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An Exploratory View Of Emerging Relationship Between Corporate Social And Financial Performance In Canada

Author

Listed:
  • PETER MAY

    (Western Co-Operative Fertilizers Limited, Calgary, Alberta, Canada)

  • ANSHUMAN KHARE

    (Centre for Innovative Management, Athabasca University, Canada)

Abstract

This study uses primary research methods to determine whether a corporate social performance (CSP)–corporate financial performance (CFP) relationship exists within the Canadian context through examination of publicly-traded Canadian-based companies.The empirical findings demonstrate a positive CSR–CFP relationship, typically with CFP preceding CSP (although this does not preclude a relationship in the other direction) when using accounting-based measures of financial performance and as applied to the Top 1000 firms in Canada as ranked by profitability. This positive relationship was not confirmed when compared to the Top 500 companies ranked by profitability (i.e., with the "bottom 500" removed). In addition, the positive relationship did not occur with respect to market-based measures of financial performance (i.e., share performance).In addition, the study noted two possible issues that may have influenced the findings although the extent of such influences (if they exist) is not known. The first of these relates to a predilection amongst the CSR-rankings towards firms with high profitability. Almost all of the top-ranked CSR leaders are from the Top 500 firms in Canada as ranked by profitability and nearly three-quarters are from the Top 100. The second issue is the potential bias of the CSR-ranking methods themselves. This may have resulted in the inclusion of some firms with more questionable reputations in the rankings as well as the lack of continuity from year to year of CSR-leaders amongst the three rankings examined.This exploratory study sets the stage for more detailed analyses within a Canadian context in the future.

Suggested Citation

  • Peter May & Anshuman Khare, 2008. "An Exploratory View Of Emerging Relationship Between Corporate Social And Financial Performance In Canada," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 10(03), pages 239-264.
    • Handle: RePEc:wsi:jeapmx:v:10:y:2008:i:03:n:s146433320800307x
    DOI: 10.1142/S146433320800307X
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    Cited by:

    1. Driss Rahma & Jarboui Anis, 2015. "Contribution of Social Disclosure and Organizational Culture to Create Financial Value of Tunisian Companies," Growth, Asian Online Journal Publishing Group, vol. 2(1), pages 10-17.
    2. Mark Fuller, 2022. "Wheat and chaff: the degree to which strategic management principles are integrated within corporate social responsibility reporting among large Canadian firms," International Journal of Corporate Social Responsibility, Springer, vol. 7(1), pages 1-17, December.

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