CORPORATE

SOCIAL
RESPONSIBIL
ITY

CONTENT
Introduction
Definition
Core elements
CSR benefits
CSR in Companies Bill 2012
Companies Bill, 2012, Clause 135
Challenges
Case study
conclusion

INTRODUCTION
CSR

expanded to include both economic

and social interests. Companies have
become more transparent in accounting and
display public reporting due to pressures
from various stakeholders. It is possible for
companies to behave in the desired ethical
and responsible manner towards
consumers, employees, communities,
stakeholders and environment.

DEFINITION
CSR

is a management concept whereby

companies integrate social and
environment concerns in their business
operations and interactions with their
stakeholders.
It is a relationship between company and
the society in which it resides.

CORE ELEMENTS
The CSR Policy should normally cover following core
elements:
1.

Care for all Stakeholders : The companies

2.

Ethical functioning : Their governance

should respect the interests of, and be responsive

towards all stakeholders, including shareholders,
employees, customers, suppliers, project affected people,
society at large etc. and create value for all of them.
systems should be underpinned by Ethics,
Transparency and Accountability. They should not
engage in business practices that are abusive, unfair,
corrupt or anti-competitive.

 3.

Respect for Workers' Rights and

Welfare : Companies should provide a workplace

environment that is safe, hygienic and humane and

which upholds the dignity of employees. They should
uphold the freedom of association , collective
bargaining, effective grievance redressal system,
should not employ child and provide and maintain
equality of opportunities without any discrimination.

4.

Respect for Human Rights : Companies

should respect human rights for all and avoid

complicity with human rights abuses by them or by
third party.

 5.

Respect for Environment : Companies

should take measures to check and prevent pollution;

recycle, manage and reduce waste, should manage
natural resources in a sustainable manner and ensure
optimal use of resources like land and water, should
proactively respond to the challenges of climate
change by adopting cleaner production methods,
promoting efficient use of energy and environment
friendly technologies.

BENEFITS OF CSR
Increased customer retention.
Developed and enhanced relations with
customers, suppliers.
Attract , retain and maintain a happy workforce.
Differentiate from competitors.
Improve business reputation and standing.
Generate positive publicity and create goodwill in
society and media.

CSR IN COMPANIES BILL 2012

According to Schedule-VII of Companies Bill, 2012 the

following activities can be included by companies in their
CSR Policies:(i) eradicating extreme hunger and poverty;
(ii) promotion of education;
(iii) promoting gender equality and empowering women;
(iv) reducing child mortality and improving maternal health;
(v) combating human immunodeficiency virus, acquired
immune deficiency syndrome, malaria and other diseases;
(vi) ensuring environmental sustainability;
(vii) employment enhancing vocational skills;
(viii) social business projects;
(ix) contribution to the Prime Ministers National Relief Fund.
(x) such other matters as may be prescribed.

The Companies Bill, 2012, Clause 135 also

provides for constitution of a CSR Committee of
the Board. The CSR Committee is required to :

(a) formulate and recommend to the Board, a CSR

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
(c) monitor the Corporate Social Responsibility Policy
of the company from time to time.
(d) The format for disclosure of CSR policy

CHALLENGES OF CSR
The biggest problem is of lack of budget
allocations followed by lack of support from
employees and lack of knowledge as well.
Lack of professionalism.
Absence of trained and developed staff.
General Public do not take enough interest in
participating and contributing to CSR activities.
The increasing demand for more transparency
disclosure of information is also inevitable.
The failure of the government to come up with
statutory guidelines to give a definite direction to
companies.

CASE STUDY

Tata Steel: It comes out with the Human

Development Index (HDI), a composite index of
health, education and income levels, to assess the
impact of its work in rural areas. Health care is
one of its main concerns. The Tata Steel Rural
Development Society aims to improve
agricultural productivity and raise farmers
standard of living.

Bharat Petroleum Corporation: Its rain water

harvesting project Boond, in association with the
Oil Industries Development Board, selects
draught-stricken villages to turn them from
water-scarce to water-positive. Some of BPCLs
other social programmes include adoption of
villages, prevention and care for HIV/AIDS and
rural health care.

CONCLUSION

Corporate sustainability is an evolving process

and not an end. The Companies bill is a good
initiative on the part of the government however
what would be included in spending on CSR is
unclear and is left for the companies to decide.
Across the globe, the concept of CSR has been
accepted as an element for success and survival
of business along with fulfilling social objectives.
However, the challenge for the companies is to
determine a strong and innovative CSR strategy
which should deliver high performance in ethical,
environmental and social areas and meet all the
stakeholders objectives.

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