RELATIONSHIP BETWEEN CORPORATE SOCIAL RESPONSIBILITY AND FINANCIAL PERFORMANCE (97 COMPANIES LISTED ON THE FTSE 100 LONDON STOCK EXCHANGE)
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Purpose: Recently, there has been a greater emphasis placed on the value of the social dimension and its contribution to the growth of businesses, particularly their financial and economic aspects. Stakeholders view social responsibility as being of particular importance because it will increase the profitability and profitability of their businesses without endangering society. This study intends to investigate the connection between corporate social responsibility (CSR) and financial performance (FP), two ideas that, despite first appearances, are strongly related from both an academic and practical standpoint. We used the (ESG) criterion to measure CSR variables, and the financial ratio Return On Assets (ROA) to measure FP. These chosen variables have been extensively used in earlier research, which has supported their potential impact on businesses’ financial performance. Methodology: A quantitative methodology based on the analysis of extra-financial (ESG) data from the “Covalence” database and the financial information of 97 companies listed on the London FTSE 100 is used to perform the study. However, the scientific development environment Spyder 4.2.5 for Python was utilized to do the descriptive statistics and statistical modeling analyses utilizing multiple regression. Finding : The findings of the statistical tests conducted to determine whether the sub-hypotheses given in support of the main hypothesis (H1) were valid revealed that social (S) and governance (G) practices have a favorable and appreciable influence on CSR. On the other hand, they noted the absence of any linear or complicated link between Environmental (E) practices and EFP that was statistically significant. Implication: The study concluded that there is a positive and statistically significant link between CSR and financial success, proving that social enterprise may be profitable. This empirical study’s findings provide proof that social policies improve financial performance. Because of the financial gain it brings to the business entity. The study advises that corporations be encouraged to step up their efforts and incorporate social issues into their short- and long-term objectives.
| Pages | 23-30 |
| Year | 2024 |
| Issue | 1 |
| Volume | 4 |
