Aligning Corporate Social Responsibility with Green Economy Development Pathways in Developing Countries

Abstract Corporate social responsibility (CSR) can be conceptualized as a mechanism through which private sector investment aligns with and shapes sustainable development. In recent years the new economic paradigm of the green economy has been adopted by many developing countries and forwarded by governments and multilateral institutions. It is in this burgeoning socio‐economic context that firms will practice their CSR. In this study, we explore the determinants of such CSR in a green economy by using structural equation modeling techniques to analyze empirical data collected from five Caribbean countries already on the green economy pathway. We find that firm level environmental policies and to a lesser extent relationships with external stakeholder networks are the main determinants of CSR in the green economy. Firms’ environmental practices and internal practices also influence CSR, but only indirectly when mediated by their environmental policies. The findings suggest that firm level environmental policies are critical to successfully aligning CSR with sustainable development in the green economy context. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment.