Corporate Social Responsibility (CSR) PPT PDF

CORPORATE SOCIAL RESPONSIBILITY DR. SOMARATA GUHACHAKRABORTY Definition of CSR  The voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both is own competitive interests and the interests of wider society.  An organizat...

CORPORATE SOCIAL RESPONSIBILITY DR. SOMARATA GUHACHAKRABORTY Definition of CSR  The voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both is own competitive interests and the interests of wider society.  An organization's obligation to maximize its positive impact and minimize its negative impact on society. Corporate Philanthropy  The act of corporations donating some of their profits or resources to charitable causes  Cash donations or In-kind donations CSR Vs Philanthropy  CSR wider perspective, focus on 3 Ps –Profits, People and Planet. Philanthropy focus on charitable activities, human causes  CSR focus on long-term sustainability. Philanthropy on short-term viability  CSR meeting the expectation of stakeholders. Philanthropy efforts are voluntary in nature. Why Social Responsibility Accountability to Society In a democratic society any kind of enterprise exists for the sake of society. Corporations’ Debt to Society A corporation has to behave as a good citizen. The corporation has to donate generously towards causes of public welfare and must get itself directly involved in social welfare programs. Corporate Social Responsibility  It is a set of obligations to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.  It is the overall relationship of the corporate with all of its stakeholders.  Elements of social responsibility include investment in community outreach, employee relations, creation and maintenance of employment, environmental stewardship and financial performance. CSR Methodology  CSR is the procedure for assessing an organization’s impact on society and evaluating their responsibilities. It begins with an assessment of the following aspects of each business:  Customers;  Suppliers;  Environment;  Communities; and,  Employees.  Models for Implementation of CSR Four Models of CSR Model Emphasis Proponent Ethical Voluntary commitment by Mahatma Gandhi companies to public welfare Statist State ownership and legal Jawaharlal Nehru requirements determine corporate responsibilities Liberal Corporate responsibilities Milton Friedman limited to private owners (shareholders) Stakeholder Companies respond to the R. Edward Freeman needs of stakeholders – customers, creditors, employees, communities, etc. Advantages of CSR  There are several advantages to corporations when they exhibit a sense of CSR and implement it, such as: 1. Improved financial performance 2. Enhanced brand image and reputation 3. Increased sales and customer loyalty 4. Increased ability to attract and retain employees 5. Reduced regulatory oversight 6. Innovation and learning 7. Risk management 8. Easier access to capital 9. Reduced operating costs Example  https://youtu.be/2fIrfyxe2IU DRIVERS OF CSR  Public Image  Government Regulation  Survival & Growth  Employee Satisfaction  Consumer Awareness CSR LAW  Section 135 of The Indian Companies Act 2013 (Effective 1st April 2014)  The Companies (CSR Policy) Rules 2014 (Effective 27th February 2014)  Circulars, Notifications and FAQs Section 135(1)  Every company having:  Net Worth of Rs. 500/- crore (Rs. 5 Billion) or more or  Turnover of Rs. 1,000/- crore (Rs. 10 Billion) or more or  Net Profit of Rs. 5 crore (Rs. 50 Million) or more …  … during the immediately preceding financial year shall constitute a Corporate Social Responsibility (CSR) Committee of the Board consisting of 3 or more directors, out of which at least one director shall be an independent director Section 135(2)  The Board’s Report should disclose:  1. the composition of the CSR Committee  2. details about the policy developed and implemented by the company on CSR initiatives undertaken during the year Section 135(3)  The CSR Committee shall:  (a) formulate and recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII;  (b) recommend the amount of expenditure to be incurred on CSR activities ; and  (c) monitor the CSR Policy of the company from time to time Section 135(4)  The Board of every company shall:  (a) after taking into account the recommendations made by the CSR Committee, approve the CSR Policy for the company and disclose contents of such Policy in its report and also place it on the company's website.  (b) ensure that the activities as are included in CSR Policy of the company are undertaken by the company. Cont..  The Board of every company shall ensure that the company spends, in every financial year, at least 2 per cent of the average net profits of the company made during the 3 immediately preceding financial years, or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years in pursuance of its CSR Policy:  Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for CSR activities: Cont..  Provided further that if the company fails to spend such amount, the Board shall,  in its report specify the reasons for not spending the amount and, unless the unspent amount relates to any ongoing project transfer such unspent amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year Cont..  Any amount remaining unspent, shall be transferred by the company within a period of thirty days from the end of the financial year to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the “Unspent CSR Account”, and such amount shall be spent by the company in pursuance of its obligation towards the CSR within a period of three financial years from the date of such transfer, Cont..  Failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year.  if a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount unspent as the case may be, or one crore(ten million) rupees, whichever is less, And every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount unspent as the case may be, or two lakh rupees, whichever is less. SPECIFIED CSR ACTIVITIES  Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation *("including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation") and making available safe drinking water;  ii. Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and differently abled and livelihood enhancement projects; CONT…  iii. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;  iv. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and water *("including contribution to the Clean Ganga Fund set- up by the Central Government for rejuvenation of river Ganga"); CONT…  v. Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art, setting up public libraries, promotion and development of traditional arts and handicrafts;