Exploring Quantitatively Corporate Financial Performance and Social Performance Relationship with Net Impact Method

Abstract

Measuring impact of corporate actions on corporate social performance (CSP) is traditionally recognized to be notoriously difficult. This manuscript reports results of a study using Net Impact Method to quantify CSP and approximates corporate financial performance (CFP). We report findings on the CFP-CSP relationship and consider temporal lags between CFP measures and CSP impacts. Our findings are mostly supporting existing research but contrary to earlier research we find non-linear dynamics between CFP and CSP measures on some accounts. Although we used a limited dataset, our findings shed additional light to the CFP-CSP relationship.