Little is known about whether CSR activities affect stockholders’ interests or nonequity stakeholders’ interests. Using the industry-specific financial materiality framework from the Sustainability Accounting Standards Board, we identify different types of CSR activities with and without financial implications across various industry sectors. Applying this concept of financial materiality in CSR engagement, we replicate and extend Qian et al.’s (2019) finding of an improvement in corporate social performance following an exogenous reduction in analyst coverage. First, we show that financially immaterial CSR engagement drives their finding, indicating that managers commit to CSR activities that are more beneficial to non-equity stakeholders when they face less short-term pressures from financial analysts. Second, we show that financially material yet socially irresponsible actions tend to increase after a drop in analyst coverage. This finding implies that a sudden loss of financial analysts’ monitoring results in firm managers’ misbehavior of engaging in value-destroying and socially irresponsible activities. Overall, our study provides new insights into the role of financial analysts in financially material and immaterial CSR engagement.