This study examines the effects of corporate ethics on corporate financial performance by focusing on internal stakeholders. I hypothesize that corporate ethics positively affects corporate financial performance when focusing on internal stakeholders. In order to test four hypotheses, data from 5719 companies in varying countries and industries is retrieved from the Asset4 and Worldscope database. Contrary to our expectations, the results show that corporate ethics does not affect financial performance when focusing on internal stakeholders. These findings are combined with the results of previous studies in order to formulate practical implications. Furthermore, based on our results and prior literature we identify desirable improvements in the theoretical framework, variable measurement and sample selection.

Corporations  care  more  and  more  about  their social  responsible  performance,  and  this stands to reason. Conscience, business ethics and pressure of public opinion are playing important  roles. Furthermore,  some  evidence  shows that  better  CSR  performance  may bring the financial performance of a corporation to a higher stage. The purpose of this study  is  to  investigate  the  relationship  between  corporate  social  responsibility  (CSR) and corporate financial performance (CFP). Drawing on the triple bottom line principle and the stakeholder theory, we divided the stakeholders that corporations should take re-sponsibility  for  into  seven  categories: shareholders,  employees,  customers,  suppliers, creditors, community and environment (natural environment).  We  used  a quantitative  method  to  conduct the empirical  study. The  empirical  study  is based  on  samples  of 95 US  listed  firms.  We  have  used  seven CSR  indicators  as  inde-pendent variables and the CFP index as dependent variable. The independent variables concern CSR performance on shareholders, customers, suppliers, creditors, employees, community  and  environment.  SPSS  software  was  used  as  a  help for investigating  the correlation  between  the  dependent  variable  and  each  independent  variables.  We  run  a multi-index  regression  using  the  indexes  we  calculated  or  got  directly  from  databases. There is a significant positive short-term relationship between CSR for employees and CFP and a significant negative short-term relationship between CSR for community and CFP. Our  main  results  show  that the  seven  groups  of  stakeholders  (including  environ-ment) can be divided into three groups: fast responders, long term responders, and occa-sional supporter.

Business is an incredible social construct of the world, consisting of firms that are part of and arise from society. However, businesses have come under increasing scrutiny from internal and external stakeholders over sustainable business practices. A sustainable business model creates a balance between integrity, equity and financial prosperity, the so-called triple-bottom-line. Environmental, social and governance issues (ESG) have become the modern-day proxy for sustainable business practices. The relationship between sustainable business practices and corporate financial performance is a relatively new but prominent area of research in practice and academia in South Africa. This study explores the relationship between ESG disclosure performance and the corresponding corporate financial performance (CFP) for 70 sampled firms listed on the Johannesburg Stock Exchange (JSE) between the periods 2011 and 2019. In line with international and South African research, ESG in its composite and disaggregated form was considered against a select number of CFP metrics. Select accounting-, market- and qualitybased CFP metrics were considered. Quantitative research methods were employed, using panel regression models to investigate the ESG-CFP relationship where ESG was the independent variable while the CFP metrics were individually considered as the dependent variables. All CFP data was obtained from Bloomberg and Bloomberg's proprietary ESG scores were used. This study finds a statistically significant negative relationship between ESG and the selected CFP metrics. Upon disaggregating the ESG scores, it was evident that the E- and S-scores were also significantly and negatively related to the CFP metrics whilst the G-score was positively related to CFP, but it was not statistically significant. The empirical evidence suggests that over a nine-year investment horizon, higher ESG disclosure performance detracts from firm fundamental and market performance. Further interpretation of the results in conjunction with the literature may suggest that ESG ought to be seen as an insurance policy against excessive underperformance during volatile periods and not a CFP enhancer. Therefore, being “over-insured with ESG” may lead to underperformance.

Denna studie fokuserar på företagsstorleks inverkan på sambandet mellan Corporate Social Responsibility (CSR) och Corporate Financial Performance (CFP). Huvudsyftet är att mäta om effekten av CSR på CFP skiljer sig mellan små och stora företag noterade på Nasdaq OMX Nordic Stockholm. Perioden som studeras är åren 2006-2009 samt år 2011. För att utröna om företagsstorlek har inverkan på sambandet tillämpas modererande regressionsanalys som går ut på att fastställa huruvida någon interaktionseffekt förekommer eller ej. Vi kontrollerar även för variablerna bransch och tid. Efter exkluderingar och bortfall består urvalet av 286 företag listade på Small-Cap, Mid-Cap och Large-Cap under den studerade tidsperioden. Resultaten visar att företagsstorlek påverkar sambandet mellan CSR och CFP, även om det är oklart på vilket sätt. Olika mått på CFP påvisar skilda riktningar av interaktionseffekten. / This study focuses on the interaction effect of firm-size on the relationship between Corporate Social Responsibility (CSR) and Corporate Financial Performance (CFP). The main purpose is to determine if the effect of CSR on CFP differ between small and large firms listed on Nasdaq OMX Nordic Stockholm. The studied period is the years between 2006 and 2009 plus 2011. In order to investigate if firm-size moderates the relationship between CSR and CFP, we apply moderated regression analysis which is used to determine whether or not an interaction effect is present. We also control for other variables such as industry and time. We consider a final sample of 286 firms listed on Small-Cap, Mid-Cap and Large-Cap during the observed time period. The results show that firm-size does have an interaction effect on the relationship between CSR and CFP, even though it is not clear in which way. Diverse measurements of CFP yield different direction of the interaction effect.

Corporate social responsibility (CSR) is a subject long debated since the 1930s, but the premises of the topic in regards to the what, how, why, and to whom it should be remain in question. The relation between CSR and corporate financial performance (CFP) has emerged at the forefront of this debate, particularly within the last 30 years, yet no unified theory has been reached. Other scholars interested in CSR have criticized the emphasis on CFP as a means of economic justification for what they believe to be a broader social issue, and have attempted to redirect the focus in CSR research to include other motivations and outcomes associated with organizational stakeholders other than shareholders. Using a descriptive and instrumental stakeholder theory approach, the focus of the current study was to explore CSR practices in both a dependent and independent sense. These theoretical underpinnings reflect stakeholder management decisions based on organizational characteristics, and the strategic management of various organizational stakeholders, respectively. The study population consisted of a diverse array of 353 U.S.- based corporations, 80 percent from the Fortune 500. Data included eleven corporate classification variables that represented organizations’ geographical location, industry, executive leadership dimensions, and financial health. It also included six CFP variables that represented accounting and market-based measures, and seven CSR variables that represented the key organizational stakeholders of the local community and environment, employees, and customers. The corporate classification variables were utilized to assess CSR performances, while CFP was assessed by analyzing differences among levels of the CSR practices. These assessments were performed for organizations for the twelve years within 1991-2002. Several results that assisted in informing descriptive and instrumental stakeholder theory were produced through the examination of previously used and under-explored variables. Specifically, the study results included new insights regarding how several organizational characteristics related to their CSR practices. Study findings provided elaboration regarding how performance differences in seven key CSR categories affected six representative accounting and market-based measures of corporate financial performance. Implications for practice for organizational decision-makers are provided along with detailed information pertaining to how, with inferences as to why, firms engage in CSR. Additionally, associated financial outcomes from different levels of CSR implementation are reported. Key findings from the study were that the CSR practices regarding employees and the environment remained stable over the twelve-year time period. Additionally, organizations’ geographical location, financial health, and corporate leadership dimensions had an impact on CSR practices for various stakeholder groups, with the exception of employees. A high level of investment in CSR for certain stakeholder groups did not produce the best financial outcomes in all cases; however, organizations that emphasized CSR in the categories relative to the community and its employees outperformed others with respect to certain financial performance measures.

That companies need to respond to the issue of climate change is no longer in question and with multiple carbon management activity options to choose from, companies need to select the most appropriate carbon management strategy to meet the challenges of a carbon constrained future. Because of South Africa’s vulnerability to the impacts of climate change as a developing country and because of business’ pivotal role in addressing this urgent issue, it is important to characterise the corporate responses to climate change. The contextual factors that influence carbon management strategy decisions need to be understood so that appropriate policy decisions are taken to encourage innovation related to climate change opportunities.To this end, secondary data in the form of qualitative responses from 70 large South African listed companies to the Carbon Disclosure Project 2011 questionnaire were analysed for this study during September and October 2012. The detailed responses were first mined using a text-mining statistical program to identify the five carbon management activities currently practised by the companies. A cluster analysis of these activities revealed four general response strategies to climate change and carbon emission reduction pressures.The companies were found to have a strong focus on saving energy with less focus on higher-order sustainability activities. While market capitalisation, turnover, sector and carbon commitment were shown to correlate and indeed predict the carbon management strategy chosen by companies, no significant link was found between carbon management strategy and corporate financial performance. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

Over the past decade, sustainability has emerged as one of the foremost issues faced by corporations across all sectors and Corporate Social Responsibility has gained much momentum in the past two decades. This research investigated whether investors in emerging markets are equally concerned about a firm’s social and environmental impacts as their counterparts in developed economies. The aim was to ascertain whether or not a correlation exists between CSR and stock market performance of South African listed companies. This was the first study undertaken in South Africa that specifically investigated the relative performances of SRI listed and non-SRI listed companies. The findings reveal that there are observable differences between the average market returns of the FTSE/JSE Socially Responsible Investment Index and the FTSE/JSE All Share Index, as well as the average price/earnings ratios and average price/book value ratios of all companies listed the JSE Main Board. Although two out of the three hypotheses failed to yield significant statistical outcomes, all the findings were in favour of the SRI. The research has opened up the avenue for future studies to investigate the purported links between sustainability and financial performance in the context of emerging markets. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

Corporate Social Responsibility (CSR) is a widely disputed and constantly evolving topic. One of the most recent methods of assessing CSR in South Africa has been through the usage of the Financial Times Stock Exchange/Johannesburg Stock Exchange (FTSE/JSE) Responsible Investment Index. The Johannesburg Stock Exchange (JSE) Socially Responsible Investment Index (SRI Index) was founded in 2004 and was replaced by the FTSE/JSE Responsible Investment Index in 2015. The index evaluates listed firms based on their triple bottom line performance i.e., environment, society, and economy. The index includes companies that are thought to have good CSR policies. This study assesses the effects of CSR on the Corporate Financial Performance (CFP) of firms listed on the JSE that were included in the FTSE/JSE All Share Index (ALSI) as of the 31st of January 2021. This it does by analyzing the stock's financial performance over a five-year period between the 2015 and 2019 financial years. The requirements for stocks to be included in this study is that they must have had an average market capitalization between R2 billion and R100 billion between the 2015 and 2019 financial years and are not part of the real estate sector. The results of the nonparametric (Mann-Whitney) tests show that companies that are part of the FTSE/JSE Responsible Investment Index perform better on average than those that are not included in the index. This conclusion is based on a review of the total return index (TRI), return on equity ratio (ROE), price-earnings ratio (PE), and the market-to-book ratio (MB). The analysis conducted using the net profit margin (NPM) as a measure of financial performance show that there is no relationship between CSR and financial performance. The Mann-Whitney test results where the return on assets (ROA) ratio was used showed a negative relationship between CSR and financial performance.

I measure the influence of ESG activities on Free Cash flow to the Firm and Free Cash Flow to Equity. I find that ESG activities primarily benefit the cash flows to creditors of firms in developed markets. The ESG effect predominantly comes from the excess spending of the firm on communicating how it integrates the economic (financial), social and environmental dimensions into its day-to-day decision-making processes. For developed market firms, the additional factor of excess spending on conditions for the workforce plays a role in boosting Free Cash Flow to the Firm.

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