The Relationship between Corporate Social Responsibility and Financial Performance

Abstract

With the rise of sustainable development, Environmental, Social, and Governance (ESG) factors have become crucial for evaluating corporate social responsibility. This research therefore examines the relationship between CSR and company financial outcomes using statistical regression analysis. Strong evidence is noted that the relationship of financial outcomes with Corporate Social Responsibility (CSR) activity postulates a positive relationship amid CSR's shareholder accountability and both the comprehensive CSR index and corporate performance. These findings point out that integration of ESG criteria in investment decisions is important because they provide insight that a company is bound to sustain and meet up with its resistance in the long run. Further, research has outpointed the significance of corporate governance directing CSR efforts towards infusing business with transparency and responsibility. Focusing on sustainability and social responsibility enhances the way a company is perceived, attracts investment, and helps to mitigate risks linked with the environment and society. These are the main observations that underline the importance of public awareness and the necessity for organizations to develop future-oriented CSR approaches that would positively feed into a more sensitive corporate environment and sustainable economic development.