Impact of CSR Initiatives on Financial Performance A Study of Select Companies in India

Abstract

Corporate Social Responsibility (CSR) is a concept whereby companies integrate social and environmental programs with their business operations. In addition to generating profits, CSR involves taking care of the interests of all the stakeholders of a business. These stakeholders include employees, investors, customers, suppliers and the society at large. With the increasing focus on CSR, organizations are incorporating their CSR objectives into their business strategies. This helps them accomplish their objectives alongside fulfilling their social responsibilities. Realizing the importance of CSR in the socio-economic arena, India became the first country to have made 2% of a company s average net profits as mandatory spending on CSR initiatives vide Section 135 of the Companies Act, 2013. As CSR spending by an organization involves costs and depletes profits, it becomes imperative to study its impact on their financial performance.