Shaping a Better World: Unleashing the Power of Corporate Social Responsibility

The United Nations Industrial Development Organisation defines corporate social responsibility as a management concept whereby companies integrate social and environmental concerns into their business operations and interactions with their stakeholders. Also, CSR refers to strategies that companies put into action as part of corporate governance that are designed to ensure that the company’s operations are ethical and beneficial for society. Every firm in the modern day must acknowledge the influence it has on the world and take action to lessen it.

There is a very thin line between the CSR that a company does and the philanthropy or charity it performs. Charity or philanthropy is not done under a boundation or obligation. There are no rules or norms that may be violated. There is no legal obligation, and no institution has made it mandatory for a company to perform charity or philanthropy. These events are merely for personal satisfaction. Whereas, Corporate Social Responsibility is the obligation to fulfil a company's moral, social, ethical, and legal responsibilities. There is a boundary on a company, for lack of a better term.

The Companies Act 2013 has made CSR under Section 135 for those companies that qualified for a certain set of criteria. The law has made it mandatory for companies to spend a minimum of 2% of their net profit over the preceding three years on CSR. The CSR provisions apply to those companies whose holding companies, subsidiary companies, and foreign companies had in the preceding financial year a net worth of more than 500 crore and a turnover of more than 1000 crore. Such companies are to constitute a CSR Committee of the Board consisting of three or more directors, out of whom at least one shall be an independent director. However, if a company is not required to appoint an independent director as per the act, then the CSR committee shall consist of two or more directors.

Not only the Parliament but other institutions such as the Securities and Exchange Board of India (SEBI) mandate that companies listed on the stock exchange provide a Business Responsibility and Sustainability Report (BRSR), which outlines their CSR activities. Additionally, the Ministry of Corporate Affairs (MCA) has issued various guidelines and circulars on CSR.

India is the only country that has regulated and mandated CSR for some select categories of companies registered under the Act. This CSR initiative will push the nation towards the achievement of sustainable development goals and a public-private partnership in transforming India. The CSR nature of India more than 20,000 companies across 14

different sectors are a part of the National CSR Programme and are now proactively involved in social initiatives as it not only helps them meet the mandatory CSR requirement but also strengthens their brand image.

When we talk about corporate social responsibility (CSR), we are referring to a set of practices that companies engage in. These practises include things like environmental management, being compliant with the law, engaging with stakeholders, ensuring that labour standards and working conditions are up to par, maintaining good relations with employees and the community, promoting social equity, striving for gender balance, protecting human rights, fostering good governance, and taking measures to prevent corruption. Corporate social responsibility is no longer just a buzzword thrown around by large corporations to make themselves look good. Most companies have a particular aim to work towards that may help in earning profits as well as performing social welfare.

Conglomerates like Reliance Industries Limited and HDFC Bank Limited have spent crores of rupees on CSR plans. The motto of the well-established Reliance Industries is "Education and Skill Enhancement", to fulfil which it organises skill development and income-generating programmes for local communities. They assist such communities by helping them start self-help groups and empowering them with marketing know-how. Another prominent example of CSR is HDFC Bank Limited, whose motto is "A STEP TOWARDS PROGRESS ''. They are helping to transform the lives of millions of Indians through their social initiatives. These initiatives come under the umbrella of 'Parivartan," and they aim to contribute towards the economic and social development of the country by sustainably empowering its communities. Similar to these, many companies, including Tata Consultancy Services Limited and Oil and Natural Gas Corporation Limited, have contributed a great deal to the National CSR Programme. A company giving into CSR fulfils its environmental, ethical, legal, and social obligations. All these activities portray a good reputation, increase the profits of the business, generate public trust, and improve a business’s customer loyalty.

CSR activities have key advantages like better brand recognition, positive business reputation,increased sales, customer loyalty, operational cost savings, better financial performance, greater ability to attract talent and retain staff, organisational growth, and lastly, easier access to capital. However, CSR also has its fair share of disadvantages and challenges, which include unhappy investors, changes in profit sharing, the fact that it comes at a cost, and most importantly, the fact that clients may take a hit.At the core of their practices is a sustainability framework called the 4Cs, which stand for conservation, community, commerce, and culture.

Companies striving to measure success beyond bottom-line financial results may adopt corporate social responsibility strategies. These strategies may target environmental, ethical, philanthropic, and fiscal responsibilities that extend beyond the products they sell. CSRs aim to make the world a better place beyond transacting with customers and may result in company-specific benefits as well.

Finally, to quote Jack Welch, who is an American business executive, chemical engineer, and writer who served as the Chairman and CEO of General Electric between 1981 and 2001, "I believe social responsibility begins with a strong, competitive company. Only a healthy enterprise can improve and enrich the lives of people and their communities.