The Effects Of Csr And Financial Performance Essay

1040 Words Jun 9th, 2016 5 Pages
Following the events of the latest financial crisis, the interest of media, public and investors towards the behavior and management of companies has seen a steady increase. Nowadays, companies are not judged solely on their financial performance but also on activities affecting a wider range of stakeholders. The set of activities under scrutiny by this research revolves around Environmental, Social and Governance practices and their effect on returns. Theoretically speaking, such activities are expected to have positive effects on performance of companies as their products and services would be favored by costumers and stockholders compared to those of other companies. Moreover, investors’ interest towards such practices has increased drastically over the past decade. This is due to the positive relation found between CSR and financial performance (Cochran & Wood, 1984; Weber 2008; Von Arx & Ziegler, 2008). This research attempt to further develop the framework of results that connects ESG practices and returns. By observing performance of mutual funds, this research has tried to create a direct link between company specific ESG activities and mutual fund returns.
The concept of better performance for companies that follows ESG practices is at the base of the research. Such results are expected to indirectly influence returns of mutual funds. The research is divided in two sections. In the first part, ESG scores are attributed to a series of mutual fund in order to test if…

Related Documents