Do Regulatory Pressures and Stakeholder Expectations Drive CSR Adherence in the Chemical Industry?

Khalid Mujahid Alharbi, Amina Elshamly () and Ibrahim G. Mahgoub
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Khalid Mujahid Alharbi: Department of Accounting, College of Business Administration in Yanbu, Taibah University, Madinah 41477, Saudi Arabia
Amina Elshamly: Department of Management, College of Business Administration in Yanbu, Taibah University, Madinah 41477, Saudi Arabia
Ibrahim G. Mahgoub: Department of Management, College of Business Administration in Yanbu, Taibah University, Madinah 41477, Saudi Arabia

Sustainability, 2025, vol. 17, issue 5, 1-22

Abstract: The chemical industry plays a pivotal role in the health of the world’s economies despite facing significant criticism for its contribution to environmental degradation, particularly in pollution management and sustainable development. This paper investigates the key factors motivating executives in chemical companies to engage in corporate social responsibility (CSR), including regulatory pressure, profit maximization, stakeholder demands, and environmental concerns. Data were collected through a cross-sectional survey of over 400 executives worldwide, and structural equation modelling (SEM) was employed to test four hypotheses examining the relationships among various variables. The findings indicate that regulatory pressure positively influences CSR adoption, although a profit-maximization orientation negatively moderates this relationship. This suggests that companies with an excessive focus on profits are less likely to engage in meaningful CSR activities beyond mere compliance. Additionally, unmet stakeholder needs drive environmental commitment, highlighting that managers and executives are responsive to the environmental expectations of consumers, society, and investors. In turn, environmental commitment strongly correlates with implementing pollution-prevention mechanisms, emphasizing the role of intrinsic motivations in promoting authentic CSR practices. This research expands on prior studies of CSR in high-impact industries by proposing a more integrated theoretical framework, drawing from Institutional Theory, Stakeholder Theory, and the Theory of Planned Behavior. Practical implications underscore the value of incentives that encourage firms to make substantial CSR commitments without jeopardizing profitability. Limitations of the study include its cross-sectional design, which calls for longitudinal research to understand causation better. Future studies could also explore additional industries to produce findings applicable across various sectors.

Keywords: corporate social responsibility (CSR); chemical industry; regulatory pressure; profit orientation; stakeholder expectations; environmental commitment (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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