Fundamental Concepts
Fundamental Concepts
•Safety, Health and Environment Policy.
•Social Contribution Charter.
•Quality Policy.
•Supplier Sustainability Guidance.
•Conflict Minerals.
•Sustainable Natural Rubber Policy.
•Human Rights Policy.
Definition
• Corporate social responsibility (CSR) refers to a firm’s sense of
responsibility towards the society in which it operates.
• Corporate social responsibility is critical to the long-term success of a
business.
• Also
A business practice that involves participating in
initiatives that benefit society.
A "corporate citizenship“ involves incurring short-term costs.
does not provide an immediate financial benefit to the company
promote positive social and environmentalchange.
Constituents of CSR
What is the importance of
corporate social
responsibility?
Mitigate the social effects of the crisis, including job losses
CSR offers a set of values to establish more cohesive society
It forms the base of transition to a sustainable economic
system.
Analysis of
Corporate Social
Responsibility.
An organisation’s total responsibility towards the business environment in
which it operates.
These standards motivate businesses to go beyond legal compliance
recognising that compliance with the law is a fundamental duty of
any organisation and an essential part of their social responsibility.
Impact of Corporate Social
Responsibility on industry?
Engagement with internal and external stakeholders
• Enables enterprises to anticipate better and take
advantage of fast- changing expectations in society.
build long-term employee, consumer and citizen trust as
a basis for sustainable business models.
Types of Corporate
social
Responsibility.
Environment: Focussed on preservation and creation of safe environment
Philanthropy: Businesses practice social responsibility by donating
to national and local charities.
Ethical labour practices: By treating employees fairly and ethically,
Types
The environment is often the primary focus of CSR.
Corporations align with certain institutions to create a better
environment for the society to live and work in.
Some businesses take up measures to voluntarily
eliminate production practices that could affect the public.
Benefits
Consumers are more likely to buy products or services from a
companies that supports activities to improve the society.
Not only does it help to attract and retain customers, but it also
improves the reputation of a company.
The kind of CSR activity undertaken is also a means to
differentiate oneself from its competitors in the market.
• Defined by United Nations
Industrial Development
Organization (UNIDO):
Corporate Social Responsibility is a management concept
that integrates social and environmental concerns in
business operations and a company’s interactions with its
stakeholders. More specifically, CSR can be seen as a
strategy to balance economic, environmental and social
imperatives while at the same time addressing the
expectations of shareholders.
• World Bank defines CSR as:
The commitment of businesses to contribute to
sustainable economic development by working with
employees, their families, the local community and
society at large to improve their lives in ways that are
good for business and for development.
• As defined by World Business
Council for Sustainable
Development (WBCSD) is the continuing
Corporate Social Responsibility
commitment by business to contribute to economic
development while improving the quality of life of the
workforce and their families as well as of the community
and society at large.
• According to European Commission,
“Corporate social responsibility (CSR) refers to companies
taking responsibility for their impact on society. The
European Commission believes that CSR is important for
the sustainability, competitiveness, and innovation of EU
enterprises and the EU economy. It brings benefits for
risk management, cost savings, access to capital,
customer relationships, and human resource
management.”
• According to Global Affairs Canada,
“Corporate Social Responsibility (CSR) is defined as the
voluntary activities undertaken by a company to operate
in an economic, social and environmentally sustainable
manner.”
• India`s new Companies Act 2013 (Companies Act)
has introduced Corporate Social Responsibility
(CSR) as a mandatory expenditure for corporates.
• As per CSR Committee and Policy: Every
qualifying company requires spending of at least
2% of its average net profit for the immediately
preceding 3 financial years on CSR activities.
As per Companies Act
• 2013: should be given to local areas and the
Preference
areas where the company operates.
• The company can also make the annual report of
CSR activities in which they mention the average
net profit for the 3 financial years and also
prescribed CSR expenditure
Section 135 of the Companies Act provides the
threshold limit for applicability of the CSR to a
Company i.e.
(a)net worth of the company to be Rs 500 crore
or more
(b)turnover of the company to be Rs 1000 crore
or more
(c)net profit of the company to be Rs 5 crore or
more.
• Promotion of education.
• Promoting gender equality and empowering women.
• Reducing child mortality and improving maternal health.
• Combating HIV and AIDS, malaria and other diseases.
• Ensuring environmental sustainability & employment.
• Enhancing vocational skills.
• Social business projects.
• Contribution to the prime minister's national relief fund
or any other fund set up by the central government or
the state governments for socio-economic development.
• Contribution to relief funds and funds for the welfare of
the minorities and women.
CHARITY CSR
• Donation of cash/kind/physical • Donation (2% of profits as per
effort. Provision of opportunities to companies act 2013) towards CSR in
members of the community and sectors that would be considered
stakeholders. valid activities under CSR.
• Voluntarily • Mandatory
• No restriction on kind of entities • Benefit a community pertaining to a
that could be beneficiary specific cause (health/education/
women). Can’t benefit an
individual.
• You may or may not demand • You must monitor progress and
accountability or sustainability for execution of projects because the
the money/items you gave. shareholder's of the company have
a right to know where their
money was invested.
Although CSR has certain challenges in its implementation yet
it is an important aspect of the corporate world. Some critics
argue that the reputational benefits that CSR companies
receive demonstrate the hypocrisy of the approach and the
industries like tobacco, alcohol etc. selling firms which actually
harm their consumers may indulge in the same philanthropic
activities which further complicates CSR. But the benefits are
much greater than the shortcomings and hence, it is required
and is beneficial for the development of developing
companies, for the company itself and for the society which
sometimes gets ignored due to the profit making motive of
the firms. It also increases a healthy competition among the
companies which in turn leads to a better performance.
• http://www.aefjn.org/index.php/369/articles/Corporate_Social_Res
ponsibility_-_An_Introduction.html
• http://www.wbcsd.org/work-program/business-role/previous-
work/corporate-social-responsibility.aspx
• http://www.international.gc.ca/trade-agreements-accords-
commerciaux/topics-domaines/other-autre/csr-rse.aspx?lang=eng
• http://ec.europa.eu/growth/industry/corporate-social-
responsibility/index_en.htm
• http://www.unido.org/fileadmin/import/84703_Background_Pape
r
LAC_Roundtable.pdf
• http://www.mondaq.com/india/x/366528/Corporate+Governance/
Corporate+Social+Responsibility+Indian+Companies+Act+2013
• https://www.quora.com/What-is-the-difference-between-
corporate-social-responsibility-CSR-and-charity.
