Corporate social responsibility and the impact on economic value added: the role of environmental innovation

Abstract

Purpose Corporate social responsibility (CSR) is a common strategy implemented by companies due to social, ethical and policy pressures to reduce its impact on society, economy and environment. However, whether CSR adds or decreases firms’ value remains little explored. Thus, this study aims to evaluate the impact of CSR adoption on companies’ economic value added (EVA). The authors also tested a mechanism of environmental innovation and the moderation role of a firm’s size. Design/methodology/approach The authors performed a regression analysis and a mediation process analysis using dataset from 4,287 largest companies worldwide to investigate this issue. The a dataset was collected from Eikon, a Thomson Reuters platform. Findings The results revealed four main findings. Companies with high CSR indexes decreased EVA; environmental innovation mediated the effect of CSR on EVA; the firm size positively moderated the effect of CSR on EVA and firm size positively moderated the effect of CSR on environmental innovation. Originality/value To the best of the author’s knowledge, this research is the first endeavor to analyze CSR’s effect on EVA and the mediation role of environmental innovation using the most prominent firms worldwide. Furthermore, the results highlight exciting implications for literature, managers and policymakers.

Environmental CSR From the Standpoint of Stakeholder Theory: Rethinking in the Era of Artificial Intelligence

“…The contribution of the article to the literature is related to the development of scientific provisions of the concept of environmental CSR. In contrast to Madaleno et al (2022), Schiessl et al (2022), Yang et al (2022), Yu et al (2022), it has been proved that environmental CSR has not only a noncommercial nature, but combines commercial (due to economic factors) and non-commercial (determined by social factors) nature. In this regard, the most comprehensive and clear criteria for assessing the potential for the development of environmental CSR are the market opportunities for the payback of responsible investments and the volume of effective demand for "green" products.…”

“…In the existing literature, Madaleno et al (2022), Schiessl et al (2022), Yang et al (2022), Yu et al (2022) indicate the non-commercial nature of environmental CSR. The development of this responsibility is associated with the progress of society.…”

Impact of Corporate Social Responsibility on Economic Value Added: The Role of the Supply Chain Management Environment at LQ45 Indonesia

“…Many companies perform business with the aim of maximizing profit without considering social problems such as improper waste management, consumer rights violations, neglecting the safety and health of employees, or other problems that significantly impact the environment. CSR strategies arise from a company's unfavorable social, environmental, and economic impacts which stimulate public grievances, and demand for new policies (Gonzalez-Perez, 2013;Schiessl & Korelo, 2021). (Fombrun & Shanley, 1990) stated that when a company pays attention to social interests such as charitable donations, develops non-polluting products, provides equal opportunities for employees, establishes foundations, and other activities related to society and the environment, then the company will earn a good reputation.…”

“…Several approaches and indicators can be used to quantify the additional value of these companies. Therefore, this research assesses CSR strategies and its effect on the EVA of companies in Indonesia (Schiessl & Korelo, 2021;Suripto, 2020).…”

“…Given the importance of CSR, previous research highlights its influence on various management topics, such as the environment (Schiessl & Korelo, 2021), product innovation (Broadstock, 2019), financial success, brand reputation, and green innovation (Long et al, 2020;Shahzad et al, 2020). However, little is known about the effect of CSR and company size, on EVA.…”