Investigating a Potential Relationship between Corporate Social Responsibility and Financial Growth

Abstract

Modern business has recently trended towards a focus on corporate social responsibility (CSR) due to a growing sense that companies should uphold ethical standards not only for their direct stakeholders, but also for society at large. This study therefore investigated whether a relationship between companies’ CSR/philanthropic efforts and financial growth may exist. The six public companies investigated (Alphabet, Apple, Bank of America, JP Morgan Chase, Kroger, and Walmart) were the six highest-ranked on the 2019 Fortune 500 list that also appeared on the 2018 Fortune Change the World list. One notable philanthropic effort for each company was selected. Financial statements from the year before, during, and after the philanthropic efforts began were examined and sales revenue was recorded. A positive correlation was found between Apple’s and Kroger’s financial success and philanthropic efforts but not for the other four companies. This may indicate that CSR is a strong factor in how customers perceive those two companies. The weak correlation found between these two variables for the four remaining firms may demonstrate that the relationship between CSR and consumer choice is weak or nonexistent. The results of this study are intended to prepare future research involving the potential relationship between corporate social responsibility and sales revenue, by providing a framework for related statistics and information among top philanthropic public corporations.