How environmental awareness and corporate social responsibility practices benefit the enterprise? An empirical study in the context of emerging economy

Abstract

Purpose The study explores the linkage between environmental awareness, green practices, firm reputation and performance. Undeniably, very few studies have been conducted on corporate social responsibility (CSR) and its effect on firms' performance. Design/methodology/approach In the current study, the data are collected from 404 firms located in Pakistan, and structural equation modeling (SEM) is employed to validate hypotheses. Findings The results show that green practices are statistically significant to build a positive image of firms; also, these practices enhance firm performance. Furthermore, the results also confirmed that CSR practice “indirect support to the community” has an insignificant relationship with firm reputation due to mismanagement and corruption involvement on governmental levels. Research limitations/implications This study suggests that the firms' management should spend money on CSR activities and concentrate on proper monitoring of CSR activities to utilize funds efficiently. The research is conducted in Pakistan's context, while future studies need to be conducted in other emerging economies to investigate the linkage between CSR, firm reputation and performance. Originality/value According to the researcher's best knowledge, very few studies have been conducted regarding the relationship between environmental awareness, green practices, firm reputation and performance in emerging economies like Pakistan.