By

EMAN ARSHAD ALI

PRANSHITA PANDEY
DIVYANSHI SINGH

INTRODUCTION
 
Corporate social responsibility, or CSR, alludes to the conviction that
organizations have a commitment to society past their responsibilities to their
investors or financial backers. As well as creating benefits, organizations are
required to have some duty to stakeholders like workers, clients, networks, and the
environment . CSR incorporates organizations being financially mindful,
improving labour practices, accepting reasonable exchange, moderating natural
harm, rewarding the local area, and expanding worker fulfillment.
Organizations can accomplish this reverence through waste and contamination
depletion and lowering  measures, by contributing instructive and social projects,
by being harmless to the ecosystem and by embraced activities of corresponding
nature. CSR is not a noble cause or gratuity. CSR is a method of leading business,
by which corporate elements noticeably adds to the community good. Socially
mindful organizations do not restrict themselves to utilize assets to participate in
exercises that leads to the expansion of just their own  benefits. They use CSR to
incorporate financial, ecological and social targets with the company's tasks and
development. CSR is said to build notoriety of an organization's image among its
clients and society.
 
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HISTORICAL BACKGROUND
While there has been a new spike in the recognition of CSR, proof of businesses
regards,implication and anxiety for society can be trailed back from the emergence
of Industrial Revolution. In the latter half of 1800s, there was an enlarged
solicitude  about workers benifits, prosperity and efficiency among industrialists. 
 
 
The looming Factory System and its spreading criticism of its framework, working
conditions, and the work of women and the children were being exposed and
disclosed, particularly in the United States. The agreement among reformers was
that current work practices were adding to social issues, including destitution and
work turmoil. Notwithstanding, industrial improvement and government assistance
developments at the time were seen as a blend of philanthropy and business
astuteness.
 
Inspite of the fact that corporations had already existed for quite a century before,
the term corporate Social Responsibility was formally coined in 1953 by an
American economic expert Howard Bowen in his publication Social
Responsibilities of the Bussinessman. As such, Bowen is generally reffered
as   father of CSR.
However, it wasn’t till the Nineteen Seventies that CSR actually began to
require flight within the us. In 1971, the conception of the ‘social contract’
between businesses and society was introduced by the Committee for Economic
Development. This contract brought forward the
concept that corporations perform and exist owing to public consent and,
therefore, there's Associate in Nursing obligation to contribute to the wants of
society.
By the Nineteen Eighties, early CSR continuing to evolve as further
other organizations began incorporating social interests in their business
practices whereas receptiveness to additional receptiveness to the stakeholders. 
 
The Companies Act, 2013  has formulated Section 135, Companies (Corporate
Social Responsibility) Rules, 2014 and Schedule VII which prescribes mandatory
provisions for Companies to fulfil their CSR. 
 
Meaning of Corporate Social Responsibility (CSR)
 
Corporate social responsibility may be a broad idea which
will take several forms reckoning on the company and business. Through CSR
programs, financial aid, and volunteer efforts,
businesses will profit society whereas boosting their brands.
As necessary as CSR is for the community, it's equally valuable for an
organization. CSR activities will facilitate forge a stronger bond
between workers and companies, boost morale and facilitate each workers and
employers feel a lot of connected with the globe around them.
For an organization to be socially accountable, initially it has to be responsible to
itself and its shareholders. Often, corporations that adopt CSR programs
have mature their business to the purpose wherever they will repay to society.
 Thus, CSR is primarily a technique of huge firms. Also, the more visible
and flourishing a company is, the a lot of responsibility that it has to set standards
of moral behavior for its peers, competition, and business.
The term corporate social responsibility (CSR) refers to practices and policies
undertaken by firms that ar supposed to own a positive influence on the globe. The
key plan behind CSR is for firms to pursue different pro-social
objectives, additionally to maximising profits. samples of common CSR
objectives embrace minimizing environmental externalities, promoting
volunteerism among company staff, and donating to charity
 
IMPORTANCE OF CSR
 
Many corporations prospect CSR as associate integral component
of their whole image, basic cognitive process that customers are a lot
of seemingly to try and do business with brands that they understand to be a lot
of moral. during this sense, CSR activities are often a very
important element of company PR. At an equivalent time, some company
founders also are driven to interact in CSR thanks to their personal convictions.
By rehearsing corporate social responsibility, conjointly called corporate
citizenship, firms may be responsive to the sort of impact they're having on all
aspects of society, as well as economic, social,and.environmental.To engage in
CSR implies that, within the normal course of business, a corporation is
working in ways in which enhance society and therefore the setting, rather
than conducive negatively to them.
 
 
FUNCTIONS, COMMITTEES AND DUTIES OF CORPORATE
SOCIAL RESPONSIBILITY
FUNCTIONS: 
The United Nations Industrial Development Organization notes that the common
functions of corporate social responsibility include:
• Responsible sourcing of materials and supplies

• Employee, vendor, customer and community engagement and relations

• Adherence to labor standards

• Environmental protection and management

• Anti-corruption measures

• Upholding social equity, gender equity and other human rights goals

• Conservation of resources, like water and energy, in production

COST SAVINGS BENEFITS

Sustainable business practices can benefit a company's bottom line as well as the
environment. By developing products that use less energy or less packaging, a
company can also save on utility bills and materials expenses. One notable
example is General Mills, which the Office of Energy Efficiency and Renewable
Energy reports has reduced a third of its energy costs by using more efficient
lighting and equipment and cutting heat waste.
BRAND PERCEPTION BENEFITS
Investing in the community and supporting local organizations can set a business
brand apart from the rest. Responsible business practices can improve public
perception of a company's brand, which can increase its customer base and overall
sales. It can also garner interest from investors that only invest in socially-
responsible companies.
INCREASED EMPLOYEE LOYALTY
Corporate social responsibility helps companies attract and retain top-quality
talent. Employees often look for employers that display ethical behavior and have
values that align with their own. The firm notes that a variety of companies saw
employee motivation and loyalty increase after engaging them in corporate social
responsibility initiatives, and these companies felt they were able to obtain better-
quality employees as a result.
LONG-TERM FINANCIAL SUCCESS
Executives who receive quarterly or annual performance-based incentives -- a
common practice among corporations -- often focus primarily on a company's
short-term financial results. While this is an important component ensuring
profitability, it doesn't necessarily mean that profits are sustainable for the long-
term.
Functions of corporate social responsibility help a company ensure long-term,
sustainable financial health. For example, reinvesting profits into the local
community and universities helps create a thriving local economy, which makes it
easier to find talented employees and contractors. Committing to sourcing
inventory and materials in a sustainable, environmentally-friendly way ensures that
the company won't run out of resources in the future for developing products.
COMMITTEES
Total Members of CSR Committee
The CSR Committee shall consist of 3 (Three) or more Director, out of which at
least one director shall be an Independent Director.
Relaxation from having Independent Director in CSR Committee:
All unlisted public limited companies on which the appointment of Independent
Director is not mandatory, are exempted from having Independent Director in their
CSR Committee.
*Where Following companies are required to have Independent Director
Directors on their Board
 1. Every Listed Public Company
2. Unlisted Public Company
The Central Government may prescribe the minimum number of independent
directors in case of any class(es) of public companies.
However, As per Rule 4 of the Companies (Appointment and Qualification of
Directors) Rules, 2014, the following classes of companies shall have at least 2
directors as independent directors.
• Public Companies with paid-up share capital of Rs. 10 crores or more.

• Public Companies with turnover of Rs. 100 crore or more.

• Public Companies with aggregate outstanding loans, debentures, and deposits,

exceeding Rs. 50 crore

Relaxation from having 3 Directors in CSR Committee
Private Limited Companies, where there are only 2 directors on their board, are
also exempted to have 3 directors for CSR committee i.e. private limited
companies can form the CSR Committee with 2 directors only.
IN CASE OF FOREIGN COMPANY
In case of Foreign companies, The CSR committee should have at least Two
person, out of which One person shall be specified under section [2]380(1)(d) of
the 2013 Act and Another person nominated by the Foreign Company.
DUTIES:
1.To share the negative consequences as a result of industrialization: This is
related to increasing conscience-focused marketplaces necessitating more ethical
business processes.
2. Closer ties between corporations and community: Through CSR the
existence of corporations in the social system is felt beyond a perception that
corporation is a place just to get employment and producers of goods and services.
3. Helping to get talents: Organizations with a reputation for CSR can take
advantage of their status and strengthen their appeal as an attractive employer by
making their commitment part of their value proposition for potential candidates.
4. CSR helps to protect environment: Some of the world's largest companies
have made a highly visible commitment to CSR, for example, with initiatives
aimed at reducing their environmental footprint. These companies take the view
that financial and environmental performance can work together to drive company
growth and social reputation
5. CSR is for human right corporate sustainability: The United Nations have
launched the “Global Compact” – an initiative to convince international companies
to commit themselves to universal principles in relation to protection of human
rights (UN Global Compact, 2009). Being the world's largest voluntary corporate
responsibility initiative, the UN Global Compact is also seen a strategic policy for
businesses that are committed to aligning their operations and strategies within the
areas of human rights, labor, and environment.
6.A CSR program can be seen as an aid to alleviate poverty: An example is a
Malaysian reality program Bersamamu of TV3 which is sponsored by Syarikat
Faiza Sendirian Berhad (SFSB), a local enterprise-cum-philanthropist who
responds to government’s appeal to help impoverished community to improve their
livelihoods (SFSB, 2009). SFSB gets help from the local media company TV3 for
publicity and audience support
7. For corporate sustainability goals:  In Europe and elsewhere outside the U.S.,
companies have been taking their social role seriously for years, often under the
banner of corporate sustainability. The EU has developed a corporate sustainability
framework, which identifies a progressive set of economic, social and
environmental objectives that companies are encouraged to achieve.
WHETHER CORPORATE SOCIAL RESPONSIBILITY
SUCCESSFUL IN INDIA?
Although, CSR is proved to be fruitful yet we cannot say that it has achieved its
objects in totality. One of the major reasons for this is the lack of effective
enforcement of these provisions. Simply mandating them will not be helpful. One
of the major stumbling blocks is finding credible projects that these companies can
support under the amit of their CSR requirements.
India is driving the way that multinational companies think about their corporate
social responsibility (CSR) work. As one of the first countries to mandate CSR
spending, India has seen social impact spending grow by nearly 50% since
implementing the “2% law” in 2014
This rapid growth in spending on India’s social impact projects outstrips growth in
corporate profits.  In other words, an increasing number of top companies are
spending more than their required 2% target.  As the Government of India lays out
an ambitious slate of development goals, many companies have embraced CSR
spending as a way to give back to local communities and position themselves – and
industry broadly – as important GOI partners.  At major companies, CSR
committees are growing in size and increasingly include company CEOs and
Board directors, demonstrating a new integration of CSR with traditional business
decision-making.
Companies are also taking more active ownership of the projects that their CSR
spending supports, with an increasing number going beyond the legal mandate to
disclose beneficiary and impact data. Over 90% of major companies now publicly
report their CSR focus areas, with many tied to companies’ strategic objectives.  In
2017-18, over 80% of these companies reported details of the people impacted by
their projects, a 400% increase since 2014-15.  The number of companies publicly
reporting their CSR expenditures has doubled over the same period. 
 While India’s CSR trends are largely positive, India will need to address some
structural challenges as it seeks to transform the mindset of companies across the
country.
• The Company Size Problem: Large companies have adapted quickly to the new
CSR mandate, in most cases easily reaching (or exceeding) the mandated
expenditure and structural requirements and aligning programs with broader
corporate strategic goals. Smaller or less well-resourced companies have been less
successful, in some cases reporting that they were unable to meet the 2% target
because they “did not find the right project.”While CSR spending is on the rise,
that growth is primarily driven by the largest companies giving more.
• Focus on 2% Misses the Mark: In some cases, companies focus on meeting the

minimum spending requirement to the exclusion of incorporating the mindset of

social impact into their operations. While more companies met the 2% spending
requirement in 2017 than prior years, there was a dip in compliance on governance
and transparency markers compared with previous years.
• NGOs Drive CSR Spending: With NGOs increasingly handling the bulk of CSR

project spending – managing the funds of 74% of companies in 2017, compared

with 62% in 2016[8] – due diligence is an increasing challenge. As a result, CSR
funds tend to be concentrated with large and well-known NGOs.  This creates
challenges for locally impactful but smaller NGOs across India.
Nearly five years after the 2% Law, India’s legislative framework on CSR
remains in flux.  Last April, the Indian Ministry of Corporate Affairs set up a
committee to review CSR compliance and provide recommended changes.  The
submitted recommendations tighten the screws on companies, disallowing the
practice of carrying forward unspent CSR funds to the next financial year and
requiring stricter adherence of projects to the set list of CSR activities.  These
changes may push more companies towards technical compliance, but it will
take changing minds in the Boardroom for many companies to see a full-scale
embrace of the CSR mindset across company operations.
 
CONCLUSION
 
Finally we can conclude that concept of corporate social responsibility is now
firmly rooted on the global business agenda.Various positives have been seen in
different abovementioned sectors, such as:
In environmental field, somr benefits such as greater material recyclability; Better
product durability and functionality; Greater use of renewable resources;
Integration of environmental management tools into business plans, including life-
cycle assessment and costing, environmental management standards, and eco-
labeling.
Government is playing a very significant role in facilitating the formulation and
implementation of CSR policies and practices, but when it comes to monitor the
activities of CSR by government the companies are against it. They think that the
role of government in regulating their CSR activities should be limited. Proper
observing and assessment of such practices can give better results as it will help in
finding out the loopholes where the companies are deficient. CSR holds a very
important place in the development scenario of the world today and can pose as an
alternative tool for sustainable development.
With increasing and widespread commitment of corporate resources to CSR,
attention is now shifting to the strategic formulation, implementation, and
measurement of the market returns to CSR initiatives. But still a concern to
companies is whether their focus on “doing good,” will provide positive returns to
their CSR actions. This emphasize the need for better measurement models of CSR
that capture and estimate clearly the effects of a company’s CSR actions on its
stakeholders as well as the nations in which they are operating.