essay about social and environmental responsibility

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118 Social Responsibility Essay Topic Ideas & Examples

Inside This Article

Social responsibility is a crucial aspect of our society that involves individuals and organizations taking actions that benefit society at large. It involves being conscious of the impact of one's actions on the environment, society, and the economy. Writing an essay on social responsibility can help raise awareness about important issues and inspire others to take action. To help you get started, here are 118 social responsibility essay topic ideas and examples:

• The importance of corporate social responsibility in today's business world
• How companies can promote social responsibility through sustainable practices
• The impact of social responsibility on consumer behavior
• The role of government in promoting social responsibility
• The ethical implications of social responsibility
• The benefits of social responsibility for businesses and society
• The relationship between social responsibility and environmental sustainability
• How social responsibility can help address social inequality
• The role of social responsibility in promoting diversity and inclusion
• The impact of social responsibility on employee morale and productivity
• How social responsibility can help businesses build trust with consumers
• The challenges of implementing social responsibility initiatives
• The role of social responsibility in shaping public policy
• The impact of social responsibility on brand reputation
• The role of social responsibility in disaster relief efforts
• The benefits of social responsibility for small businesses
• The role of social responsibility in promoting ethical leadership
• The impact of social responsibility on employee retention
• The relationship between social responsibility and corporate governance
• The role of social responsibility in promoting economic development
• The challenges of measuring the impact of social responsibility initiatives
• The role of social responsibility in addressing climate change
• The impact of social responsibility on shareholder value
• The benefits of social responsibility for nonprofit organizations
• The relationship between social responsibility and social entrepreneurship
• The role of social responsibility in promoting community development
• The impact of social responsibility on organizational culture
• The challenges of balancing social responsibility with profitability
• The role of social responsibility in promoting ethical supply chain practices
• The benefits of social responsibility for employees and their families
• The relationship between social responsibility and government regulation
• The impact of social responsibility on employee engagement
• The role of social responsibility in promoting social justice
• The challenges of integrating social responsibility into business operations
• The benefits of social responsibility for investors and shareholders
• The relationship between social responsibility and corporate social responsibility reporting
• The impact of social responsibility on brand loyalty
• The role of social responsibility in promoting employee wellness programs
• The benefits of social responsibility for local communities
• The relationship between social responsibility and social media
• The impact of social responsibility on organizational performance
• The role of social responsibility in promoting ethical marketing practices
• The challenges of implementing social responsibility initiatives in developing countries
• The relationship between social responsibility and business ethics
• The impact of social responsibility on employee satisfaction
• The role of social responsibility in promoting sustainable development
• The benefits of social responsibility for customers and consumers
• The relationship between social responsibility and corporate philanthropy
• The impact of social responsibility on organizational reputation
• The role of social responsibility in promoting environmental conservation

These social responsibility essay topic ideas and examples can help you brainstorm ideas for your essay and explore different aspects of social responsibility. Whether you are writing about the role of businesses in promoting social responsibility or the impact of social responsibility on society, there are plenty of interesting topics to choose from. Remember to conduct thorough research and provide examples to support your arguments. By writing about social responsibility, you can raise awareness about important issues and inspire others to take action for the betterment of society.

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Accountability

Social and environmental sustainability in undp.

UNDP is committed to ensuring that our programming and operations are socially and environmentally sustainable.

Sustainable Programme and project management

UNDP recognizes that social and environmental sustainability are fundamental to the achievement of sustainable development outcomes, and therefore must be fully integrated into our Programmes and Projects.  To ensure this we have the following key policies, procedures and accountability mechanisms in place to underpin our support to countries:

• Social and Environmental Standards  for UNDP Programmes and Projects  
• Project-level Social and Environmental Screening Procedure  
• Accountability Mechanism with two key functions: 1.  A Stakeholder Response Mechanism that ensures individuals, peoples, and communities affected by UNDP projects have access to appropriate procedures for hearing and addressing project-related grievances. 2.  A Compliance Review process to respond to claims that UNDP is not in compliance with UNDP’s social and environmental policies.

Environmentally sustainable operations

As a global leader in the fight against climate change, UNDP is committed to being green, sustainable, and just. UNDP has been climate neutral in its global operations since 2015 and has made an ambitious commitment to reduce its carbon footprint by 50% by 2050 through the Greening UNDP Moonshot. Read more ...

Sustainable procurement

To help countries achieve the simultaneous eradication of poverty and significant reduction of inequalities and exclusion, while at the same time address the issues of climate change, UNDP makes a shift to more sustainable production and consumption practices. Sustainable procurement means making sure that the products and services UNDP buys are as sustainable as possible, with the lowest environmental impact and most positive social results. Procurement, therefore, plays a key role in contributing to sustainable development.

Please find more information on the UNDP Procurement Website .

Related resources

• Framework for Advancing Environmental and Social Sustainability in the UN System
• UN Greening the Blue

Explore more

Undp social and environmental standards.

The revised Social and Environmental Standards (SES) came into effect on 1 January 2021 . The SES underpin UNDP's commitment to mainstream social and environmental sustainability in our Programmes and Projects to support sustainable development.

The SES are an integral component of UNDP’s quality assurance and risk management approach to programming. This includes our  Social and Environmental Screening Procedure .

Key Elements of the UNDP's Social and Environmental Standards include: 

Part A: Programming Principles: 

• Leave No One Behind 
• Human Rights 
• Gender Equality and Women's Empowerment 
• Sustainability and Resilience 
• Accountability 

Part B: Project-Level Standards:

• Standard 1: Biodiversity Conservation and Sustainable Natural Resource Management
• Standard 2: Climate Change and Disaster Risks 
• Standard 3: Community Health, Safety and Security 
• Standard 4: Cultural Heritage 
• Standard 5: Displacement and Resettlement 
• Standard 6: Indigenous Peoples
• Standard 7: Labour and Working Conditions
• Standard 8: Pollution Prevention and Resource Efficiency 

Part C: Social and Environmental Management System Requirements:

• Quality Assurance and Risk Management 
• Screening and Categorization 
• Assessment and Management 
• Stakeholder Engagement and Response Mechanism 
• Access to Information 
• Monitoring, Reporting and Compliance 

UNDP's Social and Environmental Screening Procedure (SESP)

Screening and categorization of projects is one of the key requirements of the Social and Environmental Standards (SES) . 

In this regard, the objectives of UNDP's Social and Environmental Screening Procedure (SESP) are to:

• Integrate the SES Programming Principles in order to maximize social and environmental opportunities and benefits and strengthen social and environmental sustainability; 
• Identify potential social and environmental risks and their significance; 
• Determine the project's risk category (Low, Moderate, Substantial, High); and, 
• Determine the level of social and environmental assessment and management required to address potential risks and impacts.

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The Truth About CSR

• V. Kasturi Rangan,
• Lisa Chase,
• Sohel Karim

Despite the widely accepted ideal of “shared value,” research led by Harvard Business School’s Kasturi Rangan suggests that this is not the norm—and that’s OK. Most companies practice a multifaceted version of CSR that spans theaters ranging from pure philanthropy to environmental sustainability to the explicitly strategic. To maximize their impact, companies must ensure that initiatives in the various theaters form a unified platform. Four steps can help them do so:

Pruning and aligning programs within theaters. Companies must examine their existing programs in each theater, reducing or eliminating those that do not address an important social or environmental problem in keeping with the firm’s business purpose and values.

Developing metrics to gauge performance. Just as the goals of programs vary from theater to theater, so do the definitions of success.

Coordinating programs across theaters. This does not mean that all initiatives necessarily address the same problem; it means that they are mutually reinforcing and form a cogent whole.

Developing an interdisciplinary CSR strategy. The range of purposes underlying initiatives in different theaters and the variation in how those initiatives are managed pose major barriers for many firms. Strategy development can be top-down or bottom-up, but ongoing communication is key.

These practices have helped companies including PNC Bank, IKEA, and Ambuja Cements bring discipline and coherence to their CSR portfolios.

Most of these programs aren’t strategic—and that’s OK.

Idea in Brief

The problem.

Many companies’ CSR initiatives are disparate and uncoordinated, run by a variety of managers without the active engagement of the CEO. Such firms cannot maximize their positive impact on the social and environmental systems in which they operate.

The Solution

Firms must develop coherent CSR strategies, with activities typically divided among three theaters of practice. Theater one focuses on philanthropy, theater two on improving operational effectiveness, and theater three on transforming the business model to create shared value.

Companies must prune existing programs in each theater to align them with the firm’s purpose and values; develop ways of measuring initiatives’ success; coordinate programs across theaters; and create an interdisciplinary management team to drive CSR strategy.

Most companies have long practiced some form of corporate social and environmental responsibility with the broad goal, simply, of contributing to the well-being of the communities and society they affect and on which they depend. But there is increasing pressure to dress up CSR as a business discipline and demand that every initiative deliver business results. That is asking too much of CSR and distracts from what must be its main goal: to align a company’s social and environmental activities with its business purpose and values. If in doing so CSR activities mitigate risks, enhance reputation, and contribute to business results, that is all to the good. But for many CSR programs, those outcomes should be a spillover, not their reason for being. This article explains why firms must refocus their CSR activities on this fundamental goal and provides a systematic process for bringing coherence and discipline to CSR strategies.

• VR V. Kasturi Rangan is a Baker Foundation Professor at Harvard Business School and a cofounder and cochair of the HBS Social Enterprise Initiative.
• Lisa Chase is a research associate at Harvard Business School and a freelance consultant.
• SK Sohel Karim is a cofounder and the managing director of Socient Associates, a social enterprise consulting firm.

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Environmental Responsibility

• Living reference work entry
• First Online: 17 May 2023
• Cite this living reference work entry

• Benedict Sheehy 7  

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Corporate environmentalism ; Corporate social responsibility ; Corporate sustainability ; Environmental law ; Environmental standards ; Sustainability.

Environmental responsibility is the idea that business organizations have an obligation to consider their impact on the natural environment. This obligation may be found in either the laws of the relevant jurisdiction(s) where they operate or in a broader moral obligation as an actor in society. The impact may be as a result of business consumables, production processes, or final outputs. Thus, businesses may have an environmental responsibility with respect to decisions about inputs, including sourcing, process choices, which may involve more or lesser impacts and discharges into the natural environment, and the environmental impacts of the specific goods or services they are supplying.

Environmental responsibilities are found in various hard and soft law instruments. Legal environmental responsibilities can be litigated...

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Sheehy, B. (2019a). CSR and environmental law: Concepts, intersections, and limitations. In The Oxford handbook of corporate social responsibility: Psychological and organizational perspectives (pp. 260–282). Oxford UK: Oxford University Press.

Sheehy, B. (2019b). TNC code of conduct or CSR? A regulatory systems perspective. In M. M. Rahim (Ed.), Global code of conduct on transnational corporations: Challenges and opportunities . Cham, Switzerland: Springer.

Sheehy, B., & Farneti, F. (2021). Corporate social responsibility, sustainability, sustainable development and corporate sustainability: What is the difference, and does it matter?. Sustainability, 13(11), 5965.

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London Metropolitan University, Guildhall Faculty of Business and Law London Metropolitan University, London, UK

Samuel Idowu

Cologne Business School, Ingolstadt, Germany

René Schmidpeter

College of Business, Loyola University New Orleans, New Orleans, LA, USA

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International Training Centre of the IL, International Labor Organization, Turin, Italy

Liangrong Zu

Department of Economics, Society and Politics, University of Urbino Carlo Bo, Urbino, Italy

Mara Del Baldo

Instituto Politécnico da Guarda, Guarda, Portugal

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Sheehy, B. (2023). Environmental Responsibility. In: Idowu, S., Schmidpeter, R., Capaldi, N., Zu, L., Del Baldo, M., Abreu, R. (eds) Encyclopedia of Sustainable Management. Springer, Cham. https://doi.org/10.1007/978-3-030-02006-4_396-1

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News from the Columbia Climate School

The Role of Individual Responsibility in the Transition to Environmental Sustainability

Steven Cohen

We New Yorkers live in a city that is on a gradual transition toward environmental sustainability, but we are a long way from the place we need to end up. A circular economy where there is no waste and where all material outputs become inputs is well beyond our technological and organizational capacity today. But that does not mean we shouldn’t think about how to get from here to there. Much of the work in building environmental sustainability requires the development of systems that enable us to live our lives as we wish while damaging the planet as little as possible. Large-scale institutions are needed to manage sewage treatment and drinking water, to develop renewable energy and build a modern energy grid. Government policy is needed to ensure the conservation of forests, oceans, and biodiversity. Pandemic avoidance requires global, national and local systems of public health. Climate change mitigation and adaptation also require collective action. What then can individuals do?

As individuals, we make choices about our own activities and inevitably, they involve choices about resource consumption. I see little value in criticizing people who fly on airplanes to travel to global climate conferences. (I assume you do remember airplanes and conferences, don’t you?) But I see great value in considering the importance of your attendance at the conference and asking if the trip is an indulgence or if you will have an important opportunity to learn and teach. This year has taught us how to attend events virtually. There is little question that live presence at an event enables a type of communication that can’t be achieved virtually. Many times, you will judge that the financial and environmental cost of the trip is far outweighed by the benefits. Those are the times you should travel. My argument here is that it is the thought process, the analysis of environmental costs and benefits, that is at the heart of an individual’s responsibility for environmental sustainability. Individuals are responsible for thinking about their impact on the environment and, when possible, minimize the damage they do to the planet.

Everyone needs to turn on the lights at night, start the shower in the morning, turn on the air conditioning and possibly drive somewhere on Mother’s Day. I would never argue that you should give up these forms of consumption. Instead, I believe we should all pay attention to the resources we use and the impact it has. We are responsible for that thought process and the related analysis of how we, as individuals, might accomplish the same ends with less environmentally damaging means.

Some say that the fixation on individual responsibility is a distraction from the more important task of compelling government and major institutions to implement systemic change. This perspective was forcefully argued in 2019 in The Guardian by Professor Anders Levermann of the Potsdam Institute for Climate Impact Research. According to Professor Levermann:

“Personal sacrifice alone cannot be the solution to tackling the climate crisis. There’s no other area in which the individual is held so responsible for what’s going wrong. And it’s true: people drive too much, eat too much meat, and fly too often. But reaching zero emissions requires very fundamental changes. Individual sacrifice alone will not bring us to zero. It can be achieved only by real structural change; by a new industrial revolution.   Looking for solutions to the climate crisis in individual responsibilities and actions risks obstructing this. It suggests that all we have to do is pull ourselves together over the next 30 years and save energy, walk, skip holidays abroad, and simply ‘do without.’ But these demands for individual action paralyse people, thereby preventing the large-scale change we so urgently need.”

Perhaps, but I do not see it that way. I consider individual responsibility and the thought process and value shift that stimulates individual action as the foundation of the social learning process required for effective collective action. In other words, individual change and collective system-level change are interconnected. The fact is that on a planet of nearly 8 billion people, it is too late for many of us to get back to the land and live as one with nature. There’s too many of us and not enough nature. There is an absolute limit to our ability as individuals to reduce our impact on the planet. Therefore, system-level change is absolutely needed. But system change requires individuals to understand the need for change along with a well-understood definition of the problem. The cognitive dissonance of identifying a problem but never acting on it is difficult to live with. If you see a poor child on the street begging for food, you can provide that child with food and money while continuing to support public policy that addresses the child poverty issue at the systems level. In fact, the emotional impact of that child’s face may well provide the drive that leads you to fight harder for the policy that would prevent that child from needing to beg. We learn by example, and vivid experiences and cases can lead to transformative systemic change.

While I consider individual and collective responsibility connected, without collective systems and infrastructure supporting environmental sustainability, there are distinct limits to what individual action can achieve. That is why I see no value in shaming individuals for consuming fossil fuels, eating meat, or buying a child a Mylar birthday balloon. I believe an attitude of moral superiority is particularly destructive in any effort to build the political support needed for systemic change.

As my mentor, the late Professor Lester Milbrath, often argued, the only way to save the planet is through social learning that would enable us to “learn our way to a sustainable society.” He made this argument in his pathbreaking work: Envisioning a Sustainable Society: Learning Our Way Out . In Milbrath’s view, the key was to understand environmental perceptions and values and to build on those values and perceptions to change both individual behavior and the institutions their politics generated. To Milbrath, the human effort to dominate nature had worked too well, and a new approach was needed. As he observed in Envisioning a Sustainable Society :

“Learning how to reason together about values is crucial to saving our species. As a society we have to learn better how to learn, I call it social learning; it is the dynamic for change that could lead us to a new kind of society that will not destroy itself from its own excess.”

My view is that one method to pursue social learning is learning by doing — in other words by encouraging the individual behaviors we might each take to reduce our environmental impact. Those behaviors remind us to think about the planet’s wellbeing along with our own. They reinforce and remind us and as they become habit, they impact our values and our shared understanding of how the world works.

There is, therefore, no tradeoff between individual and collective responsibility for protecting the environment unless we insist on creating one. Additionally, in a world of extreme levels of income inequality, wealthy people who have given up eating meat have the resources to consume alternative sources of nourishment. They do not occupy the moral high ground criticizing an impoverished parent proudly serving meat to their hungry child. In our complex world, we should mistrust simple answers and instead work hard to understand the varied cultures, values and perceptions that can contribute to the transition to an environmentally sustainable global economy. The path to environmental sustainability is long and winding and will require decades of listening and learning from each other.

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Steve, I appreciate your perspective on individual responsibility. I am developing a similar position and submitted an “OpEd” piece to Times about a month ago but alas it didn’t get published. I would like to share and develop the conversation with you so please reach out.

What are the responsibilities of individuals, governments and the international community in helping people have access to water?

While this highly educated society continues the GDP rat race and decimating all other patterns that create balance in the world we live in, here’s a little story of obvious stupidity for fun and profit. In 1975 my wife and I after several years of college chose to listen to scientists’ warnings about continued expansionism economically. We simplified our lives and did without things like electricity, fancy new vehicles and useless bling. We did without as a plausible direction for a template of living lightly and securing a viable future for more than just humans. We endured countless slurs ( tree huggers, eco-terrorists, hippies,) and were subjected to verbal and realistic abuse . Now at 72 and 68 we are wondering where the hell were the rest of you? Read the book “Small is Beautiful ” to see the wrongheaded direction your politicians and some clergy and certainly all greedy vulture capitalist have led the general public. I have no patience for obvious stupidity .Yeah, we were WOKE long before most people and feel no compulsion to be apologetic as all of you are to blame if you help continue the narrative of GDP unlimited growth and the population explosion. nats remark

“perhaps, but i do not see it that way” sorry but that kinda just means your guile is weak and you’re extremely credulous and succeptable to propeganda, dunno what to tell ya bud but this perspective is a total nothingburger. Of Course we must needs rely on some great measure of personal choice here, but if my choices are: Waste, Waste, Out of my Budget well i dont REALLY have a choice then Do I? which means that for the majority of americans there is no ethical choice list they can follow to fix the problem, only by compelling legislation can those choices be made available to them.

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Article contents

Corporate social responsibility.

• Abagail McWilliams Abagail McWilliams College of Business Administration, University of Illinois at Chicago
• https://doi.org/10.1093/acrefore/9780190224851.013.12
• Published online: 28 February 2020

Corporate social responsibility (CSR) is a legitimate responsibility to society, based on the principle that corporations should share some of the benefit that accrues from the control of vast resources. CSR goes beyond the legal, ethical, and financial obligations that create profits.

In the research literature, corporate social responsibility is defined in a variety of ways, depending on the aspect of CSR being examined. An inclusive definition is that social responsibility requires the firm to take into account the interests of all stakeholders, where stakeholders are defined as everyone who affects or is affected by the firm’s decisions and actions. A firm-focused definition holds that social responsibility includes actions that further a social goal, beyond what is required by ethics, law, and profitability. A political economy–oriented definition posits that firms have a responsibility to correct market failures such as negative externalities and government failures such as limits to jurisdiction that result in worker rights violations.

When implemented, altruistic CSR implies that firms provide a social good unrelated to the firms’ business that does not benefit the bottom line. Strategic CSR implies that firms are simultaneously profitable and socially responsible. To achieve this, CSR must be a core value of the firm and must be integrated into processes and products. When employed strategically, CSR can be an element of a differentiation strategy, leading to premium prices, enhanced brand and firm reputation, and supportive community relations. Corporate environmental responsibility often takes the form of overcompliance with regulation, improving the environment more than is required. A primary benefit of this is to stave off further regulation.

To capture the benefits of being socially responsible, the firm must make stakeholders aware of its record. This has led to triple bottom line reporting—that is, reporting about firm performance in terms of profits, people, and the planet. Social enterprises go a step further and make social responsibility the primary goal of the organization.

• corporate environmental responsibility (CER)
• corporate social performance (CSP)
• greenwashing
• overcompliance
• political corporate social responsibility
• psychological benefits
• stakeholders
• strategic CSR
• sustainability
• triple bottom line

Historical Perspective

Corporate social responsibility (CSR) can be thought of as legitimate responsibility to society that goes beyond the legal, ethical, and financial obligations that create profits, based on the principle that corporations should share some of the benefit that accrues from the control of vast resources. Or, more plainly, in market economies corporations can amass great wealth because society protects their right to do so, therefore the corporations owe something back to all of society, not just those engaged in market exchange with the corporations. The world’s resources should benefit the poorest in addition to the wealthiest, and corporations can be the conduit through which resources are befittingly distributed.

When resources are not equitably distributed, the disadvantaged look first to the government for help and support. But when the government hasn’t the resources, the will, or either, it cannot provide adequately for those in need and may engineer public policy to require businesses to be responsible.

The idea that corporations should act responsibly dates back to the inception of industrialization. With industrialization, the poor were often driven off the land and into cities to look for employment. The available employment, however, did not pay a living wage for an individual, let alone a family. This led to crushing poverty, ill health, and short lives for the working poor. Some industries employed young children, and low pay and inhumane working conditions were common (Marx & Engels, 1967 ). In general, governments didn’t have the will to require firms to act responsibly toward exploited groups. However, in 1833 , the English Parliament passed Lord Althorp’s Factory Act, which effectively regulated child labor in the textile industry in England. Responsible behavior was forced upon rich industrialists, but more importantly the act established the right of government to regulate industry for a clear social purpose (Marvel, 1977 ).

A hundred years after the passage of the first effective industrial regulation, the plight of the disadvantaged was not much improved. The Great Depression highlighted the resource disparities inherent in industrialized economies and triggered attention to the lack of social responsibility displayed by wealthy corporations. But World War II intervened, and the focus turned away from social needs and toward supplying the military. After the war ended and throughout the 1950s, economies turned to modernization and, in much of the world, replacement of lost industrial capacity. It was a time of great prosperity in industrial nations, but, as before, the benefits of prosperity were not equally distributed. The politically weak, including women and minorities, didn’t garner much of the benefits.

In the 1960s there was intense focus on social problems, including disparity of opportunity as well as disparity of resources. It was clear that disadvantaged groups did not have equal access to resources, many of which were controlled by corporations for the benefit of their shareholders. As women and minorities gained political power, calls for corporations to be socially responsible became more direct and visible.

Definitions

There are myriad definitions of corporate social responsibility, a few of which follow. In a managerial context, McWilliams and Siegel ( 2001 , p. 117) define corporate social responsibility as “actions that appear to further some social good, beyond the interests of the firm and that which is required by law.” From an economic perspective, Lundgren ( 2011 , p. 70) defines corporate social responsibility as “actions that, to some degree, imply corporate beyond-compliance behavior in the social and/or the environmental arena,” and Bénabou and Tirole ( 2010 , p. 2) define corporate social responsibility as “sacrificing profits in the social interest.” From a political economy viewpoint, Heal ( 2005 , p. 387) defines corporate social responsibility as “a programme of actions to reduce externalized costs or to avoid distributional conflicts.” The examples go on, with Dahlsrud examining 37 of them and concluding that “Although they apply different phrases, the definitions are predominantly congruent, making the lack of one universally accepted definition less problematic than it might seem at first glance ( 2008 , p. 6).” In a discussion of why there is no definitive definition of corporate social responsibility, McWilliams, Rupp, Siegel, Stahl, and Waldman ( 2019 , p. 3) speculate that “Targeted definitions allow researchers to focus on an area of study such as the environment or stakeholders, or on processes such as operations or strategy, while broad definitions allow interdisciplinary discourse on the motivations and ramifications of CSR.”

Beyond defining what corporate social responsibility is, it is helpful to clarify related terms that are sometimes confused with corporate social responsibility.

Compliance, Ethics, and the Triple Bottom Line

The terms compliance, ethics, and corporate social responsibility are often used interchangeably, but mistakenly so. Carroll’s pyramid of responsibilities is a good guide for separating the concepts. According to Carroll, compliance is a legal requirement, while ethics is the requirement to do no harm, and corporate social responsibility is the expectation for corporations to go beyond compliance and ethics and do good for society, creating social value (Carroll, 1991 ).

But being socially responsible and being irresponsible are not mirror images of each other. That is, being socially responsible is not just the absence of irresponsibility, and neither is social irresponsibility simply the absence of being responsible. Failing to meet any of the three explicit requirements of fiscal responsibility, laws, and ethics is irresponsible management. But meeting all three of these responsibilities does not rise to being socially responsible. Between irresponsible and socially responsible is the state of meeting fiscal, legal, and ethical responsibilities while not going the extra mile to create social good. This can be called socially neutral.

Corporate social responsibility is sometimes referred to as balancing the triple bottom line: profits, people, and the planet. The triple bottom line incorporates the idea of economic, social, and environmental concerns for which a corporation may have responsibility. A corporation that measures its performance against a triple bottom line explicitly promotes a broader responsibility than that of profit maximization and uses triple bottom line performance to convey to internal and external stakeholders that the corporation is being socially responsible in its decisions and operations.

Theoretical Perspectives

Conventional exclusionary view.

Nobel Prize–winning economist Milton Friedman argued that the responsibility of business is to maximize profits for the benefit of the owners (shareholders), within ethical and legal boundaries. Responsibility for social programs, he argued, rightfully adheres to elected officials (Friedman, 1970 ).

Arrow ( 1973 ) challenged Friedman’s broad conclusion that corporations have no responsibilities beyond profit maximization on two counts. Count one is that production often generates negative externalities (such as air and water pollution) that are not appropriately priced in the market. Count two is that there is asymmetric information between producers and consumers. Producers have more knowledge about the true quality (and therefore true value) of products than do the consumers who purchase them. Arrow concludes these two market imperfections create a social responsibility for corporations because, while externalities are sometimes regulated by government, asymmetric information is not, and both can be addressed more efficiently by corporations than by governments.

Heal ( 2005 ) offers an updated perspective of corporate social responsibility that builds on Arrow, adding the risk of protests, such as Occupy Wall Street, to Arrow’s challenge of Friedman. Heal proposes that corporate social responsibility programs (such as corporate environmentalism) can reduce externalities and also ward off conflicts and demands for distributive justice, such as Black Lives Matter (Schulz, 2017 ). Arrow and Heal’s arguments also provide a basis for stakeholder theory.

Inclusive View

Stakeholder theory challenges the assumption that shareholders have the only valid claim on the resources controlled by corporations. Freeman and Reed ( 1983 ) argue that any group that affects or is affected by the behavior of the corporation is a stakeholder whose interests should be considered in corporate decision-making. As corporations increasingly acknowledged responsibilities beyond profit maximization, stakeholder management became a means of enhancing firms’ reputations and improving community relations, and stakeholder theory became a dominant logic in corporate social responsibility. Incorporating stakeholder theory into strategic management has resulted in stakeholder analysis being directed at helping managers identify stakeholders and prioritize claims on corporate resources (Chandler, 2017 ).

Carroll ( 1991 ) repudiates Friedman’s conclusion that corporations have no social responsibility. He proposes a normative model of corporations as organizations with multiple responsibilities: economic/fiscal, legal, ethical, and philanthropic. The economic responsibility is necessary for survival, legal responsibility is required for legitimacy, ethical responsibility is required to do no harm, and philanthropic responsibilities are expected of a good corporate citizen. Carroll depicts the responsibilities as a pyramid, with profitability as the base, followed by legal, then ethical and finally philanthropic as the pinnacle. Carroll’s characterization of corporate responsibility is that it includes all four categories, including the philanthropic contributions to the community to promote social good. However, philanthropy differs in being expected, but not required.

Economic View

To explain the link between corporate social responsibility and profitability, McWilliams and Siegel ( 2001 ) take a micro-economic–based theory of the firm perspective. From this perspective, they assume that corporate managers seek to maximize profits and ask the question: How can managers determine the optimal amount of investment to make in corporate social responsibility, that is, how can they determine the amount of investment in corporate social responsibility that is consistent with profit maximization? They propose that corporate social responsibility can be a component of a differentiation strategy. Consumers demonstrate a demand for socially responsible products (e.g., LED lights, free trade coffee, hybrid vehicles) and production processes (e.g., animal-free testing, green production, organic farming), and firms respond by adding the demanded socially responsible characteristics, thereby creating a differentiated product. The added costs of differentiating the product lead to premium prices. McWilliams and Siegel ( 2001 ) therefore conclude that, because the investment in corporate social responsibility supports the firm’s differentiation strategy, it should be treated the same as any strategic investment. To maximize profits, the corporation should invest up to the point where the additional cost of corporate social responsibility is equal to the additional revenue generated by corporate social responsibility.

Lundgren ( 2011 ) provides a formal, mathematical model of corporate social responsibility at the firm level based on micro-economic theory. He proposes that the costs of socially responsible programs can be offset by the increased revenues from consumers who value corporate social responsibility and the increased market value generated by investors who value corporate social responsibility. He explicitly models goodwill capital, an intangible asset, as a primary benefit of corporate social responsibility, tying corporate social responsibility explicitly to firm value and potential profitability.

Corporate social responsibility can also be conceptualized as a form of reputation insurance that protects the firm’s reputation when adverse events occur (Minor & Morgan, 2011 ). Adverse events, such as the 2010 Deepwater Horizon oil spill, are especially costly because they include both direct cost—such as fines, legal costs, and compensation to injured parties—and the indirect costs associated with loss of corporate reputation (Mejri & DeWolf, 2013 ). Loss of reputation can affect stock price, financing terms, and future revenue far into the future. When an adverse event occurs, external stakeholders will make judgments about what went wrong. They may decide that the adverse event was the result of poor management and downgrade the reputation of the firm or they may decide that the event was just bad luck and not recalibrate the reputation of the firm. Being known for corporate social responsibility can sway external judgments in favor of management and the firm, protecting the firm’s reputation and significantly lowering the indirect costs of such an event.

Political View

Bagnoli and Watts ( 2003 ) characterize corporate social responsibility as the private provision (by the corporation) of a public good (such as pollution abatement). Building on this, Scherer and Palazzo ( 2011 ) propose that globalization of business has resulted in political, rather than normative or economic, corporate social responsibility. They point out that laws and regulations are enforced within national boundaries, while social problems know no boundaries and negative externalities (such as air pollution) cross boundaries. The void in global governance may be (perhaps by necessity) addressed by businesses, especially multinational corporations. According to Scherer and Palazzo ( 2011 ), political corporate social responsibility suggests that corporations will contribute to global regulation (such as sustainability or workplace safety) and provide public goods (such as human rights protections and community wellness programs).

Bénabou and Tirole ( 2010 ) characterize corporate social responsibility as a response to government failure. They discuss three ways in which governments fail: capture by special interest groups, limits to jurisdiction, and poor information and inefficiency.

In addressing the problem of limited jurisdiction, Christmann ( 2004 ) suggested that multinationals will embrace a global strategy so that they can transfer best practices of social responsibility across boundaries, effectively creating global standards. Multinational corporations that enforce the same standards everywhere they operate may be merely complying with regulation in their home country but being socially responsible in countries with lower standards. Implementing the same standards globally allows multinational corporations to be more efficient by taking advantage of scale economies and also benefiting from reputation insurance.

McWilliams and Siegel ( 2011 ) reject Baron’s view that motivation determines what is socially responsible behavior and, in contrast, argue that social responsibility that is motivated by profitability can reconcile Friedman’s view of the profit maximization responsibility of the firm with that of social responsibility. That is, by being socially responsible, firms can attend to the bottom line (profits) while also creating social good. This is known as strategic corporate social responsibility, a term introduced by Burke and Logsdon ( 1996 ). To the extent that corporations are meeting expectations of stakeholders, strategic corporate social responsibility disputes Friedman’s view that social responsibility adheres to public officials. According to the Organisation for Economic Co-operation and Development, “Strategic behaviour is the general term for actions taken by firms which are intended to influence the market in which they compete. Strategic behavior includes actions to influence rivals to act cooperatively so as to raise joint profits, as well as non-cooperative actions to raise the firm’s profits at the expense of rivals” (OECD, 2007 , p. 751).

McWilliams and Siegel ( 2001 ) concluded that firms can respond to demands for corporate social responsibility by incorporating social responsibility into a differentiation strategy. The firm differentiates its products/services to include CSR attributes, as well as incorporating CSR into firm processes. Differentiation should allow the firm to charge premium prices to cover additional costs of providing the socially responsible attributes.

However, when asymmetric information allows firms that do not engage in corporate social responsibility to position their products as similar to those that do embody corporate social responsibility, the socially responsible firm may face a competitive disadvantage. The socially responsible firm invests in corporate social responsibility but cannot charge more than the firms that do not. In this situation, the socially responsible firms may be forced to lobby their government for legally enforceable standards that apply to all firms in the industry (Heslin & Ochoa, 2008 ). Conversely, some firms will lobby for standards that cost their competitors more to meet than they cost the lobbying firm. The lobbying firm can create a competitive advantage by masking competitive behavior as social responsibility (McWilliams, Van Fleet, & Cory, 2002 ).

An important distinction of strategic corporate social responsibility is that it is embedded in the corporation’s operations, processes, and core competencies (Aguinis & Glavas, 2013 ), regardless of whether it is implicit as was more conventional in European companies or explicit as in U.S. companies (Matten & Moon, 2008 ). Embedding corporate social responsibility allows for synergistic effects, such as when a steel company uses its core competency in plant design and construction to build plants that are more efficient and use less energy (i.e., are environmentally responsible). Linking the corporation’s social responsibility to its core competencies can produce maximum social benefit. Being explicit and transparent about its corporate social responsibility also enables and enhances positive effects on firm reputation (Servaes & Tamayo, 2013 ).

Corporate social responsibility can be a long-term strategic asset that enhances reputation and brand image. As such, it can lead to customer loyalty and repeat sales and, in some industries, premium prices. Originally thought to only support a differentiation strategy, we now see corporate social responsibility prominently reported by low-cost-leader companies in business-to-business and commodity industries (Nucor, 2018 ). This indicates that while corporate social responsibility can support premium pricing, it also can result in lower costs, such as lower financing costs, lower legal costs, or lower turnover costs, as well as a higher-quality, better-motivated workforce (Sprinkle & Maines, 2010 ). Therefore, strategic corporate social responsibility can support a low-cost-leader strategy when embedded in the core competencies that create low-cost advantage.

However, corporate social responsibility activities will create benefits for the corporation only if they are effectively and honestly communicated to internal and external stakeholders (Lee, Oh, & Kim, 2013 ). When the corporation appears to be claiming to do more than it actually does, employees and consumers quickly become jaded and remain skeptical of future corporate social responsibility claims. Therefore, corporations must be forthright about their social responsibility so as to not generate or escalate skepticism.

Environmental

Environmental responsibility is one of the fastest growing areas of corporate social responsibility worldwide. Because compliance with environmental standards is a legal responsibility, being socially responsible means overcompliance. Corporate environmentalism is sometimes referred to as corporate environmental responsibility.

In the United States, the Environmental Protection Agency (EPA) was created by executive order in 1970 and made responsible for enforcing environmental laws. Early regulation was command and control: the EPA set standards and mandated how corporations complied. Over time, more attention was paid to gathering and disseminating information, and corporations moved to design solutions that met standards in more efficient/cost-effective ways, providing a springboard for corporate environmentalism.

Maxwell, Lyon, and Hackett ( 2000 ) couched corporate environmentalism as strategic self-regulation to preempt political action. They find that the threat of increased regulation is sufficient to prompt corporations to overcomply with existing environmental regulation. Because political action is costly for the firm and for the activists, it makes sense for firms to overcomply to fend off political action, benefiting both the corporation and the environment.

Voluntary environmental reporting such as the Global Reporting Initiative of 1997 encourages corporations to overcomply with environmental regulations and to actively engage in corporate environmentalism (Sheehy, 2019 ) to enhance firm reputation and brand. A reputation for environmentalism can result in many benefits, including attracting environmentally conscious consumers and investors (Lyon & Maxwell, 2008 ), the aforementioned preemption of regulation, and lower legal and financing costs. This last is a result of the lower probability that the firm will incur legal costs as a result of violating environmental standards, such as those tied to oil spills and poisonous gas leaks, since the internal target exceeds the legal regulation (Sheehy, 2019 ).

Environmental laws and regulations differ around the globe, requiring firms to be aware of local regulations but also providing them with opportunities to search for favorable (presumably less stringent) standards. However, Dowell, Hart, and Yeung ( 2000 ) found that firms that enforce the most stringent regulations worldwide are most successful. Additionally, Nidumolu, Prahalad, and Rangaswami ( 2009 ) found that corporations that innovate ahead of increasing standards have time to experiment and test new solutions and that corporations that enforce a single standard worldwide can take advantage of scale economies.

Conversely, corporate environmentalism branding can have serious negative consequences if not designed and implemented properly. Firms that fail to deliver on their environmental claims can be charged with “greenwashing,” that is, overstating their environmentalism. A particularly insidious form of “greenwashing” takes place when a corporation masks its true environmental performance by engaging in selective disclosure of benign impacts rather than full disclosure (Marquis, Toffel, & Zhou, 2016 ). In an empirical study of “greenwashing,” Walker and Wan ( 2012 ) demonstrated that claiming to be green (i.e., environmentally responsible) without actual green behavior negatively affects a corporation’s financial performance.

Sustainability

Corporate environmentalism increasingly embraces sustainability, which is a more comprehensive program of environmental stewardship. Sustainability requires attention to global and intergenerational effects of corporate operations.

According to the 1987 UN Brundtland report (World Commission on Environment and Development, 1987 ), “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” is sustainable. From this, one can extrapolate a definition of corporate environmental sustainability that incorporates a universal dimension—not just a clean environment where the corporation operates now, but a global and intergenerational one. That is, socially responsible corporations must consider the effects of current operations on the environment both now and in the future. They must also balance current and future economic and equity responsibilities.

Sustainability implies more than environmental impact management: all resources must be managed to ensure sustainability. Corporations must be mindful of how they manage farm land, forests, ocean fish stocks, animal and plant breeding, and valuable minerals, as well as how they can support sustainable development in developing economies. Hart ( 2010 ) coined the phrase “sustainable global enterprise” to label multinational enterprises that deliver economic, social, and environmental benefits across all their global operations. An example of a sustainable global enterprise is a multinational food company that “has implemented living wage standards for all of its farm workers in every country in which it harvests fruit, and which has introduced state-of-the-art environmental practices throughout its supply chain” (Aguilera, Rupp, Williams, & Ganapathi, 2007 , p. 838).

Nidumolu et al. ( 2009 ) studied sustainability initiatives of multinational corporations and found that embracing sustainability led to innovation that creates better products and new businesses, increases brand loyalty, and reduces costs—contributing to both the top line (revenue) and bottom line (profitability) of the corporation. Consumers perceive that products that are produced sustainably or have sustainable characteristics are better products and, therefore, worth more. New revenue streams can come from businesses created by recycling and reusing products that have exhausted their original purpose. Additional revenue is generated when consumers develop brand loyalty through their experience with sustainable products. Cost reductions come from using fewer inputs in all parts of the value chain (from raw materials, through production and distribution to final sales). Additionally, firms that anticipate increasing environmental regulation can innovate ahead of their competitors and reap first-mover advantages. All of these increase the bottom line as well as being socially responsible.

Social Enterprise

The simplest type of corporate social responsibility is philanthropy, where a corporation donates part of its profits to programs that address social problems. The inner workings of the firm, its organization, its mission, its strategy, etc., are unaffected by the goals of the programs that receive financial support.

The social goods produced by the financially supported programs can be peripheral to the corporation. Some corporations that engage in strategic corporate social responsibility explicitly align social goods produced with other strategic components of the firm. For example, firms may have “buy one–give one” program where customers buy a branded product (e.g., a pair of shoes) and the firm gives one (pair of shoes) to a child in need. The social mission is less peripheral to profit-making.

Social enterprises go one step further than that and make their social mission part of the firm’s core. Defourny and Nyssens ( 2008 , p. 202) define social enterprises as “not-for-profit private organizations providing goods or services directly related to their explicit aim to benefit the community.”

One type of social enterprise is a benefit corporation, which is a legal business entity that is required to have a social mission at its core (Hiller, 2013 ). In the United States, the need for a new legal form of for-profit that explicitly recognizes a social mission led to laws in some states that allow for benefit corporations. These corporations must declare themselves as such in their articles of incorporation and are required to submit to review by an independent third party to confirm that they are fulfilling their social mission. It should be noted that the independent review of the impact of benefit corporations is holistic—that is, it comprises all of the effects of the corporation on society, not merely its effect on selected areas such as profitability and environmentalism (B Lab Company, 2017 ). This is in contrast to standard corporations, which can legally engage in “greenwashing,” promoting corporate social responsibility activities while simultaneously obfuscating socially irresponsible actions (Marquis et al., 2016 ; Walker & Wan, 2012 ).

Another type of social enterprise is social entrepreneurship, which is an “innovative, social value creating activity that can occur within or across the nonprofit, business, or government sectors” (Austin, Stevenson, & Wei-Skillern, 2012 , p. 371). While the social mission is always core to social entrepreneurship, it is not always obviously so, because it may be either explicit or implicit. In social entrepreneurship for the disadvantaged the social mission is explicit, that is, benefits (such as jobs) are provided to the disadvantaged. In social entrepreneurship by the disadvantaged, there is an implicit social mission of improving the (disadvantaged) entrepreneur’s circumstances, irrespective of whether there is an explicit social mission, such as providing jobs for others who are disadvantaged (Renko & Freeman, 2019 ).

The implicit social mission of entrepreneurship by the disadvantaged provides a conduit for social good created by corporate social responsibility programs, making support of entrepreneurship an attractive option for firms that engage with disadvantaged populations. For example, multinational corporations in Africa are adding to their corporate social responsibility portfolios the support of entrepreneurship in disadvantaged economies through education, training, and skills development initiatives (DeBerry-Spence, Torres, & Hinson, 2019 ).

The Business Case

The business case for corporate social responsibility refers to the belief that there is a causal link between being socially responsible and achieving profitability. It is argued that firms that do good (for society) will do well (be more profitable and have higher market value). In the context of corporate social responsibility, “doing well” can be the result of many advantages, such as premium pricing, repeat sales, higher employee productivity, lower cost of capital, or lower legal costs, all of which may translate into higher profitability and firm value in either the short run or the long run. Determining if firms “do good” is more problematic but is generally referred to as corporate social performance, which Wood defines as “a business organization’s configuration of principles of social responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm’s societal relationships” ( 1991 , p. 693). Two widely used measures of corporate social performance are the Fortune Corporate Reputation Index and the Kinder, Lydenberg and Domini (KLD) index of reputation (Fombrun, Gardberg, & Sever, 2000 ).

In the 1990s the business case for corporate social responsibility (doing well by doing good) became a dominant theme in academic research. Countless empirical studies attempted to show a causal link between corporate social responsibility and corporate financial performance. These studies were hampered by difficulties in defining and measuring corporate social performance, often leading to inconsistent results (Margolis & Walsh, 2003 ) and sometimes suffering from lack of methodological rigor (McWilliams & Siegel, 2000 ). Barnett ( 2007 ) concludes that there is no universal evidence of doing well by doing good, because doing well is contingent upon the corporation, the timing, and the particular socially responsible investment. He suggests that academic research should focus on figuring out when, where, and what type of social responsibility will allow corporations to do well by doing good. Carroll and Shabana ( 2010 , p. 101) support Barnett’s findings and conclude that “the benefits of CSR are not homogeneous, and effective CSR initiatives are not generic.”

Although meta-analyses have been conducted (e.g., Friede, Busch, & Bassen, 2015 ) in an attempt to make sense of the inconsistent results of earlier studies, the inclusion of criticized empirical studies and the bias toward publishing only studies that have statistically significant results makes the results of meta-analyses problematic. Given the inherent difficulties of testing the business case for corporate social responsibility, including, “the inaccessibility, both apparent and actual, of good data” (Wood, 2010 , p. 75) and the lack of consensus on appropriate methodology, academic research has subsequently moved beyond trying to empirically verify a causal link between corporate social responsibility and profitability to accepting that corporations have social responsibilities and examining how such responsibilities can be met to the advantage of the corporation and society, ultimately arriving at the concept of strategic corporate social responsibility.

Non-Pecuniary Benefits

Although it’s difficult to separate out and quantify the effects of corporate social responsibility on firm performance, the effects on individuals can be measured directly by survey methodology. Therefore, we have better evidence of the non-pecuniary effects of corporate social responsibility than we have of corporate social performance. Corporate social responsibility is by definition about the corporation, but it is individuals who make decisions, carry out corporate social responsibility programs, and are affected by corporate actions. Stakeholders such as managers, employees, consumers, investors, and community members can shape and be shaped by corporate social responsibility activity and consequently often receive psychological benefits from their association with socially responsible corporations. The psychological benefits generated by these associations with the corporation are a component of the social value created by corporations that engage in corporate social responsibility.

Internal Stakeholders

Internal stakeholders include managers, employees, and board members, all of whom may affect or be affected by the firm’s social responsibility programs, processes, and reputation. Corporate social responsibility can be initiated by managers for personal reasons, including personal values, religious beliefs, commitment to social causes, professional image building, or a need to feel good about themselves (Hemingway & Maclagan, 2004 ). Manager-initiated corporate social responsibility can be either strategic or philanthropic, depending on the constraints of corporate governance, firm strategic orientation, and the availability of discretionary funds. Managers receive a psychological benefit when they can support their personal values, religious beliefs, or identity. It is common for large corporations to have social responsibility officers who shape the culture and reputation of the firm, maintain corporate social responsibility programs, and communicate to internal and external stakeholders. These executives have more opportunity to reap social and psychological benefits from corporate social responsibility.

In general, people desire to have meaning in their lives and often look for meaning in their work. Aguinis and Glavas ( 2019 ) explored how corporate social responsibility can help employees find meaning in their work. The closer the fit between the corporation’s identity and the employee’s identity, the more meaningful the work will seem. For example, a person who identifies as a caregiver will find meaningfulness in their work in a hospital. Corporate social responsibility programs provide additional information and experience that can help workers find more meaning in their work, that is, they may perceive that their work can serve a greater purpose.

Corporate social responsibility can affect employees’ perceptions and attitudes about their work and workplace. Gavin and Maynard ( 1975 ) tested the relationship between the employee’s perception of the corporation’s concern for the environment and the employee’s general satisfaction with their employment. They found that employees tended to report more satisfaction the greater the perceived corporate concern for the environment. Perhaps more telling, they found that the younger workers in the 1970s were most concerned about corporate environmentalism, which perhaps foretold increasing environmental awareness and activism.

Chong ( 2009 ) examined how participation in corporate social responsibility programs affect employee’s understanding and commitment to the corporation’s identity, where organization identity can be defined as “the set of meanings by which a company allows itself to be known and through which it allows people to describe, remember and relate to it” (Wheeler, Richey, Tokkman, & Sablynski, 2006 , p. 98). Chong found that participation in corporate social responsibility programs feeds off of and reinforces corporate identity, resulting in the employee experiencing higher motivation, satisfaction, and commitment to the corporation.

Mozes, Josman, and Yaniv ( 2011 ) studied the relationship between corporate social responsibility activity and both organizational identification (a driver of loyalty) and motivation to work. Workers in their study were classified as either active participants or non-active participants in volunteerism programs. Active participants demonstrated higher levels of organizational identification and motivation to work. To be most effective for external beneficiaries and most meaningful for the employees, corporate social responsibility must be embedded in the routines and processes of the organization (Aguinis & Glavas, 2013 ).

Meister ( 2012 ) found that 53% of workers surveyed by the nonprofit Net Impact reported that having a job where they can make a difference to society is important to their happiness. Further, 72% of students getting ready to enter the workforce also felt this way. According to Meister, to recruit and retain young top talent, corporations not only have to engage in corporate social responsibility, they must communicate their engagement through social media.

External Stakeholders

External stakeholders may be affected by the firm’s social responsibility programs, processes, or products, but as outsiders they do not affect these. External stakeholders include consumers, suppliers, investors, and community.

Consumers derive psychological value from purchasing socially responsible products. According to Green and Peloza ( 2011 ) there are three categories of benefit: emotional, social, and functional. Buying products from socially responsible companies allows consumers to feel good about themselves. This emotional response can be associated with companies that make charitable contributions to social causes. Consumers feels good about themselves (emotional benefit) for buying from a company that is altruistic. Alternatively, buying products from a socially responsible company can define the consumer as a good person to others and elevate their position in the community (social benefit). This social response can be associated with companies that champion a social cause such as environmental sustainability. Functional benefit comes from purchasing products that function better because of CSR attributes, such as fuel-efficient cars. The three types of benefit can work together and amplify each other. “For example, a hybrid vehicle can provide functional value (lower operating costs), emotional value (joy in saving or environmental stewardship), and social value (meeting relevant norms)” (Green & Peloza, 2011 , p. 52). For consumers to derive value from corporate social responsibility, they must be aware of it. Corporations traditionally used company reports, web pages, and advertising to make consumers aware of their corporate social responsibility but are now feeling pressure to communicate more broadly and often over social media.

Socially responsible investing provides psychological value to investors. According to Beal, Goyen, and Philips ( 2005 ), this value can take the form of “fun of participation” similar to what gamblers experience, or it can take the form of happiness similar to that generated by pleasurable activities. Psychological value augments the financial returns to socially responsible investments and helps explain the decision to invest in screened funds. According to Dam and Scholtens ( 2015 , p. 104), “consumers receive a warm-glow” when they invest responsibly.

Benefits to Investors

Investing in socially responsible firms, commonly referred to as socially responsible investing (SRI), is a way for investors to join their values and their desire for monetary gain. This has become easier for individual and institutional investors with the growth of mutual funds focused on socially responsible investing. At the start of 2018 there was over $30 trillion invested in socially responsible stock, with nearly half this amount held in Europe (Global Sustainable Investment Alliance, 2019 ). In the United States there are mutual funds that filter for social responsibility, allowing individual and institutional investors to encourage socially responsible corporations while withholding support from firms that engage in industries (such as gambling) or activities (such as genetic modification) that are not viewed as socially responsible. Because perceptions of what is socially responsible and what is not can vary, mutual fund managers develop screens to appeal to different viewpoints and choose stock of firms that meet the criteria of the screen but also meet the criteria for firm/stock performance. Several empirical studies comparing the returns to socially responsible funds and unrestricted funds have found that there is no systematic difference (e.g., Bauer, Koedijk, & Otten, 2005 ; Hamilton, Jo, & Statman, 1993 ; Sauer, 1997 ). In a meta-analysis of earlier studies, Revelli and Viviani ( 2015 , p. 158) found that “the consideration of corporate social responsibility in stock market portfolios is neither a weakness nor a strength compared with conventional investments.” On average the returns to SRI funds are the same as the returns to unrestricted funds, making SRI funds attractive to both individual and institutional investors because they combine competitive financial returns with psychological benefits (feeling good about oneself for being socially responsible).

Other avenues for socially responsible investing include individual stocks (with the opportunity to engage directly with the corporation) and community development financial institutions which engage in socially responsible investing by providing loans to small businesses in low-income, at-risk communities who otherwise would not have access to financing (Schueth, 2003 ).

Corporate social responsibility is a well-researched and thoroughly discussed topic. While there is general consensus among researchers and commentators that corporations have responsibilities to society that go beyond profit maximization, what those responsibilities are and how they should be met are still open questions. Stakeholder theory, Carroll’s pyramid of corporate responsibilities, micro-economic theory of the firm, altruistic and strategic corporate social responsibility, corporate self-regulation, political corporate social responsibility, corporate environmentalism, and sustainability all offer insights into the responsibilities of corporations and how those responsibilities may be met.

When viewed from the perspective of the firm, the evidence of corporate social responsibility has generally been about the link between corporate social performance and financial performance or firm value, with mixed results. But financial effects are not the only effects of corporate social responsibility. Individuals experience psychological effects that are also a part of the social good created by socially responsible corporations. Researchers have reported significant effects, including:

Workers find meaning in their work and experience higher motivation, satisfactionm and commitment to the firm.

Consumers feel good about themselves.

Investors get a warm glow from supporting socially responsible firms.

We have abundant information about what is and isn’t corporate social responsibility, how corporate social responsibility benefits corporations and individuals, and how investors can encourage socially responsible corporations and discourage irresponsible corporations. However, we know less about how corporations can address social problems such as human rights, justice, poverty, and environmental sustainability and next to nothing about the record of corporate social responsibility in addressing such social problems.

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The role of social responsibility in protecting the environment – a case of the petrochemical companies in Alexandria Governorate

Review of Economics and Political Science

ISSN : 2631-3561

Article publication date: 14 October 2019

Issue publication date: 11 December 2023

The purpose of this paper is as follows: First, understanding the nature of the relationship between corporate adoption of the concept of societal responsibility [availability of environmental awareness, clear vision of the impact of societal responsibility on financial performance, managers informing employees of the latest developments in societal responsibility programs, managers' response to their corporate social responsibility (CSR) proposals] in the form of an annual report that supports the success of the company's objectives, the company's management encourages employees to participate collectively in societal responsibility programs and to protect the environment from pollution in the petrochemical industry. Second, understand the nature of the relationship between the dimensions of corporate social responsibility concept (cultural, social, economic, ethical and legal) and protect the environment from pollution in the petrochemical industry. Third, the research also seeks to show the role of societal responsibility and its application in the petrochemical companies to protect the environment from pollution in The Governorate of Alexandria – Egypt, and come out with results and recommendations that could help protect the environment from the forms of environmental pollution resulting from the production processes of this industry.

Design/methodology/approach

The researcher has relied on each of the following approaches: Case study methodology is a research strategy aimed at solving a problem or facing a particular situation. It is based on preliminary hypotheses through full analysis of all data collected and recorded. Which depends on the study of a limited number of cases or vocabulary in-depth comprehensive study through the study of all or a large number of variables overlapping and interrelated and influential on the problem under consideration. Thus, it provides a deep and rich understanding of what is going on around the research and the processes that are related to it, and not only the external or apparent description of the situation or phenomenon; it cares about the total description and looks at the particles, in relation to the whole. Quantitative approach: by giving a numerical description indicating the size or size of the phenomenon or the degree of association with the phenomenon. Other phenomena. Accordingly, the role of the petrochemical companies in Alexandria Governorate, and the social responsibility programs carried out within the governorate in terms of importance, growth and requirements, and the most important characteristics and constraints and components and methods of work and developments have been described. Thus, the researcher can analyze the relationship between CSR and environmental protection from pollution in Alexandria Governorate.

There is paucity in the studies that dealt with the relationship between CSR and environmental protection against pollution in public organizations. There is agreement among the sample on the importance and feasibility of adopting the concept of social responsibility and placing it at the top of the top management concerns, especially in the field of petrochemical companies. With the need to take concrete implementation measures to support social responsibility programs aimed at serving the community among all stakeholders. The effective implementation of the mechanisms for the implementation of meaningful social responsibility programs requires fundamental changes in management practices, existing organizational structures and the quality of personnel working in the relevant departments, in general, and the social responsibility group, in particular, which may be difficult for political and economic reasons.

Research limitations/implications

Time: The study period was set from 2015 to 2017. Place: The study focuses on the petrochemical companies operating in Alexandria. Humanity: The study focuses on the employees of the petrochemical companies operating in Alexandria Governorate.

Practical implications

The adoption of social responsibility positively affects the protection of the environment from pollution, and this effect shows that the adoption of the concept of corporate social responsibility is influenced by the following factors: increasing the participation of workers with healthy environmental contributions to the productive process; increasing the companies' economic and social activities toward protecting the environment from pollution; increasing the capacity of companies to pay greater costs to preserve the environment; increasing the awareness of green consumers with the products it offers Companies; development of continuous internal work environment companies; and clearly defined strategy followed in social responsibility programs.

Social implications

The social responsibility of the public organizations derives their strength through, first, the keenness of these organizations to analyze the variables of the ethical dimension of social responsibility and their availability, which will lead the organizations to provide their services with the highest quality and sincerity. That this analysis (ethics of individuals) as training members of the social responsibility team to solve problems using brainstorming and provide employees with official data related to improving work (ethics of leadership), such as the identification of business objectives through the participation of managers with subordinates, and the punishment of workers who exhibit immoral behaviors (ethics of productive processes) as a decision-making process to ethical standards regardless of the costs involved. When there is an immoral behavior and managers are responsible for implementing the changes needed to reach the targeted outcomes), second, promote partnerships with other relevant sectors for community service.

Originality/value

According to the results of the previous studies and the applied study results, the researcher would like to submit a mechanism to the directors and heads of the boards of directors of the Egyptian petrochemical companies under study.

• Corporate social responsibility
• Environment protection
• Petrochemical industry

El-Mallah, R.K.E.-D. , Aref, A.A.e.H. and Sherif, S. (2023), "The role of social responsibility in protecting the environment – a case of the petrochemical companies in Alexandria Governorate", Review of Economics and Political Science , Vol. 8 No. 6, pp. 487-519. https://doi.org/10.1108/REPS-04-2019-0052

Emerald Publishing Limited

Copyright © 2019, Rasha Kamal El-Deen El-Mallah, Alia Abd el Hamid Aref and Sherifa Sherif.

Published in Review of Economics and Political Science . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

The evaluation of industrial companies is no longer measured by the extent to which the company achieves financial profits or a larger quantity of goods and services. A number of modern concepts have emerged in which organizations have become a legal entity that is treated as a citizen with direct social effects on the surrounding society, especially on the environmental field in which it operates.

The most important of these concepts is the concept of corporate social responsibility (CSR) towards the society in which it is located, the safety and health of its products, and contribution to a range of social activities from combating poverty and pollution control, and the pivotal role it plays in sustainable development processes in its continuous commitment to providing services and goods that achieve a better standard of living and contribute to the development of the environment to benefit them at the community level, and attention to societal responsibility towards the external environment and internal of those organizations.

Nowadays, the importance of applying the concept of societal responsibility in Egyptian public sector has become a new matter of interest for researchers and practicing administrators. How can societal responsibility be an integral part of a company's strategy to interact with society?; Which are supposed to undertake the tasks of making and implementing public policies in general and implementing of environmental policies in particular?; Where the planning of these companies did not include consideration of the environmental and community aspects and increase development, especially in the poor and marginalized areas and increase the green areas and reduce the rates of desertification and reduce the emission of carbon dioxide which is caused of the activities of factories, and increasing afforestation rates and reduce unemployment rates, awareness of fresh water purification and wastewater treatment, treatment of harmful waste and finding safe places for disposal; maintain non-renewable resources, reduce the rates of corruption and bribery and increase levels of transparency, accountability and accountability.

Just as there is a large group of organizations with a high commitment to the environment and the surrounding society, there are, on the other hand, organizations that are not committed and have no initiative in seeking to protect the environment from pollution as a result of the environmental effects of polluting the environment. The environment provides the food consumed by the community and provides it with the air and clean water it needs, and the raw materials that these organizations receive from the environment are brought back to them in the form of waste of various shapes and species, which leads to the rapid work to protect the human and the environment from pollution.

The petrochemical industry is one of the most important strategic industries in Egypt. However, these companies are a source of environmental pollution, which was monitored according to the reports of the Ministry of Environment in some industrial areas of Alexandria, Egypt.

The industrial companies in general and the petrochemical companies in particular are not charitable companies, but their first concern is to achieve a financial return commensurate with the size of their investment. Therefore, these industrial companies adopt their societal responsibilities in general and the environment in particular, which entails additional costs that may not result from other competitors, these companies in solving their environmental problems are working to add competitive advantage to others, as well as supporting the reputation of their products in the internal and external markets. It also helps to accomplish its tasks with different parties with its environmental commitment and obtaining various certificates in this field, the environmental public ecology of the government supports the trend to protect the environment from pollution.

Undoubtedly, urging organizations to adopt societal responsibility leads them to fulfill their commitments to the environment and to support their environmental management within their capabilities and responsibilities as this commitment is an integral part of social commitment.

2. Literature review

The petrochemical industry is based upon the production of chemicals from petroleum and also deals with chemicals manufactured from the byproducts of petroleum refinery. At the preliminary stages of chemical plant development and design, the choice of chemical process route is the key design decision. In the past, economics were the most important criterion in choosing the chemical process route. Modified studies imply that the two of the important planning objectives for a petrochemical industry, environmental risk and the industrial safety involved in the development. So the environmental issues especially CSR and environmental protection from pollution has now become important considerations due to the potential harmful impacts produced by petrochemical industry.

1.1 Theoretical background of corporate social responsibility

Frynas and Yamahaki (2016 , pp. 265-270), summarized the theories used to account for the CSR phenomenon. In a nutshell, the stakeholder theory ( Freeman, 1984 ) was most frequently used in CSR studies, followed by institutional theory ( Scott, 2001 ) and legitimacy theory ( Suchman, 1995 , p. 578). Moreover, the authors classified the theories with respect to CSR practices into the external- and internal-driver groups. The stakeholder theory, institutional theory, legitimacy theory and resource independence theory ( Pfeffer and Salancik, 1978 ) belong to the external-driver group, while the internal-driver group includes the Edith Penrose’s resource-based view ( Lockett and Thompson, 2004 , p. 199; Rugman and Verbeke, 2002 , p. 777) and ( Jensen and Meckling, 1976 , p. 325) agency theory.

According to the resource-based view, firms exploit internal resources (e.g. specialized skills) to create competitive advantages. Under the agency theory, management engages in CSR to communicate to stakeholders about firms’ transparency ( Frynas and Yamahaki, 2016 , p. 260). However, there are replications between different external and internal-driver theories; therefore, the collective use of theories, rather than individually, would offer a more comprehensive view of the CSR phenomenon ( Frynas and Yamahaki, 2016 , p. 281; Reverte, 2009 , p. 358).

As this research aims to determine the role of societal responsibility and its application in the petrochemical companies to protect the environment from pollution in The Governorate of Alexandria – Egypt.

Companies should work to balance their participation in CSR programs, as very limited participation can have an impact on the company's reputation, and the very broad participation of the company may incur financial losses. It must focus on “social responsibility programs” Ideal for businesses. Regardless of the size of the company is small, medium or large, it must describe its strategy of social responsibility with clearly defined objectives, key performance indicators are measurable and disclosure of frameworks in place.

1.2 Corporate social responsibility in Egypt

Although research studies have become more attentive to examining CSR in developing countries, studies from African countries are still limited ( Kolk and Lenfant, 2010 , p. 247). With the exception of South Africa, Nigeria and Lebanon ( Jamali et al. , 2017 , p. 18).

According to the World Bank projections, Egypt’s economic growth was expected to improve significantly reaching 4 per cent in 2017. This indicates that the Egyptian economy experienced a rapid recovery and maintained its stability in spite of unfavorable political and social conditions. In this respect, the Arab Spring had major consequences for firm operations but did not result in a breakdown of the economy ( Letmathe and El-Bassiouny, 2019 , p. 6).

Marquis and Raynard (2015 , pp. 297-299) highlighted corporate institutional strategies that are mainly applied in weak and challenging institutional environments. The authors classified them into three main strategies, namely, relational, infrastructure-building and socio-cultural bridging. Organizations undertaking relational strategies manage their relationships with both internal and external stakeholder groups and the government to increase the stability and certainty of their resources and to improve their competitive place in the market. Infrastructure building strategies, on the other hand, focus on building absent or limited regulatory and physical infrastructure to facilitate business activities. Organizations adopting sociocultural- bridging strategies focus on improving their socio-cultural and demographic environment, including poverty and political and social unrest, to enhance economic development and trade. All of these strategies aim at effectively managing challenging institutional environments to enhance the firms’ performance and to ensure their long-term survival.

The findings of Letmathe and El-Bassiouny (2019 , p. 12) that some companies added a “CSR” section to their 2012 annual reports. However, there is no substantial change in the disclosure of CSR-related content in the 2012 annual reports compared to Years ago. The political context in which these findings are assessed needs to be taken into account. The national and the institutional environments in which the firm operates affect the promotion of the CSR practice. Egyptian companies suffered financial deficiencies (at least during the revolution year) that would normally redirect their efforts to “survival” economic factors, such as productivity and profitability, rather than to “luxurious” CSR initiatives. However, in spite of these restrictions, sample companies continued their involvement in CSR practices.

There is no doubt that the Egyptian companies contribute annually to a large amount of donations in various charitable aspects. It has contributed to the construction of mosques, the establishment of schools and hospitals, and the support of orphanages, the handicapped and many aspects of righteousness.

However, these donations are spontaneous and ill-considered, which neglects national priorities and focuses on specific areas. As most companies are located within Cairo and Alexandria, this makes them serve certain specific groups without the other. These donations also go to individuals, which makes them go to spend my life and do not go to establish large institutions and facilities, or long-term projects.

Therefore, a central mechanism must be developed that sets out a plan to redistribute corporate contributions according to national and social priorities to achieve real sustainable development.

1.3 The literature review of the relationship between societal responsibility and environmental protection

To develop sustainable business through the implementation of corporate social responsibility, the following are essential: informing and sensitizing all stakeholders, opening channels of communication and transparency between companies and stakeholders, cooperation, strengthening the legal and institutional framework, and voluntary commitment to look at the environment in the long run by companies ( Stojanović et al. , 2016 , p. 11).

Protecting the environment is essential for companies to take care of environmental issues through the management of societal responsibility programs that promote environmental protection, as well as the need for investors and investors to invest in green, and to formulate their investment strategies to take into consideration the environmental aspects ( Andrei et al. , 2014 , p. 5).

The leaders of companies are responsible for the impact of their companies on society and the natural environment beyond the legal commitment and responsibility of individuals and more experienced leaders can gain new perspectives on how to grow in their approach to sustainability and how to develop innovative business models, A pioneer in the principle of senior management and entrepreneurs ( Bhagwat, 2011 , p. 8).

The Polish public sector institutions are taking their first steps in developing internal environmental responsibility because there are no internal mechanisms for environmental responsibility and that there is a significant difference between the environmental responsibility of the organizations in Poland and their counterparts abroad ( Hawrysz and Foltys, 2015 , p. 5).

The laws of environmental protection in India in 1986, in addition to a variety of the environmental policy laws of 2006 are not complied with by companies, which led to the condemnation of industries that damaged the environment and resulted in environmental imbalances. The CSR agenda is only formal as they announce societal responsibility programs to prove that they Officials Socially and human society as a whole to save face, but the fact is that they do this to hide the real activities that they do and do not care about the issues and environmental damage that result ( Tiwari, 2010 , p. 4).

Companies should adopt the concept of social responsibility for their impact on the environment, consumers, employees, communities, stakeholders and all members of society. Accordingly, these companies are working to promote the public interest by encouraging the growth and development of society, and eliminating practices harmful to society.

It must also set limits and controls for growth and progress to be the basis for the well-being, prosperity and happiness of the community to live in a clean, pollution-free environment, and not to waste their time in exploiting natural resources and neglecting the right of future generations to benefit as much as they enjoyed.

1.4 The literature review on societal responsibility

The results of some studies show a positive association between financial performance and CSR ( Platonova et al. , 2018 , p. 461), corporate social responsibility (CSR) practices and models are mainly Western-driven ( Jammulamadaka, 2018 , p. 12).

And the enabling environment is a product of a strong institutional environment that is commonly found in developed markets. On the other hand, lack of competition among firms, inefficient enforcement of regulations and marginal roles of NGOs and employee unions are likely to cause institutional voids that create challenging CSR environments ( Amaeshi et al. , 2016 , p. 137).

The findings of Amaeshi et al. (2016 , p. 149) suggest that in weak institutional environments, companies adopt “CSR adaptive mechanisms” that act as an “institutional buffer,” which immunes companies from their surrounding non-enabling institutional environment and enable them to successfully implement CSR practices.

The impact of the dimensions (responsibility for handling customer complaints, responsibility for providing security to customers when using the service, responsibility for providing adequate and adequate information about the service) on customer satisfaction is greater than the impact of dimensions (responsibility for maintaining customer health, Showing products in suitable places for customers), which illustrates the need to prioritize corporate social responsibility concerns ( Abu-Halaqan, 2014 , p. 133).

an impact on the ethical responsibility of the organization to empower its employees;

the commitment of organizations to assume ethical responsibility for the environment in which they operate; and

there are some fears of departmental directors of delegation of powers and responsibilities.

Ethical codes and moral training do not affect the performance of local government employees, and that the most important element of behavior promotion is ethical leadership, the most important factor in encouraging employees to be ethical. The study noted that the lack of ethical leadership will lead to fraud waste, corruption, ill-treatment and the collapse of the organization ( Elmore, 2011 , p. 163).

There is an inverse relationship between financial performance and CSR over the years of study, which may be due to the recent application of CSR practices by Egyptian companies. Consequently, the positive impact of these practices has not yet been reflected in financial performance in a stable general climate for most periods studying ( Mustafa, 2013 , p. 120).

The study of Al-Tira (2012) concluded that societal responsibility should be integrated into the message, vision and philosophy of Libyan companies and their culture, as well as the need for Libyan industrial companies to fully disclose information related to the social activities carried out during the year and the social costs resulting from them.

One of the pillars of the companies' start up is the complete conviction of shareholders, owners, board of directors and executive management of the importance and importance of social contribution and community service based on a sense of social responsibility and the principle of social solidarity, and any start of companies that are simple and simple are donations and donations to committees and charities accredited and participate in events and events social issues.

Therefore, there is an institutional shift in the establishment of specialized departments in the management and supervision of areas of social responsibility in an institutional and professional manner, which is administratively linked to the executive heads of companies and the allocation of independent financial budgets.

1.5 The literature review on environmental protection

In India TNCs are more effective in paying taxes than local companies, and that foreign affiliates with knowledge of CSR implementation are paying taxes at a higher rate than those of foreign companies less familiar with the concept. This set of findings suggests that TNCs operating in India believe that paying taxes in developing countries has to do with the implementation of CSR ( Muller and Kolk, 2012 , p. 22).

The activity of the economic institutions in Algeria has negative effects on the environment. A large group of these institutions do not pay much attention to integrating the environmental dimension into their activities.

The economic institutions in Algeria are trying to show their interest in the environment by participating in scientific conferences related to the preservation of the environment and protection from pollution. Environmental awareness has been established in these institutions by attempting to contribute to reducing the environmental pollution.

Environmental taxes and fees are an instrument by which the state intervenes to guide the environmental behavior of economic institutions, but they remain very weak, due to their low rates, poor productivity, and inefficient methods of collection.

Pressures of parties with an active interest in the environmental field, these institutions to absorb this pressure through some environmental initiatives, which are few in view of the environmental damage caused by the economic institution.

There are significant effects of different components of environmental management at the level of current output.

The most important ingredient for the compost industry is the environmental component.

The full implementation of ISO 14001 certification in the fertilizer industry in Bangladesh contributes to sustainable development.

Environmental law in Egypt is based on the importance of linking sustainable development and the environment with all its elements and contents. The Environmental Law has been concerned with the studies of environmental impact assessment, which is the new line of defense for environmental protection in the future. No project or facility will be allowed to start its activities without the EIA studies for this project. The law was also called for the establishment of an environmental protection fund to support the project, studies of environmental protection, the establishment of environmental monitoring networks covering the Egyptian territory and recording all pollution and declare emergency at risk.

3. Conceptual framework

Before analyzing the relationship between corporate social responsibility and protect the environment from pollution, we first should define them separately.

3.1 Corporate social responsibility

3.1.1 define corporate social responsibilty according to professional organizations..

According to the increasing importance of societal responsibility as concept, many professional organizations many professional organizations have tried to provide a specific definition of CSR. These definitions are:

Definition of the Organization of International Standards (ISO): Societal responsibility can be defined as “the responsibility of the organization for the effects of its decisions and activities on society and the environment, represented by transparency and ethical behavior consistent with sustainable development and the welfare of society, as well as taking the expectations of shareholders”. As (ISO 26000): Societal responsibility is defined as “translating the decisions and activities of the organization towards society and the environment by adopting transparent and ethical behavior that contributes to sustainable development (including health and welfare in society) takes into account the expectations of stakeholders, And conforms to international standards, so that this concept is incorporated into the organization as a whole, and is practiced and applied at different administrative levels”. (The Boston College Center for Corporate Citizenship – BCCCC) defines Corporate social responsibility as “the business strategy that defines the value model on which the company is based in carrying out its tasks and choices by executives, managers, and employees for engagement in the community”.

3.1.2 Definition of societal responsibility according to academic studies.

Academic studies sought to define CSR as follows:

In terms of modern management, the origin of the societal responsibility concept goes back to the 1950s ( Carroll, 1999 , p. 70). As ( Carroll, 1999 , p. 70): CSR is “The business commitments of policy-making, decision-making and the pursuit of a set of desired behaviors in the light of the goals and values of society” ( Othman, 1999 , p. 9) defines the responsibility of the establishment for the negative environmental effects resulting from its activity in response to social pressure forces, which necessitate carrying out certain mandatory activities to satisfy the social requirements imposed by the prevailing laws, policies and social norms”.

the need for the Organization to examine its decisions and actions so as to take into account the interests of the relevant parties – the parties of workers, customers, the community and the environment – as well as the pursuit of profits.

Corporate social responsibility, as undertaken by a corporation or directed by a state, includes activities that internalize costs for externalities resulting directly or indirectly from corporate actions, or processes and actions to consider and address the impact of corporate actions on affected stakeholders, which are undertaken at least in part because of a recognized moral or ethical duty to society and stakeholders beyond the corporation’s owner/shareholders.

3.1.3 Setting the corporate social responsibility definition for this study.

The current study concludes that CSR is defined as a culture of commitment to the responsibility of companies towards society, so that the interests of all parties to the activity become part of their strategic plans, while providing support from senior management towards sustainable development, including Ensuring the development, prosperity and well-being of society as a whole, protecting and reducing pollution from the environment, developing programs for the training and development of corporate personnel, improving the quality of products and services provided and complying with the laws, regulations and policies of the state.

3.2 Environment protection

In recent decades, many environmental problems have increased as the result of human activities and unplanned management of the technological development those interference eco-systems.

Environmental protection is a social movement. The protection of environment has assumed even more importance in recent times with increased industrialization resulting not only in overdraw of natural resources but also pollution of air, water, flora and fauna. While development is essential to every economy, it is also essential that no irreparable damage be caused to the eco-system ( The Institute of Company Secretaries of India (ICSI), 2005 , p. 301).

[…] the change in the natural characteristics of the elements controlling the environment in which effect human beings live -air, water and soil- change that is detrimental to the improper use of these elements by adding substances that are alien to them. The contamination may be biologically, chemically, Waste and harmful waste or lack of hygiene ( Al-Maazawy, 2004 , p. 8).

Any change in the characteristics of the environment that directly or indirectly affects human health and influences the exercise of its natural life, or damage to natural factors, organisms or biological diversity.

And it also defined as “quantitative change” And qualitative in the environmental components leads to imbalance in nature” Christopher J. ( Barrow, 2000 , p. 25). Or “an undesirable change in the characteristics of the chemical, physical and biological component of environment” ( Wagner, 1994 , p. 20). And it can be “any quantitative or qualitative change in the components of the living or non-living environment that ecosystems cannot absorb without losing their equilibrium” (Dabis, 1997, p. 15).

[…] any change in environmental properties that leads directly or indirectly to undermining man's health, negatively impacting his ability to lead a normal life, or harming natural habitats, living organisms or biological diversity

[…] protecting and promoting the components of the environment and preventing or reducing their degradation or pollution, these components encompass air, seas, internal waters, including the river Nile, lakes and subterranean water, land, natural protectorates, and other natural resources.

Environmental protection can be defined as the prevention of unwanted changes to ecosystems and their constituent parts. This includes the protection of ecosystems and their constituent parts from changes associated with human activities; and the prevention of unwanted natural changes to ecosystems and their constituent parts. Environmental remediation is distinct from environmental protection as its primary objective is to restore an ecosystem or natural environment to a previous state; that is, like exploitation, it is associated with deliberately induced change, as opposed to the prevention of change ( Hamilton and Bastianoni, 2019 , p. 320). And it is policies and procedures aimed at conserving the natural resources, preserving the current state of natural environment and, where possible, reversing its degradation ( Zhang et al. , 2019 , p. 1027).

It is necessary to gain a good understanding of the socio-economic aspects of environmental protection to ensure that measures taken to protect the environment do not place undue burdens on enterprise and society ( Environmental Protection Agency, 2013 , p. 11).

3.3 Setting the environmental protection definition for this study

However, the vision of the current study is that environmental pollution can be defined as all that affects total elements of the living environment of plants, animals, humans and non-living organisms like air, soil and water, whether affects directly or indirectly. This means that any change in the natural qualities of the elements that control the environment in which man lives. Therefore, the concept of Environmental protection can define as preserve and improve the environment components, prevent their degradation or pollution and reduce pollution. These components include air, sea and inland waters including the Nile River, lakes, groundwater and land, natural reserves and other natural resources.

And it determinate the competent administrative agency concerned that protection of the Water Environment; Protection of Land Environment from Hazardous Materials and Waste; protection of Air Environment From Pollution by Harmful Substances and Pollution from Sewage and Garbage.

4. Hypotheses

To ensure a statistically significant relationship between CSR and environmental protection from pollution in Egypt, the following hypotheses were formulated to test the assumed relationship between the search variables:

CSR affects the protection of the environment from pollution.

Adopting the concept of societal responsibility positively affects the protection of the environment from pollution.

The strength of the dimensions of societal responsibility positively affects the protection of the environment from pollution.

5. Methodology

5.1 questionnaire.

The questionnaires were administered to employees of petrochemical companies operating in Alexandria Governorate were managed in seven companies ((EPC) Egyptian Petrochemical Company, (SIDPEC) Sidi Kerir Petrochemicals Company, (ETHYDCO) The Egyptian Ethylene And Derivatives Company, Egyptian Linear Alkyl Benzene (ELAB) (2019) Company, Egyptian Styrenics (EStyrenics) (2019) Company, Alexandria National Refining and Petrochemicals Company (ANRPC) (2019) , Alexandria Specialty Petroleum Products (ASPPC) (2019) Company during the period from October 2017 to December 2018. All locations were repeated on different days of the week to be able to cover all employees. The respondents were contacted on location through a direct and personal interview with the researcher. Before the implementation of the questionnaire, the researcher tested it through a previous sample, to verify whether the questions were clearly understood and analyze the overall degree of answers variability. Before starting the interview, the interviewer presented herself, described the purpose of the study and asked if the respondent knew about the role of their company's corporate responsibility in protecting the environment from pollution. If that was the case, that questionnaire continued until end. A sample of workers produced 134 usable questionnaires.

The degree of adoption of the concept of societal responsibility (CSR) at your company comes through: (included seven phrases).

The strength of CSR programs in your company depends on: (included five phrases).

The company protects the environment from pollution when: (included seven phrases).

Furthermore, in this section the respondents expressed the extent of their agreement using a five-point Likert scale (1 – strongly disagree; 2 – disagree; 3 – neither agree nor disagree; 4 – agree; 5 – strongly agree). Full details can be found in Appendix .

5.2 Description of the sample

The study population consisted of 1,340 managers. A cluster random sample of 134 managers was selected. Depending on the type of problem under study, the main objective of the research is to test a specific imposition of the correlation between two variables: CSR (independent variable) and environmental protection (dependent variable) (Reverse) or reverse (reverse). A review of the previous literature and its findings has led to the formulation of the research hypothesis (CSR affects the protection of the environment from pollution).

On this basis, a questionnaire was used to collect data from the sample items to test the validity or incorrect relationship between the variables in question. The significance of the relationship between the change in societal responsibility and environmental protection was determined during the period (s) in which the research was conducted. Based on this analysis, it is possible to determine whether the hypothesis being tested is acceptable, The Bilateral Test.

The simple linear regression model: ( Y = β■ + β 1 x 1  + ϵ) was used to test the hypothesis.

5.3 Analytical descriptive approach

Qualitative: by describing the phenomenon and clarifying its characteristics; and

Quantitative: by giving a numerical description indicating the size or size of the phenomenon or the degree of association with the phenomenon or other phenomena.

Accordingly, the role of the petrochemical companies in Alexandria Governorate, and the social responsibility programs carried out within the governorate in terms of importance, growth and requirements, and the most important characteristics and constraints and components and methods of work and developments have been described. Thus, the researcher can analyze the relationship between CSR and environmental protection from pollution in Alexandria Governorate.

Time: The study period was set from October 2015 until September 2018.

Place: The study focuses on the petrochemical companies operating in Alexandria Governorate.

Human resource: The study focuses on the employees of the petrochemical companies operating in Alexandria Governorate.

The relationship between variables ( Figure 1 ).

(EPC) Egyptian Petrochemical Company;

(SIDPEC) Sidi Kerir Petrochemicals Company;

(ETHYDCO) The Egyptian Ethylene and Derivatives Company;

(ELAB) Egyptian Linear Alkyl Benzene Company;

(EStyrenics) Egyptian Styrenics Company;

(ANRPC) Alexandria National Refining & Petrochemicals Company; and

(ASPPC) Alexandria Specialty Petroleum Products Company.

Legal framework of the applied study:

According to petrochemical companies legal Department, “Legally”, The Egyptian Petrochemical Company (a public business company) is a member of the Egyptian Petroleum Sector and affiliated to the Egyptian petrochemical holding company (ECHEM), it has been established at 20/9/1981, and started production at September 1987, and the Egyptian Petrochemical Company is the first petrochemical company to produce PVC originating in the Arab Republic of Egypt.

The following companies are listed in the commercial registration (8) for the year 1997 and its amendments, which were canceled and replaced by Law (72) of 2017:

The shareholders of Sidi Kerir Petrochemicals Company are [Egyptian petrochemicals holding company (ECHEM) (20 per cent), Egyptian Petrochemicals Co. (7 per cent), Ahli Capital Holding (7 per cent), National Investment Bank (7 per cent), Government Sector Employees Trust Fund (19 per cent), Private Sector Employees Trust Fund (12 per cent), Misr Insurance Co. (3 per cent), Naser Social Bank (2 per cent) and General Public Offering (23 per cent)].

The shareholders of The Egyptian Ethylene and Derivatives Company are [Egyptian petrochemicals holding company (ECHEM) (20 per cent), SIDPEC (20 per cent), GASCO (11 per cent), Al Ahly Capital Holding (21 per cent) National Investment Bank (14 per cent), Banque Misr (10 per cent), Naser Social Bank (4 per cent)].

The shareholders of Egyptian Linear Alkyl Benzene Company [National Investment Bank (34.15 per cent), Royal Co (0.22 per cent), Ministry of Finance (13.11 per cent), EGPC (10.50 per cent), Egas (21 per cent), Egyptian petrochemicals holding company (ECHEM) (21.01 per cent)].

The shareholders of Egyptian Styrenics Company ( National Investment Bank, Egyptian petrochemicals holding company (ECHEM), Ministry of finance, Petrojet, Enppi).

The shareholders of Alexandria National Refining and Petrochemicals Company [Bank of Alexandria (7.75 per cent), National Bank of Egypt (18.25 per cent), Alexandria Petroleum Company (72.99 per cent), Misr Insurance Company (0.54 per cent), Misr Life Insurance (0.47 per cent)].

The shareholders of Alexandria Specialty Petroleum Products Company [Misr Petroleum Company (12.60 per cent), Alexandria Petroleum Company (20 per cent), CO_OP Company (12.60 per cent), National Bank of Egypt (10.40 per cent), Bank Misr (10.40 per cent), Naser Social Bank (4.20 per cent), Commercial International Investment Company (5.20 per cent), Al Watany Bank of Egypt (5.20 per cent), Misr Insurance Company (5.58 per cent), Misr Life Insurance Company (4.82 per cent), Social Insurance Fund For The Government Sector (4.50 per cent), Social Insurance Fund For Public And Private Sector (4.50 per cent)].

In Egypt, petrochemical companies do not have a separate CSR department so there is no hierarchical structure entailed. They are not familiar with the term of CSR or aware of the global CSR initiatives, even though there is annual Company Report that is published on their website portal (Company Report).

The practical frame mechanisms applied by companies to enhance the idea of societal responsibility and environment protection :

5.4 Societal responsibility

The petrochemical companies are committed to promoting a safe, stable, supportive and productive work environment through the foundations of work and ethical, cooperative and sustainable behavior. These include the vision of petrochemical companies to promote human rights and social values through the integration of societal responsibility within their activities and that codes of conduct have a positive impact on society, rules of international law and standards of conduct. This is to increase the production capacity of high-quality and value added petrochemical products.

Pavement and lighting of the main road leading from and to the companies and surrounding areas, and the paving and development of railway glider.

Contribution and permanent contribution in the field of health and medical treatment and purchase of medical devices, and contribute mainly to convoys of medical treatment and all medical supplies in public hospitals and universities.

Contribution and permanent contribution to charitable societies in areas surrounding petrochemical companies, and provide their needs to upgrade the infrastructure of these areas, and the participation of residents of the region in various events, and donate to government schools.

Rationalize the electricity consumption of some residential areas surrounding the companies, to save energy as part of a lower bill […] Better life. (websites of the seven petrochemical companies).

5.5 Environmental protection

Petrochemical companies are oil companies engaged in the production, processing, operation, treatment, sale, purchase, import and export of final and intermediate petrochemicals, production and sale of electrical power, maintenance, water treatment and industrial drainage and doing everything related to this purpose or helping to complete it. And is committed to ensuring that all its activities are carried out in such a way that the health and safety of all its employees and others are of absolute priority in a moral and professional sense, in the belief that it is of great importance. To maintain ecological balance at the end, it is committed to:

5.5.1 Occupational safety and health activities.

continuous growth while preserving the climate conducive to attraction and retention of qualified persons in the areas of work of the company;

support and continuous development of staff skills to ensure that the leading role in the production and supply of petrochemical materials is maintained;

employees are the driving force must be involved and maintain their safety;

identification of work hazards and the development of adequate means of control to ensure the safety of workers and environmental protection and efficiency of production processes;

training and awareness of all employees in the world's largest oil and petrochemical companies and specialized scientific and research bodies;

excellence with the interests of the surrounding society in mind and its member’s safe without any damage;

preserving the environment is a national duty and a primary objective that the senior management seeks to achieve;

adopting HSE principles as core values;

compliance with all local laws and regulations and international standards;

adherence to ethical and legal behavior;

use the best environmental techniques and practices available to reduce emissions and waste, and to meet the expectations and demands of customers and satisfy them;

application of occupational safety and health management systems OHSAS 18001 and environmental management ISO 14001;

to comply with the ISO 50001 Energy Management System for the purpose of optimizing energy use and preserving natural resources; and

documenting, distributing and monitoring all system management documents and documents to the concerned departments and communicating information related to this subject to all the employees of the company, while providing environmental data and information to the official stakeholders. (websites of the seven petrochemical companies)

5.1.2 Energy management systems.

5.1.2.1 energy..

The Alexandria petrochemical companies have chosen to apply one of the energy handling methods to ensure the improvement of sustainable energy efficiency and continuous improvement of performance, the “energy management system”, to obtain the technical support needed to prepare and implement the requirements of the energy management system in these companies and to obtain the ISO 50001 certificate. November 2011 to be certified to comply with the international standard of energy management system 50001: 2011 to be one of the first Egyptian companies to obtain this certificate and the first among the oil and gas companies and petrochemicals in Egypt, which obtains that certificate, The support of senior management, the formation of the energy team from all disciplines, increased communication with employees and the dissemination of achievements and success stories to motivate employees to participate in the energy efficiency of the company are key factors for SEDEPC's success in implementing the energy management system (Websites of the seven petrochemical companies).

5.1.2.2 Rehabilitation program for petrochemical companies to implement the energy management system.

After participating in the training program organized by the UNIDO in the framework of the project to improve industrial energy efficiency in Egypt and the success of SEDEPC in the implementation of the energy management system resulting in the ISO 50001 certificate, and it expand the exchange of knowledge and expertise acquired in the field of energy management and transfer to other companies.

UNIDO has agreed with the Egyptian Petrochemical Holding Company (ECHEM) to cooperate in the initiation of the project for the rehabilitation of companies within the petrochemical sector to implement the energy management system by supporting the national experts of SEDEPC to transfer their knowledge and expertise to the petrochemical sector in Egypt. Training and technical support were provided by SEEDBEC to 30 trainees representing six of the following petrochemical companies: EStyrenics, ELAB and ECHEM. The results of this training and technical support included 22 trainees with the “National Expert in Energy Management System from UNIDO” (Websites of Sidi Kerir Petrochemicals Company and Egyptian Petrochemical Holding Company).

5.1.2.3 Quality.

Petrochemical companies apply the concept of quality to all operations. EPC has obtained the OHSAS 18001-2007 certificate, ISO 14001-2015 certificate and the ISO 9001-2015 quality system certification certificate (Egyptian Petrochemical Company website).

While SIDPEC has been certified to comply with the requirements of ISO 9001-2015, the ISO 50001-2011 certification certificate, the 6 Sigma Black Belt certificate, the ISO 26000 compliance letter to demonstrate compliance with the requirements of ISO 26000 In the field of sustainability and societal responsibility, by receiving the National Award for Excellence from the National Institute of Quality of the Ministry of Commerce and Industry within the National Program of Excellence Awards for 2013 (Sidi Kerir Petrochemicals Company website).

ETHYDCO, in the first half of year 2018, obtained the following International Certificates: ISO 9001:2015 Certificate (Quality Management System), ISO 14001:2015 Certificate (Environmental Management System), OHSAS 18001:2007 Certificate (Occupational Safety and Health Management System), and ISO 50001:2011 Certificate (Energy Management System).

Moreover, total quality management systems general department in ETHYDCO is making great efforts to qualify the company to obtain: ISO 17025:2017 (General requirements for the efficiency of testing and calibration laboratories), and ISO 26000:2010 (Societal Responsibility). (The Egyptian Ethylene and Derivatives Company website).

ELAB entered an agreement with Energy and Environmental Studies Center, affiliate to Tebeen Institute for Metal Studies as an accredited third party to perform environmental measurements twice per year inside work environment according to Egyptian Environmental Affairs Agency, Law No. 4 ( (1994) and law no.9/2009. The periodical measurement procedures are performed by the company through environmental monitoring vehicle owned by the Petroleum Committee in Alexandria Region (Egyptian Linear Alkyl Benzene Company website).

Societal responsibility investment combines ESTYRENICS’s financial goals with our obligation and dedication to factors that ensure the well-being of society such as environmental friendly practices, economic growth and justice in society.

Corporate societal responsibility is no longer defined by how much money ESTYRENICS contributes to charity, but by its overall involvement in activities that improve the quality of people’s lives (Egyptian Styrenics Company website).

ANRPC has been accredited by Compliance Certificate for the occupational health, safety and environmental protection with honors degree, the renewal of the OHSAS18001: 2007 certification and ISO14001: 2004 certification through SGS International Company. ANRPC is committed to ongoing training systems to the safety, occupational health and environmental protection team to obtain international certifications such as: NEBOH certificate, certificates of various OSHA, Foam Training School Certificate, Fire Marshal certificate, NASP-OHSAS certificate 18001: 2007, ISO14001: 2004 (Alexandria National Refining and Petrochemicals Company website).

Environmental advantages of ANRPC and ASPPC products: cold applications, environmentally clean and solvent free products, safely handled and applied no harmful disposals during or after applications, energy conservation (Alexandria Specialty Petroleum Products Company website).

6. Results and discussion

6.1 study population.

The study population consists of managers in petrochemical companies operating in Alexandria Governorate. Emphasis was placed on the Governorate of Alexandria because it is the second largest city in Egypt, and it includes seven of petrochemical companies, it is the governorate in which the researcher lives, and no other governorates were selected due to the high costs.

The Governorate of Alexandria has a number of industrial zones, which number to about nine industrial zones and thus is considered an important industrial city in the Egyptian economy. These areas are (New Borg El Arab, Nahda Industrial Zone, Mansheya Al Jadida Industrial, Nasiriyah Industrial Zone, The Agamy Small Industries Complex, the industrial ship factory area in August).

The petrochemical industry is one of the main pillars of Egypt's future economy, which is based on value added as a principle in the exploitation of natural resources. The oil sector is considered one of the sectors that has a clear vision and a specific work program for the implementation of new projects, development of existing projects, and continuous attention to the maintenance process to achieve the increase in production and the provision of direct jobs and raw materials to establish many industries that rely on petrochemical products as inputs For the productive process, and the most important projects and companies operating in the city of Alexandria:

The production of (polyvinyl chloride) (PVC) by the Egyptian Petroleum Company (EPC) is headquartered in the industrial renaissance Elnahda zone in Ameria district in Alexandria city since its establishment in 1981 with a production capacity of 80,000 tons/year using ethylene as raw material.

The production of (polyethylene) by Sidi Kerir Petrochemicals Company (SIDPEC) is headquartered in the industrial renaissance Elnahda zone in Ameria district in Alexandria city since its establishment in November 1997, a company listed on the Egyptian Stock Exchange since March 2005.

The production of (Road Emulsion, Compounded Waxes, Petroleum Jelly, Cutback and Industrial Emulsions) by Alexandria Specialty Petroleum Products Company (ASPPC) is headquartered in Wadi El-Kamar Road, Merghem, in Agami district in Alexandria city since its establishment in February 1998.

The production of (Reformate 560,000 ton/year its RONC 100, Hydrogen 33,000 t/year, Sweet LPG 12000 t/year) by (ANRPC) Alexandria National Refining and Petrochemicals Company is headquartered in Wadi El-Kamar Road, Merghem, in Agami district in Alexandria city since was established in 1999, and in September 2013, the Zero Liquid Discharge (ZLD) unit and the company's Naphtha Hydrogen Processing Unit were launched.

The production of ((LAB) Linear Alkyl Benzene, (HAB) Heavy Alkyl Benzene) by Egyptian Linear Alkyl Benzene Company (ELAB) is headquartered in Wadi El-Kamar Road, Merghem, in Agami district in Alexandria city since its establishment in November 2003.

(EStyrenics) Egyptian Styrenics Company was established in September 2005 and is headquartered in El Dekheila Port in Agami district, Alexandria city. It produces (polystyrene, styrene monomer) with a production capacity of 200 thousand tons/year from March 2009.

The production of (Linear Low and High Density Polyethylene, Polybutadiene) by the Egyptian Ethylene and Derivatives Company (ETHYDCO) is headquartered in the industrial renaissance Elnahda zone in Ameria district in Alexandria city since its establishment in January 2011.

Therefore the petrochemical industry is one of the most important strategic industries in Egypt. However, these companies are a source of environmental pollution, which has been monitored according to the reports of the Ministry of Environment in some industrial areas in Alexandria. The researcher seeks to show the role of societal responsibility and its application in the petrochemical companies to protect the environment from pollution in Alexandria.

6.2 Study sample

The study population consisted of 1,340 managers. A cluster random sample of 134 managers was selected. The sample size was determined using the equation ( Agresti and Finlay, 2002 , p. 148). This equation is as follows: n =   N   Z ∝ / 2 2   π   ( 1 - π ) β 2   N - 1 +   Z ∝ / 2 2   π   ( 1 - π )

N = size of the population;

n = sample size;

Z = Probability value for the confidence interval of Z table “normal distribution”where Z at 95 per cent confidence level = 1.96;

β = permissible error rate = 0.05 which is the maximum allowed statistically; and

π = the percentage of the sample of the society which is the maximum allowed statistically = 50 per cent ( Table I ).

6.3 The variables of the study

Table II shows the variables of the study in accordance with the recent studies and literature of the CSR criteria. They are the determinants of societal responsibility, the power of societal responsibility, the degree of awareness and commitment to societal responsibility as independent variables, and the societal responsibility and the protection of the environment from pollution as variables affiliate.

Despite the possibility of other elements to identify the criteria of societal responsibility adopted by industrial companies in general and petrochemical companies in Alexandria in particular, but the researcher was limited to the elements specified in the list of the survey as it includes the standards used in the previous studies that were reviewed in advance by the researcher and what prompted them to quote and guide them.

6.4 Sources of data acquisition

The applied study on data collection was based on primary sources through a survey list, which is the main measuring instrument and was designed to cover all the variables of the study.

6.5 Methods of data collection

The researcher relied on the use of the survey list in collecting the data needed to conduct the field study, in addition to conducting some personal interviews for the managers to verify the validity of the information contained in the questionnaires after collection and to obtain any other information that would be useful for the field of study. The researcher measured the variables of the study, which included (18) phrases for each of the variables that are performed in companies that adopt the concept of societal responsibility to protect the environment from pollution using the (Likert scale), which is one of the most widely used measurements Reviews for easy to understand and balance grades where individuals subject refers to test the extent of their approval of each of the statements that make up the proposed trend scale.

The responses were translated as follows:

adopting societal responsibility and expressed in (7) phrases;

the strength of societal responsibility and expressed in (5) phrases; and

protection of the environment from pollution and expressed in (6) phrases.

After the researcher formulated the paragraphs of the list in its initial form, the truth was verified through content validity.

The validity of the content was verified by arbitrating this form before it was distributed by the faculty members from the administrative and statistical departments to benefit from their knowledge and knowledge curve, which earned them an outstanding reputation in their specialties, which made the form more accurate and objective in the measurement. Arbitrators all the observations mentioned have been taken into consideration.

The reliability of the parameters used by the Cronbach alpha method has been verified. The Cronbach alpha method is based on the consistency of the individual performance from one paragraph to another, indicating the strength of the correlation between the scales of the scale and, in general, of the correct one as the degree of consistency and consistency increases.

The researcher also used the method of direct contact through personal interviews with the officials of the sectors and the main departments of the companies under study, and was handed over (120) form by hand to the surveyed groups, has been clarified and understood and explained the nature and objectives of the survey and was followed up again until it was completed Table III shows the number of distributed lists, the number of recovered and correct lists and the response rate.

It is clear from the previous table that the number of survey able inspection lists (100) at a response rate is 83 per cent of the total survey lists that have been distributed and this ratio is fairly high.

6.6 Methods of statistical analysis and hypothesis testing

To achieve the objectives of the study, the primary data collected through the survey tool using the computer was analyzed through the program of statistical packages for social sciences (SPSS), No. 23, to test the type and strength of the relationship between the variables and to verify the difference between the independent variables The researcher used the appropriate statistical methods to analyze the results of the survey. The analysis was done on three levels.

Verification of honesty; and

Cronbach’s alpha coefficient to confirm the degree of stability of the scale used to measure the variables of the study.

Using descriptive methods: The results of the study were calculated to determine the extent to which the sample variables supported the availability of the variables of the study and the standard deviation to identify the extent of variance in the responses of the sample items (the respondents), the percentages and the difference coefficients.

Using simple liner regression method: This method helps determine the relative importance of the independent variable in its effect on the dependent variable.

First, to test the validity and accuracy of the measurements used in measuring the variables of the study based on the Cronbach’s alpha coefficient, this method calculates the mean correlation coefficients for all variables. The results of the study showed that all measurements were reasonably reasonable for stability, ( Sekaran, 2003 , P. 245). The results of the study showed that all measurements were fairly reasonable. Table IV presents the results of these tests.

All alpha coefficients for stability are greater than 0.60 indicating the high internal consistency of the scale and thus the stability of the scale.

The highest stability coefficient for the dimensions of the list is (0.91) related to the variable of environmental protection from pollution, while noting that the minimum value of stability was (0.82) of the variable dimensions of societal responsibility. Generally, the transactions show the stability of the results that can result from the survey list applied, previous analysis standards are true and consistent and this means the validity of standards and their validity to collect data.

6.7 Descriptive analysis

For data, the researcher used the arithmetical averages, standard deviations and variance coefficients as shown in Table V .

The above table shows that the variable of societal responsibility was the most influential in companies operating in the petrochemical sector with an average score of (3.90) and a standard deviation of (0.228) and a difference coefficient of (5.85 per cent) which shows the low dispersion in the responses of the sample of the study sample, (0.306) with a difference coefficient of (10.37 per cent). Finally, the variable environmental protection from pollution is calculated with a mean (3.34) and a standard deviation (0.825) with a difference coefficient of (24.70 per cent).

6.8 Test assignments

The researcher examined the main hypotheses of the study and focused on testing the acceptance or rejection of the study hypotheses through the use of simple regression model.

The researcher examined the main hypothesis of “CSR affects the protection of the environment from pollution”. And focus on testing the acceptance or rejection of the study hypotheses through the use of simple regression model and derived from the main hypothesis sub-assumptions:

The first sub-hypothesis: “The adoption of societal responsibility positively affects the protection of the environment from pollution”.

The first sub-hypothesis validity test: Table VI shows the results of the simple regression analysis test for the effect of societal responsibility on protecting the environment from pollution.

At the beginning, we evaluated and impact of adopting the concept of corporate societal responsibility to protect the environment from pollution. The aim of this procedure was to know whether environmental issues and environmental protection from pollution in petrochemical companies are related to the extent of adoption of the concept of societal responsibility.

For the statistical analysis, we set the hypothesis, “The adoption of societal responsibility positively affects the protection of the environment from pollution”. The analysis was carried out via discrimination of statistical hypothesis: There is no positive effect to adopt societal responsibility to protect the environment, or there is a positive impact to the adoption of societal responsibility to protect the environment.

The impact of the adoption of societal responsibility to protect the environment from pollution.

The results of the statistical analysis showed that there is a significant effect of societal responsibility on protecting the environment from pollution. The correlation coefficient reached 0.92 at a significant level of 1 per cent. This means that there is a significant positive correlation between the variable of societal responsibility and variable Protect the environment from pollution.

The coefficient of R 2 determination is (0.85), meaning that 0.85 of the changes in the environmental protection variable from pollution are due to the variable of societal responsibility and 15 per cent due to other factors. Therefore, this model is characterized by quality. The independent variable selected explains about 85 per cent of the changes Occur in the dependent variable (environmental protection from pollution).

In finding that the value of the effect of the coefficient of societal responsibility ( β ) is (0.763). This means that the increase in one degree in (x 2 ) leads to an increase in the environmental protection variable from pollution by (0.763).

The value of F is calculated at 545.36. The significance of this effect is the calculated value of F (545.36), which is significant at sig = 0.000.

Positive reference coefficient of independent variable regression Adopted societal responsibility (x 2 ) with the dependent variable environmental protection from pollution (y).

This means acceptance of this hypothesis, and the ability of this variable to contribute to the interpretation of the change in the protection of the environment from pollution, and therefore we reject the zero hypothesis and accept the alternative hypothesis.

clear vision on the impact of societal responsibility on financial performance;

the environmental awareness of senior leadership and employees;

managers should inform employees about the latest developments in societal responsibility programs;

the company's role towards societal responsibility supports the members of the community in the success of the objectives of the company;

transparency in the presentation of data by disclosing the company's societal responsibility programs as an annual report;

the company's management encourages employees to participate collectively in societal responsibility programs; and

managers respond to employees about their CSR proposals.

This will lead the petrochemical companies to respond to the requirements of its social environment, the rights of the community, and the interests of their stakeholders in making decisions. Petrochemical companies must take actions on the effects of the decisions on all stakeholders of society. Making balance between their interests and the interests of the beneficiaries, which is ultimately protects the environment from pollution. This finding is consistent with the study of Hawrysz and Foltys (2015) , Andrei et al. (2014) , Al-Tira (2012) , Bhagwat (2011) and Tiwari (2010) .

The second sub-assumption: “The dimensions of societal responsibility positively affect the protection of the environment from pollution”.

The Second sub-hypothesis validity test: Table VII shows the results of the simple regression analysis test of the impact of societal responsibility dimensions on environmental protection from pollution.

The researcher evaluated and impact of the dimensions of societal responsibility to protect the environment from pollution. The aim of this procedure was to know whether environmental protection from pollution in petrochemical companies are linked to the impact of societal responsibility dimensions, and the extent to which these dimensions influence them.

For the statistical analysis, we set the hypothesis, “The dimensions of societal responsibility positively affect the protection of the environment from pollution”. The analysis was carried out via discrimination of statistical hypothesis: There is no positive effect to the dimensions of societal responsibility to protect the environment, or: There is a positive impact to the dimensions of societal responsibility to protect the environment.

The results of the second sub-hypothesis test are shown from the figures in Table VII to the regression model estimates of the relationship between the variable of societal responsibility dimensions as an independent variable and the variable protection of the environment from pollution as a dependent variable.

The impact of the dimensions of societal responsibility on the protection of the environment from pollution.

The coefficient of R 2 determination is 0.72, meaning that 0.72 of the changes in the environmental protection variable from pollution are due to the variable of societal responsibility dimensions and 26 per cent are due to other factors. Therefore, this model is characterized by quality. The selected independent variable explains about 72 per cent which occur in the dependent variable (environmental protection from pollution).

In finding that the value of the degree of influence of the social liability dimension ( β ) is (0.638). This means that the increase in one degree in the dimensions of societal responsibility leads to an increase in the protection of the environment from pollution by 0.638.

The value of F is calculated at 267.99. The significance of this effect is the calculated value of F (267.99), which is significant at (sig = 0.000).

Positive reference coefficient of independent variable regression societal responsibility dimensions with dependent variable Environmental protection from pollution.

the strength of the economic dimension;

the strength of the cultural dimension;

the strength of the legal dimension;

the strength of moral dimension; and

the strength of the social dimension.

Our results confirm that strategic CSR is contingent to financial performance, befitting its role as the basic economic unit in a market economy; the first and foremost societal responsibility must be economic in nature. As a basic economic unit in society, the economic dimension of a corporation's social behavior extends to the production of goods and services demanded by society and available to them at reasonable and acceptable profit. The primacy of this dimension of CSR is based upon the fact that all other societal responsibilities borne or expected of a business are predicated on this fundamental obligation. This finding is consistent with the study of McWilliams and Siegel (2011) .

The second ranking of the impact of the strength of the dimensions of corporate societal responsibility on protect the environment from pollution in the petrochemical companies is the cultural dimension, societal responsibility is an organizational culture that must be disseminated among the employees of the company. It is to respect human rights, support cultural development, spread commitment to the laws and regulations of the society, promote national culture and cultural communication locally, regionally and globally and support cultural and civilizational activities ( Halkos and Skouloudis, 2016 ).

The third ranking of the impact of the strength of the dimensions of corporate societal responsibility on protect the environment from pollution in the petrochemical companies is the legal dimension, because businesses must operate within the legal framework in achieving their business objectives ( Mohammed and Rashid, 2018 ).

The fourth ranking of the impact of the strength of the dimensions of corporate societal responsibility on protect the environment from pollution in the petrochemical companies is the moral dimension, there are some elements of business behavior and activities cannot necessarily be codified into the regulatory frame, are unwritten and is an implicit social contract that businesses have with society and often acts as the source and base for extensions into the explicit social contracts embodied and codified in the formal legal framework, society has expectations of business to exhibit social behavior over and above the mandatory requirements imposed on them ( Trevino and Nelson, 1999 ).

The fifth ranking of the impact of the strength of the dimensions of corporate societal responsibility on protect the environment from pollution in the petrochemical companies is the social dimension, this dimension refers to relationship between all types of organizations and society in general ( Currás‐Pérez et al. , 2017 ).

This finding is consistent with the study of Stojanović et al. (2016) , Zanat (2016) , Mohamed Arfa (2015), Abu-Halaqan (2014) , Muller and Kolk (2012) , Elmore (2011) , Sajib et al. (2011) .

General results

There is paucity in the studies that dealt with the relationship between CSR and environmental protection against pollution in public organizations.

There is agreement among the sample on the importance and feasibility of adopting the concept of societal responsibility and placing it at the top of the top management concerns, especially in the field of petrochemical companies. With the need to take concrete implementation measures to support societal responsibility programs aimed at serving the community among all stakeholders.

The effective implementation of the mechanisms for the implementation of meaningful societal responsibility programs requires fundamental changes in management practices, existing organizational structures and the quality of personnel working in the relevant departments in general and the societal responsibility group in particular, which may be difficult for political and economic reasons.

Results of the applied study

increasing the participation of workers with healthy environmental contributions to the productive process;

increasing the capacity of companies to cope with disasters and environmental crises;

increased commitment of companies to implementing environmental public policies;

increasing the companies' economic and social activities towards protecting the environment from pollution;

increasing the capacity of companies to pay greater costs to preserve the environment;

increasing the awareness of green consumers with the products provided by companies;

development of continuous internal work environment companies; and

clearly defined strategy followed in societal responsibility programs.

The keenness of these organizations to analyze the variables of the ethical dimension of societal responsibility and their availability, which will lead the organizations to provide their services with the highest quality and sincerity. And that this analysis [(ethics of individuals) as training members of the societal responsibility team to solve problems using brainstorming and provide employees with official data related to improving work, (Ethics of leadership), such as the identification of business objectives through the participation of managers with subordinates, and the punishment of workers who exhibit immoral behaviors (ethics of productive processes) as a decision-making process to ethical standards regardless of the costs involved. When there is an immoral behavior and managers are responsible for implementing the changes needed to reach the targeted outcomes];

Promote partnerships with other relevant sectors for community service;

Align the mission and objectives of the organization with the goals and values of the community in which it operates;

Ensure compliance with legislation and laws that urge organizations to increase transparency and disclosure while providing incentives for the distinction of working organizations In the area of societal responsibility and environmental protection; and

To develop an integrated strategy for the culture of the organization on the societal responsibility programs to be provided by the organization by applying and practicing the work ethic to protect the environment from pollution on the other to motivate the workers to practice the best behavior towards work and to participate in training programs to disseminate the principles of work ethic and culture of societal responsibility among them, Giving them better opportunities to develop their skills and experience and enhance their motivation to work.

Petrochemical companies, especially public and private sector companies, produce goods and products in an environmentally friendly manner, taking into consideration waste recycling and wastewater treatment, continuous monitoring of any type of radiation or emission of harmful gases such as carbon dioxide. Such treatment should not be limited to guidance from before the EEAA or by the sovereign agencies of the state or under the pressure of laws, but must be paying attention to the development of the educational axis and support the educational aspect constantly.

Although all CSR programs within Egypt are philanthropic and humanitarian, there is still a difference between the nature of these programs offered by the public sector companies and the government sector for the private sector companies, especially in the field of environmental protection against pollution. Therefore, these efforts should be consolidated through the work of partnerships directed by the private sector towards the social imbalance that is required to be reformed.

Recommendations of the study

increase the participation of workers with healthy environmental contributions in the production process and increase the ability of companies to cope with disasters and environmental crises;

increase the commitment of companies to implement environmental public policies and guide their economic and social activities towards protecting the environment from pollution;

increase the capacity of companies to bear greater costs to preserve the environment and increase the awareness of the green consumer with the products provided by companies;

develop the internal work environment of companies with a clear definition of the strategy followed in societal responsibility programs;

the organizations' keenness to analyze the variables of the ethical dimension of societal responsibility and training the members of the team on societal responsibility to solve problems using brainstorming;

encourage other relevant companies to serve the community; and

develop an integrated strategy for the culture of the organization on the programs of societal responsibility to protect the environment from pollution and interest in involving staff in training programs to disseminate the principles of ethics.

Conclusion and future studies

The issue of societal responsibility and ethical aspects is of great importance at the present time due to the increasing influence of organizations and the increasing criticism directed at them in aspects related to the legitimacy of its work and mechanisms such as cases of corruption and unethical decisions affecting society and the environment. With the increasing role of business organizations in civil society and lobbying groups because of the spread of knowledge and the speed of communication, government organizations are obliged to enhance their social performance, especially petrochemical companies, to many community groups. All these issues have forced the management of governmental and private organizations to broaden the perspective through which they see their social role and their humanitarian performance toward different segments of society.

Finally, regarding future research lines, it would be very interesting to examine the proposed model by collecting data from a significantly large source and examining the hypothesized relationships, and it would also be very useful to analyze alternative channels of influence of legal form and environmental policy on the protection of the environment in oil and gas companies.

Distribution of study population and study sample for 2017

Study variables

Distributed and retrieved lists and response rate

The degree of stability of the measurements used to measure the variables studied

Order of the importance of study variables

Simple regression analysis results of the effect of societal responsibility on protecting the environment from pollution

The survey method

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6 Examples of Corporate Social Responsibility That Were Successful

• 06 Jun 2019

Business is about more than just making a profit. Climate change, economic inequality, and other global challenges that impact communities worldwide have compelled companies to be purpose-driven and contribute to the greater good .

In a recent study by Deloitte , 93 percent of business leaders said they believe companies aren't just employers, but stewards of society. In addition, 95 percent reported they plan to take a stronger stance on large-scale issues in the coming years and devote significant resources to socially responsible initiatives. With more CEOs turning their focus to the long term, it’s important to consider what you can do in your career to make an impact .

Access your free e-book today.

What Is Corporate Social Responsibility?

Corporate social responsibility (CSR) is a business model in which for-profit companies seek ways to create social and environmental benefits while pursuing organizational goals, such as revenue growth and maximizing shareholder value.

Today’s organizations are implementing extensive corporate social responsibility programs, with many companies dedicating C-level executive roles and entire departments to social and environmental initiatives. These executives are commonly referred to as chief officers of corporate social responsibility or chief sustainability officers (CSO).

There are many types of corporate social responsibility , and CSR might look different for each organization, but the end goal is always the same: Do well by doing good . Companies that embrace corporate social responsibility aim to maintain profitability while supporting a larger purpose.

Rather than simply focusing on generating profit, or the bottom line, socially responsible companies are concerned with the triple bottom line , which considers the impact that business decisions have on profit, people, and the planet.

It’s no coincidence that some of today’s most profitable organizations are also socially responsible. Here are six successful examples of corporate social responsibility you can use to drive social change at your organization.

Check out our video on corporate social responsibility below, and subscribe to our YouTube channel for more explainer content!

6 Corporate Social Responsibility Examples

1. lego’s commitment to sustainability.

As one of the most reputable companies in the world, Lego aims to not only help children develop through creative play but also foster a healthy planet.

Lego is the first, and only, toy company to be named a World Wildlife Fund Climate Savers Partner , marking its pledge to reduce its carbon impact. And its commitment to sustainability extends beyond its partnerships.

By 2030, the toymaker plans to use environmentally friendly materials to produce all of its core products and packaging—and it’s already taken key steps to achieve that goal.

Over 2013 and 2014, Lego shrunk its box sizes by 14 percent , saving approximately 7,000 tons of cardboard. Then, in 2018, the company introduced 150 botanical pieces made from sustainably sourced sugarcane —a break from the petroleum-based plastic typically used to produce the company’s signature building blocks. The company has also recently committed to removing all single-use plastic packaging from its materials by 2025, among other initiatives .

Along with these changes, the toymaker has committed to investing $164 million into its Sustainable Materials Center , where researchers are experimenting with bio-based materials that can be implemented into the production process.

Through these initiatives, Lego is well on its way to tackling pressing environmental challenges and furthering its mission to help build a more sustainable future.

Related : What Does "Sustainability" Mean in Business?

2. Salesforce’s 1-1-1 Philanthropic Model

Beyond being a leader in the technology space, cloud-based software giant Salesforce is a trailblazer in corporate philanthropy.

Since its outset, the company has championed its 1-1-1 philanthropic model , which involves giving one percent of product, one percent of equity, and one percent of employees’ time to communities and the nonprofit sector.

To date, Salesforce employees have logged more than 5 million volunteer hours . Not only that, the company has awarded upwards of $406 million in grants and donated to more than 40,000 nonprofit organizations and educational institutions.

In addition, through its work with San Francisco Unified and Oakland Unified School Districts, Salesforce has helped reduce algebra repeat rates and contributed to a high percentage of students receiving A’s or B’s in computer science classes.

As the company’s revenue grows, Salesforce stands as a prime example of the idea that profit-making and social impact initiatives don’t have to be at odds with one another.

3. Ben & Jerry’s Social Mission

At Ben & Jerry’s, positively impacting society is just as important as producing premium ice cream.

In 2012, the company became a certified B Corporation —a business that balances purpose and profit by meeting the highest standards of social and environmental performance, public transparency, and legal accountability.

As part of its overarching commitment to leading with progressive values, the ice cream maker established the Ben & Jerry’s Foundation in 1985, an organization dedicated to supporting grassroots movements that drive social change.

Each year, the foundation awards approximately $2.5 million in grants to organizations in Vermont and across the United States. Grant recipients have included the United Workers Association, a human rights group striving to end poverty, and the Clean Air Coalition, an environmental health and justice organization based in New York.

The foundation’s work earned it a National Committee for Responsive Philanthropy Award in 2014, and it continues to sponsor efforts to find solutions to systemic problems at both local and national levels.

Related : How to Create Social Change: 4 Business Strategies

4. Levi Strauss’s Social Impact

In addition to being one of the most successful fashion brands in history, Levi’s is also one of the first to push for a more ethical and sustainable supply chain.

In 1991, the brand created its Terms of Engagement , which established its global code of conduct regarding its supply chain and set standards for workers’ rights, a safe work environment, and an environmentally friendly production process.

To maintain its commitment in a changing world, Levi’s regularly updates its Terms of Engagement. In 2011, on the 20th anniversary of its code of conduct, Levi’s announced its Worker Well-being initiative to implement further programs focused on the health and well-being of supply chain workers.

Since 2011, the Worker Well-being initiative has been expanded to 12 countries, benefitting more than 100,000 workers. In 2016, the brand scaled up the initiative, vowing to expand the program to more than 300,000 workers and produce more than 80 percent of its product in Worker Well-being factories by 2025.

For its continued efforts to maintain the well-being of its people and the environment, Levi’s was named one of Engage for Good’s 2020 Golden Halo Award winners , the highest honor reserved for socially responsible companies.

5. Starbucks’s Commitment to Ethical Sourcing

Starbucks launched its first corporate social responsibility report in 2002 with the goal of becoming as well-known for its CSR initiatives as for its products. One of the ways the brand has fulfilled this goal is through ethical sourcing.

In 2015, Starbucks verified that 99 percent of its coffee supply chain is ethically sourced , and it seeks to boost that figure to 100 percent through continued efforts and partnerships with local coffee farmers and organizations.

The brand bases its approach on Coffee and Farmer Equity (CAFE) Practices , one of the coffee industry’s first set of ethical sourcing standards created in collaboration with Conservation International . CAFE assesses coffee farms against specific economic, social, and environmental standards, ensuring Starbucks can source its product while maintaining a positive social impact.

For its work, Starbucks was named one of the world’s most ethical companies in 2021 by Ethisphere.

6. New Belgium Brewing’s Sustainable Practices

New Belgium Brewing has always been a proponent of green initiatives . As early as 1999, it was one of the first breweries to use wind power to source 100 percent of its electricity, significantly reducing its operational carbon footprint.

In Harvard Business School Online’s Business and Climate Change course, Katie Wallace, New Belgium Brewing's chief environmental, social, and governance (ESG) officer, elaborates on the company’s sustainable practices.

"We have biogas here that we capture from our process water treatment plant," Wallace says in the course. "We make electricity with it. When we installed our solar panels on the Colorado packaging hall, it was the largest privately owned solar array at that time in Colorado. And today, we have many other sources of renewable electricity and have invested quite a bit in efficiencies."

New Belgium Brewing also turns outward in its sustainability practices by actively engaging with suppliers, customers, and competitors to promote broader environmental change. These efforts range from encouraging the use of renewable resources in supply chains to participating in policy-making discussions that foster industry-wide sustainability. For example, it co-founded the Glass Recycling Coalition to improve recycling nationwide after recognizing sustainability concerns in the bottling industry.

New Belgium's commitment to corporate social responsibility is an ongoing process, though. The brewery continues to set ambitious targets for reducing waste, conserving water, and supporting renewable energy projects to build a more sustainable future.

The Value of Being Socially Responsible

As these firms demonstrate , a deep and abiding commitment to corporate social responsibility can pay dividends. By learning from these initiatives and taking a values-driven approach to business, you can help your organization thrive and grow, even as it confronts global challenges.

Corporate social responsibility is critical for businesses today. It enables organizations to contribute to society while also achieving operational goals. By prioritizing social responsibility, you can build trust with your stakeholders and leave a positive impact.

Do you want to understand how to combine purpose and profit and more effectively tackle global challenges? Explore our online business in society courses , including Sustainable Business Strategy and Business and Climate Change , to learn more about how business can be a catalyst for system-level change.

This post was updated on May 30, 2024. It was originally published on June 6, 2019.

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• Published: 13 July 2023

Integration of Environmental, Social, and Governance (ESG) criteria: their impacts on corporate sustainability performance

• Anrafel de Souza Barbosa   ORCID: orcid.org/0000-0002-3178-4149 1 ,
• Maria Cristina Basilio Crispim da Silva 1 ,
• Luiz Bueno da Silva 1 ,
• Sandra Naomi Morioka 1 &
• Vinícius Fernandes de Souza 2  

Humanities and Social Sciences Communications volume  10 , Article number:  410 ( 2023 ) Cite this article

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In a corporate sustainability context, scholars have been studying internal and external relations provided by Environmental, Social, and Governance (ESG) criteria, mostly from the organizational perspective. Therefore, the main objective of this paper is to map and analyze the literature on the impacts of integrating ESG criteria on corporate sustainability performance from different points of view. The methodology used followed the Preferred Report Items for Systematic Reviews and Meta-analysis (PRISMA) guidelines, corroborated by a critical analysis. The results indicate that the integration of ESG criteria, observed from different perspectives, strengthens corporate sustainability performance. They also revealed narrowing gaps in the literature regarding methodological analysis. Most of the papers in the analyzed sample use company-level data and employ regression analysis in their analysis. The present study concludes that companies, regardless of nationality, follow the guidelines of ESG criteria integration and such procedure brings several benefits. It points to the lack of more confirmatory research approaches from a workers’ perspective, as the interest remains in the economic-environmental realm from the organizations’ point of view. The absence of such evidence points to a gap in the literature that suggests the need for new study initiatives.

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Introduction.

The discussion surrounding the Environmental, Social, and Governance (ESG) criteria and corporate sustainability has gained significant momentum in recent years, primarily driven by the evolving societal expectations regarding new models of production and consumption (Nishitani et al., 2021 ). Until the mid-1990s, according to Clarkson ( 1995 ), the focus of companies’ success was primarily centered on satisfying the needs of a single stakeholder, namely the shareholder. However, as time passed and the panorama shifted, particularly influenced by public policy changes, this perspective has undergone transformations. Gradually, other stakeholders have exerted pressure on companies, resulting in the integration of corporate sustainability into the strategic management of organizations, leading them to practice the ESG criteria (Wang et al., 2018 ).

Corporate sustainability performance refers to a company’s ability to operate in a manner that upholds ecological integrity, social well-being, and sound governance principles, while simultaneously generating value for its shareholders (Ahmad et al., 2023 ; Luque-Vílchez et al., 2023 ). It encompasses the effective management of environmental resources, fostering positive social relationships, and maintaining high standards of ethical conduct (Bellandi, 2023 ). The assessment of corporate sustainability performance requires the evaluation of both qualitative and quantitative indicators, examining various dimensions such as environmental stewardship, social responsibility, and corporate governance (Sandberg et al., 2022 ).

ESG criteria are used to assess corporate sustainability and ethical performance of companies and investments (Arora and Sharma, 2022 ). They are adopted by corporations to monitor and control the impacts of business activities on internal and external environments (Viranda et al., 2020 ). They mainly include: (i) collecting information; (ii) developing solutions; (iii) dealing with ESG issues in compliance with standards; (iv) conducting training; and (v) providing good communication (Boiral, 2002 ; Montabon et al., 2007 ; Merli and Preziosi, 2018 ). ESG criteria include prevention and preservation performance indicators (Gond et al., 2012 ). Besides, it requires coordination between the environmental department and other departments within companies, and balance between sustainable development goals and other corporate goals.

ESG criteria incorporates environmental, social, and governance factors into investment and business decision-making processes, and involves conditions relevant to traditional financial metrics when analyzing investments or valuing companies (Madden, 2022 ). These conditions can include metrics such as carbon emissions, water usage, employee diversity, labor practices, board diversity, executive compensation, etc. Thus, ESG criteria provide quantitative and qualitative information about a company’s sustainability practices and their potential impact on various stakeholders (Khalil et al., 2022 ; Uyar et al., 2023 ).

ESG integration involves incorporating environmental, social and governance indicators into investment and business decision-making processes. Instead of considering ESG criteria as separate from financial analysis, integration recognizes their materiality and incorporates them alongside traditional financial analysis. This integration can happen at various stages of the investment process, including portfolio construction, risk assessment, due diligence, and ongoing monitoring. Integration aims to identify and manage risks and opportunities related to ESG criteria, ultimately seeking to enhance long-term investment performance and sustainability (Gebhardt et al., 2022 ; Harasheh and Provasi, 2023 ).

ESG criteria provide the data and metrics to assess a company’s sustainability and ethical performance, while the integration involves incorporating these criteria into investment and business decision-making processes to better understand and manage the potential impacts on financial performance and corporate sustainability (Alda, 2021 ; Sahoo and Kumar, 2022 ).

In this sense, the integration of the ESG criteria has become an instrument responsible for defining, planning, operationalizing and executing the actions of corporations directed at environmental prevention and preservation, in addition to social responsibility and the quality performance of their activities (Barbosa et al., 2021 ).

Both from the standpoint of Sustainable Development Goals and the company response to shifting consumer preferences, interest in corporate sustainability has been increasing importance (Boulhaga et al., 2022 ). When looking for the relationship between the implementation of the ESG criteria and the corporate sustainability, the literature presents a heterogeneous scenario. Some researchers advocate a positive relationship (Harymawan et al., 2022 ; Kim et al., 2022 ), and others have confirmed a negative relationship (Rajesh and Rajendran, 2020 ).

As is the case with research by Lee and Isa ( 2022 ), they find a positive relationship between the implementation of ESG criteria and financial performance, suggesting that ESG criteria can increase company value. In addition, the authors also find evidence that the disclosure of ESG criteria can improve the relationship with corporate sustainability performance. Already in the study by Xu et al. ( 2022 ), the heterogeneity analysis demonstrates that the negative relationship between ESG disclosure and the risk of falling stock prices is more significant in state-owned companies, companies with higher agency costs and in companies in the development phase.

Although the results are ambiguous, there are several positive examples of the relationship between the ESG criteria and the corporate sustainability, which influences the reasons why research on sustainable business models has been carried out and why organizations are changing their business model in the direction of sustainability. Additionally, there is a lot of pressure to consider ESG factors when making decisions, particularly from capital investors and financial institutions (Jonsdottir et al., 2022 ; Park and Oh, 2022 ).

Organizations responding to the pressure to implement ESG criteria must manage environmental, social, and economic risks (Triple Bottom Line) and understand their short, medium, and long-term impacts (Bravi et al., 2020 ). To this end, many companies adopt management systems related to ESG criteria to integrate elements of the Triple Bottom Line, address stakeholder needs, and mitigate risks (Esquer-Peralta et al., 2008 ).

Thus, the ESG criteria cannot be seen only as a cost, since they can bring benefits to the company and be a competitive advantage over competitors (Barbosa et al., 2023 ; Zhang et al., 2021 ).

That said, the need for an innovative and coherent research field focused on ESG issues increases as environmental, social, and governance problems intensifies (Vanderley, 2020 ).

The literature has already discussed the research situation, qualitatively and quantitatively, regarding ESG criteria through the prism of corporations, usually in the context of trying to improve the field’s problem-solving ability in relation to companies’ concerns and practices. Baumgartner and Rauter’s ( 2017 ) research addresses the strategic perspectives of corporate sustainability management to develop sustainable organizations and promote the integration of ESG criteria into business activities and techniques.

This narrow interpretation is criticized by several scholars as being insufficiently analytical, as well as lacking a rigorous appreciation of the historical basis of human-environment interaction, highlighting worker perception (Bryant and Wilson, 1998 ; Herghiligiu et al., 2019 ).

Existing research on ESG criteria primarily focuses on the corporate perspective (Bourcet, 2020 ; Khanchel et al., 2023 ; Tsang et al., 2023 ). However, this literature review did not identify any references that support the worker’s perspective or address their involvement in organizational management, as highlighted by Ouni et al. ( 2020 ).

Therefore, this study aims to map and analyze the literature on the impacts of integrating ESG criteria on corporate sustainability performance through different points of view. The research will employ both qualitative and quantitative analysis and consider the viewpoints of both employers and employees. This study aims to fill the existing gap in the literature, as no significant research has yet converged in this direction.

As is the case with the research of Huang ( 2021 ), who conducted a systematic literature review (SLR) to examine the link between ESG activities and organizational financial performance, focusing on the institutional aspect. Similarly, Taliento et al. ( 2019 ), who investigated the impact of ESG factors on economic performance, emphasizing the corporate sustainability advantage and business understanding.

This research holds significance due to the growing global efforts to establish ESG criteria and mitigate environmental, social, and economic risks (Triple Bottom Line) for sustainable development. It aims to comprehend how these risks can affect sustainable development in the short, medium, and long-term, considering both organizational and collaborative perspectives (workers) (Bravi et al., 2020 ).

In this sense, the main objective of this paper is to map and analyze the literature on the impacts of integrating ESG criteria on corporate sustainability performance through different points of view. To achieve the proposed objective, the investigation addressed the following research questions:

What are the main features of the literature on ESG criteria?

What are the main methodological approaches used to study ESG criteria impact on corporate sustainability?

What are the main impacts of integrating ESG criteria on corporate sustainability performance observed in the literature?

This paper is divided into six sections, including this introduction (section 1). Section “Theoretical backgrounds: Environmental, Social, and Governance (ESG) criteria” refers to the theoretical foundation on the ESG criteria and the construction of the research hypotheses. Subsequently, in section “Methodological procedures”, the methodological procedures of the research are discussed. In section “Results”, the results are developed. Then, in section “Discussion”, a discussion is carried out. And, finally, in section “Conclusion”, the research conclusions are highlighted.

Theoretical backgrounds: Environmental, Social, and Governance (ESG) criteria

The ESG criteria are about the set of organizational practices that considers in its context environmental, social, and governance factors, with a view to achieving long-term sustainability (Sultana et al., 2018 ). The proportionality of these three aspects in business management has the purpose of analyzing the operations in a holistic way, not limited merely to the economic and financial aspects (Cek and Eyupoglu, 2020 ). In this sense, the economic, transparency and ethical precepts are articulated, seeking to ensure the competitiveness and the perdurability of a company. (Oncioiu et al., 2020 ).

The environmental dimension involves assessing the corporation’s carbon footprint, natural resource usage (energy consumption and efficiency), recycling policies, waste management, and efforts to minimize environmental impacts (Rajesh, 2020 ). The social dimension encompasses the company’s relationships with employees, suppliers, partners, clients, and communities. It includes promoting diversity, non-discrimination, gender pay equality, equal opportunities, employee education, and community protection (Li and Wu, 2020 ). The governance dimension focuses on leadership, internal controls, executive compensation, audits, shareholder rights, anti-corruption policies, and transparency and accountability practices (Cek and Eyupoglu, 2020 ).

ESG criteria, also known as sustainable or socially responsible investments, assist investors in assessing companies’ initiatives and commitment to environmental, social, and governance issues. These criteria can be applied internally or externally in a company’s management (Du Rietz, 2018 ).

That said, compliance with ESG policies and practices is increasingly important to investors, employees, and customers, shaping company perception and performance evaluation beyond financial measures (Beretta et al., 2019 ).

While ESG indicators may vary by region, market, and industry, there are emerging best practices in the corporate world (Khalid et al., 2021 ). Thus, an example of ESG practices can be observed through the Principles for Responsible Investment (PRI), created by initiative of investors in partnership with the United Nations Environment Program Finance Initiative (UNEP FI) and the UN Global Compact, with the aim of guiding the market in the pursuit of responsible development (Bauckloh et al., 2021 ; Naffa and Fain, 2020 ).

Therefore, one way to find out whether a particular organization is sustainable is to evaluate its performance by ESG indexes. However, these indexes have limitations as they may not capture the multidimensional aspects of ESG criteria comprehensively. Consequently, a broader focus on ESG criteria is needed, considering corporate sustainability performance.

Methodological procedures

There are distinct alternatives that can be appreciated in the deployment of a SLR, comprising a bibliometric approach, meta-analysis (Hunter et al., 1986 ) and content analysis approaches. (White and McCain, 1998 ). These three techniques were applied in the present study. The scope of this study provides qualitative and quantitative analysis of publications, in the synthesis and assimilation of the most explored academic research and authors with the support of citation analysis, as well as in the critical analysis of the sample of articles collected.

To address the research aims, which is to map and analyze the literature on the impacts on corporate sustainability performance provided by the integration of ESG criteria, this study relied on two procedures. The first procedure was a consistent and robust SLR materialized according to the Preferred Reporting Items for Systematic Reviews and Meta-analysis (PRISMA) methodology, which blends reference analysis, network analysis, and content analysis. The second method was a critical in-depth analysis of a specific sample of articles collected through the PRISMA structured procedure, which integrated and supported the initial technique, as already used in the sustainability literature (Bolis et al., 2014 ).

Primary procedure: PRISMA methodology

The PRISMA methodology is a directive that aims to provide scholars to improve the peculiarity of the externalization of research information, as well as to guide in the critical conjecture of a review of articles already published (Page et al., 2021 ).

Eligibility and ineligibility criteria

The documents eligible for the sample of this research were those published in the last 5 years (period from 2017 to March 2022); belonging to the study domain of environmental, social and governance areas (research area); considered exclusively as research articles (document type); disseminated only in scientific journals (journals ); written only in English language (language); and intrinsic to the topic of this research. The ineligible studies were those without a well-defined scientific structure, those without relevant data implicated in the theme of this research, those without access to the text ( in press ), and those that did not propose quantitative analysis (as this is a relevant point for future research).

Selection of the scientific databases

As a basis for this SLR and starting to answer the questions listed to achieve the objective of this study, the initial sample of articles followed systematic strategies that were adopted to consult the bibliometric databases until March 2022. Three scientific knowledge bases, Scopus , Web of Science ( WoS ), and Science Direct ( SD ) were used in to identify studies related to the ESG criteria.

The level of quality, the number of publications, the area of knowledge, and the set of metadata essential for the analysis of the references (including titles, abstracts, keywords, year of publication, number of citations, list of authors, countries, among others) were the criteria of choice for these 3 scientific databases. Scopus is one of the largest scientific knowledge bases of peer-reviewed literature (Morioka and de Carvalho, 2016 ). WoS can cover all indexed journals with an impact factor calculated in JCR ( Journal Citation Report ) (Carvalho et al., 2013 ). And SD combines reliable full-text publications in the scientific, technical and health fields (Direct, 2020 ). Another factor also considered was that all 3 databases provide metadata compatible with Mendeley reference analysis software (Carvalho et al., 2013 ).

Sampling procedure

The sampling procedure used to screen the articles was search by search terms, which were adapted for each defined bibliographic database. This was performed in March 2022. The keyword terms for the investigation were applied as follows: ("Environmental, Social, and Governance") AND (Impact* OR Effect* OR Performanc* OR Integrat*) AND (Sustainab*).

The initial searches are shown in Table 1 .

The first triage was applied as " Article title, Abstract, Keywords " in Scopus , as " Topic " in WoS and as " Title, abstract or author-specified keywords " in SD resulting in 5,760 collected documents ("Initial Sample"). Then, the primary parameter for refining the references was run as " Publication Years ", reducing the number of records by 1,152 documents. The secondary elimination criterion was applied as " Topic Area ", synthesizing the sample into 580 searches.

Continuing with the exclusion process, the third suppression factor was submitted as " Document Type ", summarizing the records into 486 studies. Subsequently, "Source Type" was used as the fourth parameter of reference reduction, reducing the records by 3 documents. Subsequently, the penultimate refinement requirement was performed as " Language ", subtracting 9 more references. Finally, the reading of the titles and abstracts of the articles was used as the sixth ground for the refinement of the sample as " Off Topic ", restricting to 3,172 documents that did not directly address the topic of this study. Thus, the quantity of rejected documents was 5,402 references, resulting in a sample of 358 research articles selected from the 3 scientific databases.

The references were then entered into Mendeley software to verify the intersections of studies between the databases. The triage identified 229 duplicate documents, which were excluded, reducing the sample to 129 articles. Subsequently, an isolated analysis of each of the 129 selected publications was performed to assess compatibility with the eligibility and ineligibility criteria focusing on the adequacy to the research premises and quality parameters related to the methodological peculiarity of the publications. This analysis resulted in an exclusion of 82 studies. The "Remaining Sample" became 47 research articles.

After rejecting studies that did not satisfy the "Initial Sample" pre-selection process, that were in duplicate, and that did not have the eligibility criteria, the snowball method was applied (Yin et al., 2020 ). The references were expanded to incorporate other studies that were cited in the 47 articles in the "Remaining Sample". The total number of records selected through the snowball technique was 2 studies ("Additional Sample"). The inclusion of the additional articles followed the same eligibility (except for the year of publication) and ineligibility criteria cited in section “Eligibility and ineligibility criteria”. Thus, the "Final Sample" for the conduct of this SLR was 49 research articles.

Reference analysis

Data tabulation and grouping strategies directed the stratification of information and a narrative synopsis. A spreadsheet ( Microsoft Excel 2021) and Mendeley software were used to manage the selected articles to transcribe predominant methodological minutiae of each research study comprising the assessment instrument used, the setting, participants, and substantive findings in terms of validity and credibility. The number of publications summarized by year and journal was the initial parameter of the reference analysis process. This resource made it possible to see how the records succeeded over the years and to discriminate the journals that repeatedly dealt with the theme of this research.

Network analysis

In this step, with the assistance of the VOSviewer software , the network analysis was performed, considering the compatibility of keywords and authors were analyzed through clustering diagrams. The first citation network developed was that of most relevant keywords. The second network developed was that of co-citations, which shows the degree of equivalence between the references presenting the articles mentioned together. The analysis of this network can help assimilate the intellectual character of a field and map the thematic similarities of scholars and the aspect of how groups of researchers relate to each other (Pilkington and Liston-Heyes, 1999 ).

Another analysis performed was on the methodological approaches applied among the studies. For this diagnosis, a deductive multivariate approach was applied based on the theoretical foundation and knowledge from the references. This analysis used insights extracted from the keywords and the analysis of important topics.

Content analysis

Each article included in the final sample was specifically cataloged using Mendeley software that comprised the metadata generated by scientific databases. For the content analysis, the articles were classified in order to consider the tools applied, the scope of application, the relevant industries, the research objectives, and the advantages and limitations of the process required to obtain the research results.

Secondary procedure: critical (interpretative) analysis

Critical analysis is a research skill outlined to contribute to the interpretation of complex issues to understand specific conjunctures (Gil-Guirado et al., 2021 ). Critical analysis involves multiple iterative cycles of interpreting and perceiving the content of parts of the phenomena of interest, and this assimilation of the parts entails a better understanding of the contexts as a whole (Valor et al., 2018 ).

To deepen the assimilation of the contexts, each researcher involved forms an understanding of their perspective in continuous cycles until a "cognitive fusion" is achieved resulting in a better conception of the phenomena. This approach does not aim to construct a theory, but rather to infer a better understanding of the contexts (Bolis et al., 2014 ). Thus, to complement the answers to the questions of this research, critical analysis was applied, which involved dialectical reasoning cycles to identify the understanding (systematization of applicable processes to determine the meaning and scope of methodologies) of researchers on the impacts of integrating ESG criteria on corporate sustainability performance with the aim of finding the "cognitive fusion".

The initial cycle demanded a series of reviews, syntheses, and interpretations of the sample of articles collected in the structured procedure (PRISMA). In the next cycle, the collaborative critical process was adhered to, resulting in the refinement of the main methodological characteristics fragmented by each ESG criterion. Later, in the final interpretive cycle, the procedures of the first two cycles were analyzed, which provided additional perspectives and insights that complemented the previous interpretations.

Risk of bias

To assess the methodological quality of the included articles, the Prediction Study Trend Risk Assessment Tool (PROBAST) was used. (Wolff et al., 2019 ). This tool includes 20 questions divided into four domains (participants, predictors, outcome, and analysis). The risk of bias for each domain was rated as low risk, high risk, or very unclear to judgment (Wolff et al., 2019 ). Two researchers of the present study independently assessed the risk of bias of the included articles and performed an evaluation by qualitative analysis. Disagreements were resolved by consensus with a third reviewer.

The document collection strategy yielded 129 records, and after screening titles and abstracts and applying eligibility and ineligibility criteria, 49 articles were selected for this systematic literature review (SLR). Please refer to Fig. 1 for the SLR flow diagram.

Source: Adapted from Page et al. ( 2021 ).

Consistent with Nishitani et al.’s ( 2021 ) assertion, Fig. 2 demonstrates the contemporary nature of discussions on ESG criteria and corporate sustainability, indicating their recent consolidation. In this specific context, the eligibility and ineligibility criteria of the articles were disregarded, and only a keyword search for "Environmental, Social, and Governance" was conducted across three databases. This was solely done to quantify the research related to the theme.

Source: Scopus , WoS , and SD .

It is evident that there has been an increasing number of studies focused on ESG criteria over the years, with a peak of 649 research articles in 2021 (an average of 54 articles per month). This trend aligns with the growing interest of organizations in implementing ESG criteria (Qureshi et al., 2021 ).

Literature overview

Starting to answer the first research question ( What are the main characteristics of the literature on ESG criteria? ), an overview of the literature was conducted based on descriptive statistics of the sample of 49 selected articles. Table 2 presents the most influential studies. It lists the publications with 20 or more citations in the Scopus database.

The study that stood out the most was that of Xie et al. ( 2019 ), which investigates whether environmental, social, and governance activities improve corporate financial performance, with 115 citations over 3 years, an average of 38 citations/year; followed by the respective research of Garcia et al. ( 2017 ), which highlights the sensitive emerging market sectors in relation to improved ESG performance, published in the year 2017 and has 104 citations; and by Qureshi et al. ( 2020 ), which analyzes the moderating role of the impact of sustainability disclosure and board diversity on firm value, with 41 citations in 2 year, both averaging approximately 21 citations per year.

The articles of the core sample were designated from the network analysis of keywords, a quantitative technique practiced to identify the repercussion and expressiveness of an author or an article (Garfield and Morman, 1981 ). Nevertheless, this methodology should also take into account the relevance of the journal, besides computing the average annual citation (Carvalho et al., 2013 ), as shown in Table 2 .

That said, Fig. 3 shows, through the network analysis of the VOSviewer software , the relationship between the keywords and the articles in the designated sample, with recurrences of at least 2 times (this implies that terms that appear only once were not displayed). Other points to be observed are that the more consistent (full-bodied) the meshes the stronger the connections and the larger the points (nodes) of connections the more relevance they have.

Source: Scopus, WoS , and SD .

Network analysis enables a better explanation of the consonance between the terms discovered, as well as simplifying the differentiation between the groupings literally associated with its operating principles.

There were 4 sets of keywords identified. Of the 4 sets of the keyword network analysis, 3 contain the term " ESG " and its variations. In the case of the terms " sustainability and performance ", all 4 clusters register their presence. This demonstrates that the search terms adopted were assertive, since it can be seen that they adhere to the proposed theme.

The research by Zhang et al. ( 2020 ), which discusses how ESG initiatives affect innovation performance for corporate sustainability; and the research of Xu et al. ( 2021 ), which examines the impacts of research and development (R&D) investment and ESG performance on green innovation performance; ratify the cited adherence.

Research topics: the main methodologies

The predominant impacts addressed in the sample of 49 scientific studies collected, classified by level of analysis and methodological interpellation, are evidenced in Table 3 , which already awakens the dissolution to the second research question ( What are the main methodological approaches used to study ESG criteria impact on corporate sustainability? ).

A content analysis of the full texts of the articles selected for this SLR was performed and it was found that approximately 87.75% of the studies (43 references) were conducted using information from companies through databases. Analyzes were quantitative, 46 studies, approximately 93.87%, applied regression analysis. Of these, 6 investigations, approximately 13.04%, implemented structural equation modeling. These results, corroborate the conjuncture that there is no evidence in the literature regarding research allusive to a mapping and quantitative analysis of the impacts of the integration of ESG criteria on corporate sustainability performance, from an employee’s perspective.

By Fig. 4 , it can be distinguished that the organizations’ commitment does not focus exclusively on financial performance (12 studies), but also prioritizes corporate sustainability (12 studies).

Financial performance and corporate sustainability were investigated in approximately 49% of the research (24 records), proving corporate concern for both sustainable development and economic performance. Landi et al. ( 2022 ), highlight this awareness in their investigation of the incorporation of sustainability into risk management and the impacts on financial performance. Taken together, these practices have the potential to minimize cost and risk, enhance the company’s reputation and legitimacy, intensify innovation, and solidify growth paths and trajectories, all of which are vitally important to stakeholder value creation. (Ting et al., 2020 ).

The corporate sustainability performance disclosed through the ESG criteria was investigated in an attempt to demonstrate the quality of an organization, because through environmental, social, and governance analysis, it is possible to determine how the company positions itself in relation to society and the planet, in addition to offering more transparency to the investor (Mohammad and Wasiuzzaman, 2021 ).

Figure 5 displays a broad view of the amount of research performed around the world according to the sample of articles selected for this SLR.

It can be seen that Europe stands out in the evolution of ESG criteria with approximately 32.65% of research, with the highest visibility for Italy and Spain. The research by Conca et al. ( 2021 ), on the impacts of ESG reports in European agri-food companies; and (Baraibar-Diez and Odriozola, 2019 ), related to the effects of ESG parameters on the social responsibility committees of European corporations, highlight the aforementioned evolutionary prominence.

Figure 6 displays the most often consulted databases to collect information about the ESG criteria of the listed companies for their corporate sustainability performance.

Source: Table 3 .

Thomson Reuters and Bloomberg databases stand out because they are providers of reliable answers that help organizations make confident decisions and better manage business (Alsayegh et al., 2020 ). This reinforces the fact that most studies use publicly available data to measure ESG, whether than collect the ESG criteria for the companies under investigation.

Critical analysis

Critical analysis is a method of study for understanding difficult and complex situations, especially when interpretations of the same articulation are possible and competing. It is a form of text analysis and has been handled to discover their original meanings and how they are interpreted (Shephard et al., 2019 ).

Thus, complementing the results of the primary approach (PRISMA method), a critical analysis was implemented based on the selection of 49 articles considered for discussion. The aim was to answer the third question of this research ( What are the main impacts of integrating ESG criteria on corporate sustainability performance observed in the literature? ). Table 4 shows the main perceptions of the fragmented research according to each of the ESG criteria.

The cycles of the critical analysis involved a series of reviews, syntheses, and interpretations of ESG criteria affecting corporate sustainability performance identified in the 49 selected articles corroborating the structured process of this SLR. The results are shown in Tables 3 and 4 , which summarize the focus of the research, the methodologies applied, and the main gaps, contributions, and limitations of the studies.

In this SLR, the need for future empirical studies was also identified. There are still several research questions that need to be answered in depth. Some propositions for future investigations and possible research questions are outlined in Table 5 .

Analyzing the risk of bias in scientific research is of paramount importance as it can significantly impact the validity and reliability of research findings. It helps ensure that research outcomes accurately reflect reality and can be trusted by other researchers, policymakers, and the public (McGuinness and Higgins, 2021 ). Reproducibility is a fundamental principle of scientific research and transparently analyzing bias allows researchers to identify potential pitfalls and enhance the reproducibility of their work. Ethical considerations are also important as biased research can lead to harm, perpetuate discrimination, or favor specific individuals or groups unjustly (Marshall et al., 2015 ). Analyzing bias helps to improve the quality of evidence available for decision-making processes and ensures that the scientific literature remains reliable, allowing researchers to build upon a solid foundation of unbiased evidence. By carefully evaluating and addressing bias, researchers can enhance the quality and impact of their work (Reveiz et al., 2015 ; Wang et al., 2022 ).

In accordance with Table 6 (PROBAST diagnostics), most (93.9%) of the included research evidenced a minimal risk of bias and a low concern for applicability. The participants were the companies selected in each study; the predictors were the variables measured; the results were verified by the mathematical models; and the analysis, encompass the techniques used. The quality of the studies included in this study was rated from satisfactory to excellent.

Drawing upon rigorous research, this paper elucidates the prominent features that have appeared from the examination of ESG criteria. Table 2 and Fig. 3 show the repercussion, expressiveness and relevance of studies, authors, and journals.

The content analysis highlighted in Table 3 found that the literature on ESG criteria were carried out with information from companies through databases and applied regression analysis. These findings support the idea that there is no evidence in the study literature that maps or quantifies the effects of incorporating ESG criteria on corporate sustainability performance from the viewpoint of employees.

Ouni et al. ( 2020 ), in their study on the mediating role of ESG strands in relation to executive board gender diversity and corporate financial performance, highlighted the need for future research that focuses not only on organizational understanding, but especially on the perception of women (workers) themselves, as board members, of their role and their contribution to financial performance, which strengthens the gap characterized in this SLR.

Researchers employ various methodologies to study ESG criteria, allowing for nuanced insights and robust analysis (see Table 3 ). Quantitative studies utilize large-scale data sets, statistical models, and financial indicators to explore the relationship between ESG criteria and financial performance, risk management, and firm valuation (Alkaraan et al., 2022 ; Mavlutova et al., 2022 ). Qualitative research methods employ interviews, case studies, and content analysis to investigate the organizational processes, stakeholder perceptions, and contextual factors that influence ESG practices and outcomes (Petavratzi et al., 2022 ). Some studies adopt an integrated approach by combining quantitative and qualitative methods to gain a comprehensive understanding of the multifaceted nature of ESG criteria. These integrated approaches contribute to a holistic understanding of ESG-related phenomena (Aldowaish et al., 2022 ; Rehman et al., 2021 ).

Recognizing the strengths and limitations of methodologies, researchers have increasingly adopted mixed-methods approaches to investigate the impact of ESG criteria on corporate sustainability, integrating data collection and analysis processes to provide a comprehensive understanding of the research problem (Gebhardt et al., 2022 ). This approach allows researchers to triangulate findings, validate results, and gain a more nuanced perspective on the relationship between ESG criteria and corporate sustainability (Harasheh and Provasi, 2023 ). By leveraging the strengths of methodologies, research offers a more holistic and robust approach to studying complex phenomena.

The positive relationship of voluntary disclosure of corporate sustainability through the ESG criteria of organizations found in this study (see Table 4 ) provides evidence that the implementation of environmental and social strategies within an efficient system of corporate governance in the company strengthens the performance of corporate sustainability. The results also show that environmental performance and social performance are significantly positively related to sustainable economic performance, indicating that the corporation’s economic value and the creation of value for society are interdependent.

A similar fact was also found in the investigation of Zhang et al. ( 2020 ), on environmental, social and governance initiatives that affect innovative performance for corporate sustainability, which revealed that corporate governance initiatives play a moderating role in the relationship between environmental initiatives and performance innovation and the relationship between social initiatives and innovative performance.

Shaikh ( 2021 ), in his study on ESG practices and solid performance, explains the importance of voluntary reporting of non-financial indicators and a company’s responsibility towards stakeholders, reflected in the corporation’s accounting performance.

Integrating ESG criteria into business practices can have potential negative impacts, although specific effects may vary depending on context and implementation. As shown by the investigations of Wasiuzzaman et al. ( 2022 ), which verifies the extent to which culture can affect the relationship between ESG disclosure and company performance, evidencing the negative impact on the profitability of energy companies; and of Suttipun and Yordudom ( 2022 ), which analyzes the extent, level and trend of ESG disclosure in companies in Thailand, to test the different levels between high and low profile industries, which found a negative impact of governance disclosure on market reaction . Another example is the research of Yu et al. ( 2020 ), about Greenwashing in ESG disclosures, which identified organizations’ manipulations of ESG disclosures to increase market value.

While these concerns exist, effectively integrating ESG criteria can drive long-term value creation, risk management and stakeholder confidence. Implementing robust ESG practices requires careful consideration, transparency, and ongoing evaluation to mitigate potential negative impacts and ensure sustainable results.

The main objective of this article is to map and analyze the literature concerning the impacts of the integration of ESG criteria on corporate sustainability performance. To this end, an SLR was performed using the PRISMA methodology, with the intention of selecting the most relevant articles.

Figure 2 revealed an increase in the number of publications on ESG criteria. In 2017, there were only 97 published papers. Already in 2021, this number expanded to 649 manuscripts, an evolution of approximately 570%.

The references were systematically appraised using a hybrid approach that combined literature review methodologies, including structured and objective techniques such as bibliometric analysis, network analysis, and content analysis, to identify key highlights and gaps in the literature related to the theme of this investigation; as well as subjective text interpretation technique (critical analysis), to robust the structured analysis.

This study assisted in diagnosing the methodologies addressed and narrowing the gaps in the literature in four ways. Initially, the article presents a bibliometric analysis with a perspective on ESG criteria and sustainability performance based on the sampling of 49 research studies outlining the main papers and journals (according to Table 2 ). Subsequently, with the aid of network analysis the main keywords were highlighted (see Fig. 3 ).

Next, based on an in-depth content analysis, the article presents the main study highlights, the focus of the research, and the stratification of methods (Table 3 ). Finally, the critical analysis is juxtaposed to consolidate the initial structured analysis (Table 4 ).

Several authors have discussed the topic addressed by this SLR, such as Lokuwaduge and Heenetigala ( 2017 ), who made an interpellation of the integration of ESG precepts for an organizational sustainable development. Another reference is the paper by Bouslah et al. ( 2013 ), which analyzed the ESG dimensions and corporate risks.

But there is no evidence, to the knowledge of the authors of this paper, in the sample selected for this SLR, of research on a mapping and quantitative analysis of the impacts of integrating of ESG criteria on corporate sustainability performance as a result of workers’ perceptions. The study points out the lack of more confirmatory research approaches applying a multidimensional perspective of workers, as the interest remains in the economic-environmental perspective from the organizations’ point of view. It was also found that none of the studies listed made use of other types of diagnostic instruments diverging from the databases.

That said, the absence of such evidence highlights a gap in the literature that suggests the need for new study initiatives to fill it.

In addition to the opportunities for future studies proposed in Table 5 , future researches could explore the developing standardized metrics, common metrics that are relevant across different sectors and geographies; the relationship between ESG and financial performance, mechanisms behind this relationship, such as the impacts of ESG criteria on customer loyalty or employee satisfaction; the impacts of ESG criteria on non-financial stakeholders, such as employees, customers, and communities; the role of technology in ESG, such as artificial intelligence and blockchain in ESG reporting and decision-making; and on emerging ESG issues, such as the impact of climate change on supply chains or the ethical considerations of artificial intelligence.

Therefore, it would be important to establish standards and parameters that allow companies to understand and evaluate ESG criteria. In this sense, the International Organization for Standardization (ISO) could develop a global standardization on ESG that defines parameters, guidelines, and criteria with quality indicators, in line with the ISO 9001 standard already recognized worldwide.

This exploratory work highlights as a contribution the aspect of guiding corporations in understanding how the integration of ESG criteria can positively impact corporate sustainability performance, providing investment optimization and better business planning.

Furthermore, some important conclusions related to the ESG criteria can be obtained. It was observed that companies, regardless of nationality, follow the guidelines of ESG criteria integration and such procedure brings many benefits, such as: improving the organization’s image with stakeholders; increasing the corporation’s competitiveness; promoting corporate sustainability; improving the conjuncture in relation to gender diversity; improving intellectual opportunities; among others.

This research has limitations related to the use of keyword search engines and the filters of the selected databases. The keyword groups are asked to be elaborated in diverse ways, so the combinatorial analysis of the groupings may bring different answers. The filters of the scientific databases have disparate search characteristics, which may cause divergences in the answers. Another limitation was the critical analysis that may have generated an interpretation bias. Nevertheless, the PROBAST method and the systematic multi-method approach applied (bibliometric, network analysis, and content analysis) helped to mitigate this limitation.

Data availability

Data sharing is not applicable to this research as no data were generated or analyzed.

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de Souza Barbosa, A., da Silva, M.C.B.C., da Silva, L.B. et al. Integration of Environmental, Social, and Governance (ESG) criteria: their impacts on corporate sustainability performance. Humanit Soc Sci Commun 10 , 410 (2023). https://doi.org/10.1057/s41599-023-01919-0

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Corporate sustainability and responsibility: creating value for business, society and the environment

• Mark Anthony Camilleri   ORCID: orcid.org/0000-0003-1288-4256 1  

Asian Journal of Sustainability and Social Responsibility volume  2 ,  pages 59–74 ( 2017 ) Cite this article

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Today’s corporations are increasingly implementing responsible behaviours as they pursue profit-making activities. A thorosugh literature review suggests that there is a link between corporate social responsibility (CSR) or corporate social performance (CSP) and financial performance. In addition, there are relevant theoretical underpinnings and empirical studies that have often used other concepts, including corporate citizenship, stakeholder management and business ethics. In this light, this contribution reports on how CSR is continuously evolving to reflect contemporary societal realities. At the same time, it critically analyses some of the latest value-based CSR constructs. This review paper puts forward a conceptual framework for corporate sustainability and responsibility. It suggests that responsible business practices create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility.

This research builds on the previous theoretical underpinnings of the corporate social responsibility (CSR) agenda, including corporate social performance (Waddock and Graves 1997 , Griffin and Mahon 1997 , Wang and Choi 2013 ), stakeholder management (Freeman 1984 , Berman et al. 1999 , Carroll and Buchholtz 2014 ), corporate citizenship (Carroll 1998 , Maignan et al. 1999 , Fombrun et al. 2000 , Matten and Crane 2005 ), strategic CSR (Burke and Logsdon 1996 , Lantos 2001 , McWilliams et al. 2006 , Falck and Heblich 2007 ) and creating shared value (Camilleri 2017 , Porter and Kramer 2011 , 2014 , European Union 2011 , Elkington 2012 , Crane et al. 2014 ). Moreover, it reviews the corporate sustainability and responsibility perspectives (Van Marrewijk and Werre 2003 , Salzmann et al. 2005 , Montiel 2008 , Visser 2011 , Benn et al. 2014 ). Corporate sustainability and responsibility is increasingly being recognised as a concept that offers ways of thinking and behaving. This approach toward sustainable business has potential to deliver significant benefits to business, society and the environment.

The subject of corporate social responsibility (CSR) has continuously been challenged by those who want corporations to move beyond transparency, ethical behaviour and stakeholder engagement. Today, responsible behaviours are increasingly being embedded into new sustainable business models that are designed to meet environmental, societal and governance deficits. Although there are numerous theories and empirical analyses on CSR constructs (Carroll 1979 , Margolis and Walsh 2001 , McWilliams and Siegel 2001 , Fombrun 2005 , Wang and Choi 2013 , Strand et al. 2015 ), there is still scant theoretical research that links corporate sustainability with corporate social responsibility and environmental management. Therefore, this contribution aims at filling this academic gap by examining the conceptual developments of the “corporate sustainability and responsibility” notion. This review paper reiterates that that there is a business case for CSR as organizations can pursue profit-making activities (i.e. corporate sustainability). Businesses are encouraged to strategically re-align their products, services, and operations with responsible behaviors (Husted and Allen 2009 ). Strategic CSR outcomes may include responsible management of internal practices and forging relationships with external stakeholders. It is in the organizations’ interest to forge closer ties with the regulatory authorities and with their neighbouring communities. Responsible behaviours add value to the firm, society and the environment (Camilleri 2017 ). Therefore, businesses ought to utilize their skills, resources, and management capability that lead to social progress (see Beschorner 2014 , Porter and Kramer 2011 : 77). This is consistent with the expectation that much of CSR is developed in order to improve the firm’s image and reputation, possibly allowing it to differentiate its products in the market (Fombrun 2005 ).

The underlying objective of this research is to advance the corporate sustainability and responsibility concept. Hence, this contribution provides a critical analysis of the literature that has inevitably led to the conceptual development of this value-based construct. This research elaborates on the business case for CSR and the related stakeholder theory. It provides a logical link between them. Following relevant theoretical underpinnings, this review article also puts forward a conceptual model representing a graphical illustration of ‘corporate sustainability and responsibility’.

Literature review

• Corporate social responsibility

The discussion on social responsibility grew in popularity and took shape during the 60s. Many authors have indicated that the CSR notion was a fertile ground for theory development and empirical analysis (McWilliams et al. 2006 ). However, the businesses’ way of thinking has changed dramatically since Levitt in 1958 (and Friedman in 1962) held that the companies’ only responsibility was to maximise their owners’ and shareholders’ wealth, rather than looking after societal (and environmental protection) issues. At the time, these corporations had considerable bargaining power, and their power called for responsibility (Davis 1960 ). Arguably, these businesses had responsibilities towards society beyond their economic and legal duties. In the 60s and 70s, the most important social movements included civil rights, women’s rights, consumers’ rights as well as environmental movements. The period was characterised as an issue era, where companies began noticing specific societal problems arising from social, environmental and community issues. There was a focus on philanthropy and a noticeable manifestation in charitable donations. The gifts in-kind have expanded to the groups representing the health and social services, culture, arts, and the community at large. In a book entitled, ‘Corporate Social Responsibilities’, Walton ( 1967 ) addressed many facets of CSR in society. He came up with several models for social responsibility as he underlined that CSR involved a degree of voluntarism, as opposed to coercion. Moreover, back then, the corporations were incurring discretionary costs for their CSR engagement (Walton 1967 ). Without doubt, the clarification of CSR’s meaning is a significant strand within the research agenda. Table  1 reports a list of concepts that have emerged from the CSR paradigm:

The CSR notion has developed as a rather vague concept of moral good or normative behaviour (Carroll 1991 ). This construct was described as a relativistic measure of ‘the economic, legal, ethical and discretionary expectations that society had of organizations at a given point of time’ (Carroll 1979 ). CSR tackled ‘social problem(s)’ to engender positive ‘economic benefit(s)’ to ensure ‘well paid jobs, and ... wealth’ (Drucker 1984 ). This was consistent with academia’s call toward corporate social performance (CSP). The CSP theory had evolved from previous theoretical approaches. CSP reconciled the importance of both corporate social responsibility and corporate social responsiveness (Carroll 1979 ). It also placed an emphasis on achieving better performance out of the socially-responsible initiatives. Many researchers have used the corporate social performance (CSP) construct to establish a definitive causal relationship between the firms that were doing good (CSP) and those doing well (Corporate Financial Performance, i.e. CFP) (Waddock and Graves 1997 , Orlitzky et al. 2003 , Margolis and Walsh 2001 ).

There were several unresolved theoretical debates about whether there was a clear link between CSP and financial performance. Despite certain controversies regarding the validity of some empirical findings, most studies have reported a positive relationship between the two (Waddock and Graves 1997 , Preston and O'bannon 1997 ). The working assumption of CSP research was that corporate social and financial performance were universally related. Yet, it may prove hard for businesses and academia to demonstrate how CSR could lead to tangible improvements in the firms’ bottom lines.

It may appear that there was no explicit statement that describes how socially responsible practices could possibly translate into specific results that affect the profit and loss account (Murillo and Lozano 2006 ). At times, the empirical research did not yield the desired results as the findings were mixed (McWilliams and Siegel 2001 ). Alternatively, they yielded inconsistent evidence (Vogel 2005 ). Some authors have argued that the CSP-CFP link was pointless, as they were unable to find a positive relationship between the responsible business and the firms’ performance. Alternatively, another pertinent research question was to determine whether corporate profitability could be a sufficient motive for the avoidance of irresponsible behaviours (Vogel 2005 ).

The business case for corporate social responsibility

CSR can be much more than a cost, a constraint, or a charitable deed. It is ‘a source of opportunity, innovation and competitive advantage’ (Porter and Kramer 2006 ). However, its successful implementation could be influenced by a variety of factors including the firm’s size, diversification, research and development and market conditions (McWilliams and Siegel 2001 ). Very often academic research tried to follow and capture trends in the broader societal debate on the businesses’ social responsibilities. For instance, CSR’s domains often include, commercial responsibility, ethical responsibility and social responsibility (Singh and Del Bosque 2008 ). One of the businesses’ commercial responsibilities is their continuous development of high quality products or services. Companies are also expected to be fair and truthful in their marketing communications, whist they promote their offerings to customers (Singh and Del Bosque 2008 ). Secondly, the ethical responsibility is concerned with the corporations fulfilling their obligations towards their shareholders, suppliers, distributors and other agents with whom they make their dealings. Their ethical responsibility includes safeguarding the human rights and the norms that are (not necessarily) defined in the law when carrying out business activities. The ethical principles in business relationships could have more priority over achieving superior economic performance for some responsible corporations (Singh and Del Bosque 2008 ). Hence, the other social responsibility domain focuses on philanthropic behaviours. In this case, businesses could allocate part of their budget to the natural environment, or toward social issues that favour the most vulnerable in society. This form of social responsibility supports the development of financing stewardship principles including corporate donations to charitable institutions, religious, sports, cultural and heritage activities. This latter perspective is concerned with improving societal well-being.

Other scholars examined innovation and the level of differentiation in the industry as moderators in the relationship between corporate social performance and financial performance (Hull and Rothenberg 2008 ). A study reported that corporate social performance strongly affected financial performance in low-innovation firms and in industries with little differentiation (Hull and Rothenberg 2008 ). Ideally, social performance ought to be consistent over time and across stakeholder domains (Waddock and Graves 1997 , Johnson and Greening 1999 ). For example, job seekers are attracted by CSP and organizational ethics that mirror their own values (Turban and Greening 1997 , Jones et al. 2014 ). Hence, there is an opportunity that socially-responsible businesses could differentiate themselves from other companies. They may leverage their firm’s image relative to other organizations. Lozano ( 2015 ) held that external drivers for CSR include reputation, customer demands and their expectations, as well as regulation and legislation. His findings suggest that one of the CSP outcomes is to communicate the corporations’ commitment to socially-responsible and sustainability values that stakeholders share.

CSR can help to build reputational benefits, it enhances the firms’ image among external stakeholders and could lead to a favourable climate of trust and cooperation within the company (Camilleri 2014 ). The expenditures on CSR activities are typically intended as long- term investments that are likely to yield financial returns. Corporations “give back” to their constituencies because they believe it to be in their best financial interests to do so. Many authors held that CSR is a driver for innovation and economic growth. They believed that it will help the company to achieve a competitive advantage (Burke and Logsdon 1996 , Lantos 2001 , Sen et al. 2006 ) by deriving positive benefits for both societal stakeholders and for the responsible firms. Therefore, companies should devote their attention to CSR strategies which add value to the business and disregard others’ activities which do not add value to the business (Camilleri 2017 ). In this context, the corporate philanthropy should be deeply rooted in the firm’s competences and linked to its business environment (Porter and Kramer 2002 ). Thus, strategic CSR behaviours may lead to the creation of value for both business and society (Burke and Logsdon 1996 , Lantos 2001 , McWilliams et al. 2006 , Porter and Kramer 2011 ). Strategic CSR could increase the financial performance of businesses, it minimises their costs through better operational efficiencies, boosts the employee morale, creates job satisfaction and reduces the staff turnover, along with other benefits (Camilleri 2017 ).

• Strategic CSR

CSR can bring a competitive advantage if there are appropriate relationships with multiple stakeholders. Therefore, it is in the interest of business to engage in ongoing communications and dialogue with employees, customers, marketplace and societal groups (Morsing and Schultz 2006 , Union 2016 , Bhattacharya et al. 2009 ). Businesses may also need to recognise the potential of building fruitful networks with key marketplace stakeholders, including suppliers, regulatory authorities and the community at large. These stakeholder relationships are needed to bring external knowledge sources, which may in turn enhance organizational skills and performance. Acquiring new knowledge must be accompanied by mechanisms for dissemination. Arguably, there is scope in sharing best practices, even with rival firms. It is necessary for the responsible businesses to realise that they need to work in tandem with other organizations to move the CSR agenda forward.

In the past, the stakeholder theory has demonstrated how businesses could develop long-term mutual relationships, with a wide array of stakeholders. The businesses’ closer interactions with stakeholders could be based on relational and process-oriented views (Godfrey 2005 ). Thus, many firms are already forging strategic alliances in their value chain to run their businesses profitably. Many multinational corporations including Nestlé, Google, IBM, Intel, Johnson & Johnson, Unilever, and Wal-Mart have embraced the ‘shared value’ approach (Porter and Kramer 2011 , Union 2011 , Camilleri 2017 ). In many cases, they are building partnership and collaborative agreements with external stakeholders (including suppliers) hailing from different markets. The most successful businesses are increasingly promoting the right conditions of employment within their supply chains. They are instrumental in improving the lives of their suppliers (Porter and Kramer 2011 ). They do this as they would like to enhance the quality and attributes of their products, which are ultimately delivered to customers and consumers. They have economic responsibilities toward their owners and shareholders (Godfrey et al. 2009 , Desai and Dharmapala 2009 ). Many businesses do not always pay their fair share of taxes to government. Alternatively, they may be accused of not providing the right conditions of employment, or they may even pay lousy wages to their employees (Trejo 1997 ).

Some commentators on the subject of CSR often suggested that the factors that should contribute towards creating value in business and society are often qualitative in nature, and that there are variables that may prove very difficult to measure and quantify, such as, employee morale, corporate image, reputation, public relations, goodwill, and popular opinion (Maignan et al. 1999 , Fombrun et al. 2000 ). Therefore, any discretionary expenditure on altruistic or strategic CSR activities may be regarded as long-term investments that are likely to yield financial returns (McWilliams et al. 2006 , Falck and Heblich 2007 ). Hence, corporate philanthropy, stewardship and cause-related marketing could be re-aligned with the businesses’ profit motives (Camilleri 2017 ). This perspective resonates very well with the agency theory (Eisenhardt 1989 ). In the past, scholars argued that the companies’ only responsibility was to maximise their owners’ and shareholders’ wealth (Levitt 1958 , Friedman 1970 ). Hence, companies were often encouraged to undertake CSR strategies which add value to their business and to disregard other activities which were fruitless. Moreover, at times, the fulfilment of philanthropic responsibilities could simultaneously benefit the bottom line (Lantos 2002 ). Although, it could be difficult to quantify the returns of responsible behaviours, relevant research has shown that those companies that practiced social and environmental responsibility did well by doing good, in the long run (Falck and Heblich 2007 , Porter and Kramer 2011 ). However, other research has shown that it was also possible to overspend on CSR activities (Camilleri 2017 , McWilliams and Siegel 2001 , Lantos 2001 ).

The corporate social responsibility, environmental and ethical behaviours could be triggered by genuine altruism and self-preservation (Hemingway and Maclagan 2004 , Van Marrewijk 2003 ). Some of the contributions on this topic suggest that corporate philanthropy should be deeply rooted in the firms’ competences and linked to their business environment (Porter and Kramer 2002 , Godfrey 2005 ). Many authors often referred to CSR’s core domains (economic, legal and ethical responsibilities) that were compatible and consistent with the relentless call for the business case of CSR (Carroll and Shabana 2010 , Vogel 2005 ). The ethical responsibilities demand that businesses ought to abide by moral rules that define appropriate behaviours within a particular society. Another category of corporate responsibility is related to discretionary, voluntary or philanthropic issues. Corporate philanthropy is a direct contribution by a corporation to a charity or cause, most often in the form of cash grants, donations and/or in-kind services (Kotler and Lee 2008 ). This category of social responsibility is totally dictated at the “discretion” of the organization as there are no laws or codified expectations that guide the corporations’ activities (Rasche et al. 2013 ).

Discretionary responsibilities include those business activities that are not mandated by law, and they are not expected from businesses in an ethical sense (Carroll 1979 ). Practically, some examples where organizations meet their discretionary responsibilities include, when they provide day-care centres for working mothers, by committing themselves to philanthropic donations, or by creating pleasant work place aesthetics (Carroll 1979 ). Evidently, the CSR approach had established a new way of doing business that has led to the creation of value (Porter and Kramer 2011 , Union 2011 , Wheeler et al. 2003 ) with a respectful and proactive attitude towards stakeholders (Freeman 1984 , Lantos 2001 ). The stakeholder theory provides opportunities to align business practices with societal expectations and sustainable environmental needs. The stakeholder relationships support the principle of inclusivity, as the business practitioners ought to strike a balance between the conflicting demands of different stakeholders. Inevitably, businesses need to reconcile disparate stakeholders’ wants and needs (e.g. employees, customers, investors, government, suppliers et cetera).

The CSR’s responsibilities include the obligations toward customers. The businesses maintain economic growth, and meet the consumption requirements in the market. This economic component of CSR represents the fundamental responsibility of businesses. Many firms produce goods and services and sell them at fair prices to customers (including other businesses). This will in turn allow them to make a legitimate profit and to pursue growth and competitiveness. The legal responsibilities of businesses imply that these entities must fulfil their economic mission within the extant framework of rules and regulatory parameters. This legal component recognises the firms’ obligations to obey the relevant laws in the countries where they are trading. Of course, it could prove hard to define and interpret the ethical responsibilities of businesses. This component is often referred to as a “grey area”, as it involves activities that are not necessarily mandated by law but may still entail certain organizational behaviours that are expected by society (Carroll 1979 ).

The economic, legal and ethical responsibilities of corporations are compatible with the business case for CSR (Carroll and Shabana 2010 ), as firms create value to society in the long term with a respectful and proactive attitude towards different stakeholders, including their human resources (Carroll 1991 ). Many commentators argued that the CSR agenda had potential to bring a new wave of social benefits as well as gains for the businesses themselves (Fombrun et al. 2000 , Porter and Kramer 2011 ) rather than merely acting on well-intentioned impulses or by reacting to outside pressures (Van Marrewijk 2003 ). Lozano ( 2015 ) indicated that leadership and the business case are the most important internal drivers for responsible companies. Thus, proper incentives may encourage managers ‘to do well by doing good’ (Falck and Heblich 2007 ). If it is a company’s goal to survive and prosper, it can do nothing better than to take a long-term view and understand that if it treats society well, society will return the favour. Companies could direct their discretionary investments to areas (and cost centres) that are relevant to them (Jamali 2007 , Gupta and Sharma 2009 ). The reconciliation of shareholder and other stakeholders addresses the perpetual relationship between business and society, at large.

The legitimate businesses’ response to the demands of stakeholders allow them to meet and even exceed legal, ethical, and public societal expectations (Carroll 1979 ). Therefore, CSR offers prospects for greater credibility and value added as it involves linking altruistic interventions with long-term strategic goals (Jamali 2007 ). Therefore, corporate philanthropic activities, including stewardship programmes could also create social value to the business practitioners themselves (Camilleri 2017 , Baron 2001 , Carroll and Shabana 2010 ). Certain CSR variables including voluntarism, centrality and visibility could possibly relate to value creation (Husted and Allen 2009 ). One would expect that greater voluntarism would lead to greater creation of value, particularly when CSR initiatives arise as the result of industry, tax, or regulatory constraints (Burke and Logsdon 1996 , Husted and Allen 2009 ). In a similar vein, the environmental regulation can also stimulate the innovation and competitiveness among firms (Orlitzky et al. 2011 ). The incorporation of multiple elements of competitive advantage increases the likelihood that a CSR initiative will succeed and create value for the firm (Burke and Logsdon 1996 ). There could be an optimal level of spending on CSR and environmental responsibility, as businesses are expected to continuously balance conflicting stakeholder interests for long term sustainability (Orlitzky et al. 2011 , Camilleri 2017 ).

Environmental sustainability and corporate sustainability

The term “sustainable development” has been defined in many ways, but the most frequently quoted definition is from “Our Common Future”, also known as the Brundtland Report, that was published way back in 1987. A central contribution of this report was the intermittent link between human development and actions toward environmental responsibility for the benefit of future generations (Camilleri 2014 ). Thirty years ago, the sustainable development agenda necessitated empirical research data. Debatably, today academia is calling for more policy and concrete action. Many governments as well as businesses are changing their stance on sustainability as they are becoming more proactive rather than reactive on social and environmental issues. Porter and Kramer ( 2011 : 74) recommended that national governments could set performance standards to big businesses. They suggested that they should not interfere with the methods to achieve them, “those are left to companies” (2011:74). In this day and age, we are increasingly witnessing a growing consensus on principles and regulatory guidelines. The initial flurry of codes and guidelines seem to have settled around a few core standards, such as the Global Reporting Initiative’s Sustainability Reporting Guidelines, the UN Global Compact and the Sustainable Development Goals, the World Resources Institute’s Greenhouse Gas Protocol and the UN Principles for Responsible Investment. This change toward sustainable and responsible business is a long-term process, but the momentum is important to reach the necessary tipping points in public opinion, policy response and business action. As a matter of fact, most of the largest corporations are continuously re-articulating their codes of conduct, certifiable standards, corporate programmes, industry initiatives, green politicians, triple-bottom-line reports and documentaries about sustainability (Brundtland 1987 ). Nevertheless, many of the global challenges are still present today — be they climate change, water depletion, biodiversity loss, bribery and corruption or income inequality, among others.

The term “sustainability” can mean different things to a variety of constituencies. While there may be no objection to the sentiments expressed by multiple stakeholders on the respective definitions for sustainable business, most of them are far from holistic. The sustainability systems may be too complex and varied, and their applications could be quite diverse. Some authors have attempted to relate sustainability with the corporations’ responsible behaviours: Interestingly, the corporate sustainability construct was also related to a nested system consisting of economic, societal, and ecological systems. These pillars are interconnected to each other where the economy is part of society, which is also a fundamental part of the larger ecological system. Corporate sustainability relies on six criteria: eco-efficiency, socio-efficiency, eco-effectiveness, socio-effectiveness, sufficiency and ecological equity (Dyllick and Hockerts 2002 ). These corporate sustainability imperatives can be structured into value systems that could result in a better financial performance (Salzmann et al. 2005 , Van Marrewijk 2003 ). A few researchers have developed (self)-assessment tools, that could be used to audit, analyse and interpret corporate sustainability (Van Marrewijk 2003 , Clarkson 1995 ). However, corporate sustainability may be contingent on different parameters (e.g. technology, regime and visibility) that could vary across industries, plants and countries (Salzmann et al. 2005 ). Corporate sustainability could reduce the downside operational risk as it comprises relevant measures that are intended to increase eco-efficiency, and health and safety performance among other issues (Porter and Kramer 2002 , Porter and Kramer 2011 , Camilleri 2014 ). This means that the economic value of sustainable business strategies could be materialised in the long-term (Weber 2008 , Guenster et al. 2011 ).

Notwithstanding, there are the long term effects of corporate sustainability on intangible assets (e.g. brand value, employee loyalty) could be difficult to quantify (Salzmann et al. 2005 , Dyllick and Hockerts 2002 ). Although some commentators have voiced their opposition to the normative calls in favour of the “sustainability rhetoric” (Salzmann et al. 2005 , Vogel 2007 ), it may appear that we are witnessing a relentless progression from active antagonism, through indifference, to a strong commitment to actively furthering sustainability values, not only within the organization, but across many industries and in our society as a whole. These recent developments imply that the organizations’ commitment to responsible behaviours may represent a transformation of the corporation into a truly sustainable business that is adding value to the business itself, whilst also adding value to society and the environment. Perhaps, there is scope for more collaboration between CSR and corporate sustainability fields. This synergy could help to increase the impact of social and environmental performance research within the field of strategic management. Ultimately, the corporate sustainability’s strategic goals are economic development, institutional effectiveness, stakeholder orientation and sustainable ecosystems (Dyllick and Hockerts 2002 , Shrivastava 1995 ).

Creating value for all: Seeking win-win outcomes with stakeholders

Firms create simultaneous, pluralistic definitions of value whilst targeting their stakeholders. In a similar vein, the resource based view (RBV) theory suggests that the resources of the firm affect its activities and growth, profits and the level of sustained competitive advantage (Barney, 1991 ). Significant areas of study which are synonymous with the corporate sustainability and responsibility approach include, ‘the Virtuous Circles’ (Pava and Krausz 1996 , Preston and O'bannon 1997 , Waddock and Graves 1997 ), ‘The Sustainable Local Enterprise Networks’ (Wheeler et al. 2005 , ‘The Triple Bottom Line Approach’ (Elkington 1998 ), ‘The Supply and Demand Theory of the Firm’ (McWilliams and Siegel 2001 ), ‘The Value Based Networks’ (Wheeler et al. 2003 ), ‘The Base of Pyramid Approaches’ (Anderson and Markides 2007 , Landrum 2007 ), ‘the Win-Win Perspective for CSR practices’ (Falck and Heblich 2007 ), ‘Creating Shared Value’ (Porter and Kramer 2011 , Union 2011 ), ‘Value in Business’ (Lindgreen et al. 2012 ), ‘The Stakeholder Approach to Maximizing Business and Social Value’ (Bhattacharya et al. 2012 ) and ‘Value Creation through Social Strategy’ (Husted et al. 2015 ), among others.

Very often, these value-based theories suggest that businesses should continuously monitor and evaluate their performance in terms of their economic results. It may appear that many of these propositions focus on identifying and expanding the connections between societal and economic progress. Whilst the traditional school of thought for CSR’s had primarily focused on responsibility, Porter and Kramer ( 2011 ) argued that their creating shared value (CSV) approach is inherently different than CSR. Yet, other academics did not view CSV as unrelated to strategic CSR practices (de los Reyes et al. 2016 , Beschorner 2014 ). Porter and Kramer ( 2011 ) contended that their proposed strategy has set out new business opportunities as it creates new markets, improves profitability and strengthens the corporations’ competitive positioning. The reason for this is that the businesses processes in the value chain operate in an environmental setting within their wider community context (Porter 2001 ). It may appear that Porter and Kramer ( 2011 ) had focused on the value chain activities that could bring opportunities for competitive advantage. The authors contended that there is shared value when the organizations’ social value propositions are integrated into their corporate strategies. Therefore, companies could benefit from insights, skills, and resources that cut across profit/non-profit and private/public boundaries. On the other hand, companies will be less successful if they attempt to tackle societal problems on their own.

Porter and Kramer ( 2011 ) maintained that companies could create shared value opportunities by reconceiving products and markets. Hence, new products and services that meet social needs or serve overlooked markets will require new value chain choices in areas such as production, marketing, and distribution. These revised configurations will create demand for equipment and technology that could save energy, conserve resources, and support employees. They argued that their shared value approach redefines productivity in the value chain by enabling local cluster development. They reiterated that their suggested avenues for creating shared value are mutually reinforcing as corporations, their marketplace stakeholders and the governments ought to work together to develop clusters that enable more local procurement and less dispersed supply chains. For example, Nestlé can be considered as a pioneer of the shared value initiative. The multinational organization has accessed new products, reconfigured and secured the value chain by tapping into new or better resources (through partners and cluster development) whilst improving their capabilities (in terms of skills, knowledge and productivity) of its suppliers. Nestlé sources its materials from thousands of farms in developing countries, where it provides training to farmers for sustainable production. This way, the company protects its procurement, raises its standards and maintains a high quality of the raw materials it uses. At the same time, these suppliers run profitable farms, as they offer their children a fairer future through better education. Moreover, both Nestlé and its suppliers are committed to protecting their natural environmental resources for their long-term sustainability. Nestlé’s business principles have incorporated ten United Nations Global Compact Principles on human rights, labour, the environment and corruption. The company maintains that it complies with international regulatory laws and acceptable codes of conduct, as it improves its company’s operations. Firms don’t just need to prepare financial reports. In a lot of countries, they’re legally required to report social and environmental information. And they have to build up accounting systems to do so (Rasche et al. 2013 ). Very often the companies’ responsible management may involve designing business processes and activities in a way that they meet certain social and environmental minimum standards.

Relevant academic literature is indicating that today’s businesses are strategically re-orienting themselves toward corporate sustainability and corporate responsibility whilst focusing on their stakeholders’ needs. Strand et al. ( 2015 ) suggested that CSV necessitates heightened forms of collaboration and stakeholder management as they remarked about the apparent links between creating shared value and stakeholder theory. Strand et al. ( 2015 ) posited that Porter and Kramer’s ( 2011 ) shared value proposition is a response to the competitive, conflict-based view of strategic management that Michael Porter himself helped to create (Strand 2014 ). However, some critics have argued that ‘shared value’ is based on a shallow conception of the corporation’s role in society (de los Reyes et al. 2016 , Crane et al. 2014 , Beschorner 2014 ) For instance, Crane et al. ( 2014 ) held that CSV looks naïve by ignoring the tensions that could exist between social and economic goals. They suggested that this proposition simplifies the role of corporations in society and ignores the challenges arising from business compliance. Their argument was that there are alternative ways to re-invent capitalism (Corazza et al. 2017 ). This strategic approach cannot cure all of society’s ills as not all businesses are good for society, nor would the pursuit of shared value eliminate all injustice (Porter & Kramer, 2014 ). Beschorner ( 2014 ) also noted that the creation of business value and social value may not always go hand in hand. He regarded Porter and Kramer’s ( 2011 ) shared value approach as a reformulation of a classical strategic stakeholder approach that tends to prioritise the relevance of stakeholders according to their influence on the business’ activities. Although shared value seems to address “win-win” business and society issues, it leaves managers ill-equipped to legitimately manage issues where they face the prospect of “win-lose” or “lose-win” social engagements (de los Reyes et al. 2016 ).

The way forward: -corporate sustainability and responsibility

In the past, CSR may have been more associated with corporate philanthropy, stewardship principles, contributions-in-kind toward social and environmental causes, environmental protection, employees’ engagement in community works, volunteerism and pro-bono service among other responsible initiatives. Very often, such altruistic CSR activities may have not resulted in financial performance to the business per se. On the contrary, certain discretionary expenses in corporate philanthropy could have usurped the businesses’ slack resources (including financial assets, labour and time) without adding much value (in terms of corporate reputation and goodwill) to the businesses. Nevertheless, this research reported that the contemporary discourses on corporate social responsibility are opening new opportunities for the businesses themselves. The academic discourse about CSR is moving away from ‘nice-to do’ to ‘doing-well-by-doing-good’ mantra. Evidently, the value-based approaches that were discussed in this paper could be considered as guiding principles that will lead tomorrow’s businesses to long term sustainability (in social and economic terms). Debatably, the profit motive (the business case or corporate sustainability concepts) could be linked with the corporate responsibility agenda. This way, the multinational corporations could be better prepared to address their societal and environmental deficits across the globe, whilst adding value to their business.

This review paper has built on the previous theoretical underpinnings of the corporate social responsibility agenda including Stakeholder Management, Corporate Citizenship and Creating Shared Value as it presents the latest Corporate Sustainability and Responsibility perspective. This value-based model reconciles strategic CSR and environmental management with a stakeholder approach to bring long term corporate sustainability, in terms of economic performance for the business, as well as corporate responsibility’s social outcomes. Recently, some international conferences including Humboldt University’s gatherings in 2014 and 2016 have also raised awareness on this proposition. The corporate sustainability and responsibility concept is linked to improvements to the companies’ internal processes including nvironmental management, human resource management, operations management and marketing (i.e. Corporate Sustainability). At the same time, it raises awareness on the businesses’ responsible behaviours (i.e. Corporate Responsibility) toward stakeholders including the government, suppliers, customers and the community, among others. The fundamental motivation behind this approach is the view that creating connections between stakeholders in the value chain will open-up unseen opportunities for the competitive advantage of responsible businesses, as illustrated in Table  2 .

Corporate sustainability and responsibility focuses on exploiting opportunities that reconcile differing stakeholder demands as many corporations out there are investing in corporate sustainability and responsible business practices (Lozano 2015 ). Their active engagement with multiple stakeholders (both internal and external stakeholders) will ultimately create synergistic value for all (Camilleri 2017 ).

Multinational organizations are under increased pressures from stakeholders (particularly customers and consumer associations) to revisit their numerous processes in their value chain activities. Each stage of the company’s production process, from the supply chain to the transformation of resources could add value to their businesses’ operational costs as they produce end-products. However, the businesses are always expected to be responsible in their internal processes toward their employees or toward their suppliers’ labour force. Therefore, this corporate sustainability and responsibility perspective demands that businesses create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility. In sum, corporate sustainability and responsibility may only happen when companies demonstrate their genuine willingness to add corporate responsible dimensions and stakeholder engagement to their value propositions. This occurs when businesses opt for responsible managerial practices that are integral to their overall corporate strategy. These strategic behaviours create opportunities for them to improve the well-being of stakeholders as they reduce negative externalities on the environment. The negative externalities can be eliminated by developing integrated approaches that are driven by ethical and sustainability principles. Very often, multinational businesses are in a position to mitigate risk and to avoid inconveniences to third parties. For instance, major accidents including BP’s Deep Horizon oil spill in 2010, or the collapse of Primark’s Rana Plaza factory in Bangladesh, back in 2013, could have been prevented if the big businesses were responsible beforehand.

In conclusion, the corporate sustainability and responsibility construct is about embedding sustainability and responsibility by seeking out and connecting with the stakeholders’ varied interests. As firms reap profits and grow, there is a possibility that they generate virtuous circles of positive multiplier effects (Camilleri 2017 ). Therefore, corporate sustainability and responsibility can be considered as strategic in its intents and purposes. Indeed, the businesses are capable of being socially and environmentally responsible ‘citizens’ as they are doing well, economically. This theoretical paper has contributed to academic knowledge as it explained the foundations for corporate sustainability and responsibility. Although this concept is still evolving, the debate among academic commentators is slowly but surely raising awareness on responsible managerial practices and on the skills and competences that are needed to deliver strategic results that create value for businesses, society and the environment.

Limitations and future research avenues

No research is without limitations. This conceptual paper could not have featured all of the contributions that are related to CSR’s value driven notions. However, the scope of this paper has been reached. The corporate sustainability and responsibility proposition could appeal to business practitioners themselves, as sustainable and responsible behaviours may bring significant improvements to their firms’ bottom lines. Of course, there are diverse contexts across different industry sectors (and jurisdictions) that will surely influence the successful implementation of corporate sustainability and responsibility practices and their reporting mechanisms. Notwithstanding, it may prove difficult to quantify the tangible and intangible benefits of corporate sustainability and responsibility. Future theoretical and empirical research may address these challenging issues, in further detail. Indeed, there is also potential for more conceptual development in this promising area of strategic management.

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Corporate social responsibility research: the importance of context

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There has, in recent times, been an increasing interest in understanding corporate social (and environmental) responsibility (CSR) and, in particular, CSR reporting in developing countries. However, many of these studies fail to investigate fully the contextual factors that influence CSR and reporting in those countries, preferring to rely on theories and hypotheses developed from studies undertaken in the West, particularly the US, UK and Australasia.

It may be argued that this is appropriate as many emerging economies are experiencing growth and moving towards having a more market-based orientation. Notwithstanding this, a large number of these countries have an entirely different socio-political environment, with different political regimes, legal systems and cultural influences. These factors have a significant effect on the applicability of theories such as stakeholder theory, legitimacy theory and accountability theory, which are commonly used to explain the phenomenon of reporting.

In State Capitalist countries, such as China, an important influence on companies is the political ideology that underpins the nation’s government. The nature and impact of ideology and hegemony in China has been under-studied and, therefore, investigating how the ideology, and competing forces that may mitigate its influence, manifest themselves in Chinese reporting are essential. In the Middle East, countries such as Saudi Arabia have no free press, are ruled by a royal family, have a market dominated by the oil industry, and potential religious influences. Such socio-cultural differences mean societies develop different understandings of concepts such as sustainability and social responsibility. Finally, countries such as Sri Lanka have some similarities to other developing countries, but their economy is set against a background of a recent civil war – operating in a post-conflict economy is a factor rarely considered in social and environmental disclosure, yet has important influence on policy in these areas.

This paper discusses three contextual issues that warrant more and improved consideration in CSR research, with particular emphasis on CSR reporting research.

More and more corporations worldwide are involved in corporate social responsibility activities, and as a result are providing more social and environmental information to the public. Following from this, CSR disclosure, or reporting, has become one of the major fields of investigation by accounting scholars (Deegan 2009 ; Mathews 1997 ; Tilt 2001 ). Research that considers both CSR activity and CSR reporting has traditionally focused on companies in more developed economies, predominantly the US, UK, Australia and New Zealand (Burritt and Schaltegger 2010 ; Frost et al. 2005 ; Gray 2006 ; Gurvitsh and Sidorova 2012 ; Othman and Ameer 2009 ; Patten 2002 ; Sahay 2004 ), but recently there has been increasing interest in understanding the phenomenon in developing countries particularly as they experience growth and move towards a more capitalist orientation (Sumiani et al. 2007 ). Of the research that does exist, a number of papers suggest that ‘country’ is a determinant for CSR involvement and for the level of disclosure, but do not go much further.

Many of the studies of developing countries however, choose a framework for their investigation based on those shown to be meaningful for explaining disclosure in developed, capitalist economies. That is, they fail to investigate fully the contextual factors that influence firms and their reporting in those countries that have a different social, political, legal and/or cultural context.

It may be argued that this is appropriate as many emerging economies are experiencing growth and moving towards having a more market-based orientation. However, this is rarely acknowledged or questioned in these papers. Yet, it is reasonable to suggest that these factors have a significant effect on the applicability of theories such as stakeholder theory, legitimacy theory and accountability theory, which are commonly used to explain the phenomenon of reporting.

The majority of the world’s population lives in developing countries and each country experiences its own unique social, political and environmental issues (United Nations 2013 ). These countries are in the process of industrialisation and are often characterised by unstable governments, higher levels of unemployment, limited technological capacity, unequal distribution of income, unreliable water supplies and underutilised factors of production. As a result of rapid industrial development, policies are pursued that aim to attract greater foreign investment, and the investors are often keen to start benefitting from fiscal incentives and cheap labour. While these strategies make economic sense, they have adverse social and environmental effects, including the use of child labour, low or unpaid wages, unequal career opportunities, occupational health and safety concerns, and increased pollution.

In a review of the literature on determinants of CSR reporting (Morhardt 2010 ), reports that research on the impact of different variables in different regions is inconclusive due to the lack of enough studies. Factors that may influence CSR disclosure practices fall broadly into internal and external (Fifka 2013 ; Morhardt 2010 ), but are commonly classified further as (Adams 2002 : p224):

Corporate characteristics, such as size, industry group, financial/economic performance and share trading volume, price and risk;

General contextual factors, such as country of origin, time, specific events, media pressure, stakeholders and social, political, cultural and economic context; and

Internal contextual factors, including different aspects of corporate governance.

While CSR reporting has been studied by a large number of scholars, only a few fall into the second of the categories above, and consider context in detail. This is particularly relevant when considering developing countries. A few papers have specifically reviewed studies on developing countries. For example, (Belal and Momin 2009 ) categorise the work on developing countries into three groups: studies of the volume or extent of reporting; studies of the perceptions of CSR reporting by managers; and studies of the perception of CSR reporting by stakeholders. In all the studies reviewed there is little discussion of the context, other than a description of the country, and no real thought about the theoretical assumptions being made.

This paper presents a discussion of the different contextual issues or factors that show some evidence or potential to influence CSR and reporting in developing countries. It focusses on three specific issues and provides a research agenda for future consideration of the influence of context in CSR reporting research. The paper is structured as follows. The next section introduces some broad contextual factors that warrant consideration in the literature on CSR reporting. Next, three specific contextual issues are examined: the role of political ideology and hegemony; the influence of cultural understandings; and the impact of historical economic context. Finally, by way of conclusion, some recommended areas for further research are suggested.

Contextual considerations

Adams ( 2002 ) talks about the social, political, cultural and economic context, so some consideration of what this might mean is needed as each of these concepts themselves cover a variety of aspects, and indeed overlap. While papers may talk about the ‘social context’ in which the companies being examined operate, this is not well defined and little consideration is given to what this means. Some things that could be more explicitly considered include, inter alia : the role of the press; the status of women; the legal/justice system; the level of corruption; the level of government control, cultural understandings; and so on. This paper chooses to highlight three of these areas, and these are discussed briefly below in broad terms, followed by a discussion of some specific aspects of each identified as providing fertile grounds for future research.

Political system

Assumptions are often made about capitalist systems, whether explicit or implicit, as the vast majority of work on CSR reporting has been done in the Western context. However, there is little research looking at CSR reporting in socialist or communist countries. Some work has been undertaken on China (Dong et al. 2014 ; Gao 2011 ; Situ and Tilt 2012 ), but this work often applies the same conceptual frameworks as Western studies. What about the influence of ideology, and hegemony?

Sociocultural environment

Human beings have “distinctive cultural (learned) characteristics, histories and responses to their environment” and the term ‘sociocultural’ is commonly used in anthropological research to describe these and the “interactions and processes” that this involves (Garbarino 1983 : p1). Some general studies of culture and CSR using Hofstede exist (Silvia and Belen 2013 ), but an in-depth analysis of different understandings and conceptions of terms such as CSR as a result of sociocultural influences is lacking. The work that does examine specific factors often suggests that the Western concept of CSR does not fit these contexts (Wang and Juslin 2009 ).

The majority of work that considers sociocultural factors has looked mainly at religious aspects of CSR, most commonly by reviewing reporting by Islamic organisation, such as Islamic banks (Maali et al. 2006 ; Siwar and Hossain 2009 ; Sudarma et al. 2010 ). The teachings of many religions focus on social responsibility, the relationship with the natural environment, treatment of others, fairness, justice, etc., so there is a natural expectation that religion-based organisations may be more likely to engage in CSR and CSR reporting. A more nuanced consideration of how this manifests itself in different societies would improve understanding of the drivers and motivations of these activities. Similarly, other sociocultural factors, such as national identity, values, social organisation and language, could be incorporated.

Stage of development

The emerging literature on CSR reporting outside the Western world examines countries that are ‘developing’ (Belal and Momin 2009 ; Momin and Parker 2013 ), but little depth is included about where they are in their development journey and how the potential conflict between economic and social goals impacts CSR or CSR reporting. Rostow’s ( 1962 ) Stages of Economic Growth model suggests there are five stages (traditional society, preconditions for take-off, take-off, drive to maturity, and age of high or mass consumption), yet most literature on CSR classifies countries only into developed or developing. The ‘developing’ classification potentially includes countries that are in Rostow’s first, second or third stage which may have an impact on their response to CSR issues. In addition to economic variables however, the United Nations also produces a Human Development Index (HDI) which considers life expectancy, education and income to measure how social, as well as economic, development (UNDP 2015 ). Both these concepts are important for consideration of CSR.

Importantly, consideration of just one or two aspects of these three broader contextual issues may result in misinterpretation of the results. Often these things interact, for example, social issues often cross over with cultural and religious impacts, or even with political influence where the regime is more hegemonic. It is thus important to consider, or at least acknowledge, the holistic nature of the context of the phenomenon being examined.

It is beyond the scope of this paper to discuss all of the issues raised here although this would be an important part of a larger research program. Therefore, three particular contextual issues, and three specific contexts, are the focus of this paper: the role of political ideology and hegemony (China); the influence of cultural understandings (Middle East); and the impact of historical economic context (Sri Lanka).

Politics, ideology and state control

Ideology is a set of common beliefs that are shared by a group of people, and is “the fundamental social beliefs that organize and control the social representations of groups and their members” (Van Dijk 2009 : p78). Countries such as China provide a fertile research setting to examine the influence of ideology, and hegemonic approaches of influencing CSR, which have been missing from most CSR research in the region.

The Chinese political model has some unique characteristics. Among these is the dominance of ‘the party state’, which exercises control in different forms over most aspects of the economy that is unmatched when compared to other state capitalist economies. Political leaders use a variety of tools (Bremmer 2010 ) and it is the combination of three particular tools that sets apart the Chinese system: the exercise of control as a dominant shareholder, the ability to appoint key positions in major firms, and the means to influence decision-making via ideology. First, the party exerts shareholder power over state-owned enterprises (SOEs). Chinese SOEs play an instrumental role in society (Du and Wang 2013 ) and make up around 80 % of the stock market (Economist T 2012 ). As protecting the environment is a major part of the guiding ideology and the nation’s policy, SOEs are likely to be keen to provide CER. Second, the party exercises power over the appointment of the senior leadership in SOEs (Landry 2008 ). This has resulted in control as they are “cadres first and company men second. They care more about pleasing their party bosses than about the global market” (Economist T 2012 : p6). Third, party control is exercised through ideology. The party has cells in most larger firms, whether private or state-owned, which influence business decisions made at board meetings. Given that China considers the Marxist-Leninist-Maoist ideology as crucial this distinguishes it most significantly from other varieties of state capitalism that have a more liberal-democratic flavour.

There is some evidence that the first form of party control has been declining in recent times with the number of SOEs under the SASAC’s control halving over the last decade (Mattlin 2009 ). Similarly, since 1999, the share of SOEs in the economy has declined from 37 % to less than 5 %. This results in greater use of regulation and ideological hegemony to achieve its aims, yet most CSR research still uses state-ownership as a proxy for all types of state control.

Even after economic reform, ideology in China was still pervasive (Lieber 2013 ). Lieber ( 2013 ) argues that ideology is widely used to signal loyalty and the government is good at using ideology to “control and direct key vocabularies… (and) vague ideological language can create a climate of uncertainty thus increasing the range of a control regime” (Lieber 2013 : p346). However, the prevailing ideological themes in China are dynamic. In particular, most recently, new ideological themes have developed to respond to the changes in society. When economic reform began, “building up a socialist market economy with specific Chinese characteristics” was the guiding ideology (Zhang 2012 : p25). As such, economic growth was the country’s priority, but in 2005, “building up a harmonious society became the prevailing ideology” (and CSR is a key element of this resolution).

Ideology is used by the Chinese government to exert control over businesses. Traditionally, the government has “been considered a source of moral authority, official legitimacy and political stability…and …political language has been vested with an intrinsic instrumental value: its control represents the most suitable and effective way first to codify, and then widely convey, the orthodox state ideology” (Marinellin 2012 : p26). The language “developed and used by party officials … consists of ‘correct’ formulation, aims to teach the ‘enlarged masses’ how to speak and, how to think” (Marinellin 2012 : p26). The idea of the importance of a ‘Harmonious Society’ is the “re-contextualized discourse in response to the emergent issues in the changing social stratification order” (Zhang 2012 : p33). As a result, Chinese companies have been noticeably adopting the language of social concern and environmental protection.

It may therefore be suggested that CSR reporting in China is directly a response to the government’s ideological hegemony. However, the story is not as straightforward as it may first appear, for two reasons. First, despite a great deal of commitment to social and environmental regulation in China, implementation of these regulations has been limited. Second, as China enters a phase of continued economic development, Western influences may begin to have a moderating effect on the strength of the ideology.

The Chinese economy has grown rapidly in terms of gross domestic product (GDP) (World Bank 2016 ). The economic reforms that took place over the past decades were motivated substantially by the Chinese central government, and recent scholars have noted the positive role that ideology played in driving those reforms, notwithstanding that economists historically view ideology as “distorting… knowledge, judgment and decision making” (Lieber 2013 : p344).

With economic reform however, has come substantial environmental degradation which in turn has led to poor health outcomes for much of society generally. This led to a high level of commitment to environmental regulation in particular from as early as the 1990, followed by the release of even more rigorous regulations on environmental protection in the 2000s. However, despite the high commitment made by the Chinese central government, implementation of these policies is quite poor (Bina 2010 ). In terms of environmental regulation, for example, the implementation problems stem from a number of areas, including: the position of environmental protection agencies in the political framework; conflict between central and local governments; and supervision issues. The system of supervision of local environmental departments is a key problem (Bina 2010 ). When an environmental department is set up in the central government, corresponding environmental departments are set up in local governments. Ideally, these local departments should be agencies of the central department, deliver the central environmental department’s strategies, and supervise local environmental protection implementation. In reality, the local environmental departments are subservient to the local rather than central governments. All their financial support and staff appointments come from local governments. Therefore, rather than supervising local environmental protection implementation, the local environmental departments become “rubber stamps” for local governments (Zheng 2010 ). Therefore, it is unlikely that there will be efficient enforcement of environmental laws, regulations and policies at the local level (Bina 2010 ; Zheng 2010 ).

Finally, as China heads towards a market economy, government intervention becomes a policy choice, and markets function as a tool of national interest (Zhao 2011 ). However, as Chinese firms become more involved with foreign trading partners and markets, their reporting activity is also influenced by foreign and global organisations, leading to potential tension between demonstrating commitment to state ideological goals and meeting the requirements of global stakeholders.

Given the complexity of the context, research into CSR reporting in China needs to take into account the specific aspects of Chinese politics and culture in order to provide a nuanced understanding, and ultimately an improvement, of CSR reporting activities. However, a review done of the literature on CSR in by Chinese showed that it is very descriptive with little depth and much of the CSR literature is conceptual, descriptive, or argumentative in nature (Guan and Noronha 2013 ). The authors noted proper research methodologies are not systematically applied in some studies, and supporting theories are lacking. In the non-Chinese studies on China, there is also a predominance of papers on determinants and volume of reporting (Situ and Tilt 2012 ), with very few considering broader contextual factors, other than a few that look at specific cultural attributes (e.g., Rowe & Guthrie 2009 ).

Sociocultural understandings

Notwithstanding a move towards a market orientation of many developing countries, such as in China as outlined above, conceptions of CSR by management of companies in these countries may be quite different to those in the West (Wang and Juslin 2009 ). These differing conceptions may be a result of differing values and attitudes, language, religion or identity. Even specific elements of CSR are conceived of differently, for example in China, the main understanding of sustainability is in terms of environmental protection (Situ et al. 2013 , 2015 ). These socioculturally derived understandings are inevitably reflected in their reporting.

In another example, in the Middle East, the predominant perception of CSR is that it simply means philanthropic donations. In this region, the issue of social responsibility is relatively new, and as such the number of studies of CSR and CSR reporting in the Gulf region is growing (Al-Khatar and Naser 2003 ; AlNaimi et al. 2012 ; Emtairah et al. 2009 ; Mandurah et al. 2012 ; Marios and Tor 2007 ; Minnee et al. 2013 ; Nalband and Al-Amri 2013 ; Naser et al. 2006 ; Naser and Hassan 2013 ; Qasim et al. 2011 ; Sangeetha and Pria 2012 ). Many of these studies do not consider the cultural context to a very great extent as the research is emerging and focusses on perceptions. For example, Mandurah et al. ( 2012 ) and Emtairah et al. ( 2009 ) explored managerial perceptions of the concept of CSR in Saudi Arabia and found that managers are aware of the concept, but there is little connection between the managerial level perceptions and firms’ workforce. The authors describe CSR as being in its infancy phase, which limits the understanding of the concept to the view that CSR simply means being philanthropic. This indicates a different, and perhaps less developed, understanding of the concept in the region compared with the West, but the reasons for this, and the consequences for CSR reporting, are under-explored. Some authors suggest the narrow use of the term is because of the religious obligations towards society, (Visser 2008 ). There is only minimal evidence of any CSR practices other than philanthropy-based or any strategic approaches to CSR for long-term benefits (Visser 2008 ), but the trend is increasing and the forms that philanthropy takes is expanding.

It has also been argued that politics plays a significant role in increasing the awareness of CSR in the Arab world. Avina ( 2013 ) suggests that the perception of CSR in the Middle East changed after the Arab spring event, for both local and international firms. The term CSR more than a decade ago had little meaning to the public (Visser 2008 ) but since the Arab spring, the sense of social responsibility among civil society and the corporate sector has increased Avina 2013 ). Firms realised that they play a role in social responsibility, not just governments, and recognised that CSR should go beyond just donations to charitable causes (Avina 2013 ). Ronnegard ( 2013 ), however, predicts that CSR in the Middle East will not mimic the Western concept because of the strong influence of culture and religion in the region. Moreover, the influence of stakeholders in the Middle East is considered to be limited due to there being a lack of free press, few lobby groups and the different cultural attributes of employees and consumers. Some studies in Gulf countries have however, suggested that stakeholders, such as government and charitable organisations, may have an impact on firms’ behaviour (Emtairah et al. 2009 ; Naser et al. 2006 ). Others suggest that CSR may have developed as a concept due to the increase of foreign direct investment into Arab countries, the trend of shifting family and government owned firms into the public domain, and the globalisation of the region’s large national firms.

From the limited studies that have been undertaken, there is evidence of CSR reporting by Gulf country companies, with human resources and community involvement being the dominant themes in may reports Abu-Baker and Naser 2000 ). Thus, understanding of motivations for CSR reporting is not yet well developed and few existing studies consider the different level of stakeholder pressure in the region. This suggests that more research is needed on the formation of notions of CSR within specific contexts. This region is of particular interest because, according to the Human Development Report (HDI 2013 ), countries in the region are classified as high, or very high, in human development. That is, they are not only trying to develop and improve their economy, but are also trying to improve the quality of life of their citizens (Ramady 2010 ). The overall outlook of these countries indicates that they are performing well, however, Fadaak ( 2010 ) notes that identifying poverty lines is a challenge because of a lack of a clear definition of poverty in the region. There are no official reports considering poverty or other social problems and no GCC (Gulf Cooperation Council) countries were found in the list of the World Bank Database in relation to the poverty rate.

Similarly, in other developing countries the importance of local economic, cultural, and religious factors that shape the business environment, and understandings of charity and philanthropy, need to be taken into account. Empirical work in this area is lacking (Lund-Thomsen et al. 2016 ). In Sri Lanka, for example, “the most common arguments used to ‘sell’ the business case for CSR and CP [Corporate Philanthropy], for example an improved brand image, increased market or customer share, employee retention, mitigated regulatory risks, and reduced tax burden, are considered mostly irrelevant” (Global Insights 2013 : p1). Business leaders engage in CSR for a range of business, humanitarian, social, religious, and political reasons. Key amongst them is a belief that ‘giving back’ to society discharges religious obligations to the poor, and an awareness that being seen to contribute to national development goals is important (Global Insights 2013 ). Hence, the conception of CSR in this region is culturally determined, but also shaped by the economic environment.

• Economic development

As well as government control, culture and political factors, the stage of economic development a country is in is also an important contextual factor that may impact CSR reporting. In China, as discussed above, the drive for economic reform led directly to environmental impacts which needed to be addressed. A number of other developing countries have been examined for their reporting on CSR issues, particularly from the Asian region (Andrew et al. 1989 ; Elijido-Ten et al. 2010 ), India (Mishra and Suar 2010 ; Raman 2006 ; Sahay 2004 ), and Bangladesh (Belal and Owen 2007 ; Belal and Roberts 2010 ; Khan 2010 ; Muttakin et al. 2015 ).

While these countries are classified as developing (IMF 2015 ), Bangladesh and India score only medium for human development. Another country in the region, Sri Lanka, has a high rating on the HDI, and has been exhibiting extensive growth since the end of a 30-year war (WPR 2015 ). Thus, exhibiting both economic and social growth aspects makes it an interesting case for studying CSR.

Sri Lanka has a population of over 20 million and foreign companies have increased their investments with one billion US dollars in direct foreign investments in 2013 alone ( BOI ). Classified as a middle income developing country, the challenge for Sri Lanka is to achieve high economic growth without causing irreversible damage to the environment and while continuing to eliminating social issues such as poverty, malnutrition and poor workplace ethics (Goger 2013 ). In addition, Sri Lanka also has a long history of corporate philanthropy, largely led by individuals whose values and actions stem from religious and cultural views (Beddewela and Herzig 2013 ) but has recently seen an increase in private firms offering development-related initiatives. Public infrastructure projects have been the main element of post-war economic planning, but there still remains rural poverty in the country. Thus, the primary motivation for CSR and philanthropy in Sri Lanka is poverty reduction, particularly for children and youth, social welfare organisations like orphanages and elderly homes, hospitals and health services, and veterans’ charities (Global Insights 2013 ). Thus, the economic, cultural, and political context means that these poverty rates have fallen (data indicates that the rate went from approximately 20 % in 2000 to under 9 % in 2013) and that inflation has slowed (Wijesinha 2014 ), so opportunities for private businesses to contribute to infrastructure abound. However, these private, development-orientated, CSR initiatives have often failed to deliver their aims and there is considered to be a danger that they may in fact perpetuate the causes of poverty and ethnic and religious conflict given their ties to particular ethnic groups (Global Insights 2013 ).

Notwithstanding this environment, the topic of CSR reporting in Sri Lanka has received relatively little research attention compared to other parts of the world (see Belal and Momin 2009 , for a review). In terms of motivations for CSR, there is some evidence that firms in which senior management have a positive outlook towards social and environmental practices tend to disclose more on these aspects, as compared to other firms (Fernando and Pandey 2012 ). However, reporting on CSR initiatives is not mandatory thus it is likely that any voluntary reporting by Sri Lankan firms will vary significantly. One study of reporting was conducted by Senaratne and Liyanagedara ( 2012 ) who examined the level of compliance with Global Reporting Initiative (GRI) guidelines in the disclosures of publicly listed companies, selected from seven business sectors. The authors conclude that the level of compliance with the GRI is low and that disclosures vary significantly amongst the companies, potentially reflecting varying commitment to CSR. Similarly, a longitudinal study across five years (2005–2010) was carried out by Wijesinghe ( 2012 ) to identify trends in CSR reporting in Sri Lanka and the study identified an increasingly positive trend, predicting similar levels of disclosures provided by companies in developed countries. The few studies that have been conducted examining the predominance of reporting in Sri Lanka, mostly examining multinational companies, conclude that CSR reporting is gaining momentum in Sri Lanka but is still emerging as the concept of CSR itself emerges (Beddewela and Herzig 2012 ; Hunter and Van Wassenhove 2011 ).

Conclusion and a future research agenda

As more and more research on CSR in developing countries emerges in the academic literature, it is important to ensure that appropriate consideration is given to the context in which the research takes place. Examination of CSR and CSR reporting practices without contextualisation could perpetuate flawed understandings that are based on evidence from research in the developed world. Different political, social, cultural and economic environments impact on the both the development of, and reporting of, CSR activities and consequently impact on the value of these activities to benefit society and the natural environment.

A suggested agenda for future research, that considers context in more depth, includes:

Consideration of ideological and hegemonic regimes and their attitude towards CSR. This research would consider potential positive and negative impacts of the political and governance system. In China, for example, the potential for Communist Party ideology to increase environmental protection and improve social conditions is vast, and is starting to be seen to have a strong impact on firm behaviour. Examination of this over time will provide an important contribution to understanding the role of government beyond the more common analysis of environmental protection regulation.

Greater examination of sociocultural variables in different countries, beyond analysis of religious influence, and beyond the use of Hofstede. Understandings of concepts such as CSR in countries in Asia, the Middle East and the Asian sub-continent, are known to differ from those in the West, so understanding their potential to lead to better (worse) CSR outcomes is important. The variety of variables that could be included is vast, but some clearly important issues include: language, secularism, freedom of the press, access to information, homogeneity of values and attitudes, and the existence of a national figurehead or identity.

Longitudinal examination of the process of economic development. Countries where the economy is developing rapidly, such as China and the Middle East; and countries where the historical economic context differs dramatically, such as in Sri Lanka where the need for development is borne out of conflict, provide rich backgrounds to consider how CSR is developing alongside economic developments.

A comprehensive framework for examining these, and other, potential factors that influence CSR and CSR reporting in developing countries does not exist, but Table  1 attempts to provide a preliminary outline of some factors that could comprise such a framework, and be used to guide future research. As mentioned earlier, it is important to note, however, that these variables are not discreet and are likely to interact with each other. This is noted in the table as a reminder that the classifications are somewhat artificial and that acknowledgement of a more holistic consideration is important.

These are clearly only a selection of opportunities for CSR research on developing nations and emerging economies. Calls for more work on these factors have continued since Adams’ ( 2002 ) original call, but there is still vast scope to improve our understanding of CSR practice throughout the world (Fifka 2013 ), where much of the social and environmental damage is taking place.

Importantly, research of this kind must be transdisciplinary as perspectives from areas such as political science, philosophy and economics are essential. Only with in-depth, contextualised understandings can improvements to the nature of CSR activity be implemented.

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Acknowledgements

It is important to acknowledge that this paper provides an overview of a larger research program currently being undertaken by a team of doctoral students at Flinders University and the University of South Australia. Credit must be given to Ms Hui Situ (Flinders University) who is researching environmental reporting in China, Mr Abdullah Silawi (Flinders University) who is researching social responsibility reporting in the Gulf region, and Ms Dinithi Dissanayake (University of SA), who is researching environmental disclosure in Sri Lanka.

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Tilt, C.A. Corporate social responsibility research: the importance of context. Int J Corporate Soc Responsibility 1 , 2 (2016). https://doi.org/10.1186/s40991-016-0003-7

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Environmental, Social and Corporate Governance Essay

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Introduction

Similarities of the sources, different aspects of esg highlighted by the articles, relevance, issues, and use of the esg.

Many organizations are starting to recognize the need for including their environmental, social, and governance (ESG) goals to achieve sustainability. Financial profitability is no longer the only measure of a company’s performance. As a result, investors and industry regulators are increasingly assessing the internal and external factors before making a significant decision. Specifically, venturers are focusing on the non-monetary and ethical impacts of an enterprise (Esguevillas, 2020). The objective of this paper is to synthesize the information that two articles written by McMahon and the other by Escrig-Olmedo et al. provide regarding ESG.

First, the articles agree that investors are increasingly relying on ESG to make their entrepreneurial decisions. According to McMahon (2020), when he, the author, started a firm, which specialized in producing reports, there were only 300 Canadian companies in need of their services in 2008. Currently, Sustainalytics produces data for tens of thousands of organizations in Australia, North America, Asia, and Europe. The author adds that the most significant change has been in how ratings are produced, in which there has been a heightened increase in the ESG ratings. Similarly, Escrig-Olmedo et al. (2019) note that about ten years ago, only the small firms were interested in such information. Many large organizations are now seeking service after recognizing that ESG is a better indicator of sustainability, reputation, and forecast.

Secondly, both articles recognize that ratings are essential for internal benchmarking, decision-making, sustainability, and performance enhancement. MacMahon (2020) explains that the Sustainalytics company classifies each firm into the existing 138 industries with their respective risks. The implication is that the information can be used to rate the level that an individual company is at based on the threats and the performance of rivals. For instance, in the mining industry, the issue of carbon emission is bound to surfaces. The company will also assess the specifics of the company to understand the degree of risk exposure. Given the thoroughness of the process, the financial departments can make informed choices. The other significance is that once the company’s weaknesses have been identified, the organization can make positive adjustments.

Likewise, the paper written by Escrig-Olmedo et al. (2019) recognizes that research agencies provide benchmarks to their clients. The firms have integrated various criteria to enhance robustness and accuracy (Escrig-Olmedo et al., 2019). All the efforts that are being made make it easy to make the right investment decisions. One of the key principles to observe when using ESG is to balance between the long-term and the short-term effects in what Escrig-Olmedo et al. (2019) refer to as the intergenerational perspective. Companies are also competing to improve their performances, thus achieving good ratings.

Thirdly, the articles agree that one of the most significant aspects of the ESG concerns hazards. MacMahon (2020) states that Sustainalytics company always assesses “what risks the businesses are exposed to and how well they’re managing them” (p.53). Similarly, Escrig-Olmedo et al. (2019) agree that market research agencies always integrate the intergenerational risk assessment and other strategies to handle such risks. The rationale for such scrutiny, as inferred from both articles, is responsible for investments to increase the probability of long-term sustainability.

In addition, the authors agree that compared to financial indices, the ESG is more challenging to assess. Escrig-Olmedo et al. (2019) list five problems with the ESG, including lack of transparency, commensurability, stakeholder preferences, trade-offs in the criteria, and not having an overall score. The issue is also addressed by MacMahon (2020), who writes that most of the social and environmental aspects are difficult to measure. Besides, the lack of uniformity in analysis and reporting may make quantification and benchmark complicated.

Having a specific criterion for ESG evaluation is relevant in curbing the aforementioned challenges. One of the issues that major companies are having is “survey fatigue,” which MacMahon (2020) describes as “hearing from too many rating firms that request too much information” (p. 54). There is a need to decide on specific methods that can be followed to determine a firm’s ESG so that only relevant data will be collected. Notably, some scam agencies may use extra details from the firm for scandalous reasons.

There has been a significant increase in market concertation for sustainability rating over the past decade. According to Escrig-Olmedo et al. (2019), many agencies that provide ESG data have sprouted up to meet the “demands of socially responsible investors” (p.3). From 2008, when there was a financial crisis, to 2018, financial stakeholders have shown more interest in getting information about the environmental, social, and ethical nature of a firm. The indices of ESG have significantly increased when the data in 2008 is compared to that in 2018, as illustrated by Escrig-Olmedo et al. The result is that rating enterprises have shifted their focus from being a financial niche to a more diverse business.

Furthermore, integration of the ESG principles is important to achieve standardization of the procedure. The first principle is recognizing that sustainability is multidimensional and comprises of three concepts, namely economic, environmental, and social. Next, there is recognition of the intergenerational perspective, which ensures the evaluation of past performance and forecasting while making preparations for the future. Thirdly is the principle of stakeholder approach in which needs and expectations of relevant individuals presently are addressed in consideration of the projected time. Last but not least is life cycle thinking in which the impacts of upstream and downstream activities are managed (Escrig-Olmedo et al., 2019). When there are regulations governing procedures of obtaining ESG, it will be easy to normalize the applications.

Big data and internet connectivity have played a significant role in the development and use of ESG.

In their article, Escrig-Olmedo et al. (2019) exemplify Morgan Stanley Capital International (MSCI) as a research agency that utilizes this technology. The company took advantage of the big data to expand its scope as an ESG provider. The firm has also developed indices from the massive flow of information that they receive on ratings in the construction industry. Making use of information technology is, thus, a good way for an organization to be more competitive.

The ESG analysis has increased accountability and corporate social responsibility in different industries. For example, the Paris 2016 Agreement on Climate Change made companies conscious of the harm that they possibly cause to the environment (Escrig-Olmedo et al., 2019). However, the expectations of the ESG scores have largely been criticized as being unrealistic. According to MacMahon (2020), ESG controversies and other issues such as the inability to quantify results may result in application challenges. Problems concerning the security and privacy of data have also been raised since some agencies ask for more sensitive information (MacMahon, 2020). Therefore, the need for international standardization cannot be overemphasized so that ESG’s application will be more relevant.

The articles also state that increase in the number of large agency firms that assess ESG is a significant issue with both positive and negative consequences. MacMahon (2020) recalls that when Sustainalytics started, there were only 20 people, but currently, the firm has more than 650 people. The fact that ESG agencies are now “bigger, more professionalized and finance industry-connected” implies they can produce more accurate findings to act as drivers for transforming the firm (Escrig-Olmedo et al. 2019, p. 13). There has been a substantial increase in the analytical rigor and scrutiny of ESG to provide good ratings. However, the rise in the number of researchers without standard ratings makes it difficult to verify the accuracy of the information.

Assessment of the environment, social and corporate governance may offer valid information for internal advocates to promote change. The identification of the risks that a firm is going through is a significant step in transforming a company (MacMahon, 2020). Knowing the problems motivates the managers and auditors to seek solutions. The result is continuous improvement of the organization, and sustainability can be achieved. Since the focus is given to the community and the ecosystem, the overall improvement initiates a web of positive change to all the related stakeholders.

Financial ratings have ceased being the only indices to assess the sustainability level of a firm. Many, large and small, companies are now seeking the services of companies that provide information on other non-financial aspects. The ESG is relevant for benchmarking, risk assessment and management, and promoting informed decision-making. Several criteria and principles are often used for standardization, but there are still challenges since most of the elements that are analyzed cannot be quantified. Increased mergers and acquisitions leading to bigger and more professional agencies and utilization of new information technology such as big data are a positive trend. More research and improvements in ESG are needed to enhance the accuracy of ESG.

Escrig-Olmedo, E., Fernández-Izquierdo, M., Ferrero-Ferrero, I., Rivera-Lirio, J., & Muñoz-Torres, M. (2019). Rating the raters: Evaluating how ESG rating agencies integrate sustainability principles . Sustainability , 11 (3), 1-16. Web.

Esguevillas, C. (2020). Why ESG ratings matter and how companies use them . Simply Sustainable. Web.

MacMahon, S. (2020). The challenge of rating ESG performance . Harvard Business Review , 52-55. Web.

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Essay on Social Responsibility

Social responsibility is a term that has been used in different contexts, including the economy, education, politics , and religion. Social responsibility is challenging because it encompasses so many aspects, and there is no single definition of social responsibility. In simple words, social responsibility is the responsibility of an individual to act in a way that promotes social well-being. This means that a person has a sense of obligation to society and sacrifices for the good of others. BYJU’S essay on social responsibility explains the importance of being a socially responsible citizen.

A society’s responsibility to the individuals in that society can be seen through the various social programmes and laws. Governments try to create a better world for their citizens, so they implement various social programmes like welfare, tax assistance, and unemployment benefits. Laws are also crucial to a society because they enforce practical actions by its citizens and punish harmful actions. Now, let us understand the significance of social responsibility by reading a short essay on social responsibility.

Importance of Social Responsibility

BYJU’S essay on social responsibility highlights the importance of doing good deeds for society. The short essay lists different ways people can contribute to social responsibility, such as donating time and money to charities and giving back by visiting places like hospitals or schools. This essay discusses how companies can support specific causes and how people can be actively involved in volunteering and organisations to help humanitarian efforts.

Social responsibility is essential in many aspects of life. It helps to bring people together and also promotes respect for others. Social responsibility can be seen in how you treat other people, behave outside of work, and contribute to the world around you. In addition, there are many ways to be responsible for the protection of the environment, and recycling is one way. It is crucial to recycle materials to conserve resources, create less pollution, and protect the natural environment.

Society is constantly changing, and the way people live their lives may also vary. It is crucial to keep up with new technology so that it doesn’t negatively impact everyone else. Social responsibility is key to making sure that society is prosperous. For example, social media has created a platform for people to share their experiences and insights with other people. If a company were going to develop a new product or service, it would be beneficial for them to survey people about what they think about the idea before implementing it because prior knowledge can positively impact future decisions.

Social responsibility is essential because it creates a sense of responsibility to the environment . It can lead to greater trust among members of society. Another reason is that companies could find themselves at a competitive disadvantage if they do not ensure their practices are socially responsible. Moreover, companies help people in need through money, time, and clothing, which is a great way to showcase social responsibility.

Being socially responsible is a great responsibility of every human being, and we have briefly explained this in the short essay on social responsibility. Moreover, being socially responsible helps people upgrade the environment and society. For more essays, click on BYJU’S kids learning activities.

Frequently Asked Questions

Does being socially responsible help in protecting the environment.

Yes. Being socially responsible helps in protecting the environment.

Why should we be socially responsible?

We should be socially responsible because it is the right thing to upgrade society and the environment. Another reason is to help those in need because when more people have jobs, the economy can thrive, and people will have more opportunities.

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GRADE 10 – LIFE ORIENTATION TASK 3 TOPIC: SOCIAL AND ENVIRONMENTAL RESPONSIBILITY

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