Impact of Corporate Social Responsibility on Financial Performance in The Biggest Manufacturing Sub-Sectors Contributors of Global Warming: Perspective Literature Review

Abstract

The manufacturing sector is the third contributor to global warming through significant greenhouse gas emissions and intensive energy use and the fourth majority contributor sub-sector manufacturers are the cement and lime industry, iron steel and aluminum industry, chemical industry, and refinery industry. This situation necessitates companies to take proactive measures to mitigate environmental impacts through the implementation of corporate social responsibility (CSR). CSR plays an increasingly important role in influencing the financial performance of companies, particularly in the manufacturing sector. Empirical research highlights the benefits of CSR on financial performance, starting with the enhancement of the company’s reputation and image. Manufacturing that actively runs CSR programs can improve their positive image in the eyes of stakeholders such as consumers, investors, and communities. Second, attract investors and increase market value. Investors tend to be more attracted to companies with a good track record of CSR as this indicates better risk management and long-term sustainability also increases investor confidence there by increasing the company's access to capital at lower costs. Third, operational efficiency and cost reduction. CSR programs focus on sustainability such as energy efficiency, waste management, and the use of environmentally friendly raw materials would help manufacturing companies reduce operational costs and increase profitability. Fourth, improving employee satisfaction and productivity. CSR that includes employee welfare, a safe working environment, and training development programs can increase morale, motivation, and productivity also influences employee satisfaction and increases loyalty and productivity by reducing employee turnover.