The Influence of CSR to Financial Performance in Bharat Aluminium Company Limited (BALCO)

Abstract

In the contemporary corporate environment, the integration of Corporate Social Responsibility (CSR) into core business strategy has become imperative, particularly for industries with high environmental and social impact. This research investigates the influence of CSR on financial performance at Bharat Aluminium Company Limited (BALCO), emphasizing the mediating roles of stakeholder trust, employee satisfaction, and customer loyalty. The need for this study arises from the limited empirical evidence available in the Indian context, especially within the aluminium manufacturing sector, regarding how CSR initiatives translate into tangible financial outcomes. To address this, a quantitative research design was adopted, utilizing a structured questionnaire administered to employees across various departments at BALCO. The study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) for data analysis, using SmartPLS 4.0 software. Measurement model validation was conducted through reliability checks, convergent validity, and discriminant validity using Fornell-Larcker criterion, cross-loadings, and HTMT ratio. Bootstrapping with 5,000 samples was performed to assess the structural model and test hypotheses.

The findings reveal that CSR significantly impacts financial performance both directly and indirectly through stakeholder trust, employee satisfaction, and customer loyalty. All seven proposed hypotheses were supported, highlighting the mediating effects of the identified variables. These results confirm that CSR is not merely a philanthropic activity but a strategic driver of organizational performance in the Indian industrial context. The implications of the study suggest that companies like BALCO should continue investing in CSR initiatives, as they enhance trust, satisfaction, and loyalty among key stakeholders, ultimately contributing to financial success. This research provides a valuable contribution to CSR literature and offers practical insights for corporate leaders and policymakers aiming to promote responsible and performance-enhancing corporate behaviour.