Which of the following refers to the duty of business to contribute to the well

1.4.2 Private-Funded Conservation Instruments

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Corporate Social Responsibility (CSR): CSR initiatives by private companies are either voluntary or legally mandated (e.g., in the Philippines) and are designed to have a positive environmental or sustainable development impact. CSR can help companies to improve their public image, gain publicity, or offset negative aspects of their industrial operations. However, few published examples exist. One promising CSR scheme led by Charoen Pokphand Foods (CPF), one of Thailand’s largest aquaculture companies, is reverting abandoned aquaculture ponds back to mangroves (http://www.cpfworldwide.com/en/media-center/news/view/772).

Barriers to implementing corporate social responsibility

Corporate social responsibility often includes the use of codes of conduct to regulate supplier performance in health and safety, labor rights, and environmental protection (to avoid pollution). Suppliers not only adopt the codes of conduct required by the larger enterprises that are their customers but also undergo audits from time to time to assure their compliance with the codes and continuous improvement in social standards. In 2010, the ISO created the first international standard for corporate social responsibility for enterprises to follow (International Organization for Standardization, 2010). The standard, ISO 2600, provides guidance on how businesses and organizations can operate in a socially responsible way. It also establishes seven core subjects of corporate social responsibility for enterprises to follow and to create programs around. These subjects are organizational government, human rights, labor practices, the environment, fair operating practices, consumer issues, and community involvement and development.

However, similar to the earlier discussion of barriers to regulatory compliance, SMEs may experience more difficulties engaging in corporate social responsibility than larger businesses do. Complying with regulations in general is challenging for SMEs (Avram and Kuhne, 2008; Jenkins, 2004; Lepoutre and Heene, 2006), and lack of awareness and limited resources are common barriers to SMEs engaging in corporate social responsibility. For example, Williamson et al.’s empirical study of 31 SMEs found that their environmental practices were driven not by principles of social responsibility, but mainly by regulations and business performance, with the latter emphasizing the cost reductions and efficiency that could be obtained through environmentally friendly practices (Williamson et al., 2006).

Traditionally, enterprises perform beyond regulations only when they have financial interests in doing so. Lack of corporate social responsibility has led to increasing societal requests for multinational enterprises to incorporate corporate social responsibility into supply chain management and other aspects of their businesses. This is because the impact of an enterprise’s economic activities goes beyond the enterprise’s internal interests and extends to its supply chain, as discussed above.

32.4 Discussion

CSR in the seafood industry suffers from a lack of holistic and strategic approaches. For many CSR is reduced to resource sustainability, and implemented through a series of parallel yet fragmented programs that fail to consider the connections between environmental—that is, ecological sustainability—and social systems—that is, human rights, food security, and community impacts. Moreover, their reliance on VCS exposes them to criticisms common to these programs, such as the use of inadequate or deceptive measurements and the erosion or outsourcing of responsibility [25], or that the incentives to comply with existing standards can stifle innovation [26]. Such criticisms may be particularly pertinent in the seafood industry where the most widely used CSR VCS—the MSC Standard—is designed as a consumer-facing ecolabel for product differentiation based on sustainable practices, rather than as a mechanism for corporate self-regulation.

Moreover, some scholars question the effectiveness of industry self-regulation via CSR, arguing that this approach may lead to companies being selective with their responsibilities [27], whereby they focus their CSR effort on projects deemed profitable rather than those that are most needed by society [28]. Often CSR is reduced to a list of specific benchmarks and targets, with accomplishment limited to those that “tick the list.” CSR programs based on compliance or adherence to voluntary standards can potentially overemphasize the trading relationships between buyers and suppliers (i.e., market-based mechanisms), leading to an imbalance in the sharing of costs and benefits in favor of large international buyers. Fisheries in particular, with a large number of suppliers and relatively small number of buyers, may result in disproportionate distribution of compliance costs to suppliers [36]. Fishers, with no explicit guarantee from buyers, are effectively bearing all the risk of compliance. Overreliance on VCS for corporate policies may also contribute to outsourcing of supply chain risks, with third-party certification bodies held responsible for compliance failure. In other words, large international buyers may be using VCS as accountability buffers.

Undoubtedly, private sustainability initiatives can compensate for some of the shortcomings of public governance. All international fisheries-focused VCS have integrated the concept of ecosystem-based management in their assessments, including considerations for vulnerable species and fishery impacts via trophic interactions, and fisheries have responded to such requirements [29] and have contributed to expanded practices in assurance and enforcement of standards [30]. Yet they are not a substitute for the more effective implementation of state-led management regimes both at the national and international levels. The long-term impact of private sustainability initiatives will ultimately depend on the extent to which the new business environment and corporate behaviors that are advanced under these initiatives are integrated with and reinforced by public policies [31].

Fisheries in the high seas are areas in which industry-led CSR commitments can supplement and reenforce the existing management frameworks. With no explicit mandates, current international governing regimes such as the International Maritime Organization (IMO) and RFMOs are finding themselves with limited capacity to enforce their management measures. The vessel registration and automatic identification system (AIS) vessel tracking programs by IMO, for example, do not cover a large proportion of the world’s fishing vessels. Commitments by the seafood industry to voluntarily adhere to such programs (i.e., full AIS implementation aboard their fishing fleet) can greatly enhance RFMOs’ capacity to monitor vessel activities and combat illegal, unreported, and unregulated fisheries in the high seas. Similarly with the adoption of the FAO Agreement on Port State Measures, the industry should take a proactive role in ensuring transparency for its activities. In this sense, CSR should not be viewed as a “to-do” list but as a continuously evolving strategy, reflecting the governance requirements of the time.

8.1.2.3 Food and Water Security, Peace, and Prosperity

Corporate social responsibility (CSR), the notion that corporations have a responsibility to the society and environment from which they draw their resources and whom they serve, is increasingly carried out in a way that supports businesses. For example, Lush, a UK-based cosmetics company, has been sending agricultural experts to the villages from which it obtains raw materials. These experts have helped villagers improve food production and have also taught them to refine the raw materials to the exact standard required by the cosmetics industry, thus bringing value-added production to these villages and increasing their returns (for instance, rather than selling crude natural resources to a refining plant, where much of the value of a product is added, they are able to secure the increased revenue from their products; also see FAO, 2008).

6.1.11 Social License to Operate (SLO)

In addition to CSR programs, SLO is essential to conduct business successfully in mining. In the case of CSR, many of the actions are voluntary whereas a SLO coerces the mining companies to fulfill certain obligations as laid down before the beginning of mining operations. However, to obtain an SLO, CSR is a prerequisite. Mining companies should develop good relationships with all stakeholders, especially local communities. At the outset, it may seem expensive to obtain and maintain SLO, but it pays in the long run. Mining companies have to establish their reputation and earn community trust. Both employees and communities should be provided with a fair share of the benefits from mine operations: proper education, employment opportunities, modern healthcare facilities, safety, and environmental protection. Throughout all the stages of a mine’s life cycle – exploration, development, operations, and closure – mining companies need to be respectful to local cultures, customs, and the values of people. Moreover, they should provide open dialog, accountability, transparency, honesty, mutual respect, and timely responses to community concerns (Boutilier et al., 2012).

A mining company’s responsibility to the community does not cease after mine closure. They must initiate self-sustaining programs, which will be available during the postclosure period. This kind of approach can help procure and retain SLO. Before seeking SLO, mining companies may like to conduct situational analyses that can help them understand the problems and opportunities ahead of them (Nelsen, 2006).

Thomson and Boutilier (2011) identified various degrees of social license based on different levels of social capital (Figure 6.8). It is assumed that all the stakeholders accept or allow operation at the lowest level, whereas the community approves of, and encourages, the operation to continue at higher levels. At the highest level, the community perceives that mining is part and parcel of its communal identity and culture. The community feels a sense of coownership of the operation. The strength of a social license is increased through legitimacy, creditability, and finally a lasting level of trust. However, a social license may be withdrawn anytime, if legitimacy, creditability, and trust are reversed. Thus, a social license needs continuous negotiation and maintenance, and cannot be taken for granted as permanent.

2.3.2.2 Corporate social Responsibility

CSR is a tool adopted by numerous companies in order to take responsibility for the detected social and environmental impacts. It normally goes beyond regulation compliance (Corporate Social Responsibility, 2007) and, therefore, it can be considered a sign of business pro-activeness. Nevertheless, CSR is meant in very different ways by companies. Pless et al. (2012) identifies two different approaches to CSR. The first one is “instrumental”. It commits companies to CSR only if economically profitable. Whereas the second “multifaceted” one, aims at creating shared value for both investors and stakeholders. This second approach is the one supported by the European Commission.

According to the Prince of Wales Institute, corporate responsibility should include responsible core business activities, philanthropic investments, but also business involvement in public-private partnerships (Nelson, 2002 as cited in Labuschagne et al., 2005). Labuschagne et al. (2005) splits the “corporate responsibility strategy” into two main components: societal and operational initiatives. The first one comprehends corporate social investments related to external philanthropy, while the second one is related to business core activities. The authors underline that business sustainability performance should be assessed based on sustainability initiatives (environmental, social, and economic) related to the core business activities. This is a really relevant elucidation given that a lot of businesses tend to confuse business sustainability with their contributions to external social investments and philanthropic causes mainly enhancing their image and reputation rather than their actual operations. This is an argument supported by Porter and Kramer (2011), who highlight the risks of investing in initiatives that have almost nothing to do with the business core. In fact, there is a risk for these initiatives to be quitted as soon as they do not bring business benefit anymore. Showing limited engagement with a start and an end point, it is thus difficult to maintain sustainability in the long term. However, the two authors are criticized by Crane et al. (2014) who, though recognizing that CSR literature seldom goes beyond the business case for CSR, argue the existence of a “strategic CSR,” which embeds initiatives within the business strategy in order to benefit the sustainability of the firm's core activities.

A reductionist judgment on CSR initiatives seems to be given by KPMG as well when writing:

This investment [in people, communities and the environment] entails far more than corporate philanthropy, CSR projects or “green” initiatives—worthy and important though these may be. To do well in today's business environment, you increasingly have to measure, understand and pro-actively manage the value you create, or reduce, for society and the environment as well as for shareholders.

(KPMG International, 2014, p. 4)

Lastly, CSR has been criticized by Young and Tilley (2006) for referring only to socio-efficiency, that is to say, social impact minimization and social benefit maximization in relation to the created business value (Dyllick and Hockerts, 2002), instead of considering also socio-effectiveness, defined as a continual societal positive impact.

However, as mentioned at the beginning of this section, for some authors and organizations, CSR should not be a bolt-on set of initiatives put in force by companies to serve their business case. On the contrary, it should focus on shared value creation. The critiques to CSR by Porter and Kramer (2011) bring them to the elaboration of the “creating shared value” theory willing to reshape the relationship between business and society in order to ensure prosperity for both subjects. The theory suggests economic value creation by creating societal value through three different strategies. These are:

rethinking products and markets based on society's needs and societal benefits;

transforming the value chain through efficiency measures and stakeholder relationship management; and

investing in local cluster development in order to strengthen business partnerships and the link between business and society (Porter and Kramer, 2011).

Nevertheless, this theory is partly criticized by Crane et al. (2014) who affirm that, though it represents a step forward involving stakeholders as value beneficiaries, corporate self-interest is not discussed and stakeholders would always come after business profit. As an alternative, they propose the adoption of multistakeholder processes as a true social perspective, where business is but one stakeholder among others, in order actually to walk toward the common good of society. The importance of cooperating in partnership with external stakeholders is also supported by Pfitzer et al. (2013) and Zimmermann et al. (2014) at all the process stages for firms willing to create shared value for business and society. In fact, companies with an insufficient comprehension of societal needs can rely on other actors in order to gain insight on their social purpose. Moreover, they can share innovation risks through the use of incubators and activating partnerships (Zimmermann, et al., 2014) and hybrid innovative business structures. Similarly, monitoring and assessment need an external view in order to catch the shared value of the enterprise (Pfitzer et al., 2013).

However, Porter and Kramer (2011) were not the first ones to focus on a broader interpretation of value creation. In fact, in their answer to Crane et al. (2014), they acknowledge the contribution of Emerson (2003 as cited by Dyllick and Muff, 2015) and his “blended value” concept, inviting businesses to seek profit, social, and environmental goals at the same time. Nevertheless, Porter and his colleague take the distance from this theory affirming that it is not meant to solve societal problems like theirs is designed for (Porter and Kramer, 2014).

In accordance with the multifaceted interpretation of CSR aiming at shared value creation and willing to highlight the distance taken from an instrumental use of the concept, some companies recently started to use “corporate sustainability” instead. The United Nations Global Compact, a voluntary initiative for business sustainability, based on corporate CEOs committed to bring about sustainability principles and UN goals (About the UN Global Compact, n.d.), defines it as the business way of contributing to sustainable development global challenges. It constitutes in moving their means and skills for economic, social, environmental, and ethical value creation, both for business and for society in the long term. This implies the incorporation of sustainability principles into core business strategies, acknowledging business transformative power (UNGC, 2013).

The presented critiques to instrumental CSR mainly propose a continuous business commitment to the outside by delivering positive value. Interestingly, Moneva et al. (2006), while agreeing on the reductionism of CSR as a set of initiatives inside the organization, points out its distance from sustainable development. In fact, the latter has a normative intention leading to deep global systemic changes, whereas the former acts within the status quo.

5 Conclusion

Having examined the CSR reports of the companies analyzed above, it was concluded that these European companies do not all completely meet the practices of the circular economy as they do not all reuse material. All companies recycle their products and packaging, however, the procedure could have been more successful.

Some of the companies produce their products in such a way that they can be recycled and reused. Specifically, GSK recycle and reclaim products and also convert them into products of a different use than the initial one. In cooperation with other companies, they convert products close to expiry date and promote them to be sold on the retail market. Merck follows recycling and reuse practices for their products and produces materials which are in turn used in manufacturing viable products. Their primary priority over recent years is producing cosmetics that do not contain nonbiodegradable plastic microbeads.

Pfizer comply with the applicable laws related to environmental protection and although they make a clear reference to recycling in their report, this is not the case with reusing. However, it should be noted that specific provision is made for the delivery of toxic products. Vianex recycles as does Weleda, except that they reuse products as well. In cooperation with other companies they resell them to second-hand stores for artists in order not to dispose of excess materials. There are numerous weaknesses related to informing and raising awareness among the public and employees on environmentally related issues and material reuse. In relation to recycling, the results achieved are rather satisfying.

Studies have shown that in order to implement circular economy principles, there should be legislative provisions that not only promote the proper functioning of the company, but aim also to safeguard the environment. It is imperative, at both the European and national level, for countries to safeguard the practices of recycling and reuse by companies, showing in practice their contribution to society. The reinforcement of a financial model that will respect and defend the environment will ensure the prosperity and viability of our planet.

7.1 Notion of corporate social responsibility

Understanding of the notion of corporate social responsibility necessarily involves orientation at the following three areas:

Due diligence—specifies a complex active process aimed at identification of the current and potential negative social, environmental, and economic impact oriented toward minimizing or eliminating of the given impact. Elements of the due diligence process depend on the size and conditions of the organization:

the means to assess the potential impact of existing and proposed activities on the strategic objectives,

the means to integrate key areas of social responsibility into the organization’s activities,

the means to monitor performance in the course of time, according to priority and procedures,

action to address the negative impact of relevant decisions and activities.

Determining the context and importance of key areas for the organization—the organization’s priorities need to include familiarization with all key areas related to the organization’s activities.

The organization is supposed to identify the following tasks as possible:

process a list of all custom activities,

identify stakeholders,

specify the activities of the organization itself as well as the activities of organizations within the sphere of influence,

identify realistic key areas so that the organization or the subjects within the sphere of influence or the value chain are able to carry out the relevant activities,

examine the possible impacts of the organization’s decisions and activities on stakeholders as well as sustainable development,

explore ways in which stakeholders can influence the plans, decisions, and activities of the concerned organization in the context of social responsibility,

specify topics of social responsibility, relating the day-to-day activities of the organization, which are up-to-date or occasional in specific circumstances.

Organization’s sphere of influence

In assessing the organization’s sphere of impact, account should be taken of

ownership, administration, and management,

economic relations,

legal and political status,

public opinion.

Applying the organization’s impact onto other entities, it is important to increase the positive or minimize the negative impact on sustainable development or to achieve both objectives simultaneously. The application of impacts can be carried out in the following ways:

determine contractual provisions or incentives,

make public statements of the organization,

participation of the community, political representatives, or other stakeholders,

take investment decisions,

share knowledge and information,

implement joint projects,

collaborate with the media,

promote best practices,

establish cooperation/partnerships with organizations and other entities.

Prioritizing topics

From the viewpoint of integrating social responsibility into both the organization’s activities and its day-to-day practices, it is necessary to identify priorities and ensure that they are respected. The priority specification ought to include a requirement for the involvement of stakeholders. The order of priorities can be modified over time. The following aspects should be taken into consideration when determining the priority themes of an organization:

the organization’s current activities in accordance with legislation, international standards as well as international standards of conduct, best practices,

the impact of a particular topic on the organization’s ability to meet substantial objectives,

the impact of the action on the sources necessary for implementation,

the time perspective for achieving the desired results,

financial implications if the topic will not be addressed as a matter of priority,

simplicity, clarity, and speed of implementation in order to increase awareness and motivation in the field of social responsibility within the organization.

The aim of social responsibility is to contribute to sustainable development, social prosperity, and health. Social responsibility thus becomes one of the important influences on the performance of the organization. More than ever before, the performance of an organization in relation to the social environment in which it operates and its impact on the nature of the environment becomes a critical part of assessing its overall performance and its ability to operate effectively. It reflects the growing recognition of the need to ensure a healthy ecosystem, social equality, and governance in the organization, contribution to quality of life. With increasing frequency organizations are being exposed to critical views of stakeholders, including clients and consumers (prosumer ≡ producer and consumer), workers, community members, NGOs, financiers, investors, firms, and other commercial entities.

Perception of social responsibility exercised by the organization may affect

general name/position of the organization,

the ability to attract and retain workers, and also customers, clients, or users,

maintaining employees’ morale and productivity,

the views of investors, sponsors, and financial institutions and their relations to the government, media, suppliers, partners, customers, and companies in which they operate.

The standard EN ISO 26000:2010 is intended to help organizations wishing to achieve mutual trust between stakeholders, improving, respecting, and applying social responsibility. Its origination and development were preceded by the following standards:

international standard SA8000:2008—social responsibility,

AA 1000 AccountAbility:2008—standard on dialogue with interest groups, audit, reporting,

EN ISO 14001:2015—Environmental Management Systems. Requirements.

EMAS:2009—Environmental Management and Audit System,

OHSAS 18001:2008—Occupational Health and Safety Assessment Series.

TQM tools and philosophy can be used to improve environmental efficiency/performance by eliminating waste or reducing its impact. The system thus created is called TQEM. Comprehensive environmental quality management is the cutting edge of approaches in implementing sustainability strategies for managed processes. TQEM is “an approach to continuous improving of the quality of processes and products intervening in the environment by participating in all levels and functions in the organization.” TQEM can be considered one of the most widely implemented frameworks for the establishment of an environmental management system because it provides companies with a framework to clarify the environmental impact of products and processes (Benková et al., 2007).

For the design and implementation of such a system, Albert Cherns offers the following checklist (Benková et al., 2007):

Compatibility—the process of designing a sociotechnical system should be aligned with its objective. In case of success of this system, it is necessary to give workers more freedom to make decisions and implement their knowledge.

Minimization of critical technical conditions—only important requirements should be specified when designing the system.

Disagreement management—disagreements cannot always be eliminated, but can be managed, evaluated until the source of these disagreements is identified (CE diagnostic principle, cause-effect). The source of disagreements may be a quality defect or an equipment failure.

Adaptability—the organization should be sensitive toward changes in the environment. People ought to be aware of the importance of protecting the environment and adapting to new requirements.

Effective position boundary—marginal conditions must be specified in each organization. Grouping of similar products in production brings about a reduction in production time and a reduction in the resources needed to transport materials between departments.

Information flows—the system should be designed in such a way that it provides information to those who process it further.

Feedback consistent with objectives—a system promoting rewards and humanity should be designed to clearly demonstrate the model behavior.

Proposal as iteration process—no system can be perfect. Even environmental assumptions are changing, not just quality requirements due to technological and user paradigms.

1.1 Pillars of social responsibility—social, economic, and environmental

Defining CSR should be a part of the plan of every organization concerned with increasing the rates of customer satisfaction. The organization must set its priorities, taking into account not only the resources available to facilitate achieving desirable results but also satisfying the needs of other involved parties. The enterprise needs to consider results it intends to achieve. However, it is necessary to identify critical factors which may occur too. Social responsibility aims at respecting not only social but also environmental sustainability in a way that allows for the goals of both local and global communities to be reached. Social responsibility stems from the idea of volunteering and philanthropism. For that reason, in order to create their image modern companies meticulously work out a strategy of responsible behavior to both society and environment.

The European Union started to address the issue of social responsibility and its importance in 1996 when Jacques Delors, the President of the European Union, took the agenda under his auspices. In the same year, the European Centre for Social Responsibility—Corporate Social Responsibility Europe was established.

In 2001, the European Union published a document named Green Paper which defines social responsibility as “voluntary integration of social and environmental aspects into day-to-day business operations and interactions with corporate stakeholders (individuals, groups)”.

With respect to these requirements it is necessary to invest more in human capital, the environment, but especially in green technologies as well as relations with stakeholders.

The analysis of social responsibility includes internal and external parties. The internal side includes employees, investment in human capital, health and safety, and environmentally responsible activities. The external side consists of business partners, suppliers, customers, competitors, communities, media, and public authorities. The analysis covers all entities which in some way affect activities and operation of an enterprise. Through social responsibility it is possible to achieve smooth functioning and long-term gain, while company's strategy must contain tools to identify and meet the needs of all stakeholders.

From the viewpoint of marketing social responsibility is perceived complexly, within the context of 3P “People, Planet, Profit” in the professional sense of “triple bottom line” business.

Corporate benefits are also part of CSR. There are three types of CSR:

ethical—involves a minimum level of responsibility, the enterprise avoids negative impact of its activities on the society,

altruistic—includes philanthropic activities through which the enterprise financially supports stakeholders,

strategic—focuses on voluntary activities from the perspective of benefits for the company.

1.1.4 Corporate philanthropy

Other benefits—corporate benefits, often difficult to measure but all the more monitored in the corporate environment—are also expected from an established CSR. The term corporate philanthropy means various voluntary activities oriented toward a public-benefit purpose, without expectation of added value. Corporate philanthropy is connected to the social environment in which the company does business. It is an opportunity to demonstrate one's own social responsibility by creating higher ethical standards in addition to making a profit and supporting the development of society outside its core business. The guiding principles of philanthropy include transparency, efficiency, innovation, flexibility, and sustainability. Both monetary and nonmonetary donations can be included among the instruments of philanthropy. These activities include charitable support, investments in projects of companies and communities, as well as commercial projects in cooperation with nonprofit organizations. Philanthropic/voluntary activities do not expect any reward/any consideration. The subject of social responsibility is the linking of relations between business and society, business and nature, entrepreneurship, and other social groups in local and global society, which have been greatly intensified by the globalization of the economy and new communication technologies. On the one hand, what is happening in businesses affects people's quality of life and, on the other hand, it affects the economic, political, and environmental sectors. Within the framework of global ethical responsibility, businesses need to address, on the one hand, social and environmental necessity. On the other hand, many multinationals must take into account the impact of global economic processes on the earth's humanity and nature. Social responsibility includes the following statements:

−

enterprise belongs to social entities that are created and operate in the society,

−

enterprise, as a collective entity, voluntarily claims responsibility for the consequences of its own activities,

−

social responsibility includes economic, legislative, ethical, environmental, social, and civic responsibility,

−

social responsibility is related to all corporate activities,

−

social responsibility is accepted in relation to each interest group.

Social responsibility of an enterprise is therefore a complex structured system of relations between an enterprise and groups with which it exists in a particular social system. An enterprise, that has objective knowledge of its operations and integrity is its value, is consciously and voluntarily claiming responsibility for its activities. Social responsibility presupposes the following activities on the part of the enterprise (Fig. 2.1):

Figure 2.1. Links between business activities and volunteering.

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adoption of the ethical principle of responsibility WHO?, WHAT?, TO WHOM?, WHY?, WHEN? and its application to itself,

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identification of specific groups or individuals—what the enterprise influences through its activities and at the same time what influences its activities, i.e., identify its own volunteers and create a database of relevant interests/expectations in economic, social, and ecological spheres,

−

an analysis of the foreseeable consequences of all its activities (short, medium, long term) on individual volunteers.

4 Econometric estimations

In sum, the model will encompass a CSR index (ESG score; 0–100 score); firms’ ROA (net income/total assets); debt to equity ratio (total debt/shareholders’ equity); and size (total assets). All variables were collected from the Thomson Reuters Datastream. The data extracted corresponds to the end of each fiscal year and will be applied to all distinct geographic areas, as well as to the total sample, with a twofold objective: what is the impact of CSR in financial performance, and does this impact change geographically?

Concerning geography, the firms included in the sample are distributed: 10 in Europe, 6 in America, 12 in Asia, and 1 in Africa, which will be our benchmark (Table 1).

Table 1. Descriptive statistics.

Additionally, the VIF tests provided information on the absence of multicollinearity problems (Table 2). The panel data estimation will respect the following equation:

Table 2. Econometric estimations.

⁎⁎⁎P < 0.01, ⁎⁎P < 0.05, ⁎P < 0.1.

ROAi,t=β0 +β1CSRi,t+β2TotalAssetsi,t +β3DtEi,t+ɛi,t

The estimation of both panels shed light on important areas as, contrary to what was expected, variables such as CSR and total assets do not influence the economic performance of the firm. Moreover, when the geographic dimension is included, only debt to equity remains significant.

Evidence proves that CSR is independent from firm financial performance. Therefore, profits are not directly linked to the adoption of these good practices, further reinforcing the need for precise policy actions to positively discriminate those who implement them. The sample mostly comprises European firms, and, these results evidence the need for reevaluating the policy instruments in use to tackle social responsibility strategies among firms. Moreover, the fact that the country of origin effect does appear to be significant is also very interesting, showing that there is scant incentive to promote desirable CSR practices. Most of the large firms in the chemicals sector operate directly or indirectly worldwide, and to some extent they collude in the absence of CSR practices. Given the inexistence of competition pressure due to the natural barriers to entry, these firms are perhaps not afraid of being censored by reduced demand because of their practices, due to lack of alternatives.

These finding reinforce the need for a deeper analysis of the proxies in terms of performance and model building to provide policy makers the correct insights about the actions to be taken to reinforce CSR practices in such a sensitive sector.