**4. Discussion**

One aspect of understanding the relationship between CSR and financial performance was understanding the direction of causation. This meant to understand what factor acts as a predecessor and the consequence of such a relationship. Most studies treated financial performance as a dependent variable. In the context of this study, we checked whether better financial performance led to CSR adoption. Our study, however, went beyond the boundaries of linking general financial performance to CSR and proceeded to assess the impact of specific financial indicators on CSR adoption.

This study applies the binary logit regression model to examine the impact of selected financial indicators on CSR adoption in companies from the energy sector. The ratios include ROA, ROE, EBIT, Enterprise Value to EBITDA, EBITDA per Share, and the Beta coefficient. The analysis results show that the only indicator that increases the probability of CSR adoption is ROA. The increase in the Enterprise Value to EBITDA has a negative impact. We do not find any relationship between CSR adoption and ROE, EBIT, EBITDA per Share, and the Beta coefficient. Compared to other metrics, companies with high returns on assets show the highest likelihood of CSR adoption. Such companies are more willing to invest in social initiatives than others. A way to encourage companies with a high ROA to adopt CSR as their primary means of improving their public image and long-term performance may be through society's use of moral persuasion. This means to motivate companies to implement quality-of-life practices in the community in which they conduct business to contribute to that community's educational, social, and economic development [68].

In this context, our research confirms the Slack Resources Theory, which explains the positive impact of FP on CSR. This theory indicates that better FP results in slack resources for companies mean that they can invest them in social ventures, thus emphasizing that better FP would cause better social performance [69]. Other studies in the literature confirm that better financial results translate into CSR adoption and better CSR activities. For instance, research conducted based on data from large American corporations showed that

this also positively influenced the following year's financial results [33]. Another study explored the relationship between CSR disclosure and financial performance, and vice versa, using different approaches, i.e., statistical through multiple regression modeling techniques. The study results showed that the financial results based on the company's profitability had a cause-and-effect relationship with the disclosure of CSR, and vice versa [70]. Recent research also showed a significant causal link between FP and CSR adoption, as spending on social activities depended on financial outcomes. Profitability motivated an investment in social activities and inspired investor confidence [71]. Recent studies also showed that FP affected the company's CSR in the short term and the long term [72].

The variable that was most often used to reflect financial performance in the FP–CSR relationship research was ROA; this could be found in at least 22 other studies [73]. Our analysis showed that ROA indicators had a positive and statistically significant impact on CSR adoption, thus supporting Hypothesis 1 (H1). In other words, ROA indicators were the only financial factor determining the ability of companies to engage in CSR activities. Similar results were reported by other researchers [74–76]. Dewi's [77] research showed not only a direct positive impact of ROA on CSR but also ROE on CSR. The positive correlation between the financial ratios of ROA and ROE and the CSR showed that companies with social and financial performance tended to have wide-ranging social disclosure [29]. In our research, the impact of ROE on CSR adoption turned out to be statistically insignificant, so the Hypothesis 2 was not confirmed. The estimated probabilities from the model showed that profitability had little effect on CSR adoption (low odds ratio—OR). This important finding contradicted some existing research that showed that profitability had a significant direct impact on investment in CSR.

Other hypotheses were also not confirmed in this study. The relations between EV EBITDA and CSR adoption among energy sector companies were negative. We believe that the negative impact of the Enterprise Value on EBITDA was because high-value companies tended to develop and remain competitive. Hence, they devotde most of their resources to maintaining that value rather than engaging them in social endeavors. Other relationships between financial indicators and CSR adoption were not statistically significant.

Additionally, previous research showed that CSR adoption appeared to be positively related to profitability ratios. However, the links between CSR and profitability were studied using simple statistical methods and linear regression [43]. A similar analysis, which also used a regression approach, was carried out on data from 30 publicly listed Nigerian companies [78]. Another study explored the additional effect of leverage on CSR disclosures using data from 41 listed firms [79]. As in other studies, it was found that profitability and company size positively affected CSR adoption. Importantly, it was also found that highly leveraged firms were less likely to engage in CSR. The regression model was also used to study the CSP-CFP relationship in the context of emerging markets [80].

The previous research which showed that CSR adoption appeared to be positively related to profitability ratios did not consider that many different financial indicators. The profitability measure used in another regression model used the financial data of 40 listed companies; in addition to the Return on ROA assets, was the Return on equity (ROE) [56]. Accounting indicators such as the Return on assets (ROA), return on capital (ROE) and return on sales (ROS) were also used as indicators of the financial results. However, these studies did not show a significant relationship between the examined variables. Other methods used in the analysis of FP–CSR included Dynamic Circulation Viewpoint and Multivariate Analysis of Variance (MANOVA). These studies showed a positive and mutual relationship between the variables [81].

According to Reverte [82], neither profitability nor other financial indicators explain the differences in CSR disclosure practices between companies. Thus, it is worth considering the moderating influence of other variables on these relationships. Control variables should be included in the study when there is reason to believe that they may play a role in analyzing the relationships between CSR and FP. The most influential variables explaining the differentiation of companies in CSR assessments are those related to public or social

visibility. The effect of visibility has a significant, positive relationship between visibility and CSR assessment, which is confirmed in other studies [83]. Other authors [84] argue that to investigate CSR's impact on the company's financial performance, the moderating role of corporate governance should be examined. In turn, other researchers [85] investigate the role of CEO power (measured by the relative pay of the director) and find that CEO power positively moderates the relationship between CSR and financial performance. Influential CEOs have considerable freedom in determining expenditure on social and environmental activities of enterprises. So, for example, they can suspend social and environmental activities to demonstrate a better financial performance, or they can, in other cases, increase spending to gain a personal reputation for being socially responsible. There are also studies providing empirical evidence of the relationship between board attributes and CSR engagement, as well as CSR engagemen<sup>t</sup> and financial performance in the global energy sector. These results indicate that board diligence and CSR committees are strong drivers of CSR performance [40].
