Impact of CSR on Corporate Environmental Performance: Moderating Role of Green Finance

Abstract

The Primary objective of this research is to examine the Impact of Corporate Social Responsibility CSR on environmental performance (EP). This study also examined the role of green financing as a moderator for the correlation among corporate social responsibility (CSR) and corporate environmental performance (CEP). The data used in this study was sourced from the annual reports of Pakistan’s listed companies. This study used the Panel data methods with fixed effects estimates succeeding after diagnostic tests. The results indicates that there is a strong and positive relationship between CEP and CSR. Additionally, the results of this study shows that green finance plays a mediating role between CSR and CEP. The combined effect of Corporate Social Responsibility (CSR) and Green Finance necessitates that companies grab this opportunity to increase their ecological performance to a great extent. Therefore, the present study suggests that to direct the funding towards sustainable projects, the financial institutions and governments together with other financial instruments, should promote the utilization of green bonds and loans proactively. In order to accomplish this, the green finance standards should assure openness and efficiency. In addition to this, guarantees or lower financing rates might be offered for ecologically friendly projects, whereas favorable regulatory environments are developed.