IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v24y2015i4p277-288.html

Sustainable Development and Corporate Financial Performance: A Study Based on the FTSE4Good IBEX Index

Author

Listed:
  • Maria J. Charlo
  • Ismael Moya
  • Ana M. Muñoz

Abstract

The social and environmental aspects of business investment and financing are becoming increasingly important. Most studies on corporate social responsibility (CSR) focus on analysing the relationship between company performance in the financial and social fields. However, the results obtained have not been conclusive, mainly due to the variables used to measure CSR. In order to simplify its measurement, in this work we used an empirical analytical method to determine possible differences between the financial variables of firms considered to be socially responsible and those not considered to be such. The results obtained show that socially responsible corporations obtain higher profits for the same level of systematic risk and show greater sensitivity to market changes, leverage levels and company size. This pioneering study is the first to make use of the first, and at the present time only, Spanish sustainability index, the FTSE4Good IBEX. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.

Suggested Citation

  • Maria J. Charlo & Ismael Moya & Ana M. Muñoz, 2015. "Sustainable Development and Corporate Financial Performance: A Study Based on the FTSE4Good IBEX Index," Business Strategy and the Environment, Wiley Blackwell, vol. 24(4), pages 277-288, May.
    • Handle: RePEc:bla:bstrat:v:24:y:2015:i:4:p:277-288
    DOI: 10.1002/bse.1824
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.1824
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.1824?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sandra A. Waddock & Samuel B. Graves, 1997. "The Corporate Social Performance–Financial Performance Link," Strategic Management Journal, Wiley Blackwell, vol. 18(4), pages 303-319, April.
    2. Gerwin Laan & Hans Ees & Arjen Witteloostuijn, 2008. "Corporate Social and Financial Performance: An Extended Stakeholder Theory, and Empirical Test with Accounting Measures," Journal of Business Ethics, Springer, vol. 79(3), pages 299-310, May.
    3. Brent Kurapatskie & Nicole Darnall, 2013. "Which Corporate Sustainability Activities are Associated with Greater Financial Payoffs?," Business Strategy and the Environment, Wiley Blackwell, vol. 22(1), pages 49-61, January.
    4. Stephen Brammer & Chris Brooks & Stephen Pavelin, 2006. "Corporate Social Performance and Stock Returns: UK Evidence from Disaggregate Measures," Financial Management, Financial Management Association International, vol. 35(3), pages 97-116, September.
    5. Giovanna Michelon & Giacomo Boesso & Kamalesh Kumar, 2013. "Examining the Link between Strategic Corporate Social Responsibility and Company Performance: An Analysis of the Best Corporate Citizens," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(2), pages 81-94, March.
    6. Roberto Garcia-Castro & Miguel Ariño & Miguel Canela, 2010. "Does Social Performance Really Lead to Financial Performance? Accounting for Endogeneity," Journal of Business Ethics, Springer, vol. 92(1), pages 107-126, March.
    7. Zhi Tang & Clyde Eiríkur Hull & Sandra Rothenberg, 2012. "How Corporate Social Responsibility Engagement Strategy Moderates the CSR–Financial Performance Relationship," Journal of Management Studies, Wiley Blackwell, vol. 49(7), pages 1274-1303, November.
    8. Anis Ben Brik & Belaid Rettab & Kamel Mellahi, 2011. "Market Orientation, Corporate Social Responsibility, and Business Performance," Journal of Business Ethics, Springer, vol. 99(3), pages 307-324, March.
    9. Salzmann, Oliver & Ionescu-somers, Aileen & Steger, Ulrich, 2005. "The Business Case for Corporate Sustainability:: Literature Review and Research Options," European Management Journal, Elsevier, vol. 23(1), pages 27-36, February.
    10. Supriti Mishra & Damodar Suar, 2010. "Does Corporate Social Responsibility Influence Firm Performance of Indian Companies?," Journal of Business Ethics, Springer, vol. 95(4), pages 571-601, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. José M. Brotons & Manuel E. Sansalvador, 2020. "The relation between corporate social responsibility certification and financial performance: An empirical study in Spain," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1465-1477, May.
    2. Hajer Tebini & Bouchra M’Zali & Pascal Lang & Paz Méndez-Rodrı́guez, 2015. "Social Performance and Financial Performance: A Controversial Relationship," International Series in Operations Research & Management Science, in: Enrique Ballestero & Blanca Pérez-Gladish & Ana Garcia-Bernabeu (ed.), Socially Responsible Investment, edition 127, chapter 0, pages 53-73, Springer.
    3. Renáta Myšková & Petr Hájek, 2018. "Sustainability and Corporate Social Responsibility in the Text of Annual Reports—The Case of the IT Services Industry," Sustainability, MDPI, vol. 10(11), pages 1-18, November.
    4. Emmanuel Lawal & Gökan May & Bojan Stahl, 2017. "The Significance of Corporate Social Disclosure for High‐Tech Manufacturing Companies: Focus on Employee and Community Aspects of Sustainable Development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(4), pages 295-311, July.
    5. Yang, Yang & Jiang, Yan, 2023. "Buyer-supplier CSR alignment and firm performance: A contingency theory perspective," Journal of Business Research, Elsevier, vol. 154(C).
    6. Carlos Lassala & Andreea Apetrei & Juan Sapena, 2017. "Sustainability Matter and Financial Performance of Companies," Sustainability, MDPI, vol. 9(9), pages 1-16, August.
    7. Atan, Ruhaya & Alam, Md. Mahmudul & Said, Jamaliah & Zamri, Mohamed, 2019. "The Impacts of Environmental, Social, and Governance Factors on Firm Performance: Panel Study of Malaysian Companies," SocArXiv ntz52, Center for Open Science.
    8. Francisco J. López-Arceiz & Ana J. Bellostas & Pilar Rivera, 2018. "Twenty Years of Research on the Relationship Between Economic and Social Performance: A Meta-analysis Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 140(2), pages 453-484, November.
    9. Nazim Hussain & Ugo Rigoni & Elisa Cavezzali, 2018. "Does it pay to be sustainable? Looking inside the black box of the relationship between sustainability performance and financial performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(6), pages 1198-1211, November.
    10. Woon Leong Lin & Siong Hook Law & W. N. W. Azman‐Saini, 2020. "Market differentiation threshold and the relationship between corporate social responsibility and corporate financial performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1279-1293, May.
    11. Lin, Woon Leong & Law, Siong Hook & Ho, Jo Ann & Sambasivan, Murali, 2019. "The causality direction of the corporate social responsibility – Corporate financial performance Nexus: Application of Panel Vector Autoregression approach," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 401-418.
    12. Elizabeth-Anne Thomas, 2019. "How Useful Is the Global Reporting Initiative (GRI) Reporting Framework to Identify the Non-financial Value of Corporate Social Performance (CSP)?," CSR, Sustainability, Ethics & Governance, in: Nicholas Capaldi & Samuel O. Idowu & René Schmidpeter & Martin Brueckner (ed.), Responsible Business in Uncertain Times and for a Sustainable Future, pages 37-87, Springer.
    13. Wenbin Long & Sihai Li & Huiying Wu & Xianzhong Song, 2020. "Corporate social responsibility and financial performance: The roles of government intervention and market competition," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 525-541, March.
    14. Wenwen Zhao & Zhe Zhang, 2020. "How and When Does Corporate Giving Lead to Getting? An Investigation of the Relationship Between Corporate Philanthropy and Relative Competitive Performance from a Micro-process Perspective," Journal of Business Ethics, Springer, vol. 166(2), pages 425-440, October.
    15. Deepa Sharma & Suman Chakraborty & Ashwath Ananda Rao & Lumen Shawn Lobo, 2023. "The Relationship of Corporate Social Responsibility and Firm Performance: A Bibliometric Overview," SAGE Open, , vol. 13(1), pages 21582440231, March.
    16. Felipe Arias Fogliano de Souza Cunha & Erick Meira & Renato J. Orsato, 2021. "Sustainable finance and investment: Review and research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3821-3838, December.
    17. María del Mar Miras‐Rodríguez & Amalia Carrasco‐Gallego & Bernabé Escobar‐Pérez, 2015. "Are Socially Responsible Behaviors Paid Off Equally? A Cross‐cultural Analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(4), pages 237-256, July.
    18. Najul Laskar & Tapan Kumar Chakraborty & Santi Gopal Maji, 2017. "Corporate Sustainability Performance and Financial Performance: Empirical Evidence from Japan and India," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 42(2), pages 88-106, May.
    19. Muzhar Javed & Muhammad Amir Rashid & Ghulam Hussain & Hafiz Yasir Ali, 2020. "The effects of corporate social responsibility on corporate reputation and firm financial performance: Moderating role of responsible leadership," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1395-1409, May.
    20. Najul Laskar, 2019. "Does Sustainability Reporting Enhance Firms Profitability? A Study on Select Companies from India and South Korea," Indian Journal of Corporate Governance, , vol. 12(1), pages 2-20, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:24:y:2015:i:4:p:277-288. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.