In recent years corporate social responsibility (CSR) has become a higher priority for companies as it actually shows the numerous benefits to their businesses, employees, communities and the environment. Being a good corporate is an increasingly important objective for many good organizations.
Is It Applicable for Every Corporate?
Not really, as Section 135 of the Companies Act, 2013 is applicable to every company registered under the Act, and any other previous Companies Law, with a net worth of Rs 500 crore or more, or a turnover of over Rs 1,000 crore or a net profit exceeding Rs 5 crore in any financial year. The circular further explains that ‘any financial year’ implies any of the three preceding financial years. The Circular emphasizes that the government has no role and responsibility in monitoring CSR activities; it lays the onus on the board of the company to ensure the quality and efficacy of a CSR project. The Board of Directors of the company will have to take decisions on CSR expenditure and qualifying activities as CSR.
CSR is about much more than philanthropy. As voluntary actions taken by businesses to help them become more accountable to stakeholders by providing social and environmental benefit.
CSR involves minimum legal requirements on a business to manage the environmental, economic, and societal impact of its operations.
Businesses are setting up their own standards and choose activities based on their feasibility and values. Many have their own codes of conduct and best practice guidelines to manage and conduct their programs.
Also there is a changes in consumer attitude have become a key driver for increasing CSR activities as well as increasing pressure from employees who want to work for ethical, reputable and charitable businesses.
Delivering the benefits
Being an ethical and socially responsible employer can offer numerous benefits for the businesses involved as well as to employees, the local community and the environment, including:
- Encouraging employee engagement.
- Creating a good and positive workplace.
- Increasing innovation and creativity.
- Boosting professional and personal growth.
- Giving importance to individual philanthropy.
- Gaining trust and respect from the employees.
- Improving public image and brand reputation.
As a result, more and more organizations are getting involved in CSR activities and incorporating it into their overall business plan.
Examples of Corporate Social Responsibility
Coca-Cola Company (KO)
In 2010, Coca-Cola started the 5by20 initiative to empower women across the globe, announcing the following:
The Coca-Cola Company’s global commitment to enable the empowerment of 5 million women entrepreneurs across the company’s value chain by 2020.
According to a survey- CSR programs help nonprofits Individuals make up roughly three-fourths of an organization’s total monetary contributions. CSR initiatives can help nonprofits make up that leftover 25% after they’ve looked to individual donors.
Money donated as a result of corporate giving – Corporate giving in 2017 increased to $20.77 billion, up 8% from 2016. Corporate giving was also bolstered by $405 million contributed as part of disaster relief.