What Aspects of CSR Really Matter: An Exploratory Study Using Workplace Mortality Data

Abstract

This work contributes to a growing and important body of research that tests whether there is any relationship between reporting positive corporate social responsibility metrics and their return-on-investment for stockholders. Following a review of key literature, this article will test the following hypothesis: whether a portfolio of stocks of companies that produce CSR reports that reveal the lowest on-the-job mortality rates produce better returns for investors than a portfolio of stocks of companies that produce CSR reports that reveal highest on-the-job mortality rates. Indeed, stocks of companies with lowest rates of workplace mortality on average increased in value more than the stocks of companies with the highest rates of workplace mortality, especially in a shorter observation period. However, somewhat disturbing, counterintuitive and thought-provoking, the difference in stock performance is found to not be statistically strong over a longer observation period. In the discussion section, the authors consider whether some CSR metrics are too granular to impact stock performance, whether the impacts of changes in some metrics become evident over a longer observation period, or whether outside factors affected the results. The study concludes by pointing to several new directions for promising research.