Triple bottom line doesn't help the real bottom line

I've been skeptical about corporate social responsibility. Proponents argue that firms implementing triple bottom line accounting will reap all kinds of reputational benefits. A piece of research that runs counter to these arguments and instead confirms my priors comes from Reitenga, Linthicum and Sanchez, 2009, "Social Responsibility and Corporate Reputation: The Case of the Arthur Andersen Enron Audit Failure"

We examine the influence of social responsibility ratings on market returns to Arthur Andersen (AA) clients following the Enron audit failure. Chaney and Philipich (2002) found that AA's loss of reputation resulted in negative market returns to AA clients following the Enron audit failure. Proponents of social responsibility argue that social responsibility can improve the reputation of the firm, while detractors argue that social responsibility expenditures are a poor use of shareholder money. If social responsibility sends a signal to investors regarding the reputation/ethics of management, social responsibility could mitigate the negative returns to AA clients following the Enron audit failure. Using a matched sample of AA and non-AA firms, we do not find evidence that social responsibility mitigated the negative returns to AA clients following the Enron audit failure. Our results are inconsistent with claims that social responsibility can burnish a firm's reputation in a time of crisis and with prior research indicating a positive relationship between social responsibility and market value.

If the CSR folks were right, Arthur Anderson clients with strong CSR policies would not have taken as big a hit as their less responsible compatriots. Turns out not to have been the case. I suspect that proponents of CSR, at least in our Accounting department, would argue that this is evidence of the failure of markets to recognize the importance of CSR rather than of the failure of CSR and will promote triple bottom line accounting ever the more vehemently.