Impact on the companies in adopting soft law CSR : the case of the ESR distinction in Mexican companies

Corporate Social Responsibility (CSR) has gained more importance in recent years as companies have realized that the adoption of soft law CSR instruments is a strategic resource to improve their social, environmental and financial performance. Although CSR has received a lot of attention from the academic world in recent years, researchers have not yet fully explored how specific soft law mechanisms impact on companies. Using the qualitative method, this study examines the external and internal impacts of CSR on firms. To succeed in the aim of this thesis, the ESR (Socially Responsible Company) Distinction is used as a case of study and proxy indicator of soft law CSR instruments. In the process, this study will also collect information about what motivates companies to pursue the ESR Distinction, as well as the changes and benefits derived from obtaining this recognition. The results show that CSR initiatives enhances the relationship with stakeholders and corporate reputation, boost firm attractiveness to investors, reduce costs and improve the firm’s operational efficiency. The findings suggest that external impacts are higher than the internal ones, which is connected with the companies’ motives to adopt CSR initiatives. Responses indicate that the primary motivation lies on improving companies’ reputation, followed by the firm’s differentiation from competitors, and external pressures. This dissertation expands the knowledge in this field by focusing on the impacts of private CSR initiatives, specifically in Codes of Conduct and Label instruments through the analysis of the ESR Distinction. Consequently, the study’s results contribute to knowledge by highlighting the importance of external pressures on companies’ decision-making to adopt CSR initiatives as an explanatory factor of where firms put greater efforts to receive higher impacts.nhhma