CORPORATE SOCIAL RESPONSIBILITY

 UNDERSTANDING CSR 

When a company operates, it operates in an environment (not in a vacuum) and shows its effects socially, environmentally., culturally, economically etc. Things to understand here is that every effect or contribution can't be helpful. Sometimes business models end up affecting negatively its surrounding space. To balance the negative effects done by a company Government have introduced Corporate Social Responsibility over business firms.

WHAT IS CSR- CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is also known as Corporate Citizenship. CSR is a method that makes companies socially, and environmentally, accountable. 

Corporate Social Responsibility is a way that enhances society and the environment. In this model (CSR) makes a concerted effort to enhance the experience of citizens rather than degrade society and the environment. This helps in the positive image branding of companies.

TYPES OF CSR-CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is mainly of 4 categories:

Environmental efforts: Primary focus of CSR is the environment, as many businesses (factories and industries) have large carbon footprints. Air conditioners of offices and automobiles to reach offices providing white-collar jobs also contribute to pollution. Steps taken by concerned organisations to reduce their footprint are considered good for both the company and society.

Philanthropy: Many companies and individuals practice social responsibility by donating money, products or services to social causes and nonprofits. Such help can benefit charities and local community programs. Many people have a specific charity or program in mind, and they reach out to the organization to convert ideas into reality. 

Ethical labour practices: Firms can demonstrate Corporate Social Responsibility by treating employees fairly and ethically. Such practices are true of businesses that operate in international locations with labour laws that differ from those in the United States of America.

Financial responsibility: is that pillar of Corporate Social Responsibility that ties together the three types of CSR mentioned above. A company make plans to be more environmentally, ethically, and philanthropically focused; however, the company must back these plans through financial investments in programs, donations, or product research and talent recognition.

APPLICATION OF CSR- CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility is a broad term and happens in various ways depending on the industry and its size. To contribute towards CSR a firm first needs to grow its business to the point where it can give back for welfare to society. 

Corporate Social Responsibility requires qualified companies to mandatory spend at least two per cent of their average net profit of presiding 3 years this term comes under Section 35 of the Companies Act 2013.

Criteria established in India to classify company who has to pay CSR (Corporate Social Responsibility) are:

EXAMPLES OF CSR- CORPORATE SOCIAL RESPONSIBILITY

The companies qualified to contribute onwards CSR requires to constitute a Corporate Social Responsibility Committee consisting of three or more directors. The company's practices should be in integrity to the culture and business operations. At present, people are becoming more conscious and aware of their surroundings and things impacting their surroundings. This awareness made them smart to detect corporate hypocrisy. To ensure CSR /Corporate Social Responsibility authenticity a company should care about its value, business mission and various initiatives. CSR evolved by voluntary choices of individual companies and then by mandatory Regulation at a different levels from regional to international level.

Starbucks

Starbucks has long been famous for its coffees and keen sense of Corporate Social Responsibility and commitment to sustainability and community welfare. As per its 2020 Global Social Impact Report, achievements include reaching 100% of ethically sourced coffee and creating a global network of farmers with 100 million trees by 2025. 

General Motors

In 2021, General Motors was placed on the Bloomberg General Equality Index for a fourth consecutive year. Apart from this General Motors has been placed in Diversity Inc.'s top 50 companies for a sixth consecutive year. In addition, it has planned for a $35 billion investment from 2020 to 2025 in electric vehicles and aims for 100% renewable electricity at U.S. sites by 2025.

BENEFITS OF CSR-CORPORATE SOCIAL RESPONSIBILITY

CSR is equally important for the community as well as the company. Activities involved in CSR can help to establish a stronger bond between employees and corporations. Corporate Social Responsibility aid both employees and employers to feel more connected to the world around them. 

Aside from the positive impacts on the planet, here are some additional reasons businesses pursue corporate social responsibility.

• Brand Recognition
• Investor Relations
• Employee Engagement
• Risk Mitigation

ISO 26000

In 2010, the International Organization for Standardization (ISO) released ISO 26000. ISO 26000 is a set of voluntary standards meant to help companies implement Corporate Social Responsibility. It guides to implementation of CSR because the nature of CSR is more qualitative than quantitative, and its standards cannot be certified.

ISO 26000 helps organizations to convert CSR principles into practical actions. The standard is aimed at all qualified organizations. This standard represents an international consensus as the key stakeholders from around the world contributed to developing ISO 26000.

CHALLENGES FACED IN THE IMPLEMENTATION OF CSR

Geographical bias is observed as firms are mostly funding projects closer to their locations. This results in the development of the same area and promotes the idea of the rich getting richer and the poor getting poorer. This creates a gap in development.

Lack of reporting of the amount invested by the firms towards Corporate Social Responsibility. This makes it difficult to estimate the amount invested as per their profit earned.

Lack of transparency on part of local agencies who are utilizing the funds allocated and doing impact assessment. Every person expects proper utilisation of hard earn money.

Lack of participation by communities because of limited awareness towards CSR enables minimal outreach.

Spending is skewed as in some areas like child mortality and extreme hunger and poverty funding is minimal (6% of CSR). however, education promotion and combating diseases get 44% of CSR.

CONCLUSION

Corporate Social Responsibility is an idea which enables even private organisations towards the welfare of society apart from the creation of employment. This participatory approach enables connectivity to the ground-level reality of the world and helps NGOs in better implementation of policies.

Many backward areas and rural areas have seen drastic changes due to sincere CSR functions performed by some companies either in infrastructure or school or roads or health sector. When it comes to development it is not only the Government that has the sole responsibility to perform this job, all individuals and companies should contribute towards social responsibility. 

-BHAVNA GEED.