Corporate Social Responsibility

“The set of obligations an

organization has to protect and
enhance the societal environment in
which it functions.”
“Organization’s obligation to make
choices and take actions that will
contribute to the welfare and interests
of society and organization.”

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 Areas of social responsibility
• Toward their stakeholders (anyone who is
directly affected by the practices of an
organization and has a stake in its
performance)
• Toward the natural environment
• Toward general social welfare

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STAKE HOLDERS

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To Whom is Management Responsible?

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• The Classical View
– Management’s only social responsibility
is to maximize profits (create a financial
return) by operating the business in the
best interests of the stockholders (owners
of the corporation).
– Expending the firm’s resources on doing
“social good” unjustifiably increases costs
that lower profits to the owners and
raises prices to consumers.
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• The Socioeconomic View
– Management’s social responsibility goes beyond
making profits to include protecting and
improving society’s welfare.
– Corporations are not independent entities
responsible only to stockholders.
– Firms have a moral responsibility to larger
society to become involved in social, legal, and
political issues.

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 ARGUMENTS FOR AND AGAINST SOCIAL
RESPONSIBILITY
 For  Against
 Public expectations
 Violation of profit
 Long-run profits
maximization
 Ethical obligation
 Public image
 Dilution of purpose
 Better environment  Costs
 Discouragement of further  Too much power
governmental regulation  Lack of skills
 Balance of responsibility and power
 Lack of
 Stockholder interests
accountability
 Possession of resources
 Superiority of prevention over cure
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 FROM OBLIGATION TO RESPONSIVENESS TO
RESPONSIBILITY
• Social Obligation
– The obligation of a business to meet its economic
and legal responsibilities and nothing more.
• Social Responsiveness
– When a firm engages in social actions in
response to some popular social need.
• Social Responsibility
– A business’s intention, beyond its legal and
economic obligations, to do the right things and
act in ways that are good for society.
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 ORGANIZATION’S APPROACHES
TO SOCIAL RESPONSIBILITY
High
Proactive
Take social initiatives.

Accommodation
Accept ethical responsibility.
Degree of
Social Defense
Responsibility
Do only what is legally required.

Obstruction
Disregard for social
Low responsibility.
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 CSR under Companies Bill 2013
Section 135-Corporate Social Responsibility
• Now 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.

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 Continued…
• The Corporate Social Responsibility
Committee shall, formulate and recommend to
the Board, a Corporate Social Responsibility
Policy and the amount of expenditure to be
incurred on the activities provided in the
policy.

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 Continued…
• The Board of aforesaid company shall
• a. after taking into account the recommendations
made by Corporate Social Responsibility Committee,
approve the Corporate Social Responsibility Policy for
the company and disclose contents of such Policy in
its report and also place it on the company’s website,
if any, in such manner as may be prescribed; and
• b. ensure that the activities as are included in
Corporate Social Responsibility Policy of the
company are undertaken by the company;
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 Continued…
• The Board have to ensure that the company spends, in
every financial year, at least 2% of average net profits of
the company made during 3 immediately preceding
financial years, in pursuance of its Corporate Social
Responsibility Policy and in case of failure to do so,
necessary reasons for not spending the amount, shall be
disclosed in the Director’s Report
• The company shall while spending the amount earmarked
for Corporate Social Responsibility activities give
preference to the local area and areas around it where it
operates.
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• Activities which may be included by companies in their Corporate Social
Responsibility Policies. Activities relating to:—
• (i) eradicating extreme hunger and poverty;
• (ii) promotion of education;
• (iii) promoting gender equality and empowering women;
• (iv) reducing child mortlity 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 Minister's National Relief Fund or any other
fund set up by the Central Government or the State Governments for socio-
economic development and relief and funds for the welfare of the
Scheduled Castes, the Scheduled Tribes, other backward classes, minorities
and women; and
• (x) such other matters as may be prescribed.
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 CSR in INDIA
• 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.

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 CSR in INDIA
• Bajaj Auto,
– Focus area: Development of weaker sections of
society,
– Methodology: Trust Undertakes long-term projects
in rural areas.

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 CSR in INDIA
• Castrol India,
– Focus Area: Strengthens link between business &
social investments,
– Method: Rehabilitation of earthquake affected
victims in Gujarat., Castrol Drive for Safety
Initiative

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 CSR in INDIA
• Mahindra & Mahindra
– Focus area: Sharing wealth and promote primary
education
– Methodology: College establishment, Nanhi Kali
(underprivileged girl child), 1% Profit after tax for
CSR activities, Free education for girls Lifeline
Express: medical facility Free surgeries

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 CSR in INDIA
• Infosys
• Focus Area: Support and encourage
underprivileged sections
• Methodology: Infosys Foundation provide
medical facilities to remote rural areas,
organizing novel pension schemes and aiding
orphans and street children and rural education
program titled “A library for every school”,
Human Capital Education index for its employees
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 CSR in INDIA
• ITC
• Focus: “Citizen First” watershed development
program; Empowering Farmers; Greening Wastelands
and Irrigating dry lands
• Methodology: Through “e-choupal” organizing
farmers into water user groups that plan and build
water-harvesting structures Primary education
Livestock development Social forestry Integrated
watershed development First to be certified SA 8000
standard
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 CSR in INDIA
• L&T
• Focus: Enhancing shareholder value and
responsibility for welfare of ociety at large
• Methodology: Eco Friendly approach; Create
awareness on HIV/AIDS; and waste
minimization, Health One of the first corporate
to launch HIV/AIDS program

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 CSR in INDIA
• Dabur India
• Focus: Give back some part of what Dabur has
gained from community
• Methodology: Establishment of Sundesh , NGO
Programs for ecological regeneration &
protection of endangered plant species,
Promoting health and hygiene amongst the
underprivileged through Trust and Create
environmental awareness amongst young minds
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 CSR in INDIA
• BHEL
• Focus :Community and Product development
• Methodology: Adopted 56 villages and provided
infrastructure for schools for physically
challenged children near its units, Launched
wind electric generators, solar heating systems,
solar photovoltaic systems, solar lanterns and
battery powered road vehicles

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 CSR in INDIA
• Tata Steel
• Focus: “Improve the quality of life of the
communities it serves.”
• Methodology: Through “Green Millennium”
campaign planted 1.5 million surviving trees
Through Employment Generation, Building
people, education, health and hygiene

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 CSR in INDIA
• Dr Reddy’s Lab
• Focus: Prosperity of communities integral to success
of companies
• Methodology: Through Environmental: Water Usage
• Energy Usage Wastewater Discharge COD & TDS
Load Discharge HW-hazardous waste disposal GHG
emissions

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 CSR in INDIA
• Zee Telefilms
• Focus: being successful is to be socially
responsible
• Methodology: Public Service Ads / Fillers
telecast to date are: Campaigns on TV

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 CSR in INDIA
• NIIT
• Focus: Narrowing the digital divide across the
world
• Methodology: Through launch of International
Women’s Month uplifting Indian women,
Computer literacy. Developed I-Learn Create
awareness about AIDS

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 CSR in INDIA
• Hero Honda
• Focus: Do something for community from
whose land we generate our wealth
• Methodology: Through Integrated Rural
Development Centre including : Hospital,
Sports complex, Vocational Training Centre,
Adult Literacy Mission , Marriages of
underprivileged girl, Rural Health Care

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 CSR in INDIA
• Johnson & Johnson
• Focus: Support good works and charities.
• Methodology: Through donations of time,
money and goods; Women’s and Children’s
Health Community Responsibility, Access to
Care. Advancing Health Care Knowledge
Global Public Health

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 CSR in INDIA
• Cipla Pharma
• Focus: Cipla Care
• Methodology: CIPLA Foundation Through Dr.
K. A. Hamied Institute & Cipla Cancer
Palliative Care Centre

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 CSR in INDIA
• Grasim Industries
• Focus: Social and economic development of the
communities in which we operate
• Methodology: Through “Aditya Birla Centre for
Community Initiatives and Rural Development”.
Includes education, Health & family welfare,
Sustainable development & livelihood &
agriculture & watershed development,
Infrastructure development& Social causes
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 CSR in INDIA
• Godrej
• Focus: Promoting education, housing, social
upliftment, conservation, population
management and relief of natural calamities
• Methodology: Three Foundations/Trusts to
contribute to Social, Environmental, and
Educational causes

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 CSR in INDIA
• BPCL
• Focus: Community development
• Methodology: Through Health, Rain water
harvesting, Infrastructure development,
education, HIV Health care and prevention.

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 CSR in INDIA
• Britannia Industries
• Focus: Wadia Group Community conscious,
desire to share prosperity with community.
• Methodology: Welfare of its workers through
trust Health care facilities

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 CSR in INDIA
• Colgate - Palmolive
• Focus: Colgate care for the community where
they live & work
• Methodology: Free oral care education
Through different community programs

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 CSR in INDIA
• Nestle India
• Focus: Integrated communities where it runs
industrial and commercial operations
• Methodology: Through Water Conservation,
Natural refrigerants replaced ozone depleting.
Also include Nutrition & health projects,
agricultural assistance, education and training,
arts and culture, HIV/AIDS prevention and
donations
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 CSR in INDIA
• ICICI
• Focus: Empower millions economically &
socially challenged Indians.
• Methodology: Through initiatives Give India;
Shop; Volunteer; and Info change.

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 CSR in INDIA
• Wipro
• Focus: Learning Enhancement Disaster
rehabilitation
• Methodology: Through trust: Provide
rehabilitation to survivors of natural calamities
and Enhancing learning abilities of children
from underprivileged sections.

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 CSR in INDIA
• Novartis
• Focus: Treatment for Leprosy
• Methodology: Free Multi Drug therapy. Cured
4.5 million patients

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 CSR in INDIA
• TCS
• Focus: Flexible Global business practices
• Methodology: Global delivery model: Global
deployment & delivery of high value services
35 Countries benefited

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 CSR in INDIA
• Citi group
• Focus: Women empowerment
• Methodology: Rehabilitation, Education,
Health

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 CSR in INDIA
• NTPC
• Focus: Rehabilitation & Resettlement policy,
community work, gender equality, Policy of
grant of paternity leave
• Methodology: Founded Global Compact
Society for India in 2003

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 CSR in INDIA
• SAIL
• Focus: Community development
• Methodology: AIDS awareness, Education
Medical facilities and health Development of
small scale/ancillary industries, Agriculture,
poultry, fisheries

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 CSR in INDIA
• Hindalco
• Focus: Poverty Alleviation Program
• Methodology: Asian CSR award for Integrated
Rural Poverty Alleviation Program

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