The risk-mitigating role of corporate social responsibility in Chinese listed heavy-polluting companies: An extreme event experience perspective

Corporate social responsibility (CSR) has long been a strategic concern for polluting companies. Using data on Chinese listed companies in the heavy-polluting industries from 2009 to 2019, we found that companies managed by chief executive officers (CEOs) who had experienced an unpredictable extreme event—namely, the outbreak of severe acute respiratory syndrome (SARS) in 2003—have higher CSR scores. The decline in the performance of the companies where the CEO worked in 2003 is positively associated with the CSR scores of the CEO's current company. Moreover, CEOs' pandemic experience significantly improved CSR scores for companies with higher energy consumption and more significant operational risks. For companies with CEOs who experienced the SARS pandemic, higher CSR scores can help them achieve higher performance and take less risk during the COVID-19 pandemic. The empirical results indicate the risk-mitigating role of CSR for Chinese heavy-polluting firms and the unintended long-term effects of the pandemic.