CHATPER TWOCORPORATE SOCIAL RESPONSIBILITY:GLOBAL AND REGIONAL SCENARIOToday,the term social responsibility is, kind of, a buzzword among the corporate andthe consumers alike. As a company’s survival and progress is heavily dependentupon taking in resources from the society, it only feels natural that it doescertain things for the welfare of the society. It is now safe to say that CSRhas grown into a vital strategy for companies to survive in.
Even though, itwas only recently that CSR was made legally binding, it had a ratherinteresting evolution through the course of time. A brief History of Corporate socialresponsibility Although, the term CSR was coined in 1953 with thepublication of Bowen’s Social Responsibility of Businessmen (Corporate watchreport, 2006) its history dates back many years. It can even be traced back toancient Mesopotamia where King Hammurabi introduced a code in which builders,or farmers were put to death if their negligence caused the deaths of others,or major inconvenience to local citizens. After the industrial revolution,companies and corporate began to use a portion of their wealth to supportphilanthropic ventures. Thepresent day CSR owes much of its origin to the discussions and debates, whichtook place in the 1920s, regarding how a company can and should give somethingback to the society. From the late 1980s and early 1990s CSR was beginning totake up a concrete shape and for the first time businessand social interest came closer.
Firms became more responsive to theirstakeholders. Thefirst company to implement CSR was Shell in 1998(Corporate watch report, 2006). The idea of CSR was universally receivedduring this period and in the 2000s, CSRbecame definitively an important strategic issues and is becoming an integral part of many companies’policies. A few countries around the world have enacted CSR laws encouragingpositive corporate citizenship.Methodology of Corporate SocialResponsibilityThe success of the CSR lies in the procedure of assessingan organization’s impact on society and evaluating their responsibilities.
Themost effective CSR plans ensure that while organizations comply withlegislation, their investments also respect the growth and development ofmarginalized communities and the environment. Global conglomerates should takeinto account of the socio-economic diversity of different countries and workaccordingly. It is highly necessary that all the initiatives undertaken shouldbe sustainable.Different approaches of achieving CSR Dependingupon the specific environment and culture, there can be more than oneperspective to achieve a company’s CSR. It can either be environmental,community, international or workplace based. While the environmentalperspective deals with the ecological concerns, community based perspectivesdeals with programs that tries to improve the welfare of the local population. Throughenvironmental perspectives the company tries to reduce its harmful effects onthe ecology and try to safe gaurd the ecosystem.
Workplace based perspectiveworks at improving the rights and well being of the company’s staff. Theseinclude improving working condition, covering medical insurance of the staffs,conducting medical camps etc. A companycan also combine local and workplace initiatives by recruiting staffs from thelocality.CSR and different Countries CRS has a huge impact on the welfare schemes adopted bythe countries of the world.
CSR program usually gives a lot of attention to theminorities, girl education, child care, women empowerment and health andsafety. Companies also try to provide scholarships and internship programs tostudents from weak background. In the international level, a lot of multinationalfirms and non-governmental organisations are taking up CSR activities as a partof their business proceedings.
Different countries have different CSRproceedings.CSR in USA The Corporate Social Responsibility (CSR) team in theBureau of Economic and Business Affairs overlooks U.S. businesses in thepromotion of responsible and ethical business practices. They try to encouragethe firms to adopt social responsible policies and help the companies to dowell by doing good.
The CSR office also try to provide guidelines and supportfor companies to work and take up activities in tune with the US foreignpolicy.CSR in Canada The enhanced CSR Strategy, announced onNovember 14, 2014, clearly demonstrates the Government of Canada’s expectationthat Canadian companies will promote Canadian values and operate abroad withthe highest ethicalstandards. It also outlines the Government’s initiatives to help Canadian companiesstrengthen their CSR practices.CSR in United Arab EmiratesThe concept of corporate socialresponsibility (CSR) in Dubai and the UAE has always been present from theearliest Islamic times. In fact UAE is among the countries in the region whichgives much attention to social welfare – be it through public sectorinitiatives or private companies.
In recent years, there have been worldwideinitiatives to invest responsibly and focus on investing profits into communitylife and saving the environment.France, Denmark, South Africa and China have a mandatoryreporting obligation on the amount spent on CSR activities.India and CSRIndiais the first county to make CSR mandatory.
CSR in India has traditionally beenseen as a philanthropic activity. Companies Act, 2013 sets the guidelines forthe working of CSR through the length and breadth of the country. According toindependent reports, after the enactment of the law, the CSR spending grew morethan seven times. A large population of Indians, directly or indirectly,benefited from this growth in spending. Butit is also worth noting that about half of India’s top 100 companies failed tospend their 2% earnings on CSR activities (survey conducted by accountancy firmKPMG).Corporate Social Responsibility: Examples inIndia Organizations in India have been quite sensible in taking up CSRinitiatives and integrating them into their business processes. It is at mostimportant to shape responsible and supportable relationships with the communityat large.
Companies now have specific departments and teams that developspecific policies, strategies, and goals for their CSR programs and setseparate budgets to support them. Most of the time, these programs are based onwell-defined social beliefs or are carefully aligned with the companies’business domain.· Tata Group The Tata Conglomerate carries outvarious CSR projects and gives maximum focus on community improvement andpoverty alleviation programs. It also providesscholarships and endowments for numerous institutions.
. In the field ofeducation, the Tata Group The group also engages in healthcare projects such asfacilitation of child education, immunization and creation of awareness ofAIDS.· Ultratech CementUltratech Cement, India’sbiggest cement company is involved in social work across 407 villages in thecountry. It mainly focuses on sustainable development and self reliance. Its CSR activities focus on healthcare andfamily welfare programs, education, infrastructure, environment, socialwelfare, and sustainable livelihood.· Mahindra & MahindraIndian automobile manufacturer Mahindra & Mahindra (M)established the K.
C. Mahindra Education Trust in 1954, followed by MahindraFoundation in 1969 with the purpose of promoting education. The companyprimarily focuses on education programs to assist economically and sociallydisadvantaged communities. CSR programs invest in scholarships and grants,livelihood training, healthcare for remote areas, water conservation, and disasterrelief programs.
· ITC GROUP ITCGroup, a conglomerate with business interests across hotels, FMCG, agriculture,IT, has been able to generate sustainable livelihood opportunities for sixmillion people through its CSR activities. Its social and farm forestry programassists farmers in converting wasteland to pulpwood plantations. Socialempowerment programs through micro-enterprises or loans have createdsustainable livelihoods for over 40,000 rural women.· RelianceIndustriesReliance Industries has emerged as the topcompany in terms of corporate social responsibility (CSR), having spent overRs.
760 crore, followed by state-owned ONGC and IT giant Infosys.State-wise, Maharashtra has topped thechart in terms of CSR spending. The state has 202 projects. The education sector received the maximumfunding of Rs 2042 Crore, followed by healthcare at Rs 1638 Crore, whileprograms such as child mortality, maternal health, gender equality, and socialprojects saw negligible spend.Does CSR actually pay? Today, there is a huge increase inthe amount of money companies are paying to take up CSR activities and it istrue that at least some of them are doing so to improve the reputation andmarketability of their company.
But at least some economists are scepticalwhether a company can actually benefit from CSR activities. The most promisingexample which these economists points out is that of Exxon Mobil. Even thoughExxon Mobil is having a poor reputation towards their environmentalcommitments, it is still one of the most profitable corporations. Ironicallythere are also many cases where the corporation which enjoys a strong CSRreputation actually takes home less profit than its competitors.
But it is important not togeneralize these examples. It is very difficult to draw patterns, as there aremany companies enjoying good CSR reputation and does good business. The point, however,is that companies and conglomerates should act responsibly and work sustainablyfor the common good of the community.