This study examined whether the impact of negative events on firms differs according to the excellence of corporate social responsibility (CSR) activities. The debate over the legitimacy and effectiveness of CSR activities has been continuously raised over a long period, and recent research has increasingly reported that CSR activities enhance firm value. While previous studies have primarily cited improvements in corporate image, stakeholder trust and commitment, and halo effects as reasons why CSR activities enhance firm value, this study examined whether CSR activities serve a risk management role. When a firm causes a negative event, the public imposes social sanctions, determining the level of sanctions by considering the firm's intentionality and repetitiveness regarding the negative event. A firm's CSR activities can intervene in the public's social sanctions by serving as evidence supporting non-intentionality and non-repetitiveness, thereby mitigating the level of social sanctions resulting from negative events. In this study, we limited negative events to collusion and examined whether capital market reactions following collusion detection differ according to the excellence of CSR activities. The advantages of limiting negative events to collusion are that it avoids problems arising from differences across types of negative events, allows for some degree of quantification of the impact of negative events, and ensures that collusion detection information is swiftly transmitted to the capital market. The research results showed that, first, cumulative abnormal returns after collusion detection were significantly higher for the superior CSR activity group compared to the inferior CSR activity group. Second, even when regression analysis was performed controlling for variables that could significantly affect cumulative abnormal returns, differential capital market reactions to collusion detection were observed according to the excellence of CSR activities. These findings can be interpreted as the capital market reacting less sensitively to collusion detection in the superior CSR activity group compared to the inferior CSR activity group, suggesting that CSR activities contribute to mitigating social sanctions resulting from negative events. To ensure the robustness of the results, differential reactions according to CSR activity excellence were still observable when changing the abnormal return estimation method, controlling for endogeneity using PSM and instrumental variable approaches and 2SLS, and changing the cumulation period for abnormal returns.