Corporate Purpose and Early Disaster Response: Providing Evidence of Dynamic Materiality?

This paper examines the relationship between corporate purpose and disaster response. To that aim, the authors use a unique dataset generated by Just Capital's COVID-19 response tracker that characterizes the early responses of 928 companies included in the Russell 1000 Index generated by the COVID-19 pandemic. The authors marry this data to the Business Roundtable Statement on the Purpose of a Corporation (BRT-CPS) signatories list, which includes 210 firms that declared “a fundamental commitment to all stakeholders” as their corporate purpose. The authors estimate the differential impact of BRT-CPS signees on the rest. After controlling their results with financial indicators and environmental, social, and governance (ESG) data, the authors convey that BRT-CPS signees were more likely to develop strategies that benefited their surrounding communities and other stakeholders. Moreover, corporations with high ESG were less likely to have an early response that directly benefited stakeholders other than shareholders, except for layoffs and unpaid leave. Finally, the authors discuss the outcomes considering the symbolic management theory, corporate purpose literature, and its relation to stakeholder management.