Does Mandatory CSR Spending Drive SDG Progress? A Panel Data Analysis of BSE 500 Companies (2014–2024)

Abstract

This study empirically investigates whether India's mandatory Corporate Social Responsibility (CSR) expenditure, mandated under Section 135 of the Companies Act 2013, translates into measurable progress on the United Nations Sustainable Development Goals (SDGs). Using a balanced panel dataset of 450 BSE-listed companies across seven sectors spanning the period 2014 to 2024, this research employs fixed-effects panel regression, Granger causality testing, and sector-wise moderation analysis. The dependent variable is operationalized through district-level SDG composite scores derived from the NITI Aayog SDG India Index, while the primary independent variable is annual CSR expenditure as a percentage of net profit. Control variables include firm size (log of total assets), return on assets (ROA), leverage ratio, and industry type. Findings reveal a statistically significant positive relationship between CSR expenditure and SDG outcomes in health (SDG 3), education (SDG 4), and clean energy (SDG 7), with manufacturing sector firms demonstrating stronger SDG contributions than service sector counterparts. Granger causality results confirm that CSR spending Granger-causes improvements in SDG composite scores with a two-year lag. However, the study identifies significant sectoral heterogeneity, suggesting that uniform mandatory spending thresholds may not optimize SDG impact across all industries. This paper contributes to the growing literature on the effectiveness of mandatory CSR regulations in emerging economies and provides evidence-based policy recommendations for enhancing the SDG alignment of India's CSR mandate.