IMPACT OF CSR ON FINANCIAL PERFORMANCE (1).pdf

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1. Exploring the Link Between Corporate
Social Responsibility and Financial
Performance in Business
Organizations
IMPACT OF CSR
ON FINANCIAL
PERFORMANCE
Eco-Friendly Business Solutions
Abdul Rafay (4-21/f2020/032)
Abeera Kursheed (4-21/f2020/09)
Jouzia Khurram (4-21/f2020/07)

2. This is a business model in which companies
integrate social and environmental concerns in
their operations and interactions with
stakeholders. It involves going beyond the
pursuit of profits to consider the impact on the
environment, society, and the economy. CSR
activities might include sustainable business
practices, philanthropy, ethical labor practices,
and community engagement.
CORPORATE SOCIAL RESPONSIBILITY :

3. The positive impact of corporate social responsibility on financial performance
is evident through increased customer loyalty and trust.
Companies that engage in CSR activities are more likely to attract and retain
top talent, leading to enhanced productivity.
CSR practices can result in cost savings through improved efficiency and
reduced waste, contributing to better financial performance.
Embracing CSR initiatives can help build a strong brand reputation, leading to
increased sales and revenue growth.
CSR Benefits
Attracting Talent
Cost Savings
Brand Reputation

4. Corporate Social Responsibility (CSR) initiatives have
been shown to positively impact financial performance of
companies. By engaging in activities that benefit society
and the environment, businesses can enhance their
reputation, attract investors, and improve long-term
profitability. Research indicates a strong correlation
between effective CSR strategies and increased
shareholder value and competitive advantage.
CSR Effects on Performance:
Exploring the relationship between social responsibility
actions and financial success.

5. RESEARCH PROBLEM:
The existing body of knowledge lacks a comprehensive understanding
of the specific mechanisms through which CSR initiatives, spanning
environmental sustainability, ethical labor practices, community
engagement, and philanthropy, directly influence and shape the
financial performance metrics of businesses. While anecdotal
evidence suggests a positive correlation between CSR and financial
success, there is a critical need for empirical research to delineate the
nature, extent, and conditions under which such a relationship holds
true.
RESEARCH OBJECTIVES:
Financial Measure
Market Perception
Long term financial success

6. Significance of Study:
It is critical for firms to think about the impact of social activities on the
firms’ financial performance.
The literature advised that there is significant relationship between CSP
and CFP assemble the trust of investor in the company and become more
reliable.
It attracts the investor by exhibiting the high profitability for firm. It
raises stock prices on the market, which is good news for investors and
clients.

7. CHAPTER: 02

8. CSR on the Financial Performance of banks in the service sector of Pakistan. The data is obtained from
the annual reports issued by the banks during 2008-2012. Regression models are used to check the
relation between EPS, ROA, ROE, Net Profit, and CSR. The regression model reveals a positive
relationship between profitability (EPS, ROA, ROE, and Net Profit) and CSR practices as well as a lack
of CSR in Pakistan. The study is quantitative in nature as the results and final findings are based on
data collection from annual reports. And these results are quantified using different statistical tools.
This study is related to panel data in nature. (M. Shoukat Malik1 , Muhammad Nadeem 2014)
Despite continuous research efforts, the literature is still inconclusive about the relationship Between
corporate social responsibility (CSR) and financial . With an aim to address this issue, the impact of
CSR on financial performance in the Indian situation. Using a panel data of top 137 companies from
CNX-500 for 10 years (2008-2017), the impact of CSR on three indicators of financial performance,
Return on Assets (ROA), Return on Equity (ROE) and Net Profit Margin (NPM), is evaluated using the
panel data regression analysis. (Amritjot Kaur Sekhon, Lalit Mohan Kathuria 2020)
The impact of CSR on financial performance using an extensive content analysis method on annual
reports from 13 domestic-owned Malaysian insurance companies throughout over the past 9 years
(2008-2017). The relationship among CSR and ROA, ROE and EPS is tested using correlation analysis.
(Khartic Rao Manokaran et.al , 2018)
LITERATURE REVIEW:

9. FINANCIAL
PERFORMANCE
Corporate Social
Responsibility
EARNING BEFORE INTEREST
TAX
RETURN ON ASSETS
FINANCIAL AVERAGE
DEBT TO EQUIT
RETURN ON EQUITY
INDEPENDENT VARIABLE:
FRAME WORK:
DEPENDENT VARIABLE:

10. Hypotheses (H1). There is a significant and positive impact of CSR on financial performance
Hypotheses (H2): There is a significant and positive impact of CSR on Return on equity
Hypotheses (H3): There is a significant and positive impact of CSR on Earnings before interest tax
Hypotheses (H4): There is a significant and positive impact of CSR on financial average
Hypotheses (H5): There is a significant and positive impact of CSR on debt to equity
Hypotheses (H6): There is a significant and positive impact of CSR on return on asset
HYPOTHESIS:

11. METHODOLOGY
CHAPTER NO 3:

12. Methodology is a fancy term for explaining your research method, or the process you use to answer
your research question
Methodology refers to the systematic and structured process used to conduct research, including
the techniques, tools, and methods employed to collect, analyze, and interpret data
Research design
1-Data collection
2-Data analysis
3-Data interpretation
A well-defined methodology is essential to ensure the quality, validity, and reliability of research
findings.
METHODOLOGY INTRODUCTION :

13. Explanatory research :
Our research is explanatory research The study will include a variety of Pakistan listed industries to
capture sector-specific dynamics, providing for a more nuanced understanding of how CSR
practices impact financial performance in different business situations. In this study 10 years of
data collected from PSX 30 INDEX
Research design :
Quantitative techniques :
Quantitative research is the collection and analysis of numerical data to uncover patterns,
correlations, and trends. It offers an organized way to comprehending complicated events
Population :
This research will collect data of 30 firm from 100 PSX INDEX who are doing CSR.
A data will be of 10 years

14. Our?data?will?panel?data?
We?use?regression?method
?
Reference?:
The?impact?of?corporate?social?responsibility?on?firm?financial?performance:?does?corporate
governance?matter?
This?study?was?based?on?a?sample?of?200?firms?over?2010/2021.?The?direct?and?moderating?effects
were?tested?by?using?multiple?regression?techniques.
To?analyze?the?impact?of?corporate?social?responsibility?on?financial?performance?this?study
constructed?the?following?regression?model:?
Instrument?selection?

15. Equation: Here are the equations for each dependent variable:
Formula: Yi= f (Xi, B) + ei
Earnings before Interest and Tax (EBIT) EBIT= f (CSR, B) + ei
ROE (Return on Equity) ROE= f (CSR, B) + ei
ROA (Return on Assets) ROA= f (CSR, B) + ei
Financial Average (FA) FA= f (CSR, B) + ei
Debt-to-Equity (D/E) Ratio DE= f (CSR, B) + ei

16. DEPENENT VARIABLES :
FINANCIAL MEASURES INCLUDING RETURN ON EQUITY, EARNING BEFORE INTEREST TAX,
FINANCIAL AVERAGE, DEBT TO EQUITY, RETURN ON ASSETS ARE DEPENDENT VARIABLES .
THESE DEPENDENT VARIABLES REPRESENT KEY ASPECTS OF A COMPANY'S FINANCIAL
PERFORMANCE, INCLUDING PROFITABILITY, EARNINGS, FINANCIAL STRUCTURE, AND ASSET
INDEPENDENT VARIABLES :
AS THE INDEPENDENT VARIABLE, CSR (CORPORATE SOCIAL RESPONSIBILITY) CAN BE
MEASURED AND OPERATIONALIZED IN VARIOUS WAYS, DEPENDING ON THE SPECIFIC
RESEARCH FOCUS AND OBJECTIVES.
CSR INDEX
VARIABLES :

17. THANK
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