“By social responsibility we mean the intelligent and objective concern for the welfare of society that retrains individual and corporate behaviour from ultimately destructive activities, no matter how immediately profitable and leads in the direction of positive contributions to human betterment variously as the latter may be defined“.
Kenneth R. Andrews (1980)
While there might not be a common universally accepted definition of CSR, each of them tries to explain the existing foundation of the effect that businesses have on society at large and what the society expects from them. Although the underlying foundations of CSR lie in philanthropic activities (like gifts, noble causes, etc) companies, universally, the idea of CSR has advanced and now includes all related concepts such as corporate citizenship, philanthropy, strategic philanthropy, corporate sustainability, and business responsibility.
Presently Corporate Social Responsibility (CSR) is very much recognized among investors just as with different stakeholders of society in India. The term CSR is new normal for Indian organizations. CSR basically gives more attention to how the profits of the company are used. Large firms and organizations understand that CSR is an essential part of the business system for sustainable development. Organizations additionally consider that CSR is a methodology towards Social Profit development and spotlights on the triple bottom line of Economic, Environmental and Social performance.
In India, the term Corporate Social Responsibility (CSR) is broadly utilized despite the fact that the concepts connected with such as business responsibility, supportable turn of events, philanthropy, sustainability, corporate citizenship, dependable business, triple bottom line, shared value, value creation, business morals, financial responsibility, the bottom of the pyramid, partner the board, corporate responsibility, and corporate social performance.
Since the 1960’s CSR has attracted the attention of businesses and stakeholders in regards to its benefits and what it is. India became the first nation to mandate CSR on first April 2014 under The Companies Act 2013, Section 135. We shall also investigate the arguments which indicated CSR as a social welfare mechanism. Firstly, is it necessary to understand ‘what is CSR’ and ‘how can it function’. On that note, corporate social responsibility is a longstanding idea however the perspectives on it have been changing over time.
In the midst of the COVID-19 (corona virus) outbreak, the Ministry of Corporate Affairs has notified that the companies’ expenditure to battle the pandemic will be considered substantial under CSR activities. Assets might be spent on various activities related to COVID-19, for example, the promotion of healthcare including preventive healthcare and sanitation, and disaster management. The revision notified in the Companies Act, 2013 requires companies with a net worth of at least INR 5 billion or more, or an annual business of INR 10 billion more, or net profit of at least INR 50 million, to spend 2 percent of their average net profits of three years on CSR.
Corporate Social Responsibility focuses on the idea that a business has social obligations above and beyond making a profit. It becomes the company’s duty to produce an overall helpful impact on society. In order to achieve this, we shall closely examine the guidelines and principles of CSR. The concept of social responsibility is based on the premise that a business firm is more than economic instructions. It’s an organ of society and its activities exercise significant influence on the public. This drives the need to comprehend ‘why CSR is required and in particular in India’.
It has been seen that for Indian Companies, Corporate Social Responsibility (CSR) is the responsibility of organizations to add to sustainable economic development by working with the representatives, their families, the neighbourhood local area, specialists, and the general public everywhere to improve lives in manners that are useful for business and for its development.
CSR has become a compelling instrument to work in the line of Sustainable Development Goals (SDGs) with the spotlight on social performance seen in the CSR projects of different organizations. The SDGs, also called the Global Goals, are an all-inclusive source of inspiration to end poverty, secure the planet and guarantee that all individuals live in harmony and flourish. At public sector business organizations in India, CSR has been also looked upon as closely linked with the principle of sustainable economic development, which demands that organizations should make decisions and act based not only on financial factors but also on immediate and long term social and environmental consequences of their operations and activities.
Business goals are entangled with the environment and society in which they operate and the failure to perform long-term social and environmental goals makes a business unsustainable. Corporate Social Responsibility can also be seen as a concept of management and a process whereby companies merge social and environmental concerns in their businesses and relationships with stakeholders. Many corporate organizations in developed countries have seen the importance of responsible behaviour towards society and the impact of CSR activities on customers, employees, investors, the environment, stakeholders, and business sustainability.
Corporate Social Responsibility (CSR) in India was initialized in order to acquire a change in the mentality of corporate institutions. There was a saying which said that those who give back to the general public will thrive more in the market and prosper. Also, since it felt that the general public would have profited from such an implementation, the government would readily agree to it in order to satisfy the needs and needs of individuals. CSR has an extensive and conclusive impact on all areas such as finance, organizational, business, reputation, employees’ satisfaction, and brand differentiation.
Corporate Social Responsibility (CSR) in India was initialized in order to acquire a change in the mentality of corporate institutions. There was a saying which said that those who give back to the general public will thrive more in the market and prosper. Also, since it felt that the general public will profit from such an implementation, the government would readily agree to it in order to satisfy the needs and needs of individuals.
CSR has an extensive and conclusive impact on all areas such as finance, organizational, business, reputation, employees’ satisfaction, and brand differentiation.
About author –
This article has been authored by Vidhit Verma, 2nd year BBA LLB(Hons.) student at School of Law, Christ University, Bengaluru.