Performance, Risk, and Cost of Capital: Trends and Opportunities for Future CSR Research

Asif Saeed,Robert Sroufe

doi:10.3390/jrfm14120586

Abstract

The information within this study reviews the financial management literature focusing on proponents and opponents of corporate social responsibility (CSR). We review how CSR affects different areas of corporate finance. This study’s core objective is to explore the last 20 years (2000–2019) of CSR top-tier literature to develop and theoretically support CSR and environmental management. Twenty years of publications provide a considerable amount of evidence on CSR’s impacts on firm financial characteristics and some paradoxical findings. The majority of our insights support the argument that doing good is good for business. This study also highlights existing gaps in the literature. Based on our findings, we highlight three areas to further explore in the context of CSR and corporate finance: (1) Does CSR improve specific information contents in stock prices? (2) Does CSR mitigate financial distress risk? and (3) Is CSR good for firm trade credit?

Highlights

We look at why corporate social responsibility (CSR) and environmental management are essential to a prosperous future and how the CSR paradigm is defined
We review the burgeoning studies in the business literature that show how a firm’s standards involving CSR affect different firm financial attributes. These studies highfirm’s standards involving CSR affect different firm financial attributes. These studies light the importance of investment in CSR activities and how voluntary CSR disclosures highlight the importance of investment in CSR activities and how voluntary CSR disclogenerate financial benefits for the firms
Attig et al (2013) find that the five dimensions of community, diversity, employee relations, the environment, and product quality/safety are associated with credit ratings, but not the human rights dimension. Our review of this literature in this study aims to discuss the relevant findings from prior studies that link CSR with various firm financial attributes and highlight gaps for further research in the business CSR domain

Summary

Introduction

In 2015, the United Nations (UN) presented the agenda of Transforming Our World: The 2030 Agenda for Sustainable Development, a plan of action for people, the planet, and prosperity. A total of 193 countries adopted this agenda for sustainable development over the 15 years, with 17 sustainable development goals (SDGs) associated with 169 targets. Poverty eradication is one of the most significant challenges for United Nations member countries. Of the 197 parties of the UN convention in 2016, 143 ratified the Paris. Agreement (member countries resolve to end poverty and hunger everywhere between and 2030). In the European context, the main goal of the Europe 2020 strategic plan is for the EU to become a smart, sustainable, and inclusive economy

Objectives

Methods

Results

Discussion

Conclusion