The relationship between corporate social responsibility and financial performance / Sahnur Amira Berahim

This paper is aims to investigate the relationship between Corporate Social Responsibility and Financial Performance of Malaysian public listed companies. The quotation by Maersk Line in 2010 implies that sometimes CSR initiatives can be good for the environment and society while simultaneously not really make any sense to business and its operations. According to Porter & Kramer (2006), many companies today have uncoordinated CSR activities disconnected from company strategy that neither make any meaningful social impact nor strengthen the company's long term competitiveness. There is an increasing pressure for companies operating in the global business environment to improve performance in order to stay ahead of competition. Especially, the current financial crisis has put pressure on companies to think economically, reduce their costs and become more efficient while responding to increasing customer demands. This has put heavy emphasis on the costs of doing CSR and its results created (Epstein, 2008). Hence, the companies have to identify the business case of their CSR strategy. Due to the above, this research examined the relationship between corporate social responsibility and financial performance. This study relied on secondary data obtained through content analysis of 8 published company's annual reports for the year 2009-2015.Based on literature, four independent variables are corporate social responsibility activities (environment, community, workplace and marketplace) and dependent variable net profit before tax.