Should luxury companies embrace corporate social responsibility? A longitudinal study using financial and extra-financial data

The main objective of this research is to examine the relationship between the corporate social responsibility (CSR) commitments of luxury companies and their financial performance. Our research adopts a longitudinal approach and mobilises financial and extra-financial data from a sample of eight luxury companies, collected between 2002 and 2023, and uses panel data fixed-effects regression for the estimations. The results show a negative relationship between CSR and financial performance in both directions. A difference is identified when we differentiate between social and environmental actions. While the impact of the latter on financial performance is negative, some of the social actions have a positive impact. Our findings provide insights into potential actions that can be taken by managers in the luxury sector to achieve better optimisation of financial resources committed to CSR. Thus, our results show that it is in the best interest of luxury companies to focus on certain actions close to their core business in order to benefit from synergies and avoid the risk of strong incongruence that can lead to suspicion in the minds of stakeholders. At a political level, public authorities should leverage the influence and financial power of the luxury sector to promote sustainable development issues within companies. Research into the link between luxury and sustainable development has proliferated in recent years; however, most of it remains rooted in the discipline of marketing.