Answer:
The positive and negative effects of corporate social responsibility (CSR) on profits and stock price are not definite, with a lot of debate still going on between sides that favor CSR and those against it. Lately though, the debate is being won by those favoring CSR.
Explanation:
The position against CSR is very simple, it increases costs and higher costs result in lower profits, which in turn result in lower stock price. In Europe a lot of studies have been carried out regarding the effects of CSR, and not all show unanimous results. Depending on the industry and the country, CSR can really boost sales and stock price, but on other places it simply doesn't seem to affect them.
For example, the usual corporate suspects of representing the worst type of evils, oil companies and banks, are not affected by CSR. Probably since no one expects oil companies or banks to do something good, even when they try no one believes them.
But on the hand, most normal, non diabolic corporations usually tend to benefit from CSR. Even electric companies which are the cousins of oil companies, benefit and a lot from it. Any time a electric company engages in green alternatives, its stock price skyrockets.
The same for car manufacturers, even though electric or hybrid cars represent less than 1% of total cars manufactured. The same applies to fashion industry, consumer goods, and many more.
