Unlocking success: exploring the relationship between multiple CSR initiatives, firm performance and the role of the regional quality of government

Purpose - Following signalling theory, this paper aims to study the impact of multiple corporate social responsibility (CSR) initiatives on firm performance, by considering commitment to the United Nations Global Compact (UNGC), the Occupational Health and Safety Assessment Series (OHSAS) 18001 and environmental commitment such as Kyoto Protocol or Paris Agreement, for a sample of Italian-listed companies. Through the adoption of contingency theory, the paper also aims to study whether the impact of CSR initiatives is moderated by the following contextual factors: quality of government, impartiality and corruption of the region. Information on CSR initiatives is obtained through a manual content analysis of companies’ disclosure. Design/methodology/approach - Studying a sample of Italian-listed companies, information on CSR initiatives is obtained through a manual content analysis of companies’ sustainability or integrated reports. The authors run ordinary least square regressions to test research questions. Findings - Results show that OHSAS 18001 has a positive influence on both sales growth and profitability when held alone. When the focus is on one single initiative, stakeholders tend to attribute more value to signals of the social dimension. This evaluation can be enhanced by combining OHSAS 18001 with firm commitment to UNGC and/or the Kyoto Protocol or Paris Agreement. By signalling a more comprehensive approach to CSR, firms can obtain reputational growth, which can generate competitive advantage. Finally, in regions with low corruption, high impartiality and high government quality, CSR initiatives are considered as more reliable signals, which further enhances firms’ performance. Practical implications - These results may have practical implication for managers as they confirm that using OHSAS 18001 certification ensures better performance. However, signalling commitment to a specific CSR initiative does not automatically imply an improvement in performance. Indeed, companies need to approach CSR initiatives in a strategic manner and may need to adjust their structure and philosophy to the principle of the initiative. Using a certification scheme has specific costs, which need to be considered. Social implications - Findings show that the impact of CSR initiatives is affected by contextual factors such as the quality of government. Knowing this, firms could not be interested in sustainable practices in regions with low quality of government. In this sense, policymakers and regulators should enhance the quality of their activity to improve the foster firms’ commitment to CSR. A higher firms’ commitment can be beneficial to the entire community. Originality/value - To the best of the authors’ knowledge, this paper is the first attempt to identify how the combination of multiple CSR initiatives affects corporate performance. In addition, this paper analyses the impact of commitment towards global environmental policies on firms’ performance. Then, the authors offer insights about if and how regional differences in terms of quality of government can moderate these impacts.