Research methodologies to determine the impact of strategic CSR

Abstract

Corporate Social Responsibility has been a hotly debated topic since its conception and how it affects the companies whose primary responsibility should not be social but financial – towards its shareholders. But since it was mandated in India in 2013, its effects on the companies remain to be objectively stated. In this project, we aim to understand the impact of CSR expenditure on firms and whether they are able to employ the government’s mandate to a strategic use. To achieve this aim, we went through the following approaches: i. Extensive literature review on CSR and its relationship with the performance of companies, including research papers, news articles, and reports of Standing Committee ii. Investigative journalism by interacting with government officials, bureaucrats, academicians, and journalists with domain knowledge iii. Extensive analysis on the data available on public sources to understand the regime change introduced due to the Act in 2013. This was done using OLS-based simple regression, correlation analysis, and summary stats analysis using R, the statistical programming language. The main insights include: • The only inspiration attributable to the mandatory CSR law seems to be the mandatory 2% CSR law of Mauritius enacted in 2009 • No analytical process was employed to arrive at the ‘2%’ figure • There is a certain anchoring effect involved due to the mandatory 2% rule • There has also been a change in the mode of CSR investment from donations to community investment • The total CSR investment has increased since the inception of the mandatory CSR rule in 2013