liu.seSearch for publications in DiVA
Change search
ReferencesLink to record
Permanent link

Direct link
The relationship between disclosures of corporate social performance and financial performance: Evidences from GRI reports in manufacturing industry
Linköping University, Department of Management and Engineering, Production Economics. Linköping University, The Institute of Technology.
Department of Industrial Economics and Management, Royal Institute of Technology.
Linköping University, Department of Management and Engineering, Production Economics. Linköping University, The Institute of Technology.
2015 (English)In: International Journal of Production Economics, ISSN 0925-5273, E-ISSN 1873-7579, Vol. 170, 445-456 p.Article in journal (Refereed) Published
Abstract [en]

Whether the corporate social performance affects the financial performance is still unclear in many manufacturing companies. We commonly expect, on one side, that profitable corporations have stronger incentives to reveal information on social performance in order to improve their publicity; on the other hand, companies may face the fear of rising costs due to Corporate Social Responsibility (CSR) activities. With increasing concerns of CSR, it is timely to investigate the relationship between the disclosure of corporate social performance and financial performance. In this paper with the above study objective, we use Global Reporting Initiative (GRI) reports of 75 sample companies, collect evidences by applying the method of structured content analysis of the cases and attempt to identify this relationship. The corporate social performance is measured by the indicators according to the GRI guidelines, i.e. within the categories of Labor practices and decent work, Human Rights, Society as well as Product responsibility. Financial performance is measured by return on equity, sales growth and cash flow/sales ratio. Using statistical evaluation methods, our results indicate that the categories of Human Rights, Society as well as Product responsibility display a significant and positive correlation with the return on equity. Same conclusion also holds for many CSR indicators. Nevertheless, when examining the CSR practices across different manufacturing sectors, we have not observed significant differences. The study results are important for understanding the development and implementation of CSR practices in the manufacturing industry.

Place, publisher, year, edition, pages
Elsevier, 2015. Vol. 170, 445-456 p.
Keyword [en]
corporate social responsibility, disclosures of social performance, financial performance, Global Reporting Initiative, empirical research
National Category
Other Earth and Related Environmental Sciences
URN: urn:nbn:se:liu:diva-117443DOI: 10.1016/j.ijpe.2015.04.004ISI: 000367486100009OAI: diva2:808196
Available from: 2015-04-27 Created: 2015-04-27 Last updated: 2016-02-02
In thesis
1. Sustainability and company performance: Evidence from the manufacturing industry
Open this publication in new window or tab >>Sustainability and company performance: Evidence from the manufacturing industry
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation approaches the question of sustainability and its influence on company performance, with special focus on the manufacturing industry. In the contemporary production environment, manufacturing operations must take into account not only profit, but also environmental and social performance, in order to ensure the long-term development of the company. Companies have to decide whether they should allocate resources to environmental and social practices in order to improve their competitive advantage. Consequently, in decision-making processes concerning operations, it is important for companies to understand how to coordinate profit, people, and planet.

The objective of this dissertation was to investigate the current situation regarding manufacturers’ sustainable initiatives, and to explore the relationship between these sustainable practices and companies’ performance, including financial performance, operational performance, innovation performance, environmental performance, and social performance. First of all, a structured literature review was conducted to identify sustainable factors considered to be important in the decision making of manufacturing operations. The findings were synthesized into a conceptual model, which was then adopted as the basis for designing the survey instrument used in this dissertation. Drawing on Global Reporting Initiative (GRI) reports, empirical research was performed to explore the relationship between environmental management practices and company performance. Interestingly, the findings showed that many environmental management practices had a strong positive impact on innovation performance. Sustainability disclosures and financial performance were further analyzed using extended data from the GRI reports. The results also showed that several sustainability performance indicators, such as product responsibility, human rights, and society, displayed a significant and positive correlation with return on equity in the sample companies.

In order to further explore the research area and to verify these findings, a triangulation approach was adopted and new data were collected via a survey conducted among middle and large sample companies in the Swedish manufacturing industry. The results indicated that the sustainable improvement practices had a positive impact on company performance. Some environmental and social improvement practices had a direct and positive correlation with product and process innovation. Furthermore, findings suggested that better cooperation with suppliers on environmental work could help to strengthen the organizational green capabilities of the focal companies.

When considering the company’s general approach to implementing sustainable practices, some interesting findings emerged. There were limited significant differences in sustainable practices when comparing different manufacturing sectors, and different countries and regions. However, the results showed that Swedish manufacturing companies often place higher priority on implementing economic and environmental sustainability practices than on social ones.

This dissertation contributes to the literature on manufacturing sustainability. The study expands the understanding of how environmental, social, or economic perspectives as a triple bottom line can influence company performance and to a certain extent the supply chain. Identifying and understanding such relationships gives companies the opportunity to integrate sustainability into their manufacturing operations strategy in order to sustain their manufacturing operations over the long term.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2015. 67 p.
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1698
Empirical research, sustainable practices, company performance
National Category
Economics and Business Social Sciences Interdisciplinary
urn:nbn:se:liu:diva-121052 (URN)10.3384/diss.diva-121052 (DOI)978-91-7685-967-4 (print) (ISBN)
Public defence
2015-09-22, ACAS, Hus A, Campus Valla, Linköping, 10:15 (English)
Available from: 2015-09-03 Created: 2015-09-03 Last updated: 2015-09-03Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full text

Search in DiVA

By author/editor
Chen, LujieTang, Ou
By organisation
Production EconomicsThe Institute of Technology
In the same journal
International Journal of Production Economics
Other Earth and Related Environmental Sciences

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Altmetric score

Total: 320 hits
ReferencesLink to record
Permanent link

Direct link