An Overview Of Corporate Social Responsibility

By Author: Adv. Vaishali D. Muke
Total Articles: 3
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OVERVIEW OF CSR IN INDIA

By Adv. Vaishali D. Muke LLM III SEM, CSMU, Navi Mumbai

CONCEPT OF CSR
The Companies Act, 2013 has included Section 135, Companies (Corporate Social Responsibility) Rules, and Schedule VII which stated mandatory provisions for Companies to fulfil their CSR activity.
Applicability of CSR Provisions: it is applicable to the every Company with
• Net worth of Rs. 500 Crore or more, or
• Turnover of Rs. 1000 crore or more, or
• Net Profit of Rs. 5 crore or more. During the immediately preceding financial year.

CSR Committee:
Every Company on which CSR is applicable is required to constitute a CSR Committee of the Board:
• Such board should Consisting of 3 or more directors, out of which at least one director shall be an independent director.
• Private Company consisting of 2 directors should have two directors on its Board
• Foreign company Consisting of at least 2 persons of which one person shall be its authorised person resident in India and another nominated by the foreign company

Functions of CSR Committee:
...
... The CSR Committee shall—
• Formulate and recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the Company
• Recommend the details of project and its expenditure to be incurred on the activities referred to in clause (i)
• Monitor, Recommend alterations to the CSR Policy of the company from time to time and complete the project in decided time frame.

Schedule 7
Following Activities are included by companies in their Corporate Social Responsibility:
1. Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water.
2. Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.
3. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups.
4. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga.
5. Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional art and handicrafts;
6. Measures for the benefit of armed forces veterans, war widows and their dependents;
7. Training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports
8. Contribution to the Prime Minister’s national relief fund or any other fund set up by the central govt. for socio economic development and relief and welfare of the schedule caste, tribes, other backward classes, minorities and women;
9. Contributions or funds provided to technology incubators located within academic institutions which are approved by the central govt.
10. Rural development projects
11. Slum area development.

TYPES OF CSR:

1. Environmental efforts: One primary focus of corporate social responsibility is the environment. Businesses, regardless of size, have large carbon footprints. Any steps they can take to reduce those footprints are considered good for both the company and society.
2. Philanthropy: Businesses can practice social responsibility by donating money, products or services to social causes and non-profits. Larger companies tend to have a lot of resources that can benefit charities and local community programs. It is best to consult with these organizations about their specific needs before donating.
3. Ethical labour practices: By treating employees fairly and ethically, companies can demonstrate their social responsibility. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.
4. Volunteering: Attending volunteer events says a lot about a company's sincerity. By doing good deeds without expecting anything in return, companies can express their concern for specific issues and commitment to certain organizations.

MODELS OF CSR

Traditional Conflict Model
In the traditional conflict model for corporate social responsibility, social values and benefits are seen as in conflict with shareholder profits. Under this model, corporations opting to practice forms of social responsibility are likely to see added costs for doing so. Proponents of this conceptual model generally argue that the nature of business is one of trade-offs between economic and moral values, and corporate managers will inevitably be forced to decide between their social and fiduciary responsibilities or their commitment to shareholder equity value.

Added Value Model
A second model for conceptualizing corporate social responsibility is to see social and environmental commitments as a means to increase profit. While proponents of this model tend to acknowledge that conflicts persist in business decisions, they also believe that CSR investments are also capable of generating new revenues. This model tends to focus on issues like the value of CSR in attracting socially conscious consumers, finding socially conscious employees and managing the risks of negative press.

Multiple Goals Model
Finally, a third model for corporate social responsibility posits a role for social values in corporate decisions that are untethered to economic values. Under this model, corporations have goals beyond shareholder value, including the enhancement of their community without respect to monetary gain. According to Redman, this model is thought to be relatively radical, though some corporate officers have expressed support for it. Proponents of this model emphasize quality of life as the basis of economic activity.

Challenges in achieving CSR OBJECTS:

• Lack of synergy and interaction between the goals
• Less consideration to environmental and economic dimensions
• Lack of full ownership and leadership towards philanthropy
• Lack of transparency in the process of implementation of CSR
• Lack of enabling environment
• Limited funding for gender equality and women rights
• Lack of policy space for poorer countries
• Political instability
• Compromised focus on climate change and environmental degradation
• Lack of access to basic health services

Conclusion

We will study each aspect of CSR mentioned here in detail in upcoming articles