The interplay between social responsibility and institutional investment in achieving sustainable business outcomes

Abstract

This study examines how institutional investment and CSR interact to promote sustainable business practices in Canada, emphasizing ESG reporting and ethical accountability as key drivers. The study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze survey data from 385 Canadian senior managers and sustainability officers. A Likert-scale questionnaire assessed ESG policy integration, portfolio engagement, ESG reporting, and CSR’s moderating role. The study found ESG reporting and strong CSR commitment significantly drive sustainable practices in Canadian firms, while ESG policy integration and portfolio engagement showed limited direct impact. Social responsibility’s moderating effect on institutional investment dimensions was weak, underscoring the need for transparency, ethical accountability, and deep strategic integration of ESG and CSR beyond compliance for long-term sustainability. The study concludes that ESG reporting and CSR commitment drive sustainability, while ESG policy integration and engagement have limited impact. Firms must deeply embed ESG/CSR beyond compliance, prioritizing transparency and ethical accountability for long-term sustainable outcomes. Institutional investors should assess ESG implementation depth, not just policies. Corporations must embed CSR/ESG into core strategies, prioritize transparent reporting, and avoid greenwashing through actionable practices to drive long-term sustainability beyond superficial compliance.