Corporate Social Responsibility

PRESENTED BYANTRA ASTHANA

DISHIKA AGRAWALBAIBHAV AGRAWALMUKUNDA M RAORISHABH SINGH

PRESENTATION LAYOUT

DefinitionsScope

Activities Under CSRDifferenceConclusionReferences

• Defined by United Nations Industrial Development Organization (UNIDO):Corporate Social Responsibility is a management concept that integrates social and environmental concerns in business operations and a company’s interactions with its stakeholders. More specifically, CSR can be seen as a strategy to balance economic, environmental and social imperatives while at the same time addressing the expectations of shareholders.

Corporate Social Responsibility

• World Bank defines CSR as:The commitment of businesses to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways that are good for business and for development.

• As defined by World Business Council for Sustainable Development (WBCSD)Corporate Social Responsibility is the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large.

• According to European Commission,“Corporate social responsibility (CSR) refers to companies taking responsibility for their impact on society. The European Commission believes that CSR is important for the sustainability, competitiveness, and innovation of EU enterprises and the EU economy. It brings benefits for risk management, cost savings, access to capital, customer relationships, and human resource management.”

• According to Global Affairs Canada, “Corporate Social Responsibility (CSR) is defined as the voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner.”

• India`s new Companies Act 2013 (Companies Act) has introduced Corporate Social Responsibility (CSR) as a mandatory expenditure for corporates.

• As per CSR Committee and Policy: Every qualifying company requires spending of at least 2% of its average net profit for the immediately preceding 3 financial years on CSR activities.

Scope of CSR

As per Companies Act 2013:• Preference should be given to local areas and the

areas where the company operates.• The company can also make the annual report of

CSR activities in which they mention the average net profit for the 3 financial years and also prescribed CSR expenditure

Section 135 of the Companies Act provides the threshold limit for applicability of the CSR to a Company i.e.(a) net worth of the company to be Rs 500 crore or more(b) turnover of the company to be Rs 1000 crore or more(c) net profit of the company to be Rs 5 crore or more.

• Promotion of education.• Promoting gender equality and empowering women.• Reducing child mortality and improving maternal health.• Combating HIV and AIDS, malaria and other diseases.• Ensuring environmental sustainability & employment.• Enhancing vocational skills.• Social business projects.• 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.

• Contribution to relief funds and funds for the welfare of the minorities and women.

Activities Under CSR

CHARITY CSR

• Donation of cash/kind/physical effort. Provision of opportunities to members of the community and stakeholders.

• Donation (2% of profits as per companies act 2013) towards CSR in sectors that would be considered valid activities under CSR.

• Voluntarily • Mandatory

• No restriction on kind of entities that could be beneficiary

• Benefit a community pertaining to a specific cause (health/education/ women). Can’t benefit an individual.

• You may or may not demand accountability or sustainability for the money/items you gave.

• You must monitor progress and execution of projects because the shareholder's of the company have a right to know where their money was invested.

Difference

Although CSR has certain challenges in its implementation yet it is an important aspect of the corporate world. Some critics argue that the reputational benefits that CSR companies receive demonstrate the hypocrisy of the approach and the industries like tobacco, alcohol etc. selling firms which actually harm their consumers may indulge in the same philanthropic activities which further complicates CSR. But the benefits are much greater than the shortcomings and hence, it is required and is beneficial for the development of developing companies, for the company itself and for the society which sometimes gets ignored due to the profit making motive of the firms. It also increases a healthy competition among the companies which in turn leads to a better performance.

Conclusion

• http://www.aefjn.org/index.php/369/articles/Corporate_Social_Responsibility_-_An_Introduction.html

• http://www.wbcsd.org/work-program/business-role/previous-work/corporate-social-responsibility.aspx

• http://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/other-autre/csr-rse.aspx?lang=eng

• http://ec.europa.eu/growth/industry/corporate-social-responsibility/index_en.htm

• http://www.unido.org/fileadmin/import/84703_Background_Paper__LAC_Roundtable.pdf

• http://www.mondaq.com/india/x/366528/Corporate+Governance/Corporate+Social+Responsibility+Indian+Companies+Act+2013

• https://www.quora.com/What-is-the-difference-between-corporate-social-responsibility-CSR-and-charity.

References