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Corporate social responsibility, water management, and financial performance in the food and beverage industry

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  • Olaf Weber
  • Grace Saunders‐Hogberg

Abstract

Water management is an important issue for the food and beverage sector. Global media reports about conflicts between industries and stakeholders about water resources that hurt the food and beverage industry. This study addresses the gap in the knowledge about the connection between water management performance and the financial performance of companies in the food and beverage industry that exists because of a lack of empirical studies in the field of corporate water management and financial performance. Using structural equation modeling to analyze secondary corporate social performance data from KLD‐MSCI, secondary financial data from Compustat, and primary water management data, the results suggest that corporate social performance has a positive impact on water management performance and that water management performance influences the financial performance of the firms in the sample positively. We conclude that an inside‐out approach of corporate social responsibility addressing material issues, such as water in the food and beverage industry, helps to increase the financial performance in this industry. Academically, we contribute to the knowledge about the connection between water management and financial performance in the food and beverage industry. Furthermore, our results can be used by policymakers to implement standardized water indicators for the food and beverage industry. Finally, businesses can use the results of the study to improve their water‐related environmental performance.

Suggested Citation

  • Olaf Weber & Grace Saunders‐Hogberg, 2020. "Corporate social responsibility, water management, and financial performance in the food and beverage industry," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1937-1946, July.
    • Handle: RePEc:wly:corsem:v:27:y:2020:i:4:p:1937-1946
    DOI: 10.1002/csr.1937
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    3. Yuguang Ji & Maoli Ji & Gang Yang & Shulan Dong, 2023. "Water resource management and financial performance in high water‐sensitive corporates," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2419-2434, September.
    4. Mirela Cristea & Graţiela Georgiana Noja & Eleftherios Thalassinos & Daniel Cîrciumaru & Constantin Ștefan Ponea & Carmen Claudia Durău, 2022. "Environmental, Social and Governance Credentials of Agricultural Companies—The Interplay with Company Size," Resources, MDPI, vol. 11(3), pages 1-12, March.
    5. Biancardi, Marta & Iannucci, Gianluca & Villani, Giovanni, 2024. "Water dynamics and environmental social practice in a differential game," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    6. Michael Greiner & Jing Sun, 2021. "How corporate social responsibility can incentivize top managers: A commitment to sustainability as an agency intervention," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(4), pages 1360-1375, July.

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