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CS Professional · CSR and Social Governance · Impact of CSR

Mehta Pharma Ltd claims its CSR programme proves higher profitability, citing that profit rose 12% after the programme began. An independent reviewer says the claim is weak. Which reason best supports the reviewer's view?

The claim is weak because profit growth may stem from other factors like demand or pricing, and a coincidence in timing does not prove CSR caused it. Credible impact assessment needs evidence that attributes the result to the programme, rather than assuming correlation means causation.

  1. ACSR can never affect profits in any way
  2. BProfit growth may be caused by other factors such as demand or pricing, so a link needs evidence of attribution rather than mere coincidence in timingCorrect
  3. CProfit is not a measure of corporate performance
  4. DCSR impact is measurable only after the company is wound up

Explanation

Correlation in timing does not prove causation; credible impact assessment isolates the CSR effect from other drivers. The statement that CSR never affects profit is wrong, and profit is a valid performance measure.

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