A global survey by McKinsey & Company (2014) reports that company leaders and executives increasingly see sustainability as a top CEO priority. The efforts to integrate sustainability goals into the core business face companies with a growing challenge in capturing CSR‟s full value. One of the possible values is the ability of companies to use CSR as a risk management tool, particularly during an unfavourable business climate. This study examines the effects of CSR performance on firm risk during the global financial crisis in 2007-2010. UK and US listed firms are taken as a sample in this study, and by using OLS and fixed effects regressions, the results show that the risk-reducing effect of CSR is indeed significant on firm risk, but the results show that the risk reducing effects are not more significant nor greater than in other common periods (non-crisis period). The findings of the study contribute to the literature by giving deeper insights on instrumental values of CSR and the companies‟ resource allocation decisions.
Volume 12 | Issue 1
Pages: 339-351
DOI: 10.5373/JARDCS/V12I1/20201913