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CORPORATE GOVERNANCE PROJECT ON CORPORATE SOCIAL RESPONSIBILITY
SUBMITTED TO PROF. KALPANA BHUSE SUBMITTED BY: STELLA SEBASTIAN ROLL NO: 12 CLASS: BBA LLB 2 ND YEAR
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INDEX SR
PARTICULARS
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Introduction
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Importance Of CSR
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Need For CSR
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Types Of CSR
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Advantages And Disadvantages Of CSR
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Legislation and provisions related to CSR
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CSR And The Stakeholder
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Protecting And Promoting Stakeholders Interests
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CSR In India
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Examples Of CSR
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Methodology Of CSR
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CSR Trends In India
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Reasons For Change In CSR ATTITUDES ATTITUDES
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Future Of Indian CSR
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Summary
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CORPORATE SOCIAL RESPONSIBILITY
INTRODUCTION What is Corporate Social responsibility? It is not as simple as it sounds. The definitions differ vastly according to the perception and sensitivity of the analyst. The World Business Council for Sustainable Development defines CSR thus: ‘Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.’ The
simplest and most significant definition of CSR was given by Mahatma Gandhi who said: ‘Wealth society.’ created from society has to be ploughed back into society.’
Corporate Social Responsibility is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business business monitors and ensures its active compliance with with the spirit of the law, ethical standards, standards, and international norms. norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities acti vities on the environment, e nvironment, consumers, employees, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable — to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate called corporate citizenship, companies citizenship, companies can be conscious of the kind of impact they are having on all aspects of society including economic, social, and environmental. To engage in CSR means that, in the normal course of business, a company is operating in ways that enhances society and the environment, instead of contributing negatively to it. India is the first country in the world to make make corporate social responsibility (CSR) mandatory, following an amendment to The Company Act, 2013 in April 2014. Businesses can invest their profits in areas such as education, poverty, gender equality, and hunger.
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IMPORTANCE OF CSR These days, being a responsible participant in the larger society is not optional for your company. To position your brand as a forward-thinking corporate citizen, you must take authentic steps to provide solutions to common human problems in the world around you. Valuing corporate social responsibility, or CSR, will not only benefit your larger community, but it will also provide you with specific organizational benefits. Here are our top five reasons why corporate social responsibility should matter to your company, in addition to common good it brings society.
1. MO RE ME MEDI DI A CO VER AG E: Compani Companies es that focus focus on doing doing good good in their their commu communiti nities es will attract the attention of local media. These positive stories will provide you with highly trustworthy free publicity, because they will come from journalistic sources rather than from advertising copy. Furthermore, all the people who are beneficiaries of your assistance will sing your company’s praises on their social media networks.
2. GREATE R CUST OMER RETEN TION : Acco Accord rdin ing g to Business2Community to Business2Community, “Nine out of ten consumers would refrain from doing business with a corporation if there existed no corporate social responsibility plan.” Customers are seeking dual benefits when they do business with you: They want to enjoy good services and products, but they also want to feel that they are contributing to efforts to make the world a better place. 3. BR AN D DI FFER FF EREN EN TIA TI A TI ON : Corpora Corporate te social social responsi responsibili bility ty provid provides es an an oppor opportuni tunity ty to stand apart from your competitors. In this era of social media, you are not entirely in charge of your own brand image. Participating in programs to benefit your community is crucial to fostering a brand image that is trustworthy, durable and honest. This corporate identity will be integral to people’s subjective shared impressions of who you are.
4. LOWER COSTS: Lowering costs while being socially responsible can happen in a number of ways. As an example, the Environmental Defense Fund has honored has honored IKEA, Nike and Walmart for their cost-cutting, sustainable shipping practices. These three companies have shown a way forward, changing shipping practices to reduce the company’s carbon footprint while drastically lowering costs at the same time.
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5. HAPP HA PP IER EM EMPL PLOY OY EES : Emp Employe loyees es work work harde harderr and and stay with with a company company longer longer when they believe in what the company is doing. Focusing on corporate social responsibility can be a great way to show your team what your company values. You foster the well-being of your workers when you make clear that each of them is contributing to the betterment of their community while also earning a paycheck.
NEED FOR CORPORATE SOCIAL RESPONSIBILITY Corporate social responsibility (CSR) is also known as corporate citizenship, corporate philanthropy, corporate giving, corporate community involvement, community relations, community affairs, community development, corporate responsibility, global citizenship, and corporate social marketing.
Corporate social responsibility has stepped boldly and unabashedly into the limelight in the 21st century, with many firms professing an undying love for CSR. But has it always been so?
Scholars note that for many years, the concept of social responsibility has been the object of intense ideologically influenced debates:
Antagonists have asserted that the business of business should remain business — simply making profits; while while protagonists have spoken of the firm’s responsibility to maintain maintain an equitable and working
balance among the claims of the various directly interested groups — stockholders, employees, customers and the public at large. la rge.
It is now widely accepted that corporate governance and its CSR component has moved from the profitcentered model to the socially responsible model, a concept referring to the way in which companies exercise responsibility and accountability for the economic, social and environmental impact of their business decisions and behaviors. behaviors.
Consequently, Henry Ford can boldly assert that a good company delivers excellent products and services, but a great company does all that and also strives to make the world a better place.
Why CSR?
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6 CSR has become increasingly important because today’s heightened interest in the proper role of business in society has been promoted by increased sensitivity to and awareness of environmental environmental and ethical issues.
Issues such as environmental damage, improper treatment of workers, and faulty production leading to customer inconvenience or danger are being highlighted in the Ghanaian media; elsewhere, investors and investment fund managers have begun to take account of a firm’s CSR policy in making investment decisions; some consumers have become increasingly sensitive to the CSR programmes of the firms from which they buy their goods and services.
These trends have contributed to the pressure on companies to operate in an economically, socially and environmentally sustainable way.
In Ghana, the Corporate Social Responsibility Movement (CSRM) has argued that profit maximization should not be the t he company’s single objective.
The Ghana Chamber of Mines also defines CSR as the broader responsibilities that result from the relationship that a company develops with both the environment and society in an effort to jointly achieve an integrated environmental management system and satisfy social objectives.
The Ghana Club 100 (GC 100), in ranking the nation’s best-performing companies considers their social social responsibility in areas such as concern for health, education, poverty alleviation, environmental concerns, issues relating to the socially vulnerable, and contribution to sports development.
Do firms gain from CSR?
Although some opponents have lambasted CSR practice for being mere ‘greenwash’ ‘greenwash’ or an exercise in publicity, a great volume of CSR research also concludes that companies have experienced a range of bottom-line benefits including: increased sales and market share; strengthened brand positioning; enhanced corporate image and clout; increased ability to attract, motivate and retain employees; decreased operating costs; and increased appeal to investors and financial analysts.
Government involvement and role in CSR
which enjoins The Government’s involvement in CSR seems to rest mainly with the legal dimension – which businesses to obey the law. However, there is no comprehensive comprehensive CSR policy or law in Ghana. Ghana.
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7 There are a variety of policies, laws, practices, and initiat ives that together provide the CSR framework in Ghana; the Government seeks to promote CSR by putting in place legislation that defines minimum standards for business performance. Examples include constitutional provisions, local government laws and requirements for environmental impact assessments contained in an Act of Parliament.
The Government also facilitates CSR by providing incentives to companies undertaking activities that promote the CSR agenda and drive social and environmental improvements. The role of the Government here is basically catalytic, secondary, or supportive.
“It is recommended that a CSR policy be developed for Ghana and that the laws that regulate the
various sectors of the economy (and aspects of social life) in Ghana be amended to include specific CSR provisions”; “It is recommended recommended that modalities be put in place to ensure some measure of enforcement of business and professional codes of ethics by external stakeholders in order to improve CSR in the country”; “It is recommended that regulatory institutions include in their regulatory efforts, definitive efforts at facilitating the formation and supporting of the activities of CSR advocacy groups.
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Types of CSR There are four types of CSR according to its beneficiaries: 1. Environment-Focused Corporate Social Responsibility (CSR) ( CSR) This type of CSR focuses on reducing the detrimental effects of the corporation’s operations on the environment. The corporation innovates in its manufacturing stage to reduce the production of environment harming by-products. It also promotes the use of non-renewable energy sources to prevent harm caused to the environment environment by burning of fossil fuels. Community-Based Corporate Social Responsibility (CSR) 2. Community-Based
The corporation joins hands with other organizations (usually Non-Profit ones) to ensure the welfare of a local community’s people. These organizations either fund or receive funding from corporations to perform tasks that can improve improve the living conditions conditions of the community’s community’s people.
3. Human Resource (HR)-Based Corporate Social Responsibility (CSR) Corporations focus on the well-being of their own staff and improve their living conditions. The companies may extend compassionate leaves like paternity leaves so that the employee can look after his newborn. They can also provide medical insurance to their employees to take care of accidents caused due to occupational hazards. 4. Charity Based Corporate Social Responsibility (CSR) In a charity-based CSR, corporations donate to organizations or individuals (usually through a charity partner) to improve their financial financial condition and for their general upliftment. upliftment. This is the most common form of a CSR activity. Most corporations provide direct financial support to organizations or individuals who require such assistance.
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Advantages Corporate Social Responsibility
Improvement Improvement in the image of the Corporation
The most obvious advantage that a corporation can obtain by implementing CSR policies is that of an increased goodwill value. This serves a dual purpose – Firstly, Firstly, people will want to buy the product that the corporation is selling because of its good and clean image. Secondly, other enterprises will want to do business and be associated with the corporation. This increases the corporation’s prestige to such a high level that its name may become
synonymous with reliability and goodness. People always want to be associated with the best and the most popular, so in that respect, the corporation rises in stature and becomes an important player in its market.
Increased Attraction and Retention of Employees
Companies having solid CSR commitments find it easier to recruit and retain employees. People want to work for companies that care about the well-being of their employees and provide good working conditions. Compassionate attitude towards employees is highly desired by both new recruits and old employees empl oyees alike. Appraisals, financial assistance in times of need, and attention given to personal achievements and special days (like birthdays) make employees want to remain with the company. This is a huge advantage when there is a tight labor market situation. This will reduce the cost of training new recruits and free up incentives for existing employees. Incentives induce efficient work out from employees. In short, if the company’s workforce is happy, the company gets more profits due to in creased efficiency in
production.
Regulatory Authorities become less hostile
A corporation with strong CSR programs will not be scrutinized by regulatory authorities as much as companies without CSR programs. The authorities will be lenient in their regulation because they feel that the company must be complying with all regulations as it is supported by firms and people alike for its welfare work. A company with strong CSR programs will always work within re gulations to get benefits (other than profits) fr om these CSR programs. The authorities will give fast-track preference to this company. It may also forego cumbersome paperwork that is required to set up projects if it thinks that this project is going to help the community to improve.
Attracts more Capital Inflow from Various Sources
A company’s image plays a huge role in attracting investors. If the company is engaged in CSR programs, its
image gets a massive boost, and so, people invest in its operations heavily. This company will attract capital even
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Generation of Clean and Renewable Energy from Environmental Environmental CSR
If the company has invested in an environmental CSR program, it will make sure that its operations do not harm the environment in any way. Inventing machines and techniques to reduce the harmful effects of its operational activities will give the community a clean environment. It will also give the company a chance to explore the usage of renewable energy for its operations. This will reduce the cost of acquiring fossil fuels and can reduce the cost of production by a one-time investment in renewable energy production.
Positive Publicity
A popular business principle is that any publicity is good publicity. You should be known to the people to sell your product. A good CSR program will always give good publicity and even act as an advertisement for the company. It also sets the company apart from its competitors. They may be selling a similar product at lower rates, but you are keeping the interests of your environment and community intact, and so the people do not mind a little extra charge for this thoughtfulness.
Disadvantages Corporate Social Responsibility
Shift from the Profit-Making Objective
Milton Friedman, an economist, is the biggest critic of CSR. He says that CSR shifts the focus of the company from the objective that made it a financial entity in the first place – profit-making. profit-making. The company forgets about its obligations towards its shareholders that they have to make profits for them. Instead of focusing on making profits, they engage in CSR programs and use up funds for community welfare. So basically, instead of an income, the company is affecting an outflow of cash and not fulfilling its profit- making obligations.
Company Reputation takes a hit
According to CSR policies, companies have to disclose shortcomings of even their own products if they are found to violate the CSR program. For example, car manufacturing companies calling back their vehicles in large numbers when they find glitches in the model after having sold them wallops their reputation. This creates inconvenience to the customers, and they lose trust in the manufacturer.
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Customer Conviction
Initially, customers like to see the companies that they trust a re engaged in social welfare programs. They like the fact that these programs are for a good cause. Later, they grow wary of it. If they don’t see instant results from these programs, they think that these are nothing but PR stunts. So it becomes difficult to convince customers that the results will take some time in coming and that they should continue believing in the good intentions of the company. These attempts of convincing become fruitless day by day because some customers are impatient and have a constant desire to be appeased.
Increase in Cost of Production
More often than not, CSR programs increase the expenditure of the company. This increased expenditure is reflected in the increased prices of the product for which, ultimately, the customers have to pay. Large corporations can absorb this increased expenditure. T hey may not incre ase their products’ prices, but small businesses have no other option but to increase their their products’ prices to meet their increased expenses.
CSR LAWS IN INDIA The Companies Act, 2013, a successor to The Companies Act, 1956, made CSR a compulsory act. Under the notification dated 27.2.2014, under Section 135 of the new act, CSR is compulsory for all companies- government or private or otherwise, provided they meet any one or more of the following fiscal criterions:
The net worth of the company c ompany should be Rupees 500 crores or more
The annual turnover of the company should be Rupees 1000 crores or more
Annual net profits of the company should be at least Rupees 5 crores.
If the company meets any one of the three fiscal conditions as stated above, they are required to t o create a committee to enforce its CSR mandate, with at least 3 directors, one of whom should be an independent director.
The responsibilities of the above-mentioned committee will be:
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Creation of an elaborate policy to implement its legally mandated CSR activities. CSR acts should conform to Schedule VII of the Companies Act, 2013.
The committee will allocate and audit the money for different CSR purposes.
It will be responsible for overseeing the execution of different CSR activities.
The committee will issue an annual report on the various CSR activities undertaken.
CSR policies should be placed on the company’s official website, in the form and format
approved by the committee.
The board of directors is bound to accept and follow any CSR related rel ated suggestion put up by the aforementioned committee.
The aforementioned committee must regularly assess the net profits earned by the company and ensure that at least 2 percent of the same is spent on CSR related activities.
The committee must ensure that local issues and regions are looked into first as part of CSR activities.
FEATURES OF CSR LAWS
The broad and important features of the CSR laws are as follows:
Quantum of money utilized for CSR purposes are to be compulsorily included in the annual profit-loss report released by the company.
The CSR rules came into force on 1st April 2014 and will include subsidiary companies, holdings and other foreign corporate organizations which are involved in business activities in India.
CSR has been defined in a rather broad manner in Schedule VII of Companies Act, 2013. The definition is exhaustive as it includes those specific CSR activities listed in Schedule VII and other social programmes not listed in schedule VII, whose inclusion as a CSR activity is left to the company company’s ’s discretion.
CSR activities listed in schedule VII include:
“eradicating hunger and poverty, promotion of education and employment, livelihood enhancement
projects, promoting gender equality, women empowerment, hostels for women and orphans, old age homes, day care, environmental sustainability, protection of flora and fauna, contributions to PM relief fund, measures to benefit armed forces veterans, war widows and dependants, promotion of sports, and rural development projects”.
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Net profits are calculated on the basis of Section 198 of Companies Act, 2013. However, only domestic branches are included and dividend-related payments are left out of the final calculation of total net profits.
Companies are allowed to implement CSR via any of the following means possible.
Setting up a Trust or Society under Section 8 of the 2013 Companies act under its direct administrative control.
Corporates can outsource the CSR tasks to established social enterprises- institutions engaged in CSR activities for 3 years or more. These institutions are meant to engage in not for profit activities. The corporates though are supposed to monitor the social enterprises meant to enforce their CSR mandate.
Companies can collaborate with fellow companies and work out some arrangement based on the CSR rules.
CSR activities should follow the below-mentioned rules:
Any familial activity or act of personal charity is not to be included as part of CSR activity.
Any sort of contribution-fiscal or otherwise by political organizations is outside the purview of CSR activities as indicated under Section 182 of the 2013 Companies Act.
All CSR activities are to be conducted in Indian territory to be considered valid.
Companies can utilize a maximum of 5 percent of their total expenditure to help in capacity building of their society, trust or or outsourced social enterprise.
As stated before listed public companies are mandated to have up to 3 directors as part of their CSR committee- one of whom should always be independent. Unlisted and private companies are allowed to have at least 2 directors and no independent director.
CSR reports are to be compulsorily published on an annual basis. The reports have a fixed format as designed by the CSR rules, which must include details like official CSR policy, the number of funds dedicated to CSR and its detailed utilization as well as a detailed explanation for non-utilization of funds if any. The said format and its constituents must be displayed on the official website of the company.
CSR activities initiated by a foreign company has to be via its Indian subsidiary to be considered legitimate under Section 135 of the companies act.
Trusts created by companies to carry out their mandated CSR tasks, are to be compulsorily registered in some states where it is mandatory under Income Tax, 1956.
Companies are allowed to co-operate with their independent counterparts, provided the latter has a proper tracking and reporting system for CSR activities that may be undertaken.
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Companies are allowed to engage in capacity building by allotting up to 5 percent of all expenses to be incurred on CSR activities to be devoted to training and equipping of personnel to carry out CSR and related activities.
Activities that cannot be considered as CSR include.
Operational and administrative activities of the business.
CSR activities that do not take place in Indian territory.
Employee and familial welfare activities are strictly outside the purview of CSR tasks as well.
Fiscal help rendered to political outfits is not considered as a CSR activity as well.
Events like the marathon, award functions, fiscal help rendered to charitable institutions, sponsoring TV shows etc that are strict “one-off”-i.e. meant to happen just once in a while
are not considered CSR.
Companies cannot report lawful duties rendered under acts or regulation like Labour Act, Land act etc cannot be considered as CSR tasks.
CSR AND THE STAKEHOLDER CSR is essentially a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with stakeholders on a voluntary basis. Stakeholders are those organizations and individuals who have taken an interest or 'stake in the business or corporation and its success. That includes clients, the t he population of small business people, other business assistance organizations, other economic development organizations, legislators at the country, federal, and state levels, executive e xecutive branches of government, executive departments and agencies, the staff and contracted consultants and trainers, vendors and t axpayers. The list is very broad and inclusive. The development of CSR reflects the growing expectations of the community and stakeholders of the evolving role of companies in society and the response of companies to growing environmental, social and economic pressures. By committing voluntarily to CSR initiatives companies are making an investment in their future. 8 Some of the t he driving forces behind the evolution of CSR are:
concerns and expectations from citizens, consumers, public authorities and investors; decisions made by individuals and institutions influenced by social crit eria; concerns about the impact of economic activity on the environment; and increased transparency of business activities because of the developments in information technology.
PROTECTING AND PROMOTING STAKEHOLDERS INTEREST Some consider social responsibility in terms of services rendered to c laimants or stakeholders, who could be both insiders and outsiders. The insiders are employees and shareholders while outsiders include consumers, suppliers, creditors, competitors, government and t he general public. Consumers expect quality goods and services at fair prices. Workers expect fair wages without being exploited. Shareholders expect reasonable dividends and fair return on i nvestments. Managers expect challenging jobs with attractive salary. Government general public e xpect them to add to the t he wealth [Type here]
15 and welfare of the country without polluting the environment. In short, business organizations have to consider themselves the custodians of public welfare, by rendering such services to the various sections of society. Some of the corporate c orporate social responsibilities to different groups of stakeholders are given below: 1. To consumers and community
Goods must meet the requirements of different classes, their tastes and purchasing power Goods must be reasonably priced, must be of dependable quality and of sufficient variety. Provision of after-sales service advice, guidance and maintenance. Present a 'good image' in the minds of the public for honesty and integrity i ntegrity of character Advertising policy should be based on moral/ethical principles. It should not mislead by false leading and exaggerated advertisements. Support to educational, charitable and other programmes for the benefit of the community Prevention of the growth of slums, improvement of housing conditions, elimination of crimes in industrial areas by providing training and job counselling for youth in situations where they may take to crime, and meeting the t he heavy costs of pollution and waste disposal. Business should have a progressive outlook. Proper training should be offered to the existing employees. Should be a law-abiding citizen of the State. To pay its dues and taxes to the state fully and honestly. Maintain impartiality towards political affairs, that is, to abstain from direct political involvement and not to support support political parties. To try not to contact public servants for selfish ends. To sell commodities without adulteration.
2. To employees
3.
Promote a spirit of cooperative endeavour between employees and employers through participation in decision making and in improving production production and administration. To pay fair and reasonable wages to labourers and fair salaries to executives. To develop and adopt a progressive labour policy based on recognition of genuine trade union right: settlement of disputes and conciliation; to t o create a sense of belonging to t o the business, and improving human qualities of labour by education, training, l iving conditions, housing, leisure and amenities. To provide reasonable and just work conditions. To recognize the labourer as a 'human being' and respect his dignity, and to t o preserve his or her individual liberty. Provide facilities for joint consultation and collective bargaining. Help development of proper leadership from among the employees. Guarantee religious, social and political freedom to workers to take part in civic activities.
To owners and inter-business establishments
To provide a fair return or dividend on the capital invested. Give fair and impartial treatment to all. Develop healthy cooperative business relationship between different businesses. Check the advance of such unfair practices as price-rigging, undercutting, patronage, unfair can vassing and unethical advertisements. Help in the control of monopoly and promotion of healthy competition.
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CORPORATE SOCIAL RESPONSIBILITY IN INDIA
All the Business houses and corporate have been taking up social welfare activities from time to time. While CSR is relevant in business for all societies, it is particularly significant for developing countries like India, where limited resources for meeting the ever growing aspirations and diversity of a pluralistic society, make the process of sustainable development more challenging. CSR interventions-based on commitment, mobilization of employeesvoluntarism, innovative approaches, appropriate technology and continuing partnership-have been making lasting differences in the life of the disadvantaged. Further, synergy of corporate action with the government and the civil society are making the CSR interventions more effective and facilitating the corporate carrying on business in the society.
Why CSR is aggressively needed today?
CSR as a strategy is becoming increasingly important for India today because of three identifiable trends:
1.
Changing social expectations: Consumers and society in general expect more from the
companies whose products they buy.
2.
Increasing affluence: This is true within developed nations, but also in comparison to
developing nations. Affluent consumers can afford to pick and choose the products they buy.
3.
Globalization: Growing influence of the media sees any mistakes by companies brought
immediately to the attention of the public.
CORPORATE SOCIAL RESPONSIBILITY: EXAMPLES IN INDIA Tata Group The Tata Group conglomerate in India carries out various CSR projects, most of which are community improvement and poverty alleviation programs. Through self-help groups, it is engaged in women empowerment activities, income generation, rural community development, and other social welfare programs. In the field of education, the Tata Group provides scholarships and endowments for numerous institutions. The group also engages in healthcare projects such as facilitation of child education, immunization and creation of awareness of AIDS. Other areas include economic empowerment through agriculture programs, environment protection, providing sport scholarships, and [Type here]
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infrastructure development such as hospitals, research centres, educational institutions, sports academy, and cultural centres. Ultratech Cement Ultratech Cement, India’s biggest cement company is involved in social work across 407 villages in the country aiming to create sustainability and self-reliance. Its CSR activities focus on healthcare and family welfare programs, education, infrastructure, environment, social welfare, and sustainable livelihood. The company has organized medical camps, immunization programs, sanitization programs, school enrollment, plantation drives, water conservation programs, industrial training, and organic farming programs. Mahindra & Mahindra Indian automobile manufacturer Mahindra & Mahindra Mah indra (M&M) established the K. C. Mahindra Education Trust in 1954, followed follo wed by Mahindra Foundation in 1969 with the purpose purpos e of promoting education. The company primarily focuses on education programs to assist economically and socially disadvantaged communities. CSR programs invest in scholarships and grants, livelihood training, healthcare for remote areas, water conservation, and disaster relief programs. M&M runs programs such as Nanhi Kali focusing focusin g on girl education, Mahindra Pride Schools for industrial training, and Lifeline Express for healthcare services in remote areas. ITC Group ITC Group, a conglomerate with business interests across hotels, FMCG, agriculture, IT, and packaging sectors has been focusing on creating sustainable livelihood and environment protection programs. The company has been able to generate sustainable livelihood opportunities for six million people through its CSR activities. Their e-Choupal program, which aims to connect rural farmers through the internet for procuring agriculture products, covers 40,000 villages and over four million farmers. Its social and farm forestry program assists farmers in converting wasteland to pulpwood plantations. Social empowerment programs through micro-enterprises or loans have created sustainable livelihoods for over 40,000 rural women.
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METHODOLOGY OF CORPORATE SOCIAL RESPONSIBILITY CSR is the procedure of assessing an organization’s impact on society and evaluating their responsibilities. It begins with an assessment of the following aspects of each business:
Customers;
Suppliers;
Environment;
Communities; and,
Employees.
The most effective CSR plans ensure that while organizations comply with legislation, their investments also respect the growth and development of marginalized communities and the environment. CSR should also be sustainable – involving involving activities that an organization can uphold without negatively affecting their business goals.
Organizations in India have been quite sensible in taking up CSR initiatives and integrating them into their business processes.
It has become progressively projected in the Indian corporate setting because organizations have recognized that besides growing their businesses, it is also important to shape responsible and supportable relationships with the community at large.
Companies now have specific departments and teams that develop specific policies, strategies, and goals for their CSR programs and set separate budgets to support them.
Most of the time, these programs are based on well-defined social beliefs or are carefully aligned al igned with the companies’ business domain.
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CSR TRENDS IN INDIA FY 2015-16 witnessed a 28 percent growth in CSR spending in comparison to the previous year.
Listed companies in India spent US$1.23 billion (Rs 83.45 billion) in various programs ranging from educational programs, skill development, social welfare, healthcare, and environment conservation. The Prime Minister’s Relief Fund saw an increase of 418 percent to US$103 million (Rs 7.01 billion) in
comparison to US$24.5 million (Rs 1.68 billion) in 2014-15. The education sector received the maximum funding of US$300 million (Rs 20.42 billion) followed by healthcare at US$240.88 million (Rs 16.38 billion), while programs such as child mortality, maternal health, gender equality, and social projects saw negligible spend. spend.
In terms of absolute spending, Reliance Industries spent the most followed by the government-owned National Thermal Power Corporation (NTPC) and Oil & Natural Gas (ONGC). Projects implemented implemented through foundations have gone up from 99 in FY 2015 to 153 in FY 2016, with an increasing number of companies setting up their own foundations rather than working with existing non-profits to have more control over their CSR spending.
2017 CSR spends further rose with corporate firms aligning their initiatives with new government programs such as Swachh Bharat (Clean India) and Digital India, in addition to education and healthcare, to foster inclusive growth.
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REASONS FOR CHANGE IN CSR ATTITUDES There is increasing evidence to suggest that we need to explore innovative ways of doing business so that all the stakeholders are able to participate, when differences are valued, policies are inclusive and the impact on the society is positive. There are no indicators of measurement to help evaluate the CSR initiatives but increasingly the companies are building an integrated model that is i n alignment with the business processes and and functions Social responsibility is not the exclusive domain of the government and passive philanthropy longer constitutes CSR. Most of the corporations perceive ethical conduct including compliance and transparency of business and nation building as the closest cl osest definition of CSR. Many global surveys have revealed that three of the most important factors that impact social reputation of a corporation are: business ethics, compliance compliance with regulatory requirements and and consistency in value delivery. delivery. Only 12.4 per cent of Indian companies pursue strategic philanthropy as compared to 48 per cent of the multinationals. Charity 35 per cent of Indian companies and 62 per cent of the multinationals. Both Indian and multi rations give money primarily to support education services, environment, health services and uplifting condition. Support for art and culture, employee volunteerism, event sponsorship and matching grants are some important activities of the multinationals but not Indian companies. The most responsible India are the following:
MNCS- Unilever, Sony, Johnson & Johnson, Coca-Cola, P&G. The main reason stated w were trusted brands. Coke was mentioned because of its sponsorship of sports events. However, the factors of environmental care, human rights, transparency were not mentioned.
Indian- Tata’s, Reliance, Birla’s and BHEL. The reasons mentioned were ethical care, environmental practices and social work. MNCs were rated lower than Indian companies.
India is moving from corporate philanthropy to the stakeholder model. For example, the Tata’s for their work in Tatanagar (Jamshedpur) and have set up a Tata Council for Community Initiatives and large, Indian companies have a long way to go in imbibing corporate responsibility as a business Corporate philanthropy is only a part of corporate corporate responsibility.
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FUTURE OF INDIAN CSR There is clear need to develop a more coherent discourse on CSR. It is often seen a s a strategy to clean the sins of pollution, or to provide a facelift to the company's public image. But it should be more of a tool to a cleaner reputation and socially responsible identity to companies, involving them and their employees in the long term process of positive social transition. Most of the organizations in India have not instituted structured systems for approaching or deploying CSR The organizations need to structure the CSR initiatives through articulation of policies and guidelines, allocation of resources, and performance evaluation and reporting as followed by the institution of management systems. Nearly 90 per cent of the corporations recognize that there is a paradigm shift occurring wherein investors of the future shall demand greater transparency in disclosure of both financial and nonfinancial information to better understand companies, and most of the corporations are gearing up to respond to such requirements from investors as most (88 per cent) believe that they shall benefit from such transparency. Corporations of tomorrow see themselves as entities that earn profits but through ethical practice, complying with regulatory requirements, with a specific substantial focus on protecting the environment an improvement of employee safety and health. Many corporations expect to li sten more to the concerns stakeholders, provide equal opportunity, avoid child labour, pay taxes and create jobs. Given the current perception of CSR and in view of the increasing expectation of the stakeholders on transparency, ethics and professional integrity, it becomes imperative that managers of tomorrow players, sensitive to the developments in the surroundings. Corporations predominantly continue to believe that CSR will be compliance centric. Several companies are a re transitioning from compliance to stakeholder engagement, and attributes such as handling public, community work, etc., which has thus far been accorded low importance are currently being accorded greater priority.
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SUMMARY The concept of CSR has come to mean that the responsibility of a corporation to the society is an inalienable part of its operations and strategy. CSR is about how companies manage the business process to produce an overall overall positive impact on society. Corporations, Corporations, whether public or private, private, draw much from society. If a corporation draws so much from society, it has to make its own contribution to society. When CSR is adopted as a business strategy for sustainable development, it goes to improve corporate performance. It offers manifold manifold benefits to corporations, corporations, both internally and externally. The scope of CSR is wide and could be considered in terms of different viewpoints. These include protecting and promoting all stakeholder’s stakeholder’s interests interests such as those of employees, employees, consumers, consumers, creditors, business associates, dealers, government and environment; social concern and promotion of common welfare programmes including those meant for the benefit benefit of the poor and indigent public; taking up issues issues such as drug addiction, drinking and smoking and helping NGOs fight against them; corporate philanthropy which manifests manifests itself in some form of benevolent benevolent activity at times of natural calamities calamities such as earthquakes, tsunamis, etc. CSR is the heart and soul of modern corporations and is an important standard for corporate governance. It is an indispensable mechanism for both increased corporate accountability, profitability and environmental sustainability. It is also the pole star for modern corporations in order to maintain the integrity of moral fabrics both inside and outside the corporation while conducting socially responsible business.
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WEBLIOGRAPHY
Corporate
Social
Responsibility
under
Companies
Act
https://blog.ipleaders.in/csr-laws-india/
Priya Anand (2018) Why India needs aggressive CSR Implementation? http://www.csrtimes.com/community-articles/why-india-needs-aggressive-csrimplementation/eFVPkxHMIn
Dezan Shira & Associates (2017) Corporate Social Responsibility in India https://www.india-briefing.com/news/corporate-social-responsibility-india5511.html/
The Importance Of Corporate Social Responsibility http://performph.com/importance-corporate-social-responsibility/
The Need for Corporate Social Responsibility https://www.modernghana.com/news/254784/1/the-need-for-corporate-socialresponsibility.html
BIBLIOGRAPHY
A.C Fernando - Business Ethics And Corporate Governance
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