Corporate social responsibility and financial performance: Evidence from U.S tech firms

This study provides quantitative evidence on the positive effect of spending on socially responsible causes on the long-term growth of U.S technology companies. Maximizing shareholder wealth remains the overarching principle driving organizational strategies, but this has always conflicted with other stakeholders’ interests. Because of these conflicting priorities, entrenching the principles of social responsibility has become imperative. We leverage content analysis, fixed-effects and pooled regression models to examine the effect of engaging in CSR on tech companies’ corporate financial performance in the U.S. The empirical study consists of panel data of the top 100 tech companies listed on the S&P 500 for the period 2017 and 2019. We examine the link between corporate financial performance and CSR proxies. The main results indicate that tech companies that spend more on CSR experience a corresponding increase in revenue and profitability. Contrary to previous studies, we observe insignificant evidence to support a relationship between CSR and Tobin’s Q

Corporate environmental responsibility, financial performance, and international bank loans: Evidence from China

In the context of sustainable development and “going global” strategies, Chinese firms are paying more attention to corporate environmental responsibility (CER). Using a sample of Chinese firms from 2010-2019, this study examines the impact of CER on corporate financial performance (CFP) and international bank loans. We find that the proactive disclosure of non-hazardous industrial waste (NHIW) emissions has no significant effect on the return on assets (ROA) but significantly increases the return on equity (ROE). In addition, our results show that international banks will offer lower loan spreads and longer loan maturities to firms with better environmental performance

The Impact of Corporate ESG Performance on Environmental Investment

As a standard for measuring corporate sustainability and long-term value growth investment, corporate ESG performance is of great significance for evaluating corporate sustainability, guiding investment decisions and promoting corporate improvement. Based on the sample of A-share listed companies in Shanghai and Shenzhen that have obtained SynTao Green Finance’s ESG rating from 2011 to 2021, this paper empirically examines the role of corporate ESG performance on green investment based on the theory of “stakeholders” and the theory of “sustainable development”. The results show that: (1) good ESG performance can significantly improve the level of environmental investment, and this conclusion is still valid under a series of robustness tests; (2) The mechanism test shows that good ESG performance can expand the scale of enterprises and indirectly promote corporate green investment; (3) The intermediary mechanism test shows that there is a partial mediating effect of managerial risk appetite (Mrip) on ESG performance in environmental investment. In the new stage of accelerating the green transformation of China’s industry, Chinese enterprises urgently need to improve the green financial system, accelerate the process of green transformation, and help achieve the goals of “carbon peak” and “carbon neutrality”

Does ESG Improve Crisis Resilience? Empirical Evidence of Global Emerging Equity Markets during the Covid-19 Crisis

We examine the role of Environmental, Social, and Governance (ESG) factors in explaining the crisis resilience of 1031 global emerging market (GEM) equities during the Covid-19 crisis downturn of Q1 2020. We use linear and quantile regressions (QR) and find a statistically significant negative relationship between a firm's ESG management score and crisis resilience as proxied by stock maximal drawdown. Our results suggest that companies with better ESG management were less crisis resilient, a finding consistent with agency-theory-based explanations found in the literature. Results are robust across all OLS and QR models

Selecting socially responsible portfolios: A fuzzy multicriteria approach

[EN] We propose a multi-objective approach for portfolio selection, which allows investors to consider not only return and downside risk criteria but also to include environmental, social and governance (ESG) scores in the investment decision-making process. Owing to the uncertain environment of portfolio selection, the return and ESG score of each asset are considered as independent L-R power fuzzy variables. To make the model more realistic, we take budget, floor ceiling and cardinality constraints into account. In order to select the optimal portfolio along the efficient frontier, we apply the Sortino ratio in a credibilistic environment. The subsequent empirical application uses a data set from Bloomberg's ESG Data in combination with US Dow Jones Industrial Average data. The experimental results show that the proposed model offers promising results for socially responsible investors seeking ethical and sustainability goals beyond the return-risk trade-off and its ability to beat the benchmarkGarcía García, F.; Gonzalez-Bueno, J.; Oliver-Muncharaz, J.; Riley, N. (2019). Selecting socially responsible portfolios: A fuzzy multicriteria approach. Sustainability. 11(9). https://doi.org/10.3390/su11092496S119Ballestero, E., Pérez-Gladish, B., & Garcia-Bernabeu, A. (2014). The Ethical Financial Question and the MCDM Framework. International Series in Operations Research & Management Science, 3-22. doi:10.1007/978-3-319-11836-9_1Zopounidis, C., & Doumpos, M. (2002). Multicriteria classification and sorting methods: A literature review. European Journal of Operational Research, 138(2), 229-246. doi:10.1016/s0377-2217(01)00243-0ARRIBAS, I., GARCÍA, F., GUIJARRO, F., OLIVER, J., & TAMOŠIŪNIENĖ, R. (2016). MASS APPRAISAL OF RESIDENTIAL REAL ESTATE USING MULTILEVEL MODELLING. International Journal of Strategic Property Management, 20(1), 77-87. doi:10.3846/1648715x.2015.1134702García, F., Guijarro, F., Oliver, J., & Tamošiūnienė, R. (2018). HYBRID FUZZY NEURAL NETWORK TO PREDICT PRICE DIRECTION IN THE GERMAN DAX-30 INDEX. Technological and Economic Development of Economy, 24(6), 2161-2178. doi:10.3846/tede.2018.6394Xidonas, P., Doukas, H., Mavrotas, G., & Pechak, O. (2015). Environmental corporate responsibility for investments evaluation: an alternative multi-objective programming model. Annals of Operations Research, 247(2), 395-413. doi:10.1007/s10479-015-1820-xMiralles-Quirós, M. del M., & Miralles-Quirós, J. L. (2015). Improving Diversification Opportunities for Socially Responsible Investors. Journal of Business Ethics, 140(2), 339-351. doi:10.1007/s10551-015-2691-4JERÓNIMO SILVESTRE, W., ANTUNES, P., & LEAL FILHO, W. (2016). THE CORPORATE SUSTAINABILITY TYPOLOGY: ANALYSING SUSTAINABILITY DRIVERS AND FOSTERING SUSTAINABILITY AT ENTERPRISES. Technological and Economic Development of Economy, 24(2), 513-533. doi:10.3846/20294913.2016.1213199Rahman, S., Lee, C.-F., & Xiao, Y. (2016). The investment performance, attributes, and investment behavior of ethical equity mutual funds in the US: an empirical investigation. Review of Quantitative Finance and Accounting, 49(1), 91-116. doi:10.1007/s11156-016-0581-1Bouslah, K., Kryzanowski, L., & M’Zali, B. (2013). The impact of the dimensions of social performance on firm risk. Journal of Banking & Finance, 37(4), 1258-1273. doi:10.1016/j.jbankfin.2012.12.004Petrillo, A., De Felice, F., García-Melón, M., & Pérez-Gladish, B. (2016). Investing in socially responsible mutual funds: Proposal of non-financial ranking in Italian market. Research in International Business and Finance, 37, 541-555. doi:10.1016/j.ribaf.2016.01.027Fowler, S. J., & Hope, C. (2007). A Critical Review of Sustainable Business Indices and their Impact. Journal of Business Ethics, 76(3), 243-252. doi:10.1007/s10551-007-9590-2Jankalová, M., & Jankal, R. (2017). The assessment of corporate social responsibility: approaches analysis. Entrepreneurship and Sustainability Issues, 4(4), 441-459. doi:10.9770/jesi.2017.4.4(4)Smaliukienė, R., & Monni, S. (2019). A step-by-step approach to social marketing in energy transition. Insights into Regional Development, 1(1), 19-32. doi:10.9770/ird.2019.1.1(2)Anagnostopoulos, T., Skouloudis, A., Khan, N., & Evangelinos, K. (2018). Incorporating Sustainability Considerations into Lending Decisions and the Management of Bad Loans: Evidence from Greece. Sustainability, 10(12), 4728. doi:10.3390/su10124728Charlo, M., Moya, I., & Muñoz, A. (2017). Financial Performance of Socially Responsible Firms: The Short- and Long-Term Impact. Sustainability, 9(9), 1622. doi:10.3390/su9091622De Colle, S., & York, J. G. (2008). Why Wine is not Glue? The Unresolved Problem of Negative Screening in Socially Responsible Investing. Journal of Business Ethics, 85(S1), 83-95. doi:10.1007/s10551-008-9949-zDerwall, J., & Koedijk, K. (2009). Socially Responsible Fixed-Income Funds. Journal of Business Finance & Accounting, 36(1-2), 210-229. doi:10.1111/j.1468-5957.2008.02119.xWu, J., Lodorfos, G., Dean, A., & Gioulmpaxiotis, G. (2015). The Market Performance of Socially Responsible Investment during Periods of the Economic Cycle - Illustrated Using the Case of FTSE. Managerial and Decision Economics, 38(2), 238-251. doi:10.1002/mde.2772Chang, C. E., & Doug Witte, H. (2010). Performance Evaluation of U.S. Socially Responsible Mutual Funds: Revisiting Doing Good and Doing Well. American Journal of Business, 25(1), 9-24. doi:10.1108/19355181201000001Cortez, M. C., Silva, F., & Areal, N. (2008). The Performance of European Socially Responsible Funds. Journal of Business Ethics, 87(4), 573-588. doi:10.1007/s10551-008-9959-xInvesting in Socially Responsible Mutual Fundshttps://repository.upenn.edu/cgi/viewcontent.cgi?article=1444&context=fnce_papersJones, S., van der Laan, S., Frost, G., & Loftus, J. (2007). The Investment Performance of Socially Responsible Investment Funds in Australia. Journal of Business Ethics, 80(2), 181-203. doi:10.1007/s10551-007-9412-6Renneboog, L., Ter Horst, J., & Zhang, C. (2008). Socially responsible investments: Institutional aspects, performance, and investor behavior. Journal of Banking & Finance, 32(9), 1723-1742. doi:10.1016/j.jbankfin.2007.12.039Bauer, R., Koedijk, K., & Otten, R. (2005). International evidence on ethical mutual fund performance and investment style. Journal of Banking & Finance, 29(7), 1751-1767. doi:10.1016/j.jbankfin.2004.06.035Brzeszczyński, J., & McIntosh, G. (2013). Performance of Portfolios Composed of British SRI Stocks. Journal of Business Ethics, 120(3), 335-362. doi:10.1007/s10551-012-1541-xGoldreyer, E. F., & Diltz, J. D. (1999). The performance of socially responsible mutual funds: incorporating sociopolitical information in portfolio selection. Managerial Finance, 25(1), 23-36. doi:10.1108/03074359910765830Hamilton, S., Jo, H., & Statman, M. (1993). Doing Well While Doing Good? The Investment Performance of Socially Responsible Mutual Funds. Financial Analysts Journal, 49(6), 62-66. doi:10.2469/faj.v49.n6.62Revelli, C., & Viviani, J.-L. (2014). Financial performance of socially responsible investing (SRI): what have we learned? A meta-analysis. Business Ethics: A European Review, 24(2), 158-185. doi:10.1111/beer.12076McWilliams, A., & Siegel, D. (2001). Corporate Social Responsibility: a Theory of the Firm Perspective. Academy of Management Review, 26(1), 117-127. doi:10.5465/amr.2001.4011987El Ghoul, S., Guedhami, O., Kwok, C. C. Y., & Mishra, D. R. (2011). 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Forecasting the environmental, social and governance rating of firms by using corporate financial performance variables: A rough sets approach

[EN] The environmental, social, and governance (ESG) rating of firms is a useful tool for stakeholders and investment decision-makers. This paper develops a rough set model to relate ESG scores to popular corporate financial performance measures. This methodology permits handling with information in an uncertain, ambiguous, and imperfect context. A large database was gathered, including ESG scores, as well as industry sector and financial variables for publicly traded European companies during the period 2013-2018. We carried out 500 simulations of the rough set model for different values in the discretization parameter and different grouping scenarios of firms regarding ESG scores. The results suggest that the variables considered are useful in the prediction of ESG rank when firms are clustered in three or four equally balanced groups. However, the prediction power vanishes when a larger number of groups is computed. This would suggest that industry sector and financial variables serve to find big differences across firms regarding ESG, but the significance of the model drops when small differences in ESG performance are scrutinized.García García, F.; González-Bueno, J.; Guijarro, F.; Oliver-Muncharaz, J. (2020). Forecasting the environmental, social and governance rating of firms by using corporate financial performance variables: A rough sets approach. Sustainability. 12(8):1-18. https://doi.org/10.3390/su12083324S118128García-Rodríguez, F. J., García-Rodríguez, J. L., Castilla-Gutiérrez, C., & Major, S. A. (2013). Corporate Social Responsibility of Oil Companies in Developing Countries: From Altruism to Business Strategy. Corporate Social Responsibility and Environmental Management, 20(6), 371-384. doi:10.1002/csr.1320García, González-Bueno, Oliver, & Riley. (2019). Selecting Socially Responsible Portfolios: A Fuzzy Multicriteria Approach. Sustainability, 11(9), 2496. doi:10.3390/su11092496Arribas, I., Espinós-Vañó, M. D., García, F., & Tamošiūnienė, R. (2019). Negative screening and sustainable portfolio diversification. Entrepreneurship and Sustainability Issues, 6(4), 1566-1586. doi:10.9770/jesi.2019.6.4(2)Martínez-Ferrero, J., Gallego-Álvarez, I., & García-Sánchez, I. M. (2015). A Bidirectional Analysis of Earnings Management and Corporate Social Responsibility: The Moderating Effect of Stakeholder and Investor Protection. Australian Accounting Review, 25(4), 359-371. doi:10.1111/auar.12075Garriga, E., & Melé, D. (2004). Corporate Social Responsibility Theories: Mapping the Territory. Journal of Business Ethics, 53(1/2), 51-71. doi:10.1023/b:busi.0000039399.90587.34Jensen, M. C. (2002). Value Maximization, Stakeholder Theory, and the Corporate Objective Function. Business Ethics Quarterly, 12(2), 235-256. doi:10.2307/3857812Charlo, M. J., Moya, I., & Muñoz, A. M. (2017). Sustainable Development in Spanish Listed Companies: A Strategic Approach. Corporate Social Responsibility and Environmental Management, 24(3), 222-234. doi:10.1002/csr.1403Hillman, A. J., & Keim, G. D. (2001). Shareholder value, stakeholder management, and social issues: what’s the bottom line? Strategic Management Journal, 22(2), 125-139. doi:10.1002/1097-0266(200101)22:23.0.co;2-hMio, C., Venturelli, A., & Leopizzi, R. (2015). Management by objectives and corporate social responsibility disclosure. Accounting, Auditing & Accountability Journal, 28(3), 325-364. doi:10.1108/aaaj-09-2013-1480Venturelli, A., Caputo, F., Leopizzi, R., Mastroleo, G., & Mio, C. (2017). How can CSR identity be evaluated? A pilot study using a Fuzzy Expert System. Journal of Cleaner Production, 141, 1000-1010. doi:10.1016/j.jclepro.2016.09.172Lii, Y.-S., Wu, K.-W., & Ding, M.-C. (2011). Doing Good Does Good? Sustainable Marketing of CSR and Consumer Evaluations. Corporate Social Responsibility and Environmental Management, 20(1), 15-28. doi:10.1002/csr.294Sheikh, S., & Beise‐Zee, R. (2011). Corporate social responsibility or cause‐related marketing? The role of cause specificity of CSR. Journal of Consumer Marketing, 28(1), 27-39. doi:10.1108/07363761111101921Hermawan, A., & Gunardi, A. (2019). Motivation for disclosure of corporate social responsibility: evidence from banking industry in Indonesia. Entrepreneurship and Sustainability Issues, 6(3), 1297-1306. doi:10.9770/jesi.2019.6.3(17)Davis, K. (1967). Understanding the social responsibility puzzle. Business Horizons, 10(4), 45-50. doi:10.1016/0007-6813(67)90007-9Labib Eid, N., & Robert Sabella, A. (2014). A fresh approach to corporate social responsibility (CSR): partnerships between businesses and non-profit sectors. Corporate Governance, 14(3), 352-362. doi:10.1108/cg-01-2013-0011Donaldson, T., & Dunfee, T. W. (2002). Ties that bind in business ethics: Social contracts and why they matter. Journal of Banking & Finance, 26(9), 1853-1865. doi:10.1016/s0378-4266(02)00195-4Jahn, J., & Brühl, R. (2016). How Friedman’s View on Individual Freedom Relates to Stakeholder Theory and Social Contract Theory. Journal of Business Ethics, 153(1), 41-52. doi:10.1007/s10551-016-3353-xSison, A. J. G. (2009). From CSR to Corporate Citizenship: Anglo-American and Continental European Perspectives. Journal of Business Ethics, 89(S3), 235-246. doi:10.1007/s10551-010-0395-3Lee, J. W., & Tan, W. N. (2019). Global Corporate Citizenship: Cross-cultural Comparison of Best Practices in the Global Automotive Industry. The Journal of Asian Finance, Economics and Business, 6(1), 261-271. doi:10.13106/jafeb.2019.vol6.no1.261Wartick, S. L., & Rude, R. E. (1986). Issues Management: Corporate Fad or Corporate Function? California Management Review, 29(1), 124-140. doi:10.2307/41165231Preston, L. E., & Post, J. E. (1981). Private Management and Public Policy. California Management Review, 23(3), 56-62. doi:10.2307/41172602Shnayder, L., van Rijnsoever, F. J., & Hekkert, M. P. (2016). Motivations for Corporate Social Responsibility in the packaged food industry: an institutional and stakeholder management perspective. Journal of Cleaner Production, 122, 212-227. doi:10.1016/j.jclepro.2016.02.030Wartick, S. L., & Cochran, P. L. (1985). The Evolution of the Corporate Social Performance Model. Academy of Management Review, 10(4), 758-769. doi:10.5465/amr.1985.4279099Schwartz, M. S., & Carroll, A. B. (2003). Corporate Social Responsibility: A Three-Domain Approach. Business Ethics Quarterly, 13(4), 503-530. doi:10.5840/beq200313435Cassel, D. (2001). Human Rights and Business Responsibilities in the Global Marketplace. Business Ethics Quarterly, 11(2), 261-274. doi:10.2307/3857749Hart, S. L., & Ahuja, G. (1996). DOES IT PAY TO BE GREEN? AN EMPIRICAL EXAMINATION OF THE RELATIONSHIP BETWEEN EMISSION REDUCTION AND FIRM PERFORMANCE. Business Strategy and the Environment, 5(1), 30-37. doi:10.1002/(sici)1099-0836(199603)5:13.0.co;2-qHang, M., Geyer-Klingeberg, J., & Rathgeber, A. W. (2018). It is merely a matter of time: A meta-analysis of the causality between environmental performance and financial performance. Business Strategy and the Environment, 28(2), 257-273. doi:10.1002/bse.2215McWilliams, A., & Siegel, D. (2001). Corporate Social Responsibility: a Theory of the Firm Perspective. Academy of Management Review, 26(1), 117-127. doi:10.5465/amr.2001.4011987Luo, X., & Bhattacharya, C. B. (2006). Corporate Social Responsibility, Customer Satisfaction, and Market Value. Journal of Marketing, 70(4), 1-18. doi:10.1509/jmkg.70.4.001Seifert, B., Morris, S. A., & Bartkus, B. R. (2004). Having, Giving, and Getting: Slack Resources, Corporate Philanthropy, and Firm Financial Performance. Business & Society, 43(2), 135-161. doi:10.1177/0007650304263919Brammer, S., Brooks, C., & Pavelin, S. (2006). Corporate Social Performance and Stock Returns: UK Evidence from Disaggregate Measures. Financial Management, 35(3), 97-116. doi:10.1111/j.1755-053x.2006.tb00149.xArribas, I., Espinós-Vañó, M. D., García, F., & Oliver, J. (2019). Defining socially responsible companies according to retail investors’ preferences. Entrepreneurship and Sustainability Issues, 7(2), 1641-1653. doi:10.9770/jesi.2019.7.2(59)Arribas, I., Espinós-Vañó, M., García, F., & Morales-Bañuelos, P. (2019). The Inclusion of Socially Irresponsible Companies in Sustainable Stock Indices. Sustainability, 11(7), 2047. doi:10.3390/su11072047BACCARO, L., & MELE, V. (2011). FOR LACK OF ANYTHING BETTER? INTERNATIONAL ORGANIZATIONS AND GLOBAL CORPORATE CODES. Public Administration, 89(2), 451-470. doi:10.1111/j.1467-9299.2011.01918.xChatterji, A. K., Levine, D. I., & Toffel, M. W. (2009). 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The Impact of Digital Transformation on Corporate ESG Performance: Empirical Evidence from Chinese Listed Companies

This study uses information from listed firms on China's Shanghai and Shenzhen A-share markets to analyze how the digital transformation has impacted corporate Environmental, Social, and Governance (ESG) performance between 2010 and 2020. The empirical results demonstrate that the influence of digital transformation on ESG performance is only marginally favorable. Important processes including green technology development, information transparency, decision-making, and operational efficiency all contribute to a company's ESG performance through digital transformation. According to the study's findings, non-state-owned enterprises, younger corporations, and larger companies are more likely to have positive benefits of digital transformation on ESG performance. These findings have practical implications for organizations and decision-makers seeking to enhance ESG performance through digital transformation