Corporate Social Responsibility: Towards Clean Revenue and Financial Outperformance
Dieste Martinez, Mariana (2021)
2021
Master's Programme in Leadership for Change
Johtamisen ja talouden tiedekunta - Faculty of Management and Business
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Hyväksymispäivämäärä
2021-05-04
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tuni-202104243435
https://urn.fi/URN:NBN:fi:tuni-202104243435
Tiivistelmä
The current global situation, where sustainability and responsibility issues are becoming more important and severe than ever, has put firms under public pressure to change their traditional business models. As a result, the relevance of CSR keeps growing, and firms continue to increasingly engage in CSR, thus it is key for firms to find not only the societal and environmental justifications for their sustainability efforts, but also an economic justification that can prove that doing good translates into doing well.
The purpose of this study is to examine the relationship between CSR and CFP through the evidence of front-runner sustainable firms, listed in the Global 100 Most Sustainable Corporations in the World Index by Corporate Knights. This study contributes to the previous academic literature by providing new insight into the relationship between CSR and CFP, analyzing the relationship between a relatively new metric of sustainability, clean revenue, and overall sustainability score and CFP. Additionally, the timeframe of the study offers the most recent data on the topic.
The study uses clean revenue percentage and overall sustainability score as measures of Corporate Social Responsibility. To measure Corporate Financial Performance, accounting-based measures ROA, ROE, EBIT and EBITDA, and market-based measure Tobin’s Q are used. The research sample is drawn from the Global 100 Most Sustainable Corporations in the World Index by Corporate Knights by including firms that have appeared consequently in the index between 2018 and 2020. After excluding financial firms, the research sample consists of 36 firms.
The research sample was analyzed using regression analysis in order to test if the clean revenue percentage and the overall sustainability score affect corporate financial performance. The findings of this thesis suggest that the clean revenue percentage is positively associated with ROA and ROE and that the overall sustainability score does not have a statistically significant relation to accounting- or market-based measures of corporate financial performance. The findings indicate that those firms that have high shares of revenue from clean goods and services are utilising their assets and the capital that their shareholders have invested better than similar firms with lower clean revenue percentages.
The purpose of this study is to examine the relationship between CSR and CFP through the evidence of front-runner sustainable firms, listed in the Global 100 Most Sustainable Corporations in the World Index by Corporate Knights. This study contributes to the previous academic literature by providing new insight into the relationship between CSR and CFP, analyzing the relationship between a relatively new metric of sustainability, clean revenue, and overall sustainability score and CFP. Additionally, the timeframe of the study offers the most recent data on the topic.
The study uses clean revenue percentage and overall sustainability score as measures of Corporate Social Responsibility. To measure Corporate Financial Performance, accounting-based measures ROA, ROE, EBIT and EBITDA, and market-based measure Tobin’s Q are used. The research sample is drawn from the Global 100 Most Sustainable Corporations in the World Index by Corporate Knights by including firms that have appeared consequently in the index between 2018 and 2020. After excluding financial firms, the research sample consists of 36 firms.
The research sample was analyzed using regression analysis in order to test if the clean revenue percentage and the overall sustainability score affect corporate financial performance. The findings of this thesis suggest that the clean revenue percentage is positively associated with ROA and ROE and that the overall sustainability score does not have a statistically significant relation to accounting- or market-based measures of corporate financial performance. The findings indicate that those firms that have high shares of revenue from clean goods and services are utilising their assets and the capital that their shareholders have invested better than similar firms with lower clean revenue percentages.