report on csr

7/28/2019 report on csr

1/27

if companies

behave irresponsibly,

in social or

environmental terms,

then no amount of

good-giving will tilt

their overall

contribution to the

society back from thenegative to the

positive.

A pirate throwing

doubloons to a better

may claim to be a

philanthropist, butthat hardly makes

him a responsible

businessman.

Rio Tinto


2/27

Literature Review

Although the subject Corporate Social Responsibility in its present form andcontenthas gained popular attention only in recent years, its origin can be traced backto the evolution of the concept of a welfare state.

As the pace of industrialization quickened employers became more and more

concerned with the loss of productivity efficiency due to avoidable sickness or accidents

or stoppage of work due to bad personal relationships. This gave rise to the idea of a

welfare state, which was further strengthened by the growth of democracy and of respect

to human dignity during the last 150 years. The frame work of a welfare state and with it

the concept of social responsibility have thus come to stay in many countries of the world.

I firmly believe as do many

others, that voluntary business

initiatives in the form of corporate

social responsibility can play a key

role in contributing to sustainable

development, while enhancing a

countrys innovative potential and

competitivenessEuropean Commission Vice President

Gunten Verheugen, November 2006

The changing image of business in the recent years has lent further support

to the idea of social responsibility. Some public opinion have left businessman

disenchanted. It was revealed that the businessman is viewed as an individual who

does not cares for others, who ignored social problems, who prey upon the

population, who exploits labor, and who is a selfish money grabber.

On the other hand, until these opinions were unveiled, the businessman

believed that others viewed him as he viewed himself, as a practical, down-to-earth,

hardworking, broadminded, progressive, interesting and a competitive free enterpriser.

He believed that the society looked up at him as a self sacrificing community leader,

pillar of society, generous to a fault, great supporter of education, patron of the arts, in

short, the salt of the earth. Indeed, the businessman in the early days thought of

himself as a happy mix of Plato, Gandhi, and Churchill.


3/27


4/27

Programmes implemented by Companies, national agencies or NGOs


5/27

Promote a functional community on NGOs with complementary workplans

that are relevant to the national development programme

The Government of Mauritius has also given the CSR a legal framework,

stipulating that any company making profit is required as per Section 50K and 50L

of Income Tax Act to contribute 2% of their book profit after income tax, in

compliance with prevailing legislation, to set up a CSR Fund to finance CSR

activities, excluding companies holding a Global Business Licence Category 1

under the Financial Services Act, secondly Incomes of banks derived from

transactions with non-residents and corporation holding a Global Business

Licence, IRS Company and non-resident societe, a trust or a trustee of a unit trust

scheme.

Thus, corporate social responsibility is necessarily an evolving term that does not

have a standard definition or a fully recognized set of specific criteria. With the understanding

that businesses play a key role on job and wealth creation in society, CSR is generally

understood to be the way a company achieves a balance or integration of economic,

environmental, and social imperatives while at the same time addressing shareholder and

stakeholder expectations. CSR is generally accepted as applying to firms wherever they

operate in the domestic and global economy. The way businesses engage or involve the

shareholders, employees, customers, suppliers, governments, non-governmental

organizations, international organizations, and other

stakeholders is usually a key feature of

the concept. While business compliance with laws

and regulations on social, environmental and

economic objectives set the official level of

CSR performance, CSR is often understood

as involving the private sector commitments

and activities that extend beyond this

foundation of compliance with laws.

From a progressive business perspective, CSR usually involves focusing

on new opportunities as a way to respond to interrelated economic, societal and

environmental demands in the marketplace. Many firms believe that this focus

provides a clear competitive advantage and stimulates corporate innovation.

Power cannot be separatedfrom responsibility. For markets

to expand in a sustainable way,we must provide those currentlyexcluded with better and more

opportunities to improve theirlivelihoods


6/27

"More and more companies are

accepting corporate citizenship as a new

strategic and managerial purpose requiring

their attention. Once seen as a purely

charitable activitya source of general

goodwill, with no bottom-line consequence--

citizenship is moving from the margins of

concern to the center at leading companies."

CSR is about taking personalresponsibility for your actionsand the impacts that you have

on society. Companies andemployees must undergo a

personal transformation, re-examine their roles, their

responsibilities and increasetheir level of accountability.

Today, there are many

references to corporate social

responsibility (CSR), sometimes

referred to as corporate

citizenship, in our workplaces, in

the media, in the government, in

our communities. While there is

no agreed-upon definition, the

World Business Council for

Sustainable Development defines

CSR as the business

commitment and contribution to

the quality of life of employees,

their families and the local

community and society overall to

support sustainable economic

development. Simply put, the

business case for CSR--

establishing a positive company

reputation and brand in the public

eye through good work that

yields a competitive edge while at

the same time contributing to

others--demands that

organizations shift from solely

focusing on making a profit to

including financial, environmental

and social responsibility in their

core business strategies. Despite


7/27

what the phrase corporate social responsibility

suggests, the concept is not restricted to

corporations but rather is intended for most types

of organizations, such as associations, labor

unions, organizations that serve the community

for scientific, educational, artistic, public health or

charitable purposes, and governmental

agencies.

CSR is generally seen as the business

contribution to sustainable development which

has been defined as "development that meets the

needs of the present without compromising the

ability of future generations to meet their own

needs", and is generally understood as focusing

on how to achieve the integration of economic,

environmental, and social imperatives. CSR also

overlaps and often is synonymous with many

features of other related concepts such as

corporate sustainability, corporate accountability,

corporate responsibility, corporate citizenship,

corporate stewardship, etc.


8/27

CSR commitments and activities typically address aspects of a firm's behaviour

(including its policies and practices) with respect to such key elements as; health and

safety, environmental protection, human rights, human resource management

practices, corporate governance, community development, and consumer protection,

labour protection, supplier relations, business ethics, and stakeholder rights.

T


9/27

The Responsibilities of Corporate Social Responsibility

For CSR to be accepted by a conscientious business person, it should be framed in

such a way that the entire range of business responsibilities is embraced. It is suggested here

that four kinds of social responsibilities constitute total CSR: economic, legal, ethical, and

philanthropic. Furthermore, these four categories or components of CSR might be depicted as

a pyramid. To be sure, all of these kinds of responsibilities have always existed to some extent.

But it has only been in recent years that ethical and philanthropic functions have taken a

significant place. Each of these four categories deserves closer consideration.

Economic Responsibilities

Historically, business organizations were created as economic entities designed

to provide goods and services to societal members. The profit motive was established

as the primary incentive for entrepreneurship. Before it was anything else, business

organization was the basic economic unit in our society. As such, its principal role was

to produce goods and services that consumers needed and wanted and to make an

acceptable profit in the process. At some point the idea of the profit motive got

transformed into a notion of maximum profits, and this has been an enduring value

ever since. All other business responsibilities are predicated upon the economic

responsibility of the firm, because without it the others become moot considerations.

Legal Responsibilities

Society has not only sanctioned business to operate according to the profit motive; at

the same time business is expected to comply with the laws and regulations promulgated by

governments as the ground rules under which business must operate. As a partial fulfillment of

the "social contract" between business and society firms are expected to pursue their economic

missions within the framework of the law. Legal responsibilities reflect a view of "codified ethics"

in the sense that they embody basic notions of fair operations as established by our lawmakers.

They are depicted as the next layer on the pyramid to portray their historical development, but

they are appropriately seen as coexisting with economic responsibilities as fundamental

precepts of the free enterprise system.

Ethical Responsibilities


10/27

Although economic and legal responsibilities embody ethical norms about

fairness and justice, ethical responsibilities embrace those activities and practices that

are expected or prohibited by societal members even though they are not codified into

law. Ethical responsibilities embody those standards, norms, or expectations that reflect

a concern for what consumers, employees, shareholders, and the community regard as

fair, just, or in keeping with the respect or protection of stakeholders' moral rights.

Philanthropic Responsibilities

Philanthropy encompasses those corporate actions that are in response to societys

expectation that businesses be good corporate citizens. This includes actively engaging in acts

or programs to promote human welfare or goodwill. Examples of philanthropy include business

contributions to financial resources or executive time, such as contributions to the arts,

education, or the community. A loaned-executive program that provides leadership for a

communitys United Way campaign is one illustration of philanthropy.

The pyramid of corporate social responsibility is depicted below. It portrays the

four components of CSR, beginning with the basic building block notion that economic

performance undergirds all else. At the same time, business is expected to obey the

law because the law is society's codification of acceptable and unacceptable behavior.

Next is business's responsibility to be ethical. At its most fundamental level, this is the

obligation to do what is right, just, and fair, and to avoid or minimize harm to

stakeholders (employees, consumers, the environment, and others). Finally, business

is expected to be a good corporate citizen. This is captured in the philanthropic

responsibility, wherein business is expected to contribute financial and human

resources to the community and to improve the quality of life.


11/27

In summary, the total corporate social responsibility of business entails the

simultaneous fulfillment of the firm's economic, legal, ethical, and philanthropic

responsibilities. Stated in more pragmatic and managerial terms, the CSR firm should

strive to make a profit, obey the law, be ethical, and be a good corporate citizen.

The pyramid of corporate social responsibility


12/27

The CSR concept evolution started with the concerns related to the damage createdbybusiness on environment and society at large by way of activities linked to their

business operation. Businesses are expected to clean up the mess they have

generated to the environment. Until the 1980s CSR was considered same as corporate

philanthropy. The current CSR concept started formulating in early 80s. In 1980s and 1990s

events like Shell spoiling the environment and violating the human rights in Nigeria, started a

new wave of criticism which triggered a completely different thinking on CSR and hence many

CSR definitions emerged during this period. Customer expectations and demand for clean and

green companies have led to a number of benchmarks and guidelines, such as the Sullivan

Principles, the UN Global Compact etc. Hence, CSR has continued to evolve rapidly over the

last thirty years and companies now all over the world are expected to engage in CSR activities

to be recognized as a socially responsible company that not only looks after the interests of

itself but also after the interests of the society.

History of CSR


13/27

Illustrations of CorporateSocial Responsibility in India

TataGroup

Tata Group in India has a range of CSR projects, most of which are community

improvement programs. For example, it is a leading provider of maternal and child health

services, family planning, and has provided 98 percent immunization in Jamshedpur. 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.

Tata Group also has an organized relief program in case of natural disasters, including long-

term treatment and rebuilding efforts. It did laudable work during the Gujarat earthquakes

and Orissa floods. It also supports education, with over 500 schools, and also is a benefactor

of the arts and culture. It has done abundant work in improving the environment and local

populations around its industries.

Aptech

Aptech a leading education player with a global presence that has played a broad and

continued role in encouraging and nurturing education throughout the country since its

inception. As a global player with complete solutions-providing capabilities, 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, and training and

awareness-camps.

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. Moreover, the Education and Research

Department at Infosys also works with employee volunteers on community development

projects.

The management team at Infosys continues to set examples in the area of corporate

citizenship and has involved itself vigorously in key national bodies. They have taken

initiatives to work in the areas of research and education, community service, rural outreach

programs, employment, healthcare for the poor, education, arts and culture, and welfareactivities undertaken by the Infosys Foundation.

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 across age groups and across income strata. 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 toincrease the number to 10,000 in the next two years by reaching out to the underprivileged

children, especially in rural areas.


14/27


15/27

The Interest Group (Stakeholders)

Corporations are motivated to involve stakeholders in their decision-making and to

address societal challenges because today's stakeholders are increasingly aware of the

importance and impact of corporate decisions upon society and the environment. The

stakeholders can reward or punish corporations. Thus, Corporate Social Responsibility

requires the identification of various interest groups, which may affect the functioning of a

business organization and may also be affected by its functioning. Normally various

groups associated with a business organization are shareholders, workers, customers,

creditors, suppliers, government and society in general.

Shareholders:

The first responsibility of the management is to protect the interest of

shareholders. The interests of majority of shareholders and large minority of

shareholders are generally well protected through either direct participation in the

management actions or they have real power to intervene, if necessary. They should

be informed about the functioning of the organization adequately and timely.

Therefore, management has a responsibility to provide proper

safeguard to the money invested by shareholders.


16/27

Workers:

Workers have direct interest in an organization because by working there,

they satisfy their needs. Thus, it is the managements responsibility to protect the

interest of workers in the organization. This can be done by the management in the

following ways:

- Management should treat workers as another wheel of the cart

- Management should develop administrative process in such a way

that promotes cooperative endeavor between employers and employees.

- The management should adopt a progressive labor policy based on

recognition of genuine trade union rights participation of workers in management,

creating a sense of belongingness, improving their living and working conditions.

- Management should pay fair and reasonable wages and other

financial benefits to workers.

Customers:

Management owes a primary obligation to give a fair deal to the

customers. This can be done in the following ways:

- Customers should be charged a fair and reasonable price.

- The supply of goods and services should be of uniform

standard and of reasonable quality.

- Management should not indulge in profiteering, hoarding, or

creating artificial scarcity.

- Management should not mislead the customers by false,

misleading and exaggerated advertisements.

Creditors, Suppliers and Others:

They affect the organization in various ways. Therefore , the

management is responsible to fulfill its obligations towards them. This can

be done in the following ways.

- Management should create healthy and cooperative inter

business relationship between different businesses.


17/27

Management should provide accurate and relevant information to creditors andsuppliers.

- Payments of price of materials, interest on borrowings, other

charges should be prompt.

Government:

It is very closely related with the business system of the country. It provides

various facilities for the development of business. Government, no doubt, exercises

control over business, but these controls are meant for overall development of

business. Management can discharge its obligation to government by:

- Management should be a law-abiding citizen

- Management should pay taxes and other dues fully, timely &

honestly.

- It should not corrupt government workers and public servants and the

democratic process

- It should not buy political favors by any means

Society:Organizations exist within a social system and get facilities from the system.

Therefore, they owe obligations to the society as a whole. This can be done by:

- Management should maintain fair business policies and practices.

- It should play a proper role in civic affairs.

- It should provide and promote general amenities and help in creating

better living conditions in general.


18/27

Arguments forSocialResponsi

bilities ofBusiness

Change in publicexpectations

The needs of todays

consumers have

changed, resulting in a

change in their

expectations of

businesses. Since

businesses owe their

profits to society, they

have to therefore respond

to the needs of society.

Business is a partof society

Society and business

are benefited when

there is a symbiotic

relationship between the

two. Society gains

through economic

development and the

provision of employment

opportunities; and

business benefits

through the workforce

and consumers

provided by society.


19/27

Avoidingintervention bygovernment

By being socially

responsible,

organizations attract

less attention from

regulatory agencies.

This gives them greater

freedom and flexibility in

their operations.

Balance of responsibility andpower

Businesses have

considerable power

and authority. The

exercise of this powershould be

accompanied by a

corresponding amount

of responsibility.

Impact of internalactivities of the

organization on theexternalenvironment

Most firms are open

systems, i.e., they

interact with the external

environment. The internal

activities of such firms

have an impact on the

external environment. To

avoid a negative impact


20/27

on the external

environment, firms

should be socially

responsible.

Protectingshareholderinterests

By being

socially

involved, a

company can

improve its

image and thus

protect its

shareholders

interests.

New avenues tocreate profits


21/27

Social responsibility

involves the

conservation of natural

resources.

Conservation can be

beneficial for firms.

Items that had been

considered waste

earlier (for example,

empty soft drink cans)

can be recycled and

profitably used again.

Favorable publicimage

Through social involvement,

a firm can create a favorable

public image for itself and

endear itself to society. By so

doing, a firm can attract

customers, employees, and

investors.

Endeavor to findnew solutions

Businesses have a history

of coming up with

innovative ideas. Therefore,

they are likely to come up

with solutions for social

problems, which other

institutions were unable to

tackle.

Best use of resources of a


22/27

business

Businesses should make

optimum use of the skills

and talent of its managerial

personnel as well as its

capital resources to

produce good quality

products and services. By

so doing, the business will

be able to fulfill their

obligations toward society.

Prevention isbetter than cure

It is in the interests

of business

organizations to

prevent social

problems. Instead of

allowing large-scale

unemployment to

lead to social unrest

(which will harm

business interests),

businesses can besources of

employment for

eligible youth.


23/27


24/27

Arguments against Social Responsibility of Business

Opposes the principle of profit maximization

The main motive of a business is profit maximization. Social involvement may

not be economically viable for a business.

Excessive costs

When a business incurs excessive costs for social involvement, it passes the cost on to

its customers in the form of higher prices. Society, therefore, has to bear the burden of

the social involvement of business by paying higher prices for its products and services.

Weakened international balance of payments

A weakened international balance of payments situation may be created by the

social involvement of organizations. Since the cost of social initiatives would be

added to the price of the products, the multinational companies selling in

international markets would be at a disadvantage when competing with domestic

companies which may not be involved in social activities.

Increase in the firms power and influence

Businesses are inherently equipped with a certain amount of power. Their

involvement in social activities can lead to an increase in their power and

influence. Such influence and power may corrupt them.

Lack of necessary skills among businesspeople

Businesspeople do not possess the necessary skills to handle the problems of society.

Their expertise and knowledge may not be relevant to deal with social problems.

Lack of accountability to society

Until a proper mechanism to establish the accountability of businesses is

developed, they should not get involved in social activities.

Lack of consensus on social involvement


25/27

There is no

agreement regarding

the type of socially

responsible actions

that a business

should undertake.

Conclusion

Taking into view the

recent happenings at

Reliance Industries, it can be

said that the focus on topics

like Ethics And Corporate

Social Responsibility is

increasing. Nowadays the

companies have to keep in

view the social benefits of all

projects undertaken, they

have to keep in mind the well

being of the Stakeholders as

also issues like the

safeguarding of the

Environment. These activities

are constantly under the

microscope of the society.

When a corporate

undertakes a new project

it has to keep in mind

how does it portray its

image in the market. Any

wrongdoings can be

potential pitfalls for the

corporates; they have to


26/27

be right all the time, any

mistake or shortcoming

can immediately result in

a loss of market share as

also reputation. Thus the

companies have to

continuously Re

Evaluate its goals and

Objectives and align

them with the Corporate

Strategy. They can take

this opportunity to

inculcate proper

Business Ethics &

Corporate Values in their

employees.

Along with the

CSR comes the

opportunity to convert

these social initiatives into

tangible results, namely

profits. A company should

look what amount of value

the project can give back

to the company. A Social

Cost Benefit Analysis can

give the company a fair

idea about what kind of

rewards the initiative can

generate for the company.

Thus a company can

decide on the initiatives

taking into consideration

these various factors.


27/27

report on csr

Documents

Transcript of report on csr