Analyzing the impact of corporate social responsibility reporting on financial performance and sustainable business strategies

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Abstract

Corporate social responsibility (CSR) reporting is vital for organizations striving to balance financial success with social and environmental commitments. This study addresses the research problem of quantifying how the quality of such reporting impacts firm value. Specifically, its purpose is to examine the influence of high-quality CSR reporting on both financial performance and sustainable business strategies, focusing on return on equity (ROE), return on assets (ROA), net profit margin (NPM), and earnings per share (EPS). It further explores connections between innovative sustainable products, employee satisfaction, and CSR quality. Using secondary data from publicly listed firms, the study employs quantitative methodological approaches, including descriptive statistics, reliability tests, and ordinary least squares (OLS) regression, to assess the studied relationships. Our findings reveal a strong, positive, and statistically significant correlation between the quality of CSR reporting and enhanced financial performance, particularly in ROA and ROE. The results also affirm that robust CSR reporting is associated with greater innovation and higher employee satisfaction, supporting the former’s role in fostering sustainable practices. As such, the present work provides empirical evidence supporting recent academic discourse (Antorine et al., 2024; Mohammad, 2025) by demonstrating that CSR reporting is a strategic asset that bolsters financial growth, organizational resilience, and long-term value.

Keywords: Corporate Social Responsibility, Financial Performance, Innovation, Ordinary Least Squares Analysis, Structural Equation Modeling, Sustainable Business Practices

Authors’ individual contribution: Conceptualization — N.Y.; Methodology — A.M.Y., N.Y., M.F.F., and A.A.; Formal Analysis — N.Y. and M.F.F.; Investigation — A.M.Y., N.Y., and A.A.; Writing — Original Draft — A.M.Y., N.Y., and A.A.; Writing — Review & Editing — N.Y. and M.F.F.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G30, M14, Q56

Received: 12.02.2025
Revised: 15.05.2025; 01.07.2025; 01.09.2025
Accepted: 25.09.2025
Published online: 29.09.2025

How to cite this paper: Yamani, A. M., Yusuf, N., Fawzy, M. F., & Alguraisy, A. (2025). Analyzing the impact of corporate social responsibility reporting on financial performance and sustainable business strategies [Special issue]. Corporate Governance and Sustainability Review, 9(3), 231–241. https://doi.org/10.22495/cgsrv9i3sip4