Corporate social responsibility and financial performance: Evidence from the Johannesburg Stock Exchange, South Africa

Background: Stakeholders are increasingly concerned whether the companies they are involved with act in a socially responsible way. However, stakeholders like employees and shareholders also have a direct financial interest in those companies and need to be assured that company actions bring forth some financial benefit. Aim: The research investigated one of the main questions surrounding the concept of corporate socially responsibility, namely whether a company’s investment in and effort towards corporate social responsibility results in improved financial performance. The purpose of this study was to narrow the gap in the body of knowledge in relation to corporate social responsibility and its relationship to financial performance. Setting: This research investigated whether there was a relationship between being listed on the Johannesburg Stock Exchange (JSE) Socially Responsible Investment (SRI) Index and financial performance. The unit of study comprises 885 company-years of companies listed on the JSE over the period 2009–2014. Methods: Logistic regression was used to find evidence of a relationship between a listing on the JSE SRI Index and financial performance. Results: It is evident that there was no real relationship between inclusion on the JSE SRI Index and financial performance, but there was a direct relationship between the size of a company and having a listing on the JSE SRI Index. Conclusion: A listing on the JSE SRI Index does not have a clear and direct impact on financial performance, but it appeared that larger companies are perhaps better able to invest in corporate social activities and are, as a result, more likely to be listed on the JSE SRI Index

The value relevance of environmental, social, and governance disclosure: Evidence from Dow Jones Sustainability World Index listed companies

The relationship between a company's sustainability practices and its financial performance has been investigated with different methods and from different theoretical perspectives. This study aims to answer the following questions: (a) Do investors react to the publication of sustainability reports on company websites? (b) Has the market reaction to the publication of the sustainability report increased in the last few years? In this study, 170 report disclosures were considered from 55 listed companies from all over the world in the period from 2009 to 2016. To analyze the impact of the report publications on the security returns, 33 different event windows were analyzed. Results show two significant event windows and an increasing level of significance in the reports released after 2013