The Influence of Corporate Social Responsibility on the Financial Performance of Contractor Companies

In accordance with UU No. 40/2007, Article 74(1), companies are obligated to implement Corporate Social Responsibility (CSR) programs, both internally and externally. The expectation stemming from this legislative provision is the full engagement of companies in environmental management activities. Several prior studies have investigated the impact of CSR on company performance, financial performance, good corporate governance (GCG), corporate reputation, and the relationship between CSR and company size. Profitability aspects have also been examined as mediating variables. However, not all previous research has yielded consistent findings. Consequently, this study aims to compile a literature review regarding the influence of CSR on financial performance, as measured by Return on Assets (ROA), Return on Equity (ROE), and Earnings Per Share (EPS). The research methodology employed in this study is a qualitative approach, involving a review of previous research obtained through search engines such as Google Scholar, Web of Science, Scopus, and Proquest. The data source timeframe is limited to the period from 2017 to 2023. A total of 63 articles were initially identified, but after a more thorough analysis, only 49 articles were deemed relevant. The results of this review indicate that 25 of these articles demonstrate a positive relationship between CSR and Corporate Financial Performance (CFP), while 19 other studies reveal a negative impact. Additionally, 5 studies do not indicate a significant relationship between CSR and CFP.