In the realm of corporate sustainability, firms encounter dual pressures: (1) the need to conform to baseline expectations from stakeholders and (2) the desire to differentiate by leveraging CSR strategy to stand out from peers. This research introduces an ends-and-means framework to analyse CSR distinctiveness, distinguishes between objective distinctiveness and practice distinctiveness in firm’s CSR strategy and examine how these dimensions independently and interactively influence social audience sentiment. Analysing a dataset of sustainability reports from 5,652 publicly traded companies across various sectors listed in major exchanges worldwide from 2016–2020, I identified an expected inverted U-shaped relationship between objective distinctiveness and social favourability, and a puzzling U-shaped relationship between practice distinctiveness and social favourability. These results suggest that different dimensions of distinctiveness require varying levels of cognitive effort from audiences for legitimacy assessment. Specifically, understanding CSR practices demands more analytical cognition compared to CSR objectives for causal and efficiency inference. Furthermore, distinctive objectives moderate and attenuate the U-shaped curve of practice distinctiveness. These findings advance the understanding of optimal distinctiveness by highlighting its multilevel nature and contextual contingencies.
