Benchmarking of Corporate Social Responsibility: Methodological Problems and Robustness

Corporate social responsibility and financial performance relationship: a review of measurement approaches

“…Nevertheless, indices are far from being ideal measures of CSR. One particular drawback is that they are typically compiled by private firms that have their own agendas and do not necessarily use rigorous methods that are usually expected in scientific research (Graafland et al, 2004). Another major disadvantage is a limited coverage of firms appraised.…”

“…First, they are typically compiled by private firms that have their own agendas and do not necessarily use scientific methods (Graafland, Eijffinger, & SmidJohan, 2004;Unerman, 2000). Related to this, rating agencies often merely provide aggregated CSR scores even though researchers may sometimes be only interested in certain CSR dimensions.…”

Corporate responsibility and financial performance: the role of intangible resources

“…Although the Sustainalytics and KLD databases both include a multidimensional appraisal of firm responsibility performance, we believe that the Sustainalytics measure of CRP provides answers to the aggregation problems underlined by Graafland, Eijffinger, and Smid (2004), Griffin and Mahon (1997), and Rowley and Berman (2000) with reference to KLD ratings. The problems they identified are threefold.…”

Corporate responsibility and financial performance: the role of intangible resources

“…As explained, our measure tackles this problem by using sector-specific weights. The authors' third criticism is the treatment of ordinal measures of CRP, such as the KLD index, as if they were Graafland et al (2004), a solution to this problem may be to rely on the judgment of a third party (non-governmental organizations in their case) to weight all CRP dimensions. This is the methodology applied by Sustainalytics to its CRP index, with weights that rely on the judgment of experts.…”