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CORPORATE SOCIAL RESPONSIBILITY:
GLOBAL AND REGIONAL SCENARIO

Today,
the term social responsibility is, kind of, a buzzword among the corporate and
the consumers alike. As a company’s survival and progress is heavily dependent
upon taking in resources from the society, it only feels natural that it does
certain things for the welfare of the society. It is now safe to say that CSR
has grown into a vital strategy for companies to survive in. Even though, it
was only recently that CSR was made legally binding, it had a rather
interesting evolution through the course of time.

A brief History of Corporate social
responsibility

            Although, the term CSR was coined in 1953 with the
publication of Bowen’s Social Responsibility of Businessmen (Corporate watch
report, 2006) its history dates back many years. It can even be traced back to
ancient 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 support
philanthropic ventures.

The
present day CSR owes much of its origin to the discussions and debates, which
took place in the 1920s, regarding how a company can and should give something
back to the society. From the late 1980s and early 1990s CSR was beginning to
take up a concrete shape and for the first time business
and social interest came closer. Firms became more responsive to their
stakeholders.

The
first company to implement CSR was Shell in 1998(Corporate watch report, 2006).  The idea of CSR was universally received
during this period and in the 2000s, CSR
became 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 encouraging
positive corporate citizenship.

Methodology of Corporate Social
Responsibility

The success of the CSR lies in the procedure of assessing
an organization’s impact on society and evaluating their responsibilities. The
most effective CSR plans ensure that while organizations comply with
legislation, their investments also respect the growth and development of
marginalized communities and the environment. Global conglomerates should take
into account of the socio-economic diversity of different countries and work
accordingly. It is highly necessary that all the initiatives undertaken should
be sustainable.

Different approaches of achieving CSR

            Depending
upon the specific environment and culture, there can be more than one
perspective to achieve a company’s CSR. It can either be environmental,
community, international or workplace based. While the environmental
perspective deals with the ecological concerns, community based perspectives
deals with programs that tries to improve the welfare of the local population. Through
environmental perspectives the company tries to reduce its harmful effects on
the ecology and try to safe gaurd the ecosystem. Workplace based perspective
works at improving the rights and well being of the company’s staff. These
include improving working condition, covering medical insurance of the staffs,
conducting medical camps etc.  A company
can also combine local and workplace initiatives by recruiting staffs from the
locality.

CSR and different Countries

            CRS has a huge impact on the welfare schemes adopted by
the countries of the world. CSR program usually gives a lot of attention to the
minorities, girl education, child care, women empowerment and health and
safety. Companies also try to provide scholarships and internship programs to
students from weak background. In the international level, a lot of multinational
firms and non-governmental organisations are taking up CSR activities as a part
of their business proceedings. Different countries have different CSR
proceedings.

CSR in USA

            The Corporate Social Responsibility (CSR) team in the
Bureau of Economic and Business Affairs overlooks U.S. businesses in the
promotion of responsible and ethical business practices. They try to encourage
the firms to adopt social responsible policies and help the companies to do
well by doing good. The CSR office also try to provide guidelines and support
for companies to work and take up activities in tune with the US foreign
policy.

CSR in Canada                                                                  

The enhanced CSR Strategy, announced on
November 14, 2014, clearly demonstrates the Government of Canada’s expectation
that Canadian companies will promote Canadian values and operate abroad with
the highest ethical
standards. It also outlines the Government’s initiatives to help Canadian companies
strengthen their CSR practices.

CSR in United Arab Emirates

The concept of corporate social
responsibility (CSR) in Dubai and the UAE has always been present from the
earliest Islamic times. In fact UAE is among the countries in the region which
gives much attention to social welfare – be it through public sector
initiatives or private companies. In recent years, there have been worldwide
initiatives to invest responsibly and focus on investing profits into community
life and saving the environment.

France, Denmark, South Africa and China have a mandatory
reporting obligation on the amount spent on CSR activities.

India and CSR

India
is the first county to make CSR mandatory. CSR in India has traditionally been
seen as a philanthropic activity. Companies Act, 2013 sets the guidelines for
the working of CSR through the length and breadth of the country. According to
independent reports, after the enactment of the law, the CSR spending grew more
than seven times. A large population of Indians, directly or indirectly,
benefited from this growth in spending.  But
it is also worth noting that about half of India’s top 100 companies failed to
spend their 2% earnings on CSR activities (survey conducted by accountancy firm
KPMG).

Corporate Social Responsibility: Examples in
India           

           Organizations in India have been quite sensible in taking up CSR
initiatives and integrating them into their business processes. It is at most
important to shape responsible and supportable relationships with the community
at large. Companies now have specific departments and teams that develop
specific policies, strategies, and goals for their CSR programs and set
separate budgets to support them. Most of the time, these programs are based on
well-defined social beliefs or are carefully aligned with the companies’
business domain.

·        
Tata Group

            The Tata Conglomerate carries out
various CSR projects and gives maximum focus on community improvement and
poverty alleviation programs. It also provides
scholarships and endowments for numerous institutions. . In the field of
education, the Tata Group The group also engages in healthcare projects such as
facilitation of child education, immunization and creation of awareness of
AIDS.

·        
Ultratech Cement

Ultratech Cement, India’s
biggest cement company is involved in social work across 407 villages in the
country. It mainly focuses on sustainable development and self reliance.  Its CSR activities focus on healthcare and
family welfare programs, education, infrastructure, environment, social
welfare, and sustainable livelihood.

·        
Mahindra & Mahindra

Indian automobile manufacturer Mahindra & Mahindra (M)
established the K. C. Mahindra Education Trust in 1954, followed by Mahindra
Foundation in 1969 with the purpose of promoting education. The company
primarily focuses on education programs to assist economically and socially
disadvantaged communities. CSR programs invest in scholarships and grants,
livelihood training, healthcare for remote areas, water conservation, and disaster
relief programs.

·     
ITC GROUP

     ITC
Group, a conglomerate with business interests across hotels, FMCG, agriculture,
IT, has been able to generate sustainable livelihood opportunities for six
million people through its CSR activities. Its social and farm forestry program
assists farmers in converting wasteland to pulpwood plantations. Social
empowerment programs through micro-enterprises or loans have created
sustainable livelihoods for over 40,000 rural women.

·        
Reliance
Industries

Reliance Industries has emerged as the top
company in terms of corporate social responsibility (CSR), having spent over
Rs. 760 crore, followed by state-owned ONGC and IT giant Infosys.

State-wise, Maharashtra has topped the
chart in terms of CSR spending. The state has 202 projects. The education sector received the maximum
funding of Rs 2042 Crore, followed by healthcare at Rs 1638 Crore, while
programs such as child mortality, maternal health, gender equality, and social
projects saw negligible spend.

Does CSR actually pay?      
            Today, there is a huge increase in
the amount of money companies are paying to take up CSR activities and it is
true that at least some of them are doing so to improve the reputation and
marketability of their company. But at least some economists are sceptical
whether a company can actually benefit from CSR activities. The most promising
example which these economists points out is that of Exxon Mobil. Even though
Exxon Mobil is having a poor reputation towards their environmental
commitments, it is still one of the most profitable corporations. Ironically
there are also many cases where the corporation which enjoys a strong CSR
reputation actually takes home less profit than its competitors.

            But it is important not to
generalize these examples. It is very difficult to draw patterns, as there are
many companies enjoying good CSR reputation and does good business. The point, however,
is that companies and conglomerates should act responsibly and work sustainably
for the common good of the community.

           

 

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