Social and environmental sustainability: An empirical analysis of supply chain profitability and the recession

Abstract

With the looming possibility of another recession, firms are wondering if their supply chain will be ready. This research helps firms understand the impacts of environmental and socially responsible activities on the financial performance of firms before and after the 2008 recession at different stages of the supply chain that includes four industries: Retail, Wholesale, Manufacturing, and Transportation. We found that the financial impacts of the Corporate Social Responsibility (CSR) activities on supply chain firms have changed since the financial crisis in 2008 and that only in the retail industry both positive environmental and socially responsible activities have consistent positive impacts on the companies' profitability. The impacts of positive activities are mixed for the other supply chain industries. The negative environmental activities consistently have negative financial impacts on companies across all supply chain industries. In the transportation industry, negative social activities are consistently associated with positive financial impacts.