ENVIRONMENTAL CSR PRACTICES AND MARKET PERFORMANCE OF INSURANCE FIRMS IN NAIROBI COUNTY, KENYA
Abstract
Corporate Social Responsibility (CSR) has increasingly emerged as a strategic tool for enhancing competitiveness and sustainability among organizations operating in dynamic business environments. However, the insurance industry in Nairobi County, Kenya continues to experience challenges such as low market penetration, declining customer confidence, and intensified competition. Despite extensive studies on CSR within sectors such as banking and telecommunications, limited empirical evidence exists on its effect on the market performance of insurance firms. This study aimed to examine the effect of Environmental CSR practices on the market performance of insurance companies in Nairobi County, Kenya. The study was anchored on Stakeholder Theory and Legitimacy Theory, which collectively explain how CSR practices influence organizational performance and stakeholder relationships. The study adopted quantitative research design incorporating both descriptive and explanatory approaches. The target population comprised 168 managers from insurance firms operating in Nairobi County, and a census approach was employed. Primary data was collected using structured questionnaires based on a five-point Likert scale. A pilot study was conducted in Nakuru County to test the reliability and validity of the research instrument. Data analysis involved descriptive statistics, Pearson correlation, and simple regression analysis using SPSS at a 0.05 level of significance. The findings revealed that Environmental CSR practices had a significant positive effect on market performance. Environmental CSR practices explained approximately 58.4% of the variance in market performance (R² = 0.584, β = 0.764, p < 0.001). The study concludes that Environmental CSR practices significantly contribute to market performance among insurance firms in Nairobi County. The study recommends that insurance firms strengthen environmental sustainability initiatives by developing clearly defined environmental sustainability policies, promoting paperless operations, implementing energy-saving measures, ensuring compliance with environmental regulations, and effectively enforcing waste management practices.
Keywords: Environmental CSR, corporate social responsibility, market performance, insurance firms, sustainability, Nairobi County
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