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Analysis of the Relationship between Corporate CSR Investment and Business Performance Using ESG Index—The Use-Case of Korean Companies

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  • Jihye Yun

    (Business Administration, Kyung-sung University, 309, Suyeong-ro, Nam-gu, Busan 48434, Korea)

  • Jonghwa Lee

    (Department of e-Business, Dong-eui University, 176, Eomgwang-ro, Busanjin-gu, Busan 47340, Korea)

Abstract

ESG management has become the most prominent topic this year as the worldwide business environment of companies changes. ESG management is not an option to raise a company’s reputation but a factor that significantly affects corporate sustainability and corporate value in the long run as well as can be seen as an essential requirement for a company’s survival. As this trend is essential in evaluating corporate sustainability, ESG management is an inevitable global issue. This study aims to develop an index for ESG, a key indicator of corporate sustainability, targeting 49 companies that issue ‘sustainability reports’ among the top 150 asset-ranked companies. In addition, companies were divided into high and low groups based on the ESG index, and each group attempted to study the effect of economic responsibility among corporate social responsibility on financial performance. As a result, out of 49 companies, the high group was divided into 17 companies, and the low group was split into 14 companies. It was found that only the low group had a significantly positive (+) effect on the relationship between corporate economic responsibility and financial performance. This study can be used as a reference data for ESG research by developing an ESG index related to corporate sustainability. It is meaningful to confirm the management paradigm for corporate social responsibility and the importance of financial performance through comparison.

Suggested Citation

  • Jihye Yun & Jonghwa Lee, 2022. "Analysis of the Relationship between Corporate CSR Investment and Business Performance Using ESG Index—The Use-Case of Korean Companies," Sustainability, MDPI, vol. 14(5), pages 1-14, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:5:p:2911-:d:762612
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    References listed on IDEAS

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    Cited by:

    1. Min-Jung Kang & Seul-Gi Oh & Ho-Young Lee, 2022. "The Association between Outside Directors’ Compensation and ESG Performance: Evidence from Korean Firms," Sustainability, MDPI, vol. 14(19), pages 1-22, September.

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