RESEARCH ARTICLE
Corporate social responsibility, water management, and financial performance in the food and beverage industry
Olaf Weber,
Grace Saunders-Hogberg,
Corresponding Author
Olaf Weber
School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, Ontario, Canada
Correspondence
Olaf Weber, School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, ON N2L 3G1, Canada.
Email: oweber@uwaterloo.ca
Search for more papers by this authorGrace Saunders-Hogberg
School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, Ontario, Canada
Search for more papers by this authorOlaf Weber,
Grace Saunders-Hogberg,
Corresponding Author
Olaf Weber
School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, Ontario, Canada
Correspondence
Olaf Weber, School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, ON N2L 3G1, Canada.
Email: oweber@uwaterloo.ca
Search for more papers by this authorGrace Saunders-Hogberg
School of Environment, Enterprise and Development (SEED), University of Waterloo, Waterloo, Ontario, Canada
Search for more papers by this authorFunding information: Water Institute of the University of Waterloo
Abstract
Water management is an important issue for the food and beverage sector. Global media reports about conflicts between industries and stakeholders about water resources that hurt the food and beverage industry. This study addresses the gap in the knowledge about the connection between water management performance and the financial performance of companies in the food and beverage industry that exists because of a lack of empirical studies in the field of corporate water management and financial performance. Using structural equation modeling to analyze secondary corporate social performance data from KLD-MSCI, secondary financial data from Compustat, and primary water management data, the results suggest that corporate social performance has a positive impact on water management performance and that water management performance influences the financial performance of the firms in the sample positively. We conclude that an inside-out approach of corporate social responsibility addressing material issues, such as water in the food and beverage industry, helps to increase the financial performance in this industry. Academically, we contribute to the knowledge about the connection between water management and financial performance in the food and beverage industry. Furthermore, our results can be used by policymakers to implement standardized water indicators for the food and beverage industry. Finally, businesses can use the results of the study to improve their water-related environmental performance.
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