Description
Purpose – This paper aims to study the inter-relationship among corporate social responsibility (CSR), sustainability and organizational performance in the pharmaceutical sector influencing health and environment.
Methodology –
In depth analysis of organizational performance, CSR and sustainability activities of selected 8 pharmaceutical companies was undertaken for a period of consecutive 5 years from 2016 to 2020. This included data collection for the organizational performance variables net income, annual sales, and stock market performance parameters (market capitalization, price-to-earnings ratio, and market price per share) for each year. A cumulative score based on the number of activities performed under CSR and sustainability agenda a score was calculated for each selected company for each year. This followed a linear regression analysis to identify whether there is an existence of a relationship among the three parameters. Additionally, the activities under 17 SDGs (sustainable development goals) were compared to identify gaps.
Result and discussion –
Both sustainability and CSR positively influence organizational performance in terms of annual sales, and net income (before and after-tax). However, market capitalization and market price per share were negatively influenced by both CSR and sustainability. Another interesting finding showed that price-to-earnings ratios are not influenced by both CSR and sustainability. Key activities under SDG 3 (good health and well-being) aimed to increase access to medicine and under SDG 12 (responsible consumption and production) include the application of green chemistry to make the manufacturing process more environmentally friendly. A few examples include the use of renewable sources of energy and the processing of toxic waste before release in nature. SDG 1 (no poverty) remains the least target across all companies.
Conclusion -
The new insights obtained in the study have further provided real world evidence to support that both CSR and sustainability improve long-term profits and can be considered investments into the future in the pharmaceutical sector. Result highlights the SDGs least addressed and provides an opportunity for peer-learning. It also provides evidence for policymakers to advocate the integration of CSR and sustainability in companies both to promote environment-friendly manufacturing processes and improve long-term profits.
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