Unit 4: 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).

• 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.

• 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.

• 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.

The UN Global Compact (launched 2000) is a voluntary initiative asking companies to adopt ten principles in four areas:

• GRI Standards: most widely used sustainability reporting framework — universal, sector and topic standards.
• Other codes: ISO 26000 (guidance on social responsibility), OECD Guidelines for MNEs, UN Guiding Principles, SA8000 (labour standards), ISSB IFRS S1/S2.

• 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.