Corporates must contribute to the society with CSR
Corporates must contribute to the society with CSR
Indian corporates are increasingly going global. This has resulted in strengthening reputation of India Inc but also ensuring that foreign firms are demonstrating greater confidence in making investment in the country.
However, the concept of growth should be inclusive and hence companies must show their commitment in improving lives of people as well as help environment. Corporate Social Responsibility is a term which has increasingly become a part of firms world over. Companies are not only looking at growing rapidly but are also looking at gaining brownie points through meaningful contribution to the society. This is an exercise intended to improve their image amongst stakeholders as well as shareholders along with increasing confidence amongst people as well. With Indian companies growing in size as well as reputation, it is no surprise that the Indian government has tried to bring forth its importance in recent times.
The recently approved Companies Act, 2013 mandates Indian corporates having a profit of over Rs 5 crore or more to spend 2 percent of their net profits on CSR. This is an important step forward for ensuring that companies spend on social causes. Some of the big industrial names such as the Tata Group and Birlas have built up credibility more so because of their CSR practices in various parts of the country which have resulted in creating an impact on the society as well as on their stakeholders. Companies also have a moral obligation to do CSR as the practices followed by them would inspire upcoming firms to ensure that they not just make money but also make a meaningful contribution in improving lives of the underprivileged.
CSR activities are being incorporated through special teams which are responsible for formulating policies, goals as well as strategies in order to achieve them. Besides this, Non Governmental Organisations are also aiding in ensuring that the funds provided by companies reaches to maximum people and has the desired impact.
Companies end up winning faith and confidence of local community through job creation as well as other initiatives such as educating children, helping families through medical assistance as well as providing drinking water.
All these result in building an image which cannot be done through any marketing activities. It may not seem relevant but companies’ are finding that such exercises go a long way in cementing relationships with people helping them in gaining easier access to nearby markets as well.
A new crop of entrepreneurs called social entrepreneurs have also emerged. These have realized that they can generate revenue as well as help in making an impact on the society.
CSR in India is still at a very nascent stage and the foreseeable future may witness companies making bigger impact on the society through their CSR activities.
Discussion
- Corporates must contribute to the society with CSR -Farhana Afreen (04/03/14)
Corporates must contribute to the society with CSR.
Corporate, especially larger ones where production is large scale take away a lot more from society than what it gives back. Whatever they give back is a paid product or service from which they benefit on terms of money. Their contribution to the society is a topic that often raises diverse opinion. Their work might be a contribution to the nation in terms of development and industrialization but yet there remains a question about their monitory contribution to the society. They must surely contribute to the society in terms of CSR. This would ensure both development and social awareness in them. Let’s first know what CSR actually means.
Corporate social responsibility, CSR, also known by other terms such as corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business is a form of corporate self-regulation incorporated into a business model. CSR policy works as an integral, self-regulating mechanism according to which a business keeps a check and makes sure of its active conformity with the character of the law, moral principles, and global standard. Sometimes a firm's act of CSR goes beyond conformity and leads to actions that appear to advance some social good, outside the interests of the firm and that which is obligatory by law. CSR is a system with the objective to take responsibility for the company's actions and promote a positive result through its actions on the environment, customers, workers, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.
The actions of the companies often cause major and straight environmental impact, dislocation of people or loss of employment and hence they are held rigorously responsible to contribute back to the neighboring communities and environment. Larger industries cannot deny polluting the environment, however hard they might try to adopt eco-friendly alternatives. Dominantly, industries in India are still suing the older means of work that are harmful of the environment on a large scale. Industries relocating the employees or in some case terminating jobs of the employees are also liable to contribute to the society through CSR.
It was reported that Indian government is making plans that shall make it obligatory for industries to set aside a fixed percentage of their total profit towards the CSR for their locality. The passing of this law is yet to happen but the companies must begin following this since it is their responsibility to contribute something for the betterment of the society in return for what they are taking from the society for their personal benefit. It must be ensured that the sum allotted for CSR should be spent in a way that leads to the advancement and development of the social surrounding. If the government makes a law for fixing the amount that companies shall require to contribute towards CSR, it must also set aside laws that determine what kind of purposes come under the entities.
Progressively more and more corporations are stimulated to become more socially responsible because their most significant stakeholders anticipate them to comprehend and concentrate on the social and community issues that are pertinent to them. Taking care of the needs and requisites of its employees is one of the biggest responsibilities that a company must fulfil and this would ensure more allegiance, better employment, improved maintenance, and superior output. The company must also cater to the needs of its customers, clients and investors. Socially responsible corporations play a vital role in the development of a nation and also benefits it by what it gives away as CSR.
