In general companies rely on societal assets to operate efficiently, as they are morally obligated to contribute back to the society. CSR in India has traditionally been seen as a philanthropy activity. As some observers have pointed out, the practice of CSR in India still remains within the philanthropic space, but has moved from institutional building (eduational, research and cultural) to community development through various projects. While CSR remains largely restricted to community development, it is getting more strategic in nature (that is, getting linked with businesses ) than philanthropic, and a larger number of companies are reporting the activities they are undertaking in this space in their annual reports,sustainability reports and some companies are even publishing CSR reports.
In a very general sense, CSR is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their Stakeholders. It is a way through which a company achieves a balance of economic, environmental and social imperatives, and while at the same time addressing the expectations of shareholders and stakeholders.
Although corporate social responsibility is a very broad concept that is understood and implemented differently by each company, the underlying idea of CSR is to operate in an economically, socially, and environmentally sustainable manner.
In a very basic nature the corporate social responsibility initiatives are categorized as;
- ENVIRONMENTAL RESPONSIBILITY initiatives which aims to reduce the pollution and greenhouse gas emissions and sustainable use of natural resources.
- HUMAN RIGHTS RESPONSIBILITY initiatives involve providing fair labor practices (eg- equal pay for equal work) and fair trade practices, and deny child labor.
- PHILANTHROPIC RESPONSIBILITY basically includes things such as funding educational programs, supporting health initiatives, donating to causes, and also supporting community betterment projects.
- ECONOMIC RESPONSIBILITY initiatives involve improving the firm’s business operation while participating in sustainable practices.
Corporate Social Responsibility is no longer defined by how much money a company contributes to charity, but by its overall involvement in activities that improve the quality of people’s lives. The organizations can contribute to their individual wealth and to overall community wealth by taking into account the ef fect they have on the entire globe while making the decisions.
ORIGIN / DEVELOPMENT OF CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility emerged in the United States of America as a social and political reaction to the rapid growth of Capitalism during the thirty years following the American Civil War (1861-5).
The American government assumed the responsibility for correcting the social behaviour of big corporations as early as the 1890s and it passed laws on child labor, safety at industrial sites, and on workers right to form trusts.
HOWARD BOWEN, an American economist and Grinnell College President, is often cited as the “Father of CSR” . He connected the responsibility of corporations to society and published a book in 1953, which advocated for business ethics to societal stakeholder called Social Responsibilities of the Businessman.
CSR truly began to take hold in the U.S. in the 1970s, when the concept of Social Contract between business and society was declared by the Committee for Economic Development in 1971. The social contract is based on the idea that businesses function because of public consent, therefore, business has an obligation to constructively serve the needs of society. This is often referred to today as “license to operate ”- that is to contribute more to society than solely their products for sale.
The social contract outlined three responsibilities, and they are still applicable today-
- Provide jobs and economic growth through well run businesses.
- Run the business fairly and honestly regarding employees and customers.
- Become more broadly involved in improving the conditions of the community and environment in which it operates.
SOME ESSENTIAL ELEMENTS OF CSR-
- Protection of Environment-
Companies/ Firms in the Business sector can do their bit for the environment primarily by raising awareness among employees, clients and suppliers. This can be done by way of simple incentives such as installing recycling dustbins, giving tips on reducing energy consumption, encouraging people to take the train instead of the car and purchasing sustainable promotional products.
- Employee safety and commitment-
Employees should be given the respect they deserve. Bullying and unsafe workplaces are by no means the exception. Companies should draft an ethical code and have it signed by all their branches/ committees.
- Non-Profit Organization Collaboration-
While profit is important to companies, they could share a portion of their profits with not for profit businesses or charitable foundations. For eg- companies in the business sector can offer discounts to NON-PROFIT organizations or offer them printed items, which might be beneficial to them.
- Sustainable investment and purchasing policies-
More and more companies now-a-days are making sustainable investments. This means that they take into account the economic, social, ecological and cultural impact of their entire processes, both in the short and then the long term.
- Corporate Governance-
It is a general term for the way in which companies are managed. Companies should have great importance in having an efficient management team that maintains good relationships with the interested parties.
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