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The relationship between corporate social responsibility and financial performance: evidence from the Johannesburg stock exchange
Corporate Social Responsibility (CSR) is a widely disputed and constantly evolving topic. One of the most recent methods of assessing CSR in South Africa has been through the usage of the Financial Times Stock Exchange/Johannesburg Stock Exchange (FTSE/JSE) Responsible Investment Index. The Johannes...
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| Format: | Thesis |
| Language: | English |
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Department of Finance and Tax
2023
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| _version_ | 1867613215342460928 |
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| access_status_str | Open Access |
| author | Sokhela, Hlengiwe |
| author2 | Chamisa, Edward |
| author_browse | Chamisa, Edward Sokhela, Hlengiwe |
| author_facet | Chamisa, Edward Sokhela, Hlengiwe |
| author_sort | Sokhela, Hlengiwe |
| collection | Thesis |
| description | Corporate Social Responsibility (CSR) is a widely disputed and constantly evolving topic. One of the most recent methods of assessing CSR in South Africa has been through the usage of the Financial Times Stock Exchange/Johannesburg Stock Exchange (FTSE/JSE) Responsible Investment Index. The Johannesburg Stock Exchange (JSE) Socially Responsible Investment Index (SRI Index) was founded in 2004 and was replaced by the FTSE/JSE Responsible Investment Index in 2015. The index evaluates listed firms based on their triple bottom line performance i.e., environment, society, and economy. The index includes companies that are thought to have good CSR policies. This study assesses the effects of CSR on the Corporate Financial Performance (CFP) of firms listed on the JSE that were included in the FTSE/JSE All Share Index (ALSI) as of the 31st of January 2021. This it does by analyzing the stock's financial performance over a five-year period between the 2015 and 2019 financial years. The requirements for stocks to be included in this study is that they must have had an average market capitalization between R2 billion and R100 billion between the 2015 and 2019 financial years and are not part of the real estate sector. The results of the nonparametric (Mann-Whitney) tests show that companies that are part of the FTSE/JSE Responsible Investment Index perform better on average than those that are not included in the index. This conclusion is based on a review of the total return index (TRI), return on equity ratio (ROE), price-earnings ratio (PE), and the market-to-book ratio (MB). The analysis conducted using the net profit margin (NPM) as a measure of financial performance show that there is no relationship between CSR and financial performance. The Mann-Whitney test results where the return on assets (ROA) ratio was used showed a negative relationship between CSR and financial performance. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/37798 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:32:36.207Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2023 |
| publishDateRange | 2023 |
| publishDateSort | 2023 |
| publisher | Department of Finance and Tax |
| publisherStr | Department of Finance and Tax |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/37798 The relationship between corporate social responsibility and financial performance: evidence from the Johannesburg stock exchange Sokhela, Hlengiwe Chamisa, Edward Corporate Social Responsibility (CSR) Corporate Financial Performance (CFP) Responsible Investment Index Corporate Social Responsibility (CSR) is a widely disputed and constantly evolving topic. One of the most recent methods of assessing CSR in South Africa has been through the usage of the Financial Times Stock Exchange/Johannesburg Stock Exchange (FTSE/JSE) Responsible Investment Index. The Johannesburg Stock Exchange (JSE) Socially Responsible Investment Index (SRI Index) was founded in 2004 and was replaced by the FTSE/JSE Responsible Investment Index in 2015. The index evaluates listed firms based on their triple bottom line performance i.e., environment, society, and economy. The index includes companies that are thought to have good CSR policies. This study assesses the effects of CSR on the Corporate Financial Performance (CFP) of firms listed on the JSE that were included in the FTSE/JSE All Share Index (ALSI) as of the 31st of January 2021. This it does by analyzing the stock's financial performance over a five-year period between the 2015 and 2019 financial years. The requirements for stocks to be included in this study is that they must have had an average market capitalization between R2 billion and R100 billion between the 2015 and 2019 financial years and are not part of the real estate sector. The results of the nonparametric (Mann-Whitney) tests show that companies that are part of the FTSE/JSE Responsible Investment Index perform better on average than those that are not included in the index. This conclusion is based on a review of the total return index (TRI), return on equity ratio (ROE), price-earnings ratio (PE), and the market-to-book ratio (MB). The analysis conducted using the net profit margin (NPM) as a measure of financial performance show that there is no relationship between CSR and financial performance. The Mann-Whitney test results where the return on assets (ROA) ratio was used showed a negative relationship between CSR and financial performance. 2023-04-20T11:40:39Z 2023-04-20T11:40:39Z 2022 2023-04-20T11:40:01Z Master Thesis Masters MCom http://hdl.handle.net/11427/37798 eng application/pdf Department of Finance and Tax Faculty of Commerce |
| spellingShingle | Corporate Social Responsibility (CSR) Corporate Financial Performance (CFP) Responsible Investment Index Sokhela, Hlengiwe The relationship between corporate social responsibility and financial performance: evidence from the Johannesburg stock exchange |
| thesis_degree_str | Master's |
| title | The relationship between corporate social responsibility and financial performance: evidence from the Johannesburg stock exchange |
| title_full | The relationship between corporate social responsibility and financial performance: evidence from the Johannesburg stock exchange |
| title_fullStr | The relationship between corporate social responsibility and financial performance: evidence from the Johannesburg stock exchange |
| title_full_unstemmed | The relationship between corporate social responsibility and financial performance: evidence from the Johannesburg stock exchange |
| title_short | The relationship between corporate social responsibility and financial performance: evidence from the Johannesburg stock exchange |
| title_sort | relationship between corporate social responsibility and financial performance evidence from the johannesburg stock exchange |
| topic | Corporate Social Responsibility (CSR) Corporate Financial Performance (CFP) Responsible Investment Index |
| url | http://hdl.handle.net/11427/37798 |
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