, 2016). This reason for engaging in CSR would apply to any firm, not necessarily firms from ‘sin’ industries. However, the first reason for engaging in CSR is particularly important for alcoholic beverage firms due to its negative social impact.
Improving the image of the alcoholic beverage company as a reason to engage in CSR is further supported by McCambridge et al. (2018). They investigate various CSR initiatives of alcoholic beverage companies in relation to the reduction of
harmful drinking. These include the prevention of drink driving and alcohol education provision. They come to the conclusion that CSR initiatives that alcoholic beverage companies undertake do not reduce harmful drinking but alter the framing of alcohol related issues to benefit the industry. This supports the arguments made by Luo and Lam (2016) as they both view CSR as a strategy to allow the activities of the firms to be seen in a more positive light by stakeholders including customers and policy makers. McCambridge et al. (2018) make the point that the CSR activities of alcoholic beverage companies highlight the aspect of individual decision making when framing alcohol related issues. This, they argue, conflicts with the way public organizations present the issue of harmful drinking which thus interferes with policies to reduce harmful drinking. This shows how CSR initiatives are being used to
improve the reputation of alcoholic beverage firms, not by attempting to improve people’s view of their activities, but by downplaying their role in the problems caused by irresponsible drinking.
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risk of being heavily regulated. CSR plays a role in attempting to avoid this from happening by presenting alcoholic beverage companies as being socially
responsible.
Due to this problem of having a poor reputation, there needs to be careful consideration when it comes to communicating the CSR policy of the firm. Linked to the theory of ‘sin’ industries, fast food can be seen as a similar industry to Kim and Ramos (2018) explain the issues that fast food firms face when it comes to communicating CSR policies. They state that stakeholders become suspicious if the self-serving motives of CSR are not reported. In other words, it is best for firms to take an honest approach to their CSR reporting and must report activities that benefit both the stakeholders and the firm. To an extent, this supports the points made by Cai et al. (2011).
2.3 Impact of institutional context on CSR
Central to this study, is the impact of institutional environments on firms and how this impacts their CSR strategy. Most research surrounding the impact of the institutional environment on CSR is based on institutional theory developed by DiMaggio and Powell (1983). Whilst the institutional environment needs to be considered in the many operations that a business undertakes, CSR is particularly impacted by the institutional environment as highlighted by Kim et al. (2013). They make the point that in Western countries, child labour is unethical yet it is not viewed as in the same way in South Asia. Equally, some Asian countries would view Western companies dismissing employees during an economic downturn as unethical. This goes to show that when a company is operating in a foreign environment, it is vital for them to understand the institutional context. A firms CSR policy is a way of them trying to gain legitimacy from various stakeholders. For this to be achieved, they need to understand the values of these stakeholders.
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pressures from society as well as pressure from organizations which the firm depends on. In the third stage of the model, mimetic isomorphism is the source of the pressure. This refers to the way that organizations copy each other in order to gain legitimacy. Another type of pressure that firms are exposed to are normative pressures. Normative pressures are derived from the norms that emerge in the environment. The need for a three stage model explaining how institutional pressures influence firms CSR reporting is supported by Kim et al. (2013). They state that CSR practices are not static. This means they change over time in response to the institutional environment. The diagram below is a depiction of the complex mechanism of how the institutional environment influences CSR.
To a degree, the three stage model can be seen in action in a study by Kim et al. (2013). They investigate the impact of institutional pressures on CSR. It is stated that previous research has largely attributed CSR practices to be as a result of singular features of an institutional environment. However, the study finds that CSR generally reflects a broad range of pressures that the firm faces and the interactions between these pressures that takes place. Institutional theory is of particular importance to the CSR of firms that operate in several different countries, due to the fact that they are facing a lot of pressures, some of which can be conflicting. Kim et al. (2013) state that the CSR strategies of Korean firms predominantly involves philanthropy. This is due to the fact that Korean culture promotes a short term approach to CSR. This has meant that Korean firms have not had the capacity to adopt a sustainable approach to CSR when it comes to issues such as corporate governance and managerial transparency. However, Korean firms that are operating abroad are subjected to
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international pressures and regulations which have caused them to adopt a more sustainable approach to CSR. This has meant that more Korean firms are now complying with global standards such as the UN Global Compact and the Global Reporting Initiative.
Linked to the institutional environment of the country, there has also been evidence to suggest that the level of development of the country can have an impact on what influences CSR reporting. Ali et al. (2017) states that in developed countries, the CSR reporting of firms is influenced by stakeholders including the public, media, regulators and investors. However, this is not so much the case in developing countries. Ali et al. (2017) state that this could be due to the public in developing countries being less aware of the social and environmental impacts that the firm has on the local community. This suggests further evidence that the CSR strategy that a firm chooses to adopt is influenced by the institutional environment and subsequently stakeholders with differing expectations on how firms should behave.
The culture of a country could be the source of institutional pressure on companies. Dzupina (2016) suggests that multinational corporations are readily adapting to cultural change as they collaborate with people and different companies all over the world. This suggests that when it comes to the CSR strategies of multinational companies, the culture in which they operate could be a significant determinant. Ringov and Zollo (2007) link Hofstede’s cultural dimensions to the corporate social performance of firms. They do this by investigating the social and environmental performance of firms from all over the world. They come to the conclusion that power distance and masculinity are the biggest determinants of corporate social performance. This gives evidence to suggest the culture plays and important role in the CSR strategies of firms.
2.4 National Business Systems Theory
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According to Whitley, there are four key characteristics when it comes to the structuring of business systems. These are the state, the financial system, skill development and control system and trust and authority relations. For this study, the state is a key to defining the institutional environment in which alcoholic beverage firms operate in. The aspects of the state that are of importance in defining the national business systems include their willingness to share risks with private owners, the extent to which they support the establishment of economic associations between the state, firms and individuals and the level of regulation of market boundaries.
Whitley (1992) explains the scope of analysis and the level of analysis that can be applied to the national business systems theory. The scope of analysis includes sectors, economies and a dynamic focus. The level of analysis can be component characteristics or the whole system. Predominantly for this study, the scope of analysis will be the economy and the level of analysis will be the whole system. This will take place by examining the characteristics of different aspects of the economy in each of the relevant countries. The alcoholic beverage companies being investigated in this study operate in many countries. Whitley (1992) states that the differences between states in Europe are substantial enough for nation states to be justified as a separate unit of analysis. This supports the need to categorise the alcoholic beverage companies according to the country they come from, as opposed to group of countries or continents.
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Thailand there is (WHO, 2016). These varying regulations are creating an institutional environment which will have an impact on the operations of alcoholic beverage companies.
The national business systems theory has been applied to CSR in several studies (Tenglad and Ohlsson (2010), Chapple and Moon (2005), Haak (2002) and Newell and Frynas (2007)) . Tengblad and Ohlssen (2010) investigate how CSR is changing in response to globalization and changing national business systems. In doing so, they apply an extension to the theory of national business systems adopted by Haak (2002). Haak catergorises business systems as communitarian or individualistic. Communitarian business systems refers are where actors share tight interfaces and form communities. Individualistic business systems are where actors protect their individual autonomy through loose interfaces. In applying this theory to their investigation of Swedish companies, Tengblad and Ohlssen (2010) find that over time, companies have moved from a communitarianism and national approach to CSR to a global and individualistic approach to CSR. Tenglad and Ohlssen (2010) explain the concept of a global and individualistic approach to CSR. They state that this approach is based on self-regulation whereby firms aim to act responsibly for in order to maintain good relationships with stakeholders and that the stakeholders they are trying to satisfy are from a many different countries.
2.5 Implicit and Explicit CSR
Matten and Moon (2008) apply the impact of a countries national business system on the CSR of companies within that country. This study will operationalise Matten and Moon’s (2008) implicit and explicit CSR framework in order to determine the impact of the national business system on the CSR of alcoholic beverage companies.
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Implicit CSR, on the other hand, refers to values, norms and rules which cause firms to respond to stakeholder issues in a certain way. It is characterized by the firms interactions with formal and informal institutions and the role it plays in contributing to societies concerns and interests (Matten and Moon, 2008) With regards to linking the national business system to either implicit or explicit CSR, they state that an explicit CSR is more likely to be prominent in a liberal market economy whereas implicit CSR is more likely to occur in coordinated market economies. According to Matten and Moon, in liberal market economies, national institutions encourage individualism, network governance and policies providing discretion. Coordinated market economies, on the other hand, consist of national institutions encouraging collectivism, partnership governance and policies providing obligations. This expansion of the framework provides a basis for the type of CSR to be examined according to the country of origin. Figure 2 depicts how Matten and Moon (2008) suggest the type of national business system should influence the type of CSR strategy that a firm adopts.
Carson et al. (2015) highlight some points made by Matten and Moon with regards to CSR in the USA and in Europe. They state that as a way of comparison, it is assumed that companies in the USA and in Europe act just as responsibly as each other. However, there is a difference in the way CSR is reported, hence the implicit and explicit framework. US companies have tended to report CSR more explicitly with more company specific policies whereas European companies have tended to adopt a more implicit strategy according to social norms. This is because corporate
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engagement in social initiatives is embedded in the national institutional system (Morsing, Shultz and Neilson, 2008). This shows how the stakeholders within institutional environments have different expectations which subsequently influence the strategies that companies choose to adopt.
Carson et al. (2015), however, also state that European companies are moving to a more explicit strategy. Carson et al. show this by examining two Scandinavian companies. They state that one of the companies using CSR as a way of being ‘different and better’ than its competitors. This clearly shows an explicit strategy as they are significantly highlighting their CSR strategy as a tool to improve the image of the company. This view is supported by Strand et al. (2015) who investigates the CSR of US and Scandinavian companies. Strand states that Scandinavia traditionally has a history of implicit CSR but can move to explicit CSR by adopting ‘the language of CSR’. This is identified by Matten and Moon as a key determinant of the type of CSR strategy being adopted.
The difficulty in measuring implicit and explicit CSR has been made apparent by Gjoldberg (2009) who investigates the CSR practices of twenty companies. Due to ease of measurement, explicit CSR strategies are measured in an index. Gjoldberg states that it would be expected that US companies should score highly and Nordic countries shouldn’t due to the institutional environment. However, Gjoldberg didn’t find this to be the case which contradicts the theory presented by Matten and Moon. A possible reason for this that Gjoldberg suggests is that companies from countries that promote implicit CSR with a lot of regulation are pressured into conducting a lot of CSR programmes. So whilst the environment may promote implicit CSR, companies may undertake explicit CSR programmes to adhere to this.
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distinguish the type of CSR strategy according to how it is presented in the report and what has influenced the firm to engage in this policy. By using these dimensions, a content analysis can be conducted in order to establish the firms motivations for engaging in CSR.
2.6 CSR Reporting
CSR reporting is a way of firms conveying information about social and environmental issues to various stakeholders (Golob and Bartlet, 2007). Lots of research has shown the importance of institutional theory in influencing the CSR reporting of firms (Young and Marais, 2012; Chapple and Moon, 2005; Fortanier et al., 2011) . Neilson and Thomsen (2007) investigate the CSR reporting of several Danish companies. The topics that are reported on include employees, the local community and the environment. They find that whilst the topics that they report on are similar, the extent of how they report on them is different. Also, the angle at which they report is very different. Some companies report on customer stakeholders whereas other report on employee stakeholders. Similarly, some companies CSR reports are globally orientated whereas others are locally orientated. Neilson and Thomsen (2007) come to the conclusion that this is due to the various stakeholders that need to be satisfied for the company to perform well. Different stakeholders have different expectations of the firm which will be reflected in their CSR reporting.
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The impact of the country of origin on CSR reporting is highlighted by Einwiller et al. (2016). They show the impact of the institutional environment by examining the CSR reports of companies from the US and Germany. One finding from the study was that companies that adhere to global standards of the GRI are more similar in their reporting than those that do not adhere to these global standards. This shows that that regulatory pressures have an impact on the CSR reporting of firms as they are conforming to regulations of international bodies as well as possibly being subject to pressures from other organizations who also conform to the regulations of these bodies. Institutional theory is also highlighted in the study of Einwiller et al. (2016) as their study shows there to be a strong country-of-origin effect due to US and German companies reporting on different issues. In their reporting, German companies placed a higher emphasis on environmental performance. US companies, however, placed a higher emphasis on social dimensions such as the community. This goes to show how the country in which a company is based in can have an influence over their CSR policy as the various stakeholders that they have to satisfy have different expectations of the company. This is supported by Fortanier et al. (2011) who also explains the importance of the country-of-origin effect in CSR reporting. They state that many studies have examined non-financial disclosures and come to the conclusion that they vary hugely according to where the company comes from. This further supports the point that the stakeholders that the firm needs to satisfy has a huge impact on what they choose to report.
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3.0 Methodology
The data for this study will take place in the form of a qualitative approach. An exploratory research design (Hahn and Lulfs, 2014) will be adopted to highlight how different components of CSR are more prominent in alcoholic beverage companies in different countries in the form of a qualitative content analysis. This approach is most appropriate as CSR reporting cannot be easily quantified and a qualitative approach offers flexibility. This means that the content of text can be measured using statistics but also the deeper meaning of the text can be determined, which requires more interpretation (Duriau, 2007).
3.1 Data Collection
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Company Country Headquarters
SAB Miller plc UK London
Heineken Netherlands Amsterdam
Carlsberg Denmark Copenhagen
Pernod Ricard France Paris
Diageo UK London
Table 1 Americas
Company Country Headquarters
Grupo Modelo Mexico Mexico City
Southern Glazer USA Miami
Constellation Brands USA New York
Table 2 Asia
Company Country Headquarters
Asahi Group Holdings Ltd Japan Tokyo
Kirin Holdings Japan Tokyo
Suntory Holdings Ltd Japan Tokyo
ThaiBev Thailand Bangkok
Tsingtao China Qingdao
Table 3 Oceania
Company Country Headquarters
Treasury Wine Australia Melbourne
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3.2 Data Analysis
The first stage of the analysis is to categorise the different programmes that the companies report on. The content of CSR reports can be broken down into six main categories. These are the environment, health, labour and human rights, people and society, responsible business and equality. A programme that is classed as labour and human rights refers to initiatives that promote worker’s rights and support them in their careers. This would also include initiatives to improve working conditions. Programmes categorised as people and society refer to initiatives that support people in the local community and aim to reduce poverty. Responsible business refers to initiatives that aim to improve the integrity of operations. This could include reducing corruption. Equality refers to promoting a diverse workforce. The CSR reports will be examined with these six categories.
The research for this study will be based on grounded theory. Grounded theory is explained by Bryman and Bell (2003). Grounded theory can be defined as ‘theory that was derived from data, systematically gathered and analysed through the research process’ (Straus and Corbin, 1998) A key element of grounded theory that will be used in this study is coding. This is where data is broken down into component parts which will be given names. More specifically, the type of coding that will be used in this study is called open coding. Bryman and Bell (2003) state that open coding refers to ‘the process of breaking down, examining, comparing, conceptualizing and categorizing data. This process forms concepts which can be grouped into categories.
A coding system will also be used to test the theory of implicit and explicit CSR. By their nature, CSR reports appear explicit as they companies aim to promote their own initiatives. For this reason, the word ‘program’ will be searched for to find all the initiatives that the companies undertake. Searching for the American spelling will also pick up the British spelling.
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‘giving back to society’ is likely to be used a lot. Therefore, in order to test for implicit CSR strategies, there will be an examination of the use of the word ‘stakeholder’. Whilst the word ‘society’ may not give much of an insight into implicit CSR strategies, the word ‘stakeholder’ is likely to give an insight into the company’s role in society as collaboration with a large number of stakeholders is likely to suggest the company is
performing a wider role in society. Thaibev use the phrase: ‘The Company has
established guidelines for appropriate stakeholder engagement’. This shows an implicit strategy as the company has procedures in place to integrate into society. The link between stakeholders and implicit CSR is highlighted by Strand et al. (2015) who states that implicit CSR is particularly prominent in Scandinavian countries and they promote the participation with a wide range of stakeholders. Strand states that Scandinavian countries are known to demonstrate a ‘Scandinavian cooperative advantage’ due to their willingness to collaborate with stakeholders.
The overall categorisation of the company’s CSR strategy will be determined by how many explicit and implicit strategies are discussed. A medium strategy will be where the two strategies are equal. An explicit strategy will be where there are a large number of programmes reported on compared to the reporting of stakeholder engagement. An implicit strategy overall will discuss stakeholders frequently but not mention many programmes that the company has undertaken. A highly implicit strategy will discuss a clear mechanism which allows stakeholders to get involved in the CSR strategies of the company, mainly though communication.
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4.0 Findings
This section will present various pieces of information with regards to the CSR reporting of each of the companies as well as the country in which they are headquartered. For information on their CSR reporting, the number of CSR programmes relating to each issue will be presented and whether the strategy the firm has adopted is implicit or explicit overall. With regards to the country that the firms are based in, information relating to the regulation on the alcohol industry will be presented. In addition to this, cultural dimension scores according to Hofestede Insights will be presented. This will give an indication as to what kind of business system the country is.
4.1 Different Issues
This part of the findings will examine how the companies prioritise different CSR activities by looking at what issues they focus on. This will be determined by seeing what issue has the largest number of programmes mentioned within the report. Figure 3 shows the number of programmes reported by the companies in three continents. As can be seen by the graph, the three biggest issues were the environment, health
and labour and human rights. These issues will be discussed
below. Figure 3 0,00 10,00 20,00 30,00 40,00 50,00 60,00 70,00 80,00 90,00 100,00
Environment Health Labour and human rights People and society Responsible business Equality Percentage CSR Issue
CSR Issue reported by continent
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4.1.1 Labour and human rights
A pattern that has emerged from the data regarding the specific issues that are reported is that the Asian firms placed the highest emphasis on labour and human rights. As a total of all the programmes, 57% of the programmes of the Asian companies were associated with labour and human rights. This is compared to 14% from European companies and 38% from American companies. This would suggest that institutional pressures in Asia encourage companies to establish initiatives to support their works. In order to establish a possible link between the institutional environment and the reporting of programmes relating to labour and human rights, Hofstede’s individualism scores of the countries will be examined.
28 | P a g e Country Individualism Australia 90 China 20 Denmark 74 France 71 Japan 46 Mexico 30 United Kingdom 89 USA 91
Table 5: Hofestede Insights, 2018
The firms that focus on labour and human rights programmes are Thaibev, Grupo Modelo, Suntory Holdings and Treasury Wine. Thailand has a low individualism score of 20 so they have more of a collectivist culture. This cultural dimension appears to be reflected in Thaibev’s CSR policy with a large emphasis on labour and human rights. Therefore the CSR reporting of Thaibev appears to be in line with the culture of Thailand in that they are in favour of supporting individuals and allowing them to progress at their job. In Thaibevs last report, they had a total of 11 programmes, 10 of which were relating to labour and human rights. Many of these programmes were relating to improving the skills of the workforce. In order to improve the workforce at the top of the organisation, there were several programmes mentioned in the report that aimed at improving the skills of managers. These include the Top Executive Development programme and the Leadership Development Program. There is also the mention of several other programmes aimed at developing the workforce. This shows a large commitment from Thaibev to their workforce as emphasis is placed on development.
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adopted similar programmes to Thaibev in terms of development of their workforce. In their report, they state the various initiatives they are undertaking for various stakeholder groups. For employees, they list initiatives such as employee training and
development programmes and an “Inducción a Grupo Modelo” program. These
various programmes would suggest a high emphasis on investing in the workforce. The same pattern can be seen for Suntory Holdings who also appear to reflect the national culture of their country of origin with China having an individualism score of 20. Similarly, Suntory Holdings place a large emphasis on programmes relating to labour and human rights. In their report, they discuss the health of their employees. They explain how employees have regular health checks and they discuss their commitment to a good work life balance for employees. They explain how their commitment to their employees health has been recognised by the Ministry of Economy, Trade and Industry through their Certified Health and Productivity Management Organisation Recognition Program.
However, the same cannot be said for Treasury Wine. Australia has a high individualism score of 90. This would suggest that they would not be as supportive of employees, which does not appear to be the case in their report. Of the 7 programmes that Treasury Wine mentioned in their report, 3 were in relation to labour and human rights. They discuss the Employee Assistance Program which allows all employees to have access to free and professional counselling. To an extent, this is a similar to the stance taken by Suntory Holdings as it relates to the health and wellbeing of employees.
4.1.2 Environment
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institutions. This does not appear to be the case with this sample as the two US companies in the sample as they do not report on any environmental programmes of their own. Constellation, however, do report on taking part in an initiative with other leading beverage companies to improve their environmental sustainability. The fact that the two US companies do not report on their own environmental programmes goes against the arguments made by Matten and Moon.
Despite the figures not supporting Matten and Moon’s (2008) application to the national business systems theory, there appears to be a pattern with regards to environmental reporting and cultural characteristics of the countries. According to Hofestede, the long term orientation of a country gives an indication as to how they will deal with societal issues. Countries that score low will be more suspicious of societal change and will prefer to stick to norms when dealing with societal issues. A country that scores highly, however, will take steps to prepare for the future. With this theory applied to the issue of environmental protection, the data from this sample supports the cultural dimensions of the four countries. Table 6 shows the long term orientation score for the countries in the sample.
Country Long term orientation score
Denmark 35 Netherlands 67 United Kingdom 51 United States 26 Australia 21 China 87 Japan 88 France 63
Table 6: Hofstede Insights, 2018
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suppliers to help them reduce their carbon emissions as well as a programme called ‘Water of Life’ which is aimed at increasing water sustainability. Heineken’s environmental programmes were also aimed at increasing water sustainability as well as reducing CO2 emissions and ensuring sustainable sourcing.
4.1.3 Health
One pattern that has emerged from the reporting of health issues is that the companies with the highest emphasis on health in their reports have come from countries with the highest drinking age limits. Japan has a drinking age of 20 and the USA has a drinking of 21. This shows a potential link between the government policies with regards to the control of alcohol and the level of CSR strategies relating to health.
From the sample, Kirin and Southern Glazer placed the highest emphasis on health in their CSR reports. Of the six programmes that Kirin report on, two of them are in relation to health. They discuss an initiative where they used external experts to help provide education on the harmful effects of alcohol. Similarly, Southern Glazer mentioned eleven programmes in their CSR report, four of which were in relation to health issues. They placed particular emphasis on reducing underage drinking. They discuss an initiative they founded called Youth Alcohol & Education Foundation Inc. This institution funds various programmes that raise awareness of the dangers of underage drinking.
Table 7 highlights the part of the labelling regulations that apply to alcoholic beverage companies in each country.
Country Health Warning Required
China Yes Denmark No France No Japan No Mexico Yes United Kingdom No
United States Yes
Netherlands No
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An interesting finding hear is that China and the United states both require a health warning on the labels of alcoholic beverages and Kirin and Southern Glazer both report significantly on health issues. This shows the institutional environment having an influence over the companies CSR reporting as it is likely that China and the United States have strict regulation on the alcoholic beverage industry when it comes to health issues.
4.2 Implicit and Explicit Strategies
The previous section of the findings has shown there to be a huge variation in CSR reporting from companies in different countries. This section of the findings will present the level of implicit or explicit strategies for the companies in the sample.
Company Explicit Implicit Overall
Asahi Enhancing human capital- training programmes
Satisfaction for stakeholders Vision for stakeholders Initiatives with stakeholders
Seeking to deepen our dialogue with all stakeholders
Implicit
Carlsberg Sustainability program:
Zero Carbon footprint Zero irresponsible drinking Zero waste water
Zero accidents culture
UN program to develop greater energy efficiency.
Collaboration with relevant stakeholders.
Explicit
Thaibev Spirit induction program Pracharath program- joint with stakeholders
Guidelines for appropriate stakeholder engagement
Implicit
Tsigtao Psychological aid programme Business ethics and compliance with regulations.
Medium
Suntory Natural Water Education Program
Drink Smart
Cooperation with stakeholders for a sustainable future
*Stakeholder Dialogue
Implicit
Heineken HIV/AIDS prevention
Energy reduction programme Zero Waste programme Sustainable sourcing (agriculture) programme
UN Sustainable Development Goals United Nations Industrial
Development Organisation (UNIDO) Engage
relevant stakeholders for feedback and advice
on these risks (human rights)
Implicit
Kirin Participation in the UN global
compact
Identifies stakeholders
Section of the report with the title ‘to our stakeholders’
Implicit
Grupo Model
‘’Consumidor Modelo” program Inducción a Grupo Modelo”
Commitment to stakeholders
*A survey -Stakeholder Engagement was carried out in 2012.
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Company Explicit Implicit Overall
Environmental awareness programmes
Southern Glazer
Youth Alcohol Awareness & Education Foundation, Inc. Step Up For Students Scholarship Program
Community Kitchen Program
Explicit
Pernod Ricard
“Mixers” and “Shakers” programme
Mentoring programmes Biodiversity programme
Dialogue with stakeholders Stakeholders feedback
Implicit
Diageo Smashed programme Plan W programme
Carbon Disclosure Project Alcohol in society program Diageo Water Blueprint Speak Up programme
Identification of stakeholders Paris Agreement and UN Global Goals
‘Our role in society’
Explicit
Treasury Wine
Code of Conduct and Diversity &Inclusion Policy
Employee Assistance Program
TWEforShe
The Whistleblower program
Explicit
Constellat ion
Nourishing Neighbours program
Employee Match Program Safe Ride Home Program
Letter to stakeholders Explicit
SAB Miller
4e Path to Progress Manja Pamodzi (Hands Together)
Safety Around Beverages Wellness Development Programme
Women in Maize programme
We support moves towards greater tax transparency and are actively working to share more information with key stakeholders
Multi-stakeholder approach
Explicit
Table 8
4.2.1 Explicit
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women within the company by providing leadership training. These various programmes that Treasury Wine report on show an explicit strategy as they are voluntary programmes undertaken by the company. The lack of reference towards other stakeholders would suggest that there are not many institutional pressures that Treasury Wine face to satisfy the needs of stakeholders.
Another company that had a highly explicit strategy was Southern Glazer. Again, their report focussed heavily on their programmes but did not report on any activities involving stakeholders. As well as the Youth Alcohol Awareness & Education Foundation Inc described earlier, they have other initiatives such as the Community Kitchen Program. This a programme whereby local foodbanks are supported to provide food to impoverished families.
Carlsberg's report also appeared to present an explicit CSR strategy due to the large amount of their own initiatives they present. Despite this, Carlsberg does present some dimensions that would be seen as an implicit strategy. They discuss their participation in a UN programme to develop greater energy efficiency. This shows an implicit strategy as they are collaborating with other institutions and are conforming to externally codified rules in order to gain legitimacy. However, despite these strategies, Carlsberg CSR report predominately reports on explicit strategies. They discuss their initiative 'Working Together Towards Zero'. This initiative has a range of programmes covering a variety of issues. These include as Zero Carbon Emission, Zero Waste Water and Zero Irresponsible Drinking. With regards to the irresponsible drinking programme, Carlsberg state:
'We will offer 100% distribution of alcohol-free brews by 2022 to expand consumer choice. We will also provide responsible drinking messaging as well as nutrition and ingredient information on our packaging and online..’
Carlsberg (2017)
This clearly shows an explicit strategy when it comes to the health of the population. In order to tackle the issue of irresponsible drinking, they have created an initiative whereby they are altering the production of the products to provide a healthier alternative.
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drinking was to set up an organisation specifically to address this issue. They explain this in their report:
'A centerpiece of these multi-faceted efforts and in its role as an industry leader, Southern Glazer’s established the Youth Alcohol Awareness & Education Foundation, Inc., whose aim is devoted to the prevention of underage drinking. The Foundation provides financial support to advance alcohol safety and programmes to prevent underage drinking prevention in alliance with diverse educational institutions and community-based groups.'
Southern Glazer (2017)
This shows an explicit strategy as they have created an organisation to deal with the issue of irresponsible drinking. This communicated in a particularly explicit way as they emphasize that this is their initiative.
4.2.2 Implicit
From the sample, the companies identified as having an implicit CSR strategy are the ones which make a lot of references to their stakeholders in the framing of their CSR policies. This shows them taking a more collective approach to their CSR strategy. The companies with highly implicit strategies have been identified as the ones who offer a clear system of communication with their stakeholders. This would allow their CSR policy to satisfy the needs of various stakeholders within the wider community in which they operate.
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'We conserve our watersheds and endeavor to improve local water quality and quantity in cooperation with stakeholders for a sustainable future.'
Suntory Group (2017)
This shows an implicit approach as it is allowing a variety of stakeholders to have an input in their sustainability policies. With this approach, the aim of their CSR strategy is more likely to be to suit their role in society and conforming to the expectations of formal and informal institutions.
Thaibev have adopted a similar implicit strategy. They discuss guidelines for stakeholder engagement that they have in place. The state:
‘The Company has established guidelines for appropriate stakeholder
engagement, with an emphasis on continuously promoting creative engagement with all stakeholders through various activities and communication channels where various demands, opinions, concerns, and suggestions may be voiced.’
Thaibev (2017)
This shows an implicit strategy as there are clearly mechanisms in place which allow stakeholders to become involved in Thaibev’s CSR strategy. The mention of ‘communication channels’ would suggest that the company allows for regular interaction with stakeholders.
Heineken have a similarly implicit strategy when it comes to the issue of human rights and the various risks that they face. Their CSR strategies in this area appear to be not their own initiatives but as a result of various stakeholder expectations. They state:
'We will further test these salient risks internally and externally, without losing sight of other relevant Human Rights. We will also engage relevant stakeholders for feedback and advice on these risks.'
Heineken (2017)
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4.3 Linking the implicit explicit theory to national business system
This part section of the findings will apply the findings regarding implicit and explicit CSR and the national business systems theory to Matten and Moon’s (2008) linkages between these two factors. The diagram presented in the theory section depicts how the Matten and Moon expect the type of national business system to impact the CSR strategy adopted by companies.
As explained by Whitley, there are many characteristics that make up the national business system. Alquist and Breunig (2008) categorise six of the host countries from the sample, based on how much control the government has over the countries. These are listed in table 9.
Country Coordinated or liberal market economy
Australia Liberal market economy
United Kingdom Liberal market economy
Japan Coordinated market economy
USA Liberal market economy
Netherlands Coordinated market economy
Denmark Coordinated market economy
Table 9
This categorization of countries according to their type of economy gives a useful basis to test the implicit and explicit CSR framework against the national business systems theory.
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market economy and they both have an explicit CSR strategy. Constellation Brands and Southern Glazer also have an explicit CSR strategy and they are both from the USA. With regards to firms with an implicit CSR strategy, Heineken fits Matten and Moon’s diagram as they are from the Netherlands, which is a coordinated market economy. This is also the case for Asahi and Suntory Holdings who are from Japan, a coordinated market economy.
Carlsberg, however, does not fit the theory presented by Matten and Moon. They have an explicit CSR strategy, yet Denmark is a coordinated market economy. From the companies sampled, this is the only anomaly from the countries classified by Alquist and Breunig. The likely reason for this is the regulation that is applied to Danish firms with regards to CSR reporting. Since 2008, regulations were put in place which meant the largest Danish companies are legally obliged to report their CSR activities. This means that large Danish companies are required to report on issues such as the environment, anti-corruption and social matters (KPMG, 2017). With regulation promoting CSR reporting, Danish companies are likely to move to an explicit strategy as it clearly shows the company valuing CSR.
Where a country has not been classified as either being a coordinated or liberal market economy, a countries individualism score can be used to determine its characteristics. The table below shows the individualism score for each of the countries. A country with a low individualism score is more likely to be a coordinated market economy and a country with a high individualism score is more likely to be a liberal market economy.
Country Individualism
China 20
France 71
Mexico 30
Thailand 20
Table 10: (Hofstede Insights, 2018)
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implicit strategies. However, France would be classified as a liberal market economy, according to the individualism score yet Pernod Ricard have an implicit strategy. It must be noted that the individualism score does not determine whether a country is a CME or an LME as it is only a characteristic. Alquist and Breunig (2008) state that France is difficult to categorise and they label it as ‘not categorized or controversial’. This shows that with some countries, care needs to be taken when categorising them. Alquist and Breunig (2008) categorise the Netherlands as a CME, even though it has some aspects of an LME.
4.4 Change in CSR over time
This section will determine whether there has been any changes in the CSR strategies of the companies. Table 11 highlights the CSR strategies for the companies from 2011.
Company Explicit Implicit Overall
Carlsberg Responsible sourcing
program
Global and local suite of training and development programme
Partnering with stakeholders to promote responsible drinking Materiality analysis among our internal and external
stakeholders
We are determined to act as a responsible corporate citizen and take the concerns of other stakeholders into account
Implicit
Kirin Community Outreach
Program
"Table For Two" Program Kirin Kids School of Great Taste
industry-wide programmes and campaigns against the harmful use of alcohol in Japan and abroad. Training Programmes Developed to Prevent the Harmful Use of Alcohol Kirin Fund against Drunk Driving
Energy Efficiency Opportunities (EEO) program
Kirin Brewery's Dialogue with Stakeholders
Medium
Thaibev ThaiBev Safe Driving
Program
ßYoung Entrepreneur Program Sustainable Development in Relation to Stakeholders
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Company Explicit Implicit Overall
ThaiBev Thai Talent
project
Treasury Wine
CSR program Governance - oversight of our
CSR programmes and how we engage our business and external stakeholders; and compliance with applicable environmental and social regulations. Undertake external CSR stakeholder engagement survey Implicit Suntory Holdings
Program for Creating New Value
Raising Awareness and Preventing Drunk Driving Top Safety Site Program Volunteer Leave Program Strengthening Support for Youth Education
Responding to Our Stakeholders
The Suntory Group values dialogue on the environment and discussions with all of its stakeholder.
Medium
SAB Miller ‘Men in Taverns’ education
programme CSI programmes Our Tavern Intervention Programme
Our TalkingAlcohol.com website remains an important part of the way we provide balanced and accurate
information to consumers and other stakeholders.
Transparency and ethics- Communicating effectively and clearly with our stakeholders and working ethically. We seek to engage in
constructive policy dialogues through industry-wide groups or directly with government and other stakeholders and to be open about the way we do this.
Implicit
Constellation Brands
Employee match program Explicit
Diageo Water of Life’
Learning for Life programme
Safe Water for Africa GREENiQ engagement programme
Zero Harm programme
Engaging stakeholders Involve all stakeholders in working towards a common goal.
Stakeholder dialogue We aim to contribute to sustainable development through our operations, community investment and collaboration with our
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Company Explicit Implicit Overall
stakeholders. We are proud of our role in enabling the
development of local
economies, and improving life for many people around the world.
Table 11
As can be seen from the tables 8 and 11, the CSR reporting of some of the companies has changed over the past few years. A pattern that has emerged is that the European companies have moved from an implicit strategy to an explicit strategy as suggested by Matten and Moon (2008). In their 2011 reports, whilst the reporting of company initiatives was only slightly lower, there was a lot bigger emphasis on stakeholders, showing a more implicit strategy. When discussing their stakeholder engagement, Diageo state:
‘Understanding how our business affects our stakeholders is essential for determining what our key impacts are and how we need to manage them. Engagement is a process that ranges from sharing information and discussing issues with stakeholders to, at its best, working in partnership on projects of mutual interest.’
Diageo (2012)
This statement shows an implicit strategy as their role in the wider society is acknowledged by saying it is important for them to understand the company affects their stakeholders. The mention of a process suggests that engaging with stakeholders is part of a wider corporate policy.
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and state that they aim to adopt this and for use by the general public. When describing these programmes, they state:
‘We encourage our employees in Japan to assess their drinking habits and practice responsible drinking so that they can continue to enjoy alcohol for the rest of their lives. We will develop a similar training program for the general public to help reduce health problems and alcoholism caused by excessive drinking in society. This will be our second public program after the one on preventing underage drinking’.
Kirin Holdings Company (2011)
This shows an explicit strategy as there are company initiatives in place to deal with
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5.0 Discussion and Conclusion
Studies by Palazzo and Richter (2005), Cai et al. (2011), Grougiou et al (2011) and McCambridge et al. (2018) present theories as to why alcoholic beverage companies engage in CSR. These studies, among others, show CSR to be an important issue to the alcoholic beverage industry due to alcoholic consumptions negative impact on society. This study has provided a comprehensive insight into the differences in CSR reporting of alcoholic beverage companies around the world on two distinct levels. Firstly, it takes into account how the issues reported on by companies varies according to where the company originates from. Secondly, it shows how there are differences in their strategies according to the implicit and explicit theory.
The first section of the findings show that there are variations in the issues reported on by alcoholic beverage companies. What this does, is proves the value in studying CSR reporting as there are many key variations that need to investigating. Whilst there are global reporting standards when it comes to CSR, there are enough differences in CSR reports, showing there to be many possible influences on companies. This illustrates the relevance of institutional theory created by DiMaggio and Powell (1983) and how it can be applied to the issue of CSR (Shabana et al, 2016).
The first section of the findings does show that there is a link between the group of countries and the issues that are given the most emphasis. It is shown that the companies from Asia place a lot higher emphasis on labour human and human rights than Europe and the Americas. The Asian companies put a greater emphasis on supporting workers and providing training. These findings support the evidence made by Kim et al. (2013) who highlighted the importance of the institutional environment on CSR. This would suggest that Asian countries have adopted a culture of supporting workers as part of their collectivist culture.
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environment on the CSR reports, there is a broader issue here in that there appears to be integration among countries. With issues such as the environment, European countries will be following the same EU regulation so it is likely that much of their environmental policies will be similar. However, in the context of CSR, integration among countries means that the rules and norms will spread across national boundaries. So when looking at the environmental policies of Diageo, Carlsberg and Heineken, it is likely that they will be exposed to similar pressures from a variety of stakeholders, by nature of their geographic proximity.
Examining the country characteristics gives more of an insight into the nature of the institutional pressure. There appears to be a connection between the individualism of the country and the emphasis place on labour and human rights in CSR reports. With the exception of Treasury Wines, the three other companies that reported heavily on labour and human rights were from countries with low individualism scores. This suggests a collectivist culture puts pressure on companies to support their workers and ensure they have good working conditions. It must be noted that two of the companies that reported the most on labour and human rights were from Japan. This extends the research undertaken by Ringov and Zollow (2007). They found power distance and masculinity to be the biggest determinant of corporate social performance but evidence from this study shows individualism to have an impact on company’s CSR strategy. This supports the arguments presented by Dzupina (2016) who states that multinational corporations adapt to cultural change as they collaborate with different stakeholders all over the world. This is relevant to the issue of CSR reporting, as it shows the culture of the host country to have a significant impact. Also, multinational corporations ability to adapt their strategies is also important in the wider international business context as this is a requirement for companies that want to expand internationally in an increasingly globalised world.
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A pattern that has emerged is that Asian companies are more implicit than companies in the US and Europe. Their CSR strategies are more framed around the various stakeholders in society and a much more collective approach has been adopted. In Europe and the US, on the other hand, there appears to be a much more explicit approach in that companies have adopted their own strategies to promote their CSR agenda. CSR in European and American companies appear to be more engrained into their wider corporate strategy. In Europe and America, CSR appears to be used as a marketing tool to improve the image of the company. In Asia, however, CSR is more about obligations that the company need to fulfil.
Another interesting finding from this study is that the CSR strategies of the companies have changed over time. By looking back at reports from 2011, it emerged that European companies have moved from an implicit strategy to an explicit strategy and Asian companies have moved from an explicit to an implicit strategy. The findings of European companies moving to an explicit CSR strategy support the view of Matten and Moon (2008) and Strand (2013). With Asian companies moving the opposite way, it suggests that there are no universal norms for CSR reporting and that there is little evidence to suggest that countries are becoming more similar in the way they influence CSR reporting of companies operating there. So whilst there is no universal trend, what can also be taken from this study is that CSR reporting is likely to change over time in response to various stakeholder pressures. This view is supported by Kim et al. (2013) who acknowledge the complexity of the relationship between institutional pressures and CSR.
