CSR Committees’ impact on ESG Performance : A Quantitative Study of Swedish Listed Firms

Abstract: Environmental, social, and corporate governance (ESG) related issues has increased in relevance in recent years. To address societal pressures, many firms introduce corporate social responsibility (CSR) committees in their boards. The purpose of this study is to investigate whether CSR committees have an impact on ESG performance in Swedish listed firms. Prior literature has offered inconsistent findings regarding the link between CSR committees and ESG performance, which might be due to the lack of systematic understanding on the topic or the use of varying ESG measurements. This study contributes to the present knowledge by analyzing if CSR committees substantively increase ESG performance, or if it may simply be a symbolic act to enhance legitimacy, meet stakeholder demands, and conform to normative pressures in high stakeholder-oriented countries, such as Sweden. A multiple OLS regression is conducted to analyze a sample of 299 Swedish listed firms on Nasdaq OMX Stockholm for the year 2020. The results indicate a positive and significant relationship between CSR committees and ESG performance, which could be interpreted as CSR committees not being utilized as impression management tools but rather fundamentally contribute to increase the firm’s ESG performance. However, drawing generalizable conclusions is difficult since the study is limited by endogeneity concerns. Nevertheless, these results may have implications for practitioners who consider implementing CSR committees to enhance the firm’s ESG performance.