Documente Academic
Documente Profesional
Documente Cultură
Meaning of CSR
Corporate social responsibility (CSR) is also known by a number of other names. These include
corporate responsibility, corporate accountability, corporate ethics, corporate citizenship or
stewardship, responsible entrepreneurship, and "triple bottom line," to name just a few. As CSR
issues become increasingly integrated into modern business practices, there is a trend towards
referring to it as "responsible competitiveness" or "corporate sustainability."
"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".
Corporate social responsibility may also be referred to as "corporate citizenship" and can involve
incurring short-term costs that do not provide an immediate financial benefit to the company, but
instead promote positive social and environmental change.
Corporate social responsibility (CSR) can be defined as the "economic, legal, ethical, and
discretionary expectations that society has of organizations at a given point in time".
Corporate Governance | 1
CORPORATE SOCIAL RESPONSIBILITY IN INDIA
The World Business Council for Sustainable Development has described CSR as the business
contribution to sustainable economic development. Building on a base of compliance with legislation
and regulations, CSR typically includes "beyond law" commitments and activities pertaining to:
1. Corporate governance and ethics;
2. Health and safety;
3. Environmental stewardship;
4. Human rights (including core labour rights);
5. Sustainable development;
6. Conditions of work (including safety and health, hours of work, wages);
7. Industrial relations;
8. Community involvement, development and investment;
9. Involvement of and respect for diverse cultures and disadvantaged peoples;
10. Corporate philanthropy and employee volunteering;
11. Customer satisfaction and adherence to principles of fair competition;
12. Anti-bribery and anti-corruption measures;
13. Accountability, transparency and performance reporting; and
14. Supplier relations, for both domestic and international supply chains.
Generally, CSR is understood to be the way firms integrate social, environmental and economic
concerns into their values, culture, decision-making, strategy and operations in a transparent and
accountable manner, and thereby establish better practices within the firm, create wealth and
improve society.
The Ministry of Corporate Affairs has established a National Foundation for Corporate
Governance (NFCG). This is a partnership with the Confederation of Indian Industry (CII), the
Institute of Company Secretaries of India (ICSI) and the Institute of Chartered Accountants of India
Corporate Governance | 2
CORPORATE SOCIAL RESPONSIBILITY IN INDIA
(ICAI). The purpose of the National Foundation for Corporate Governanceis to promote better
corporate governance practices and raise the standard of corporate governance in India towards
achieving stability and growth.
Further the Guidelines provides for the implementation guidance for business and Industrial
entities:
1. The CSR policy of the business entity should provide for an implementation strategy;
2. Companies should allocate specific amount in their budgets for CSR activities and
3. The companies should disseminate information on CSR policy, activities and progress in a
structured manner to all their stakeholders and the public at large through their websites,
annual reports, and other communication media.
Guideline for Corporate Social Responsibility for Central Public Sector Enterprises (CPSEs) by
Ministry of Public Enterprises and Ministry of Heavy Industries.
This guideline on Corporate Social Responsibility (CSR) was issued by Ministry of Public
Enterprises on 9th April 2010.The Salient Features of Guideline:
1. Planning of CSR Action Plan: The planning for Corporate Social Responsibility should start
with the identification of the activities/projects to be undertaken. Company specific Corporate Social
Responsibility strategies should be developed that mandate the design of Corporate Social
Responsibility Action Plan (Long-term, mediumterm and short-term), with a shift from the casual
approach to the project based accountability approach. Each of these plans should clearly specify
requirements relating to baseline survey; activities to be undertaken, budgets allocated, time-lines
prescribed, responsibilities and authorities defined and major results expected.
2. Implementation of CSR Action Plan: CSR initiatives of Central Public Sector Enterprises
(CPSEs) should consider the following parameters for identification/selection of schemes/projects:
1. The time-frame and periodic milestones should be finalized at the outset;
2. CSR activities should help in building a positive image of the company in the public
perception;
3. CSR projects may be closely linked with the principles of sustainable development,
ensure gender sensitivity, skill enhancement, entrepreneurship development and
employment generation by co-creating value with local institutions/people;
4. Public-Private Partnership between Government and the Central Public Sector Enterprise
could also be encouraged to leverage the strengths of the latter in Disaster management;
5. CSR is to be implemented by Specialized Agencies and generally NOT by staff of the
CPSE concerned and,
6. Activities related to Sustainable Development will form a significant element of the total
initiatives of CSR.
3. National CSR Hub: The Department Of Public Enterprises, in conjunction with Standing
Conference of Public Enterprises (SCOPE) and the CPSEs will create a National CSR Hub, which
will undertake/facilitate the activities like Nation-wide compilation, documentation, and creation of
database; Advocacy; Research; Conferences, Seminars, Workshops - both national and international
etc.
4. Monitoring
1. Monitoring of the CSR projects is very crucial and needs to be a periodic activity of the
Enterprise.
2. The Boards of CPSEs should discuss the implementation of CSR activities in their Board
meetings.
3. CSR projects should also be evaluated by an independent external agency.
Corporate Governance | 3
CORPORATE SOCIAL RESPONSIBILITY IN INDIA
The Companies Bill 2011 provide that Every company having net worth of rupees five hundred
crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or
more during any financial year shall constitute a Corporate Social Responsibility Committee of the
Board consisting of three or more directors, out of which at least one director shall be an independent
director.
Such Corporate Social Responsibility Committee shall,-
(a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which
shall indicate the activities to be undertaken by the company as specified in Schedule VII;
(b) recommend the amount of expenditure to be incurred on the activities referred to in clause
(a); and
(c) monitor the Corporate Social Responsibility Policy of the company from time to time.
Corporate Governance | 4
CORPORATE SOCIAL RESPONSIBILITY IN INDIA
quickly assess and profile business practices they view as either problematic or exemplary. In
the CSR context, modern communications technology offers opportunities to improve
dialogue and partnerships.
6. Finance: Consumers and investors are showing increasing interest in supporting responsible
business practices and are demanding more information on how companies are addressing
risks and opportunities related to social and environmental issues. A sound CSR approach can
help build share value, lower the cost of capital, and ensure better responsiveness to markets.
7. Ethics: A number of serious and high-profile breaches of corporate ethics resulting in damage
to employees, shareholders, communities or the environment as well as share price-have
contributed to elevated public mistrust of corporations. A CSR approach can help improve
corporate governance, transparency, accountability and ethical standards.
8. Consistency and Community: Citizens in many countries are making it clear that corporations
should meet the same high standards of social and environmental care, no matter where they
operate. In the CSR context, firms can help build a sense of community and shared approach
to common problems.
9. Leadership: At the same time, there is increasing awareness of the limits of government
legislative and regulatory initiatives to effectively capture all the issues that CSR address.
CSR can offer the flexibility and incentive for firms to act in advance of regulations, or in
areas where regulations seem unlikely.
10. Business Tool: Businesses are recognizing that adopting an effective approach to CSR can
reduce the risk of business disruptions, open up new opportunities, drive innovation, enhance
brand and company reputation and even improve efficiency.
Corporate Governance | 5
CORPORATE SOCIAL RESPONSIBILITY IN INDIA
social goals may dilute economic productivity, and of the costs incurred as many socially responsible
actions do not cover their costs.
Corporate Governance | 6
CORPORATE SOCIAL RESPONSIBILITY IN INDIA
NTPC had a specific corporate objective towards sustainable power development as follows:- To
contribute to sustainable power development by functioning as a responsible corporate citizen and
discharge social responsibilities in the areas of environment protection and rehabilitation. The
corporation will strive to utilize the ash produced at its stations to the maximum extent possible.
For achieving its mission and objective, NTPC formulated specific policies, as delineated in
subsequent paras of this note. The policies were formulated to address the issue of corporate social
responsibility in a comprehensive and systematic manner. The Corporate Human Resources
Department also formulated the policies on "Facilities to be given to land oustees" whose land is
expropriated for setting up the power project; policy on educational facilities for the children of
employees as early as 1980. Further, institutional mechanism like participative forums for employees
and environment group were established as early as 1980 itself. Specific guidelines were formulated
on Engagement of Contractors workers and staff.
Some other initiatives
• IBM- Upliftment of tribals in SASAN. • ADOBE, KPMG, Promoting
• INDIAN PAINT INDUSTRY: Making entrepreneurship.
green more environment friendly. • RELIANCE- Project DRISHTI
• FINANCIAL SERVICES-Neasing of • NDTV-GREENATHON
carbon footprints-renewable energy • AIRCEL-SAVE THE TIGER
etc- HSBC, MAX NEWYORK LIFE, • COPENHAGEN- Environment issues.
SCB • E WASTE MANAGEMENT
• E Chaupal
BENEFITS OF CSR
Based on a two-year study, the World Business Council for Sustainable Development has drawn
several conclusions about the benefits of CSR to companies"
1. A coherent CSR strategy, based on integrity, sound values and a longterm approach,
offers clear business benefits to companies and helps a firm make a positive contribution
to society;
2. A CSR strategy provides businesses with the opportunity to show their human face;
3. Such a strategy requires engagement in open dialogue and constructive partnerships with
governments at various levels, intergovernmental organizations, non-governmental
organizations, other elements of civil society and, in particular, local communities;
4. When implementing a CSR strategy, companies should recognize and respect local and
cultural differences, while maintaining high and consistent global standards and policies;
and
5. Being responsive to local differences means taking specific initiatives.
CONCLUSION
Finally we can conclude that concept of corporate social responsibility is now firmly rooted on
the global business agenda. Transparency and dialogue can help to make a business appear more
trustworthy, and push up the standards of other organizations at the same time. Selected PSUs are
trying to manage their CSR department in a very good manner. As discussed above PSUs are
expecting huge amount of support from government for implementing CSR policies and in return
government is also trying to facilitate them by launching various Guidelines, norms and procedures.
The government while formulation its guidelines have made provisions for 0.5% to 2% net profits to
be allocated to social, environmental and economic sectors. Various positives have been seen in
different abovementioned sectors, such as:
In environmental field, some benefits such as greater material recyclability; Better product
durability and functionality; Greater use of renewable resources; Integration of environmental
Corporate Governance | 7
CORPORATE SOCIAL RESPONSIBILITY IN INDIA
management tools into business plans, including life-cycle assessment and costing, environmental
management standards, and eco-labeling.
At community level some benefits to society and the General Public are charitable contributions;
Employee volunteer programs; corporate involvement in community education, employment and
homelessness programs; Product safety and quality. While at company level itself it enjoys the
benefits of Improved financial performance; Lower operating costs; Enhanced brand image and
reputation; Increased sales and customer loyalty; Greater productivity and quality; More ability to
attract and retain employees; Reduced regulatory oversight; Access to capital; Workforce diversity;
Product safety and decreased liability.
Government is playing a very significant role in facilitating the formulation and implementation
of CSR policies and practices, but when it comes to monitor the activities of CSR by government the
companies are against it. They think that the role of government in regulating their CSR activities
should be limited. Proper observing and assessment of such practices can give better results as it will
help in finding out the loopholes where the companies are deficient. CSR holds a very important
place in the development scenario of the world today and can pose as an alternative tool for
sustainable development.
With increasing and widespread commitment of corporate resources to CSR, attention is now
shifting to the strategic formulation, implementation, and measurement of the market returns to CSR
initiatives. But still a concern to companies is whether their focus on "doing good," will provide
positive returns to their CSR actions. This emphasize the need for better measurement models of
CSR that capture and estimate clearly the effects of a company's CSR actions on its stakeholders as
well as the nations in which they are operating.
Corporate Governance | 8