Corporate social responsibility no panacea for Covid-19

By James Langton | January 20, 2021 | Last updated on January 20, 2021
1 min read
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Companies committed to corporate social responsibility (CSR) before Covid-19 hit weren’t spared in the resulting market shock.

According to a forthcoming paper from a finance professor at York University’s Schulich School of Business — along with colleagues at the University of Alberta, Lingnan University in Hong Kong, and the University of South Carolina — a study of 1,750 U.S. firms found no evidence that those with higher CSR scores fared better in terms of stock market performance when the pandemic sparked a market crash.

Additionally, the researchers found that companies headed by CEOs belonging to the Business Roundtable, a trade group of CEOs from the largest U.S. companies that committed to serving broader stakeholders’ interests, didn’t do better in the crisis, either.

“Business Roundtable companies that powerfully demonstrated a CSR commitment to stakeholders just prior to the crisis did not perform any differently during the crisis,” said Kee-Hong Bae, finance professor at Schulich, in a release.

The crisis also revealed that some companies’ purported CSR pledges weren’t reflected in their actions during the crisis.

“While some companies stepped up to the plate by helping employees (e.g., increasing their hourly wage), customers (e.g., offering unlimited mobile data), and suppliers (e.g., accelerating payments), other companies with strong CSR reputations laid off a significant percentage of their workforce, jeopardizing employees’ health-care benefits at a time when they were arguably needed the most,” Bae said.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.