Ethical motivations for firms to prioritise stakeholder well-being during the initial phase of the COVID-19 pandemic
by Kevin Pan; Reginald J. Harris; Alan I. Blankley; David Hurtt
International Journal of Sustainable Economy (IJSE), Vol. 15, No. 3, 2023

Abstract: The initial onset of COVID-19 provides a unique setting to examine firms' behaviours related to corporate social responsibility (CSR). In this study, we investigate whether firms' prior self-declared commitment in CSR and the status of having published ESG scores would predict their prioritisation of stakeholder well-being, evidenced by voluntary disclosures related to COVID-19 and well-being. Consistent with previous literature, firms having published ESG scores appear more likely to act responsibly during a crisis. However, contrary to previous literature, firms' voluntary use of ethics related-terms in financial reports is not correlated with ESG status and is an independent predictor of firms filing more voluntary disclosures on well-being. Further, we found no evidence that firms prioritise well-being to avoid lawsuits. The findings contribute to the discussion in the literature on firms' ethical behaviours, suggesting that firms' own beliefs may play a more important role than lawsuit avoidance in a global crisis.

Online publication date: Tue, 04-Jul-2023

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