Collaborators: Gerwin van der Laan and Jan Dul 

Corporate social performance has been considered a must for corporate financial performance by stakeholder theory scholars. Unfortunately, research until recently lacked the analytical tool to adequately analyze such causal claims, and resorted to an analysis of social performance’s sufficiency (rather than necessity) for financial performance. We introduce Necessary Condition Analysis (NCA) to this research field and investigate whether social performance, specifically the dimension of environmental performance, is a necessary condition for financial performance, specifically profit margins, in a sample of S&P 500 manufacturing firms over the 1991-2013 period. Next to offering a step-by-step approach of NCA, our following of this approach also contributes to the social performance literature by demonstrating that a certain level of environmental performance is indeed necessary for firms aspiring a certain profit margin.