Corporate Social Responsibility Trends Research Articles

Corporate Social Responsibility and Asset Pricing in Industry Equilibrium

Corporate social responsibility (CSR) represents a growing strategic concern for corporations around the world, many of which are adopting CSR as a core management or board-level function. The Global Reporting Initiative founded in the late 1990’s, embraced by the United Nations Environment Program, has provided corporations with a reporting framework on their economic, environmental, and social sustainability. No longer necessarily viewed outside the profit maximizing framework, many questions still remain on how CSR policies affect the risks firms are facing and the stock market implications of those policies. We aim to understand the asset pricing consequences of CSR adoption, but also of non-adoption in the presence of industry CSR trends. We plan to develop an industry equilibrium model where firms make production and CSR investment decisions and embed this model within a standard asset pricing framework. Following the exiting work in finance and marketing, we model an investment in CSR as a mechanism to acquire customer loyalty. Greater customer loyalty takes the form of a less price elastic demand, which the firm uses to smooth out the effect of demand fluctuations. With this assumption, the model captures the folklore view in the literature that a firm with a more loyal demand has profits that are relatively less sensitive to aggregate economic conditions than a firm with a less loyal demand. A risk averse investor will therefore, all else equal, value more highly the firm with the more loyal demand, pricing a lower systematic risk (lower beta) and expecting a lower return. We will test the model predictions using a comprehensive dataset on firm-level CSR from MSCI’s Environmental, Social and Governance (ESG) database. The database provides coverage for companies that constitute several major international stock indices. The full sample includes 34 countries and 3,005 firms from 2004 to 2010, equivalent to an unbalanced panel with 9,795 firm-year observations. To address the endogenity issues, we will create two instruments for CSR. The first instrument is based on the sample of environmental and engineering disasters. The second instrument is based on data on product recalls. We adjust these data for their relevance using hand collected data on newspaper articles before and after the incidents. Our results will have important practical capital budgeting and policy implications. Beta is the major parameter used in estimating the cost of equity. Given our results, we expect CSR companies to have lower cost of equity than non-CSR firms. In addition, projects that increase firms’ reputation for CSR should be discounted with lower cost of equity, compared to otherwise similar projects. Thus, for example, investments in green energy should be discounted with a lower cost of equity than investments in more polluting sources of energy.

Corporate social responsibility in fortune magazine’s top 50 companies: State of action and salient trends

The concept of corporate social responsibility constantly adapts to the needs of global business. Given the recent development of corporate social responsibility and sustainability ideologies, along with methodologies and criteria used to meet the standards of a “responsible” company, it becomes necessary to examine their realization in practice, by focusing on those responsible for the trends: the fortune 500 companies. This article addressed both of these needs by comparing the corporate social responsibility reports of Fortune Magazine’s Top 50 companies. The article tried to evaluate each company’s performance against a defined set of criteria in order to test for the didactic nature of the competitive relationships between Fortune’s Top companies and their influence on smaller companies. It then tried to answer three important related questions concerning corporate social responsibility now and in the future: 1) to what extent have Fortune’s Top 50 companies embraced the concept of corporate social responsibility? 2) What is their understanding of corporate social responsibility? 3) What are the current trends of corporate social responsibility? The article concluded with analyses of future trends that may assist companies to develop their corporate socialresponsibility practices on an ongoing basis. Key words: Corporate social responsibility (CSR), fortune 500, fortune’s top 50.

Sustainability and Corporate Social Responsibility Trends: An Empirical Analysis of Drivers, Success Measures and Competitive Value for Multi-National Corporations within the Information and Communications Technology Industry

The social responsibilities of organizations to the greater society have been debated for years, and the expected role of organizations and their social contract appear to be changing. Indicators of a new social contract are reflected by the growth of many sustainability and Corporate Social Responsibility (CSR) initiatives domestically and abroad. Even as organizations craft responses to this dynamic environment that emphasize and reward sustainability and social responsibility, it remains poorly understood how and to what extent these initiatives contribute to the well being of the organization. An empirical analysis of two large MNCs within the ICT industry was conducted, using a multi-case study methodology. Data analysis revealed that both MNCs respond to a set of drivers, not one single driver. These empirical findings provide organizations better understanding and enable them to craft their response to the changing social contract, and its contribution to their respective organizational competitiveness.

Corporate Social Reporting: A Preliminary Study of Bank Islam Malaysia Berhad (BIMB)

The purpose of this paper is to examine the themes, locations, extent, and also trends of corporate social responsibility (CSR) disclosure of Bank<br />Islam Malaysia Berhad (BIMB) from 1992 to 2005. A disclosure index (checklist) and the extent of such disclosures were measured using content analysis based on number of sentences. The findings of this study show that BIMB prefers to disclose themes associated with employees, product, and service contributions and community involvement. Among the most popular locations in disclosing such information are in the chairman’s statement, financial statements, and directors’ report. The results also reveal that the bank has improved in terms of volume and the manner of presenting or disclosing CSR from year to year. This study is the first of its kind to be conducted on a company in a specific industry in Malaysia using a longitudinal approach, and its empirical findings complement the findings of prior studies.<br /><br />

Corporate Space for Social Sciences through Corporate Social Responsibility Initiatives Rising trend of Corporate Social Responsibility is a Boom for Asia’s Social Sciences from Theory and Practice Perspective

Corporate Space for Social Sciences through Corporate Social Responsibility Initiatives Rising trend of Corporate Social Responsibility is a Boom for Asia’s Social Sciences from Theory and Practice Perspective

Corporate Social Responsibility in Europe, North America and Asia

This paper builds on previous work of the author in assessing policies on corporate social responsibility (CSR) based on 20 elements. The elements are based on international conventions, codes of conduct and industry best practice. In a second survey of current priorities for CSR among large listed companies, the paper examines the written policies of companies in 15 countries in Europe, North America and Asia. The second survey demonstrates an increased emphasis on ethics, bribery and corruption and increased policies among companies on child labour compared with the first survey. It shows that one cannot assume that Asian countries are less developed than their Western counterparts and points to a growing trend of CSR in Japan, in particular. Nevertheless, it is demonstrated that there is a link between the development of CSR and the economic development of countries and that many CSR policies are based on localised issues and cultural traditions at a country level. Supply chain aspects of CSR are growing in importance, particularly among countries with a strong trading tradition. l Corporate social responsibility

A Review of Corporate Social Responsibility in India

Critiques argue that Corporate Social Responsibility (CSR) is a North-led agenda with narrow focus. Bimal Arora and Ravi Puranik apply a development-oriented framework to contextualize CSR to structural adjustments-related macro socio-economic issues relevant to the developing countries, with a focus on CSR in India. They review contemporary CSR trends in India concluding that although the corporate sector in India benefited immensely from liberalization and privatization processes, its transition from philanthropic mindsets to CSR has been lagging behind its impressive financial growth.