Corporate Social Responsibility (CSR) Initiatives: Practices and Issues

Abstract

CSR is an age-old concept and business organisations have been contributing towards social and community development. It is the deliberate inclusion of public concern into corporate decisions with a fundamental principle not only as a public policy. but also that corporates should be responsive to social issues and it revolves around sustainability, accountability and transparency. Thus, CSR involves relocation of resources from private to public bodies for environmental and social benefits and integrates organisational core business with social and environmental concerns of the community; so as to provide impetus to economic development and improve the living standard of the people.CSR has been used differently in various countries and approaches followed are categorised in three broad heads as: CSR as corporate philanthropy wherein contribution is for activities in the areas such as arts, health, education, social welfare, environment, housing, sanitation; or CSR as value creation with a focus on core business; or CSR as risk management to mitigate operational risks and supports external relationships.India is the only country where CSR has been enforced by a legislation wherein profitable listed companies above a certain size are required to contribute a certain percentage of profit towards prescribed activities. In other countries it is by voluntary measures which vary from country to country. Studies have shown that total CSR spend fall short of the government mandate of two per cent of profit. Education and healthcare attracted the largest CSR spend, while empowering women, support for senior citizens and armed forces veterans saw no takers. The study highlights the need to examine whether mandatory approach to CSR would be effective than the voluntary incentivised scheme prevalent earlier in India and elsewhere.

Business response to mandatory corporate social responsibility with evidence from India

“…The Indonesian government did not specify the amount spent and left that part voluntary (Fauzi, 2009; Waagstein, 2011). In India, private self‐regulation on CSR started in 2009 as CSR voluntary guidelines for reporting (Dhameja, 2016; Gupta & Chakradhar, 2022, p. 202). The Ministry of Corporate Affairs laid out the foundation for governance in CSR in the task force report for corporate excellence.…”