Responsibility As A Business Strategy BBA - 6A Presented By:- Nishchay 2021020079 What Is Corporate Social Responsibility?
CSR refers to a company’s
commitment to operating in an CSR is an extension of the economically, socially, and principles of sustainable environmentally sustainable development and is based on manner. This involves a the idea that companies have a responsibility to act in the best responsibility to contribute to interests of society and to balance the needs of stakeholders, the long-term health and well- including customers, employees, being of society and the shareholders, suppliers, and the environment. community. Four Types Of Corporate Social Responsibility
Environmental responsibility refers to the Refers to a company’s commitment to operate their
organization’s commitment to sustainability business in an ethical manner that upholds human rights principles, such as fair treatment of all and environmentally friendly operations. stakeholders.
Refers to a corporation’s aims, goals and Economic responsibility refers to the practice of objectives for actively bettering society as making financial decisions based on a a whole. commitment to doing good Benefits Of Corporate Social Responsibility Better Brand Operational costs Recognition savings
Positive Business Better financial
Reputation performance
Increased sales and Easier access
customer loyalty to capital Provisions of CSR Under Section 135 of Companies Act 2013
Section 135(1) Provision to Section 135(1)
Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore Provided that where a company is or more or a net profit of rupees five not required to appoint an crore or more during immediately independent director under sub- preceding financial year shall constitute section (4) of section 149, it shall a Corporate Social Responsibility have in its Corporate Social Committee of the Board consisting of Responsibility Committee two or three or more directors, out of which at more directors. least one director shall be an independent director. Provisions of CSR Under Section 135 of Companies Act 2013
Section 135(2) Section 135(3)
(a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken The Board's report under sub-section (3) by the company in areas or subject, specified of section 134 shall disclose the in Schedule VII; composition of the Corporate Social (b) recommend the amount of expenditure to Responsibility Committee. be incurred on the activities referred to in clause (a); and (c) monitor the Corporate Social Responsibility Policy of the company from time to time. Provisions of CSR Under Section 135 of Companies Act 2013
Section 135(4) Section 135(5)
a) after taking into account the The Board of every company referred recommendations made by the to in sub-section (1), shall ensure that Corporate Social Responsibility the company spends, in every financial Committee, approve the Corporate year, at least two per cent of the Social Responsibility Policy for the average net profits of the company company and disclose contents of such made during the three immediately Policy in its report and also place it on preceding financial years, in the company's website, if any, in such pursuance of its Corporate Social manner as may be prescribed Responsibility Policy: Provisions of CSR Under Section 135 of Companies Act 2013
1st Provision to Section 135(5) 2nd Provision to Section 135(5)
Provided that the company shall Provided further that, if the company give preference to the local area fails to spend such amount, the and areas around it where it Board shall, in its report made under operates, for spending the amount clause (o) of sub-section (3) of earmarked for Corporate Social section 134, specify the reasons for Responsibility activities not spending the amount. Characteristics Of Corporate Social Responsibility
Sustainable development practices
Transparency and accountability
Maintain good relationship management
Advocacy of human rights
Compliance with accepted standards on CSR
Ethical business practice
Importance of Corporate Social Responsibilty CSR improves the public image by publicising the efforts towards a better society and increasing their chance of becoming favourable in the eyes of consumers. CSR increases media coverage as media visibility throws a positive light on the organisation. CSR enhances the company’s brand value by building a socially strong relationship with customers. CSR helps companies to stand out from the competition when companies are involved in any kind of community. The CSR Committee will formulate and recommend a CSR policy to the Board. CSR policy shall point out the activities to be undertaken by the company as enumerated in Schedule VII of the Act.
Duties of CSR Committee will recommend the amount of
CSR expenditure to be incurred on the CSR activities to be
undertaken by the company.
Committee CSR Committee will monitor the CSR policy of the
Company from time to time.
The CSR Committee will establish a transparent
controlling mechanism for the implementation of the CSR projects or programs or activities undertaken by the company. Sustainable Development Practices Corporate social responsibility, or CSR, involves balancing corporate citizenship and environmental responsibility to give back to the communities in which they operate, which also supports long-term business success. Socially responsible companies preserve environmental resources crucial to future generations, according to the International Institute for Sustainable Development. Transparency and Accountability
CSR demonstrates transparency by openly
disclosing activities, setting measurable goals, engaging stakeholders, and undergoing independent verification. Accountability is ensured through compliance with regulations, regular reporting, integration into business strategy, addressing failures, and continuous improvement. Eligible Activities Under CSR 1. Eradicating hunger, poverty, and malnutrition. 2. Promoting education, including special education and employment- enhancing vocational skills. 3. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans. 4. Reducing child mortality and improving maternal health. 5. Ensuring environmental sustainability, conservation of natural resources, and ecological balance. 6. Animal welfare, including veterinary services and animal shelters. 7. R&D in the areas of sustainable development. 8. Contributions to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development. Non-Eligible Activities Under CSR 1. Activities that benefit only the employees or shareholders of the company. 2. Routine operational expenses not directly related to CSR initiatives. 3. Donations to political parties or organizations affiliated with political causes. 4. Activities that generate income for the company, except when such income is used for CSR purposes. 5. Activities that contravene any law or regulation. Demerits Of Corporate Social Responsibility Subject to Losing Sight Of Greater Scrutiny What Matters
Risk to Client can
Reputation become impatient
Rising Costs Of Investor’s
Operations resistance How Is Corporate Social Responsibility Related To Marketing?
Customers Channel Members
CSR activities that supports social 1)Enhanced Reputation causes such as education, healthcare, 2)Improved Relationships poverty alleviation can directly benefit 3)Risk Management customers by improving access to essential services. 4)Employee Engagement CSR Reporting
With respect to CSR Reporting, the provisions are as
follows : The Board’s Report referring to any financial year initiating on or after the 1st day of April 2014 shall include an annual report on CSR. In the case of a foreign company, the balance sheet filed shall contain an Annexure regarding a report on CSR. To Community CSR fosters ethical business practices by engaging Ethical communities through sustainable initiatives, promoting social welfare, respecting human rights, supporting
Business education, healthcare, and environmental conservation,
thereby contributing positively to society's well-being
Practice and development.
To Government CSR practices ethically towards government by adhering to regulations, paying taxes promptly, engaging in transparent lobbying practices, and supporting public welfare initiatives. FAQs Related to Corporate Social Responsibility
Why CSR is mandatory? How much CSR is mandatory?
The Companies Act, 2013 provides for CSR under section 135. Thus, it is It is mandatory for the mandatory for the companies covered companies covered under under section 135 to comply with the CSR section 135(1) of the Companies provisions in India. Companies are Act, 2013 to spend 2% of their net required to spend a minimum of 2% of profit over the proceeding three their net profit over the preceding three years as per the CSR policy. years as CSR. Case Study: Vardhaman Group Vardhman Group has been making positive contribution to the society in the form of its products and services in the field of textiles since about last 50 years. With a growing realization in the organization to contribute more directly for the up-liftment of the society, the interface with society has become multidimensional. Noteworthy contribution has been made in the field of education, vocational training for skill development, agriculture and environment conservation.
The Group’s initiatives towards CSR in the past include setting up of Aurobindo Public School at Baddi, Sri Aurobindo College of Commerce & Management at Ludhiana, Village Cluster Adoption Program (VCAP) for improvement in cotton quality for benefit of farmers, Research on Treated Wastewater for Irrigation Purpose, Capability Enhancement Training Programs, providing aid during disasters/natural calamities and energy saving and conservation of natural resources through environmental management etc. CSR Policy of the Company 1. PROMOTION OF EDUCATION: To continue our endeavor for promoting education by setting up schools, colleges to deliver high quality education to students of all strata of society including wards of VSSL employees. It, inter-alia, includes various other initiatives such as grant of scholarships to deserving-needy students, computer education and supply of equipments to students and developing innovative teaching methods. 2. ENVIROMENT PROTECTION AND ENERGY CONSERVATION: To protect environment and to sustain and continuously improve standards of Environment, Health and Safety through the collective endeavor of Company and its employees at all levels towards attaining world class standards. 3. DEVELOPMENT OF HUMAN CAPITAL: To encourage the development of human capital through skills development, vocational training programmes. 4. RURAL DEVELOPMENT: To contribute to development in rural areas through agricultural research and knowledge sharing, productivity and quality and other agri-extension practices such as soil and moisture conservation and watershed management etc. Thank You Have a Great Day
