Unit 3: Corporate Social Responsibility in India
Business Ethics and Corporate Social Responsibility notes · PTU syllabus (BBASEC 401-18)
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Unit summary
Corporate Social Responsibility (CSR) is a company's commitment to contribute to society and the environment beyond profit. This unit covers the meaning and evolution of CSR, philanthropy and corporate citizenship, the triple bottom line and sustainability, CSR and governance, environmental aspects, Carroll's model, and the drivers and codes of CSR in India.
After this unit you can
- Define CSR and trace its history and evolution
- Explain corporate philanthropy, citizenship and the triple bottom line
- Explain Carroll's CSR pyramid
- Describe CSR drivers, codes and the legal framework in India
PTU syllabus topics
- Meaning
- definition
- history and evolution of CSR
- corporate philanthropy and citizenship
- triple bottom line and sustainable business
- CSR and corporate governance
- environmental aspects
- Carroll's model
- drivers and codes of CSR in India
- Philanthropic
Be a good corporate citizen
- Ethical
Do what is right, just and fair
- Legal
Obey the law
- Economic
Be profitable
Topic 1
Meaning, history and evolution of CSR
CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families, the local community and society at large (WBCSD).
- 1Ethical and philanthropic phase
Pre-independence: charity by business families
- 2Nation-building phase
1950s–1970s: public sector and social goals
- 3Stakeholder phase
1980s–2000s: voluntary CSR
- 4Mandatory phase
2014 onward: Section 135 of the Companies Act
Topic 2
Philanthropy, citizenship and the triple bottom line
- Corporate philanthropy: donations to good causes.
- Corporate citizenship: being a responsible member of society in all operations.
- Triple bottom line (John Elkington): measuring performance on people (social), planet (environmental) and profit (economic).
- Sustainable business: meeting present needs without compromising future generations.
Topic 3
Carroll's CSR pyramid
- Philanthropic
Be a good corporate citizen (desired)
- Ethical
Do what is right and fair (expected)
- Legal
Obey the law (required)
- Economic
Be profitable (required)
Topic 4
CSR in India: drivers, codes and law
- Section 135, Companies Act 2013: companies with net worth ≥ ₹500 crore, turnover ≥ ₹1,000 crore or net profit ≥ ₹5 crore must spend at least 2% of average net profit of the preceding three years on Schedule VII activities, form a CSR committee (if required) and report.
- Schedule VII includes hunger and poverty, education, health, gender equality, environment, heritage, armed forces veterans, sports, PM CARES and similar funds, and rural development.
- Drivers: law, reputation, stakeholder pressure, investor ESG demands and employee expectations.
- CSR and governance: CSR is overseen by the board; good governance ensures CSR funds are used transparently. Environmental CSR includes pollution control, renewable energy and conservation.
Key terms
- CSR
- Business commitment to society and the environment
- Triple bottom line
- People, planet and profit
- Corporate citizenship
- Responsible behaviour across all operations
- Carroll's pyramid
- Economic, legal, ethical and philanthropic responsibilities
- Schedule VII
- List of permitted CSR activities in India
Quick revision
- CSR evolved from charity to a legal mandate (2014).
- Triple bottom line: people, planet, profit.
- Carroll: economic → legal → ethical → philanthropic.
- Section 135: 2% of average net profit for qualifying companies.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.Define CSR.
- Q2.What is the triple bottom line?
- Q3.List the four levels of Carroll's pyramid.
- Q4.Which companies must spend on CSR in India?
- Q5.Name four Schedule VII activities.
Long-answer questions
- Q1.Explain the meaning and evolution of CSR in India.
- Q2.Explain Carroll's model of CSR.
- Q3.Explain the CSR provisions of the Companies Act, 2013.
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