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1. ACKNOWLEDGEMENT
2. 1.RESEARCH METHODOLOGY
2.HYPOTHESIS:
3. INTRODUCTION
4. CHAPTERS:
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ACKNOWLEDGEMENT
I would like to take this opportunity to thank MR.VIJYANT SINHA, for his invaluable
support, guidance and advice. I would also like to thank my parents who have always been
there to support me. I would also like to thank the library staff for working long hours to
facilitate us with required material going a long way in quenching our thirst for education.
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RESEARCH METHODOLOGY
My research is a blend of doctrinal and non-doctrinal research. Doctrinal in the sense that I
have collected theoretical material from different sources such as text books and Internet
resources.
Analytical or Descriptive?
I have tried to be analytical in writing this project but nevertheless I have included statistics
and important quotes from different sources, as and when considered suitable.
HYPOTHESIS:
The hypothesis which the researcher has presumed to perform this study is that
THE FIRM viewpoint its csr is the set of moral duties towards other social
actors and towards society that the firm assumes as a result of its economic
,social, political and of course ,ethical reflection on its role in society and on its
relationship with those other actor.
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INTRODUCTION
Corporate social responsibility (CSR, also called corporate conscience, corporate
citizenship or responsible business) is a form of corporate self-regulation integrated into
a business model. CSR policy functions as a self-regulatory mechanism whereby a business
monitors and ensures its active compliance with the spirit of the law, ethical standards and
national or international norms. With some models, a firm's implementation of CSR goes
beyond compliance and engages in "actions that appear to further some social good, beyond
the interests of the firm and that which is required by law." The aim is to increase long-term
profits and shareholder trust through positive public relations and high ethical standards to
reduce business and legal risk by taking responsibility for corporate actions. CSR strategies
encourage the company to make a positive impact on the environment
and stakeholders including consumers, employees, investors, communities, and others.
Proponents argue that corporations increase long-term profits by operating with a CSR
perspective, while critics argue that CSR distracts from businesses' economic role. A 2000
study compared existing econometric studies of the relationship between social and financial
performance, concluding that the contradictory results of previous studies reporting positive,
negative, and neutral financial impact, were due to flawed empirical analysis and claimed
when the study is properly specified, CSR has a neutral impact on financial outcomes.
Critics questioned the "lofty" and sometimes "unrealistic expectations" in CSR. or that CSR
is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog
over powerful multinational corporations.
CSR is titled to aid an organization's mission as well as serve as a guide to what the company
represents for its consumers. Business ethics is the part of applied ethics that examines ethical
principles and moral or ethical problems that can arise in a business environment. ISO
1
en.wikipedia.org/wiki/Corporate_social_responsibility
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26000 is the recognized international standard for CSR. Public sector organizations (the
United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that
CSR adheres to similar principles, but with no formal act of legislation.
In the past few years, great emphasis has been given to the concept of
Corporate Social Responsibility, precisely defined in terms of the responsiveness of
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businesses to stakeholders legal, ethical, social, economical and environmental expectations.
Over the last decade, there have been number of companies worldwide that have started
promoting their business through Corporate Social Responsibility strategies because the
customers and the investors expect them to act sustainable as well as responsible.
ISO 26000 is the recognized international standard for CSR. The standard emphasizes the
relationship of a business to the society and environment in which they operate which is a
critical factor in their ability to continue to operate effectively. The ISO 26000 standard is
becoming popular these days as it helps businesses and organizations translate principles into
effective actions and shares best practices relating to social responsibility, globally and is
meant for all types of organizations regardless of their industry, activity, size or location.
Social responsibility and sustainability have become important marketing strategies for
businesses. Corporations are motivated to become more socially responsible because their
most important stakeholders expect them to understand and address the social and community
issues that are relevant to them. Generally, CSR is related to crisis i.e. whenever a company
falls into a social or economical crisis they look towards the concept of corporate social
responsibility. It is important that organizations understand the significance of the concept of
CRS and integrate it into their business models.
Aligning a business towards a sustainability approach is always helpful in the long run. CSR
is an evolving theory and with the coming of the global digital age, the theory is gaining rapid
significance among business of all sizes. Corporate social responsibility has many facets and
its important to note the interconnectedness of Corporate Social Responsibility, corporate
governance, social inclusion and economic growth. This paper highlights this
interconnectedness and the importance of CSR towards nation building. The potential and
advantages of CSR are often overlooked and in order to achieve inclusive growth businesses
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must participate in addressing socio-economic concerns while still maintaining their business
strategies and the necessity to nurture and include all the relevant stakeholders in their growth
stories. The changing policy environment in India makes it imperative to be prepared and
support industry efforts and provide technical assistance for adapting to the change. The next
phase of CSR in India is promising and provides great motivation and incentive to reduce
inequalities in our country. We are glad to be associated with PHD Chamber, New Delhi as a
knowledge partner and participate in their endeavour to provide a knowledge sharing
platform and an understanding of CSR and the implications of the recently proposed
Companies Bill in the industry and its expected contribution to inclusive growth.
Over the past few years CSR, as a concept, has been the focus of many
deliberations and research. It has grown in importance both academically as well as in the
business sense. It captures a spectrum of values and criteria for measuring a companys
contribution to social development. As the term CSR is used continually, many
complementary and overlapping concepts, such as corporate citizenship, business ethics,
stakeholder management and sustainability, have emerged. These extensive ranges of
synonymously used terms indicate that multiple perspectives and by those in facilitating roles
such as the corporate sector, government agencies, academics and the public sector, context
has been given by the European Union (EU). It describes CSR as the concept that an
enterprise is accountable for its impact on all relevant stakeholders. It is the continuing
commitment by business to behave fairly and responsibly, and contribute to economic
development while improving the quality of life of the work force and their families as well
as of the local community and society at large1 In other words, CSR refers to ensuring the
success of the business by inclusion of social and environmental considerations into a
companys operations. It means satisfying your shareholders and customers demands while
also managing the expectation of other stakeholders such as employees, suppliers and the
c2ommunity at large. It also means contributing positively to society and managing your
organizations environmental impact. Hence, CSR is a contribution to A renewed EU
sustainable development, implying the way a company balances its economic, environmental
and social objectives while addressing stakeholder expectations and enhancing shareholder
value. CSR not only includes the activities that a company undertakes development, but also
includes the methods that a company responsible investments, and transparency to various
stakeholders among others. Realizing the importance and the have incorporated socially
2
s://www.unitar.org/event/full.../introduction-corporate-social-responsibility-1
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responsible business practices. The basic objective of CSR is to maximize the companys
overall impact on the society and stakeholders while considering environment and overall
sustainability.
As the importance of being socially responsible is being recognized throughout the world,
governments are aware of the national competitive advantages won from a responsible
business sector. Large corporations have progressively realized l operations are located. The
Organization for Economic Co-operation and Development (OECD) established a set of
guidelines for multinational enterprises in 1976, and was thus a pioneer in developing the
concept of CSR. The purpose of these guidelines was to improve the investment climate and
encourage the positive contribution multinational enterprises can make to economic and
social Over progress. In addition to the OECDs 30 member countries, 11 observer countries
have endorsed the guidelines. It is observed that, transparency in reporting enhances the focus
on economic, social and environmental factors. It motivates companies to intensify their
efforts in becoming socially responsible. Several efforts have been taken by various
governments, to encourage CSR reporting, such as incentivizing companies who voluntarily
report their CSR activities or by taking measures such as mandating CSR reporting. In 2007,
the Malaysian government passed a regulation to mandate all publicly listed companies to
publish their CSR initiatives in their annual reports on a comply or explain basis.
Accordingly, all public listed companies (PLCs) in Malaysia have to either publish CSR
information or they need to explain why they should be exempted.4 In another example, in
2009 Denmark mandated CSR reporting, asking all state-owned companies and companies
with total assets of more than 19 million, revenues more than 38 million and more than 250
employees, to report their . To enable transparency from businesses on the environment,
social and governance front, France passed a law called Grenelle II, which mandates
integrated sustainability and exchanges, including subsidiaries of foreign companies located
in France and unlisted companies with sales revenue of more than 400 million and more
than 2,000 employees.5 Although some CSR standards are mandatory, there are others,
which comprise of both, mandatory and voluntary standards. For instance, in 2006 the British
Companies Act mandated all companies listed in the UK to include information about their
CSR activities in their annual reports; however, a full length CSR reporting was made
voluntary. 6 A corporate responsibility index challenges and supports large organizations to
integrate responsible business practices. Emerging markets such as Brazil, China and South
Africa have become forerunners in CSR reporting in the developing world in terms of their
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involvement in CSR-related activities in order to promote the listed companies credibility,
transparency and emerging market stock exchange to create a socially responsible investing
(SRI) index in 2004. China has also encouraged CSR reporting in guidelines released through
the Shanghai and Shenzhen Stock Exchange. In today's economic and social environment,
issues related to social responsibility andsustainability are gaining more importance,
especially in the business sector. Business goals are inseparable from the societies and
environments within which they operate. Whilst short-term economic gain can be pursued,
the failure to account for longer-term social and environmental impacts makes those business
practices unsustainable.
A recent study on Sustainability and Innovation by the MIT Sloan Management Review and
the Boston Consulting Group has revealed that sustainability has a permanent place on 70%
of management agendas. The majority of the 3,000 respondents to the study also mentioned
that sustainability activities are adding to profits, with companies making changes to their
organisational structure and business models in order to support more sustainable business
practices.
At the international level, the United Nations launched in 2000 the Global Compact to align
business operations and strategies with ten universally accepted principles in the areas of
human rights, labour standards, the environment and anti-corruption. With almost 8,000
corporate participants in over 140 countries, the UN Global Compact is the worlds largest
voluntary corporate sustainability initiative.
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projects. Also, with global influences and with communities becoming more active and
demanding, there appears to be a discernible trend, that while CSR remains largely restricted
to community development, it is getting more strategic in nature (that is, getting linked with
business) than philanthropic, and a large number of companies are reporting the activities
they are undertaking in this space in their official websites, annual reports, sustainability
reports and even publishing CSR reports. The Companies Act, 2013 has introduced the idea
of CSR to the forefront and through its disclose-or-explain mandate, is promoting greater
transparency and disclosure. Schedule VII of the Act, which lists out the CSR activities,
suggests communities to be the focal point. On the other hand, by discussing a companys
relationship to its stakeholders and integrating CSR into its core operations, the draft rules
suggest that CSR needs to go beyond communities and beyond the concept of philanthropy. It
will be interesting to observe the ways in which this will translate into action at the ground
level, and how the understanding of CSR is set to undergo a change. CSR and sustainability
Sustainability (corporate sustainability) is derived from the concept of sustainable
development which is defined by the Brundtland Commission as development that meets the
needs of the present without compromising the ability of future generations to meet their own
needs 4 . Corporate sustainability essentially refers to the role that companies can play in
meeting the agenda of sustainable development and entails a balanced approach to economic
progress, social progress and environmental stewardship. CSR in India tends to focus on what
is done with profits after they are made. On the other hand, sustainability is about factoring
the social and environmental impacts of conducting business, that is, how profits are made.
3
Hence, much of the Indian practice of CSR is an important component of sustainability or
responsible business, which is a larger idea, a fact that is evident from various sustainability
frameworks. An interesting case in point is the NVGs for social, environmental and economic
responsibilities of business issued by the Ministry of Corporate Affairs in June 2011.
Principle eight relating to inclusive development encompasses most of the aspects covered by
the CSR clause of the Companies Act, 2013. However, the remaining eight principles relate
to other aspects of the business. The UN Global Compact, a widely used sustainability
framework has 10 principles covering social, environmental, human rights and governance
issues, and what is described as CSR is implicit rather than explicit in these principles.
3
.wikipedia.org/wiki/Evolution_of_corporate_social_responsibility_in_India
www.janalakshmi.com/wp-content/uploads/evolution_of_csr_in_india.p
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Globally, the notion of CSR and sustainability seems to be converging, as is
evident from the various definitions of CSR put forth by global organisations. The genesis of
this convergence can be observed from the preamble to the recently released draft rules
relating to the CSR clause within the Companies Act, 2013 which talks about stakeholders
and integrating it with the social, environmental and economic objectives, all of which
constitute the idea of a triple bottom line approach. It is also acknowledged in the Guidelines
on Corporate Social Responsibility and Sustainability for Central Public Sector Enterprises
issued by the DPE in April 20135 . The new guidelines, which have replaced two existing
separate guidelines on CSR and sustainable development, issued in 2010 and 2011
respectively, mentions the following: Since corporate social responsibility and sustainability
are so closely entwined, it can be said that corporate social responsibility and sustainability is
a companys commitment to its stakeholders to conduct business in an economically, socially
and environmentally sustainable manner that is transparent and ethical.
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increased focus and a changing policy environment to enable sustainable practices and
increased participation in the socially inclusive practices.
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/www.scribd.com/.../Evolution-of-Corporate-Social-Responsibility-in-India-
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The Third Phase
The third phase of CSR (196080) had its relation to the element of "mixed economy",
emergence of Public Sector Undertakings (PSUs) and laws relating labour and environmental
standards. During this period the private sector was forced to take a backseat.The public
sector was seen as the prime mover of development.Because of the stringent legal rules and
regulations surrounding the activities of the private sector, the period was described as an
"era of command and control". The policy of industrial licensing, high taxes and restrictions
on the private sector led to corporate malpractices.This led to enactment of legislation
regarding corporate governance, labour and environmental issues. PSUs were set up by the
state to ensure suitable distribution of resources (wealth, food etc.) to the needy. However the
public sector was effective only to a certain limited extent. This led to shift of expectation
from the public to the private sector and their active involvement in the socio-economic
development of the country became absolutely necessary.In 1965 Indian academicians,
politicians and businessmen set up a national workshop on CSR aimed at reconciliation. They
emphasized upon transparency, social accountability and regular stakeholder dialogues. In
spite of such attempts the CSR failed to catch steam.
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CURRENT SCENARIO OF CSR IN INDIA
As discussed above, CSR is not a new concept in India. Ever since their inception, corporates
like the Tata Group, the Aditya Birla Group,and Indian Oil Corporation, to name a few, have
been involved in serving the community. Through donations and charity events, many other
organizations have been doing their part for the society. The basic objective of CSR in these
days is to maximize the company's overall impact on the society and stakeholders. CSR
policies, practices and programs are being comprehensively integrated by an increasing
number of companies throughout their business operations and processes. A growing number
of corporates feel that CSR is not just another form of indirect expense but is important for
protecting the goodwill and reputation, defending attacks and increasing business
competitiveness.[6]5
Companies have specialised CSR teams that formulate policies, strategies and goals for their
CSR programs and set aside budgets to fund them. These programs are often determined by
social philosophy which have clear objectives and are well defined and are aligned with the
mainstream business. The programs are put into practice by the employees who are crucial to
this process. CSR programs ranges from community development to development in
education, environment and healthcare etc.
Also, corporates increasingly join hands with non-governmental organizations (NGOs) and
use their expertise in devising programs which address wider social problems.
CSR has gone through many phases in India. The ability to make a significant difference in
the society and improve the overall quality of life has clearly been proven by the corporates.
5
www.isca.in/IJMS/Archive/v2/i12/3.ISCA-RJMS-2013-105.
www.indiainfoline.com/.../indias-csr-journey-and-scenario-
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Not one but all corporates should try and bring about a change in the current social situation
in India in order to have an effective and lasting solution to the social woes . Partnerships
between companies, NGOs and the government should be facilitated so that a combination of
their skills such as expertise, strategic thinking, manpower and money to initiate extensive
social change will put the socio-economic development of India on a fast track.
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and increasing the reach of CSR projects. It can be observed that only 28% of the companies
have established partnerships with other companies for CSR initiatives. This is one area
where strategic deliberations are required in order to evolve mechanisms and platforms where
companies can collaborate to support important social initiatives in a focused and
comprehensive manner and avoid duplication of effort and resources. Partnership with local
and state governments is another important factor that will help in better utilization of
resources. Establishing partnerships and supporting the government have the potential to
strengthen ongoing social programs and ensuring long-term sustainability. The research
indicates that 46% of companies have established partnerships and are found to be supporting
programs or schemes of local or sta6te government through CSR. Mostly, the support is in
terms of improving infrastructure, providing equipment, learning aids and other supplies to
government programs. This is another area, which needs strategic thinking and efforts so that
companies can complement governments efforts by supporting government run programs
and welfare schemes. Most of the companies implement CSR activities through NGOs. The
research indicates that nearly 70% have partnerships with the NGOs for implementation of
CSR activities. The remaining companies are implementing CSR activities directly; it is
possible that these companies are not likely to have disclosed their partnerships in the public
domain. Deliver: The research focused on understanding broad thematic areas such as
education, health care, environment, livelihood, rural development and disaster relief as a
focus of CSR initiatives. ' issues covered in each of these broad thematic areas. covered by
the companies include health, education, livelihoods, environment and rural development. Of
these thematic areas, education is the most common and research indicates that 100% of the
companies included in the research were found to have some initiatives on education
followed by livelihoods and environment and then health care and rural development. The
research indicates that providing infrastructure support is the most common activity in the
education domain, undertaken by approximately 88% (44 out of total of 50 companies
focusing on educational thematic area) of the companies. For the purpose of this study we
have included equipment, furniture, books, teaching supplies, construction of libraries and
renovation work for school buildings as a part of providing infrastructure support. Providing
scholarships to disadvantaged students is another common activity being observed with 62%
of all companies offering some form of scholarships. The research also indicates that
approximately 74% of companies were also running projects to improve quality of education
6
//www.researchgate.net/.../259332084_A_REVIEW_OF_THE_CURRENT_SCENERIO
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by offering coaching classes for underserved children, training primary and secondary school
teachers in new and improved teaching methodologies and providing innovative teaching and
learning aids. Around 34% of companies included in the research were found to be running
their own schools. 88% 74% 48% 34% 62% 30% Running own schools Infrastructure
support Quality of education Girl child education Adult education Scholarships Health care
In the health care domain, organizing health camps to offer curative services and raising
awareness on health issues is the most common activity being implemented by nearly 74% of
the companies included in the research. Providing infrastructural and equipment support is
another common activity in the health care domain being undertaken by around 68% of the
companies. The infrastructure and equipment support includes medical equipment and
ambulances to hospitals and health centers as well as renovation of hospital buildings and
construction of new health centers. Water and sanitation and maternal and child health are
other chosen areas of intervention in the health domain.
CSR initiatives aimed toward the betterment of the environment include green initiatives such
as tree plantation drives to promote afforestation, efforts to conserve water and manage and
dispose of waste responsibly. Green initiatives garner the initiatives to improve the
environment and approximately 64% taking measures to conserve water.
Of the 50 companies taken into consideration approximately 88% support skill development
through vocational training and career counselling to improve skills and employability of
candidates and subsequently their earning capacities. Some activities undertaken by
companies have included such as sensitizing farmers about new and improved farming
techniques. Approximately 78% of the companies were found to be supporting income
generation activities for people and especially for women in rural areas.
In rural development, 68% of all researched companies have been working toward betterment
of rural areas by providing infrastructure support such as building of check dams, revamping
of water pumps and laying down of roads to improve connectivity. Companies have also been
working for rural development through organizing awareness generation camps for issues
such as domestic violence, female feticide, and importance of education among others
initiatives.
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undertake CSR activities near their area of operation and about 46% have expanded their
CSR activities to other areas. The study also emphasized on understanding how many
companies are focusing on major EAG states including Bihar, Maharashtra, Rajasthan,
Odhisha and Uttar Pradesh. There are a total of 8 states. However, for the purpose of this
indicates that around 79% of the 50 companies are working in at states included in the
research.
Being one of the highly industrialized states, Maharashtra emerged as one where nearly 50%
of the companies included in this study were implementing CSR initiatives Out of the 50
companies analyzed, 38% have supported disaster relief and rehabilitation activities as part of
CSR. Around 26 % of the companies have made a contribution toward relief funds such as
PM National relief fund, and CM State relief fund for various social initiatives.
Disclose: One of the key focus areas of research was to determine whether companies
disclose their CSR initiatives in the public domain either through a sustainability report or a
specialized CSR report. The research also determined whether the allocated budget or the
total expenditure for CSR activities was disclosed in the public domain. Out of the 50
researched companies 40% are a signatory to UN Global Compact.11 This implies that these
companies are committed to aligning their business operations and strategies to the ten
universally acceptable principles in the domain of human rights, labour, environment and
anti-corruption Approximately 66% of all the considered companies had compiled a report
regarding their CSR activities. Among these, 19 publish a sustainability report and 5 publish
a business responsibility report whereas 9 report their CSR activities under other titles such as
CSR Activity report, CSR Brochure, Report of Inclusive growth, amongst others. The funds
allocated/spent on CSR activities. The above analysis indicates that companies in India need
to revisit their CSR policies and strategies in order to adequately adapt their activities to the
requirements of the Companies Bill, 2012. Once the guidelines related to the CSR clause are
the terms of permissibility of the expenses that will be counted as CSR and possible thematic
areas and activities that could be considered for CSR. However, the Clause 135 of the
Companies Bill, 2012 is very clear on the requirement of reporting of the CSR activities and
expenses. This is one area where many companies have to focus and evolve mechanisms to
regularly document, collate and analyze data regarding CSR activities and prepare a CSR
report to share at the public domain for all stakeholders.
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The corporate takeover
in KizhakkambalaM
An Indian garment manufacturing company called Kitex has taken over the administration of
a small village called Kizhakkambalam by winning the local body elections held in
November, 2015. Mainstream political leaders and environmental activists feel that this can
lead to a dangerous precedent because corporate body can have a hidden agenda in taking
over the administration of political bodies. Former Indian MP Sebastian Paul says that "the
company was at loggerheads with the former panchayat on issues like environmental
pollution so we dont know what their vested interest is in taking over the panchayat. They
also employ a big segment of the population there and also give out dole to locals. This
model can be replicated...it is setting a dangerous precedent. Environmentalists like
C.R.Neelakantan point out that the Kitex group has became active in social service only after
they were involved in court cases connected with water and land pollution.
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Companies Act, 2013, Clause 135: CSR committee requirements A CSR committee of the
board should be constituted. It should consist of at least three directors out of whom at least
one is an independent director. This composition will be disclosed in the boards report as per
sub-section (3) of section 134. The CSR committee shall: - formulate and recommend a
CSR policy to the board, indicating the activities as specified in Schedule VII of the Act -
recommend the amount of expenditure to be incurred on the activities indicated in the policy
- monitor the CSR policy regularly .This is an excellent starting point for any company new
to CSR. In case a company already practices CSR, this committee should be set up at the
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earliest so that it can guide the alignment of the companys activities with the requirements
of the Act. For effective implementation, the CSR committee must also oversee the
systematic development of a set of processes and guidelines for CSR to deliver its proposed
value to the company, including: one-time processes such as developing the CSR strategy
and operationalising the institutional mechanism repetitive processes such as the annual
CSR policy, due diligence of the implementation partner, project development, project
approval, contracting, budgeting and payments, monitoring, impact measurement and
reporting and communication.
While developing these processes, no standard set of recommendations exist for all
companies. However, an overview of the required details, the activities required to be
completed for each of these processes along with some additional guidance on critical issues
has been provided below:
Step one: : Developing a CSR strategy and policy .Purpose :The Companies
Act, 2013 requires every company to put out its CSR policy in the public domain. The
guidance provided in the Act and the draft rules on what constitutes a CSR policy are that it
should: exclude normal business activities of the company contain a list of the CSR
projects or programmes which the company plans to undertake during the implementation
year While specifying the annual report requirements, the draft rules go on to say is that the
company must provide: a brief outline of its CSR policy, including the statement of intent
reflecting the ethos of the company, broad areas of CSR interest and an overview of activities
to be undertaken a web link to the CSR policy including the full list of projects, activities
and programmes proposed to be undertaken by the company Since most of the development
requires long-term commitments and their impact often takes a while to accrue, a good CSR
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onstrategyhq.com/resources/strategic-corporate-social-responsibility/
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practice requires that a company that is serious about its CSR should develop a long-term
(three to five years) vision and strategy which is reviewed annually and the activities and
budgets are planned on an annual basis. The latter will comply with the CSR policy
requirements of the Companies Act, 2013. To avoid confusion regarding terms like policy,
strategy, project and programme, a brief explanation has been provided here: CSR strategy
refers to what the company expects to achieve in the next three to five years and incorporates
the vision, mission and goals on a broader level. It also entails how it plans to achieve these
in terms of organisation and approach. CSR policy refers to what the company expects to
achieve over the next year. This is aligned with the requirements of the Companies Act, 2013
. Programme refers to a sector or an issue that the company proposes to address through its
CSR. This can, for instance, be education of the girl child or agriculture development.
Programmes will be clearly outlined in the companys CSR strategy. Programme goals will
be achieved through a series of individual projects and, a project refers to a set of
interventions, typically in a specific geography and addressing a specific stakeholder group,
with a definite set of goals, beginning and end and a budget attached to it. Each project in
turn will consist of a number of activities. All of which contribute towards the project goals.
Target group: While development and welfare programmes in India address all the
citizens, the focus is on the disadvantaged, marginalised and excluded. Marginalisation in
India is primarily on the basis of gender, disability, ethnicity and location. This leads to social
and physical exclusion of such groups from all kinds of development. Engaging the
marginalised in India is further complicated due to language and literacy variances,
information asymmetry, infrastructure constraints, geographical challenges and cultural
barriers to name a few. The CSR strategy should ideally indicate which of these marginalised
groups it proposes to target.
Geography: The Companies Act, 2013 encourages companies to target their CSR
interventions in their local region. While this is an obvious choice for companies that are in
manufacturing, those in the services sector (like banking and telecom) with a wider footprint
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have no concentrated local region. Companies must decide whether their CSR activities will
be focused on a few geographies (this can be around their plants or in specific backward
districts) or whether they will prefer to particularly work anywhere in India.
Sector and issue: Sector refers to the development area that the company wishes to focus
on; typically, health, education, livelihood, environment, and so on. Issue refers to a specific
aspect of a sector for example, primary education in the education sector, skills development
or social enterprise in the livelihoods sector. It is important for a company to determine which
sector and issues it will focus on to ensure significant positive impact. Also, the reporting8
format in draft rules of the Companies Act, 2013 requires that the company report against the
sector making it all the more important.
Process
Output(s): the CSR policy document and an indication of sectors and issues,
geographies and a profile of the beneficiaries.
Activities Reviewing the past as well as the current CSR activities and examining their
alignment with Schedule VII of the Companies Act, 2013. Studying the publicly available
information on national and local development priorities. Meeting development experts in
the government as well as the NGOs to understand priorities and identifying potential areas
of intervention. Conducting internal meetings with business leaders to establish the
relevance of potential CSR activities to the companys core business. Studying the good
CSR practices of other companies and their achievements. Developing a CSR strategy that
defines for the next three to five years, what the companys CSR activities will cover in terms
of: - vision and mission - sectors and issues - geographies: states and districts - beneficiaries -
KPIs Determining the implementation mechanism: - grant-making or direct implementation
- institutional mechanism: in-house department, corporate foundation, partnerships with other
NGOs Annually developing a CSR policy in line with the Companies Act, 2013 rules that
defines programmes, geographies and budgets for the following financial year, aligned with
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the strategy and ensuring that the 2% requirement of funds allocation is met Establish
methods for monitoring and reporting.
a corporate to gain the greatest leverage and a strategic advantage through the investment of
intellectual and financial resources, they are required to select their implementation
mechanism. In terms of implementation mechanism, a company has several options, which
are permitted under the CSR draft rules: Self-execution through: - an in-house CSR
department - a company foundation with execution capabilities Making grants to an
independent implementation partner (which has a track record of at least three years). The
grants can be made: - directly by an in-house CSR department - through the companys grant-
making foundation.
Purpose : Due diligence refers to the process a company undertakes to determine the
risks as well as the benefits of working with a potential implementation partner. This process
has to be sufficiently robust to ensure that a companys implementation partners have the
reputation, competence and integrity to deliver effective programmes on the ground. It begins
as soon as the discussions with the implementation partner suggest that there is prima facie
interest of both parties to enter into a partnership. A detailed due-diligence is essential for
large and long partnerships but may be brief for a relatively small or opportunistic partnership
opportunity. The due diligence process consists of five primary areas for investigation:
competence of the implementation partner identity management accountability
transparency and financial capability. A more detailed due-diligence can also undertake the
evaluation of the following five issues: organisation structure operations, systems and
processes human resource financial capability risk management CII and Credibility
Alliances guidelines for identifying NGO partners.
Process Objective: Selecting the implementation partner. Process owners: The CSR
department or Company Foundation Inputs: the CSR strategy and policy discussions with
communities, board, staff, other funders, local government officials, local leaders or
influencers, auditors studying the books of accounts and the auditors report.
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Activities: Establishing a due diligence criteria to evaluate the implementation or concept
development agency including its incorporation, permits and licenses, systems, processes,
public image, management, team deployment, track record, financial soundness, competence
level, presence in desired geography, compatibility with company CSR policy and any
conflicts of interest. Establishing a due diligence criteria for evaluation and empanelment of
private funders for partnership and joint projects. Evaluating the partnership opportunities
for its risks and benefits.
Process owners: The implementation agency (the CSR department, company foundation
or the NGO partner) Inputs: the CSR policy institutional mechanisms information from
the government sources, previous studies done in the area, etc information on programs
targeting similar geographies and beneficiary groups or strategies monitoring impact
measurement reports from any earlier projects.
Output(s): A project proposal that details: a project context including the roles of other
development factors key needs of the target beneficiaries project goals, KPIs, baselines
and expected end lines project milestones for progress monitoring purposes activities and
timelines to achieve the stated project goals budgets along with the basis for estimation
risks and mitigation strategies progress reporting: content, frequency.
Activities: Developing a framework to identify key stakeholder groups including the local
community, the local government or bodies, academia and research institutions, investors,
etc. Conducting a needs assessment (if required) to assess development priorities. The
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methodology for this can be participatory processes, surveys or a combination of the two.
Studying and adopting good practices to address similar challenges based on prior
experiences or lessons available from other practitioners and develop the approach. Detailing
the project: The objectives, the beneficiaries and the impact on the beneficiaries, the
assumptions, the expected outputs and outcomes, detailed activities, potential to influence
public policy and practice. Identifying the indicators of success with the means of
verification and establish the baseline for each. This can be commissioned as a separate study
or can even be included in the needs assessment stage. Estimating the budget and how it9
will be funded specifying the community contributions, leveraging of the government
schemes and contributions from the other donors. Indicating the monitoring and evaluation
methodologies for impact measurement.
Purpose: Every project, whether developed by the in-house team or an external agency,
must be formally examined and approved. This is to ensure that each project is in line with
the CSR strategy and policy, the monitoring indicators are clearly defined and relevant and
there is an adequate budget available. Projects that go on for longer durations or demand a
larger amount of resources must be scrutinised more carefully than the others. The CSR
committee is ultimately the one responsible for every project. It can, however, choose to
delegate authority to a project approval committee consisting of company staff and outside
experts with clearly defined roles and responsibilities.
Process Objective: Approve the project based on the CSR policy objectives, principles
and guidelines. Process owners: The CSR committee or the delegated project approval
committee.
Output(s): An approved project proposal including a monitoring process and reporting and
responsibility for this. Activities: Determining the delegation of power for the project
approval. Establishing an evaluation framework for the appraisal of the project concepts and
implementing agencies that ensure complete alignment with the CSR policy. Establishing
tests for the theory of change; whether the concept will be able to deliver the intended result
.Establishing tests for the value for money, economy, effectiveness and efficiency.
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Reviewing risks and mitigation measures. Identifying resource availability and any specific
organisational requirements and constraints. Laying down organisational supervision and
oversight requirements.
Voluntary : Although a lot of CSR activities are described by the law, many definitions of
CSR state these activities to be voluntary.
Internalizing or managing externalities together are the second characteristic
of CSR, where externalities are the positive and negative side effects of economic behavior of
others on the company. They are not taken into account in a firms decision making process.
A classic example of externality is pollution. Through such regulations as pollution fines the
firms can be forced to internalize the cost of this externality, but CSR represents a voluntary
approach. For example, a firm investing in clean technologies that prevent pollution.
Multiple stakeholder orientation: It goes without saying that companies have
responsibilities to their shareholders. However, companies rely on various constituencies
such as suppliers, employees, consumers and local communities in order to survive and
prosper. Therefore, companies have responsibilities to them as well. There are debates on to
which extent shareholders and stakeholders should be taken into account in a companys
CSR.
Alignment of social and economic responsibilities: Although this is much
debated about, many definitions of CSR stress that social and economical responsibilities of a
company are aligned, and profitability is an important issue. This characteristic of CSR
prompts attention to how firms can benefit economically from being socially responsible.
Practices and values: It is obvious that CSR implies a particular set of business
practices and strategies that deal with social issues. Moreover, many write that CSR is a
philosophy or set of values that underpins these practices. Therefore, it is often being
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discussed not only what companies do in the social arena, but why they do it.
Beyond philanthropy: Sometimes CSR is mainly about philanthropy, which means, for
example, corporate generosity towards the less fortunate. Currently it is being stated that CSR
should also be about how the entire operations of the company impact our society. Among
core business functions one can name production, marketing, procurement, human resource
management, finance, and so on. This core characteristic implies that CSR needs to be
mainstreamed into normal business practice rather than being left only to discretionary
activity.
4.Use social media. Dont just tell your customers what youre doing; solicit
their ideas, experiences and concerns to get them invested in your projects. Make sure
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you use multiple digital platforms such as blogs Facebook,Twitter, and a YouTube
channel to reach people with different media preferences.
6.Seek publicity. If youve never sought media coverage for your business
before, this might be the time to start. Send out a press release about any contests,
events or fundraising drives and reach out to media outlets that present on green
topics as theyll be apt to give you positive coverage.
10
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/www.caycon.com/blog/.../7-steps-to-effective-corporate-social-responsibility/
//www.entrepreneur.com/article/245162
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CONCLUSION
The first responsibility to society is to operate at a profit, and only slightly less important is
the necessity for growth. The business is the wealth-creating and wealth-producing organ of
the society. Management must maintain its wealth-producing resource intact by making
adequate profits to offset the risk of economic activity. And it must beside increase the
wealth-producing capacity of these resources and with them the wealth of society.
Ethics play an importance role in social responsibility. The business organizations must have
ethical responsibility as they are doing business, including production, management, and
services and so on. Without ethics, it would be danger to the human. Ethics is simply the
rules that say what is right and wrong, as defined by a particular reference group or
individual.
The social responsibility is very importance to both society and business organizations.
Although there are some arguments for and against social responsibility, even more of the
organizations would take action on social responsibility. Many of the advantages being social
responsibility was created, some of that was already discuss on previous pages. Believed that,
the best interest of business organizations is social responsibilities, that would be benefit in
the long run of company, can be earn more profit, and benefit to the human and the
environment.
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BIBLIOGRAPHY
BOOK REFERRED
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