The social and environmental aspects of business investment and financing are becoming increasingly important. Most studies on corporate social responsibility (CSR) focus on analysing the relationship between company performance in the financial and social fields. However, the results obtained have not been conclusive, mainly due to the variables used to measure CSR. In order to simplify its measurement, in this work we used an empirical analytical method to determine possible differences between the financial variables of firms considered to be socially responsible and those not considered to be such. The results obtained show that socially responsible corporations obtain higher profits for the same level of systematic risk and show greater sensitivity to market changes, leverage levels and company size. This pioneering study is the first to make use of the first, and at the present time only, Spanish sustainability index, the FTSE4Good IBEX.

Companies should be interested in implementing corporate social responsibility (CSR) practices not only for ethical reasons, but also for their potential profits. Considering the need to confirm this relationship more thoroughly, this research is based on the only stock market index in Spain which is an objective indicator of best business practices. The purpose of this study is to find out whether being listed in the FTSE4Good IBEX explains a different ulterior financial performance. To this end, the potential accounting and stock market differences between two groups of companies listed in the Spanish IBEX are analysed: those classified as responsible due to their inclusion in the responsible company index and those companies which, as they are not in it, do not receive this denomination. The study, conducted according to the CSR strategic approach, covers 2008–2013. Its outcomes confirm the presence of significant differences between the two groups. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

Abstract:The pressure of society for firms to adopt socially responsible behavior is evident. Yet, Corporate Social Responsibility (CSR) needs an economic justification. In response to this, there exists a comprehensive literature that analyzes the possible relation between social and business financial performance. During the last decade, the literature has been heading toward the carrying out of dynamic studies as researches find that the relationship between social and financial performance is not static. The purpose of this work is to analyze the relevance for the financial performance of Spanish listed firms of maintaining their responsible behavior. To do so, we carry out a comparison between two analyses-one cross-sectional, and the other longitudinal-to be able to conclude whether or not adopting responsible criteria makes a difference in business financial performance in the short and long-term. Some of the results obtained in the cross-sectional study are consolidated in the long-term study. In this sense, responsible firms exhibit a higher systematic risk and have greater size. As a conclusion, be responsible does not mean less stock profitability or a lower business result. It certainly contributes to firms continuing to voluntarily incorporate good corporate social responsibility practices into their business models. What is more, these results support the governmental policies and initiatives that bolster corporate social responsibility.