ABSTRACT: Corporate Social Responsibility (CSR) has become the buzzword in business arena.

CSR
literally means to repay by business to the society in turn, of what has been given by the society to
business. The terms as corporate responsibility, responsible business, corporate citizenship and
corporate social opportunity are interchangeably used. CSR recompense several direct and indirect
benefits to the business. The most important advantage of CSR is to provide a business organization
with in improved social image. Social responsibility includes the areas as health, education,
employment, poverty alleviation and quality of life. CSR has been instrumental in maximizing the
bottom line of an organization. Organizations, which have an indifferent attitude towards society,
will feel great difficulty in getting competitive. CSR has been an imperative constitute for any
organisation to have ceaseless success and to create a good image in the eyes of the public. The CSR
should not confine to the papers only rather the business organizations ought to put CSR initiatives
to practice and bring about perceptible change in the life of marginal, downtrodden and poor
people.

Introduction
Corporate Social Responsibility (CSR) means putting something back to the society or giving back to
the society. There has been a growing plea that business should be socially liable as the business
organizations make the use of resources of society and fully hinge upon it for their survival and
success. According to the World Bank, CSR is the commitment of business to contribute to
sustainable economic development working with employees, their families, the local community and
society at large to improve their quality of life, in ways that are good for business and good for
development.
CSR can be viewed as responsibility on the part of the business and industrial organization to be
accountable to their stakeholders including society. At the start of the 20th century, there were
numbered corporate acts of charity. Wealthy people provided wealth for charitable purposes in the
name of philanthropy. Peter F. Drucker in his book titled, The Practices of Management (1963)
compared the relationship between a business organization and society with the relationship
between a ship and sea. He has categorically mentioned that even the most private to private
enterprise is an organization of society and serves the social function.
It is needless to mention that Corporate Social Responsibility (CSR) is an integral part of a business
organizations functioning. The relationship between society and a business organization is
analogous to the relationship between the flower and the garden. Business organizations have an
active interplay with the society. They are interdependent on each other. A business organization is
an open system and continually interacts with its external environment. Thinking of a business
organization without society is futile. If we create wealth from society, we will have to plough it back
for the welfare of society. This general principal requires to be followed.
CSR in India has traditionally been seen as a philanthropic activity. And in keeping with the Indian
tradition, it was an activity that was performed but not deliberated. As a result, there is limited
documentation on specific activities related to this concept. However, what was clearly evident that
much of this had a national character encapsulated within it, whether it was endowing institutions
to actively participating in Indias freedom movement, and embedded in the idea of trusteeship.

As some observers have pointed out, the practice of CSR in India still remains within the
philanthropic space, but has moved from institutional building (educational, research and cultural)
to community development through various projects. Also, with global influences and with
communities becoming more active and demanding, there appears to be a discernible trend, that
while CSR remains largely restricted to community development, it is getting more strategic in
nature (that is, getting linked with business) than philanthropic, and a large number of companies
are reporting the activities they are undertaking in this space in their official websites, annual
reports, sustainability reports and even publishing CSR reports.
The Companies Act, 2013 has introduced the idea of CSR to the forefront and through its disclose-orexplain mandate, is promoting greater transparency and disclosure. Schedule VII of the Act, which
lists out the CSR activities, suggests communities to be the focal point. On the other hand, by
discussing a companys relationship to its stakeholders and integrating CSR into its core operations,
the draft rules suggest that CSR needs to go beyond communities and beyond the concept of
philanthropy. It will be interesting to observe the ways in which this will translate into action at the
ground level, and how the understanding of CSR is set to undergo a change.
Some existing CSR policy initiatives across countries
As the importance of being socially responsible is being recognized throughout the world,
governments are aware of the national competitive advantages won from a responsible business
sector. Large corporations have progressively realized the benefit of implementing CSR initiatives
where their business operations are located.
The Organization for Economic Co-operation and Development (OECD) established a set of
guidelines for multinational enterprises in 1976, and was thus a pioneer in developing the concept of
CSR. The purpose of these guidelines was to improve the investment climate and encourage the
positive contribution multinational enterprises can make to economic and social progress. In
addition to the OECDs 30 member countries, 11 observer countries have endorsed the guidelines.
It is observed that, transparency in reporting enhances the focus on economic, social and
environmental factors. It motivates companies to intensify their efforts in becoming socially
responsible. Several efforts have been taken by various governments, to encourage CSR reporting,
such as incentivizing companies who voluntarily report their CSR activities or by taking measures
such as mandating CSR reporting. In 2007, the Malaysian government passed a regulation to
mandate all publicly listed companies to publish their CSR initiatives in their annual reports on a
comply or explain basis. Accordingly, all public listed companies (PLCs) in Malaysia have to either
publish CSR information or they need to explain why they should be exempted. In another example,
in 2009 Denmark mandated CSR reporting, asking all state-owned companies and companies with
total assets of more than 19 million, revenues more than 38 million and more than 250
employees, to report their social initiatives in their annual financial reports.
To enable transparency from businesses on the environment, social and governance front, France
passed a law called Grenelle II, which mandates integrated sustainability and financial reporting for
all companies listed on the French stock exchanges, including subsidiaries of foreign companies
located in France and unlisted companies with sales revenue of more than 400 million and more
than 2,000 employees.

Although some CSR standards are mandatory, there are others, which comprise of both, mandatory
and voluntary standards. For instance, in 2006 the British Companies Act mandated all companies
listed in the UK to include information about their CSR activities in their annual reports; however, a
full length CSR reporting was made voluntary.
A corporate responsibility index challenges and supports large organizations to integrate responsible
business practices. Emerging markets such as Brazil, China and South Africa have become
forerunners in CSR reporting in the developing world in terms of their involvement in CSR-related
activities in order to promote the listed companies credibility, transparency and endurance. The
Johannesburg Stock Exchange was the first emerging market stock exchange to create a socially
responsible investing (SRI) index in 2004. China has also encouraged CSR reporting in guidelines
released through the Shanghai and Shenzhen Stock Exchange.
CSR and sustainability
Sustainability (corporate sustainability) is derived from the concept of sustainable development
which is defined by the Brundtland Commission as development that meets the needs of the
present without compromising the ability of future generations to meet their own needs. Corporate
sustainability essentially refers to the role that companies can play in meeting the agenda of
sustainable development and entails a balanced approach to economic progress, social progress and
environmental stewardship.
CSR in India tends to focus on what is done with profits after they are made. On the other hand,
sustainability is about factoring the social and environmental impacts of conducting business, that is,
how profits are made. Hence, much of the Indian practice of CSR is an important component of
sustainability or responsible business, which is a larger idea, a fact that is evident from various
sustainability frameworks. An interesting case in point is the NVGs for social, environmental and
economic responsibilities of business issued by the Ministry of Corporate Affairs in June 2011.
Principle eight relating to inclusive development encompasses most of the aspects covered by the
CSR clause of the Companies Act, 2013. However, the remaining eight principles relate to other
aspects of the business. The UN Global Compact, a widely used sustainability framework has 10
principles covering social, environmental, human rights and governance issues, and what is
described as CSR is implicit rather than explicit in these principles.
Globally, the notion of CSR and sustainability seems to be converging, as is evident from the various
definitions of CSR put forth by global organisations. The genesis of this convergence can be observed
from the preamble to the recently released draft rules relating to the CSR clause within the
Companies Act, 2013 which talks about stakeholders and integrating it with the social,
environmental and economic objectives, all of which constitute the idea of a triple bottom line
approach. It is also acknowledged in the Guidelines on Corporate Social Responsibility and
Sustainability for Central Public Sector Enterprises issued by the DPE in April 2013.
The new guidelines, which have replaced two existing separate guidelines on CSR and sustainable
development, issued in 2010 and 2011 respectively, mentions the following: Since corporate social
responsibility and sustainability are so closely entwined, it can be said that corporate social
responsibility and sustainability is a companys commitment to its stakeholders to conduct business
in an economically, socially and environmentally sustainable manner that is transparent and ethical.

Benefits of a robust CSR programme

As the business environment gets increasingly complex and stakeholders become vocal about their
expectations, good CSR practices can only bring in greater benefits, some of which are as follows:
Communities provide the licence to operate: Apart from internal drivers such as values and ethos,
some of the key stakeholders that influence corporate behaviour include governments (through laws
and regulations), investors and customers. In India, a fourth and increasingly important stakeholder
is the community, and many companies have started realising that the licence to operate is no
longer given by governments alone, but communities that are impacted by a companys business
operations. Thus, a robust CSR programme that meets the aspirations of these communities not only
provides them with the licence to operate, but also to maintain the licence, thereby precluding the
trust deficit.
Attracting and retaining employees: Several human resource studies have linked a companys
ability to attract, retain and motivate employees with their CSR commitments. Interventions that
encourage and enable employees to participate are shown to increase employee morale and a sense
of belonging to the company.
Communities as suppliers: There are certain innovative CSR initiatives emerging, wherein
companies have invested in enhancing community livelihood by incorporating them into their supply
chain. This has benefitted communities and increased their income levels, while providing these
companies with an additional and secure supply chain.
Enhancing corporate reputation: The traditional benefit of generating goodwill, creating a positive
image and branding benefits continue to exist for companies that operate effective CSR
programmes. This allows companies to position themselves as responsible corporate citizens.