Corporate social responsibility practices: An empirical study of voluntary and mandatory disclosure by NIFTY 100 companies

• Published date: 01 December 2022
• Author: Ritika Gupta,Pankaj Kumar
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/pa.2748

RESEARCH ARTICLE

Corporate social responsibility practices: An empirical study of

voluntary and mandatory disclosure by NIFTY 100 companies

Ritika Gupta | Pankaj Kumar

Department of Management Studies,

Deenbandhu Chhotu Ram University of

Science & Technology, Sonipat, India

Correspondence

Ritika Gupta, Department of Management

Studies, Deenbandhu Chhotu Ram University

of Science & Technology, Murthal,

Sonipat-131039, Haryana, India.

Email: ritika.gupta1609@gmail.com

Corporations have come to the realization that numerous benefits can be derived by

being socially responsible in the societies they operate. Presently, the argument is

not just about being a good corporate citizen but the ability of a business to commu-

nicate its social contributions to the stakeholders. Therefore, the present study exam-

ines the extent of corporate social responsibility disclosure (CSRD) practices by

NIFTY 100 companies in the voluntary period of CSRD and the period after the

implementation of Section-135 of the Companies Act, 2013. The annual reports of

companies are content analyzed using a CSRD measurement index to calculate dis-

closure score under six themes of corporate social responsibility, namely community

development, human resource, environmental activities, development of rural areas,

product and customer relation, and fair business. The percentage of companies mak-

ing CSRD has been increasing over the period of study. In both periods, environmen-

tal activities is the most disclosed CSRD theme followed by human resource.

Moreover, the results have shown a significant difference in the CSRD practices of

sectors. Overall, companies operating in more sensitive sectors and high visibility sec-

tors engage more in CSRD practices. Lastly, the results also indicate that companies

have focused on different CSR themes depending on their sector type.

KEYWORDS

corporate social responsibility, disclosure, India, NIFTY 100

1|INTRODUCTION

The socio-economic development of every country requires dealing with

few problems like protection of environment, education, unemployment,

poverty, health, welfare, along with the overall growth of people

(Mishra, 2021). In the current dynamic scenario, investors, financial insti-

tutions, partners, and social stakeholders are emphasizing the need for an

integrated appraisal of the value that a company creates using a bundle

of various forms (economic, natural, and social) of capital (Figge &

Hahn, 2002,2005). Therefore, the corporate sector is under enormous

pressure to realize its implicit commitment and reciprocation to society.

Corporate social responsibility (CSR) is a “set of business policies, strate-

gies and operational guidelines used by companies to manage effects of

their operations in a sustainable manner”(Miljenovi

c, 2018,p.156).Nota-

bly, the CSR approach considers environmental and social aspects of

doing business in addition to the financial effects. Hence, in the wake of

growing changes, a holistic evaluation of the sustainable values added by

a company hinges on CSR-based models. Around the world, corporations

have reacted to the shifts in societal expectations and beliefs by making

corporate social responsibility disclosures (CSRD) an intrinsic part of their

efforts to interact with stakeholders (Bowd et al., 2006). Guthrie and Par-

ker (1990)elucidatedCSRDas“reporting on the social impacts of its

activities; effectiveness of its social programmes; discharge of its social

responsibilities; stewardship of its own social resources”(p.166). Compa-

nies are concerned with CSRD to mitigate negative perceptions

(Jacoby, 1973), construct a platform for meaningful dialog with stake-

holders to promote mutual trust (Dean, 2003), improve financial perfor-

mance (Orlitzky et al., 2003), build a reputation (Dawkins, 2004), and to

reduce sustainability risks and costs (Adams et al., 2012). Moreover, the

integration of CSR into business operations also benefits a company

Received: 24 October 2020 Revised: 2 August 2021 Accepted: 9 August 2021

DOI: 10.1002/pa.2748

J Public Affairs. 2022;22(Suppl. 1):e2748. wileyonlinelibrary.com/journal/pa © 2021 John Wiley & Sons Ltd. 1of11

https://doi.org/10.1002/pa.2748