Many Ways to Rome: Exogenous and Endogenous CSR Pathways to Environmental and Social Performance

Abstract

It is often taken for granted that corporate social responsibility (CSR) will bring about social benefits and environmental improvements. Yet there is little empirical evidence of outcomes of CSR initiatives for the natural environment or the wider society as studies have focused on the influence of CSR on financial performance rather than its societal outcomes. This study begins addressing this gap in the literature by empirically studying the environmental and social performance of CSR in 19 European companies. We analyse which configurations of institutional constraints and organizational CSR practices influence environmental and social performance. Based on this analysis, we identify two pathways that can lead to high environmental and social performance and we scrutinize configurations that lead to low performance. The exogenous pathway is characterized by the use of externally certified management tools and certificates and a high importance of external rating schemes. This pathway seems typical for large publicly listed firms. The endogenous pathway, in turn, includes firms that are characterized by internally developed means of conducting CSR.