TABLE OF CONTENTS

TABLE OF CONTENTS....................................................................................................................1
CHAPTER 1: INTRODUCTION.......................................................................................................2
1.1 Corporate Social Responsibility...................................................................................................2
1.2 Meaning and Definition...............................................................................................................3
1.3 Components of definition............................................................................................................4
1.4 CSR components.........................................................................................................................4
1.5 India's history with corporate social responsibility......................................................................6
1.6 Position Indian corporate social responsibility............................................................................7
1.7 The Evolution of Corporate Social Responsibility: Challenges...................................................8
1.8 Companies Act 2013 and Corporate Social Responsibility..........................................................9
1.9 The origins of CSR....................................................................................................................10
1.10 CSR from a perspective of India..............................................................................................13
CHAPTER 2: CSR-INDIAN FRAMEWORK-SOCIAL, LEGAL AND ECONOMIC ISSUES.16
2.1 Social Dimensions of CSR in India...........................................................................................16
2.2 Caste-Based Culture..................................................................................................................17
2.2.1 Family.....................................................................................................................................17
2.2.2 Women's Place........................................................................................................................17
2.2.3 Men.........................................................................................................................................17
2.2.4 Marriage.................................................................................................................................18
2.2.5 The Patriarchal System...........................................................................................................18
2.2.6 Patriarchal Structure...............................................................................................................18
2.2.7 Birth of Children.....................................................................................................................18
2.2.8 Death......................................................................................................................................18
2.2.9 Illiteracy..................................................................................................................................19
2.3 CSR, Indian Framework, and Legal Aspect...............................................................................19
2.4 Law of the Constitution.............................................................................................................20
2.5 Felony law.................................................................................................................................21
2.6 The Law of Civil........................................................................................................................21
2.7 Indian Framework for CSR: Economic Aspect..........................................................................23
CHAPTER 3: THEORIES OF CSR................................................................................................24
3.1 Introduction...............................................................................................................................24
3.2 Triple-bottom-line thinking.......................................................................................................27
3.3 Participant Theory.....................................................................................................................31
3.4 The Three Forms of Corporate Social Responsibility: A Conclusion........................................34
CHAPTER 4: A JUDICIAL APPROACH AND STANDARD GUIDELINES IN CSR
PRACTICES......................................................................................................................................35
 4.1 Introduction...............................................................................................................................35
4.2 Linking CSR and the Law..........................................................................................................36
4.3 The Earth Charter's involvement in CSR...................................................................................37
4.4 Environmental Protection through CSR: Legal Aspects............................................................38
4.5 Conclusion.................................................................................................................................42
CHAPTER 5: CONCLUSION AND SUGGESTIONS...................................................................44
5.1 Summary and General Remarks on International and Indian CSR Practices.............................44
5.2 Suggestions for Broader Actions to Stop Corruption.................................................................48
5.3 Criteria for Companies to Become Socially Responsible...........................................................48
5.3.1 Rewards for CSR Activities....................................................................................................48
5.3.2 Voluntarily engaging in CSR..................................................................................................48
5.3.3 CSR for Sustainability, Innovation, and Branding..................................................................49
5.3.4 Commercial Performance for CSR.........................................................................................49
5.3.5 CSR for National Development..............................................................................................49
5.3.6 CSR Practice Alignment with Business Goals........................................................................49
5.4 Individual CSR Legislation........................................................................................................49
 CHAPTER 1: INTRODUCTION

“The world is improving, but not quickly enough for everyone; in fact, much of the
progress that has been made has frequently made inequality in the world worse. The
privileged receive more perfection while the most in need receive less”. Bill Gates

1.1 Corporate Social Responsibility

The impact of business on society has long been a source of contention. "Corporate Social
Responsibility" refers to the amount of work that corporations do to improve society (CSR).
Furthermore, we discovered that businesses must change their approach to prioritizing the
interests of owners and shareholders over all other stakeholders. The concept has been
debated throughout the twentieth century. In his 1953 book "Social Responsibilities of the
Businessman," Howard Bowen argued that for business to value broader social purposes in
its decision-making, it must assume all-purpose social and economic demands that are
beneficial to society. A company can give back to its community by participating in
"corporate social responsibility" activities. Examples include healthcare initiatives, cultural
heritage preservation, volunteerism, community relations, special education/training,
financial aid, and city beautification. The fundamental concept is that businesses must return
to society what they have taken for profit.1

1.2 Meaning and Definition

Many have formally defined corporate social responsibility (CSR) as follows:

Nancy Lee and Philip Kotler, renowned management experts, coined the phrase “a
commitment to promote community welfare through discretionary business practices and
contributions of corporate resources”.

According to the World Business Council for Sustainable Development's publication of

Richard Holme and Phil Watts' book "Making Good Business Sense," "corporate social
responsibility" is "the continuing commitment by business to behave ethically and contribute

1
Corporate Social Responsibility in India, Global CSR Sumitt, July 25th, (2013). PHD House, New Delhi,
www.ey.com/...Corporate-Social-Responsibility-in-India/.../EY Corporate- Social-Resp.
(PDF) Corporate Social Responsibility (CSR) in India -Evolution and Challenges (From Ancient Period to Present
Age). https://www.researchgate.net/publication/334624821_Corporate_Social_Responsibility_CSR_in_India_-
Evolution_and_Challenges_From_Ancient_Period_to_Present_Age
to economic development while improving the quality of life of the workforce and their
families, as well as the local community and society at large."

According to the ISO working group, "corporate social responsibility" is "an organization's
responsibility for the impacts of its decisions and activities on society and the environment
through transparent and ethical behavior that is consistent with sustainable development and
societal welfare, considers stakeholder expectations, is in compliance with applicable law and
consistent with international norms of behavior, and is integrated throughout the
organization." "An organization's responsibility for the effects of its decisions and activities
on society and the environment through transparent and ethical behavior consistent with
sustainable development and the welfare of its stakeholders," according to the definition
(CSR).

According to the prestigious publication CSR Asia, "corporate social responsibility" refers to
a company's commitment to conducting business in an economically, socially, and
environmentally sustainable manner while balancing the interests of its various stakeholders.

Corporate social responsibility (CSR) is defined in the United States and the United Kingdom
as "operating a business in a way that meets or exceeds society's ethical, legal, commercial,
and public expectations from the enterprise.

1.3 Components of definition

The majority of CSR definitions include the following five cited essential components

The following is a list of some of the responsibilities that corporations have in addition to the
straightforward production of goods and services for the purpose of making a profit:

 They have a wider constituency than just stockholders;

 They have a broad impact, going beyond the simple marketplace transactions;
 They serve a wide range of human values that can be summed up in the phrase
"corporate social responsibility.

Other names for corporate social responsibility include "Triple Bottom Line," "Corporate
Accountability," "Corporate Ethics," "Corporate Citizenship," and "Corporate Stewardship"
(CSR). CSR concerns are increasingly referred to as "corporate sustainability" and
"responsible competitiveness" as they are integrated into business practices.
1.4 CSR components

Corporate social responsibility is a concept that is currently quite adaptable and can be put
into practice in a variety of ways. There is no comprehensive list of CSR-related activities
because the definition of CSR has evolved over time and is not agreed upon by all. CSR
activities are frequently carried out in accordance with societal expectations, and they are
occasionally modified in response to a wide range of ultimately unique circumstances.

The following list provides a concise summary of the concept of corporate social
responsibility (CSR):

 Environmental safeguards This subfield is concerned with finding long-term,

sustainable, and cost-effective ways to use natural resources. To be environmentally
responsible, a company's operations and product development must be approached
holistically. This entails scrutinizing the goods and services provided, eliminating
waste and emissions, improving the performance of each asset, and avoiding
behaviors that may make it more difficult for future generations to enjoy the planet's
resources.
 protecting the workforce Employees, as one of the most important stakeholder groups
in the business, require special consideration in this regard. Employee safety must be
a part of corporate social responsibility. Acceptance of collective bargaining, abolition
of child labor and forced labor, and the development of discernment regarding one's
vocation and place of employment are all part of corporate social responsibility.
 Respecting human rights Unfair business practices can jeopardize people's
fundamental rights and sense of self-worth, so both should be protected. The primary
goal is to create work environments free of discrimination, to encourage original
thought, to foster learning, and to maintain a healthy balance between each
employee's personal and professional lives. Human rights ignorance will harm a
company's reputation, public perception, and, ultimately, profitability.
 The phrase "community involvement" refers to various initiatives undertaken by the
company to broaden the scope of its CSR programs. Employee giving, volunteering,
philanthropy, product and service donations, and community partnerships are all
included in participation in local and international communities.
 Promotion of well-being Various business practices may have a negative impact on
the overall health of the community as well as the health of the employees. Businesses
 can compensate for the harm they have caused to the health of their numerous
stakeholders by participating in health promotion activities.
 Education aims to boost the brain's productivity, which is already one of the most
productive machines on the planet. Businesses collaborate with local governments
and non-profit organizations to increase the number of productive employees and
expand access to higher-quality education. As a result, the development of intellectual
capital benefits the nation's economy and growth.
 Businesses, in collaboration with the public sector, civil society, and international
organizations, have made significant contributions to humanitarian aid efforts in the
aftermath of devastating natural disasters. Because of the potential for harm and the
complexities of how major disasters affect society, the most important task is to focus
on prevention rather than "proactive response," and corporate social responsibility
(CSR) may assist key stakeholders in implementing more development-oriented
strategies.
 In recent years, there has been a greater emphasis placed in developing countries on
understanding corporate social responsibility (CSR), environmental responsibility,
and CSR reporting.
 Corporate social responsibility, or CSR for short, is a self-policing business model
that allows an organization to be socially accountable to its clients, shareholders, and
the general public. This type of business strategy is referred to as "corporate social
responsibility" (CSR). Companies that practice corporate social responsibility are
more likely to be aware of how their actions affect society's social, economic, and
environmental facets.
 The implementation of corporate social responsibility policies and practices is
expected to benefit communities all over the world. These procedures are founded on
the notion that an organization's influence does not always have to be negative.
Businesses can make the world a better place by conducting their daily operations in a
way that has a lower negative impact on society and the environment.
 A growing number of businesses around the world are implementing CSR initiatives
to educate the public about environmental and social issues.

1.5 India's history with corporate social responsibility

It was less about running a business and more about raising funds for charities. It was more
reminiscent of educational and research institutions than anything else. Businesses now view
corporate social responsibility (CSR) as ethical strategic philanthropy, and they are
emphasizing community development through a variety of initiatives. According to the most
recent school of thought, it is no longer seen as required generosity or as a requirement to
complete a task. To advance societal goals and improve a company's reputation, money or
other resources must be spent.

Corporate social responsibility (CSR) is a responsibility, but it is not required, resulting in a

paradigm shift. Instead of "must comply," the phrase "will comply or explain why we did
not" is used.

Businesses are also beginning to invest in projects such as slum improvement, pollution
control, and improved road safety. Some companies, such as "Skill India" and "Swatch
Bharat," have even matched the broad goals of their corporate social responsibility spending
with those of the government's many social impact initiatives. The Prime Minister's
Emergency Fund has not received many requests. "Why only in these areas, and not in areas
such as arts and culture, conservation of endangered animals, preservation of national
heritage, growth of rural sports or dying sports, or development of new technologies for the
benefit of the poor?" one might ask. Why only in these areas? It makes sense to inquire about
each of these subjects. Traditional regions require funding because they, on average, benefit a
larger population or community. This is the reason why it is necessary.

Some of the larger organizations' founders established their own foundations and used them
as platforms for the causes they wanted to support. Some of these organizations are well-
known on a global scale. Other businesses also contributed to the growth of the communities
in which they were founded or operated.

Companies that have always engaged in CSR have been better able to do so, even if it is not
required by law. This gave these businesses the opportunity to review and reevaluate the
steps they were taking to comply with the law.

1.6 Position Indian corporate social responsibility

On April 1, 2014, India made history by becoming the first country in the world to require
corporate social responsibility. Companies that meet the turnover and profitability standards
outlined in Section 135 of the Indian Companies Act are required to contribute 2% of their
average net profits over the previous three years to corporate social responsibility.

In India, shareholders and other social stakeholders have recently expressed strong support
for corporate social responsibility, or CSR. All Indian businesses are now required to practice
corporate social responsibility (CSR). Typically, corporate social responsibility focuses on
what happens to profits after they are made. The importance of CSR in the corporate
framework for sustainable development2 is recognised by larger organisations. The "triple
bottom line"—economic, environmental, and social performance—is viewed by businesses as
a strategy for achieving both economically and socially sustainable growth.

According to observations, Indian businesses are committed to fostering long-term economic

development, a concept known as “corporate social responsibility” (CSR). This is
accomplished by collaborating with employees, their families, the larger community, experts,
and the general public to improve people's lives in ways that support the company's growth.

CSR is also closely associated with the concept of sustainable economic development in
India's public sector businesses. This theory contends that organizations should base their
decisions and actions not only on financial factors, but also on the short- and long-term social
and environmental impacts of their operations. Many similarities are thought to exist between
CSR and both of these concepts.

Indian businesses have demonstrated an awareness of critical societal issues as well as a

commitment to conducting their core operations in a socially responsible manner that
considers the needs of the larger community and the environment.

1.7 The Evolution of Corporate Social Responsibility: Challenges3

1. Opposition to CSR initiatives in the community The local community is not

particularly enthusiastic about CSR initiatives. The lack of genuine efforts to raise
CSR awareness and inspire trust in these activities is largely due to a lack of
information about CSR in the local communities. This is largely because no genuine
efforts have been made to educate local communities about CSR and foster trust in
such initiatives. The lack of communication between the company and the community
has exacerbated the situation.
2
Moon J., 2007. The contribution of Corporate Social Responsibility to Sustainable Development. Sustainable
Development 15: 296-306.
3
Kumar, Nitin. (2014). Corporate Social Responsibility: An Analysis of Impact and Challenges in India. vol.3,
issue 5 (May2014) online issn 2320-0073
2. The need to strengthen regional capabilities: Local nongovernmental organizations
must be strengthened because there aren't enough organizations that are qualified,
trained, and capable of making a significant contribution to businesses' ongoing CSR
initiatives. CSR programs' reach is severely limited as a result, making their
expansion difficult.
3. Issues Impairing Transparency: According to the survey results, one of the most
pressing issues is a lack of transparency. Local implementing agencies, according to
businesses, lack transparency because they do not put enough effort into disclosing
information about their programs, audit issues, impact assessments, and fund
utilization. Furthermore, the businesses claim that a lack of transparency allows them
to engage in unethical business practices. This alleged lack of transparency impedes
the process of establishing trust between businesses and local communities, which is
essential for the success of any local CSR program. This assurance is critical to the
success of any local CSR program.
4. Another common complaint about the scarcity of well-organized nongovernmental
organizations in rural and remote areas is that none exist. These organizations are
capable of assessing and determining the community's true needs, as well as
collaborating with businesses to ensure the successful implementation of CSR
initiatives. This adds to the case for investing in local communities by increasing their
capacity to carry out local development projects.
5. The Impact of Visibility: The role of the media in highlighting effective CSR
initiatives is encouraged because it sends out positive messages and educates the
public about the various CSR programs that businesses are currently implementing.
This encourages media participation in highlighting effective CSR initiatives. Many
charitable organizations' participation in event-based programming, which appears to
increase visibility and branding, often prevents them from making genuine grassroots
interventions.
6. A Strict Perspective on CSR Initiatives Organizations in both the public and private
sectors frequently take a narrow perspective on corporate social responsibility (CSR)
initiatives. These corporations frequently assert that their CSR programs are donor-
driven rather than regionally focused. As a result, they struggle to decide whether to
engage in such activities in the medium and long term.
7. The absence of clear policy guidelines or regulatory requirements capable of
effectively directing corporate social responsibility programs. The study's findings
 suggest that the size and type of business of an organization should be the primary
determinants of the scope of its CSR initiatives. In other words, as a company grows,
so does its corporate social responsibility (CSR) program.
8. Local organizations do not always agree on how to carry out CSR projects.
Furthermore, there is a lack of agreement on CSR initiatives. Corporate entities
frequently repeat their interventions in areas where there is no agreement. This
encourages regional implementing agencies to compete rather than develop
cooperative strategies for overcoming challenges. The issue will make it more
difficult for the organization to evaluate the effects of its operations on a consistent
basis.

1.8 Companies Act 2013 and Corporate Social Responsibility

The term “corporate social responsibility” first appeared in the Companies Act of 2013,
which was passed in 2013.

The concept of corporate social responsibility did not exist under the previous Companies
Act. The Companies Act of 2013 and Section 135 of the Companies Act of 2014 were the
first to codify the novel concept of corporate social responsibility.

With the passage of the new Companies Act in 2013, India became the first country in the
world to make corporate social responsibility (also known as CSR) mandatory. According to
historical evidence, corporate social responsibility (CSR) was not a novel concept in India
prior to this significant growth.

After conducting extensive online research, one might conclude that India stole the concept
of corporate social responsibility (CSR) and CSR regulations from other countries. However,
the concept of corporate social responsibility has existed since ancient India, and the
information gathered by our forefathers served as its foundation. This is a proud moment for
the company because it has served as a model for many other companies and industries.
Modern corporate CSR initiatives are founded on a thorough understanding of the company's
history and deeply ingrained traditions. The Upanishads, Puranas, and other works of Vedic
and ancient Indian literature, such as the Ramayana, Mahabharata, and Bhagavad-Gita, can
be consulted for research into the origins of CSR.

Corporate social responsibility, charitable giving, and philanthropy are all thought to have
existed in India since the beginning of time. Businesses were giving back to society in a
variety of ways, including investing in communities or causes that were important to them,
hiring businessmen to support these causes, establishing foundations to build places of
worship that would bring people from different backgrounds together, and a variety of other
ways. Most of the time, these were viewed as acts of philanthropy or charity on the part of the
owners, as well as community contributions.

1.9 The origins of CSR

Business strategies that emphasize social responsibility are neither novel nor groundbreaking.
There is a long history of companies having social obligations in addition to maximizing
profits. In a 1916 article published in the Journal of Political Economy, J. M. Clark argued
that because people are accountable for the outcomes of their actions whether or not the law
recognizes them, these outcomes must be included in business responsibilities. He claims that
this is the case because everyone is accountable for the consequences of their actions. In
1931, Stanford University professor Theodore Kreps added business and social welfare to the
curriculum. He coined the term "social audit" to describe the process by which companies
disclose their social responsibilities. In 1942, Peter Drucker published his second book, "The
Future of Industrial Man," in which he argued that businesses have a responsibility to the
communities in which they operate. Corporate social responsibility was still in its infancy in
the eighteenth century. The wealthy corporations of the eighteenth century pioneered the
concept of corporate social responsibility. Cadbury, a well-known example of this
phenomenon, was a British chocolate manufacturer that enjoyed great success in the 1870s
before relocating to a "Greenfield" location that would later become Bournville. The
company's first factory was in Birmingham, and the new location was a little outside of town.
Cadbury's building of the "factory in the garden" signaled the beginning of a new era in labor
relations and employee welfare. The Cadbury brothers, the company's founders, proposed
joint consultation as one of their ideas. The Bournville factory had more than tripled in size
and employed over 2,600 people by 1899. It was scientifically managed with the help of
analytical labs, cost and advertising offices, a sales department, a works committee, a medical
department, pension funds, and employee education and training. The phrase "a successful
business in thriving communities" is used to advocate for housing reform and a greener
environment, as well as to illustrate the current corporate social responsibility slogan.
Bournville was founded in 1900 by George Cadbury. Cadbury Brothers was a genuine
family-run business in its early years in Bournville. Employees were treated as if they were
family and received the same benefits. As the company grew, its management structure
became more organized and hierarchical. In 1905, works committees investigated all
employee-related complaints. In 1905, democratically elected workplace councils were
established to address all employee-related issues. Each department was assigned an equal
number of delegates representing workers and management via secret ballot. Each delegate
spoke on behalf of the division for which they worked. Johnson and Johnson is another
company that consistently outperforms competitors in its industry who are primarily
concerned with profit maximization. Its Credo, which was published nearly 60 years ago,
stated that the most important stakeholders for the company were its customers, employees,
and local communities. According to the 1940s Credo, the company's primary responsibility
is to its stockholders. A profit is required for a business to survive. They must experiment
with new ideas, continue innovative research projects, buy new machinery, build new
facilities, and manufacture new goods. The shareholders will see a positive return on their
investment if the company follows these guidelines.

For many years, businesses all over the world have used a CSR strategy to manage their
operations. The current CSR movement aims to make corporate responsibility a standard
practice for most businesses in order to improve the quality of life for both current and future
generations, as well as our planet's long-term viability. The 1950s were not particularly
memorable, but as business's influence grew, a growing awareness of the need for businesses
to take responsibility for their communities emerged. According to Bowen's original
interpretation, corporate social responsibility (CSR) is the obligation of businesspeople to
develop appropriate guidelines for making decisions that benefit society and to put those
guidelines into action. The term "corporate social responsibility" has also been used to
describe social responsibilities (SR). Corporate social responsibility and more thorough
analyses of business activities have become more difficult as a result of the 1960s' growing
social consciousness. This shift in society contrasted sharply with the widespread acceptance
of corporations' legitimacy in the 1950s. The most significant forerunners of the current
corporate social responsibility movement were social movements that promoted consumer,
women's, civil, and environmental rights. During the 1960s, corporate philanthropy shifted
from highly individual charity driven by industrial tycoons funding their preferred causes to
more organized giving programs serving corporate goals. Throughout the 1970s, the CSR
made significant progress in a variety of areas. The Consumer Product Safety Commission,
Equal Employment Opportunity Commission, Occupational Health and Safety
Administration, and Environmental Protection Agency were all established in the early 1970s
(EPA). This was the federal government's most significant response to the 1960s problems
(CPSC). Social regulations got their name because they addressed and legitimized contractual
obligations governed by social movements. After being elected president in 1980, Ronald
Reagan encouraged businesses and private initiatives to address social issues, lending
legitimacy to the corporate social responsibility (CSR) movement. Three long-term CSR
trends are globalization, institutionalization, and strategic reconciliation. Each of these trends
emerged in the 1990s. Given how much CSR is valued and enthusiastically embraced by all
modern businesses, one could argue that the business case for it has been established. When
the economy is booming, corporate social responsibility (CSR) is given more thought and
support. Whatever the circumstances, it is abundantly clear that active, strategic justifications
for corporate social responsibility have largely supplanted charitable giving (CSR). Despite
incorporating new ideas, arguments, and frameworks on a sporadic basis, corporate social
responsibility (CSR) has remained prominent at the start of the twenty-first century.

1.10 CSR from a perspective of India

Despite the fact that it has only recently gained recognition, India has a long history of CSR.
Kautilya was a philosopher who promoted and preached a variety of ethical business
practices. He advocated for and supported these methods. The concept of assisting society's
weaker members is mentioned in nearly every older piece of writing. A variety of religions
and their corresponding laws backed up the idea. As examples of corporate social
responsibility, the Muslim practice of "Zakat," the Hindu practice of "Dharmada," and the
Sikh practice of "Daashaant" have all been cited.

Phase 1:

The first stage of corporate social responsibility, also known as "business philanthropy," was
marked by charitable donations and other acts of philanthropy. The concept of sharing one's
fair share of excess wealth for the good of the community first appeared during the Vedic
period. The merchant elite, whose formation was critical, placed a high value on charity, also
known as "daan," among their social and religious beliefs. Merchants contributed to the
construction of dharmshalas, bathing ghats, and pyaus, as well as the expansion of initiatives
in the fields of culture, medicine, and education (water-supplying facilities). Corporate social
responsibility has been influenced by factors such as industrialization, family values, cultural
norms, religious beliefs, and others. During India's early industrialization in the nineteenth
and twentieth centuries, business families continued to give back to the community. In
addition to feeding the poor, they built temples and other places of worship. Throughout the
colonization process, however, businessmen such as Tata and Birla, among others, engaged
in corporate social responsibility by establishing charitable foundations, trusts, and other
institutions that provided healthcare and education. However, a political factor limited the use
of this generosity.

Phase 2:

Trusteeship Leaders in the field such as JRD Tata, Ramakrishna Bajaj, Arvind Mafatlal, and
Kasturbhai Lalbhal deserve the majority of the credit for bringing the subject of social
responsibility to the attention of the business community. They are the ones who are
primarily responsible for the success. Vinoba Bhave, who had assumed Gandhiji's persona,
wished for businesspeople to see business as a noble mission and to engage in charitable,
educational, and other socially beneficial activities. This helped to popularize Gandhiji's
"trusteeship of wealth" theory, which held that business owners and employees were both co-
trustees of the corporation for the benefit of society. Gandhiji delegated his authority to
Vinoba Bhave. Its support for both socialist goals and the conventional notion of charity at
the time earned it the official backing of business and government leaders.

Phase 3:

Declare businesses' social responsibilities. In the 1960s, Jai Prakash Narain organized
conferences on business' social responsibilities, which helped spread Vinoba's message. This
emphasized the fact that businesses owe obligations to a variety of parties, including
shareholders, employees, the government, and customers. However, no law governs how a
business must interact with the people or community in which it operates. The business
community should be made aware of their responsibilities as community stakeholders. This
concept included more than just giving back to the community. One of these gatherings also
recognized the importance of creating business standards that the business community would
accept. Ramakrishna Bajaj, JRD Tata, and a few other individuals founded the Fair-Trade
Standards Association in Mumbai in 1966 to standardize and enforce moral business
practices.

Phase 4:
Business executives with a keen sense of the future realized in the 1970s and 1980s that if the
business community did not meet the country's basic developmental needs and participate in
efforts to build it, the country's future would be jeopardized. This realization came at a time
when the country's economy was rapidly expanding. This realization came to her in a timely
manner. Pioneer JRD Tata was in charge of making it happen and setting the bar high. To
accomplish this, he added a section to the Tata companies' articles of association outlining
their responsibilities to all relevant stakeholders, including the community. As a result, he
promised that all Tata businesses would support charitable causes and act ethically. Both
Bajaj and Arvind Mafatlal, who later joined JRD, concluded that the business sector had a
dual responsibility to generate wealth while also supporting the community's social and
ethical goals. This action was taken to ensure the community's survival in a democratic
society.

Phase 5:

Globalization has widened the wealth gap between countries. Government initiatives alone
cannot address social issues. According to the United Nations' Human Development Report
for 2003, India spent very little money on primary education, primary healthcare, child
nutrition, and other related areas; as a result, it would have to find other ways to fund these
initiatives. A career in business is one of these options. In addition to funding, initiatives for
corporate social responsibility can benefit from leadership, organizational know-how, and a
talent pool. There are additional advantages to the growing popularity of CSR initiatives. The
Business Community Foundation, Action Aid, and the Centre for Philanthropy are a few non-
profit organizations in India that collaborate with the country's for-profit corporations
(Mumbai).

Defining CSR in the current environment is the sixth stage. On CSR, there are two
opposing extremes:

1) A business is acting responsibly when it abides by the rules and laws of the country in
which it operates.

2) A corporation that practises social responsibility is completely altruistic in the sense that it
donates without hoping to receive something in return.

Corporate social responsibility cannot be adequately explained from these two perspectives.
According to the Prince of Wales Business Leaders' Forum, the Corporate Citizenship
Company of the United Kingdom, and the Asian Institute of Management, there is broad
agreement on the business behaviors that are classified as socially responsible (PWBLF). An
organization's social responsibility policy is held accountable to all of its internal and external
stakeholders. Managers and shareholders are frequently called upon to determine whether a
company's morally acceptable behavior is both legal and profitable. Even when no legal
obligations are at stake, shareholders and boards of directors should be willing to forego
profits or take a financial hit in order to protect consumer safety, disclose potential safety
risks, reduce harmful pollution, prevent bribery, and treat others fairly. Businesses are forced
to evaluate and decide for themselves when governments are dishonest or ineffective. The
number of contentious issues and challenges is also increasing.
 CHAPTER 2: CSR-INDIAN FRAMEWORK-SOCIAL, LEGAL AND
ECONOMIC ISSUES

2.1 Social Dimensions of CSR in India

The ability of a company to transform inputs into outputs, including profit, benefits society as
a whole. Businesses are required to return a portion of their profits to society in a variety of
ways under corporate social responsibility. India is a large country with many different
customs and practices that vary from province to province and region to region, but the social
structure is consistent throughout the country and serves as a unifying factor. The following
provides a high-level overview of the Indian social system and its distinguishing features.4

2.2 Caste-Based Culture

In Indian society, caste is the primary organizing principle. The four major castes in this
society are the Brahmans, Kshatriyas, Vaishyas, and Sudras. The highest caste is the priestly
caste of Brahmans. Sudras belong to the working class, Vaishyas to the merchant caste, and
Kshatriyas to the warrior caste. Even though intercaste marriages are becoming more
common in cities, it is illegal to marry people from different castes. Those who participate in
the practice of untouchability may face legal consequences, according to the Indian
Constitution. The caste system has become increasingly antiquated as a result of recent
urbanization trends.

2.2.1 Family

Divorce is uncommon, and the family unit as a whole receives the care and attention it
deserves. Because most couples value the role that parenting plays in their lives, they prefer
to work out their differences within their marriages rather than end it. The entire family is

4
The authors in their seminal paper (2001), Theory of Corporate Social Responsibility: Its Evolutionary Path
and the Road Ahead, International Journal of Management Review, Vol. 5, pp 34-45
responsible for the children's upbringing and general well-being. However, because of the
pervasive rational thinking based on the concept of modernization in contemporary society,
divorce is now the preferred method for ending an unhappy marriage.

2.2.2 Women's Place

Women have long held significant power in India's political and social structures. Women
were more liberated and powerful in the past than they are now. However, once Muslims
arrived in India, the purdah system was implemented in Muslim-majority areas. Women are
still oppressed and viewed as nothing more than property in many parts of the country.
Women, on the other hand, have become more confident and free to express their opinions as
education levels have increased, which is a very encouraging trend.

2.2.3 Men

In Indian culture, the man is revered for his role as the primary provider and source of income
for the family. The vast majority of women are not opposed to men wielding power over
women. Because men are traditionally expected to care for their families, they are naturally
more authoritative than women.

2.2.4 Marriage

In India, most people marry because it is socially acceptable. It is something that society
values highly. Although most marriages are pre-planned, many urban residents choose their
partners before getting married. Having children outside of marriage is frowned upon by
society. Marriages typically cost a lot of money because they are performed in accordance
with specific rituals and demand a lot of money.

2.2.5 The Patriarchal System

The father is the primary figure of authority in Indian society, with the father serving as the
primary figure of authority in the family. The oldest male family member, who serves as the
family head, has the final say in all family-related decisions.

2.2.6 Patriarchal Structure

Women in southern India, particularly in the state of Kerala, are expected to take the lead in
making decisions that directly affect their families. Despite open communication between
husbands and wives, it is ultimately the wives who make decisions that affect the family.

2.2.7 Birth of Children

There is much joy and celebration in the home when a new family member is welcomed. To
commemorate the event, rituals and ceremonies are held. Despite the fact that the number of
unfavorable births is decreasing as parents and other family members become more educated,
there are still regions of the country where the birth of a male child is celebrated and the birth
of a female child is despised. However, celebrating the birth of a male child is more common
than celebrating the birth of a female child. In a society where many superstitions still exist,
even if the mother gave birth to the child, she may still be blamed for its birth.

2.2.8 Death

There has been a significant but unfortunate family incident. To properly honor a deceased
family member, rituals must be performed. In addition, annual rituals are held in memory of
the deceased.

2.2.9 Illiteracy

Since India's independence, the proportion of people who can read and write has increased
dramatically. Since independence, the country's overall literacy rate has risen from 19% to
72%. Unfortunately for Indian civilization, 28% of the population is still illiterate. Illiteracy is
a significant barrier to Indian society's socioeconomic advancement.

2.3 CSR, Indian Framework, and Legal Aspect

The Indian legal system is made up of civil law, common law, and religious or widely
accepted customs. This system was developed in light of India's colonial history and a
number of British laws that are still in effect there, either unchanged or with minor
modifications. CSR is either directly or indirectly related to the implications of such laws,
which have been found to comply with the United Nations Guidelines on human rights and
environmental law. The personal laws of the Indian legal system are notoriously difficult to
comprehend. Almost every region of the United States has laws and regulations. To be more
specific, there are numerous laws that apply to Christians, Hindus, Muslims, Sikhs, and many
other religions. The current civil law in Goa, which includes provisions for marriage,
adoption, and divorce, is inclusive of all major religions. The Indian Supreme Court recently
ruled that the Islamic practice known as Triple Talaq, in which the husband says "Talaq"
three times during a divorce, is illegal. As part of the reformist movement, this choice was
made. Feminists and supporters of women's rights in India applauded the Supreme Court of
India's historic ruling. The Supreme Court's majority is made up of three men and two
women, and it has ruled that the "Triple Talaq" principle of Muslim personal law is
unconstitutional. With a 3:2 majority, a bench of five Supreme Court of India justices issued
a decision that would change the course of Indian legal history on August 22, 2017. When it
comes to assisting the underprivileged and those affected by "Triple Talaq" in rebuilding
their lives, corporate social responsibility (CSR) is critical. As of January 2017, India had
approximately 1248 laws in force, according to Wikipedia. Due to the existence of both
central and state laws, determining the exact number of laws in force in India is difficult;
however, as of January 2017, there were approximately 1248 laws in force. The ancient
Indian legal system was unique among legal systems. The two most important treaties that
were regarded as authoritative legal advice at the time they were written are the Arthashastra,
written around 400 B.C., and the Manusmriti, written around 100 A.D. Let us take a look at
some of the most important laws that form the foundation of India's legal framework.

2.4 Law of the Constitution5

The majority of people agree that India's constitution, ratified on January 26, 1950, is the
longest in the world. Other parts of the Constitution were derived from other sources as well
as international constitutions in force at the time it was adopted. The Government of India
Act of 1935 significantly altered the administrative provisions of the Constitution. All Indian
law derives from the Constitution, and any law thought to be in conflict with or more
important than the Constitution is invalid and exists independently of it. "I think it is agreed
that our Constitution, despite its many provisions granting the Centre overriding power over
the States, is nonetheless a federal one," said Dr. B. R. Ambedkar, chairman of the
Constitution Drafting Committee. In this context, he mentioned the Indian Constitution's
federal structure. It contains information on how the Union and individual states operate. The
dynamics of the center-state have been formalized. The Fundamental Rights of Citizens and
the Directive Principles of State Policy are widely regarded as the two most important
5
Constitution debate 1976
provisions of the Constitution. The Constitution, which established and legislated a federal
form of government, made it abundantly clear that the Federation and the States had strict
legislative and executive responsibilities. All provincial and state governments in India are
bound by the laws passed by the Indian Parliament. In addition to the laws already passed by
the Indian Parliament, each State Government is free to enact its own laws concerning State
Subjects. The preamble to the Constitution states the primary goals of the laws passed by the
legislature. As a result of this, the Indian Constitution's Preamble reads as follows: We, the
people of India, have solemnly resolved to establish India as a Sovereign Socialist Secular
Democratic Republic and to ensure equality of status and opportunity, freedom of thought,
expression, belief, and worship, as well as social, economic, and political justice; we have
also committed to working hard to achieve all of these goals. Fraternity also safeguards the
country's integrity and unity, as well as the individual's right to dignity. Our Constitution
Assembly gave us this Constitution on November 26, 1949, passed it into law, and bestowed
it upon us. The adoption anniversary is also commemorated on this day. The Constitution
guarantees free speech, free press, religious freedom, and social, economic, and political
justice. Fraternity is an important strategy for achieving the constitutional goals stated in the
Preamble and previously discussed. Fraternity upholds the individual's dignity in addition to
the nation's harmony, morality, and CSR. Fraternity is a fundamental strategy for achieving
the Preamble's and previously discussed constitutional goals.

2.5 Felony law

The British government drafted the Indian Penal Code, which serves as the foundation of
Indian criminal law, in 1860. The original text was written in English. The 1973 Code of
Criminal Procedure establishes the rules governing criminal procedure in India. Criminal
offenses that violate the rules of the Code of Criminal Procedure are punishable. The Indian
Penal Code is the primary body of law in India that governs how criminals are punished.

2.6 The Law of Civil

Contract law, labor law, company law, tort law, property law, and tax law are all part of
India's civil legal system. Under the 1908 Code of Civil Procedure, any civil wrongdoer may
be prosecuted, though this may change based on any relevant legislation.
The right to life and a means of subsistence is guaranteed in Article 21 of the Indian
Constitution. Article 21 of the Indian Constitution applies to everyone, including tourists and
business visitors who are only visiting the country for a short time. In the case of Munn v.
Illinois, decided on November 4, 1994, Justice Field stated that "life" can mean many
different things. He went on to say that "something beyond the mere existence of animals is
intended by the term 'life' as used here." The prohibition on letting go applies to any limb or
ability that allows a person to live a fulfilling life. Amputation of an eye, limb, or any other
bodily organ that allows the soul to communicate with the outside world violates this clause.
This includes amputating limbs such as the arms or legs, as well as the eyes. The Supreme
Court of India declared in Chairman, Railway Board v. Chandrima Das, AIR 2000 SC 988,
that visitors "have the right to live, so long as they are here, with human dignity; The State is
obliged to safeguard the lives of noncitizens in the same way that it is obliged to safeguard
the lives of every citizen of this country." The need for the State of India to protect the lives
of its citizens drove this decision. According to the cited article, no one's life or personal
freedom may be taken away without first going through a legal process. Article 21 of the
CSR has been revised in accordance with the CSR to ensure that everyone has the
opportunity to live a life of dignity and that life itself is protected. The argument that the term
"livelihood" is included in Article 21's definition of "life" must be rejected because the
Supreme Court determined in Re Sant Ram, AIR 1960 SC 932 that the right to livelihood
does not fall under that definition. The Supreme Court ruled that the definition of "life" in
this case did not include the right to a living. The Supreme Court initially ruled that Article
21 of the Constitution does not grant an individual the right to a means of subsistence. The
language of Article 21 makes no mention of how to obtain means of subsistence.

Again, in Olga Tellis v. Bombay Municipal Corporation6, The Bombay Municipal

Corporation's decision to evict pavement residents was challenged. In this case, the right to
life was asserted to take precedence over the right to subsistence. This is due to the fact that
having a means of support, also known as an income source, is required in order to survive.
"We must decide whether the right to life includes the right to subsistence," the Supreme
Court stated. There is only one possible response to this question: "That it does." Article 21
guarantees the right to life in its entirety. There is a lot of security here. It goes beyond simply
prohibiting removal from a person or execution unless authorized by law. Instead, it implies
that there is no other way to take or end another person's life. Even though it is only one

6
AIR 1986 SC 180
component of the right to life, the right to a means of subsistence is critical. This is due to the
fact that no one can survive without some form of income. As a result, CSR is a
constitutionally sound theory. This is because Article 21 protects both the right to life and the
right to a decent standard of living. It is not possible to live a life with no means of support
and no purpose. Article 21 of the Constitution requires businesses to donate a portion of their
profits to charitable organizations. To meet this requirement, the company must engage in
charitable activities and make contributions to the defense of the rights of economically
disadvantaged members of society to life and a means of subsistence.

According to Section 135 of the Firms Act of 2013, businesses are permitted to participate in
CSR-related activities. In any fiscal year, any company with a net worth of at least Rs 500
crore, a turnover of at least Rs 1,000 crore, or a net profit of at least Rs 5 crore is required to
form a CSR Committee from the Board. This committee must have at least three Directors,
one of whom must be an Independent Director. Its goal is to advocate for businesses to
devote at least 2% of their annual average net profits to CSR programs.

2.7 Indian Framework for CSR: Economic Aspect

The primary goals of legally formed businesses are to maximize shareholder wealth and
achieve an appropriate profit. This is done in order for legally established businesses to
produce goods and services that meet societal demands. The managers that the companies
appoint are primarily responsible for providing shareholders with a satisfactory return in their
capacity as representatives of the company's owners. This duty and responsibility must take
precedence. The CSR dimension includes the practice of maximizing earnings per share, the
ability to thrive in a competitive corporate environment, efficiency, and profit as the primary
metric of business success. CSR also includes operational efficiency. However, it is critical to
remember that maximizing profits does not advance the interests of stakeholders. Given that
India is a developing country with numerous socioeconomic challenges, corporate social
responsibility (CSR) programs implemented by Indian businesses should aid the Indian
economy's development. Indian corporations must be fully aware of the economic
environment and profile that will impact their business decisions. It is critical to consider the
unique aspects of the Indian economy before developing a CSR strategy tailored to the needs
of the Indian market. A company's primary economic responsibility or area of focus should
be its ability to turn a profit. This viewpoint, similar to Milton Friedman's, contends that
corporations' economic responsibility should be prioritized. According to Milton Friedman, it
is business's social responsibility to maximize profits. The economic component of India's
CSR framework raises the question of whether businesses should be motivated primarily by
profit. However, by examining the characteristics of the Indian economy listed below, the
problem becomes much clearer.

CHAPTER 3: THEORIES OF CSR

3.1 Introduction

The traditional definition of a corporation as a type of business is one whose primary goal is
to maximize shareholder returns. According to this profit-driven point of view, business
ethics are important because they can be used to resolve moral issues that arise when people
try to make money. Here's an example of one of these difficult questions: What
responsibilities do businesses have to ensure that candidates for jobs and promotions are
treated fairly? What precautions should be taken ahead of time to avoid potential conflicts of
interest? Similarly, "What kind of marketing strategy should be used?"

Despite the fact that these quandaries remain important in economics, the idea that businesses
have a variety of economic and civic responsibilities as part of their daily operations is
increasing the importance of the field of business ethics. Aside from the fight for financial
stability, there are now numerous issues that must be addressed. There are three major
theoretical perspectives on these additional responsibilities:

1. Corporate social responsibility, (CSR)

2. The triple bottom line

3. Stakeholder theory,

4. Social Responsibility of Corporations (CSR)

There are two schools of thought on what "corporate social responsibility" entails. It is a
broad term for any corporate theory that emphasizes both the obligation to make money and
the obligation to engage in morally responsible community interaction. Second, "corporate
social responsibility" refers to a specific interpretation of a company's obligation to profitably
address larger societal issues.7

The term “corporate social responsibility” (CSR) refers to a school of thought that examines
how companies interact with both the communities in which they are based and the rest of the
world. It is composed of the following four responsibilities:

1. The desire to learn how to make money. Fundamental economic principles require
this obligation, which can be thought of as the business survival instinct. Companies
that are unable to turn a profit in today's free market economy are doomed to fail. Of
course, there are some outlier cases. Charitable organizations raise funds through
ongoing operations, gifts, and grants. These funds are then immediately reinvested to
help them further their missions. Partnerships between the public and private sectors
may also incur losses. A group is charged with collecting trash in a few locations, and
despite not (theoretically) making any money, they keep the streets clean. However,
profit is critical for the vast majority of businesses. Without them, no business, let
alone one that follows ethical business practices, could exist.

2. The obligation to follow its rules and policies. This obligation, like the one before it,
cannot be contested. Proponents of CSR, on the other hand, argue that this obligation
should be viewed as proactive rather than reactive. In other words, even if the
consequences are minor, businesses cannot disobey or break the law. Companies that
follow the law, on the other hand, see regulations as beneficial to society and make
genuine efforts to uphold both the letter and the spirit of the law. Consider the
difference between a driver who follows the speed limit because he cannot afford a
traffic ticket and one who does so because it is in everyone's best interest to obey
posted signs, stoplights, and speed limits. One does this because they understand that
following these rules benefits everyone. When he remembered John Travolta racing
his Porsche down a country road, he didn't feel the same way. Both W. R. Grace, Inc.
and the fictional corporation from the film disregard the law until the consequences
are too severe. W. R. Grace, Inc. is portrayed similarly in the film. In contrast to this
behavior model, a company's CSR vision states that all social boundaries will be
strictly enforced, even if the fine is only one dollar.
7
H. Shrivastava and S. Venkatateswarn (2000)' work, 'The Business of Social Responsibility: The Why, What
and How of Corporate Social Responsibility in India, New Delhi
 3. the obligation to act morally even when the letter or spirit of the law do not require it.
To meet this fundamental requirement of the theory, an organization must have a
strong corporate culture that views itself as a contributing member of society,
complete with the obligations that such membership usually entails. Although there is
no legal obligation to assist a driver who is stranded on the side of the road due to a
flat tire, a Porsche driver speeding down a country road in the dead of winter has a
moral obligation to do so. The same idea holds true in the business world. Various
types of industrial facilities generate hazardous waste during the manufacturing
process. This was the fault of both W. R. Grace and Beatrice Foods of Woburn,
Massachusetts. Even if it wasn't required by law, wouldn't it be appropriate for
businesses to store their poisons in barrels with double walls and no leaks to prevent
contamination? While it is true that it may not be the best choice in terms of
maximizing profits, it may be a good choice in terms of valuing everyone's welfare.
4. A company has a moral obligation to contribute to the betterment of society, even if
such efforts have no impact on how the company operates. When a lawyer returns
from work and sees the kids gathered around a run-down lemonade stand, he or she
may feel compelled to buy lemonade for the kids' business. Similarly, if a law firm is
willing to open its doors to local students for an afternoon once a year, they can show
them what attorneys actually do during the course of a typical workday. A company
that sells industrial chemicals could turn unused land into a park. None of these
responsibilities have resulted from the company's ongoing business operations. They
are not required to dispose of waste, unlike chemical companies. These public deeds,
on the other hand, demonstrate the idea that businesses, like everyone else in the
world, are required to contribute to the general welfare in ways that are specific to the
location.

These four responsibilities are listed in decreasing order of importance according to the
corporate social responsibility ethos. When the primary responsibility is completed, the focus
can shift to the secondary responsibilities, and so on. This rating makes perfect sense when
taken to its logical conclusion. A closing law firm should not conduct school visits, at least
not if doing so prevents the firm from accruing billable hours and income. Because they will
be unable to fulfill their charitable obligations if the company declares bankruptcy and ceases
operations, lawyers must prioritize their professional financial obligations over their personal
ones when facing financial difficulties.

Conflicts between legal and financial obligations create new issues. To maintain profitability,
a manufacturing facility may be forced to discard hazardous waste and waste products in
barrels that only meet the bare minimum of legal requirements. If these constraints are
insufficient to keep the barrel seal in place, the law may appear to have been broken. The
ability to keep running a business is the economic benefit of cutting corners. As a result, the
number of jobs in the region will not decrease, families will not face the stress of
unemployment, suppliers' commitments will be honored, and customers' needs will be met.
The disadvantage is that there is a risk—a very high risk at Woburn—that these chemicals
will leak and harm future generations of workers' children.

There is no room for debate now that we know what happened to those Woburn children.
Allowing the chemicals to escape would have clearly been preferable to all other options.
Before causing such harm to society, the company should have declared bankruptcy.
However, the details of the risks and benefits may not have been as clear at the time of the
decision as they are now. Even among those who were adamant about the importance of
business to the community, there may not have been agreement on the best course of action.
In any case, according to CSR principles, businesses must fulfill their obligations in the
following order: charitable, moral, legal, and economic.

3.2 Triple-bottom-line thinking

Under a type of CSR known as the triple bottom line, business leaders are required to
evaluate their organization's financial performance in relation to its effects on the social,
environmental, and economic spheres (costs versus revenue). This concept is divided into two
parts.

It is necessary to specify and keep separate the outcomes for each of the three responsibility
columns. Second, the company should achieve long-term success in all three of these areas.

The term "sustainability" has a very specific meaning. Sustainability is defined as the long-
term preservation of equilibrium at the intersection of ethics and economics. According to
theorists such as John Elkington, the process by which equilibrium is created and maintained
in the economy, society, and environment is as follows:
In terms of economic sustainability, stable long-term finances carry more weight than erratic
short-term revenues, regardless of size. Large corporations are in charge of developing
business plans that allow for continuous and regular activity, according to the triple-bottom-
line model. Businesses should exercise caution when considering investments in dot-coms
and comparable businesses due to this natural preference for length. Attempts based on
speculation have the same chances of success and financial gain. For example, Silicon Valley
in California is home to numerous start-up businesses. Some of these will be successful, just
as Google, Apple, and Microsoft were. None of the unsuccessful people, including those who
lost their life savings on a failed business venture, are mentioned in newspaper articles
praising Steve Jobs or Bill Gates. This is due to the fact that these articles highlight the
accomplishments of successful people. To practice sustainability as a virtue, one must respect
economic policies that may not immediately produce enormous profits but prevent disastrous
failures.

Applying this logic to the current situation, there may be an economic-sustainability

argument against W. R. Grace's decision to dump toxins into the ground soil. Businesses that
engage in unethical behavior, such as pollution or other misconduct, may see a temporary
increase in profits. Cost savings result from less expensive disposal. However, if one looks
further into the future, it is possible that if the activity is discovered later, it could have
disastrous economic consequences (such as personal injury lawyers filing enormous
lawsuits). This hypothesis immediately implies that corporate concerns about long-term
financial viability oppose dumping.

The concept of social sustainability places a premium on harmony in people's lives and our
way of life. Millions of people on every continent live on less than $1 per day, whereas a
small number of Fortune 500 CEOs earn millions of dollars per year. This cannot be allowed
to continue. As the disparities widen, society is more likely to implode in rage and uprising.
Given the country's strong middle class and lack of public hostility toward the wealthy, the
idea of a political revolution from below seems absurd. Nonetheless, similar revolutions have
occurred frequently throughout human history. It is not necessary to conclude that a
revolution will take place in the modern industrialized nations. On the other hand, it may
imply that in order for a company to eventually turn a profit, it must provide as many people
with opportunities and, as a result, money as possible.

This moral demand for equality of opportunity and prosperity is met by fair trade. Even
though it is not required by basic economic laws such as supply and demand, fair trade
organizations encourage businesses, particularly large producers in developed countries, to
ensure that suppliers in developing countries are fairly compensated for the goods and
services they provide. This is especially important given that many of these companies import
their products from less developed countries. In the 1960s, Europe developed and improved
on this concept. The most compelling case for sustainable development, however, is that
global peace and order are dependent on equitable resource distribution, which eliminates
feelings of hostility, resentment, and rage. There are numerous moral justifications for fair
trade, including the idea that in order for a society to function, it must respect both money
and people. All types of work are beneficial, according to stability, and no employee should
be treated like a cog in a factory machine. This viewpoint is especially prevalent in Europe.
Many people believe that the rise of modern capitalism is directly to blame for the
denigration of many trades and professions. They see minimum-wage workers struggling to
make ends meet and potentially losing their jobs when the next recession hits. Employees are
quickly replaced by managers who make no effort to learn their names. Temporary
employment agencies hire the employees. It's possible that these feelings and the contempt
shown in so many places where McJob rules the world will pass. People will not tolerate
being treated with less respect than their superiors in the long run, just as they will not
tolerate being paid pennies on the dollar while their leaders are paid millions.

Finally, in order to be socially sustainable, businesses must cultivate positive relationships

with the people who live in their communities. When this responsibility is applied to the
situation at W. R. Grace in Woburn, it is immediately clear that a company that releases
toxins that cause birth defects in the children of nearby neighbors will be unable to maintain
any kind of relationship with the locals. Because our complaints are valid, there is no way we
can ever work together for our mutual benefit.

The understanding that the planet's natural resources are finite underpins environmental
sustainability. This is especially true for the oil that powers our cars, as well as the clean air
and water we breathe and drink. If things continue to deteriorate at this rate, the vast majority
of our children will be unable to live in the same level of comfort that we do. As a result, it is
critical that we protect our natural resources and develop alternative energy sources that can
eventually replace our current energy mix.

Another example of scarce resources can be found in the case of a chemical company that
released toxins into the environment and suffered terrible consequences. The company was to
blame for the explosion in this case. This case also highlights our planet's limited ability to
naturally regenerate clean air and water from smokestacks and industrial runoff. It is
undeniably true that reasonable people are capable of having open discussions about the
limits of such discussions. Have we increased greenhouse gas concentrations in the
atmosphere to the point where, for example, the earth's temperature has begun to rise?
Carbon pollution will eventually damage the environment in the same way that toxic runoff
did. Woburn: The city will cease to be habitable, though no one knows when. Promoting the
regrowth of our natural environment is critical for environmental sustainability. Recycling or
eradicating pollution, in addition to preventing pollution from businesses, vehicles, and
consumer goods, is critical in this situation. Businesses follow the triple-bottom-line model of
corporate responsibility because it is a direct obligation of the model, not because it is
required by law. Businesses therefore have a duty to aid each of these initiatives.

When taken as a whole, the concepts of economic, social, and environmental sustainability
direct businesses toward actions that are consistent with the idea that the company is a part of
the community and not just a profit maker.

There are significant philosophical differences between triple bottom line and corporate
social responsibility. Compared to the second, the first tastes more like Europe. Because they
are accustomed to economic prosperity, Americans are more likely to be open to and
optimistic about change. According to the majority of Americans, business should change the
world and ethical issues should (ideally) be taken into account to ensure that these changes
will maximize social progress. Because they are used to seeing the United States' overall
economic decline, Europeans are much more resistant to change. By default, they try to keep
things the same and fight against change as much as they can. The notion of sustainability as
a core value fits this viewpoint extremely well.

While pursuing sustainability as a corporate objective will slow the economy and is
conservative in the (nonpolitical) sense that it prefers the current state to one that has been
altered, this does not imply that it will support a halt in economic growth. Instead, it does
imply that it will support a slowdown in the economy. Luddism, on the other hand, rejects all
forms of technological development outright. Sustainability differs from sustainability.

A group of British textile workers known as the Luddites foresaw the introduction of
mechanical looms as a threat to their way of life and means of subsistence in the 19th
century, and they were right. They raided factories repeatedly, destroying everything they
could in an effort to stop the transformation. Their aggressive approach initially worked, but
ultimately failed. The term "ludditism" in today's society describes a dislike of new
technologies in any industry. This aversion is a result of the idea that society is being torn
apart by new technologies, forcing people to change against their will. The start of this
phenomenon in the workplace eventually spreads to all facets of daily life. Both ludditism
and the corporate ethics of sustainability include some future worry (which may be justified),
but they also have important differences. For instance, environmental concerns do not always
preclude technological advancements. In fact, as long as changes are made while maintaining
the status quo, innovation is encouraged. For instance, improvements in the production of
wind power would enable society to use the same amount of energy as it does now even after
the world's oil reserves run out. This would also result in a reduction in air pollution.

3.3 Participant Theory

Corporate social responsibility, according to Edward Freeman and others, is the polar
opposite of stakeholder theory. Rather than beginning with a single business, the stakeholder
theory begins with the entire world and then investigates the various ethical obligations that
exist. The question is, "What are their legitimate claims on the business?" and then lists and
describes the organizations and people whose lives will be impacted by the company's
decisions. Which legal obligations and commitments can they impose on a specific company?
What legal recourse do they have to challenge the company's actions? According to
stakeholder theory, people whose lives are impacted by a company have both the right and
the duty to be involved in determining the company's course.

For example, in terms of corporate social responsibility, the owners of a factory are entirely
responsible for the proper disposal of waste. A stakeholder theorist, on the other hand, begins
with the locals, who may be exposed to environmental toxins, and then discusses business
ethics. They go on to say that these people have a right to clean water and air. Proponents of
stakeholder theory prioritize locals because they are the most likely to be affected by the
business. As a result, because they are stakeholders in the company, the company must
consider their perspectives when making decisions about the matter. They have a moral
obligation to participate in decision-making even if they do not own any company stock. This
is a critical point that cannot be overstated. In theory, a company's decisions affect the lives
of its shareholders and owners. Because the decisions made by the corporation will affect
their lives, they have a right to participate in its management.

Who are the specific individuals and groups with a business interest? The response will differ
depending on the industry, but the list could be lengthy. Stakeholders are people who own
stock in a company that manufactures chemicals for industrial use in a sleepy Massachusetts
town:

 “Business owners, whether they are private individuals or shareholders;

 Company employees;
 Customers and potential customers of the business;
 Suppliers and potential suppliers to the business;
 Every resident of the town who might be impacted by contamination from workplace
operations;
 Creditors whose money or loaned goods are combined with the company”.

The first five on the list are known as the five main stakeholders. Customers, suppliers,
employees, and shareholders are all examples of stakeholders.

The boundaries of stakeholdership are unclear. Because we all breathe the same air and the
global economy is so intertwined that decisions made in a boardroom on the East Coast can
cost someone their job in India, it is likely that every person on the planet is a stakeholder in
any serious factory. This is because everyone breathes the same air and everyone is affected
by boardroom decisions because the world economy is so interconnected. After that, the
effects will last for some time.

It would be impossible to put in place a stakeholder theory that is so rigid that it insists on
granting moral claims to everyone who is affected by a company's actions. To simply list the
individuals whose rights must be respected would take an eternity. In reality, a company's
stakeholders are the people whose lives are directly impacted by its actions. A business
decision should be directly related to a person's life.
The discussion of stakeholder ethics can begin once a specific group of a company's
stakeholders has been identified.8 According to this theory, the goal of a corporation should
be to maximize profit on the overall bottom line, with "profit" defined as improving
employee quality of life rather than maximizing financial gain. The collective bottom line is
the long-term impact of an organization's actions on all of its stakeholders. As a result, rather
than focusing solely on the interests of shareholders, company executives must ensure that
the interests of all stakeholders are considered, that any potential conflicts between those
interests are resolved, and that the company's medium- and long-term benefits are maximized
(the owners of the business). In other words, a corporate director spends time each day
explaining to the board of directors and shareholders how the current plans will increase
profits. They do, however, discuss their interests with others at other times of the day. They
talk with local environmentalists about pollution reduction strategies and ways to make
products safer for customers. Shareholders are viewed as individuals whose needs must be
met and whose opinions have real weight in the decision-making process at each stage.
Stakeholders are viewed similarly (at least in part).

Transparency is frequently cited as a top priority by advocates for stakeholder ethics. The
following is a summary of the argument: Each stakeholder must be aware of what is going on
if they are to actively participate in a corporation's decision-making process. It is critical to
recognize that, in the case of W. R. Grace, for example, taking into account stakeholders'
perspectives may not have resulted in the immediate cessation of chemical dumping into the
soil. Everyone who may be affected by the proposal should be informed about the chemical
runoff that is being discharged, the risks it poses to people and the environment, and the costs
associated with taking the necessary precautions to dispose of it in a more permanent and
secure manner.

As previously stated, we now have the information necessary to determine what W. R. Grace
should have done in order to adhere to the majority of ethical theories. Those who had a
complete understanding of the situation at the time, on the other hand, might not have been as
confident because it was not immediately obvious that the runoff would cause such serious
problems. This is because it was not immediately obvious that the runoff would cause such
serious issues (or any problems at all). It's possible that the owners preferred dumping
because it increases profits. The issue then shifts to the local labor force. It is critical to

8
T. Donaldson and L. E. Preston(1995)'work, ' The Stakeholder Theory of the Corporation: Concepts, Evidence
and Implications,' The Academy of Management Review, 20(1), pp. 65-91
remember that safe waste removal may have resulted in lower business profits, job losses, or
a delay in wage increases for some employees. As stakeholders, it's possible that they would
have approved of the dumping. Local politicians may view higher tax collections as a benefit
of high business profits because they have more money to collect in taxes.

Corporate directors, according to stakeholder theory, must unquestionably appeal to all

parties and strike a balance between the interests and welfare of all stakeholders. This is
critical in order to maximize benefits for a diverse range of people whose lives are impacted
by the company.

3.4 The Three Forms of Corporate Social Responsibility: A Conclusion

Corporate board members have had the difficult and specific responsibility of guiding the
company's operations toward profitability throughout its history. Businesses with the highest
profits, sales, and customer counts have always been the most successful. Moral
considerations have centered on the duty to protect the primary interest of the owners, which
is likely to result in a return on their investment. This fundamental responsibility serves as the
foundation for their organizational structure. The study of business ethics has almost entirely
been dominated by the conflicts and conundrums that arise within organizations when people
try to cooperate in order to succeed in the fiercely competitive business world. Stakeholder
theory, the triple bottom line, and the concept of corporate social responsibility have all
contributed to the emergence of a new area of business ethics. In the modern era, corporate
directors are expected to be aware of and responsive to a wide range of responsibilities that
extend beyond the town where their company's headquarters is located to the communities
and society that are nearby.
 CHAPTER 4: A JUDICIAL APPROACH AND STANDARD
GUIDELINES IN CSR PRACTICES

4.1 Introduction

In the twenty-first century, the Earth is already under too much population pressure. To meet
people's daily needs, a significant amount of food, clothing, shelter, and other necessities are
required. Threats to the planet include species extinction, ecosystem destruction, climate
change, global warming, and power struggles between various governments and
multinational corporations.9 Many legal issues are being investigated in order to use CSR to
address these issues for the benefit of society. These include, among other things,
multinational corporations' practical roles, environmental and ecological balance issues,
employee fairness in the workplace, bribery of judges and other officials, lobbying for or
against governmental regulations to reduce greenhouse gas emissions, and funding for
political campaigns. Many legal issues are being investigated in order to use CSR to address

9
Tineke Lambooy in his paper , Legal Aspects of Corporate social Responsibility, Utrecht Journal of
International and European Law, Vol. 30, p. 78(2014), has portrayed a picture of relevance of law and its role in
CSR
these issues for the benefit of society. The Earth Charter's preamble states in this context,
"The history of Earth has reached a critical crossroads, and it is time for humanity to choose
its path forward." The world's growing interdependence and fragility pose a serious threat as
well as a significant opportunity. If we are to progress, we must recognize that, despite the
enormous diversity of Earth's civilizations and life forms, we are all members of the same
human family with a common goal. This demonstrates how the law has a significant impact
on social behavior, either benefiting or harming society. Law is the establishment of a
requirement for someone to do something or refrain from doing something in the name of
humanity and society as a whole. One of the most important responsibilities of the state is the
administration of justice, which is overseen by the court through a judicial process. There
would be no need for a legal or judicial system if there were no dishonest people in a society.
On the other hand, some members of society tend to violate social norms, whether or not they
are codified, and the legal system and the law play a role in this situation.

4.2 Linking CSR and the Law10

CSR as a social science is related to corporate law, corporate governance, environmental law,
criminal law, tort law, international law, and European law. These and numerous other laws,
whether directly or indirectly, have an impact on how it is organized. To put it another way,
corporate social responsibility, or CSR, is the culmination of all of these rules that the world
uses to address a variety of CSR and business issues. The law has a significant impact on
whether or not businesses consider sustainability and CSR issues. The connection between
CSR and legal principles is not fully explained. The aforementioned laws have a significant
impact on corporate social responsibility-related actions. The Companies Act of 2013
requires Indian companies to participate in CSR initiatives within certain geographic areas.
Lowering infant and maternal mortality rates, combating HIV/AIDS and AIDS-related
illnesses, malaria, and other diseases, protecting the environment, improving vocational
skills, and empowering women are some of these areas. Improving education, advancing
gender equality and women's empowerment, eradicating extreme poverty, and eradicating
extreme hunger and poverty are among the other areas. Environmental law focuses on
environmental issues, tort law focuses on civil wrongs, and so on.

10
Karin Buhmann(2006) in her seminal paper, '' Corporate social responsibility: What role for law? Some
aspects of law and CSR, Corporate Governance, the International Journal of business in society, Vol. 6, No. 2,
pp.188-202 has discussed in details the relations between law and CSR.
4.3 The Earth Charter's involvement in CSR

The main document that drives CSR activity is the Earth Charter. It is the embodiment of
four pillars and sixteen principles.11

Principles

The Earth Charter is backed by four pillars and sixteen principles, including:

I. “Honoring and Protecting Community Life

1. Show respect for the Earth and all species.

2. Show love, compassion, and understanding to the community of life.

3. Create democratic societies that are fair, inclusive, long-lasting, and peaceful.

4. Preserve the beauty and prosperity of the Earth for present and future generations”.

Part II: Ecological Integrity

5. “Maintain and repair the ecological systems of the planet, with a focus on biological
diversity and the natural processes that support life.

6. Avoiding harm is the best way to safeguard the environment, and when understanding is
lacking, use caution.

7. Adopt production, consumption, and reproduction patterns that protect the environment,
human rights, and social cohesion.

8. Promote the free sharing and widespread use of the knowledge attained while advancing
the study of ecological sustainability”.

Part III: Social and economic justice

9. “Eliminate poverty as a moral, social, and ecological need.

10. Ensure that institutions and economic activity at all levels support equitable and long-
term human development.

11. Confirm that gender justice and equality are necessary for sustainable development, and
ensuring that everyone has access to economic opportunity, health care, and education.

11
Y. Ronald (2013) 's paper, ''Legal Framework for CSR in India" retrieved
frombhttp://www.researchgate.net/publication/268226026 dated 19/09/2017
12. Uphold everyone's equal right to a natural environment that supports their human dignity,
physical health, and spiritual well-being, paying particular regard to the rights of minorities
and indigenous peoples”.

Part IV: Peace, democracy, and nonviolence

13. “Promote inclusive participation in decision-making, the strengthening of democratic

institutions at all levels, and access to the legal system.

14. Include the information, attitudes, and skills required for a sustainable way of life in both
formal education and lifelong learning.

15. Show concern and respect for all living things.

16. Encourage a culture of acceptance, peace, and nonviolence”.

Adherence to OECD recommendations (NCPs) and the maintenance of a network of National

Contact Points are critical for implementing the OECD Guidelines for Multinational
Companies on International Obligations, State Responsibility, and Judicial Review. 180 Any
issues that fall under the purview of the OECD Guidelines must be resolved by the NCP of
each OECD Member State, which must be established within each Member State's domestic
system. The OECD Guidelines cover a wide range of topics. Stakeholders in their states must
file complaints with the NCP about companies that have violated the OECD Guidelines. Scott
Robinson provides consulting services on the issue of a state's legal obligation to establish an
NCP. The NCP is expected to work with other governments on issues and to submit reports
on a regular basis. He believes that states should provide quick and easy access to
administrative, impartial judicial, and non-judicial procedures, as well as remedies and
redress, even when corporations are responsible for violations of human rights and the
environment.

4.4 Environmental Protection through CSR: Legal Aspects

According to Principle 1 of the Stockholm Conference, humanity is solely responsible for

preserving and improving the natural environment. Both private individuals and publicly
traded corporations are subject to this requirement. Later formulations gained more support
for the idea that everyone has a responsibility to protect the environment from harm caused
by improper or excessive use of natural resources. As required by law, all conduct must be
guided by the principles of the World Charter. Everyone bears responsibility for
environmental protection in accordance with the fundamental tenets governing human rights
and the environment. All of these tactics include moral obligation, even if none of them
impose a legally binding obligation on a person. They do, however, believe that criminal
responsibility is necessary for enforcing international environmental law. In this context, it is
critical to discuss the Bhopal Gas Tragedy, which occurred in India in the early 1980s. The
tragedy was caused by the release of toxic gases into the atmosphere. Following the terrible
Bhopal disaster, environmentalists, social workers, governments, the general public, and
those who appreciate nature began thinking about ways to prevent similar disasters in the
future. As a result, legislative and administrative action was taken. Before the Indian
Supreme Court established the absolute liability rule, one of the worst accidents in human
history, the Bhopal Gas Leak Accident, had occurred. In M. C. Mehta v. Union of India, the
Supreme Court of India developed the concept of absolute culpability for injury caused by a
hazardous industry by interpreting Article 32's authority to issue directives and orders in
accordance with appropriate procedures. Article 32 gives the Supreme Court the authority to
issue orders and directives in accordance with the procedures in place. 12 Judge P. N.
Bhagwati concluded that the case should be dismissed, emphasizing the importance of
complete accountability for the hazardous substance management company. When this case
was brought before the Supreme Court, the Bhopal Gas Case was still pending, and it was
expected that the decisions made there would have an impact on how the Bhopal case turned
out. In the case of M. C. Mehta v. Union of India, the learned judge stated that an
organization engaged in a hazardous or inherently dangerous industry that may jeopardize the
health and safety of those who work in the factory and live nearby has an absolute and non-
delegable duty to the community to ensure that no one is injured as a result of the hazardous
or inherently dangerous nature of the activity. This obligation is owed to you by the
community. It is necessary to assume that the company owes full compensation to the parties
who were harmed. The adoption of absolute liability standards by the Supreme Court
rendered businesses engaged in naturally occurring activities defenseless in the event of an
accident.

The fundamental ideas of the Ryland v. Fletcher13 decision is embodied in this. The "strict
liability rule" was established in Ryland v. Fletcher. The Supreme Court of India considered
whether the 19th-century strict liability rule needed to be modified in the M. C. Mehta case.
The Supreme Court decided in Deepak Nitrate v. State of Gujarat that the extent of the
12
AIR 1987 SC 982
13
1866 LR. 1 EX. 256, 1868 LR. 3 HL. 330
victim's suffering should be considered when determining liability rather than the industry's
ability to pay damages. It was determined that "this two hundred year old tortious liability
principle cannot be taken as it is in the modern world without modification" because the
"very principle was developed in the nineteenth century and during the period when the
industrial revolution was just beginning." The Supreme Court of India issued an order in the
case of Indian Council for Enviro-Legal Action v. Union of India directing the Central
Government to determine and recover from the respondents the cost of corrective measures
related to environmental contamination in a hamlet in the state of Rajasthan. Section 3 of the
Environment Protection Act expressly authorizes the Central Government to take any and all
actions it deems necessary or appropriate to protect and improve the quality of the
environment.14

The Andhra Pradesh High Court invoked Articles 51A (g) and 48A once more in T.
Dhamodar Rao v. Special Officer, Municipal Corporation of Hyderabad to prevent the
conversion of open land into a residential complex. T. Dhamodar Rao began the legal
process. The court held both the state and its citizens accountable for the preservation of the
natural environment. The Supreme Court of India upheld the fundamental argument of the M.
C. Mehta case in the case Indian Council for Environment Legal Action v. Union of India.
"Once an activity is hazardous or inherently dangerous, the person performing the activity is
liable to make up the loss caused to any other person by his activity, regardless of whether he
exercised reasonable care while performing the activity, “the Supreme Court concluded. This
is by far the better and more necessary standard”.15

The new rule is far more inclusive than the previous one in every way. There are no
exceptions to this rule; however, its parameters may be adjusted as needed. Justice ES
Venkataramaiah of the Supreme Court of India issued a significant ruling in the Ganga
pollution/Kanpur Tanneries Case in the case of M. C. Mehta v. Union of India. The order
required the closure of a number of Kanpur's polluting tanneries. The Taj Mahal, one of the
world's seven wonders, is in jeopardy due to high levels of toxic emissions produced by
Mathura Refineries, Iron Foundries, and a variety of other chemical businesses. As a result of
acid rain, additional historical sites, including the Taj Mahal, were placed in extremely
precarious positions within the Taj Trapezium. The Supreme Court of India issued a number
of orders in the historic case M. C. Mehta v. Union of India, also known as the Taj Trapezium

14
AIR 1999 SC 1502
15
AIR 1996 SC 1448
Case, including a suggestion that companies switch to compressed natural gas (CNG) and a
prohibition on the use of coal and coke. In the case of Rural Litigation and Entitlement
Kendra, Dehradun v. State of Uttar Pradesh, Justices P. N. Bhagwati and Ranganath Mishra
of the bench provided the term's first definition. In 1987, the non-governmental organization
RLEK sued the Valley limestone quarry. It was widely assumed that humanity's limitless
resources were not meant to be depleted in a single generation. Natural resources must be
handled with caution and care in order to avoid harming the ecology and the environment.
This action was taken to avoid any negative outcomes. It may be useful to cite the
Environmental Impact Assessment to support the legal approach to CSR. This is because the
Environmental Impact Assessment was involved in the case of Indian Council for
Environmental Legal Action v. Union of India. 16 In this case, the "Polluter Pays" principle
was used. According to this concept, those who cause pollution should be held accountable
for any damage that results from it. The Supreme Court ordered coastal governments to
develop coastal management plans by a specific deadline and imposed restrictions on
industrial and construction activities within 500 meters of the high tide line. The Court also
mandated that coastal governments develop management plans by a certain date.

Another important judgement rendered by the Apex Court Bench, comprised of Justice Ruma
Pal and B. N. Srikrishna, in the case of Essar Oil Ltd. v. Utarsh Samiti 17, “merits mentioning.
The region's flora, wildlife, and overall ecological balance were in jeopardy as Essar Oil Ltd.
laid pipeline for its Jamnagar Oil refinery”. As a result, the environmental advocacy
organization Utarsh Samiti became involved and filed a Writ Petition. In its decision, the
cited Bench emphasized that "the need to protect ecology and the environment should not
impede economic or other development; however, development should not be permitted if it
harms ecology or causes widespread environmental harm and degradation." "The need to
protect ecology and the environment should not impede economic or other development,"
according to the cited Bench. Development and the environment must coexist without
causing harm to either. Instead, both goals should be pursued while maintaining an
appropriate level of environmental stewardship. Businesses must take the necessary
precautions when considering a proposal in accordance with this legal requirement. The law's
purpose is to prevent environmental harm from any industry expansion, so this is done to
ensure that this does not occur. If the role of the Supreme Court in environmental
constitutional interpretation is unclear, the legal approach to CSR may remain insufficient.
16
AIR 1999 SC 1502
17
AIR 2004 SC 1834
The 42nd Amendment added Articles 48A and 51A(g) to the Indian Constitution, which deal
with Fundamental Duties and Directive Principles of State Policy, respectively.

The Apex Court of India stated in Sachidananda Pandey v. State of West Bengal 18 that the
court was obligated to take environmental preservation into consideration and issue clear
instructions to any firm in the circumstances without hesitation. In other words, the court
would give environmental concerns the highest priority. The government is required by
Article 48A to work to safeguard and enhance the nation's forests and wildlife, as well as the
surrounding environment. According to Article 51A(g) of the Indian Constitution, every
citizen of the nation has the right to seek legal redress if necessary and has a duty to protect
and enhance the environment. In Damodar Rao v. S. O. Municipal Corporation, the Supreme
Court of India ruled that environmental pollution and spoliation, which contaminate and
poison the atmosphere over time, should also be seen as a breach of Article 21 of the Indian
Constitution.

4.5 Conclusion

Businesses and society have successfully pursued and implemented corporate social
responsibility for the benefit of society as a whole (CSR). It covered tort law, the United
Nations Framework Convention on Climate Change (UNFCCC), the Companies Act of 2013,
and Indian Constitutional Articles 21, 48A, and 51A(g). Because CSR is only required in
India, there are numerous interpretations of what it entails. The Supreme Court investigates a
wide range of issues, including child labor, human rights violations, ecological balance, and
environmental protection. Any of the aforementioned corporate actions will give rise to legal
action under tort law or other applicable legislation. This chapter provides examples of how
laws and other national and international pronouncements have impacted and been influenced
by CSR-related concerns. The European Commission defines "corporate social
responsibility" (CSR) as "the obligation of businesses to account for the effects they have on
society."

It has been debated throughout the thesis to what extent this specific definition of CSR is all-
inclusive. This was done due to concerns about CSR. In terms of corporate social
responsibility, specific articles of the Indian Constitution and relevant sections of the
Companies Act of 2013 govern Indian corporations (CSR). In order to operate legally,
multinational corporations must adhere to other conventions and conferences in addition to
18
AIR 1987 SC 1109
those of the United Nations, the United Nations Educational, Scientific, and Cultural
Organization (UNESCO), and the United Nations Children's Fund (UNICEF). The Supreme
Court and High Court rulings on various issues relating to corporate social responsibility
govern the judicial process. Another step taken to address CSR-related issues is to investigate
the statements made by various international bodies. The concept of corporate social
responsibility (CSR) has evolved into a sophisticated one as a result of the efforts of a
number of multinational corporations widely regarded as pioneers in the field of CSR
integration. It is now one of the most important factors when conducting business. As
previously stated, the media exaggerated public crises such as racial discrimination,
environmental degradation, and child labor. This raises the question of whether the harm to a
company's reputation is what motivates domestic and international CSR regulations to be
implemented. Because CSR practices are still in their infancy in India, international
organizations' guidelines and judicial support are extremely beneficial in bringing them to
maturity. The GRI reference may be appropriate in accordance with internationally
recognized standards and guidelines. The Global Reporting Initiative (GRI) Guidelines are a
set of rules designed to encourage businesses to act ethically.

CERES and the United Nations Environment Programme established the Global Reporting
Initiative (GRI) in 1997. (UNEP). Because it allows organizations to disclose non-financial
information about their operations and activities, the Global Reporting Initiative (GRI) is a
useful tool for developing reporting standards. The GRI principles cover social behavior,
environmental issues, and corruption-related issues in addition to human rights issues. Except
for India, the majority of countries regard CSR as a choice rather than a requirement. The
UN, UNESCO, UNDP, and other organizations' standards guidelines, as well as court
decisions in tort law and related legislation, serve as guidelines for addressing CSR issues.
These recommendations are concerned with CSR issues. Because there is no uniformly strict
legal framework requiring CSR compliance, many businesses have developed their own
sustainability frameworks. Coca-Cola, for example, has a code of business conduct that
outlines what the company expects of its employees in areas such as combating corruption
and dealing with competition. 207 Furthermore, by signing the Global Compact, the company
has demonstrated its commitment to international CSR standards. 208 Future plans call for
judicial and non-judicial support to improve CSR practice and establish it as a nationally and
internationally recognized institution. Future advances in CSR practice are expected with
support from both judicial and extrajudicial sources.
 CHAPTER 5: CONCLUSION AND SUGGESTIONS

5.1 Summary and General Remarks on International and Indian CSR Practices

Many businesses operate in India, engaging in a wide range of activities such as providing
microcredit, empowering women, educating the general public, and providing healthcare.
Despite the fact that many Indian businesses have embraced the widely recognized practice
of corporate social responsibility (CSR), numerous surveys conducted in India show that
CSR is still in disarray. Each company defines corporate social responsibility based on its
specific circumstances and constraints. As a result, all CSR initiatives are merely
philanthropic initiatives or extensions of them. Profit sharing appears to be the only
component of corporate social responsibility (CSR) that has grown in India. To strengthen
sound business practices, a critical component of sound business practice, the phenomenon of
business understanding and active participation in equitable social development must be
strengthened.

In India, corporate social responsibility (CSR) practices prioritize societal and human issues
over environmental ones. Professionals in CSR have discovered that developing CSR policies
that prioritize the welfare of society as a whole, as well as providing fundamental and general
education to society's citizens, are far more important. It also addresses issues such as open
and honest business dealings with creditors, transparent corporate governance, and positive
labor relations. When putting CSR principles into action, they make an effort to adhere to the
CSR-related regulations outlined in the Companies Act of 2013 as well as the best practices
of the relevant industry. The use of renewable resources, solid waste management, and trash
recycling remained the only major CSR initiatives. Simultaneously, it was discovered that
initiatives to reduce energy consumption, manage water pollution, and stop soil erosion,
among other things, are behind schedule. Child labor, the prevalence of workplace conflicts,
failure to pay the minimum wage, and issues with employee health insurance are just a few of
the issues plaguing the Indian commercial sector. Employee-community issues, employee
retirement benefits, specific rights for female employees, and employee compensation for
workplace accidents, on the other hand, are not given enough attention or weight by Indian
businesses. Donations for the establishment of hospitals, midday meals in schools, the
distribution of books and educational materials to students from socially and economically
disadvantaged groups, the promotion of sanitation and cleanliness among the general public,
and the establishment of neighborhood libraries are among the programs included in this
category. The main reasons for implementing corporate social responsibility are regulatory
compliance, the development of product and service brands, the promotion of corporate
image in society, becoming a model corporate citizen (the term "corporate citizen" here refers
to becoming a good neighbor), and gaining the confidence and support of the community.
When it comes to the issues that prevent the corporate sector from implementing effective
CSR practices, a lack of people with the necessary technical knowledge, skill, experience,
and expertise has been identified as a limiting factor. This was discovered while researching
the challenges that businesses face when implementing CSR practices. The perception that
CSR procedures are costly and that proper guidance is lacking also impedes the development
of a respectable level of CSR practices. Middle management and hired CSR consultants
collaborate to put the CSR delivery mechanism in place. This is because internal business
capabilities are still not at a level where CSR activities can be carried out. CSR policies are
typically developed and implemented by an organization's middle management levels. When
it comes to holding their various stakeholders accountable, India's corporate sector prioritizes
its workers, clients, and trade unions. Following that are the community and shareholders,
followed by financial institutions and creditors, and finally shareholders. Understanding the
effects of CSR initiatives through consumer satisfaction surveys, cause-related marketing
campaigns, and other comparable initiatives benefits the Indian business community as well.
Furthermore, businesses prioritize the development of their workforce's skills by providing
ongoing training, sporadic on-the-job training, and so on. The extent to which they do so,
however, is unremarkable. Companies in India develop long-term CSR strategies based on
regular feedback from stakeholders such as investors, competitors, trade associations, the
media, the government and regulators, clients and suppliers, and, where possible, merchant
chambers of commerce. Furthermore, some elements, such as the Companies Act of 2013,
human rights concerns, labor relations, and human resource policies, have a greater impact on
business performance. Transparency in corporate governance, company mission, vision, and
objectives, as well as interactions with national chambers of commerce and international
trade groups are all given the weight they deserve when comparing the practices of Indian
corporations to those of corporations based in other countries.

It is widely acknowledged that India is a developing country attempting to meet its citizens'
social, legal, and economic needs. Ethical concerns are also growing in importance, though
not at an alarming rate. India lags behind economically developed nations in terms of CSR
activities due to its status as a developing country with a labor-intensive economy. The term
"corporate social responsibility" refers to a company's promise to implement policies and
participate in activities that benefit the country's environment and population. Offering a CSR
definition that is consistent with Indian practice, according to the overall analysis, may be a
holy endeavor. As a result, the promise to provide a CSR definition consistent with Indian
practice can be considered a definition of CSR. Instead of focusing solely on activities that
increase profits, the Indian corporate sector should engage in CSR activities that improve
their economic viability. Giving to charities and doing other types of volunteer work in the
community are examples of these activities. The "Three P Model" (People, Planet, and Profit)
is the most likely framework. To ensure the company's long-term success and viability,
corporate social responsibility (CSR) practices should prioritize people's needs over those of
the environment or the planet, and profit should come last. Corporate social responsibility, or
CSR, provides numerous benefits to Indian businesses, including the ability to retain
employees, increase their level of commitment, and improve brand perception. An employee
would feel like they belonged to the company if the workplace was pleasant and they were
treated with respect, for example. According to a recent study, Indian businesses that practice
corporate social responsibility are more likely to retain their employees than those that do not
(CSR). This is acceptable because it increases employee happiness, and only satisfied
employees will stay with their companies for a long time. Only satisfied employees will stay
with the company for a long time. Employees are encouraged to contribute more because
their employers provide a pleasant working environment that motivates them to work more
effectively. Corporate social responsibility is promoted by encouraging employees to work
more productively. The main issue that businesses are currently facing in terms of cost
inefficiency and unproductive labor is intense market competition, which frequently results in
wage rate reductions and the provision of subpar working conditions. Because CSR
necessitates financial resources that must be rationed when supply and demand are out of
balance, Indian businesses are less likely to participate in CSR. In contrast to the need-based
CSR activities used by private sector businesses and multinational corporations, the majority
of public sector organizations have unique management rules for program execution.
However, assisting those who are less fortunate or excluded from society will be simple if
they set aside a specific amount of money for CSR initiatives that will help the
socioeconomic system develop over time. In comparison to the private and multinational
corporation sectors, the public sector only devotes 2% of its net earnings to corporate social
responsibility. According to Central Public Sector Enterprises, the budgeted allocation for
CSR activities has been increased to at least the statutory limit for all businesses with a profit
after tax (PAT) of more than Rs. 1,50,000. 500 billion per year. This contributes to the
development and enhancement of the company's public image. On the other hand, one could
argue that corporate social responsibility, or CSR, is still in its early stages in India and that it
needs to be strategically integrated into businesses' core business operations. Given that the
private sector and multinational corporations have significantly more financial, human, and
technological resources than the government, it is critical to recognize that the government
cannot solve all of the world's problems on its own. As a result, they must carry out
successful CSR initiatives. This thesis will focus on India's and other countries' perspectives
and CSR practices. The researchers discovered that developed nations with strong socially
effective and efficient CSR mechanisms include the United States, the United Kingdom of
Great Britain and Northern Ireland, Germany, France, Canada, and Japan. The rule of law is
important in determining whether these countries have a corporate social responsibility
(CSR) culture based on moral and ethical imperatives. Businesses almost never wait for
legislative guidance before implementing CSR or CSR initiatives because CSR is considered
a mandatory practice in some countries. CSR, on the other hand, is widely regarded
negatively in India, Sri Lanka, Bangladesh, South Africa, and Pakistan. Because they are not
required to do so by regional law, these countries question the necessity of implementing
CSR initiatives. Corporate social responsibility (CSR) programs are developing and being
implemented in significant and voluntary ways in countries such as China, Malaysia, and
South Korea. The best CSR strategy for establishing and maintaining a sustainable society is
"live and let live," which recognizes that society owns the resources. It is critical to recognize
that society controls the resources.

5.2 Suggestions for Broader Actions to Stop Corruption

CSR should include a variety of specific and appropriate actions to deter corrupt behavior by
multinational corporations operating in developing countries. In order to effectively reduce
instances of corruption, which is a critical component of corporate social responsibility, the
Companies Act of 2013 or any other applicable legislation must include legal safeguards
(CSR).

5.3 Criteria for Companies to Become Socially Responsible

A company must meet all four requirements listed in A. B. Carroll's definition of corporate
social responsibility (CSR) in order to be deemed socially responsible: dimensions of money,
law, ethics, and free will. However, it can be difficult for businesses to meet the demands of
all four CSR dimensions at once. Therefore, it is advised that flexibility be implemented so
that companies can simultaneously meet the needs of one aspect and the needs of another.
Companies must engage in CSR activities, according to the Companies Act of 2013 and the
CSR Rules of 2014. These regulations came into effect in 2014. It is also advised that the
CSR activities list be as thorough as possible. It is clear that following CSR practices'
economic and ethical requirements is much easier than following their legal and discretionary
requirements.

5.3.1 Rewards for CSR Activities

To entice companies to participate in CSR initiatives, the government and those in positions
of authority should create the proper incentives, such as tax deductions, exemptions, and
rebates.

5.3.2 Voluntarily engaging in CSR

CSR is considered fully operational in countries where voluntary participation is valued over
mandatory legal compliance. In a country like India, where businesses see corporate social
responsibility as a burden, the government has mandated participation. The survey results
show that several countries take CSR initiatives seriously even though they are not required
by law. As a result, adopting CSR best practices should not be mandated by law; rather, it
should be promoted as a component of successful companies' corporate cultures.

5.3.3 CSR for Sustainability, Innovation, and Branding

Corporate social responsibility (CSR) should be a useful tool for improving branding,
innovation, sustainability, and shareholder value maximization. CSR is an abbreviation for
corporate social responsibility. Furthermore, employees and suppliers must be treated fairly.
Compliance with local laws and ordinances should be part of a company's CSR practices to
ensure sustainability. This contributes to the company's long-term survival.

5.3.4 Commercial Performance for CSR

Because voluntary corporate social responsibility practices are linked to businesses' financial
performance, they must be implemented immediately. Businesses that sell products with
added value and conduct business dealings involving cutting-edge products in a fiercely
competitive market are more resilient.

5.3.5 CSR for National Development

Because it increases public trust in the social welfare efforts made by businesses operating
under the CSR umbrella, corporate social responsibility can be used as a tool for the growth
of social capital, the strengthening of nations, and the expansion of commercial opportunities.

5.3.6 CSR Practice Alignment with Business Goals

Due to the possibility that top management will support the development and implementation
of CSR initiatives by the companies, CSR practice should be aligned with the organizations'
mission, vision, and objectives to ensure CSR compliance.

5.4 Individual CSR Legislation

It is recommended that comprehensive, independent legislation be enacted that is compatible
with the relevant provisions of the Companies Act of 2013, the Foreign Exchange
Management Act of 2000, the Consumer Protection Act of 1986, the Air Pollution Control
Act of 1980, and other related laws, as well as any additional national laws and rules that
have anything to do with CSR management. It is also recommended that this legislation be
consistent with any other national laws and acts that are directly or indirectly related to the
topic.

Suggestions such as economic activities, profit sharing with society, and corporate citizenship
have aided corporate social responsibility practice in India. Opportunity to Serve is a term
used to describe corporate social responsibility, or CSR. Unwanted law, or UL, prevents
India from implementing corporate social responsibility. As a result, the aforementioned
benefits could be given more weight in order to improve corporate social responsibility
practices in India. Pakistan, Bangladesh, South Africa, Sri Lanka, and Malaysia, for example,
do not engage in extensive CSR initiatives. The United States, the United Kingdom, Austria,
Canada, Japan, Germany, China, Brazil, and India are examples of developed economies.
Less developed countries should therefore place a greater emphasis on implementing better
CSR practices. According to factor a, corporate governance, transparency in dealing with
creditors, environmental concerns, philanthropic and moral concerns, UNGC, OECD
Guidelines for multinational companies, United Nations Guiding Principles on Business,
human rights, solid waste treatment, environmentally friendly operations, water pollution
control, atmospheric pollution control, greenery initiatives, and renewable energy sources all
have a significant impact on a company's sustainability. Operational factors such as employee
welfare, financing, market management, supply chain management, training, civil society,
regulatory, ethical, and environmental factors, among others, must be strengthened for better
CSR practices.

BIBLIOGRAPHY

 Nunnally, J. C. 1978. Psycometric theory. 2nd ed. New York: McGraw-Hill.

 O'Hare, M. 1982. Information strategies as regulatory surrogates. In: Bardach, E. &
Kagan, R. (eds), Social regulation: Strategies for reform: 221-36. San Francisco:
Transaction Books.
 O'Rourke, D. 2003. Outsourcing regulation: Analyzing non-governmental systems of
labor standards and monitoring. The Policy Studies Journal, 31(1): 1-29.
 OECD. 2001. Private initiatives for corporate responsibility: An analysis. Paris:
Organisation for Economic Cooperation and Development.
 Ogden, S. & Watson, R. 1999. Corporate performance and stakeholder management:
Balancing shareholder and customer interests in the UK Privatized water industry.
Academy of Management Journal, 42(5): 526–38.
 Oliver, C. 1997. Sustainable competitive advantage: Combining institutional and
resource-based views. Strategic Management Journal, 18(9): 697-713.
 Oppenheim, A. N. 1966. Questionnaire design and attitude measurement. New York:
Basic Books.
 Oskarsson, K. & von Malmborg, F. 2005. Integrated management systems as a
corporate response to sustainable development. Corporate Social Responsibility and
Environmental Management, 12: 121-28.
 Othman, R. & Ameer, R. 2009. Environmental disclosures of palm oil plantation
companies in Malaysia: A tool for stakeholder engagement. Corporate Social -
Responsibility and Environmental Management, 17(1): 52-62.
Paine, L., Deshpande, R., Margolis, J., D. , & Bettcher, K. E. 2005. Up to code.
Harvard Business Review, 83(12): 122-33.
 Palazzo, G. & Scherer, A. G. 2006. Corporate legitimacy as deliberation: A
communicative framework. Journal of Business Ethics, 66(1): 71-88.
 Pallant, J. 2005. SPSS survival manual. 2nd ed. Berkshire: Open University Press.
Pallister, J. & Law, J. 2006. A dictionary of business and management 4th ed. Oxford:
Oxford Universtiy Press.
 Podsakoff, P. M. & Organ, D. W. 1986. Self-reports in organizational research:
Problems and prospects. Journal of Management, 12(4): 531-44.
 Podsakoff, P. M., Lee, J.-Y., MacKenzie, S. B., & Podsakoff, N. P. 2003. Common
method biases in behavioral research: A critical review of the literature and
recommended remedies. Journal of Applied Psychology, 88(5): 879-903.
 Porter, M. E. & Kramer, M. R. 2003. The competitive advantage of corporate
philanthropy. In: Harvard Business Review (ed), Harvard business review on
corporate responsibility: 27-64. Boston: Harvard Business School Press.
 Porter, M. E., Ketels, C., & Delgado, M. 2009. The microeconomic foundations of
prosperity: Findings from the business competitiveness index. In: Schwab, K. (ed),
The global competitiveness report 2009-2010: 49-57.
 Geneva: World Economic Forum. Post, J. E., Preston, L. E., & Sachs, S. 2002.
Redefining the corporation. Stakeholder management and organizational wealth.
California: Stanford University Press.