The market value of CSR performance across sectors

Abstract

In this paper we investigate the relationship between Corporate Social Responsibility performance (CSP) and firms’ financial standing – corporate financial performance (CFP) in ten Global Industry Classification System (GICS) sectors. The analysis of each sector provides unique opportunity of finding these CSR actions which nowadays play the most important role. We use Thomson Reuters ASSET4 ratings in order to proxy the CSR behaviour of 2428 companies from all over the world in the period of 2009–2012. We find CSR actions’ effects measured by value increase as well as transitory effect on earnings conditional upon the company’s sector. Firstly, we prove that eco-efficiency investments are value destructors in 8 out 10 sectors. For corporate governance we find significant results only in three sectors with ambiguous characteristic. Despite of adding the third, social dimension we observe relatively lesser impact of CSR actions on firms’ financial performance in case of four sectors.