Small Presentation on Corporate social responsibility

1. “Responsible business is good business”
BY:-ROCKY KUMAR

2. INTRODUCTION.
Oneofthehumankindsgreatestchallengeistoensuresustainable,justandbalanceddevelopment.Theneedofthecurrentandfuturegenerationscannotbemetunlessthereisrespectfornaturalsystemandfollowingstandardsoflaw&sustainabilityforprotectingsocialandenvironmentalvalues.Inthiscontext,corporations,beingpartofthesociety,itisincreasinglyrecognizedthattheroleofbusinesssectoriscritical.Thus,corporationsengagedinthereprofitseekingpractices,aroundtheworldarestrugglingwithanewrole-CSR.
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3. WHAT IS CSR?
CorporateSocialResponsibilityisawaythroughwhichcompaniesintegratelegal,ethical,moral,socialandenvironmentalconcernsintheirbusinessoperationsandinteractionwithstakeholders:-workforce,society, competitors,businessassociates,government,investors,shareholdersandothergroup.
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4. DEFINITIONS.
PhilipKotlerandNancylee(2005)–“acommitmenttoimprovecommunitywellbeingthroughdiscretionarybusinesspracticesandcontributionsofcorporateresources”.
Mallenbaker-“awaycompaniesmanagethebusinessprocesstoproduceanoverallpositiveimpactonsociety”.
Worldbusinesscouncilforsustainabledevelopment-“CSRisthecontinuingcommitmentbybusinesstobehaveethicallyandcontributetoeconomicdevelopmentwhileimprovingthequalityoflifeoftheworkforceandtheirfamiliesaswellasofthelocalcommunityandsocietyatlarge”.
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5. CSR-A MISUNDERSTOOD CONCEPT.
InabsenceofauniversallyaccepteddefinitionsofCSR,therearesomemythsthatsurroundtheconcept:
Myth1.ACharity
Myth2.CostEnhancer.
Myth3.JustPublicRelation.
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6. OBJECTIVE & PRINCIPLES.
Tomaximizethecompany’soverallimpactonthesocietyandstakeholders.
Therearethreebasicprinciplesofcsr:sustainability,accountability, transparency.
Theeffectisthatthecsrclausewillonlyapplytosomeoftheover800,000companiesinindia,includingover8,000publiclylistedcompaniesandmultinationalcompanies.Theaccountingfirmernst&youngestimatesthatthelawwouldcoverover2,500companiesinindiaandgenerateoverU.S$2billionofCSRspendinginlocalcommunities.
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7. REASONS.
SOCIALOBLIGATION–Corporationsbeingpartofthesociety,takeresourcefromit,growsanddeveloponit.Secondly,theactivitiesoftheindustriesandcompaniesalsoresultinenvironmentdegradation.Thirdly, theexpectationsofthecitizens,consumers,publicauthoritiesetccompelsthecompanyforCSR.Fourthly,businesscan’toperateonunsuccessfulsociety.Thus,it’sthesocialandmoraldutyofthemtocatertotheneedsofthesociety.
LEGALOBLIGATION–Toalignwiththeprovisionofthecompaniesbill,2012andSEBIguidelines(cl.16)
BUSINESSPLAN–Itbuildsthegoodwill,reputationofthefirm,defendsattacksofsocialgroups,NGOsetcandincreasesbusinesscompetitiveness. Itworksforlongtermsustainabilityofthefirmandalso‘connectthedots’.
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8. REASONS.
OTHERFACTORS–Itincludesfactorslike:sustainabledevelopment, expectationsofthepublic,globalization,ethics,community,communication, financeetc.aretheotherdeterminingfactors.
WATCH-DOGORGANIZATIONS–ItincludesorganizationssuchasNGOsandothergovernmentalandsocialbodies.
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9. Provisions of law.
Aspernewcompaniesbill2012,cl135,2%oftheaverageprofitsoflastthree(3)yearsofthecompaniesreportingRs.5croreormoreprofitsinlastthreeyearsshouldgoforcorporatesocialresponsibility.
Specifically,theCSRclauseappliestoanycompany,duringanyfiscalyear, with(i)anetworthofrupees500crore(aboutus$90million)ormore;(ii)aturnoverofrupees1,000crore(aboutus$180million)ormore;or(iii)anetprofitofrupees5crore(aboutus$900,000)ormore.
Ifcompaniesdonotcomplytotheprovisions,theyhavetogiveexplanationsandpenaltiesisalsoleviedonthem.Finefornoncomplianceisnotlessthan50,000Rs.(AboutUS$900)andupto25lacs(aboutUS$46,000).Further, officerswhodefaultonthereportingprovisioncouldbesubjecttouptothreeyearsinprisonand/orfinesofnotlessthan50,000rupees(us$900)andashighas5lacs(upto$9,200).
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10. Provisions of law.
ThereisfreedomtochooseareasofCSR.ThelawalsorequirestoformCSRcommitteewithintheboardofdirectorsthatwilldevise,recommendandmonitorCSRactivitiesandamountspentonsuchactivities,totherestoftheboard.TheCSRcommitteemustconsistofthreeormoredirectors,atleastoneofwhichmustbeanindependentdirector-cl149(6).
Un,ilo,oecdalsoprescribesguidelineswhichthecompanyshouldfollowforsustainability.
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11. AREAS.
Human rights
Employment
Education
Health & nutrition
Anti-corruption measures
Gender balance and empowering women.
Industrial supplier relation
Anti-bribery
Customer satisfaction
Cultural activities
Eco efficiency
Environment management (eco efficiency)
Labour, employees and stakeholders management
Hunger and poverty.
Reducing child morality and improving maternal health.
Combating hivaids, malaria and other diseases.
Contribution to pmnrfor any fund set up by the central or state govt. For socio economic development and reliefs & funds for the welfare of SC/ ST, OBC, minorities, woman etc.
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12. BENEFITS OR IMPORTANCE OF CSR.
Operationalefficiency,costsavingandbeneficialinlongrun.
Buildsgoodwill,reputation,positivemediaprofile.
Acatalystforresponsibleconsumptionandimprovesrelationswithregulators.
Compliancewithlawprotectsitfromanylegalactionsthereof.
Attractsconsumersandbuildsrelations.
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13. STATISTICS.
Many companies now, report their annual financial statement along with CSR reports. Real companies are reporting real benefits from CSR activities . here are some examples:
1. The indianTATA group is engaged in a wide variety of activities directed at helping community development. The company web site lists ex. Of the positive media this has generated.
2. There are now high profile lists of the most responsible companies. The innovestfirm “ ex.100 most sustainable companies in the world” list, for ex. Has been released annually at the world economic forum since 2005.
3. The 2007 edelmantrust barometer suggested that there had been an improvement in public perception of business. This may have been due to the increased attention businesses are giving to CSR issues.
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14. STATISTICS.
4.Standardcharteredbank’s“seeingisbelieving”campaigntohelpcataractsufferershasresultedinanumberofawardsforthecompany.
Financialmarketopinion.
“Thereisagrowingbodyofevidencethatcompanieswhichmanageenvironmental,socialandgovernancerisksmosteffectivelytendtodeliverbetterriskadjustedfinancialperformancethantheirindustrypeers.”–Jeanfrijns,chiefinvestmentofficer.Abp,2004.
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