Social effect and corporate social responsibility: An analysis of the oil sector in an emerging market

Corporate Social Responsibility (CSR) and social impact are two fundamental pillars of companies' strategy. However, the extent to which these two dimensions affect market performance remains understudied in emerging economies. To fill this gap, this paper examines the relationship between CSR and social impact in the oil industry in an emerging market (Peru). Using an adequate case study approach, together with financial data analysis, and the information provided by companies’ annual reports and CSR reports, our results show that the expected positive relationship varies depending on many diverse factors. Specifically, to achieve social impact, companies must prioritize community and environmental responsibility, as well as stakeholder engagement. Nevertheless, we found that businesses struggling with any of these aspects either completely or partially reject social impact. Our findings have some important ramifications for policymakers as well as managers in the oil sector. This issue is especially relevant in emerging economies like the Peruvian one since they are highly dependent on raw materials exports, which ultimately affects not only the environment but also the local communities.