In this paper, we explore how the adherence to Sharia principles in non-financial firms impacts on Corporate Social Responsibility (CSR) aptitudes, proxied by Environmental, Social and Governance (ESG) scores. By employing a worldwide dataset of 4,725 entities from 2002 to 2018, we find that Sharia-compliant firms are more likely to engage in sustainable and responsible practices, especially towards the environmental dimension. Evidence from a set of quasi-natural experiments, built around a range of significant natural disasters and social events, reveals a greater response of Sharia firms to CSR engagement, confirming the role played by faith-based business ethics in Islamic entities. Our results offer precious insight to policymakers and investors, suggesting that the integration of ethical and religious-oriented incentives can improve sustainability practices and resilience of firms.

The religious fringe of Corporate Social Responsibility.

Laura Chiaramonte;
2022

Abstract

In this paper, we explore how the adherence to Sharia principles in non-financial firms impacts on Corporate Social Responsibility (CSR) aptitudes, proxied by Environmental, Social and Governance (ESG) scores. By employing a worldwide dataset of 4,725 entities from 2002 to 2018, we find that Sharia-compliant firms are more likely to engage in sustainable and responsible practices, especially towards the environmental dimension. Evidence from a set of quasi-natural experiments, built around a range of significant natural disasters and social events, reveals a greater response of Sharia firms to CSR engagement, confirming the role played by faith-based business ethics in Islamic entities. Our results offer precious insight to policymakers and investors, suggesting that the integration of ethical and religious-oriented incentives can improve sustainability practices and resilience of firms.
Sharia-compliance, Islamic finance, Corporate social responsibility
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11562/1070629
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