Introduction
The emphasis given to corporate social responsibility (CSR) activities has become a
significant factor in companies’ agendas during recent decades. Having witnessed various
recent corporate scandals, an increasing number of companies have recognised the need
to adopt policies that focus on ethical, environmental and social conduct and its reporting.
The benefits associated with CSR policies have also attracted the attention of academicians
and practitioners and resulted in a vast amount of empirical study. Most of these studies
focus on the interaction between CSR and financial performance; however, no consensus
has been reached as to a result. In their comprehensive study, Margolis and Walsh (2003)
provide an overview of the empirical studies concerning the results of the relationship
between CSR and financial performance. They state that a positive interaction has been
observed in 50 per cent of studies, whereas no relationship has been found in 25 per cent of
studies. The remaining 20 per cent and 5 per cent have shown mixed and negative results,
respectively. Serious difficulties regarding the quantification of CSR and various
methodological issues are offered as the reasons for these contradictory results.