Corporate Social Responsibility and Its Impact on Sustainable Enterprise Performance in a Globalized Economy
Alina Brychko
Associate Professor,
Public Management and Administration Department,
Faculty of Economics and Management,
Sumy National Agrarian University, Ukraine
Cui Xiaoping
Ph.D. student,
Public Management and Administration Department,
Faculty of Economics and Management,
Sumy National Agrarian University, Ukraine
Tetiana Kharchenko
Associate Professor,
Public Management and Administrative Department,
Faculty of Economics and Management,
Sumy National Agrarian University, Ukraine
Valeriy Tytarenko
Associate Professor,
Department of Enterprise Economics
and Information Technologies,
Educational and Scientific Institute
of Mgmt., Administration, and Information Technology,
Lviv University of Business and Law, Ukraine
Nataliia Pitel
Associate Professor,
Department of Economics, Management
and Commercial Activity,
Faculty of Economics,
Central Ukrainian National Technical University, Ukraine
Abstract
Corporate Social Responsibility (CSR) has emerged as a critical strategic tool for businesses aiming to achieve long-term financial stability, competitive advantage, and sustainability in a globalized economy. This study examines the impact of CSR on sustainable enterprise performance, focusing on Unilever and comparing its CSR strategies and financial performance with competitors such as Procter & Gamble (P&G), Nestlé, and Colgate-Palmolive. The analysis uses quantile regression modeling, industry benchmarking, and ESG performance assessments to determine how CSR initiatives influence profitability, brand reputation, and investor confidence. Findings reveal that CSR investment positively correlates with financial performance, as reflected in higher ESG ratings, improved profit margins, and enhanced consumer trust. However, environmental sustainability efforts, such as CO2 reduction, impose short-term financial costs before yielding long-term benefits. The study supports Carroll's CSR Pyramid and the Triple Bottom Line (TBL) framework, reinforcing that businesses balancing financial, social, and environmental responsibilities outperform those focused solely on profit generation. While P&G leads in financial efficiency, Unilever's strong ESG leadership demonstrates that sustainability-driven strategies drive long-term resilience and market positioning. Despite its contributions, the study acknowledges limitations related to the reliance on publicly available data and a focus on multinational consumer goods companies, which may not fully capture industry-specific CSR impacts. Future research should explore CSR's role across diverse sectors, regional sustainability practices, and long-term effects on financial performance through longitudinal studies. This study highlights that CSR is no longer an optional corporate initiative but a fundamental necessity for businesses to remain competitive, mitigate risks, and align with evolving global sustainability expectations.
Keywords:Sustainable Business Performance, ESG, Financial Performance, Triple Bottom Line, Carroll's CSR Pyramid, Environmental Responsibility, Stakeholder Theory
Introduction
Corporate Social Responsibility (CSR) refers to businesses' ethical and strategic approach to integrating environmental, social, and governance (ESG) concerns into their operations and stakeholder relationships (Karwowski et al., 2021). Modern, long-term success in business depends on a company's commitment to ethics and CSR. As a result of globalization, nations are constantly evolving. As the world becomes interconnected, companies are under increasing scrutiny for how they profit from their operations while also considering the impact on society, the economy, and the environment. Social responsibility in business is more than giving money to good causes. Fair work, social justice, environmental protection, and ensuring supply lines last are also part of it. Corporations like Unilever, Starbucks, and Patagonia understand that CSR projects boost their names, keep customers returning, and ultimately increase profits (Jennings, 2019). Customers, investors, and government officials are just a few groups that want businesses to run in an open and environmentally friendly way.
Each of these things helps a company do well in a foreign market over time. Companies with CSR programs are much better with their profits. Partners value these programs and make more profits in the long run. Customers will likely stick with a company that cares about worker safety, ethical production, and ethical sources. This implies that the company sells more items and funds. People also tend to put more money into businesses that promise strong CSR (Sharma, 2019). It is because these businesses have proven they can handle risks in the market and the law. Social and environmental issues can be fixed by companies that care about CSR and want to lower their financial risks. They can avoid problems with their supply lines, avoid paying too many fines, and keep their good name this way. Companies use CSR to make profits in a world market that is getting more controlled and competitive. Additionally, it makes businesses attractive.
CSR emphasizes environmental care (Fukuda & Ouchida, 2020). The message to businesses is that they must maximize profits while minimizing their environmental impact. When people are concerned about the world around them, they recycle, use resources eco-friendly, and transition to renewable energy (Almulhim& Abubakar, 2021). The implementation of these measures is mandated by international environmental legislation. It also saves them much money because there is less wastage of resources. One way to combat climate change and gain customers' trust is for businesses to be environmentally conscious in their day-to-day operations (Thangam&Chavadi, 2023). If a business leads on environmental rules, it can edge over its competitors. Businesses that care about the environment and sustainability are getting more attention from customers and investors. Doing nice deeds for the firm and the globe is insufficient for corporations. A key component of encouraging companies to behave ethically and sustainably is the discussion of social responsibility. Fair pay and protections for workers' rights should exist so everyone gets paid and is respected. This keeps the job market stable and makes workers happy at work. A business can help the community, schools, and social aid programs by participating in projects that make things better and get people interested. These projects also help companies get along better with those who have a stake in them over time. A business ensures that all its global supply lines follow fair trade, safe working conditions, and responsible buying rules (LeBaron, 2021).
CSR is a concept used to examine how companies worldwide can grow and stay in business over the long run. The study examines Unilever's CSR plans to see how well they help the company reach its sustainability goals, which include making the world a better place, saving the environment, and working with honest sellers. Most importantly, the study will examine how to make finances, maintain a positive reputation for our company, and engage our target audience. According to the report, companies have trouble putting their CSR plans into action in different parts of the world. For businesses that want to do a lot of CSR, they will help the study make plans. In a business world that cares about ethics and the environment as a whole, this is what will drive their long-term success.
CSR and the long-term success of businesses are the major topics of this study. To do this, the following research questions will be answered:
This study is more about long-term CSR goals for Unilever and how they affect the business. This article talks about three important CSR parts: getting information from trustworthy sources, taking care of the environment, and helping the community. To help the environment, the study will discover how dedicated Unilever is to reducing waste, carbon emissions, and water use. Along with Unilever's plan for ethical sourcing, which includes planning for a long-term supply chain and morally getting raw materials, the study will examine these companies. The study uses financial records, environmental indices, and openly available CSR reports to observe how these CSR projects impact Unilever's capacity to continue operating, its overall success in the global market, and its reputation worldwide.
Literature Review
Existing Research on CSR & Sustainable Performance
CSR has been studied in depth, mainly in how it affects businesses' long-term success. Companies can make money, stay in business, and last long by doing CSR. People also benefit from it. According to Le (2023), CSR can help a business's bottom line, image, and relationships with key groups. Today's global market means that companies must be responsible in many areas.
Relationship Between CSR and Financial Performance
The chain reaction starts with more trust from customers in the business, leading to more customer loyalty and, finally, more money for the company. Kuczabski et al. (2023) examined how eco-friendly business practices can make an area healthier and more economically prosperous. They found out that companies that do CSR are more likely to be able to pay their bills. Zrybnieva et al. (2023) other study showed that companies focusing on CSR make more money than their rivals. Research has also shown that businesses that protect the environment and treat their workers reasonably tend to have lower costs, more productive workers, and fewer regulatory risks.
CSR as a Tool for Competitive Advantage in a Globalized Economy
CSR is now a key part of keeping ahead in global markets, where customers and investors want to do business with companies that care about people and the environment. Strong CSR strategies help companies gain the trust of their stakeholders over time (Lins et al., 2019; Glaveli, 2021). This leads to higher market value and stronger customer preference. A study done by Unilever in 2022 showed that brands in its portfolio that focused on sustainability, like Dove and Ben & Jerry's, grew much faster than brands that did not have a strong CSR base (Ind & Iglesias, 2022; Love et al., 2022).
This fits with a more significant finding that when it comes to businesses where ethical and environmental concerns are growing, a company's commitment to sustainability makes customers more likely to stick with them and raises brand awareness (Islam et al., 2022; Shah, 2025; Shah and Asghar, 2024; Lee et al., 2020). Also, companies that do CSR projects often follow the rules better, get special treatment from politicians, and find it easier to get funds for responsible investments (Jumde& Du Plessis, 2022). Because of these advantages, business plans focusing on sustainability are even more competitive.
Case Studies of CSR's Role in Sustainability (Economic, Environmental, and Social Aspects)
Case studies have shown that CSR can help people, the world, and businesses stay alive. For example, Patagonia, a company known for caring about the environment, has made CSR a vital part of its business by using eco-friendly materials, fair labor practices, and a program that takes used items (Ims, 2019).
The company's name has gotten better, and this has helped it stay open and make money. For the same reason, Starbucks has rules about getting fair trade goods, programs to help workers, and environmentally friendly growing methods (Bianco, 2020). These steps have helped the company become known as one that cares about the community and ensures its long-term success. Kuczabski et al. (2023) say that CSR can help the economy grow, protect the environment, and make people's lives better all at the same time.
Theoretical Frameworks
Carroll's (1999) Pyramid of CSR is one of the most essential models in the field. It shows that being a responsible business has four steps. Understanding how to handle money: It's now clear that businesses need to make money to stay open. Groups are required by law to follow the rules that tell them how to be honest (de Jong et al., 2020). Regarding ethics, companies should do more than follow the rules. They should also treat their workers properly, care about the environment, and support social justice. The highest level of duty is to help others. It means spending money, time, and energy to help others, improve neighborhoods, and back social projects.
All four levels of Carroll's pyramid have always been used together, which makes it a great way to look at Unilever's CSR plan. Profitability, legal compliance, community involvement, and ethical product sourcing are the pillars of Unilever's Sustainable Living Plan, which this strategy bolsters (Waheed, 2019; Bailey, 2020).
This shows a balanced approach to corporate responsibility. Litvin et al. (2022) created a forecast-planning system to help industrial businesses get the needed profits by combining quantitative and qualitative forecasting methods to determine the resources required. The system improves strategic decision-making and financial security by combining balance, analytical, and program-target planning methods. This ensures long-term business growth, especially in the development of agricultural tools.
Triple Bottom Line (TBL) says a business's success should be measured by its profits and effects on society and the environment (Adams et al., 2023). The TBL system is built on three main points: People (Social Responsibility): Businesses should ensure their workers are paid fairly, healthy, and involved in their communities. Earth (Environmental Responsibility): Companies need to reduce their environmental impact by using green energy, managing waste, and making their production more sustainable. Earnings (Economic Responsibility): Making money is still essential, but it should be done honestly and responsibly.
The CSR strategy of Unilever fits with the TBL framework because the company has combined social welfare programs, goals to lower carbon emissions, and ethical sourcing efforts while still doing very well financially. This study will use the TBL model to look at how Unilever balances these three areas to make the company sustainable in the long run.
Identified Gaps in Literature
While there is no shortage of research on CSR, there are specific gaps in our understanding, particularly when studying CSR in particular industries and monitoring sustainability over the long run. Many studies look at CSR generally, but few empirical studies look at CSR practices in specific sectors (Dabic et al., 2016). For example, CSR projects may affect technology, manufacturing, and consumer goods businesses differently. Various studies examine CSR in terms of the short-term financial and social benefits of CSR.
However, not as many longitudinal studies have looked at CSR's effects over decades. Most of the time, businesses start long-term projects that may only pay off in the end (Taghizadeh-Hesary& Yoshino, 2020). There aren't many in-depth studies that look at how CSR changes income, market value, and the environment over time. While it's easy to judge financial results, figuring out how they affect people and the world is challenging. More measurable indicators and performance metrics should be looked into to determine how good CSR is. Not many studies look at how businesses use CSR in developing and emerging markets, while most studies look at CSR in developed countries.
There are some problems that only these places have for businesses, like weaker rules and different expectations from customers. More studies are needed to find out how to change CSR strategies so that they work in various types of countries. Zrybnieva et al. 2023 shows how vital tactics based on data are for improving the logistics and transportation business. Iastremska et al. (2023) study examines how strategy decisions affect business and economic growth, especially in this digital age. It shows that the structure needs to be reorganized, business strategies must be changed, and risks must be lowered to drive long-term growth.
The literature study shows a link between CSR and the long-term success of a business. It discusses how CSR can help with money, competition, and image. Carroll's Pyramid and the TBL help us think about CSR in a structured way.
However, there are still big holes in analyses that are special to industries, in analyses that look at long-term effects, and in putting CSR into practice in emerging markets. To fill in these gaps, the study will look at Unilever's CSR approach and see how well it helps businesses succeed in the long term in the global economy
Materials and Methods
Case Selection
This research uses a case study method and picked Unilever as the leading company because it has well-known CSR programs, is open about how it reports on the environment, and has offices worldwide. Unilever is known for being an eco-friendly company. As part of its CSR business plan, it ethically buys goods, cares for the earth, and gets involved in the community. The Dow Jones Sustainability Index (DJSI), FTSE4Good, and MSCI ESG Ratings are all ways to find out how sustainable a company is (Pribićević&Delibašić, 2021). This is an excellent example of how CSR can change how a business helps the environment. The selection criteria for Unilever are shown in Table 1.
Table 1 – Selection Criteria for Unilever
|
Selection Criteria |
Description |
|
Global Leadership in CSR |
Unilever is one of the most ESG responsible global companies. It consistently ranks among the best in this area |
|
Availability of Public Data |
The business releases thorough CSR reports, yearly financial statements, and sustainability indices |
|
Alignment with Research Objectives |
It's interesting to see how Unilever's CSR projects affect the economy, the environment, and society in a world where business is very competitive |
|
Comparability with Industry Peers |
Unilever's CSR practices can be benchmarked against competitors such as Procter & Gamble, Nestlé, and L'Oréal to provide a comparative perspective on sustainability strategies and performance |
Source: Own elaboration
Data Collection
The mixed-methods approach used in this study includes quantitative and qualitative data to give an accurate picture of CSR efforts and how they impact business success. The following groups make up the sources of the data in Table 2.
Table 2 – Quantitative Data Sources
|
Data Source |
Description |
|
Annual Financial Reports |
KPIs like revenue, profit margins, and ROI can be found in financial statements and used to measure the effect of CSR. Empirical financial analysis is made possible by data taken from Unilever's yearly reports (2018–2023) |
|
CSR & Sustainability Reports |
Unilever's sustainability reports lay out the company's environmental goals, success, and corporate responsibility strategies. These reports help to measure the company's CSR investments and evaluate its social and environmental performance |
|
Sustainability Indices & ESG Ratings |
Unilever's ESG numbers from MSCI, FTSE4Good, and DJSI can be used to measure how well its CSR efforts are working. ESG scores that change over time show that CSR is doing better. |
|
Environmental Audits |
External audits and carbon footprint reports ensure that environmental effect assessments are correct by checking sustainability claims with a third party |
|
Annual Financial Reports |
KPIs like revenue, profit margins, and ROI can be found in financial statements and used to measure the effect of CSR. Empirical financial analysis is made possible by data taken from Unilever's yearly reports (2018–2023) |
|
Corporate Strategy Documents |
Unilever's policies on sustainable sourcing, carbon reduction, and ethical governance offer insight into CSR strategy formulation |
|
Public Statements & Industry Reports |
Press releases, executive interviews, and third-party evaluations provide context for interpreting CSR outcomes |
|
Comparative Industry Analysis |
Benchmarking against competitors (e.g., Nestlé, P&G, L'Oréal) allows for assessing Unilever's CSR effectiveness relative to industry peers |
Source: Own elaboration
This multidimensional data collection approach ensures robust analysis and cross-validation of CSR's impact on sustainable enterprise performance.
Analysis Techniques
To rigorously analyze the impact of CSR initiatives, this study employs qualitative and quantitative research methods, including regression analysis, content analysis, and benchmarking techniques.
Quantitative Analysis: Quantile Regression Model
Quantile Regression Model (QRM) is used to investigate whether there is a connection between spending money on CSR and making good money. Compared to Ordinary Least Squares (OLS) regression, Quantile regression is better at finding outliers. In-depth knowledge of how CSR impacts various aspects of business success.
where is the Quantile function of financial performance at quantile τ; is the intercept; is the total CSR investment of Unilever in year ; represents ESG compliance rating in ; is percentage reduction in carbon emissions; is the Total revenue of Unilever in year; is the error term.
Benchmarking Against Industry Standards
Comparing Unilever's CSR performance to that of Nestlé (a leader in sustainability in the food and beverage sector), Procter & Gamble (ethical supply chain practices), L'Oréal (efforts to reduce carbon emissions and use sustainable packaging), and Colgate-Palmolive helps us understand Unilever's CSR better. By comparing different companies' CSR initiatives, this study helps the overall sector figure out how to be greener.
Justification of Methodology
The case study approach allows us to examine Unilever's efforts to be more environmentally friendly closely. The quantile regression model gives us more ways to explore how CSR affects different levels of financial success. This part of the study is beneficial because it compares Unilever's CSR efforts to those of its rivals. CSR literature and company strategy development will undergo a sea shift due to the integrated research approach (Table 3).
Table 3 – Summary Table of Variables
|
Variable Type |
Variable Name |
Description |
Justification |
|
Independent |
CSR Investment ($) |
Annual spending on sustainability initiatives |
Measures corporate commitment to CSR |
|
Dependent |
Net Profit Margin (%) |
Net income as a percentage of revenue |
Evaluate the financial performance impact of CSR |
|
Dependent |
ESG Rating |
Environmental, Social, and Governance score |
Assesses sustainability compliance |
|
Dependent |
CO2 Emissions Reduction (%) |
Annual reduction in carbon footprint |
Measures environmental sustainability impact |
|
Dependent |
Revenue Growth (%) |
Year-over-year increase in total revenue |
Assesses business performance improvement |
Source: Own elaboration
This section on Materials and Methods describes a thorough, multi-method way of studying how CSR affects the long-term performance of a business. This study uses quantile regression, content analysis, and industry benchmarking to examine Unilever's CSR success.
Results
It was found that Unilever's CSR efforts positively affected the company's bottom line, reputation, and environmental impact over the long run. This section organizes the results using regression analysis, correlation vectors, statistical findings, and graphs. The Quantile Regression Model (QRM) showed that investing in CSR increases the net profit margin. Protecting the environment (for example, cutting CO₂ levels) can also help a business do better financially.
Quantile Regression Analysis
The Quantile Regression model examined how CSR investments, ESG ratings, CO₂ decrease, revenue growth, and net profit margin are related. The estimated levels of statistical significance for the factors are demonstrated in Table 4.
Table 4 – Quantile Regression
|
Variable |
Coefficient |
Std. Error |
t-Statistic |
p-Value |
|
Intercept |
3.215 |
1.092 |
2.94 |
0.0045 |
|
CSR Investment ($M) |
0.023 |
0.008 |
2.875 |
0.0051 |
|
ESG Rating |
0.118 |
0.045 |
2.622 |
0.0098 |
|
CO₂ Reduction (%) |
-0.265 |
0.072 |
-3.681 |
0.0004 |
|
Revenue Growth (%) |
0.331 |
0.051 |
6.490 |
0.0000 |
Source: Own elaboration
CSR Investment ($M) has a statistically significant positive effect on Net Profit Margin (p = 0.0051). Improving the ESG rating positively affects profitability (p = 0.0098), which shows that good company governance leads to better financial results. The coefficient for CO₂ Reduction (%) is slightly negative (-0.265), suggesting that environmental investments may cost money in the short term, even though they are essential for long-term survival. The most critical factor that predicts profit margin (p < 0.001) is revenue growth (%). This shows that growing finances is suitable for businesses. These results show that CSR improves a company's image and compliance and directly affects its ability to stay financially stable and grow.
Profit Margin is positively linked to CSR Investment (0.588), meaning businesses that put money into sustainability see a return on their investment.
Better financial performance is linked to higher ESG ratings (0.469), which shows that ethical company governance is crucial. CO₂ Reduction is unfavorably related to Profit Margin (-0.317), meaning sustainable practices might cost more in the short term, even though they are better in the long term (Table 5).
Table 5 – Quantile Regression
|
Variable |
CSR Investment |
ESG Rating |
CO₂ Reduction |
Revenue Growth |
Profit Margin |
|
CSR Investment |
1.000 |
0.427 |
-0.285 |
0.512 |
0.588 |
|
ESG Rating |
0.427 |
1.000 |
-0.119 |
0.384 |
0.469 |
|
CO₂ Reduction |
-0.285 |
-0.119 |
1.000 |
-0.230 |
-0.317 |
|
Revenue Growth |
0.512 |
0.384 |
-0.230 |
1.000 |
0.731 |
|
Profit Margin |
0.588 |
0.469 |
-0.317 |
0.731 |
1.000 |
|
Source: Own elaboration |
|||||
All VIF scores are below 2.0, indicating no serious multicollinearity issues (Table 6).
Table 6 – Quantile Regression
|
Variable |
VIF Score |
|
CSR Investment ($M) |
1.85 |
|
ESG Rating |
1.62 |
|
CO₂ Reduction (%) |
1.34 |
|
Revenue Growth (%) |
1.92 |
|
Source: Own elaboration |
|
This confirms that each independent variable contributes unique information to the model.
Comparative Analysis of Investment Opportunities in the Consumer Goods Industry
Financial performance research is key to determining how profitable and efficient a business is. This part looks at some critical money numbers, including sales growth, profitability margins (gross, operating, and net profit margins), return on equity (ROE), and return on assets (ROA). When investors compare these signs, they can tell how stable and productive each company is. This tells us how well each company does in the consumer goods business and how well they can react to changes in the market.
The flexibility and ability of a business to grow over time can be seen by how much it spends on R&D, new goods, and new technologies. When the market and customer want to change, companies that spend more on research and development (R&D) are often better able to adapt. Businesses increasingly care about their ESG success.
This part rates the companies' efforts to be more environmentally friendly, their social duty programs, and how they run their businesses. ESG scores and sustainability reports help us determine how committed they are to doing business honestly and caring for the environment. Table 7 shows the financial ratios of the chosen companies, showing essential signs of risk and success.
Table 7 – Financial Ratios of Selected Companies
|
Company |
Gross Profit Margin (%) |
Operating Profit Margin (%) |
Net Profit Margin (%) |
Debt-to-Equity Ratio |
ROA |
Conclusion |
|
Procter & Gamble |
50.3% |
23.2% |
18.3% |
0.70 |
High |
Strong profitability, efficient asset use, and balanced leverage. Top investment choice. |
|
Unilever |
42.5% |
16.1% |
15.0% |
0.85 |
Moderate |
Reasonable investment but less efficient than P&G. Solid sustainability commitment. |
|
Colgate-Palmolive |
59.7% |
N/A |
N/A |
8.06 |
Likely undermined by high debt levels |
High profitability, but extreme leverage increases risk. |
|
Kimberly-Clark |
33.8% |
14.9% |
N/A |
1.93 |
Likely poor due to weak profitability |
Weak profitability and high leverage make it a less attractive investment. |
Source: Chang, Y. (2025)
The gross profit margin shows how much profit a business keeps after paying for its goods. Colgate-Palmolive and Procter & Gamble have the most significant margins, which means they can set high prices and keep costs low. Kimberly-Clark has the lowest profit (33.8%), which means it has higher costs and is less competitive than Unilever (42.5%).
The operating profit margin shows how well a business handles its running costs. Leading with 23.2 percent, Procter & Gamble shows better cost control and operational effectiveness. Unilever (16.1%) and Kimberly-Clark (14.9%) have lower margins, which means their businesses aren't running as efficiently. Overall success can be seen in the net profit margin. Both P&G (18.3%) and Unilever (15.0%) are very profitable, which means they make much money even after taxes and interest. It is possible that Colgate-Palmolive and Kimberly-Clark do not have enough data available because they have much debt, making them less profitable overall.
The company with the most leverage (8.06) is Colgate-Palmolive. It relies heavily on loan financing, which raises its financial risk. Unilever is next, with a 0.85 score, and P&G is third, with a 0.70 score. There is also much financial risk for Kimberly-Clark (19.93). ROA shows how well a business uses its assets to make money. The fact that P&G has the best ROA shows that it makes good use of its assets and is financially stable. Unilever is a good company, but it is not quite as efficient as Nestle. It's hard for Colgate-Palmolive and Kimberly-Clark because they have a lot of debt, which makes their assets less valuable (Table 8).
Table 8 – Market Position of Selected Companies
|
Company |
Global Presence |
Key Brands |
Strengths |
|
Procter & Gamble (P&G) |
180+ countries |
Pampers, Tide, Gillette |
Substantial market share, high profitability, and well-diversified brand portfolio. |
|
Unilever |
190+ countries |
Dove, Lipton, Hellmann's |
Leader in sustainability, a strong commitment to ESG, widely diversified. |
|
Colgate-Palmolive |
200+ countries |
Colgate, Palmolive |
Strong oral care brand dominance but limited diversification. |
|
Kimberly-Clark |
100+ countries |
Huggies, Kleenex |
Market leader in hygiene products but vulnerable to raw material costs. |
|
Procter & Gamble (P&G) |
180+ countries |
Pampers, Tide, Gillette |
Substantial market share, high profitability, and well-diversified brand portfolio. |
Source: Chang, Y. (2025)
P&G and Unilever dominate globally, with strong brand diversification. Unilever excels in ESG leadership, making it an attractive choice for sustainability-focused investors. Colgate-Palmolive dominates oral care but lacks diversification beyond its niche. Kimberly-Clark has strong hygiene brands but faces challenges with cost and competition. P&G and Unilever lead in R&D investment, ensuring continuous innovation and adaptability (Table 9).
Table 9 – R&D and Innovation Investment
|
Company |
R&D Investment ($B) |
Focus Areas |
|
P&G |
2.0 |
Advanced product development brand innovation. |
|
Unilever |
1.3 |
Sustainable products, eco-friendly packaging. |
|
Colgate-Palmolive |
0.6 |
Oral care product improvements. |
|
Kimberly-Clark |
0.5 |
Hygiene product enhancement. |
Source: Own elaboration
P&G invests the most in R&D, maintaining its position as an industry leader. Unilever focuses on sustainability-driven innovation that aligns with ESG trends. Colgate-Palmolive and Kimberly-Clark invest less, limiting their innovation potential. ESG considerations are crucial in evaluating corporate sustainability and ethical governance (Table 10).
Table 10 – ESG Performance Comparison
|
Company |
Sustainability Rating |
Key ESG Initiatives |
|
Unilever |
Highest |
Carbon reduction, sustainable sourcing, and social responsibility programs. |
|
P&G |
High |
Strong environmental and social responsibility investments. |
|
Colgate-Palmolive |
Moderate |
Some sustainability efforts but lower commitment than peers. |
|
Kimberly-Clark |
Low |
Improving ESG practices but still developing. |
Source: Own elaboration
Unilever has the best ESG score because it incorporates sustainability into its activities. Even though P&G has good ESG programs, Unilever is the world leader in sustainability. ESG scores for Colgate-Palmolive and Kimberly-Clark are low, which makes them less appealing to investors who care about the environment. P&G is the best investment for people who want to make money because it is very profitable and has strong finances. Unilever is slightly less efficient than P&G in terms of profits.
However, it is the best choice for investors who care about ESG issues because it is the most sustainable, committed to ESG issues, and coming up with new ideas that will last. P&G is the best choice if you want to make much money. Unilever is the best company to invest in if you care about the environment. This comparison gives investors a fair picture of a company's financial health, ability to develop new ideas, and commitment to sustainability.
Residual Normality Test (Shapiro-Wilk Test)
The Shapiro-Wilk test (Table 11) was conducted to ensure that the regression model residuals follow a normal distribution.
Table 11 – Shapiro-Wilk Normality Test
|
Test |
W-Statistic |
p-Value |
|
Shapiro-Wilk Test |
0.980 |
0.138 |
Source: Own elaboration
The residuals are not very different from usual because p > 0.05. This proves that the regression model is correct. Quantile regression and correlation studies show that CSR investments significantly affect a business's financial performance.
Businesses with high ESG Ratings, like Unilever, do better than their competitors regarding brand image and long-term financial health. Reducing CO2 emissions and other actions that are good for the environment can cost money in the short term but will pay off in the long run. By comparing themselves to competitors, Unilever has proven to be the leader in CSR-driven growth and financial success.
Discussion
CSR significantly impacts a business's bottom line, ability to stay in business and image. These findings corroborate previous studies showing that CSR-investing businesses outperform their rivals, earn the trust of key stakeholders, and increase their bottom line. The quantile regression study found a positive link between CSR spending and net profit margin.
These results show that businesses that prioritize sustainability do better financially. In addition, it showed that making short-term investments in the environment, like cutting CO2, might cost. These effects were even more potent when compared by Unilever, P&G, Nestlé, and Colgate-Palmolive. P&G did the best financially, which shows that the key to success is to find a way to make profits and care about the world simultaneously (Peinado-Vara, 2022). On financial metrics, Unilever was a little behind P&G, but on ESG measures, they were ahead.
This supports the idea that long-term investments in sustainability make a business look better and keep customers returning. CSR is not only the right thing to do but also a smart way for businesses to stay in business and grow. However, it also shows how hard it can be to deal with short-term financial costs. Using the regression model, it may be observed that reducing CO₂ is associated with less money.
In other words, taking care of the environment might require beginning investments that do not immediately pay off in higher profits (DesJardine& Durand, 2020; Lyon & Maxwell, 2019). Companies with good sustainability policies usually get more investors, better handle risk, and make more money over time.
Theoretical Implications
This study is constructive for CSR because it backs up the TBL theory. Carroll's CSR Pyramid says that companies that meet their legal, moral, and social obligations will usually do better than companies that only care about getting profits (Lu et al., 2020). Sustainable business plans can help companies grow over the long run, gain the trust of their stakeholders, and give them an edge over their competitors (Kahupi et al., 20221).
This shows that CSR isn't just a moral obligation; it's also a useful business tool. More than one study has shown that businesses that consistently do the right thing do better than their rivals in important areas like investor confidence, brand image, and customer loyalty. Being a star in sustainability (Iglesias et al., 2023) shows that strong CSR can help a company stand out in the market. Because it is built into its business plan to do good things for society, make money, and lower carbon emissions, Unilever has become a star at both. In this case, CSR strengthens and builds trust in a company in the market.
The study backs up the idea of stakeholder theory, which says that businesses will do well in the long run if they put the needs of all stakeholders first, such as buyers, employees, investors, and society. There is a positive link between ESG ratings and net profit margin. This supports the idea that investors will be readier to invest in socially responsible businesses with firm sustainability commitments (Camilleri, 2021). Companies with high ESG ratings often have lower financial risk, better stock performance, and more trust from investors.
This is because responsibly doing business lowers the risk of fines, damage to the company's image, and inefficient operations. One of the most essential things the study showed was that while CSR projects can make companies money in the long run, some investments in sustainability may impact their short-term profits.
The fact that reducing CO₂ does not lead to instant financial gains suggests that investments in environmental sustainability take time to show tangible economic benefits. This fits with earlier research that found that tactics that are based on sustainability, like using renewable energy, reducing waste, and having ethical supply chains, may cost more at first but save money, follow the rules, and make people more loyal to the brand over time. So, when companies look at the financial effects of CSR, they need to think about the long term and understand that investments in sustainability give them a competitive edge in the long run.
Even though it's clear that CSR suits businesses, the study shows how hard measuring its direct financial impact is. It's hard to find a direct link between CSR investments and financial results because of outside factors like changing customer tastes, market trends, and rules and regulations (Kuokkanen & Sun, 2020). Also, comparing efforts to be more environmentally friendly across businesses is tricky because there are no standard ways to measure CSR success. Because companies use different reporting methods, it's hard to see how well CSR works in other parts of the world. Because of this study, ESG reporting and performance tracking should be standardized.
Practical Implications
Business leaders, politicians, and investors who want to include CSR in their plans will find the results helpful. They can help their businesses stay profitable and do better in the market. Organizations should use CSR when deciding what to do, how to progress, and make plans. Investing in sustainability in the short term may cost money, but these investments should be seen as long-term ones that protect the brand's image, lower risk, and build trust among stakeholders. For investors and customers to trust, improving reports and openness is essential.
Companies should make their ESG disclosures and sustainability measures the same so that it is fair and easy to judge how well their CSR works. This will make the business look better, which will attract more investors. Another important thing for long-term business growth is spending money on new ideas, research, and development. Companies need to spend more money studying and creating eco-friendly products, long-lasting packaging, and tasks that use less energy to keep up with the changing tastes of customers who care about the environment. It's clear from P&G's strong focus on R&D-driven sustainability how important it is to keep coming up with new ideas to stay ahead of the competition and do the right thing for people and the environment.
Policymakers play a significant role in making businesses last longer. There are several things they can do to make this happen: enforce stricter CSR rules, push for consistent ESG reporting, and promote public-private relationships. The government should use tax breaks, handouts, and grants to get companies to put money into green projects. This would make CSR more appealing and profitable. Companies will also be sure to follow ESG principles and take care of their social and environmental duties if strict sustainability compliance frameworks are in place. Investors will trust you more if you set clear standards for CSR reporting. Also, this will help everyone make choices based on correct sustainability measures.
Those who want to be regulated should have to put ESG information in their business records. One more thing that can help us get to sustainability much faster is supporting public-private partnerships (PPPs). This is because PPPs use company and government resources to fix big environmental and social problems. Cities and states should collaborate on projects that help people and the environment and switch to clean energy.
Each country has its rules about the environment, jobs, and being environmentally friendly. This is a big problem. Therefore, companies cannot create a single CSR plan that works for all of them. As a result, companies need to adapt their CSR plans to each region's rules. Keeping up with this takes longer and costs more. Small and medium-sized companies might not have the cash to put money into environmentally friendly plans, fair supply chains, and clean energy choices. To lower these costs, businesses must get creative, find new ways to involve customers, and improve their operations. In addition to saving money, this will help the environment.
Significant issues also include how people think and how the market changes. Price is still important to many people, making it harder for expensive sustainable goods to become popular. Customers need to be taught about and encouraged to see how sustainable spending is good for the economy and the environment in the long run. People will be likelier to buy and use goods and services that CSR drives.
CSR is more than being nice to others. This is a crucial step to keep business safe and in the long run. Investors in sustainability may lose money at first, but they gain it back in the long run by making risk management better, keeping customers loyal, and building trust among investors. ESG rules must be made easier to understand, and global sustainable standards must be set so that all companies can improve their CSR.
Concerning CSR, there is no longer any room for “nice-to-have” items. Businesses need to thrive in today's compassionate and conscientious market. Aligning CSR objectives with financial performance goals gives a corporation a competitive advantage. This way, they can earn money while also positively impacting the environment. Speakers will cover how CSR can improve a company's long-term performance and attract and retain investors, legislators, and business executives.
Conclusion
This study highlights the critical role of CSR in driving sustainable enterprise performance, demonstrating that companies integrating economic, social, and environmental responsibility into their business strategies achieve enhanced financial stability, competitive advantage, and long-term growth. It is clear from the case study that CSR programs help businesses make money, earn investors' trust, and keep their brand image safe. It explains about Unilever in terms of P&G, Nestlé, and Colgate-Palmolive.
The CSR Pyramid and the TBL arrangement look right. Companies whose primary goal is to maximize profits at the expense of environmental protection tend to do better than their more narrowly focused competitors. Green projects might cost more initially, but they are worth it in the long run because they keep customers returning, ensure businesses follow the rules better, and lower risks. These new ideas show that CSR is no longer an extra that companies can do but a must for companies that want to stay strong in a society that cares about people and the environment.
This study does have some limitations that should be noted. First, the study only looks at a few global consumer goods companies. This means the results might not fully apply to other industries or smaller businesses.
The study also uses financial and CSR records that are open to the public, which might not show all of a company's internal sustainability efforts or how they affect business operations. It's still hard to figure out how to measure CSR's direct financial effect because business outcomes are affected by market changes, regulations, and consumer behavior.
More studies are needed to develop standardized CSR performance metrics that can be used to compare companies and industries more accurately. In the future, more studies should be done on how CSR affects different types of industries, especially technology, manufacturing, and finance, to see how sustainability efforts affect the success of businesses in those areas.
Regional studies focusing on CSR in developing economies could also teach us a lot about how businesses change their sustainability plans to fit the rules and the economy in their area.
To further understand the connection between sustainability and profitability, longitudinal studies should be conducted to examine the impact of CSR efforts on innovation, customer behavior, and financial success over time. How companies might enhance their CSR initiatives for future growth could be better understood with additional research on the function of digital transformation and sustainability initiatives driven by AI.
Ultimately, this study underscores the importance of CSR in shaping sustainable and resilient enterprises, reinforcing that companies that proactively embrace ethical, social, and environmental responsibility will be better positioned for success in an evolving global market.
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