Corporate Social Responsibility:An Overview

Ashish Kr. Chaurasia

Corporate Social Responsibility (CSR)

CSR is the continuing commitment by business :

• to behave ethically;

• for contribution to economic development;

• for improving the quality of life of the

workforce and their families; and

• to the local community and society at large

CSR is a form of corporate self-regulation integrated into a business model.

CSR policy functions as a built in, self-regulating mechanism

A business monitors and ensures its active compliance with the spirit of the law, ethical standards and international norms.

Wikipedia

Face of CSR • CSR, some times, goes beyond compliance of law;• It encourages a positive impact through its activities on

– Environment– Consumers– Employees– Communities– Stakeholders

• Actions beyond the interest of the firm;• Embraces the responsibilities for the companies

actions;

Importance of CSR

• Improves Public Image of the FirmSocial initiatives taken by organizations tend to promote

goodwill, public favour, corporate trust, profit.

Improving Stock Priceit gives recognition to the needs of developing countries; limiting the extent of political involvement or campaigning; donations to, or sponsorship of, the arts, educational or research institutions, sporting organizations or charities.

Importance of CSR

• Assist to Government to solve social, economical and political problems of the country.

• Pressure of Consumer Movement Movement to protect consumers against business malpractices like adulteration, black marketing, unfair pricing, shortage in weight, measures, etc.

Importance of CSR

• Pressure of Trade Union Relations between management and labour.• Attracts and retains staff• Customers are attracted to socially responsible

companies• Corporate Social Responsibility attracts

investors• Corporate Social Responsibility helps to cut your

business costs

Social Accounting and Reporting

• Social accounting is the communication of– Social and – environmental

effects of a company’s economic actions to• particular interest groups within society; and • to society at large

Guidelines on Corporate Social Responsibility and Sustainability for

Central Public Sector Enterprises

Every year, each CPSE shall with the approval of its Board of Directors make a budgetary allocation for CSR and Sustainability activities/ projects for the year.

The budgetary allocation will be based on the profitability of the company.

Guidelines on Corporate Social Responsibility and Sustainability for

Central Public Sector EnterprisesMore specifically, it will be determined by the Profit

After Tax (PAT) of the company in the previous year as shown below:

(i) Less than Rs. 100 crore(ii) Rs. 100 crore to Rs. 500 crore(iii) Rs. 500 crore and above

PAT of CPSE in the Previous Year

Range of Budgetary Allocation for CSR and Sustainability Activities (as % of PAT in

Previous Year)3% - 5%2% - 3%1% - 2%

The Companies Bill, 2011

• The bill advocates that those companies with net worth above Rs. 500 crore, or an annual turnover of over Rs. 1,000 crore, shall earmark 2 percent of average net profits of three years towards CSR.

• In the draft Companies Bill, 2009, the CSR clause was voluntary, though it was mandatory for companies to disclose their CSR spending to shareholders.

• It also suggested that company boards should have at least one female member.

CSR Practices in India

Tata Group

Tata Group in India has a range of CSR projects, most of which are :– Community improvement programs;

• The company also endorses sports as a way of life: – It has established a football academy, archery

academy, and – promotes sports among employees. It offers

healthcare services all over the country with programs like rural health development

AptechAptech a leading education player with a global presence that

has played a broad and continued role in encouraging and

nurturing education throughout the country. Aptech has a long history of participating in community

activities. It has, in association with leading NGOs, provided computers

at – schools, – education to the deprived, – training and – awareness-camps.

Mahindra & Mahindra

At Mahindra & Mahindra, The K. C. Mahindra Education Trust was established in

1953 with the purpose of promoting education. Its vision is to renovate the lives of people in India

through education and financial assistance across age groups and across income strata.

Mahindra & Mahindra

The K. C. Mahindra Education Trust undertakes a number of education plans, which make a difference to the lives of worthy students.

The Trust has provided more than Rs. 7.5 crore in the form of grants, scholarships and loans.

It promotes education mostly by the way of scholarships. The Nanhi Kali (children) project has over 3,300 children under

it and the company aims to increase the number to 10,000 in the next two years by reaching out to the underprivileged children, especially in rural areas.

Infosys

• Infosys is aggressively involved in a variety of community growth programs.

• In 1996, the company created the Infosys Foundation as a not-for-profit trust to which it contributes up to 1 percent of profits after tax every year.

• The Education and Research Department at Infosys also works with employee volunteers on community development projects.

TCSTCS has chosen the following channels to drive its CSR

initiatives:• Developing innovative solutions to address large-scale

societal problems by utilizing our IT core competence. • Volunteering for projects that address the felt need of

communities in which TCS operates, while aligning with the core themes of TCS’ CSR.

• Participating in community development program championed by our clients.

• Partnering with select non-government and civil society organizations and other government bodies.

• Supporting large-scale causes such as disaster relief or any other cause as determined by the Corporate CSR Council.

Some of the Initiatives Include

• Adult Literacy Programs • University Alliances• TCS’ BPO Employability

Program• Academic Interface

Program• mKRISHI• WebHealth Center

• Mansuki• TCS Maitree village

development initiative• TCS Maitree’s Advanced

Computer Training Center • Med Mantra • InsighT • Empower• CSR Technical Team’s

support to social organizations

Indian OilInitiatives taken by the corporation Sharing Profits

Every year, IndianOil sets aside a fixed portion of its profits for spreading smiles in millions of lives across the country through a comprehensive community welfare and development programme. About one-fourth of the community development funds are spent on the welfare of Scheduled Caste and Scheduled Tribe beneficiaries.

LPG SchemesProvision of Common LPG Kitchen facilities in villages

Release of one-time grant to Below Poverty Line (BPL) families in the rural areas for release of new LPG connection under Rajiv Gandhi Gramin LPG Vitarak Yojana(RGGLV Yojana)

Indian Oil

Community Development:• Providing Clean Drinking Water• Health & Medical Care• 50 Bed Swarna Jayanti Samudaik Hospital,• Raunchi Bangar, Mathura• 200 bed hospital set up by Assam Oil Division,IOCL at

Digboi, Assam• Assam Oil School of Nursing, AOD, Digboi• IndianOil Rural Mobile HealthCare Scheme

Indian Oil• IndianOil Scholarship Schemes: IndianOil awards 2600 scholarships to meritorious

students pursuing full-time courses in 10+/ITI, Engineering/Medical and Business Administration to nurture and support talent among the deserving students belonging to families with less than rupees one lakh as the gross joint annual income. Some of the scholarship schemes are: “IndianOil Scholarships Scheme” for Graduate and

Post-Graduate students; “IndianOil Merit Scholarships Scheme” for 10+/ITI

studies;

Indian Oil

· Indian Oil Sports Scholarship SchemeIndian Oil awards Sports Scholarship to promising young sports persons representing State in team games and on National ranking in others. The Sports Scholarship Scheme awards 150 (number of scholarships increased from 72 to 150 during the year) for 10 games.

Indian Oil

Environment

• As part of its environment-protection initiatives, Indian Oil has invested close to Rs. 7,000 crore in state-of-

the-art technologies at its refineries for production of green fuels meeting global standards.

• To further reduce dependence on precious petroleum products and secure the nation’s energy security, the Corporation is now in the process of commercialising various options in alternative fuels such as ethanol-blended petrol, biodiesel, and Hydrogen and Hydrogen-CNG.

References

• Bansal, P.; Roth, R. (2000). "Why Companies Go Green: A model of Ecological Responsiveness". The Academy of Management Journal 43 (4): 717–736. doi:10.2307/1556363. ISSN 0001-4273. JSTOR 1556363

• Bhattacharya, CB, Sankar Sen and Daniel Korschun (2011) Leveraging Corporate Social Responsibility: The Stakeholder Route to Business and Social Value, Cambridge University Press, Cambridge: UK.

• Brand Strategy (2007). "10 key things to know about CSR". London. pg.47.

References

• Catalyst Consortium (2002). "What is Corporate Social Responsibility?"

• Grace, D., S. Cohen (2005). Business Ethics: Australian Problems and Cases. Oxford University Press. ISBN 0-19-550794-0.

• K. C. John Wei (2011). Corporate Social Responsibility – A Comparison Between Vietnam and China, International Journal of Governance. Vol. 1, No.1, July 2011.

• Visser, W., D. Matten, M. Pohl, Nick Tolhurst (eds.) (2008). The A to Z of Corporate Social Responsibility. Wiley. ISBN 978-0-470-72395-1.

References

• Websites referred to:– wikipedia.com– tatafoundation.com– tcs.com– timesfoundation.com– iocl.com– cognizant.com– india-briefing.com

Thank you…