Does Corporate Social Responsibility Improve Firm‐Level Energy Efficiency? The Case of the Iron and Steel Industries in India

ABSTRACT We investigate the impact of corporate social responsibility (CSR) on energy efficiency for the Iron and Steel Industries of India. Using firm‐level data, the panel fixed effects regression model shows an inverse relationship between CSR and energy intensity, suggesting that a strategic firm's involvement in CSR increases energy efficiency. In addition, businesses with higher CSR spending tend to be more energy efficient; however, the association is not consistently observed across all profit‐making CSR firms. Our findings at the disaggregate level suggest that firms that spend beyond the threshold levels experience a visible impact on energy efficiency. Further, CSR expenditure of R&D‐intensive firms tends to have higher energy efficiency than their counterparts. We conclude that CSR plays a significant role in enhancing the energy efficiency of a socially and environmentally responsible firm. Thus, environmental sustainability should be one of the priority investment areas for CSR‐driven firms in India.