-Palima Pandey

Corporate Social Responsibility - Unit 1

CSR Concept & Meaning
CSR stands for Corporate Social Responsibility and is a business’s approach
to sustainable development by delivering economic, social and environmental
benefits. It also encapsulates the initiatives by which a company takes
responsibility for its effect on social and environmental well-being. In essence,
CSR looks beyond the company profits and focuses on benefiting the greater
community.
CSR is the continued commitment of businesses to conduct themselves ethically
and contribute to economic development while improving the quality of life of
their employees and families, as well as the local community and society in
general”
CSR for different interest groups
 Responsibility towards society
 Responsibility towards government
 Responsibility towards owners
 Responsibility towards shareholders
 Responsibility towards employee
 Responsibility towards suppliers
 Responsibility towards consumers
Nature of CSR
 CSR is normative in nature.
 CSR is a relative concept.
 CSR may be started as a proactive or reactive.
 All firms do not follow the same patterns of CSR.
 Legal & socially responsible.
 Legal but socially irresponsible.
 Illegal but socially responsible.
 Illegal & socially irresponsible.
Types of Social Responsibility

1. Philanthropic Corporate Social Responsibility:

Philanthropies’ responsibility intends to serve mankind. This standard focuses
on the prosperity of the unprivileged or poor individuals who need our help to
sustain this planet.
Organizations satisfy their philanthropic duty by giving their time, money to
good cause and associations at public or worldwide levels.
These gifts are particularly given to a group of noble causes including common
liberties, public disaster relief, education programs, and more.
2. Environmental Responsibility:
Companies will undoubtedly satisfy their monetary obligation since the
consciousness of environmental issues is developing generally among the
consumers.
They need organizations to find fundamental ways to save our planet and save
every one of the lives in it. Companies that are worried about decreasing air,
land, and water contamination have expanded their remaining as great corporate
residents while profiting society.
Environmental CSR involves the assessment of the company’s production
difficulties to locate wasteful activities and destroy them from the business
structure.
3. Ethical Responsibility:
It is about looking after the well-being of the employees by ensuring fair labor
practices for the employees.
Ensuring fair labor practices for employees means that there will be no gender,
race, or religious discrimination among the employees. It ensures that each
employee will be given equal pay for equal work.
4. Economic Responsibility:
Economic responsibility is an interconnected domain that concentrates to find
some kind of equivalence between business, environmental, and philanthropic
works.
It submits to the set principles of ethical and good regulations. In this unique
situation, companies strive to discover an answer that can work with their
business development and create benefits by profiting the community.
CSR Advantages/Relevance
A recent report from Reputation Institute, as published in Forbes magazine,
found that 42% of how people feel about a company is based on their perception
of its CSR activities. The advantages of CSR are listed as follows:
1. It encourages customer loyalty

People are giving to charitable organizations in high numbers. Millennials are

especially active. To attract customers and keep their loyalty, corporations need
to pay attention to what customers care about. If a customer feels like they are
living out their values by supporting a certain business, they are more likely to
stick with the brand. They’ll feel a sense of pride when buying from the
business and are more likely to recommend it. Loyal customers are the best
marketing a company can get.

2. It gives businesses a competitive edge

Customers care about a business’s part in social issues and they will be loyal to
corporations they believe align with their values. That means corporations that
cater to these customers have a competitive edge over companies that don’t.
They might offer the same products and services, but the fact that they are
making corporate responsibility a priority makes them more appealing. Drawing
that distinction is essential for marketing purposes.

3. Corporate responsibility makes employees happier and more fulfilled

Research shows that employees of businesses that prioritize CSR are happier
and more fulfilled. 80% of employees report feeling more purpose when they
believe their work makes a difference in the world. That sense of purpose is
essential to employee loyalty and dedication. When personally fulfilled, people
are less vulnerable to fatigue and stress. They’re also more likely to stay with
the company.

4. It makes a business more sustainable

When a corporation decides to make corporate responsibility a focus, it needs to

be more innovative and creative. It can’t be “business as usual.” Nurturing
innovation and creativity forces a company to stay relevant and adjust according
to what customers want. These days and for the foreseeable future, customers
want social responsibility. The ability to adapt is important for longevity and
sustainability.

5. Customers are willing to pay more

Corporate responsibility is great for business in a few ways. One of them is that
companies can charge more for their products and services. A Nielsen Global
Survey of Corporate Social Responsibility revealed that more than half of the
surveyed customers are willing to pay more if the company is committed to
corporate responsibility.

6. It attracts more investors

Investors care about a business’s sustainability, customer loyalty, and

competitiveness. There are also many eager to support companies that work to
make the world better. Corporations that commit to social change and are
willing to adapt are very attractive to investors. Incorporating CSR is an
effective way to attract socially-minded investors as well as those thinking
about long-term financial success.
7. Corporate responsibility attracts more employees

The generations that really care about social justice and social change will make
up the majority of the workforce. 66% of people surveyed in the Nielsen Global
Survey of Corporate Social Responsibility prefer to work for companies that
prioritize corporate responsibility. By embracing that, a corporation can attract
the best employees and keep them, making the business stronger.

8. Corporate responsibility can reduce costs

Making money has been the primary goal of “business as usual,” but corporate
responsibility doesn’t mean a company sacrifices profits. In fact, it can reduce
costs. Since General Mills installed an energy monitoring system, they’ve saved
millions of dollars each year. While equipment can cost a company initially, it
saves money in the long-term. When reduced costs and higher-priced products
are combined, companies can make a very good profit by being socially
responsible.

9. Corporate responsibility opens up new opportunities/markets

There are a lot of markets that haven’t been tapped into because traditional
business thinking doesn’t see them as “profitable.” With social activism on the
brain, corporations can open new doors into neglected areas and causes. In
considering social impact as well as profit, corporations can find a balance and
set themselves apart from the crowd. Consumers will appreciate that a
corporation is thinking about where it can help and not only about profits.

10. Corporate responsibility makes the world a better place

Businesses, especially big corporations, can change society in significant ways.

They have a lot of influence, so they can not only raise awareness of issues,
they can play an essential role in progress. Addressing climate change is a prime
example of where corporations can take charge. By taking responsibility for
their impact, corporations can help the world become a healthier, happier place.

Evolution of CSR
CSR has its roots in the late 1800s, when the rise of philanthropy combined
with deteriorating working conditions made some businesses reconsider their
current production models. Business tycoons began donating to community
causes, and some business owners (although somewhat reluctantly) reduced
working hours and improved factory conditions, laying the foundation of
responsible corporations. The term “Corporate Social Responsibility,”
however, was not coined until 1953, when American economist Howard Bowen
published Social Responsibilities of the Businessman. In this book, Bowen
identified the great power of corporations and recognized that their actions had
a tangible impact on society.
What started as a movement for businesses to give to charity and reduce
working hours has blossomed into an initiative that has changed the way
business is done and affects every aspect of a business’ operations. This
transformation began in the 1960s, when scholars began to approach CSR as a
response to the emerging problems of the new modern society, and businesses
in turn started implementing these practices. So while the 1960s did mark
progress in the CSR movement, it in no way mirrored our current understanding
of corporate responsibility.
Business adoption of CSR continued steadily in the 1970s and 80s, and
became all the more important in the 80s due to greater deregulation of
business, meaning corporations had to engage in more self-regulation and take
responsibility for the social impact of their operations. However, CSR during
this time was mainly limited to human and labor rights, pollution, and waste
management.
Increasing globalization in the 1990s was instrumental in widening the scope
of CSR, and laid the foundation for how we understand Corporate Social
Responsibility today. A wide array of international events and agreements
occurred in the 90s, namely the adoption of Agenda 21, the United Nations
Framework Convention on Climate Change, and the Kyoto Protocol. These
events increased CSR concerns for multinational corporations, and for the first
time made businesses consider their impact on the world as a whole compared
to just their local community. Throughout the 90s and into the early 2000s, the
rhetoric of CSR began to shift from minimizing local harm to tackling global
issues.
CSR Today: The Way to Do Business
Today, CSR has become an integral part of doing business, and is
increasingly driving consumer choice. For instance, nearly 90% of consumers
would purchase a product because a company supported an issue they care
about, while 75% would refuse to buy a product if the company had a different
stance on an issue. CSR is also a big factor in attracting talented employees, as
people want to work for a company that upholds strong values. Further, a
comprehensive CSR program can have the benefits of “increased brand
reputation and credibility, improved risk and supply chain management, cost
savings from efficiency improvements, and increased revenue.” Companies are
thus discovering that CSR is not only better for society, but in many cases better
for business as well.
 The scope of CSR has also never been wider. Now, companies craft their
CSR programs around the UN’s 17 Sustainable Development Goals, ranging
from gender equality to protection of ocean life.

Business Ethics & Corporate Social Responsibility

Business Ethics vs Corporate Social Responsibility
The main difference between business ethics and social responsibility is that the
concept of business ethics is to know what is right or wrong for the company
and its workers, while the concept of social responsibility is knowing what
impact one’s business is making in the society and whether it is right or wrong.
Business Ethics

The term "ethics" is derived from the Greek word "ethos" which refers to
character or customs or accepted behaviours. The Oxford Dictionary states
ethics as "the moral principle that governs a person's behaviour or how an
activity is conducted". Ethics is a set of principles or standards of human
conduct that govern
vern the behaviour of individuals or organizations. Using these
ethical standards, a person or a group of persons or an organization regulate
their behaviour to distinguish between what is right and what is wrong as
perceived by others.

The various sourcess from where ethical values have been evolved. The main
sources are

 Religion
 Society
 Legal System
 Genetic inheritance
 Marketplace
 Nature
  Culture

CHARACTERISTICS OF BUSINESS ETHICS

1. Business ethics are based on social values, as the generally accepted

norms of good or bad and ‘right’ and ‘wrong’ practices.
2. It is based on the social customs, traditions, standards, and attributes.
3. Business ethics may determine the ways and means for better and
optimum business performance.
4. Business ethics provide basic guidelines and parameters towards most
appropriate perfections in business scenario.
5. Business ethics is concerned basically the study of human behaviour and
conducts.
6. Business ethics is a philosophy to determine the standards and norms to
make mutual interactions and behaviour between individual and group in
organisation.
7. Business ethics offers to establish the norms and directional approaches
for making an appropriate code of conducts in business.
8. Business ethics are based on the concepts, thoughts and standards as
contributed as well as generated by Indian ethos.
9. Business ethics may be an ‘Art’ as well as ‘Science’ also.
10.Business ethics basically inspire the values, standards and norms of
professionalism in business for the well-being of customers.

ELEMENTS OF BUSINESS ETHICS

(i) A Formal Code of Conduct: Code of conduct is statements of

organizational values. The Sarbanes-Oxley Act, 2002 made it
important for businesses to have an ethics code, something in writing
which will help the employees know – with both ease and clarity –
what is expected of them on the job. The code should reflect the
managements desire to incorporate the values and policies of the
organization.
Code of Ethics: For every new business incorporated, it is important
for the management to have a code of ethics for his business. It is
usually unwritten for small businesses. It usually specifies methods for
reporting violations, disciplinary action for violation and a structure of
the due process to be followed. A code of ethics must summarize the
beliefs and values of the organization. For a large business empire, it
is important to hire talent to assist existing personnel with regards to
integrity, understanding, responsibility, and cultural norms of the
country.
(ii) Ethics Committee: Ethics committees can rise concerns of ethical
nature; prepare or update code of conduct, and resolve ethical
dilemma in organization. They formulate ethical policies and develop
ethical standards. They evaluate the compliances of the organisation
with these ethical standards. The committee members should be
conscious about the corporate culture and ethical concise of the
organisation.

The following committees are to be formed:

a. Ethics committee at the board level- The committee would be charged

to oversee development and operation of the ethics management programme.

b. Ethics management committee – It will be charged with implementing

and administrating an ethics management programme, including
administrating and training about policies and procedures, and resolving
ethical dilemmas.

(iii)Ethical Communication System: Ethical communication system helps

the employees in making enquiries, getting advice if needed and reporting all
the wrong done in the organisation. Objectives of ethical communication
system are:

 To communicate the organizations values and standards of ethical

conduct or business to employees.
 To provide information to employees on the company’s policies and
procedures regarding ethical code of conduct.
 To help employees get guidance and resolve queries.
 To set up means of enquiries such as hotlines, suggestion boxes and e-
mail facilities. Top management can communicate the ethical
standards to the lower management which can be further transferred to
the operational level.

(iv) An Ethics Office with Ethical Officers: The job of an ethics officer is
to communicate and implement ethical policies amongst employees of the
organisation. Ethics officer should develop a reputation for credibility,
integrity, honesty and responsibility.
(v)Ethics Training Programme: Any written ethical code will not work
unless supported and followed by a proper training programme. Some
companies have an in-house training department while others may opt for an
out-source expert. To ensure ethical behaviour, a corporate training
programme is established which deals in assisting employees to understand
the ethical issues that are likely to arise in their workplace.

(vi) A Disciplinary System: A disciplinary system should be established in

the organisation to deal with ethical violations promptly and severely. If
unethical behavior is not properly dealt with, it will result in threatening the
entire social system. A company should adopt fair attitude towards everyone
without any discrimination.

(vii) Establishing an Ombudsperson: An ombudsperson is responsible to

help coordinate development of policies and procedures to institutionalize
moral values in the workplace.

(viii) Monitoring: To make an ethical programme, a successful monitoring

programme needs to be developed. A monitoring committee isformed.
Monitoring can be done by keen observation by ethics officer, surveys and
supporting systems.

COMPANIES WITH BEST ETHICAL CORPORATE POLICIES

• Google • Microsoft • Intel • TATA Steel • Wipro Limited

Ethical Theories
The various ethical theories are:

1. Teleological Ethics (Consequentialism)

A. Ethical Egoism
 B. Hedonism
C. Utilitarianism
2. Deontology
A. Kantian
3. Virtue Ethics

1. Teleological Ethics

The Teleological Ethical Theories are concerned with the consequences of

actions which means the basic standards for our actions being morally right
or wrong depends on the good or evil generated. The teleological theory
suggests an action is good or bad depending on its outcome. It is based on
measuring the probable outcome of the consequences of the decisions taken.
For instance, most people would agree that telling a lie is wrong. But if
telling a lie would help to save a person's life, consequentialism says it's
the right thing to do.

A) Ethical Egoism - Ethical egoism is the normative theory that the

promotion of one's own good is in accordance with morality. Each
person should focus exclusively on his or her interest. It requires that we
promote only our self interest, and not both our interests.

B) Hedonism - The term hedonism is derived from the Greek word

“hedone” which means pleasure. Ethical hedonism is said to have been
started by Aristippus of Cyrene, a student of Socrates. It is the idea that each
person should do everything in their power to achieve the greatest amount of
pleasure possible to them.

There are two types of hedonism:

• Psychological hedonism - Psychological hedonism is the view that

humans are psychologically constructed in such a way that we exclusively
desire pleasure.

• Ethical hedonism - Ethical hedonism is the view that our fundamental

moral obligation is to maximize pleasure or happiness.

C)Utilitarianism - Utilitarianism is a tradition of ethical philosophy that is

associated with Jeremy Bentham and John Stuart Mill (1806 – 1873) British
philosophers. Utilitarianism is a normative ethical theory that places the
 locus of right and wrong solely on the outcomes (consequences) of
choosing one actions.

Three Basic Principles of Utilitarianism:

 Pleasure or Happiness Is the Only Thing That Truly Has Intrinsic

Value
 Actions Are Right as they Promote Happiness, Wrong as they
Produce Unhappiness
 Everyone's Happiness Counts Equally

2. Deontology

Deontology is a theory that suggests actions are good or bad according to a

clear set of rules. Its name comes from the Greek word deon, meaning duty. In
moral philosophy, deontological ethics or deontology is the normative ethical
theory that the morality of an action should be based on whether that action
itself is right or wrong under a series of rules, rather than based on the
consequences of the action.

A) Kantian - Kantian ethics refers to a deontological ethical theory developed

by German philosopher Immanuel Kant. According to these theories, the
rightness or wrongness of actions does not depend on their consequences
but on whether they fulfil our duty.

3. Virtue Ethics

Virtue ethics Virtue ethics is developed by the philosopher Aristotle.Virtue

Ethics mainly deals with the honesty and morality of a person. It states that
practicing good habits such as courage, honesty, ambitious, truthfulness and
patience makes a moral and virtuous person. Virtues are admirable qualities
that lead to moral excellence.

Corporate Social Responsibility practices in India

India is the first country in the world to make corporate social

responsibility (CSR) mandatory, following an amendment to the Companies
Act, 2013 in April 2014. Businesses can invest their profits in areas such as
education, poverty, gender equality, and hunger as part of any CSR compliance.
Amid the COVID-19 (coronavirus) outbreak, the Ministry of Corporate
Affairs has notified that companies’ expenditure to fight the pandemic will be
considered valid under CSR activities.

The amendment notified in the Companies Act, 2013 requires companies with
a net worth of INR 5 billion (US$70 million) or more, or an annual
turnover of INR 10 billion (US$140 million) or more, or net profit of INR
50 million (US$699,125) or more, to spend 2 percent of their average net
profits of three years on CSR.

Prior to that, the CSR clause was voluntary for companies, though it was
mandatory to disclose their CSR spending to shareholders. CSR includes but is
not limited to the following:

 Projects related to activities specified in the Companies Act; or

 Projects related to activities taken by the company board as recommended
by the CSR Committee, provided those activities cover items listed in the
Companies Act.

Businesses must note that the expenses towards CSR are not eligible for
deduction in the computation of taxable income. The government, however, is
considering a re-evaluation of this provision, as well as other CSR provisions
recently introduced under the Companies (Amendment) Act, 2019 (“the Act”).

CSR amendments under the Companies (Amendment)

Act, 2019
Until now, if a company was unable to fully spend its CSR funds in a given
year, it could carry the amount forward and spend it in the next fiscal, in
addition to the money allotted for that year.

The CSR amendments introduced under the Act now require companies to
deposit the unspent CSR funds into a fund prescribed under Schedule VII
of the Act within the end of the fiscal year. This amount must be utilized
within three years from the date of transfer, failing which the fund must be
deposited in to one of the specified funds.

The new law prescribes for a monetary penalty as well as imprisonment in

case of non-compliance. The penalty ranges from INR 50,000 (US$700) to
INR 2.5 million (US$35,000) whereas the defaulting officer of the company
may be liable to imprisonment for up to three years, or a fine up to INR 500,000
(US $7,023), or both.
CSR: The Indian Experience
Organizations in India have been quite sensible in taking up CSR initiatives and
integrating them into their business processes.

It has become progressively projected in the Indian corporate setting because

organizations have recognized that besides growing their businesses, it is also
important to shape responsible and supportable relationships with the
community at large.Companies now have specific departments and teams that
develop specific policies, strategies, and goals for their CSR programs and set
separate budgets to support them.

Since the applicability of mandatory CSR provision in 2014, CSR spending

by corporate India has increased significantly. In 2018, companies spent 47
percent higher as compared to the amount in 2014-15, contributing US$1 billion
to CSR initiatives, according to a survey.

Listed companies in India spent INR 100 billion (US$1.4 billion) in various
programs ranging from educational programs, skill development, social welfare,
healthcare, and environment conservation, while the Prime Minister’s Relief
Fund saw an increase of 139 percent in CSR contribution over last one
year.

The education sector received the maximum funding (38 percent of the
total) followed by hunger, poverty, and healthcare (25 percent), environmental
sustainability (12 percent), rural development (11 percent). Programs such
as technology incubators, sports, armed forces, reducing inequalities saw
negligible spends.

Taking into account the recent amendments to CSR provisions, industry

research estimates CSR compliance to improve and range between 97 to 98
percent by FY 2019-20.

Examples of CSR in India:

Tata Group

The Tata Group conglomerate in India carries out various CSR projects, most of
which are community improvement and poverty alleviation programs.
Through self-help groups, it has engaged in women empowerment activities,
income generation, rural community development, and other social welfare
programs. In the field of education, the Tata Group provides scholarships and
endowments for numerous institutions.

The group also engages in healthcare projects, such as the facilitation of child
education, immunization, and creation of awareness of AIDS. Other areas
include economic empowerment through agriculture programs, environment
protection, providing sports scholarships, and infrastructure development,
such as hospitals, research centers, educational institutions, sports academy, and
cultural centers.

Ultratech Cement

Ultratech Cement, India’s biggest cement company is involved in social work

across 407 villages in the country aiming to create sustainability and self-
reliance. Its CSR activities focus on healthcare and family welfare programs,
education, infrastructure, environment, social welfare, and sustainable
livelihood.

The company has organized medical camps, immunization programs,

sanitization programs, school enrollment, plantation drives, water
conservation programs, industrial training, and organic farming programs.

Mahindra & Mahindra

Indian automobile manufacturer Mahindra & Mahindra (M&M) established the

K. C. Mahindra Education Trust in 1954, followed by Mahindra
Foundation in 1969 with the purpose of promoting education. The company
primarily focuses on education programs to assist economically and socially
disadvantaged communities.

Its CSR programs invest in scholarships and grants, livelihood training,

healthcare for remote areas, water conservation, and disaster relief
programs. M&M runs programs such as Nanhi Kali focusing on education for
girls, Mahindra Pride Schools for industrial training, and Lifeline Express for
healthcare services in remote areas.
ITC Group

ITC Group, a conglomerate with business interests across hotels, FMCG,

agriculture, IT, and packaging sectors has been focusing on creating sustainable
livelihood and environment protection programs. The company has been able to
generate sustainable livelihood opportunities for six million people through
its CSR activities.

Their e-Choupal program, which aims to connect rural farmers through the
internet for procuring agriculture products, covers 40,000 villages and over
four million farmers. It’s social and farm forestry program assists farmers in
converting wasteland to pulpwood plantations. Social empowerment
programs through micro-enterprises or loans have created sustainable
livelihoods for over 40,000 rural women.
CSR UNIT 2 - Promoting Corporate Social Responsibility
Corporate Social Responsibility
esponsibility and the role of the Board
oard of Directors

In CSR, the role of the board is to oversee management.. In this capacity, the
board may want to askmanagement whether and to what extent the
company has developed a social purpose strategy and the extent of related
activities, challenge or question both, and reviewhow they are being
executed. If the company does not have a stated social purpose strategy the
board may want to understand management’s rea reasoning,
soning, challenging it as
appropriate.
Depending upon the nature and extent of the company’s social purpose, the
board may wish to consider forming a separate, boardboard-level
level committee to
oversee those activities. Forming such a committee may generate reputational
reputat
benefits by demonstrating the company’s pro
pro-social
social commitment at the highest
levels. It may also provide some comfort to investors on board oversight of
social purpose strategy, activities and related benefits and risks for the
company. At the same time,
ime, boards may need to consider whether forming a
new committee will put undue burdens on directors or employees
responsible for assisting the board.
Within a sub-committee or under the purview of the entire board of directors,
the board can also help management determine which issues and
organizations should receive advocacy and support from the company. Just
as the board oversees capital allocation, the board can oversee the allocation
of the company’s limited pro-social resources to help maximize shareholder
value.
The role of board of directors for CSR activities has been summarized as
follows:
The role of directors is necessarily tied to questions about the fiduciary duties of
directors. Their role are as follows:
 Approve and Disclose CSR policy in the Annual Director’s report and
company website;
 Ensure implementation of CSR activities as per the policy;
 Ensure that the company spends, in every financial year, at least 2% of
average net profit made during the three immediate preceding financial
years;
 Director’s report to specify reasons in case the specified amount is not
spent.
Constitution of CSR Committee
 The CSR Committee of the Board shall consist of three or more directors,
out of which at least one shall be an independent director.
 Foreign companies shall constitute CSR Committee with at least two
persons in which one must be a resident person, authorised to accept
notices/ documents served on the foreign company and the other as
nominated by the foreign company.
 Unlisted public company (UPC) or a private company, which otherwise
does not require an independent director on its board, shall not need an
independent director for the purposes of this committee.
 Any private company which only has two directors on its board shall
have the said two directors in the CSR committee.
Functions of CSR Committee
 Formulation and recommend to the Board, a Corporate Social
Responsibility Policy which shall indicate the projects/activities to be
undertaken by the Company in areas or subject, as specified in Schedule
VII.
 Reviewing with the CSR management, the quarterly financial statements
before submission to the Board for approval.
 Recommend the amount of expenditure to be incurred on CSR
projects/activities undertaken.
 To constitute Management Committee for implementation and execution
of CSR initiatives/ activities.
 Shall institute a transparent monitoring mechanism for implementation of
CSR projects/activities undertaken by the company.
 Reviewing performance of the Company in the areas of CSR.
 Submit an annual report of CSR projects/activities to the board.
 Monitoring CSR Policy from time to time.
The Potentials &Limits
imits of Corporate Social Responsibility

Challenges for Corporate Social Responsibility

1. Lack of Community Participation in CSR Activities: There is a lack of
interest of the local community in participating and contributing to CSR
activities of companies. This is largely attributable to the fact that there
exists little or no knowledge about CSR among community people.
2. Need to Build ld Local Capacities: There is a need for capacity building of
the local nongovernmental organizations as there is serious dearth of
trained and efficient organizations that can effectively contribute to the
ongoing CSR activities initiated by companies.
3. Issues of Transparency: Lack of transparency is one of the key issues
brought forth by the survey. There is an expression by the companies that
there exists lack of transparency on the part of the local implementing
agencies as they do not make adequate ef efforts
forts to disclose information on
their programs, audit issues, impact assessment and utilization of funds.
4. Non-availability
availability of Well Organized Non
Non-governmental
Organizations: It is also reported that there is non availability of well
 organized nongovernmental organizations in remote and rural areas that
can assess and identify real needs of the community and work along with
companies to ensure successful implementation of CSR activities.
5. Visibility Factor: The role of media in highlighting good cases of
successful CSR initiatives is welcomed as it spreads good stories and
sensitizes the local population about various ongoing CSR initiatives of
companies. This apparent influence of gaining visibility and branding
exercise often leads many nongovernmental organizations to involve
themselves in event-based programs; in the process, they often miss out
on meaningful grassroots interventions.
6. Narrow Perception towards CSR Initiatives: Non-governmental
organizations and Government agencies usually possess a narrow outlook
towards the CSR initiatives of companies, often defining CSR initiatives
more donor-driven than local in approach. As a result, they find it hard to
decide whether they should participate in such activities at all in medium
and long run.
7. Non-availability of Clear CSR Guidelines: There are no clear cut
statutory guidelines or policy directives to give a definitive direction to
CSR initiatives of companies.
8. Lack of Consensus on Implementing CSR Issues: There is a lack of
consensus amongst local agencies regarding CSR projects. This lack of
consensus often results in duplication of activities by corporate houses in
areas of their intervention.
Beyond Corporate Social Responsibility to Corporate Social Engagement
Corporate social responsibility refers to a business practice that involves
participating in initiatives that benefit society. Example - Actions carried out
with the objective of creating awareness in the community about a problem or
negative situation, obtaining support in its solution; However, it is often viewed
as a corporate-driven, top-down, obligatory duty that does not connect
employees with the mission of the company.
Thus, corporate social responsibility is transitioning to a more palatable
approach called corporate social engagement—a thoughtful, mission-driven
approach that brings companies and employees together to make a greater
social impact. Only recently has engagement become an expectation for
companies seeking to build their brands, improve customer loyalty, and attract
and retain talent.
Corporate social engagement as a brand and loyalty strategy
Today customers choose products and services provided by companies that are
committed to making a difference in the world.Consumers around the world
are saying loud and clear that a brand’s social purpose is among the factors that
influence purchase decisions.
In fact, a recent Nielsen survey found 55 percent of global online consumers
across 60 countries are willing to pay more for products and services provided
by companies that are committed to positive social and environmental impact.
Consumer attributes common among millennials include:
 Active and highly participatory
 Value corporate affiliation with a social cause
 Seek brands with benefits beyond the bottom line
 Believe companies and individuals should work together for greater
social impact
 Want to be actively engaged to do good in the world

Corporate social engagement as a recruitment strategy

A 2014 Bentley University study of more than 3,100 people found that job-
seekers are not as enthusiastic about entering the business world as they should
be, considering the demand for them in the workforce. This could be in part
because they have a negative perception of traditional businesses. As a result,
they seek out employers who are committed to social responsibility:
 85% prefer to work for a socially responsible or ethical company
 95% prefer to work for a company with a positive corporate
reputation
 91% prefer to work for an employer based on social impact efforts

Infusing corporate social engagement into your brand

Corporate social engagement is not simply about making monetary donations. It
has to be meaningful to employees and the cause must relate to the mission
of the organization. Without a strategy for corporate social engagement,
employees can become disconnected from the cause and lose interest in the
mission. The most successful corporate social engagement strategies include
a three-way approach, offering employees options: giving money to a
corporate-sponsored cause, joining a corporate-sponsored community initiative,
and/or extending care into the community through corporate-sponsored
community service.