Corporate social responsibility

1. By
- M. Tamilarasu

2. MEANING:
Corporate Social Responsibility (CSR) is a management concept that describes how a
company contributes to the well-being of communities and society through environmental
and social measures. It is a form of self-regulation that can be expressed in initiatives or
strategies, depending on an organization’s goals. CSR is generally understood as being the
way through which a company achieves a balance of economic, environmental, and social
imperatives, while at the same time addressing the expectations of shareholders and
stakeholders.

3. DEFINITION:
"Corporatesocialresponsibilitymeanssomething,butnotalwaysthesamethingto
everybody"
-Votaw

4. TYPES:
1. Environmental Responsibility: This type of CSR focuses on reducing the negative
impact of business operations on the environment. It involves initiatives such as reducing
carbon emissions, conserving energy, reducing waste, and using sustainable materials.
Examples include reducing greenhouse gas emissions, minimizing waste, and conserving
natural resources.
2. Ethical/Human Rights Responsibility: This type of CSR focuses on ensuring that a
company's operations are ethical and respect human rights. It involves initiatives such as
ensuring fair labor practices, avoiding child labor, and avoiding the use of conflict minerals.
Examples include setting a higher minimum wage, guaranteeing all materials are ethically
sourced, and ensuring that all employees receive competitive pay and comprehensive benefits
as well as treated with respect.

5. 3. Philanthropic Responsibility: This type of CSR focuses on giving back to the community
through charitable donations and volunteer work. It involves initiatives such as donating to
non-profit organizations, sponsoring community events, and supporting disaster relief efforts.
Examples include charitable donations, volunteering, and community outreach programs.
4. Economic Responsibility: This type of CSR focuses on ensuring that a company's
financial decisions are ethical and beneficial to society. It involves initiatives such as creating
jobs, supporting local businesses, and investing in sustainable practices. The end goal isn’t
just to maximize profits, but also to make sure the business operations positively impact the
environment, people, and society.

6. INFLUENCING FACTORS
1. Company size: According to one study, company size was found to have the most
decisive influence on the level of CSR disclosure. Larger companies may have more
resources to devote to CSR initiatives and may face more pressure from stakeholders to
engage in socially responsible practices.
2. Industry sensitivity: The nature of the industry in which a company operates can also
influence its CSR initiatives. For example, companies in industries with a high environmental
impact, such as oil and gas, may face more pressure to engage in environmentally responsible
practices.

7. 3. Government regulations and guidelines: Regulations and guidelines set by governments
can also influence a company's CSR initiatives. For example, laws mandating the use of
renewable energy sources may encourage companies to invest in sustainable energy.
4. Management support: The support of top management is crucial for the success of CSR
initiatives. Without the commitment of senior leaders, CSR initiatives may not receive the
necessary resources and attention to be effective.

8. 5. Reputation risk: Companies may engage in CSR initiatives to protect their reputation and
avoid negative publicity. For example, a company that is accused of unethical labor practices
may launch initiatives to improve working conditions and avoid damaging its reputation.
6. Consumer and workforce demand: Consumer and workforce demand is another factor
that can influence a company's CSR initiatives. Consumers and employees may prefer to
support companies that engage in socially responsible practices, which can create a
competitive advantage for those companies.

9. STEPS
1. Define your company's purpose and values: The first step in creating a CSR plan is to
clearly define your company's purpose and organizational values. This will help guide your
decision-making and ensure that your CSR efforts align authentically with your company's
culture and overall goals and priorities.
2. Conduct a CSR audit: Once you have defined your company's purpose and values, the
next step is to conduct a CSR audit. This involves assessing your current environmental,
social, and governance practices and the impact of your products or services.

10. 3. Set specific goals and objectives: After conducting a CSR audit, the next step is to set
specific goals and objectives for your CSR plan. Set distinct goals around each of your
biggest stakeholders, which include the impact the company wants to make on society, on its
workforce, and its business priorities. Remember to keep goals SMART (specific,
measurable, achievable, relevant, and time-bound).
4. Develop a CSR strategy: After setting your CSR goals and objectives, the next step is to
develop a comprehensive CSR strategic plan. This should include specific actions and
initiatives that your company will take to achieve its CSR goals.

11. 5. Implement and monitor your CSR plan: Once you have developed a CSR strategic plan,
the next step is to implement and monitor your CSR plan. This involves putting your plan
into action and regularly monitoring your progress to ensure that you are meeting your goals
and objectives.
6. Involve your customers and stakeholders: Involving your customers and stakeholders is
an important step in CSR. This can include soliciting feedback, engaging in dialogue, and
collaborating on initiatives.
7. Use social media: Social media can be a powerful tool for communicating your CSR
initiatives and engaging with stakeholders. Use social media to share your progress, highlight
your successes, and engage with your audience.

12. FUNCTIONS (or) MERITS (or) OBJECTIVES
1. Enhancing brand image and reputation: CSR initiatives can help improve a company's
brand image and reputation by demonstrating a commitment to social responsibility and
ethical practices.
2. Improving stakeholder relationships: CSR initiatives can help build stronger
relationships with stakeholders, including customers, employees, investors, and the
community.

13. 3. Mitigating risk: CSR initiatives can help mitigate risks associated with negative publicity,
legalaction,andenvironmentalorsocialimpact.
4. Attracting and retaining employees: CSR initiatives can help attract and retain employees
whoaremotivatedbyacompany'scommitmenttosocialresponsibility.

14. 5. Increasing customer loyalty and sales: CSR initiatives can help increase customer
loyalty and sales by appealing to consumers who prioritize socially responsible companies.
6. Cost savings: CSR initiatives can lead to cost savings through operational efficiencies,
waste reduction, and energy conservation.
7. Contributing to society: CSR initiatives can have a positive impact on society by
addressing social and environmental issues and contributing to sustainable development.

15. Demerits of Corporate Social Responsibility:
1. Cost: CSR initiatives can be expensive, and the cost may fall disproportionately on small
companies.
2. Conflict with fiduciary duty: CSR initiatives may conflict with a company's fiduciary
dutyto its shareholders, which is to maximize profits.

16. 3. Greenwashing: Some customers may view CSR initiatives as greenwashing, or a way for
companies to appear socially responsible without actually making a significant impact.
4. Negative impact on profitability: CSR initiatives may have a negative impact on
profitability if they are not implemented effectively.
5. Shift in focus: CSR initiatives may shift a company's focus away from its core business
objectives and priorities.

17. EXAMPLES
1. Reliance Industries Limited: Reliance Industries Limited is India's largest company by
market capitalization and is involved in a wide range of businesses, including petroleum,
natural gas, retail, and telecommunications. The company spent Rs 60.01 crores on CSR
initiatives in FY2020-21, while it was obligated to spend Rs 120.89 crores as per the
Company’s Act. The company's CSR initiatives focus on areas such as education, healthcare,
rural development, and disaster response.

18. 2. Tata Consultancy Services Limited: Tata Consultancy Services Limited is a
multinational information technology services and consulting company headquartered in
Mumbai. The companyspent Rs 315.22 crores on CSR initiatives in FY2020-21, while it was
obligated to spend Rs 315.22 crores as per the Company’s Act. The company's CSR
initiatives focus on areas such as education, healthcare, environment, and community
development.