Germany is in the midst of a radical transformation of its power sector, which in 2016 led two of its main electric utilities, EON and RWE, to undertake dramatic restructurings. EON spun off its fossil fuel and trading segments, while RWE carved out its renewable energy, retail and grid business. The paper examines the drivers of these divestitures. Building on corporate finance literature, the paper uses a mix of comparative descriptive statistics, interviews and event studies to test four groups of hypotheses. The evidence rejects drivers related to operations and management, biased investment and investor preferences and instead points to financing-related drivers. Among the financing-related drivers, debt overhang and risk contamination seemed to have played the main role. Utilities restructured to save their healthy assets (renewables and grid infrastructure) from losses at their conventional power generation business (fossil fuel and nuclear plants). Already weakened from record losses in their fossil fuel powered generation fleet due to low electricity prices, after 2011 the nuclear exit emerged as an additional challenge to the utilities. Investors doubted the adequacy of utilities provisions for decommissioning nuclear power plants and storing toxic waste, and feared major cost increases for which the utilities would be unlimitedly liable. The paper uses existing research on divestitures in an empirical case that has implications for the evolution of European power markets. The results suggest that exiting conventional technologies as part of the transition to a more renewable energy mix might cause substantial costs. If these are not clarified and allocated ex ante, policy makers might find themselves forced to either burden tax payers or endanger utilities that are of systemic relevance to the energy sector.
{"title":"Utility Divestitures in Germany: A Case Study of Corporate Financial Strategies and Energy Transition Risk","authors":"Lena Hornlein","doi":"10.2139/ssrn.3379545","DOIUrl":"https://doi.org/10.2139/ssrn.3379545","url":null,"abstract":"Germany is in the midst of a radical transformation of its power sector, which in 2016 led two of its main electric utilities, EON and RWE, to undertake dramatic restructurings. EON spun off its fossil fuel and trading segments, while RWE carved out its renewable energy, retail and grid business. \u0000The paper examines the drivers of these divestitures. Building on corporate finance literature, the paper uses a mix of comparative descriptive statistics, interviews and event studies to test four groups of hypotheses. The evidence rejects drivers related to operations and management, biased investment and investor preferences and instead points to financing-related drivers. \u0000Among the financing-related drivers, debt overhang and risk contamination seemed to have played the main role. Utilities restructured to save their healthy assets (renewables and grid infrastructure) from losses at their conventional power generation business (fossil fuel and nuclear plants). \u0000Already weakened from record losses in their fossil fuel powered generation fleet due to low electricity prices, after 2011 the nuclear exit emerged as an additional challenge to the utilities. Investors doubted the adequacy of utilities provisions for decommissioning nuclear power plants and storing toxic waste, and feared major cost increases for which the utilities would be unlimitedly liable. \u0000The paper uses existing research on divestitures in an empirical case that has implications for the evolution of European power markets. The results suggest that exiting conventional technologies as part of the transition to a more renewable energy mix might cause substantial costs. If these are not clarified and allocated ex ante, policy makers might find themselves forced to either burden tax payers or endanger utilities that are of systemic relevance to the energy sector.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"382 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115204959","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A number of studies have addressed issues on Energy Efficiency (EE) pertaining to improving productivity, employment generation, and increased energy security. Investing EE reduces demand for electricity generation, reduces fiscal deficit and energy deficits. In this context, very few studies focused on scaling up EE efforts, the present approach is fragmented and lack holistic approach to make finance available from financial institutions. Therefore, this study makes an effort to mainstreaming energy productivity lending practices among financial institutions through five voluntary principles framework. The proposed framework is in line with India’s National Mission on Enhanced EE (NMEEE) as a part of the National Action Plan on Climate Change (NAPCC). The outcome of this study will provide a boost to the country’s efforts on enhancing EE efforts by strengthening national action plans, strategies and policies. Thus, a greater collaboration, mitigating institutional barriers and develops a favorable environment for the fiscal and regulatory landscape to attract investments for EE efforts.
{"title":"Mainstreaming Energy Productivity Lending Practices among Indian Financial Institutions (FIs)","authors":"Janardhana Anjanappa, Juthathip Jongwanich","doi":"10.2139/ssrn.3378796","DOIUrl":"https://doi.org/10.2139/ssrn.3378796","url":null,"abstract":"A number of studies have addressed issues on Energy Efficiency (EE) pertaining to improving productivity, employment generation, and increased energy security. Investing EE reduces demand for electricity generation, reduces fiscal deficit and energy deficits. In this context, very few studies focused on scaling up EE efforts, the present approach is fragmented and lack holistic approach to make finance available from financial institutions. Therefore, this study makes an effort to mainstreaming energy productivity lending practices among financial institutions through five voluntary principles framework. The proposed framework is in line with India’s National Mission on Enhanced EE (NMEEE) as a part of the National Action Plan on Climate Change (NAPCC). The outcome of this study will provide a boost to the country’s efforts on enhancing EE efforts by strengthening national action plans, strategies and policies. Thus, a greater collaboration, mitigating institutional barriers and develops a favorable environment for the fiscal and regulatory landscape to attract investments for EE efforts.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128651509","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A. Bertolotti, Debarshi Basu, Kenza Akallal, Brian Deese
We investigate the impacts of climate change on equity investments in US Electric Utilities by evaluating market reactions around extreme weather events. We hypothesize that investment risk from climate change is already present in the market and that extreme weather events evidence this risk through price and risk dislocations. From the geolocation of power plants, we build up the exposure of parent company securities to hurricanes, wildfires, floods, droughts and temperatures to arrive at a combined climate change exposure score. We find price reactions of up to 1.5% and rise in volatility of 6% in the 30-day period after a hurricane make landfall. We then determine the extreme weather exposure for each power plant location and aggregate these exposures to the publicly traded parent company for a climate risk exposure score.
{"title":"Climate Risk in the US Electric Utility Sector: A Case Study","authors":"A. Bertolotti, Debarshi Basu, Kenza Akallal, Brian Deese","doi":"10.2139/ssrn.3347746","DOIUrl":"https://doi.org/10.2139/ssrn.3347746","url":null,"abstract":"We investigate the impacts of climate change on equity investments in US Electric Utilities by evaluating market reactions around extreme weather events. We hypothesize that investment risk from climate change is already present in the market and that extreme weather events evidence this risk through price and risk dislocations. From the geolocation of power plants, we build up the exposure of parent company securities to hurricanes, wildfires, floods, droughts and temperatures to arrive at a combined climate change exposure score. We find price reactions of up to 1.5% and rise in volatility of 6% in the 30-day period after a hurricane make landfall. We then determine the extreme weather exposure for each power plant location and aggregate these exposures to the publicly traded parent company for a climate risk exposure score.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"132 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115900881","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine how employee layoffs, an action that lowers a firm’s social performance, affect stakeholders’ wealth and contract terms. We find that although layoff-performance sensitivity is similar between firms with high and low corporate social responsibility (CSR) performance, high CSR firms’ shareholders, suppliers, and bondholders realize more negative returns from layoff announcements than those of low CSR firms. After layoffs, these firms also experience greater deterioration in supplier relationships, operating performance, and CSR investment and a larger increase in loan rates. The results suggest that high CSR firms’ layoffs signal their weak future prospects and deterioration in stakeholder relationships.
{"title":"How Do Changes in Firms’ Social Performance Affect Stakeholders? Evidence from Employee Layoffs","authors":"Jun-Koo Kang, S. Selvam","doi":"10.2139/ssrn.3319311","DOIUrl":"https://doi.org/10.2139/ssrn.3319311","url":null,"abstract":"We examine how employee layoffs, an action that lowers a firm’s social performance, affect stakeholders’ wealth and contract terms. We find that although layoff-performance sensitivity is similar between firms with high and low corporate social responsibility (CSR) performance, high CSR firms’ shareholders, suppliers, and bondholders realize more negative returns from layoff announcements than those of low CSR firms. After layoffs, these firms also experience greater deterioration in supplier relationships, operating performance, and CSR investment and a larger increase in loan rates. The results suggest that high CSR firms’ layoffs signal their weak future prospects and deterioration in stakeholder relationships.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131074598","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the performance of socially screened bond portfolios of 189 Eurozone companies between 2003 and 2016. Bond portfolios are formed on the basis of an aggregate measure of corporate social responsibility (CSR) as well as on specific dimensions of CSR: Environment, Social and Governance dimensions. Our results suggest that the performance of high socially rated bonds is not statistically different from that of low-rated bonds. We further analyze the evolution of bond portfolio performance over time. The results indicate that in an earlier stage portfolios of high-rated bonds outperformed portfolios of low-rated bonds. Yet, over time this outperformance disappears. These results suggest that the errors-in-expectations hypothesis and the shunned-security hypothesis are not only useful to explain the performance of socially responsible equity portfolios but they are also useful in explaining the performance of socially screened bond portfolios over time.
{"title":"Socially Responsible Investing and the Performance of European Bond Portfolios","authors":"Patrícia Pereira, M. C. Cortez, F. Silva","doi":"10.2139/ssrn.3289307","DOIUrl":"https://doi.org/10.2139/ssrn.3289307","url":null,"abstract":"This paper investigates the performance of socially screened bond portfolios of 189 Eurozone companies between 2003 and 2016. Bond portfolios are formed on the basis of an aggregate measure of corporate social responsibility (CSR) as well as on specific dimensions of CSR: Environment, Social and Governance dimensions. Our results suggest that the performance of high socially rated bonds is not statistically different from that of low-rated bonds. We further analyze the evolution of bond portfolio performance over time. The results indicate that in an earlier stage portfolios of high-rated bonds outperformed portfolios of low-rated bonds. Yet, over time this outperformance disappears. These results suggest that the errors-in-expectations hypothesis and the shunned-security hypothesis are not only useful to explain the performance of socially responsible equity portfolios but they are also useful in explaining the performance of socially screened bond portfolios over time.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"79 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129214409","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The European Union has set ambitious targets for emission reduction and the penetration of renewable energy, including the electricity generation sector as one of the major emitters of CO2. After a period of subsidy-driven investments, the costs of renewables decreased strongly making investments more attractive. Since European countries differ strongly in terms of natural resources, we analyse the profitability of wind onshore and offshore and solar PV across Europe to determine where it is optimal to invest in the future and to understand which factors drive the profitability of the investments. We use a power systems model to simulate the whole European electricity market in 2030. Using the renewable revenues determined by the model, we calculate the internal rate of return to analyse how profitable each technology is in each country. We find that investments in the considered technologies are not homogeneously profitable across Europe. This suggests that cooperation between European countries can be expected to achieve the overall targets at lower costs than nationally-driven approaches. We also find that in many countries, wind onshore and solar PV are profitable by 2030 in absence of any financial support. Wind offshore does not seem to be profitable without financial support.
{"title":"Are Renewables Profitable in 2030? A Comparison between Wind and Solar Across Europe","authors":"V. Bertsch, Valeria Di Cosmo","doi":"10.2139/ssrn.3241987","DOIUrl":"https://doi.org/10.2139/ssrn.3241987","url":null,"abstract":"The European Union has set ambitious targets for emission reduction and the penetration of renewable energy, including the electricity generation sector as one of the major emitters of CO2. After a period of subsidy-driven investments, the costs of renewables decreased strongly making investments more attractive. Since European countries differ strongly in terms of natural resources, we analyse the profitability of wind onshore and offshore and solar PV across Europe to determine where it is optimal to invest in the future and to understand which factors drive the profitability of the investments. We use a power systems model to simulate the whole European electricity market in 2030. Using the renewable revenues determined by the model, we calculate the internal rate of return to analyse how profitable each technology is in each country. We find that investments in the considered technologies are not homogeneously profitable across Europe. This suggests that cooperation between European countries can be expected to achieve the overall targets at lower costs than nationally-driven approaches. We also find that in many countries, wind onshore and solar PV are profitable by 2030 in absence of any financial support. Wind offshore does not seem to be profitable without financial support.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114353353","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Neoliberalism and the corporate economy stand in fundamental contradiction. First, corporations are created and sustained through government intervention in the economy, contradicting neoliberal strictures. Second, the neoliberal attempt, in the face of this contradiction, to better square the corporation with free market principles, by treating it as a private partnership of stockholders as opposed to a state franchise, renders the corporation dysfunctional. Particularly damaging has been the application of a distorted version of agency theory that, as I show, is indebted to game theory, in which stockholders are modeled as the “principal” and management (and workers) as their opportunistic agent. This exaggerated “agency problem” has been addressed through a massive reallocation of firm revenues, from reinvestment and workers, to executives and stockholders. Far from supercharging capital accumulation, as widely assumed, neoliberalism has the opposite effect, decapitalizing the corporation, the state, and the worker in order to enrich the stockholder and stock-compensated executive. In contradiction to its ideals, neoliberalism applied to a corporate economy lowers investment, slows growth, heightens irresponsibility, intensifies worker coercion, and sharply raises economic inequality. And for all this, it fails to reduce the corporation’s dependence on government intervention.
{"title":"Neoliberalism and the Corporation: Mutually Contradictory and Corrupting","authors":"David Ciepley","doi":"10.2139/ssrn.3230520","DOIUrl":"https://doi.org/10.2139/ssrn.3230520","url":null,"abstract":"Neoliberalism and the corporate economy stand in fundamental contradiction. First, corporations are created and sustained through government intervention in the economy, contradicting neoliberal strictures. Second, the neoliberal attempt, in the face of this contradiction, to better square the corporation with free market principles, by treating it as a private partnership of stockholders as opposed to a state franchise, renders the corporation dysfunctional. Particularly damaging has been the application of a distorted version of agency theory that, as I show, is indebted to game theory, in which stockholders are modeled as the “principal” and management (and workers) as their opportunistic agent. This exaggerated “agency problem” has been addressed through a massive reallocation of firm revenues, from reinvestment and workers, to executives and stockholders. Far from supercharging capital accumulation, as widely assumed, neoliberalism has the opposite effect, decapitalizing the corporation, the state, and the worker in order to enrich the stockholder and stock-compensated executive. In contradiction to its ideals, neoliberalism applied to a corporate economy lowers investment, slows growth, heightens irresponsibility, intensifies worker coercion, and sharply raises economic inequality. And for all this, it fails to reduce the corporation’s dependence on government intervention.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"239 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121515171","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Research Summary: Research exploring investor reactions to sustainability has substantial empirical limitations, which we address with a large‐scale longitudinal financial event study of the first global sustainability index, DJSI World. We examine investor reactions to firms from 27 countries over 17 years that are added, deleted, or continue on the index. We find that once relevant controls and comparisons to observationally equivalent firms beyond the index are included, DJSI events have only limited significance and/or materiality. Nonetheless, investors' valuation of sustainability around the world has evolved over time, involving diminishing reactions to U.S. firms and increasing benefits, particularly of continuation on the index, over time. The study highlights the importance of careful analysis and longitudinal global samples in making inferences about the financial effects of social performance. Managerial Summary: The debate about how investors perceive corporate social responsibility (CSR) predates Milton Friedman's famous statement that the only social responsibility of business is to increase profits. Although extensive research has studied whether sustainability contributes to financial performance, we have yet to understand whether investors believe it pays off. This financial event study of reactions to the addition, continuation, and deletion from DJSI World, the first global sustainability index, shows that investors care little about DJSI announcements. Nonetheless, there is some evidence that global assessments of sustainability are converging and that investors may increasingly be valuing continuation on the DJSI, suggesting that firms may gain at least limited benefits from reliable sustainability activities.
{"title":"Do Investors Actually Value Sustainability? New Evidence from Investor Reactions to the Dow Jones Sustainability Index (DJSI)","authors":"Olga Hawn, A. Chatterji, W. Mitchell","doi":"10.2139/ssrn.2418300","DOIUrl":"https://doi.org/10.2139/ssrn.2418300","url":null,"abstract":"Research Summary: Research exploring investor reactions to sustainability has substantial empirical limitations, which we address with a large‐scale longitudinal financial event study of the first global sustainability index, DJSI World. We examine investor reactions to firms from 27 countries over 17 years that are added, deleted, or continue on the index. We find that once relevant controls and comparisons to observationally equivalent firms beyond the index are included, DJSI events have only limited significance and/or materiality. Nonetheless, investors' valuation of sustainability around the world has evolved over time, involving diminishing reactions to U.S. firms and increasing benefits, particularly of continuation on the index, over time. The study highlights the importance of careful analysis and longitudinal global samples in making inferences about the financial effects of social performance. Managerial Summary: The debate about how investors perceive corporate social responsibility (CSR) predates Milton Friedman's famous statement that the only social responsibility of business is to increase profits. Although extensive research has studied whether sustainability contributes to financial performance, we have yet to understand whether investors believe it pays off. This financial event study of reactions to the addition, continuation, and deletion from DJSI World, the first global sustainability index, shows that investors care little about DJSI announcements. Nonetheless, there is some evidence that global assessments of sustainability are converging and that investors may increasingly be valuing continuation on the DJSI, suggesting that firms may gain at least limited benefits from reliable sustainability activities.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"93 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127065288","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Russian Abstract: Статья посвящена выявлению исследовательских кластеров в области управления инновациями. На основе морфологического анализа публикаций в отечественных и зарубежных наукометрических базах выявлено семантическое ядро наиболее актуальных направлений исследований. Определены направления для развития теории и методологии управления инновациями, базовым из которых является формирование концепции национальной инновационной среды. English Abstract: The article is devoted to the identification of research fronts in the field of innovation management. On the basis of morphological analysis of publications in national and international scientometric databases identified semantic core of the most important areas of research. Identified areas for development of theory and methodology of innovation management, the base of which is the formation of the concept of national innovation environment.
{"title":"Мировые Кластеры Научных Исследований В Области Управления Инновациями (Global Clusters for Scientific Research in the Field of Innovation Menedgement)","authors":"R. Fedosova","doi":"10.2139/ssrn.3046987","DOIUrl":"https://doi.org/10.2139/ssrn.3046987","url":null,"abstract":"<b>Russian Abstract:</b> Статья посвящена выявлению исследовательских кластеров в области управления инновациями. На основе морфологического анализа публикаций в отечественных и зарубежных наукометрических базах выявлено семантическое ядро наиболее актуальных направлений исследований. Определены направления для развития теории и методологии управления инновациями, базовым из которых является формирование концепции национальной инновационной среды. <b>English Abstract:</b> The article is devoted to the identification of research fronts in the field of innovation management. On the basis of morphological analysis of publications in national and international scientometric databases identified semantic core of the most important areas of research. Identified areas for development of theory and methodology of innovation management, the base of which is the formation of the concept of national innovation environment.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128450430","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Globalization increased calls for corporations to use firms' resources to alleviate a wide variety of social problems taking into consideration that existing governments are unable or unwilling to deal with such problems. In this context, corporate social responsibility (CSR) in the banking sector became a strategic tool of legitimacy in parallel to the recognition of stakeholders' interests keeping the primacy of shareholders' interests. This article studies CSR in the Lebanese banking sector through Suchman's (1995) legitimacy approach to the shareholders' and stakeholders' debate. Using a qualitative approach, this paper discloses how the banking strategy in terms of CSR could respond to the process of legitimacy within the debate: " creating value for stakeholders creates value for shareholders " ; and reveals how normative considerations are likely to modify substantially banks' behavior and practices.
{"title":"CSR in the Banking Sector: A Legitimacy Approach to the Shareholders’ and Stakeholders’ Debate","authors":"C. Chedrawi, Souheir Osta","doi":"10.33844/MBR.2017.60272","DOIUrl":"https://doi.org/10.33844/MBR.2017.60272","url":null,"abstract":"Globalization increased calls for corporations to use firms' resources to alleviate a wide variety of social problems taking into consideration that existing governments are unable or unwilling to deal with such problems. In this context, corporate social responsibility (CSR) in the banking sector became a strategic tool of legitimacy in parallel to the recognition of stakeholders' interests keeping the primacy of shareholders' interests. This article studies CSR in the Lebanese banking sector through Suchman's (1995) legitimacy approach to the shareholders' and stakeholders' debate. Using a qualitative approach, this paper discloses how the banking strategy in terms of CSR could respond to the process of legitimacy within the debate: \" creating value for stakeholders creates value for shareholders \" ; and reveals how normative considerations are likely to modify substantially banks' behavior and practices.","PeriodicalId":185902,"journal":{"name":"Investment & Social Responsibility eJournal","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125000941","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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