Corporate social responsibility disclosures have benefits, but also come with costs
Corporate social responsibility (CSR) disclosures can enhance a company鈥檚 public image and contribute to increased sales. However, these benefits may come at a cost. In a study analyzing CSR disclosures from companies in China, where such reporting is mandatory, Associate Professor of Quantitative Marketing and Analytics聽Vivek Astvansh聽found that while these disclosures attract customers, they may also discourage new suppliers. "CSR reports resonate well with customers, but they often alienate suppliers," writes Astvansh in an op-ed for The Conversation. "This may be because suppliers frequently shoulder the costs when a company emphasizes social responsibility." This dynamic can result in a company becoming more reliant on its existing suppliers. Astvansh explains, 鈥淲hen suppliers recognize a company鈥檚 dependency, they are more likely to demand cash payments instead of credit, which can strain a company鈥檚 cash flow and limit funds available for future investments.鈥�
