ENVIRONMENTAL CORPORATE SOCIAL RESPONSIBILITY AND FINANCIAL PERFORMANCE OF TELECOMMUNICATION COMPANIES IN KENYA
Abstract
Purpose of the study: The purpose of the study was to examine the effect of environmental Corporate Social Responsibility programs on financial performance of telecommunication companies in Kenya.
Statement of the problem: The telecommunication industry in Kenya is highly volatile and competitive, and the financial performance of telecommunication companies has witnessed a decline in recent years. For example, Safaricom reported a decrease in profit from 68,676.2 million in 2021 to 67,496.1 million in 2022. Additionally, Airtel Networks Kenya Limited experienced losses of 24,822,606,000 in 2020 and 30,662,525,000 in 2021.
Methodology: The research design employed in this study was correlational research design. The population scope comprised a total of 6,597 employees from the three major telecommunication companies in Kenya: Safaricom, Airtel Kenya, and Telkom Kenya, with 3,859, 1,694, and 1,044 employees respectively. The sample size was determined using Yamane's formula, resulting in 353 employees from top and middle-level management. Data collection employed semi-structured questionnaires, enabling the collection of quantitative and qualitative data. The collected data was analyzed using SPSS version 29 software.
Findings: The study found there is a positive and significant association between environmental CSR programs and financial performance (r=0.633, p=0.000). environmental CSR programs can explain 40.1% of the variations of financial performance of telecommunication companies in Kenya. The regression results showed that environmental CSR programs are positively and significantly related to financial performance of telecommunication companies in Kenya (β =.573, t (1, 324) = 14.667, p<.05).
Conclusion: The study concludes that environmental CSR initiatives serve as a means for corporations to allocate resources towards environmental conservation efforts, thereby contributing to a favorable ecological outcome. These programs may manifest in various formats, with notable instances encompassing the allocation of resources towards renewable energy initiatives, the implementation of waste reduction strategies, and the preservation of biodiversity. Environmental CSR programs offer numerous advantages.
Recommendations: The study recommends that telecommunications companies in Kenya should allocate investments towards renewable energy initiatives, specifically those pertaining to solar and wind farms. Furthermore, organisations have the capacity to incorporate renewable energy sources into their own operational activities. Companies to contribute to the conservation of biodiversity through the implementation of measures aimed at safeguarding endangered species.
Keywords: Environmental CSR programs, Financial Performance, Telecommunication Companies, Kenya
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