Corporate Social Responsibility Activities and The Firm’s Value: The Case of Containers and Packaging Industry Sector

This study analyzes the influence of Corporate Social Responsibility (CSR) initiatives on the firms’ value. The scope is the Container and Packaging Industry Group companies operating in three regions. The common perception is such that packaging materials have negative impact on the environment. Therefore, we expect CSR activities must positively influence and add value to the company’s financial performance, increasing share values. We utilized ASSET4 database of Thomson Reuters between the period 2012–2016. Three main area of CSR scores were considered as independent variables (Environmental, Social and Corporate Governance Scores). Price to Earnings Ratio (PER) and Tobin’s Q Values were used as dependent variables. The geographical locations were taken as controlling variables. We observed the value of companies are not increasing as a direct influence of CSR Activities individually, but as a combination of all three components which are categorically assessed by region. The main conclusion is that investing in CSR is not only having a goodwill by customers and consumers, it can help companies earn real share value as well. Thus, it needs to be part of corporate purpose. Our recommendation to these companies are to communicate CSR activities timely and in full to stakeholders, showing their contribution to the society. It will not only help in mitigating the overall negative image of packaging industry with respect to environment and sustainability aspects but also gain public support as people will trust them as a positive contributor.