Analysis of the Effect of Corporate Social Investment on Resource Efficiency
DOI:
https://doi.org/10.58423/2786-6742/2025-9-244-256Keywords:
corporate social investment, water consumption, energy consumption, Broad-Based Black Economic Empowerment (BBBEE) investmentAbstract
Corporate sustainability is a key priority on many companies' agendas since they must report on it. Companies invest in corporate sustainability programs to maintain compliance while still making a profit. Therefore, the purpose of this study is to evaluate the effect of corporate social investment (CSI) on corporate resource efficiency ( where resource efficiency is represented by water and energy consumption) of companies listed in the FTSE/JSE Responsible Investment Index. The applied method is in two phases, firstly the paper’s theoretical foundation is inclined on the stakeholder and agency theory, which is further buttress by empirical literature. Secondly, the study adopted quantitative research method to collect and analyse secondary data. The secondary data used in this paper was collected from annual integrated reports of 24 social investment performing companies listed in FTSE/JSE Responsible Investment Index. The secondary data was analysed through the application of feasible generalised least squares (FGLS) and panel corrected standard error for model(PCSE). It also tested for regression compliance by applying various tests such as Heteroscedasticity, Multicollinearity, Autocorrelation using the Correlation matrix, Variance inflation factor, Wooldridge test and Wald test. Therefore using the FGLS and PCSE, the paper tested two models arising from the two dependent variables representing resource efficiency. Findings from this study show a positive relationship between corporate social investment on water an energy resource efficiency at P<0.10. The implication of the findings is that companies that engage and improve upon their social investment are more likely to achieve a dual positive benefit of environmental resource efficiency (water reduction and energy reduction), which would indirectly lead to cost savings and enhance profit. Further implication is that the achievement of environmental resource efficiency would also attract good reputation to the companies.
References
Schilirò, D., 2019. Sustainability, innovation, and efficiency: A key relationship. In Financing sustainable development, pp.83-102.
Parker, L.D., 2020. The COVID-19 office in transition: cost, efficiency and the social responsibility business case. Accounting, Auditing & Accountability Journal, 33(8), pp.1943-1967.
Meuer, J., Koelbel, J. and Hoffmann, V.H., 2020. On the nature of corporate sustainability. Organization & environment, 33(3), pp.319-341.
Sharma, Y.K., Mangla, S.K., Patil, P.P. and Liu, S., 2019. When challenges impede the process: For circular economy-driven sustainability practices in food supply chain. Management Decision 57(4), pp.995-1017.
Tura, N., Keränen, J. and Patala, S., 2019. The darker side of sustainability: Tensions from sustainable business practices in business networks. Industrial Marketing Management, 77, pp.221-231.
Sari, R., 2021. The effect of company size, profitability, and international share ownership on corporate social responsibility disclosure. Point of View Research Accounting and Auditing, 2(1), pp.35-42.
How, S.M., Lee, C.G. & Brown, D.M., 2019. Shareholder theory versus stakeholder theory in explaining financial soundness. International Advances in Economic Research, 25(1):pp133-135.
Daugaard, D. and Ding, A., 2022. Global drivers for ESG performance: The body of knowledge. Sustainability, 14(4), pp.21-22.
Adomako, S., Simms, C., Vazquez‐Brust, D. and Nguyen, H.T., 2023. Stakeholder green pressure and new product performance in emerging countries: a cross‐country study. British Journal of Management, 34(1), pp.299-320.
Bătae, O.M., Dragomir, V.D. and Feleagă, L., 2021. The relationship between environmental, social, and financial performance in the banking sector: A European study. Journal of Cleaner Production, 290, pp.125-791.
Glambosky, M., Jory, S.R. and Ngo, T., 2023. Stock market response to the statement on the purpose of a corporation: A vindication of stakeholder theory. Corporate Governance: An International Review, pp. 1-21.
Abdel Megeid, N.S. and Abd-Elmageed, M.H., 2021. Do Board Characteristics and Corporate Social Responsibility Practices Affects Profitability and Firm Value in the Egyptian Listed Companies? Journal of Accounting Thought. 25(2), pp.517-553.
Ferreira, J.J., Lopes, J.M., Gomes, S. and Rammal, H.G., 2023. Industry 4.0 implementation: Environmental and social sustainability in manufacturing multinational enterprises. Journal of Cleaner Production, 404, p.136841.
Joshi, N., Agrawal, S. and Welegedara, N.P., 2022. Something old, something new, something green: community leagues and neighborhood energy transitions in Edmonton, Canada. Energy Research & Social Science, 88, p.102-524.
Gachie, W., 2021. Practical implementation of sustainability accounting: research of major public listed companies. The Journal of Accounting and Management, 11(1).pp173-188.
Adeleye, B.N., Akam, D., Inuwa, N., James, H.T. and Basila, D., 2023. Does globalization and energy usage influence carbon emissions in South Asia? An empirical revisit of the debate. Environmental Science and Pollution Research, 30(13), pp.36190-36207.
Adeleye, B.N., Bengana, I., Boukhelkhal, A., Shafiq, M.M. and Abdulkareem, H.K., 2022. Does human capital tilt the population-economic growth dynamics? Evidence from Middle East and North African countries. Social Indicators Research, 162(2), pp.863-883.
Alferez, M., Bagtasos, N.F., Chio, K.S., Payot, J., Laygan, R.M., Abing, M.J., Capulong, C. and Teves, M.R., 2024. Islamic Finance and Economic Performance: A Panel Analysis in Selected Countries. International Journal of Islamic Economics and Finance (IJIEF), 7(2), pp.248-266.
Wojewnik-Filipkowska, A., Dziadkiewicz, A., Dryl, W., Dryl, T. and Bęben, R., 2019. Obstacles and challenges in applying stakeholder analysis to infrastructure projects: Is there a gap between stakeholder theory and practice? Journal of Property Investment & Finance, 39(3), pp.199-222.
Yang, G., Miao, G., Zhang, X. and Xie, Q., 2022. Research on Value Creation of Engineering Project from the Perspective of Knowledge Creation Fusion—Based on Stakeholder Theory. Journal of the Knowledge Economy, pp.1-19.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Mancheleng V Nakeng, Collins Ngwakwe
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons CC BY-NC License.
