Corporate social responsibility (CSR) and, more recently, brand activism have become important topics in business strategies, with companies playing an increasingly prominent role in socio-political life and addressing a wide range of social issues. However, the legitimacy of spending capital for investments in CSR and activism actions is not yet fully accepted by the business and academic world, with several companies and authors considering these expenses unnecessary. As such, this chapter aims to highlight Portuguese empirical research that demonstrates how companies' social and environmental responsibility actions can impact their corporate reputation, based on a quantitative investigation carried out to 613 consumers of a company in the Portuguese energy sector. The results showed that CSR is one of the factors that has the greatest positive impact on corporate reputation, thus contributing to a better understanding of how companies' social investments can be a source of competitive advantage and benefit corporate performance.
TopIntroduction
The importance of studying the impacts that corporate social and environmental policies can have on intangible company's performance comes not only from the topicality of the subject, but also from the need to clarify the possible corporate results of these strategies.
Corporate Social Responsibility (CSR) has received increasing attention from both academia and the corporate world, becoming, in the recent decades, an important topic in business strategies (McWilliams & Siegel, 2000; Mohr et al., 2001; Šontaitė-Petkevičienė, 2015). If, at an early stage, CSR was closely related to ethics in business management and to philanthropic actions, in an increasingly pluralistic and globalized world, the concept has been evolving and integrating other theoretical notions and issues, such as the concepts of sustainability (Elkington, 1997) and activism (Sarkar & Kotler, 2018).
Since the turn of the century, the notion of sustainability has been gaining preponderant relevance in organizational studies, with the subject becoming an integral part of all CSR discussions (Carroll & Shabana, 2010). At the same time, CSR has taken on a politicized character, with companies playing an increasingly prominent role in socio-political life and addressing a wide range of social issues (Goodyear, 1999; Matten et al., 2003). In this sense, the concept of Brand Activism is an emerging marketing strategy through which companies take a public stance concerning relevant social, economic, legal, environmental, workplace and political issues (Manfredi-Sánchez, 2019; Sarkar & Kotler, 2018).
Despite these developments, the legitimacy of spending capital for investments in CSR actions has been contested over time (e.g., Friedman, 1970; Murray & Montanari, 1986; Jensen, 2001; Keinert, 2008) and, more recently, some authors warned that the high risks of companies getting involved in activist causes may lead to fewer companies to bet on these strategies (Eyada, 2020; Moorman, 2020). Given the often-controversial nature of the social issues addressed by brand activism, supporting activist actions can pose risks for brands such as backlashes or boycotts, especially by stakeholder segments that do not agree with the brand’s position (Barros, 2019) or feel that the brand is engaging with the cause only as a marketing strategy (Eyada, 2020; Gardberg & Newburry, 2009; Garfield, 2018). On the other hand, pressure from the most varied stakeholder groups for companies to adopt socially responsible behavior and get involved in the defense of sociopolitical issues has grown significantly (Aguilera et al., 2007; Shetty et al., 2019; Šontaitė-Petkevičienė, 2015). Currently, organizations attract great public attention on social and environmental issues and may suffer some punishments, such as backlashes or consumer boycotts, when they demonstrate socially irresponsible conducts or don't meet the moral expectations of stakeholders (Manfredi-Sánchez, 2019; Smith, 2000).