Legitimacy TheoryLegitimacy theory states that businesses, under appropriate arrangements, undertake many socially desirable actions to secure their rewards and goals. These actions guarantee their long-term existence in the market and improve their competitive position. Businesses must follow social norms and values ​​if they are to successfully continue their operations (Dowling & Pfeffer, 1975). Companies' voluntary environmental disclosures in their annual reports can be explained by the illustrations of legitimacy theory. Companies take all measures that guarantee their legitimacy in front of stakeholders who may have an influence on the legitimacy of the respective entity.Classification and applicationRegarding the means of ensuring legitimacy, the most important and effective follow-up by companies is the voluntary disclosure of information relating to the social and environmental aspects of their activity in annual reports. Companies use this disclosure policy to send a signal to society that the company is honestly fulfilling its environmental protection obligations [O'Donovan, G. (2002)]. Either companies begin to behave in a socially desirable manner or they at least take steps to convey the impression that corporate conduct is acceptable. The socially acceptable way of operating and its demonstration to society forms the basis of legitimacy theory. Companies willingly follow the disclosure strategy if they are involved in social and environmental incidents that have negative effects on their legitimacy. The application of legitimacy is driven by perceptions of the society in which businesses operate [Deegan & Tobin (2002)]. It is a way of assessing conduct...... middle of paper ......and has recognized and integrated into its CSR ensuring the structural integrity of the factories in which their products are manufactured. Conclusion: Overall, Wal-Mart's behavior remained disappointing after the two incidents mentioned. Their actions and statements have seriously undermined their legitimacy. Wal-Mart has not allocated any funds to prevent such incidents in the future, its annual reports show. No new CSR agreements have been signed by Wal-Mart to ensure worker safety. On the other hand, Primark has realized the importance of CSR and has taken steps to improve its legitimacy. Overall, there is a trend among manufacturers to start following and ensuring safety measures. Cooperation has also increased among stakeholders to protect CSR, to strengthen legitimacy.