Corporate Social Responsibility And Financial Returns

Abstract

Corporate Social Responsibility (CSR) has evolved from being a philanthropic obligation to a core strategic function influencing stakeholder engagement, brand reputation, sustainability, and ultimately, financial performance. In a dynamic global economic environment, companies are increasingly pressured by governments, investors, and consumers to align their operations with social and environmental standards. While CSR practices have often been considered a cost center, recent research suggests a positive correlation between CSR and financial returns through enhanced brand value, customer loyalty, and risk management. This study aims to explore the relationship between CSR initiatives and the financial performance of corporations, particularly in the Indian context. Furthermore, it integrates software and machine learning (ML) perspectives by employing data analytics and predictive models to analyze the impact of CSR disclosures on stock performance, Return on Equity (ROE), Return on Assets (ROA), and Earnings Per Share (EPS). Using ML techniques like linear regression, sentiment analysis on CSR reports, and clustering, the study quantifies intangible social impact indicators and correlates them with financial datasets. The ultimate goal is to demonstrate how technology can empower investors and companies to make informed, ethically-aligned decisions while achieving economic gains.