The Impact of Corporate Social Irresponsibility in the Agri‐Food Sector and Its Policy Implications

ABSTRACT The financial impacts of Corporate Social Irresponsibility (CSI) on publicly traded agricultural firms are analysed using an EGARCH event‐study framework and 18,635 CSI incidents. We find that CSI events are associated with significantly lower stock returns and elevated market volatility. The clearest and most persistent return penalties arise for novel, sharp, broad‐reaching, and lower‐severity incidents, while high‐severity incidents are associated primarily with large and significant increases in volatility in the immediate post‐event windows. Larger firms are more resilient to CSI shocks than smaller firms, highlighting the role of firm size in absorbing reputational damage. The findings show that agri‐food firms are financially exposed not only to catastrophic ESG failures but also to more routine and unexpected incidents, with implications for ESG governance, disclosure and crisis management.