**1. Introduction**

The unpredictable COVID-19 pandemic has highlighted several fragilities in the business environment and caused an instability among the global financial system. Many explanations could be provided such as the weakness of "the supply chains, labor markets, credit quality and liquidity" according to Chartered Financial Analyst Institute [1].

This pandemic has engendered a genuine global economic crisis [2] that is quite similar to post great depression of 1930s. In this regard, the global gross domestic product (GDP) was expected to decline by 3% in 2020 (the International Monetary Fund IMF, April 2020), and a drop of the world trade by between 13% and 32% [3].

In the same vein, Zhang et al. [4] analyzed the volatility of financial markets. They have demonstrated an instability and an increasing uncertainty, particularly in risky

businesses after by the pandemic. They seem to have significant effects on investor psychology and their behavioral decision-making, which have caused a sharp stock price decline [4]. For instance, the Taiwan stock market's weighted stock price index plummeted by 4.19% with a drop among all the industries. Particularly, the travel industry marked a sharp decline in order of 11.30% in January 2020 [5].

However, despite its substantial impact on the financial markets, it was an opportunity to test the vulnerability and the resilience of the business models. It was also an opportunity to rethink the enterprises' behaviors, plans, and actions to face potential crises related to biodiversity loss and climate change [6]. For instance, GD Sharma et al. found an increasing interest in sustainable investment during the pandemic period and even in the post-pandemic era [7].

According to UBS Global (2020), sustainable investing strategies have shown better financial outcomes than conventional ones as many investors have preferred to undertake sustainable investments to cope with the post-pandemic consequences. Also, most people have become more concerned about the social and environmental consequences of their consumption decisions. Hence, Sayekti [8], Zhao [9], Sharma et al. [7] considered the sustainable investment a preferred form of investment and a clear winner during the pandemic. In response to the pandemic, the European Parliament recommitted to the European Green Deal, which is a set of policies introduced in December 2019 that aims to make Europe climate-neutral by 2050. It is also trying to build post-COVID-19 economic stimulus packages around the goals of the Green Deal. All these initiatives stress the urgent need to commit to a more sustainable corporate social responsibility (CSR) in a more integrated recovery process.

In this regard, Zhao [9] claimed that sustainability-oriented investments became a necessity to manage the corporate goals and revise the risk management of the companies for potential future crises in a way that decreases the inequality among the wider society. Hence, the responsible practices should surpass the philanthropic responsibility by setting practical factors; they are likely to guarantee an organizational readiness to promote an inclusive business model. It establishes the core to strategize the CSR practices and specially to respond to the critical challenges caused by the pandemic.

Khan et al. [10] have claimed that firms with strong ratings on material sustainability issues have better future performance than firms with inferior ratings on the same issues. In contrast, firms with strong ratings on immaterial issues do not outperform firms with poor ratings on these issues. Finally, firms with strong ratings on material issues and concurrently poor ratings on immaterial issues have the best future performance.

To integrate a strategic CSR and get financial outcomes from CSR practices, the strategic aspects of CSR must be involved into the core business activities [11]. Actually, the financial crisis of 2008–2009 has highlighted this important link between CSR investments and the financial performance. Specifically, the firms practicing intense CSR earned stock outcomes about four to seven percentage points higher than firms ignoring the CSR practices [12]. In general, the concept of CSR is no longer considered as exclusively a moral or social responsibility to respond to the stakeholders' needs. It evolves to an integrated strategic process adopted to increase the financial performance, the reputation, and customer relationships [13]. This concept has developed at the macro-level as well as the corporation level by involving the social and economic issues [14].

In contrast, the response to the crisis has revealed many irresponsible corporate behaviors such as the dismissal of employees; Disney, for instance, stopped paying 100,000 workers while the remuneration of its director was USD 65.6 million in 2018 and USD 47 million in 2019. In fact, the problem of greenwashing has emerged even

#### *Perspective Chapter: Rethinking CSR Strategies in the Era of COVID-19 DOI: http://dx.doi.org/10.5772/intechopen.106248*

during the pandemic in order to acquire social legitimacy, build better relationships with stakeholders, and create a green brand image.

Recently, Yin and Jamali [15] examined within the framework of strategic CSR whether Multinational Companies Subsidiaries (MNCs) in the emerging market of China are generating profits while satisfying the local stakeholders' needs and acknowledging the obligations of the parent company. Their findings provide evidence that MNCs in China are creating a social and economic value simultaneously [15]. On the other hand, Yu and Liang [16] tried to explore the determinants of strategic CSR; they concluded that product market competition does not contribute to the implementation of CSR strategically, while corporate reputation and customer awareness impact the engagement in strategic CSR positively [16]. Similarly, Vishwanathan et al. have determined four attributes that intervene in the positive association between CSR and corporate financial performance (CFP) and thus, identify the strategic CSR [17]. Besides, several Governance dimensions such as board gender diversity, the presence of foreign directors, age diversity lead to more socially responsible initiatives [18].

Moreover, Yousfi and Loukil [19] debate the aspects of CSR strategies, which are divided into strategic CSR and passive CSR, the former can be explained as the socially responsible activities that go beyond the usual CSR principles and common practices. The latter includes defensive, charitable, and promotional CSR strategies that aim to satisfy the stakeholders' basic needs [19]. Besides, Maury [20] determined the main business strategies (prospector and growth strategies) through which CSR can generate a better corporate performance. The prospector strategy focuses on the innovation, which explains the importance of this process to attain a strategic CSR [20]. Within the framework of COVID-19, Bae et al. [21] have examined the stock market returns of CSR companies and its resilience toward this pandemic in the American market. They have concluded a positive association during the crisis in a condition of consistent and genuine CSR [21].

Hence, there is a need to better overcome the narrow view on CSR and better understand what is exactly essential to simultaneously realize profits and guarantee a social legitimacy, otherwise, gain a social and economic value [22], by determining the factors through which CSR can be qualified as strategic [23].

Thus, the strategic CSR is an important trend worthy of being investigated to be able to differentiate between strategic behavior and greenwashing.

This chapter aims to distinguish between sustainable CSR strategies and those that seek compliance and purpose-washing. It assesses the factors able to promote the conceptualization and strategization of CSR that are likely to drive a win-win behavior.

The remainder of this chapter is organized as follows: section 2 presents the relevant theories of strategic CSR to determine the key elements that distinguish the strategic CSR from other practices. We define the greenwashing to better encounter this issue and define the classification of greenwashing and the elements that can deter this issue, in the section 3. Finally, last section makes conclusion.
