Corporate social responsibility (CSR) expenditure has been mandated for firms in India so that they assume responsibility towards all stakeholders, including the environment. While there is some anecdotal evidence of firms’ achieving environmental sustainability as a result of engagement in CSR activities, there is lack of systematic empirical evidence on the relationship. The lack of empirical studies, particularly in developing nations, may be attributed to the challenges associated in measuring the multidimensional construct CSR and environmental sustainability, as a construct. The present study therefore, examines the welfare aspect of CSR on the environment. This is done by examining the relationship between CSR and corporate environmental sustainability using the economics of environmental CSR. Firms’ investment in social responsibility is measured using size adjusted CSR. Environmental sustainability is examined through energy consumption -- energy intensity, measured in both monetary and physical units. Regression results based on firm data of BSE 100 index over the time-period FY 2009-10 to FY 2014-15 suggests no significant association between CSR and energy intensity. However, there is a negative relationship between social responsibility expenditure and energy intensity (monetary unit) for firms belonging to pollution intensive industries. The study has implications for policymakers and company managers. Policymakers may leverage CSR mechanism to fix environmental responsibilities at firm level. For this, the enforcement and monitoring of CSR disclosure regulation may be strengthened. The company managers may invest in environmental improvement as part of CSR and gain competitive advantage. Further, they may communicate their efforts through disclosures in their annual report or the business responsibility report or the CSR report to signal their environmental responsiveness.
