Measuring the perceived importance of ethics and social responsibility in financial services: a narrative‐inductive approach

Finance or philanthropy? Exploring the motivations and criteria of impact investors

Purpose

The growing prevalence of social entrepreneurship has been coupled with an increasing number of so-called “impact investors”. However, much remains to be learned about this nascent class of investors. To address the dearth of scholarly attention to impact investing, this study seeks to answer four questions that are central to understanding the phenomenon. What are the defining characteristics of impact investing? Do impact investors differ from traditional classes of investors and, if so, how? What are the motivations that drive impact investment? And, what criteria do impact investors use when evaluating potential investments?

Design/methodology/approach

A partially inductive study based on semi-structured interviews with 31 investors and ethnographic observation was conducted to explore how impact investors differ from other classes of investors in their motivations and unique criteria used to evaluate ventures seeking investment.

Findings

This study reveals that impact investors represent a unique class of investors that differs from socially responsible investing, from other types of for-profit investors, such as venture capitalists and angel investors, and from traditional philanthropists. The varied motivations of impact investors and the criteria they use to evaluate investments are identified.

Originality/value

Despite the growing practitioner and media attention to impact investing, several foundational issues remain unaddressed. This study takes the first steps toward shedding light on this new realm of early-stage venture investing and clarifying its role in larger efforts of social responsibility.

Corporate social responsibility practice and corporate financial performance: evidence from Nigeria companies

Purpose

– The purpose of this paper is to describe the nature and trend of corporate social responsibility (CSR) practices in Nigeria. The second objective of this paper is to examine the relationship between the dimensions of CSR disclosures and corporate financial performance (CFP) among Nigerian listed companies.

Design/methodology/approach

– To carry out this research, content analysis was conducted to extract CSR and financial data from annual reports of 68 companies listed on the Nigeria Stock Exchange. Financial data were cross-referenced with the NSE Factbook. CSR indexes and financial performance measures were computed for estimation of the regression analysis equation. The percentages were used to describe the nature and trend of CSR practice in Nigeria. This was followed by the hierarchical multiple regression analysis to examine the relationship between CSR and CFP.

Findings

– The results of the descriptive statistics show that the listed companies used CSR initiatives to communicate social performance to their stakeholders. From the regression analysis, community involvement disclosure, products and customer disclosures and human resource disclosures were found to enhance CFP. The results also reveal a negative relationship between environmental disclosure and CFP, which indicates that disclosure of environmental impact information could be value destroying in Nigeria.

Research limitations/implications

– The major limitation of this paper is the sample size. Also, failure of corporations to disclose CSR in the annual reports will have a material effect on these findings.

Practical implications

– The findings of this paper have practical implications on the management of Nigerian companies to re-think and re-strategize their CSR policies that incorporate social and economic performance to improve their CFP.

Social implications

– This paper has implication on stakeholders in validating the corporate citizenship of corporations based on the level of commitment and participation in CSR initiatives. Also, findings of this paper will alert the enforcement agencies on the status of CSR practices in Nigeria. Government in collaboration with private and public agencies should consider the needs for CSR framework and database to guide social and environmental reporting in the country.

Originality/value

– The paper has examined the relationship between CSR and CFP based on CSR dimensional approach. Aspect of human resource and products/customers CSR has been neglected in the context of Nigerian CSR research. This paper makes valuable contribution by offering new and fresh insight on these dimensions.