CORPORATE LAW

PSDA ACTIVITY

TOPIC: CSR REPORT ON SABIC INDIA

SUBMITTED BY: KUSHAGRA GOYAL

ENROLLMENT NO.: 10110303817

CLASS: 3-C

GROUP 1

SUBMITTED TO: Ms. ABHILASHA SEMWAL

 INTRODUCTION

The appearance of the idea of Corporate Social Responsibility (CSR) is a consequence of the
works introduced by international organizations in order to establish the rules of sustainable
development. Accordingly , we assume a collective responsibility to advance and strengthen the
interdependent and mutually reinforcing pillars of sustainable development—economic
development, social development, and environmental protection—at local, national, regional,
and global levels. CSR is a concept according to organizations, generally on a voluntary basis,
pursues a policy which takes into account social, environmental, and local business. The Opole
University of Technology. Defined Corporate social responsibility as : the commitment of
business to contribute to sustainable economic development, working with employees, their
families, the local community, and society at large to improve their quality of life.

India is the first country in the world to make corporate social responsibility (CSR) mandatory,
following an amendment to the Companies Act, 2013 in April 2014. Businesses can invest their
profits in areas such as education, poverty, gender equality, and hunger as part of any CSR
compliance.

The amendment notified in the Companies Act, 2013 requires companies with a net worth of INR
500 crore (US $70 million) or more, or an annual turnover of INR 1000 crore (US $140 million)
or more, or net profit of INR 5 crore (US $699,125) or more, to spend 2 percent of their average
net profits of three years on CSR.

Prior to that, the CSR clause was voluntary for companies, though it was mandatory to disclose
their CSR spending to shareholders. CSR includes but is not limited to the following:

 Projects related to activities specified in the Companies Act; or

 Projects related to activities taken by the company board as recommended by the CSR
Committee, provided those activities cover items listed in the Companies Act.
 HISTORY AND ORIGIN OF CSR (CORPORATE SOCIAL
RESPONSIBILITY)

The idea that companies must do CSR and play an active role in the sustainable development
fight has its roots in the work of some American managers in the 1950s. What was their idea?
They thought that if companies no longer focused only on their profits but also on the impact
they have on society and the environment, they’d have other kinds of benefits. For example, if a
company pays its employees better, it may spend more on paying for salaries but on the other
hand its workers purchasing power increases and so do the chances that they buy the company’s
products. As well, if a company better manages its environmental impacts, it will save money in
the short term by avoiding fines and in the long term by bypassing the necessity to manage
natural disasters.

In 1953, Howard Bowen published a book entitled ―The Social Responsibility of the
Businessman‖ in which he explains why companies should be interested in being more socially
and environmentally accountable and gave the first ―recognized‖ definition of CSR.

Moreover, with the development of environmental concerns in addition to economic and social
issues in the second half of the 20th century, corporate (social) responsibility became a growing
issue. More and more consumers started becoming critical of companies and wanted them to be
more respectful of the laws, the environment, and more responsible in general.

THE DEVELOPMENT AND INSTITUTIONALIZATION OF CSR

In the 1990s and 2000s, governments in several countries around the world started putting in
place regulations that created the foundations for modern CSR. In France, NRE laws were the
first to force companies to communicate their performance in terms of sustainable
development. These laws were then followed by various regulations such as the Grenelle Laws
or the Laws of Vigilance.

Afterward, companies started becoming aware of the need of starting to invest in CSR so that
they didn’t stay behind their competitors. At this point, CSR started to be seen and used as a tool
for management, communication, and business development. CSR became also essential in
improving corporate image among consumers, enhancing internal communication and
productivity and was a way of reducing costs by turning organizations more efficient when it
comes to managing energy and resources.

Today, as the world faces many social and ecological challenges, it’s hard to find medium/big
size companies that don’t have a CSR report, a CSR department or a person in charge, or at least
a communication strategy dedicated to CSR.

CSR DEFINITION AND ESG DEFINITION: WHAT’S THE

DIFFERENCE?

Although CSR and ESG are often used as if they were the same, they’re not. Yes, both follow
the principles that profit isn’t all that matters and that corporations must protect society and the
environment, contributing to sustainable development. However, their approach and target are
not the same.

CSR is all about a company’s engagement with its stakeholders and its commitment to socially
and environmentally responsible practices. On the other hand, ESG is a capital market term used
by investors that represents the environmental, social and governance criteria under which they’ll
assess a company’s responsible practices.
 CORPORATE SOCIAL RESPONSIBILITY
OF SABIC
OBJECTIVE
SABIC is committed to high performance related to social responsibilities. SABIC strives to
establish strong and lasting relationships with the communities in which it operates and to
ensure that its flagship social responsibility programs result in tangible and positive economic
and social benefits.

PRIORITY FOCUS AREAS

In CSR key focus are on the areas, which are consistent with the aspirations and resources of
the company, as well as global issues and society needs, including:
 Science and technology education

 Water and sustainable agriculture

 Environmental protection

 Health

PRINCIPLES

SABIC’s social responsibility mission focuses on the company’s commitment and promises to
the communities in which it operates and serves, supported by several basic principles,
including:
 Commitment to developing long-term and mutually beneficial partnerships with our
communities.
 Consideration of the diversity of cultures, values, customs, and choices of our
societies, and respecting them.
 Provision of social responsibility programs that give economic and social benefit to
both SABIC and society.
  Implementation of social responsibility with a methodology that strengthens
sustainability and prevent dependence on others.
 Monitoring and measuring the extent to which the outcomes of CSR programs are
achieved, and ensuring areas that need to be developed are continuously improved.
 Sharing information about our performance and activities that have a significant impact
on our communities.

APPLICATION

The responsibility of applying this policy is rests with all employees of SABIC and its
affiliates in various regions, and contractors in various sectors. SABIC managers and officials
are required to share this policy and urge its application.

DONATION AND INVESTMENT

SABIC community giving this year totaled US$36.5 million. From modest donations to one-
off local projects to major ongoing commitments, such giving can bring life-changing
benefits to people and good causes all around the world.

SERVING THE COMMUNITY

In India this year, SABIC got together with Bangalore (south) Rotary Club and SVADES
(Society for Rural Development in Petrochemical Areas) to combat the physical
deterioration denying educational opportunity to many of the poorest members of the
community. Floors were repaved, walls re-plastered, windows fixed and renovated, and new
toilet facilities and a pump and water purification system installed, transforming a dilapidated
school into a sound, clean and efficient environment in which children can gain the education
to equip them for future employment and fulfilled lives.
 SCIENCE AND TECHNOLOGY IN EDUCATION

Education has always been a prime focus for SABIC, both in its own right and for the
benefits it offers individuals and society as a whole. We are particularly committed to
science and technical education. This year’s initiatives included:

Collaboration for development of leaders and entrepreneurship – SABIC and JA

Worldwide, a US-based non-profit organization dedicated to youth education, have signed
an agreement to collaborate on a number of educational and

innovation programs in support of communities in 22 countries where SABIC operates

covering more than 100,000 students. Moreover, in collaboration with Injaz Saudi
Arabia, SABIC will embark on five new programs in Saudi Arabia targeting over
90,000 students at 1,500 institutions across the Kingdom. They cover areas such as
personal life planning, environmental awareness and leadership, and aim to help
prepare students for productive and fulfilled employment.

HEALTH AND WELLNESS

The efforts of Health and Wellbeing volunteers at SABIC’s plant in Tee side, UK, were
recognized at the Better Health at Work Awards in March with two awards. The Health
and Wellbeing Steering
Group and Health Advocates, who are all volunteers, are the backbone of SABIC’s
achievements in this area. SABIC’s ongoing improvements to health and wellbeing are
due to the time and efforts put in by the volunteers on an ongoing basis.

In India, a Healthy Child, Healthy Mind program aims to impart health, hygiene and
water and sanitation awareness education, particularly for children from less
privileged backgrounds. The program in government and government-aided schools in
Anekal Taluk in Bengalaru, Karnataka aims to reduce drop out rates and help children
maintain a healthy life. The educational initiatives are backed up by donations of oral
hygiene kits, and help in getting referrals to no- and low-cost medical and counseling
services. ―They See, They Learn,‖ is a large-scale comprehensive eye-care program
covering screening and vision correction and providing free spectacles for school
children in government and government-aided schools in Delhi, Bengaluru,
Chennai, Vadodara and Mumbai in India.

In India Sabic has been a major investor and fund provider to a NGO called
BloodConnect. NGO which was started in 2010 by the students of Indian Institute
of Technology, Delhi as an organization which aimed at fulfilling the blood
insufficiency in India by organizing blood donation camps, awareness camps about
blood donation and also by running a 24*7 helpline portal to provide donors to the
needy. Since inception Sabic has been a substantial fund provider to this
organization and It also organizes annual events with various government hospitals
in Delhi where it donates equipment to the hospital’s blood bank for the welfare of
the society.

CONCLUSION

Observation of changes and global trends in application and use of the CSR reporting allow to
infer that the development of societies will be based on the CSR principles. Company being the
entity which utilizes the resources of the society it is social as well as moral responsibility to
return in some or the other way the favours. Societies expect that companies will take into
account their needs and expectations. They expect respect for their fundamental needs (though
not everywhere and not for all), ethic and moral laws as also taking actions on a large scale in
social and ecological areas taking into account all interested parties.