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The terms Corporate Social Responsibility, or CSR, sustainability, and ESG (Environmental, Social and Governance) reporting have been ubiquitous among business and management researchers for the best part of two decades now - and in the news as well.

Most companies have a CSR programme, some even have a department, though some now choose to call it sustainability, ESG or sustainable business. 

These initiatives are often hugely expensive for the company and tend to be sold as a win-win for the company and the intended beneficiary (society as whole). But is that always the case? Is CSR synonymous with “greenwashing” in that companies use it to mask their socially-damaging activities?

How do business even measure the success of their CSR initiatives? Are they really helping society and adding to the firm's reputation and then profits? These are complex questions to unpick, but below are five reads that will help companies find an answer


1 The robustness of the corporate social and financial performance relation: A second-order meta-analysis

By Timo Busch and Gunnar Friede. Corporate Social Responsibility and Environmental Management, March 2018. 

A good (or perhaps as we will see later a bad) place to start is to ask whether there is any strategic competitive advantage or financial gains to firms when they engage in CSR.

This meta-analysis does that by synthesizing the findings of thousands of studies to give a broad picture of the relationship between CSR and corporate financial performance: an area of study that is overly saturated, yet still relevant.

The meta-analysis finds that in general, there is a positive relation between CSR and financial performance. Companies that engage in CSR do well for their shareholders as well. 

The way this value creation is achieved is through higher corporate reputation, higher operational financial performance (such as productivity), better accounting results (such as return on assets) and increasing market attainment (such as market value). 

This paper is relatively new, and provides an easy read summarising the research literature on the virtuous circle of CSR improving corporate financial performance. Its reference list includes the most highly-cited academic articles on CSR.

What we know and don’t know about Corporate Social Responsibility: A review and research agenda

By Herman Aguinis and Ante Glavas, Journal of Management, March 2012.

This article is interesting and one could argue that its findings have led to a great deal of research on the determinants of CSR, whether at the country level through regulatory incentives introduced by governments, at an industry level with tools like codes of conduct, or by looking into individual workers values, ideology, and emotions. 

One of the key findings of this paper is that the literature on CSR is weak (and still is) on individual motivations for doing CSR. Companies are made up of people, who have certain biases, emotions, ideologies, and the study of these individual decision makers’ characteristics has, since the publication of this article, been a welcome addition to our understanding of why CSR happens; what kind of CSR happens; why some companies are more or less likely to acquiesce to activist demands on climate change, and other areas of sustainability concerns.


3 Stop talking about how CSR helps your bottom line

By Stephan Meier and Lea Cassar. Harvard Business Review, January 2018.

As firms engage more in CSR, one of the benefits is that the productivity of workers goes up. Another benefit often cited is that firms that use CSR attract better talent, but is that always the case?

It turns out workers are smart and gauge the intention of the company which engages in CSR. If employees perceive that the company is using CSR instrumentally, ie they are in it for their own sake only, then they will react negatively and actually put in less effort.


4 Reorient the business case for corporate sustainability

By Michael Barnett, Benjamin Cashore, Irene Henriques, Bryan Husted, Rajat Panwar, and Jonathan Pinske. Stanford Social Innovation Review, Summer 2021. 

The authors argue that while corporate sustainability initiatives have worked in some cases and have benefited society in terms of reduced environmental degradation, focusing on the business case for CSR threatens the long-lasting impact of it on society.

They argue if firms are motivated by the business case – based on the 'win-win' idea for corporations and society –  it reduces CSR to profitable investments or investments that outwit the competition. If firms narrow their focus on the 'win-win' idea it will lead to fewer meaningful actions, such as protecting endangered species, which may be ignored because they do not generate a win for companies.

To escape this narrow focus on 'profitable' environmentally-friendly actions, the authors propose firms should collaborate with other stakeholders to tackle excessive consumerism, or work with NGOs and regulators to adequately account for and reduce the environmental effects of business actions. 

This paper is a must-read for the avid 21st century Change Maker.

5 More and more CEOs are taking their social responsibility seriously

By Rebecca Henderson. Harvard Business Review, February 2018.

This article stresses that companies, and their CEOs in particular, understand the risks of climate change and growing socio-economic injustice. 

In some ways, this article portrays the hope that CSR can help fix the grand challenges that we face today. Two reasons behind this hope are: first, millennials’ growing role in the workforce and their insistence that companies have a positive social mission; and second, a declining confidence on the part of executives that Government will effectively solve the biggest problems we have today, hence requiring corporations to step in.

This positive observation is not without a caveat. The more socially active companies tend to be large and without much competition. However, this is still a good read to understand and critically evaluate how companies can contribute to the social good.


Umar Boodoo is Assistant Professor of Organisation and Management. and teaches Organisational Behaviour on the Distance Learning MBA. He also lectures on Human Resource Management on the Executive MBA and Work and Human Resources on the MSc International Business.

Follow Umar Boodoo on Twitter @Dr_MuhammadUmar

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