Indigenous corporate responsibility and financial performance

ABSTRACT

The impact of Corporate Social Responsibility with respect to Indigenous (CSRI) initiatives and issues on financial performance was studied using several CSRI metrics, both innovated (where necessary) and pre-existing (where possible). We find that CSRI initiatives based on dollar expenditures and firm website scores are positively associated with financial performance while increase to reputation risk has a negative impact. We also find that a CSRI score can only be moderated by an overall ESG score that is substantially stronger than the CSRI metric. In a world that increasingly emphasizes the importance of ‘truth and reconciliation’ with its Indigenous populations while meeting environmental resource needs, we must seek a path that recognizes and respects Indigenous rights and cultural practices. Providing well developed, consistently measured and acceptable CSRI metrics and assessing their impact on firm financial performance is a crucial step in this reconciliation process. This paper makes important contributions to that goal.

KEYWORDS:

• Corporate social responsibility
• indigenous initiatives
• financial performance
• ESG indigenous metrics

JEL CLASSIFICATIONS:

• L25
• M14

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Marie Racine

Marie Racine did her PhD at U.C. San Diego under the supervision of Robert F. Engle. She has published in the areas of asset pricing, investments, investor behaviour and quantitative methods.