CORPORATE SOCIAL RESPONSIBILITY

Presented by:
CHARLES V. VICTOR
Sr. No.- 11861
Aerospace Dept

CONTENTS

What is Corporate Social Responsibility ?

Benefits of CSR
Dimensions of CSR
Common Understanding
Sustainable Development
Models of CSR
Aspects covered in CSR
Key Issues in CSR
For whom is CSR Applicable?
What to do when CSR is Applicable & CSR Mgmt. Structure
Allocation of Funds
Implementation
Reporting
Common mistakes in CSR
International CSR Instruments
CSR Initiatives of some renowned companies

What is Corporate Social Responsibility?

Corporate Social Responsibility (CSR) is the continuing
commitment by business to behave ethically and contribute
to economic development while improving the quality of life of
the workforce and their families as well as of the local
community and society at large.
World Business Council For Sustainable Development

Benefits of CSR

Enhanced
Relationship with
stakeholders

Saving money
on energy and
operating cost

Benefits
of CSR

Differentiating
yourself from the
competitor
Enhancing your
influence in the
industry

Attracting,
Retaining and
Maintaining a happy
workforce

Media interest
and good
reputation
Access to funding
opportunities

Increase in
customer retention

Be
ne
fit

Be
ne
fi

ts

Winning new
businesses

Dimensions of CSR
Internal
Dimension:
This
focuses
on
organizational
practices with respect to
internal
stakeholders
that
should be aligned to corporate
social responsibility standards.

External
Dimension:
This
focuses on an organizations
practices towards external
stakeholders which should be
in
accordance
with
international
standards
of

Common Understanding One : Integration

CSR is an idea whereby companies integrate economic,
social and environmental concerns in their business
operations
Exchan
ge
Rates
Governan
ce
Climat
e
Chang
e
Waste

Consumer
Confidence

Interes
t Rates
Regulation/Polic
y

Economic

Corruption

Environment

Biodiversit
y
Resour
ce Use

Social

Human
Rights

Communitie
s

Labour/
Workplac
e

Common Understanding Two : Stakeholders

CSR relates to the idea whereby a business addresses and

balances the needs of stakeholders.

Who/what are Stakeholders?

Individuals and groups who may affect or be affected by

the actions, decisions, policies, practices or goals o an
enterprise.
Examples:
Shareholders and other investors
Employees
Customers
Governments
Local communities
NGOs
Environment

CSR and Sustainable Development

Many definitions describe CSR as the business pursuit of

sustainable development.

Sustainable development: development that meets the

needs of the present without compromising the ability of

future generations to meet their own needs. (1987
Brundtland Report).

Like CSR, sustainable development is also recognized as

having three fundamental pillars: economic development,

social development and environmental protection

Models of corporate social responsibility

Friedman model (1962-73)
Ackerman Model (1976)
Carroll Model (1991)
Environmental Integrity & Community Model.
Stockholders & Stakeholders Model.
Corporate Citizenship Model.
New Model of CSR.

Carroll Model (1991)

Responsibility towards Society

Carrying on business with moral& ethical standards.
Prevention of environmental pollution.
Minimizing ecological imbalance.
Contributing towards the development of social health,
education
Making use of appropriate technology.
Overall development of locality

Responsibility towards Government

Obey rules & regulations.
Regular payment of taxes.
Cooperating with the Govt to promote social values.
Not to take advantage of loopholes in business laws.
Cooperating with the Govt for economic growth &
development

Responsibility towards Shareholders

To ensure a reasonable rate of return over time.
To work for the survival & the growth of the concern.
To build reputation & goodwill of the company.
To remain transparent & accountable

Responsibility towards Employee

To provide a healthy working environment.
To provide efficient mechanism to redress workers grievances.
To provide reasonable working standard & norms
Proper recognition of efficiency & hard work
To provide training & promotion facilities.
To grant regular & fair wages.
To provide welfare services.

Responsibility towards Consumers

Supplying socially harmless products.
Supplying the quality, standards, as promised.
Resisting black-marketing & profiteering
Maintaining consumers grievances cell.
Adopt fair pricing.
Provide after sales services.
Fair competition.

Key Issues in CSR

Labour rights:
child labour
forced labour
right to organize
safety and health

Environmental conditions
water & air emissions
climate change

Human rights
cooperation with paramilitary forces
complicity in extra-judicial killings

Poverty Alleviation
job creation
public revenues
skills and technology

For Whom Its Applicable?

Companies on whom the provisions of the CSR shall be applicable
are contained in Sub Section 1 of Section 135 of the Companies
Act, 2013. As per the said section,

the companies having Net worth of INR 500 crore or more;

or Turnover of INR 1000 crore or more;
or Net Profit of INR 5 crore or more

,during any financial year shall be required to constitute a Corporate

Social Responsibility Committee of the Board with effect from 1st
April, 2014.

What To Do When CSR Is Applicable?

The companies covered under the Sub section 1 of Section 135 shall be
required to do the following activities:

The companies shall be required to Constitute Corporate Social

Responsibility Committee of the Board .The CSR Committee shall be
comprised of 3 or more directors, out of which at least one director shall
be an independent director.

Board's report shall disclose the compositions of the CSR Committee.

All such companies shall spend, in every financial year, at least 2% of the
average net profits of the company made during the three immediately
preceding financial years,.

CSR Management : Management structure

Audit Committee of
Board

Board of Directors

President & CEO

Group
Presidents

Chief
Financial
Officer

VP of Human
Resources

General
Counsel

Corporate
Responsibility
Officer

Steering
Committee

Allocation of Funds
Every year, with the approval of its Board of Directors a
budgetary allocation is to be made for CSR and Sustainability
activities / projects for that year.
The budgetary allocation will be based on the profitability of the
company, ie, Profit After Tax (PAT) of the company in the
previous year as shown

PAT of CPSE
in the previous year

(i)

Less than Rs. 100 Crore

Range of Budgetary allocation for CSR and

Sustainability activities
(as % of PAT in previous year)
3% - 5%

(ii) Rs. 100 Crore to Rs. 500 Crore

2% - 3%

(iii) Rs. 500 Crore and above

1% - 2%

Points to Remember
The CSR projects or programs undertaken only in India shall
amount to CSR Expenditure
The CSR projects that benefit only the employees of the
company and their families shall not be considered as CSR
activities in accordance with Section 135 of the act
Contributions of any amount directly of indirectly to any
political party shall not be considered as CSR activities

Implementation
Activities planned under CSR are to be implemented by
Specialized Agencies and generally NOT by staff of the
organization.
Such specialized agencies would include:

Community based organization whether formal or informal.

Elected local bodies such as Panchayats
Voluntary Agencies (NGOs)
Institutes/Academic Organizations
Trusts, Mission etc.
Self-help groups
Government, Semi Government and autonomous Organizations.
Standing Conference of Public Enterprises (SCOPE)
Mahila Mondals/Samitis and the like Contracted agencies for civil works
Professional Consultancy Organization etc.

Reporting of CSR
Rule 8 of the CSR Rules provides that the companies, shall be
required to incorporate in its Board's report an ANNUAL REPORT on
CSR containing the following particulars:
Brief outline of the company's CSR Policy, including overview of projects or
programs proposed to be undertaken
The composition of the CSR Committee;
Average net profit of the company for last three financial years;
Prescribed CSR Expenditure
Details of CSR Spent during the financial year;
In case the company has failed to spend the 2% of the average net profit of the
last three financial year, reasons thereof;
The approved CSR Policy for the company are to be disclosed and displayed on
the companys website, if any , as per the norms.

Extract from the Format of the Annual Report

Code of Conduct:
Issue emphasis varies by industry

Source: OECD 1999 survey of 233 codes

Common Mistakes in CSR

Lack of vision
Scale of change
Sub-strategic management
Risk/opportunity roles
Selective hearing
Maintaining old structures
One World approaches
Uneven approaches
Non-participative management
Failure to see CSR as innovation

International CSR Initiatives Posing Challenges to Firms

United Nations Global Compact

World Summit on Sustainable Development
OECD Guidelines on Multinational Enterprises
ISO 26000
ISO 9001
ISO 14001
OHSAS 18001
OECD Principles of Corporate Governance
Social Accountability 8000
Global Reporting Initiative
World Business Council for Sustainable Development
Environmental and Social Standards of International Finance Corporation
International Labour Standards of International Labour Organization
Equator Principles
Principles for Responsible Investment
United Nations Human Rights Instruments
Transparency International Business Principles
Voluntary Principles on Security and Human Rights

CASE STUDIES

Cokes sale was banned as the

result of tests, including those
by the Indian government,
which
found
high
concentrations of pesticides.
Communities in India , around
Coca-Cola's bottling operations
are facing severe shortages of
water as a result of the cola
major sucking huge amounts of
water from the common
groundwater source.

Vodafone promised to cut down their

carbon dioxide emissions in half by 2020
through improving the energy efficiency of
its global mobile -phone networks.
Additional points for Vodafone on CSR
because they are constantly updating us
with the results of the campaign; no
matter whether its going well or not.
Future promises includes pledging to
recycle 95% of network equipment waste
and plans to reduce work-related
accidents that cause lost time by 10%. On
top
of
that,
Vodafone
is
a
leading business in socially responsible
products such as the text-to-speech
software for blind people and easy-to-use
handsets for the elderly.

The banks head of corporate

sustainability, Teresa Au, has said
that
despite
the
economic
situation,HSBC would continue to
support its sustainability campaign.
Initiatives include providing small
businesses
with
sustainability
insurance options and developing an
index for climate change.
The business has also boosted its
management of ethical and socially
responsible investing funds by 60%
over the last two years. HSBC has an
American unit that is dedicated to
assisting local communities by
promoting
affordable
homeownership, among other goals.

In conclusion:
In this session we have looked at:
What is CSR
Why CSR is likely to be come more widely
adopted
The business case for CSR
The Value Statement (Customer,
Employee, Stakeholder and Social focus)
Reporting and Accountability options for
CSR including the Triple Bottom Line
concept
CSR and social criticism of international
organisations

Need for Corporate Social Responsibility

To reduce the social cost

To enhance the performance of employees
It a type of investment
It leads to industrial peace
It improves the public image
Can generate more profit
To provide moral justification
It satisfies the stakeholders
Helps to avoid government regulations & control
Enhance the health by non-polluting measures

Compliance Management:
Management by certification

Introduced 1995
By 2002: 37,000 factories,
112 countries

Introduced 1998
By 2005: 763 factories,
47 countries