INTRODUCTION

In recent years, CSR has garnered increasing attention from both scholars and business leaders, highlighting its growing relevance in addressing urgent social and environmental challenges [1]. Companies today face rising expectations from consumers, prompting a shift beyond traditional business practices toward more ethical and sustainable actions [2,3]. This includes promoting fairness across supply chains, ensuring equitable labor conditions, and developing sustainable products and services. Voluntary CSR initiatives such as philanthropy, employee volunteering, and charitable giving have become key tools in supporting community needs [4].

CSR has evolved into a mature field of research, with numerous studies showing that CSR efforts deliver benefits not only to shareholders but also to wider stakeholder groups, including employees, customers, and communities [5]. However, CSR is not a standalone concept it intersects with broader areas such as business ethics, corporate governance, and stakeholder management [6]. For CSR initiatives to be effective, decision-making processes must be informed by a clear understanding of human behavior, particularly CB. These biases, which represent systematic deviations from rational thinking, can significantly undermine the effectiveness of CSR efforts [7,8].

Despite the growing body of research on CSR, [9] emphasizes that little is known about how CB operates in CSR-related decisions. Even experienced managers may unknowingly be influenced by cognitive distortions, which complicates efforts to achieve ethical and sustainable outcomes. This study addresses this gap by investigating how cognitive biases affect CSR decision-making. Using a systematic review grounded in PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) guidelines, the study maps the relationship between CSR and CB in both developed and emerging markets.

The central research question guiding this inquiry is: What are the primary cognitive biases that affect CSR decision-making? To explore this, the study proposes a conceptual framework that integrates multiple theoretical perspectives including transaction cost economics, stakeholder theory, social judgment theory, and bounded ethicality. This multidimensional approach aims to offer a comprehensive view of how psychological and social dynamics shape CSR practices.

Historically, corporate behavior has often been criticized for prioritizing profits over social responsibilities. [10] influential perspective that the sole responsibility of business is to increase profits dominated at a time when regulatory frameworks were underdeveloped. As a result, corporations sometimes overlooked broader social responsibilities, especially regarding labor rights, environmental protection, and consumer welfare. However, societal expectations have evolved, demanding that companies engage in more inclusive and responsible practices across all stakeholder groups, including customers, employees, and communities [11].

Recent research suggests that cognitive biases significantly distort decision-making in CSR contexts [12]. However, most CSR literature still lacks a thorough integration of psychological and behavioral insights. This review attempts to bridge that gap by proposing an evidence-based, hybrid model that incorporates the influence of CB into CSR frameworks. This model is expected to help corporate leaders, policymakers, and researchers better understand how unconscious biases shape corporate behavior, potentially improving decision-making processes and outcomes.

The study is guided by three primary objectives. First, it aims to clarify key conceptual and definitional issues related to CSR and to highlight the importance of incorporating CB into CSR discourse [13]. Second, it identifies and synthesizes existing scientific literature that examines various types of cognitive bias. Third, it seeks to resolve the theoretical and methodological complexities arising from these studies, thereby contributing to the development of a more robust framework for CSR analysis.

Managers today often face complex stakeholder demands and information overload, which can trigger emotional responses and impair rational decision-making [14]. These pressures can lead to “myopic” managerial behavior focusing on short-term gains at the expense of long-term sustainability [2]. The cognitive constraints experienced by decision-makers reflect broader themes in behavioral decision theory and demonstrate the limitations of relying solely on ethical codes or legal standards to guide behavior [15,16].

The structure of the paper is as follows: Section 2 outlines the theoretical framework; Section 3 describes the research methodology; Section 4 presents the results and proposed model; and Section 5 concludes the study.

THEORETICAL BACKGROUND

The study introduces a detailed framework designed to identify and examine the significant influence of CB on CSR engagement [17]. This framework deepens our insight into the various types of CB and their substantial effects on CSR reporting practices. Furthermore, it clarifies the potential interconnected role of cognitive bias in CSR initiatives at both individual and societal levels, offering a well-rounded perspective on this topic [18].

To further establish the theoretical foundation of the proposed The Cognitive Bias Impact Framework (CBIF) model, we explicitly link it to two dominant frameworks in the CSR literature: bounded rationality and stakeholder theory. While the concept of bounded rationality [19] highlights the limitations of decision-makers operating under information constraints and cognitive load, the CBIF extends this notion by identifying specific, recurring cognitive biases such as framing effects, groupthink, and availability heuristics that systematically distort CSR-related judgments. This extension allows for a more nuanced and actionable understanding of how decisions in CSR contexts may deviate from rational or optimal outcomes.

Moreover, the CBIF enriches stakeholder theory [20] by introducing psychological realism into the way firms perceive and respond to stakeholder expectations. Traditional stakeholder models often assume rational prioritization based on salience or ethical responsibility. In contrast, CBIF suggests that perception filters introduced by cognitive bias for example, the illusion of transparency or optimism bias can cause managers to misjudge stakeholder needs or overestimate the clarity of their own CSR intentions. These distortions can result in selective engagement, miscommunication, or even reputational risk.

Positioning CBIF at the intersection of these two theoretical streams allows us to view CSR not only as a strategic or ethical decision space but also as a behaviorally constrained process, shaped by underlying psychological mechanisms. In doing so, the framework contributes a novel and integrative perspective to the theoretical discourse on corporate responsibility.

CSR has become a key element in business strategy, though its interpretation varies across contexts. A unified conceptual framework is needed to fully grasp its economic, social, and environmental dimensions, along with the complex relationships between firms and stakeholders [21–24]. While CSR is often framed as an ethical or legal obligation, it also represents a strategic opportunity to gain a competitive advantage [25]. However, the implementation of CSR initiatives can be undermined by CB, which distorts managerial decision-making [26]. These biases systematic errors in judgment can lead to flawed decisions that diminish the effectiveness of CSR programs [27].

Specific biases such as confirmation bias favoring information that aligns with pre-existing beliefs can block meaningful stakeholder engagement [28]. Similarly, anchoring bias can cause overreliance on initial information, discouraging the flexibility needed for evolving community needs. These distortions can invalidate CSR efforts and create tension among stakeholders.

Recognizing CB is essential for fostering better CSR strategies. When companies incorporate awareness of these biases, they are better equipped to align with stakeholder expectations and enhance CSR program effectiveness [29]. The interplay between CSR and cognitive psychology reveals limitations in traditional CSR models and highlights the need for more informed, evidence-based approaches. A deeper understanding of cognitive tendencies enables firms to build stronger stakeholder partnerships and develop more sustainable and impactful CSR strategies [26]. This emerging field calls for further research to refine CSR practices and promote sustainable development [30].

Cognitive biases deviations from rational thinking are well-documented in psychology and behavioral economics, particularly through the foundational work of [31]. These mental shortcuts, or heuristics, simplify decision-making but often lead to suboptimal outcomes [32]. For instance, the availability heuristic causes people to overestimate the likelihood of vivid or recent events, such as plane crashes, due to their ease of recall.

Confirmation bias further distorts perception by reinforcing pre-existing beliefs and dismissing contradictory information. This affects not only individual thinking but also team dynamics and organizational decision-making. Such biases contribute to misinformation and limit critical thinking across various contexts.

Loss aversion, introduced by [33], is another powerful bias. It explains why people are more affected by losses than by equivalent gains, which can result in poor financial decisions and resistance to acknowledging failure in business. Relatedly, the sunk cost fallacy described by [34] leads individuals and organizations to continue investing in failing projects due to prior investments, further compounding losses.

Understanding and mitigating these biases is vital for improving decision-making processes. Organizations can implement feedback systems, diversify perspectives, and adopt structured decision-making approaches to reduce CB influence. Employee training programs that raise awareness of cognitive distortions help cultivate objectivity and support sound business decisions.

In conclusion, cognitive bias theories expose the complex ways in which human thinking can compromise judgment. Awareness of these psychological tendencies supports better CSR engagement, improves decision-making quality, and enhances organizational performance [27]. As such, integrating cognitive bias research into CSR strategies is essential for building more resilient, ethical, and sustainable businesses.

The relationship between CSR and cognitive bias is intricate, rooted in how different CB can influence perceptions and decisions about CSR initiatives. CSR means an effort on the part of companies to operate ethically but also considering the environmental, economic and social consequences. In contrast, CB are systematic deviations from rational judgment that can significantly affect how stakeholders view and respond to CSR practices. Despite extensive research on CSR frameworks, there is still a considerable gap in understanding how CB influence CSR practices and decision-making.

CB significantly impact decisions related to CSR at various organizational levels. Confirmation bias, as stated by [35], leads decision makers to choose information that agrees with their beliefs. This attitude hinders innovativeness and practices related to the sustainability of innovative ideas. Furthermore, being biased towards optimism leads to underestimating the positive results that CSR actions could bring and generating an incorrect allocation of resources. This practice distances companies from reality, and stakeholders may unintentionally ignore key information that contradicts their positive views [36].

Another prejudice is that of anchoring which manifests itself when the basic ideas significantly influence the final choices. [37] suggest that anchoring can result in superficial CSR strategies that focus more on public perception than on creating real, meaningful impact. Acknowledging and addressing these biases is crucial for improving the overall effectiveness of CSR initiatives.

The effectiveness of CSR initiatives largely depends on how stakeholders perceive and engage with them. Cognitive biases, particularly the framing effect and availability heuristic, play a central role in shaping these perceptions. The framing effect demonstrates how the presentation of information influences stakeholder interpretation. For instance, when companies highlight their commitment to sustainability and community welfare, such messaging can create a disproportionately positive image—an outcome often reinforced by the halo effect, where a single favorable attribute, such as CSR engagement, enhances overall perceptions of corporate behavior.

Empirical studies support this view. [38] found that stakeholders tend to recall CSR activities that are framed positively or linked to immediate, visible outcomes, even when their overall impact is limited. Similarly, [39] identified the illusion of transparency bias, wherein organizations mistakenly assume that their CSR intentions and actions are clearly understood by external audiences. This cognitive distortion can lead to misinterpretations, stakeholder skepticism, and ultimately, a reduction in the perceived authenticity and effectiveness of CSR efforts.

Organizations often focus on their successes and achievements while minimizing or overlooking challenges and failures [39]. To give a concrete example, a company that highlights the percentage of reduction in Co2 emissions could demonstrate without fully fighting and facing the difficulties of the context in which it does so. This can create information distortions relating to the real impact of organizations on environmental and social issues. In addition to this, the possible presence of similar thinking within a board of directors could worsen reporting practices.

[40] point out how the pressure to conform can be an obstacle to critical evaluations in the context of CSR strategies and could lead directors to avoid putting in place contrary opinions to avoid having discussions and to maintain the harmony of the group. This therefore leads to distortions and unexamined CSR strategies with potential flaws and problems such as less transparency, faulty reporting processes or lack of accountability.

Behavioral economics offers valuable insights into the intricate relationship between CSR and cognitive biases, illustrating how these psychological factors can shape organizational behavior and decision-making. One important concept in this domain is moral licensing, which refers to the tendency of organizations to legitimize and rationalize unethical or irresponsible behaviors after partaking in socially responsible behaviors, such as CSR initiatives.

[41] highlight that moral licensing can cause organizations to consciously seek to justify acting less ethically, with danger to the integrity of their CSR initiatives. For example, an organization might be involved in philanthropic causes issues to boost appearance while at the same time, neglect its environmental responsibility which causes a mismatch with what values the organization claims to is.

Such behavior not only undermines the credibility of CSR but also highlights the urgent need for stronger accountability frameworks to hold companies accountable for their actions across all dimensions of their operations. They illustrate that emotional biases play a role in corporate philanthropy, with emotionally-affined decision-makers more likely to channel resources into the charity sector [42]. Their results imply that companies may prioritize projects that elicit the most stirred emotions, even if they are not aligned with their strategic priorities or if they are not the optimal provider of societal benefit. Such a disconnect can result in misallocation of resources that might be better spent on efforts that produce meaningful impact.

For instance, adopting decision-making frameworks that promote critical thinking and diverse viewpoints can help mitigate the impacts of moral licensing and emotional biases. Additionally, training programs that focus on ethical decision-making and raising awareness of CB can empower employees and leaders to better identify and manage these psychological factors in their CSR efforts.

Addressing CB in CSR requires a well-rounded approach. A three-pronged approach to combat cognitive bias may include self-awareness campaigns, education and training, and policy reform. According to [43], one of the methods to reduce groupthink and anchoring biases in CSR planning is to include diverse perspectives. Moreover, it is important to also use data-driven methods and tools for transparency to promote accountability. For example, real-time feedback from digital platforms for stakeholder engagement can help mitigate the influence of selective attention bias.

These strategies can increase both the credibility and effectiveness of CSR initiatives, leading to real social and environmental value. Such biases can sidetrack and block effective adoption and facilitation of CSR elements, signaling that corporate actors have an important stake in tackling societal issues and the challenges pertaining to them [44]. For example, they can help reduce the social and environmental harm linked to business operations, fostering values rooted in morality. Since CSR is not inherently a corporate obligation, these CB present significant challenges to the authentic practice of CSR values by companies.

Table 1 summarizes prior systematic reviews on cognitive bias within the domain of corporate social responsibility (CSR).

TABLE 1

Table 1. Prior systematic review on Cognitive bias in CSR domains.

METHODOLOGY

Building on earlier studies [56,57], we conducted a Systematic Literature Review (SLR) to delve into the existing literature and evidence that connects CSR to cognitive bias. The SLR serves as a strong and effective method for synthesizing and evaluating previous research, helping to reduce biases that can occur in broader literature reviews. This review follows the most recent guidelines set for the systematic review process, which are recognized protocols for quantitative systematic review designs and are outlined through specific checklists. Adhering to these guidelines is crucial, as research shows that the quality of reporting in systematic reviews is often lacking, frequently leaving out essential information that readers need to accurately evaluate, assess, and replicate the findings and methodologies [58]. By applying clear, concise, and well-structured guidelines, we allow readers to verify the systematic approach of the review by looking at both the protocols and the reported elements, thus minimizing the potential for bias [59]. Utilizing these protocols boosts the credibility, transparency, reproducibility, and integrity of the review, while also fostering greater accountability in both the review process and its conclusions [60]. To ensure a thorough selection process, we followed PRISMA guidelines, which offer a transparent and objective framework for conducting SLR’s [56]. This framework includes three main stages: identifying, selecting, and including relevant studies. As a result, the records were assessed through a structured screening process, which is explained in the following sections and illustrated in Figure 1.

FIGURE 1

Figure 1. Prisma flow’s chart of shortlisted studies. (Source: Author’s elaboration).

The first phase of the PRISMA protocol is centered on identifying relevant studies. We conducted a search across major databases, including Scopus and Web of Science, with a strong emphasis on Scopus due to its extensive collection of high-quality indexed scientific journals, which features over 20,000 peer-reviewed publications. This focus ensures more reliable research outcomes, particularly in the area of CSR. Initially, we identified a total of 220 academic articles published between 2014 and 2023 during the Boolean phase of our advanced search. A well-crafted set of keywords was developed to gather records from the database, incorporating terms such as “cognitive bias”, “corporate social responsibility”, “CSR decision-making”, “stakeholder perception”, and “behavioral economics”. We utilized Boolean operators (AND, OR) to refine our search results, targeting articles that included all these keywords, specifically within the fields of “Business, Management and Accounting” and “Economics and Finance.”

The search strategy was conducted using a combination of Boolean operators and keyword clustering to capture relevant literature on cognitive biases and CSR. Searches were performed across two major databases Scopus and Web of Science selected for their comprehensive coverage of peer-reviewed research in business, psychology, and interdisciplinary social sciences. The decision to use both databases aimed to ensure a broad yet rigorous collection of relevant literature.

The following Boolean search strings were applied in both Scopus and Web of Science databases to identify relevant articles published between 2014 and 2023:

(“cognitive bias” OR “behavioral bias” OR “heuristics”) AND

(“corporate social responsibility” OR “CSR”) AND

(“decision-making” OR “reporting” OR “stakeholder perception” OR “communication” OR “sustainability strategy”)

Scopus was chosen due to its extensive indexing of scholarly journals in business, psychology, and social sciences, offering high-quality and multidisciplinary coverage of CSR and cognitive science literature. Web of Science (WoS) was included to ensure broader disciplinary reach and capture foundational and cross-referenced works in corporate ethics and behavioral theory. The use of both databases helps minimize publication and disciplinary bias and enhances the comprehensiveness and reliability of the systematic review.

We used specific keywords and search terms related to our research question. This step is vital for collecting a diverse range of relevant articles, including both published and unpublished studies [61]. It's important to accurately document the number of records found and their sources to maintain transparency in the review process. Additionally, the systematic approach of this phase helps ensure that important studies are not missed. The final set of papers included in the qualitative synthesis comprised 79 journal articles published between 2014 and 2023. In accordance with the Prisma protocol by [62], this study followed the three main stages of the PRISMA protocol, as shown in Figure 1.

The second phase, following the identification of records, involves screening these studies by applying specific inclusion and exclusion criteria. During this step, we eliminated duplicate entries and assessed the titles and abstracts of the identified studies to determine their relevance to the research question. We screened the titles and abstracts of the unique records to pinpoint potentially relevant studies. This screening process helps to narrow down the literature pool to those studies that meet the established inclusion criteria. It is crucial to retain only relevant studies to maintain the integrity of the subsequent analysis, as this reduces the impact of unrelated studies on the results. After removing duplicates and records lacking author names, irrelevant context, and inaccessible full texts, we were left with 79 unique records. These records were then screened for their relevance to CSR and cognitive biases.

Inclusion compiles studies that meet the criteria for both qualitative and quantitative syntheses [61]. This structured approach enhances the reliability of research findings. During this phase, we created a comprehensive list of studies that satisfied the established eligibility criteria. These studies are incorporated into both the qualitative and quantitative syntheses of the review findings. Ultimately, a total of 79 articles met all the criteria, forming the foundation for this review. Two researchers carefully evaluated the articles to determine their eligibility based on specific inclusion criteria. These criteria stipulated that (1) the article must focus on CSR, (2) there should be at least one documented or inferred instance of cognitive bias, and (3) the publication must be available in English.

To ensure methodological rigor and consistency in identifying and categorizing cognitive biases, we developed a structured coding protocol. The coding scheme captured variables such as the type of cognitive bias, CSR domain (e.g., decision-making, communication, or reporting), methodological approach, and theoretical framework. Two researchers independently coded a representative subsample of 20 articles. Inter-rater reliability was assessed using Cohen’s Kappa, yielding a value of 0.83, indicating strong agreement and high coding consistency. The full coding procedure and definitions used are detailed in Table 2.

The following coding protocol was developed to systematically classify and analyze the studies included in the review. Each study was assessed for the type of cognitive bias identified, the corresponding CSR domain, and key indicators or cues that supported classification. The coding was conducted independently by two researchers, and inter-rater reliability was measured using Cohen’s Kappa, which yielded a value of 0.83, indicating strong agreement.

TABLE 2

Table 2. Coding protocol and inter-rater reliability.

RESULTS AND FINDINGS

This section outlines our research findings. The SLR conducted using the PRISMA framework uncovered several key insights into the relationship between CB and CSR practices, as well as stakeholder perceptions. These insights emphasize the complexities of how CB affect decision-making, communication, and the overall success of CSR initiatives.

Our screening results show a steady increase in the number of papers focusing on CB and CSR over the years. To analyze these trends, we categorized the studies by their publication year and calculated the annual publication percentages. Figure 2 shows the trends of the studies analyzed with evidence of the annual trends.

The period from 2014 to 2016 saw the publication of 24 papers with an average annual publication rate of 8%. This moderately low value highlights how the intersection between cognitive bias and CSR is not the primary objective of researchers. Furthermore, due to the limited results, it is highlighted that there is minimal commitment from the academic world.

Instead, the period from 2017 to 2019 recorded a slight increase with 26 papers published and an annual average of 8.66%.

This rise points to a growing awareness of the importance of CB in understanding CSR, especially regarding stakeholder perceptions and corporate reputation. High social expectations of transparency and corporate responsibility could enhance this increase and encourage researchers to study how psychological factors influence organizational activity in CSR contexts.

From 2020 to 2023 we highlight the publication of 29 research papers with an annual average of 7.25%.

Even though the number of published papers is increasing, the average is decreasing and this indicates a slowdown in momentum. Several factors could explain this decline in the annual percentage of publications on CB and CSR. Bringing the field to saturation can represent a very significant challenge; By increasing the body of literature, researchers may find it difficult to identify new research questions that help improve existing ones. Therefore, these difficulties could reduce the development of new papers. Moreover, the shifting research priorities brought about by the COVID-19 pandemic have redirected academic focus toward urgent global issues like public health and economic recovery, which may result in decreased funding and interest in niche topics such as CB in CSR. The creation of sector competition could lead to the intensification of scientific papers and therefore lengthen publication cycles due to the fact that researchers must increasingly refine their research projects and deal with peer review feedback. Finally, the methodological challenges of studying CB in CSR contexts can discourage researchers, as they may face difficulties in designing studies that effectively capture the complexities involved in both CSR and cognitive biases, ultimately leading to a reduction in research output.

FIGURE 2

Figure 2. Distribution of studies by year. (Source: Author’s elaboration).

The results of this systematic review have highlighted the complex impact of CB on CSR practices, providing important insights across three key themes: decision-making, communication and perception, and reporting and evaluation. If the results obtained are connected to existing literature, the implications for organizations and stakeholders can be understood. Table 3 outlines and describes the 9 types of cognitive biases extracted and framed in 79 selected papers together with their respective frequencies.

TABLE 3

Table 3. PRISMA 2020 summary of systematic review process.

CB play a significant role in how organizations make decisions regarding CSR, potentially leading to pitfalls that can diminish the effectiveness of their efforts.

Confirmation bias: this case, according to [35], occurs when decision-makers assign a preference to information that they consider highly according to their beliefs. This not only obscures innovation processes but also causes old and obsolete systems to persist. For example, if a company is convinced that its traditional CSR initiatives effectively enhance its reputation, it may overlook new evidence indicating that more innovative strategies could have a greater impact. [63] highlight how cognitive rigidity prevents organizations from adapting to evolving social expectations by not allowing the development and progress of CSR.

Optimism Bias: [64] highlight that organizations often misjudge the effectiveness of their CSR strategies due to optimism bias. Overconfident executives tend to display a heightened sense of optimism, believing that favorable outcomes are more likely than unfavorable ones. They also risk succumbing to an illusion of control, mistakenly believing they have full control over a number of situations. This mistake can create wrong expectations and insufficient contingency planning, potentially leading to initiatives not realizing the expected benefits. A study by [65], supporting this, (2020) demonstrates, overconfident CSR projects are the source of underinvestment and overbuilding of business facilities that result in the waste of the resources needed for genuine impact. In pursuit of unattainable goals, organizations often neglect critical evaluation of associated risks, only to set themselves up for failure when realization of these goals produces unforeseen challenges during implementation.

Anchoring Bias: Anchoring bias refers to the propensity to refer to basic information during decision making. This process can hinder the ability to adapt and have optimal results [66]. This type of prejudice leads organizations to adopt CSR strategies based on old practices that perhaps need to be addressed based on modern needs. Research by [67] supports this idea, showing that dependence on historical benchmarks can obstruct organizations from seizing new opportunities for innovation in CSR. By sticking to old models, companies risk becoming stagnant and unable to adapt to the changing landscape of corporate social responsibility. These observations suggest the need to build mechanisms for continuous critical deliberation that question the status quo and encourage disruptive thinking. Fostering open dialogue and varying perspectives can help companies make better decisions and find ways for their CSR strategies to align with those of today's stakeholders.

Each of these biases directly impacts CSR strategic formulation and resource allocation, as identified in our coding analysis (Table 2) and supported by a significant percentage of reviewed literature (see Table 4).

TABLE 4

Table 4. Detailed overview of CB in CSR research.

The way CSR initiatives are communicated and how stakeholders perceive them are influenced by cognitive biases, which in turn affects stakeholder engagement and the overall effectiveness of these initiatives.

Availability Heuristic: Stakeholders often tend to focus on CSR activities that are easily remembered, as highlighted by [38]. This can result in a skewed allocation of resources towards projects that are more visible. Supporting this, research by [68] shows that visibility frequently outweighs substantive impact in how stakeholders assess CSR efforts. For instance, companies might pour significant resources into high-profile philanthropic events while overlooking less visible yet more effective sustainability initiatives. This disconnect can result in a superficial approach to CSR that does not adequately tackle urgent social challenges, as shown in Table 3.

Framing Effects: Framing effect has the characteristic of influencing the level of perception of stakeholders. The presentation of CSR initiatives can have a huge impact on public support [39]. This is consistent with the findings of [31], who show that framing can impact decision making and perceptions across different circumstances. The argument that organizations can use strategically designed messages to create positive framing for CSR in order to better engage stakeholders catches the attention.

Illusion of Transparency: Organizations often misjudge how well stakeholders grasp their CSR messages. As noted by [40], this attitude can lead to misunderstandings and loss of trust. In support of this, research by [69] highlights that stakeholders' skepticism increases whenever they perceive unclear communication in CSR. To resolve this, companies must adopt more effective communication with stakeholders, ensuring their messages are clear. These findings highlight the importance for organizations to create communication strategies that take cognitive biases into account. It is in fact appropriate to focus on transparency and clarity, so that companies can improve the work of stakeholders to achieve a relationship of trust that brings positive results to all interested parties.

These communication-related biases influence stakeholder trust, engagement, and authenticity key dimensions of CSR effectiveness. Their frequency and importance are evidenced by their appearance in more than 40% of the reviewed studies (see Table 4).

The biases that influence CSR reporting and evaluation practices can seriously compromise the integrity of CSR initiatives. A very important bias is selective attention, where companies often highlight positive results without considering challenges, which leads to an unrealistic picture of CSR performance [70]. This selective focus supports the findings of [71], who suggest that such practices can undermine stakeholder trust and lead to accusations of greenwashing, as organizations strive to meet their stakeholders' expectations of authenticity and transparency. Another important bias is groupthink within boards of directors which can negatively influence the critical evaluation of CSR strategies. This phenomenon is also present in the research of [72], who highlights how groupthink often leads to poor decisions by discouraging divergent opinions. Organizations that foster an environment that stimulates critical evaluation are better able to manage and address the complexities of CSR. Finally, the concept of morality poses a significant challenge; this bias allows companies to justify unethical practices after achieving positive CSR results, as noted by [42]. The research by [73] also demonstrates how previous actions can create a moral and psychological justification, which allows individuals or organizations to adopt less ethical behavior without guilt. Potentially damaging to public trust when discrepancies arise between stated CSR values ​​and current practices. Collectively, these biases emphasize the need for transparency, critical evaluation, and ethical integrity in effective CSR reporting and evaluation. From these topics of reflection, it is highlighted that there is a need to create strong and independent governance structures and control systems in order to ensure the responsibility and transparency of CSR. In this way, organizations will strengthen the credibility of CSR strategies and will be able to increase the trust of stakeholders. Table 5 presents the various types of CSR initiatives.

TABLE 5

Table 5. Types of CSR initiatives analyzed in selected studies.

DISCUSSION OF PREVIOUS RESULTS AND PROPOSED MODEL

The systematic review of literature on CB in CSR has provided important insights into the ways these biases affect decision-making, communication, and reporting practices. By integrating these findings with established theories and research, we can develop a comprehensive model that illustrates the dynamics of CB within CSR contexts.

The analysis shows that CB have a significant impact on three key areas of CSR: decision-making, communication and perception, and reporting and evaluation. In the decision-making process, biases such as confirmation bias and optimism are very important. [35] argue that bias leads decision makers to seek information that aligns with their existing beliefs, which can hinder innovation. Furthermore, [66] explain that optimistic bias causes organizations to overestimate the success of their CSR initiatives, creating unrealistic expectations and insufficient contingency plans. This opinion is supported by [65], who noted that such overconfidence often results in misallocated resources. When communication needs to be done, CB affects how CSR initiatives are communicated to stakeholders. For example, [38] discuss the availability heuristic, which expresses that stakeholders focus mainly on easily remembered CSR activities, forgetting those that offer long-term benefits. [41] place great importance on the effects of pollution, showing that the way in which CSR efforts succeed positively influences common thinking. This is crucial because [69] highlight that organizations often overestimate how well stakeholders understand their CSR messages, leading to a false sense of transparency and potential misunderstandings. Finally, in terms of reporting and evaluation, biases such as selective attention and groupthink often influence practices. [70] point out that companies can focus on positive outcomes while ignoring failures, which ultimately reduces transparency and can lead to accusations of greenwashing. [41] discuss how groupthink can hinder critical evaluation in corporate boards, leading to strategies that do not effectively tackle the complex challenges related to CSR. These insights collectively emphasize the significant impact of CB on different aspects of CSR, pointing out the need for organizations to confront these biases to improve their effectiveness and integrity.

Based on these findings, we introduce the CBIF for CSR, which highlights the relationship between CB and important CSR areas. This model can be represented as follows.

Figure 3 visualizes the frequency and clustering of identified biases in relation to core CSR processes, providing empirical support for the structuring of the CBIF.

FIGURE 3

Figure 3. A comprehensive model of Cognitive Bias and CSR.

The proposed CBIF offers a clear perspective on how CB influence CSR dynamics. By connecting earlier research to this model, organizations can gain insights into the psychological factors involved and create strategies to improve the effectiveness of their CSR efforts. Tackling CB goes beyond theory; it has real-world implications for enhancing decision-making, promoting transparency, and ultimately achieving more significant social and environmental outcomes in corporate practices. As previous studies have shown, a deeper understanding of these biases can help align CSR initiatives with stakeholder expectations, fostering increased trust and collaboration in the process:

These layers reflect an integrated process in which cognitive distortions cascade through organizational behavior from strategic planning to external reporting. The selection of these particular biases in the CBIF is not arbitrary; it is based on their high frequency of occurrence, cross-domain impact, and practical relevance as shown through our systematic review and coding analysis (Tables 3 and 4).

CONCLUSIONS

This paper looks in depth at the relationship between cognitive bias and CSR. This relationship has significant implications from both a theoretical and practical point of view. The literature review highlights how CBs influence decision-making, reporting and communications in CSR initiatives, highlighting that a more detailed understanding of these psychological aspects is needed.

Integrating CB into CSR models can deepen our understanding of the psychological factors that influence management practices and stakeholder interactions. This approach encourages a reevaluation of current CSR theories to include cognitive processes, which can strengthen their relevance and effectiveness in various contexts. It prompts researchers to think about how cognitive elements might impact the success of CSR initiatives and the quality of relationships between businesses and communities.

This study adds to the existing literature by merging insights from behavioral economics with CSR research. It highlights the need to consider CB as key factors shaping organizational behavior in CSR scenarios. The CBIF provides a conceptual instrument for exploring how these biases affect stakeholder perceptions and corporate actions and how that can change. This framework could be employed by future studies to investigate particular biases in varied cultural and organizational contexts, which in contrast, would enhance and deepen the theoretical dialogues surrounding both CSR and behavioral decision-making.

The insights derived from this study offer important guidance for managers, CSR officers, and corporate decision-makers seeking to reduce the influence of cognitive biases on sustainability strategies. To move beyond abstract principles, we propose several actionable interventions grounded in behavioral decision-making research.

First, organizations should adopt debiasing tools such as premortem analysis a technique in which decision-makers assume a project has failed and work backward to determine what could lead to that failure. This method can help counter overconfidence and optimism bias, which frequently distort CSR planning. Similarly, the use of structured decision audits and counterfactual reasoning exercises can help teams critically evaluate CSR options and mitigate confirmation bias.

Second, instead of generic training programs, firms can implement scenario-based learning modules focused on common bias scenarios in CSR contexts. For example, case studies involving miscommunication of CSR objectives or stakeholder backlash due to selective framing can be used to train managers to recognize and respond to bias-driven decisions. These interventions should include guided reflection, bias self-assessments, and interactive role-play exercises.

Third, companies should consider embedding bias-aware governance mechanisms into their CSR processes. These could include:

Finally, CSR communication protocols should incorporate checklists or structured message frameworks to ensure balanced reporting and prevent the selective presentation of only favorable outcomes (availability heuristic). Periodic communication audits can reinforce accountability and reduce reputational risks associated with misleading CSR narratives.

By integrating these behavioral insights and decision tools, firms can foster more transparent, inclusive, and rational CSR practices. These measures also help position CSR not just as a reputational strategy but as a learning-oriented process shaped by cognitive awareness and stakeholder alignment.

Although our review offers important insights, it is essential to acknowledge its limitations. The analysis primarily relies on prior literature, which cannot include every relevant study, particularly those not written in English or located in more obscure venues. Furthermore, concentrating on specific CB may neglect other psychological factors that could impact CSR practices. Lastly, although the proposed framework is beneficial, it needs empirical validation through case studies and quantitative research to evaluate its relevance in various contexts.

Future research should delve deeper into how CB interact with CSR, exploring the ways these biases can influence each other during decision-making. Such longitudinal studies could help illuminate how these biases change over time and impact the success of CSR efforts.

Furthermore, it would be beneficial to examine how factors like industry type, organizational culture, and regional differences shape the expression of CB in CSR practices. By broadening the investigation into CB within CSR, researchers can create valuable insights that help organizations navigate the complexities of social responsibility in a constantly evolving environment.

In conclusion, grasping the relationship between CB and CSR is essential for both theoretical growth and practical implementation. By tackling the noted limitations and pursuing new research paths, scholars and practitioners can collaborate to improve the effectiveness of CSR initiatives and promote a more responsible corporate culture.

KEY TAKEAWAYS

Cognitive biases shape CSR practices: The review identifies systematic patterns in how cognitive biases such as confirmation bias, framing effects, groupthink, and the availability heuristic influence decision-making, stakeholder perception, and CSR reporting.

The CBIF model offers a novel theoretical lens: The CBIF integrates behavioral science with CSR literature, explaining how specific biases affect organizational behavior and stakeholder responses across CSR domains.

Debiasing strategies are critical for CSR effectiveness: The paper outlines practical interventions such as premortem analysis, scenario-based training, and communication audits to reduce the distorting effects of bias in CSR planning and messaging.

Research on cognitive bias in CSR is still emerging: Most studies focus on Western contexts, and few offer empirical testing of bias mitigation strategies. There is a strong need for cross-cultural studies and experimental validation of the CBIF model.

Interdisciplinary collaboration is key: This review demonstrates the value of integrating insights from psychology, organizational behavior, and business ethics to better understand and improve CSR implementation in practice.

COMPLIANCE WITH ETHICAL STANDARDS

CREDIT AUTHORSHIP CONTRIBUTION STATEMENT

DM: Writing—review & editing, Writing—original draft, Validation, Supervision, Methodology, Investigation, Formal analysis, Conceptualization.

IB: writing—review & editing, Writing—original draft, Visualization, Supervision, Project administration, Investigation, Funding acquisition, Conceptualization.

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

ACKNOWLEDGMENTS AND FINANCIAL STATEMENT

This work was supported and funded by the Deanship of Scientific Research of Imam Mohammad Ibn Saud Islamic University (IMSIU) (grant number IMSIU-DDRSP2502)

CONFLICTS OF INTEREST

In accordance with Taylor & Francis policy and my ethical obligation as a researcher, I am reporting that I have no financial and/or business interests in a company that may be affected by the research reported in the enclosed paper. There are no financial, personal or other relationships that could influence the work.