Effect of Environmental CSR Activities on the Financial Performance of Financial Institutions in Kirinyaga County.

Abstract

A new dimension to the corporate world have been brought up in the recent past by the CSR practices adopted by the financial institutions across the world. Previous research seeking to find out the effect of CSR on the financial performance of various institutions have yielded different results. This study aimed at finding out the effect of Corporate Social Responsibility activities on the financial performance of Financial Institutions in Kirinyaga County. Specifically, the study aimed at determining the effect of Environmental CSR activities on the financial performance of the financial institutions in Kirinyaga County. The study was based on the stakeholder’s theory. The study population was 300 employees working in the financial institutions in Kirinyaga County and a sample of 171 employees was used for the study. A causal research design was adopted while carrying out the research. The researcher used both the stratified and systematic sampling techniques to select the sample. Primary data was gathered through administration of questionnaires to the selected respondents in the financial institutions while Secondary data was sourced from journals, libraries, e-books and the websites of the financial institutions. Financial performance was assessed on the basis of the net profit after tax for the firms. The data was analysed using the SPSS version 23 software. The study found a strong positive relationship between environmental CSR practices and financial performance of financial institutions. The study recommended that financial institutions should invest in environmental CSR activities as such activities positively influence their financial performance.

Keywords: Environmental CSR activities, financial performance, financial institutions, Kirinyaga County.

DOI: 10.7176/RJFA/10-5-07

Publication date:March 31^st 2019