Unit 3: Corporate Social Responsibility

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).

• Need for CSR: business uses society's resources, creates externalities, depends on a healthy community and workforce, and must retain its social licence to operate.

• Classical (shareholder) view: Milton Friedman (1970) — "the social responsibility of business is to increase its profits", within the rules of the game.
• Stakeholder view: Freeman — the firm is accountable to all groups it affects.
• Social contract view: business exists by society's consent and must meet its expectations.
• Shared value (Porter and Kramer, 2011): create economic value by solving social problems.

• Other models: ethical model (Gandhian trusteeship), statist model (state-led, PSU social responsibility), liberal model (Friedman — profit within law), stakeholder model (Freeman); shared value (Porter and Kramer, 2011) — creating economic value by addressing social needs.

• Regulation (Section 135), investor pressure (ESG funds), consumer expectations, employee engagement, reputation and brand, licence to operate in communities, risk management, global supply chain standards.

• CSR and ethics: ethics guides individual and corporate conduct; CSR is the organisational expression of ethical commitment to society.
• CSR and governance: good governance ensures accountability for CSR — board CSR committee, policy, monitoring and disclosure; ESG integrates environment, social and governance.
• Environmental aspects: climate action, renewable energy, water stewardship, waste reduction, biodiversity — increasingly the largest part of CSR and ESG commitments.

• 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.

• Global Reporting Initiative (GRI): founded in 1997 in Boston; issues the most widely used sustainability reporting standards.

• Principles: accuracy, balance, clarity, comparability, completeness, sustainability context, timeliness, verifiability.
• Materiality: report on topics with the most significant impact on the economy, environment and people.

• NVGs (2011): issued by the Ministry of Corporate Affairs — National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, with nine principles.
• NGRBC (2019): revised as the National Guidelines on Responsible Business Conduct, aligned with the UN Guiding Principles and SDGs.

• Reporting: SEBI required the top 100 (later 500, then 1,000) listed companies to file a Business Responsibility Report; it was replaced by the Business Responsibility and Sustainability Report (BRSR), mandatory for the top 1,000 listed companies from FY 2022–23, with BRSR Core assurance phased in for the largest firms.