By examining data from 4,534 companies, specifically focusing on 498 healthcare and 223 resource extraction firms, the study explores how CSR, when aligned with industry-specific priorities, affects financial outcomes. The analysis compares community-focused CSR in healthcare with environmental CSR in the resource extraction sector to assess their impact, particularly during the 2008–2009 recession.
The findings reveal that strategic fit between CSR and the industry value chain enhances financial performance significantly. Healthcare firms experienced notable improvements in profitability when engaging in community-oriented CSR, while resource extraction companies achieved financial gains from environmental initiatives. Conversely, misalignment, such as healthcare firms focusing on environmental CSR, led to diminished performance. During economic hardship, these effects were amplified: firms with well-aligned CSR sustained or even improved their financial performance, showcasing the resilience that comes from CSR integration with the value chain. As the authors observe, "Strategic CSR - aligned with a firm’s core value chain - not only satisfies salient stakeholders but creates a virtuous cycle where social impact and financial performance reinforce each other, especially when resources are scarce." This cycle highlights how firms can harness CSR not merely as reputation management but as a strategic asset.
Crucially, the study emphasizes the role of stakeholder salience in enhancing CSR credibility. Healthcare firms that served community stakeholders and resource firms addressing environmental concerns gained legitimacy and reduced perceptions of "greenwashing." These findings validate Porter and Kramer’s "shared value" concept and expand strategic stakeholder theory by framing CSR strategic fit as a pathway to financial gains. Practically speaking, firms should focus their CSR efforts on the areas tied to their operational strengths, especially under conditions of economic constraints.
The study is particularly relevant today as firms confront post-pandemic recovery, climate change, and growing regulatory pressure. It reinforces the importance of materiality in ESG frameworks, aligning with SASB standards and informing new reporting mandates like the EU’s CSRD. Additionally, it connects CSR to global priorities by supporting the UN Sustainable Development Goals (SDGs), for example SDG 3 (Health) for healthcare firms and SDG 13 (Climate Action) for extractive industries, by demonstrating how firms can move beyond philanthropy to systemic impact. Ultimately, this research suggests CSR is not only a moral or regulatory necessity but a strategic imperative, guiding firms to build resilience, foster stakeholder trust, and drive long-term financial success. Read the full paper here.
FULL ARTICLE HERE
