“STUDY OF CORPORATE SOCIAL RESPONSIBILITY IN INDIA

TABLE OF CONTENTS

Chapter Particulars Page No.

1 INTRODUCTION 1 – 10
 BACKGROUND OF THE STUDY 1–9
 OBJECTIVES OF THE STUDY 10
 SCOPE OF THE STUDY 10
 LIMITATIONS OF THE STUDY 10
 RESEARCH METHODOLOGY 10

2 REVIEW OF LITERATURE 13 – 17

3 DATA REPRESENTATION AND ANALYSI 18

4 FINDINGS

5 SUGGESTIONS AND CONCLUSION 48 – 51

BIBLIOGRAPHY 56 – 57
 Abstract

Corporate Social Responsibility is a concept where by industries to take care of

the Society interests in every aspect. The objective of the CSR is to improve the
standards of living while preserving the profitability of the corporation for its
stake holders both within the and outside the industry. In the recent years the
concept of corporate social responsibility is spreading very rapidly in India at all
the sectors. Corporate social responsibility is to contribute towards the society
while working with in ethics. In developing countries like India. Industries plays
a very important role in upgrading the economy of the country not only by
producing products but also by imposing a new practice called social
responsibility (CSR). In the global economy the link between industries and
government has been growing. Business is an inseparable and embedded part of
the society. Corporate social responsibility is an evolving a number of internal
and external policies and practices right from the place where they work to the
community, the environment and beyond. In the present scenario, there is need to
take new initiatives and adopt new policies taking into consideration of the
industry history towards sustained environmental, Social and Economic growth.

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 CHAPTER -1

INTRODUCTION

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 INTRODUCTION

Corporate Social Responsibility is a concept whereby companies integrate social and environmental
concerns into their business operations and in their interaction with their stakeholders (employees,
customers, shareholders, investors, local communities, government), on a voluntary basis. Corporate
responsibility programs can help businesses entice customers, attract and retain talent, assure investors,
reduce operating costs, improve employee morale and enhance a company's reputation. However,
business owners should understand the benefits and limitations of corporate responsibility programs in
order to choose an initiative that benefits the community and the company. Corporate responsibility
programs must be embraced and supported by top management and woven into company culture and
operations. Stakeholders will soon become skeptical of one-time initiatives or programs that come and
go. Convincing shareholders or other financial decision makers to allocate resources to a program
designed to benefit something other than the company's bottom line can be the first obstacle a small
business owner must overcome. Small businesses owners should not assume that customers and
community members know about the company's investment in socially responsible programs.

Among other countries India has one of the richest traditions of Corporate Social Responsibility.
Much has been done in recent years to make Indian Entrepreneurs aware of social responsibility as an
important segment of their business activity but Corporate Social Responsibility in India has yet to
receive widespread recognition. If this goal has to be realized then the Corporate Social Responsibility
approach of corporate has to be in line with their attitudes towards mainstream business- companies
setting clear objectives, undertaking potential investments, measuring and reporting performance
publicly.

WHAT IS CSR

The voluntary compliance of social and ecological responsibility of companies is called Corporate
Social Responsibility (CSR).Corporate social responsibility is basically a concept whereby companies
decide voluntarily to contribute to a better society and a cleaner environment, corporate social
responsibility is represented by the contributions undertaken by companies to society through its
business activities and its social investment. This is also to connect the Concept of sustainable
development to the company‘s level.

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 Over the last years an increasing number of companies worldwide started promoting their
Corporate Social Responsibility strategies because the customers, the public and the investors expect
them to act sustainable as well as responsible. In most cases CSR is a result of a variety of social,
environmental and economic pressures. The Term Corporate Social Responsibility is imprecise and its
application differs. CSR can not only refer to the compliance of human right standards, labour and
social security arrangements, but also to the fight against climate change, sustainable management of
natural resources and consumer protection. The concept of Corporate Social Responsibility was first
mentioned 1953 in the Publication ‗Social Responsibilities of the Businessman ‘by William J. Bowen.
However, the term CSR became only popular in the 1990s, when the German Beta pharm, a generic
pharmaceutical company decided to implement CSR. The generic market is characterized by an
interchange ability of products. In 1997 a halt in sales growth led the company to the realization that in
the generic drugs market companies could not differentiate on price or quality. This was the prelude
for the company to adopt CSR as an expression of the company‘s values and as a part of its corporate
strategies. By using strategic and social commitment for families with chronically ill children, Beta
pharm took a strategic advantage. In July 2001, the European Commission decided to launch a
consultative paper on Corporate Social Responsibility with the title „Promoting a European
Framework for Corporate Social Responsibility―. This paper aimed to launch a debate on how the
European Union could promote Corporate Social Responsibility at both the European and international
level. The paper further aimed to promote CSR practices, to ensure the credibility of CSR claims as
well as to provide coherence in public policy on CSR.

IMPORTANCE OF CSR

Corporate social responsibility (CSR) plays a major role in developing the economy of a country. It
can be defined as the way in which a company manages various business entities to produce an impact
on the society. Companies with high CSR standards are able to demonstrate their responsibilities to the
stock holders, employees, customers, and the general public. Business organizations that have high
corporate social responsibility standard scan attract staff thereby reducing employee turnover and cost
of recruitment. What is the importance of corporate social responsibility? Anyone can give a clear
answer to this question. Companies voluntarily contribute a large sum of money to make a better
society and a clean environment. Corporate social responsibility is a process in which all companies
come together as one and take part in the welfare of the society. Many organizations conduct
campaigns to create awareness among corporate, civic bodies, and government bodies about the
importance of corporate social responsibility. Many national and multinational firms are booming in
various developing countries. But at the same time,

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these countries suffer social challenges such as poverty, corruption, population growth, etc. Therefore,
it is important for all companies to strive together and adapt corporate social responsibility standards to
make the society better than before. An organization can exhibit a better image in the society if it cares
for its employees and involve them in social activities. The responsibilities of an organization may
range from providing small donations to executing bigger projects for the welfare of the society. Many
business houses around the world show their commitment to corporate social responsibility. What is
the importance of corporate social responsibility? The answer lies in two things: 1) organizations
understanding their role in developing a society and2) awareness among business houses, corporate
bodies, and the people. Versatile, profitable, and dynamic businesses are the driving forces that build
the economy of the country. We must remember that the growth of a country purely depends on the
growth of the society and the people in the society.

The Four Phases of CSR Development in India

The history of Corporate Social Responsibility in India has its four phases which run parallel
to India's historical development and has resulted in different approaches towards Corporate Social
Responsibility. However the phases are not static and the features of each phase may overlap other
phases.
The First Phase

In the first phase charity and philanthropy were the main drivers of Corporate Social
Responsibility. Culture, religion, family values and tradition and industrialization had an
influential effect on Corporate Social Responsibility. In the pre-industrialization period, which lasted
till 1850, wealthy merchants shared a part of their wealth with the wider society by way of
.
setting up temples for a religious cause With the arrival of colonial rule in India from 1850s

onwards, the approach towards Corporate Social Responsibility changed. The industrial families of the
19th century such as Tata, Godrej, Bajaj, Birla, Singhania were strongly inclined towards economic as
well as social considerations. However it has been observed that their efforts towards social as well as
industrial development were not only driven by selfless and religious motives but also influenced by
caste groups and political objectives.

The Second Phase

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 In the second phase, during the Independence movement, there was increased stress on Indian
Industrialists to demonstrate their dedication towards the progress of the society. According to Gandhi,
Indian companies were supposed to be the "temples of modern India". Under his influence

businesses established trusts for schools and colleges and also helped in setting up training and
scientific institutions. The operations of the trusts were largely in line with Gandhi's reforms which
sought to abolish un touch ability, encourage empowerment of women and rural development.

The Third Phase

The third phase of Corporate Social Responsibility (1960–80) had its relation to the element of
"mixed economy", emergence of Public Sector Undertaking and laws relating labour and
environmental standards. During this period the private sector was forced to take a backseat. The
public sector was seen as the prime mover of development. Because of the stringent legal rules and
regulations surrounding the activities of the private sector, the period was described as an "era of
command and control".

The Fourth Phase

In the fourth phase (1980 until the present) Indian companies started abandoning their traditional
engagement with CSR and integrated it into a sustainable business strategy. In 1990s the first
initiation towards Globalizations and Economic Liberalization were undertaken. Controls and
licensing system were partly done away with which gave a boost to the economy the signs of which
are very evident today. Increased growth momentum of the economy helped Indian companies grow
rapidly and this made them more willing. Globalization has transformed India into an important
destination in terms of production and manufacturing bases of TNCs are concerned. As Western
markets are becoming more and more concerned about and labour and environmental standards in the
developing countries, Indian companies who export and produce goods for the developed world need
to pay a close attention to compliance with the international standards.
Some of the positive outcomes that can arise when businesses adopt a policy of social
responsibility include:

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 Company benefits

 Improved financial performance

 Lower operating costs

 Enhanced brand image and reputation

 Increased sales and customer loyalty

 Greater productivity and quality

 More ability to attract and retain employees

 Reduced regulatory oversight

 Access to capital

 Workforce diversity

 Product safety and decreased liability.

BENEFITS TO THE COMMUNITY AND THE GENERAL PUBLIC

 Charitable contributions

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 Employee volunteer programmes

 Corporate involvement in community education, employment and homelessness

programmes
 Product safety and quality.

ENVIRONMENTAL BENEFITS

 Greater material recyclability

 Better product durability and functionality

 Greater use of renewable resources

 Integration of environmental management tools into business plans, including life- cycle
assessment and costing, environmental management standards, and eco- labelling.

 How companies benefit from the Corporate Social Responsibility concept?

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 Why Corporate Social Responsibility?

Corporate Social Responsibility main aim is to embrace responsibility for the company's actions
and encourage a positive impact through its activities on the environment, consumers, employees,
communities, stakeholders and all other members of the public spare. There are many numbers of
business models developed in order to achieve CSR objectives. Being a good corporate citizen the
companies have to be internally well governed and externally responsible. In other words, CSR and
corporate governance are two sides of the same coin.
The following are some of the drivers pushing business towards Corporate Social Responsibility.

1. The Shrinking Role of Government: Shrinking government resources, coupled with a distrust of
regulations, has led to the exploration of voluntary and non-regulatory initiatives instead.
2. Demands for Greater Disclosure including customers, suppliers, employees, communities,
investors, and activist organizations.
3. Increased Customer Interest: In a recent survey by Environs International, more than one in five
consumers reported having either rewarded or punished companies based on their perceived social
performance.

4. Growing Investor Pressure: The Social Investment Forum reports that in the US in 1999, there was
more than $2 trillion worth of assets invested in portfolios that used screens linked to the environment
and social responsibility. A separate survey by Environs International revealed that more than a
quarter of share-owning Americans took into account ethical considerations when buying and selling
stocks.

5. Competitive Labour Markets: Employees are increasingly looking beyond pay checks and
benefits, and seeking out employers whose philosophies and operating practices match their own
principles. In order to hire and retain skilled employees, companies are being forced to improve
working conditions.
6. Supplier Relations: As stakeholders are becoming increasingly interested in business affairs, many
companies are taking steps to ensure that their partners conduct themselves in a socially responsible
manner are introducing codes of conduct for their suppliers, to ensure that other companies' policies
or practices do not tarnish their reputation.

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 Objectives of the study

1. The study has been conducted mainly to understand the concept of CSR.

2. To study the efforts of various organisations in CSR and its impact on the
company

Limitations of the study

Costs of operation could rise above those required for continued

profitability and sustainability.
Critics already argue that the CSR of companies is simply to make a
profit, and legislation would increase the vocalization of these concerns.
Reporting criteria vary so much by company, sector and country, and they
are in constant evolution.

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 Scope of the study

Initially, CSR emphasized the official behaviors of individual firms. Later, it

expanded to include supplier behaviors and the uses to which products were put and
how they were disposed of after they used.

Significance of the study

It would help to avoid the excessive exploitation of labor, bribery and

corruption. Companies would know what is expected of them, thereby promoting
a level playing field. Many aspects of CSR behaviors are good for business (such
as reputation, human resources, branding and making it easier to locate in new
communities) and legislation It could help to improve profitability, growth and
sustainability.
Some areas, such as downsizing, could help to redress the balance between
companies and their employees.
Rogue companies would find it more difficult to compete through lower standards.
The wider community would benefit as companies reach out to the key issue of
Under development around the world.

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 RESEARCH METHODOLOGY

DATA SOURCES

The data is secondary in nature and the knowledge has been obtained only through various articles
available on various websites.

RESEARCH OBJECTIVES

The study has been conducted mainly to understand the concept of CSR.

To study and analyze the purview of CSR in present day’s context.

To identify well established companies from various sectors and studying their corporate
social responsibilities. The companies that have been selected are pioneers or the market
leaders, in their respective industry area.

RESEARCH METHODOLOGY
The research commences by searching for the articles related to the topic Corporate Social
Responsibility, then having a detailed knowledge of the same and studying the steps taken and efforts
made in this field by various Indian companies. Taking some examples of Indian companies and
explaining the efforts made by listing their contributions. After identifying them, there is study of the
results it had on the business and what positive results came out.

Then explaining by examples of various studies that how it has led to increase in profits and is one
the reason of corporate success. Also there is special emphasis on an Indian company which can
explain the topic better and help to achieve the objectives.

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 CHAPTER -2

REVIEW OF LITERATURE

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 REVIEW OF LITERATURE

A literature review is a body text that aims to review the critical points of current knowledge including
substantive findings as well as theoretical and methodological contributions to a particular topic.
Literature reviews are secondary sources and as such do not report any new or original experimental
work. Its ultimate goal is to bring the reader up to date with current literature on a topic and forms the
basis for another goal such as future research that may be needed in the area.
To design the present study in scientific manner, the researcher surveyed a good amount of
research work and literature carried out in the area of corporate social responsibility. There are some of
the reviews of the studies which had been previously undertaken in the field of CSR.

1. Alex Edmans (2012)- The Link Between Job Satisfaction And Firm Value, With
Implications For Corporate Social Responsibility

The paper finds that how job satisfaction and firm value are linked. Companies listed in the “100 Best
Companies to work for in America” generated 2.3% to 3.8% higher stock returns per year than their
peers from 1984 through 2011. These results have three main implications. First, consistent with
human resource management theories, job satisfaction is beneficial for firm value. Second, corporate
social responsibility can improve stock returns. Third, the stock market does not fully value intangible
assets, and so it may be necessary to shield managers from short term stock prices to encourage long
run growth. 1
In India, many firms have taken the initiatives of CSR practices which have met with varying needs
of the society. The present study has made an attempt to understand the status, progress and initiatives
made by large firms of India in context to CSR policy framing and implementation. Although India has
entered or taken a transformational change by involving into new CSR initiatives, but still a lot has to
be done in this area.2
Many companies have established a corporate identity using CSR as a core activity of their business, which
has become a focal point of their success and competitive advantage. The basic objective of this paper
is to know the concept of corporate social responsibility and review existing knowledge available in
this area.3Z

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2. Anupam Sharma And Ravi Kiran, School Of Behavioural Sciences And Business
Studies, Thapar University, Patiala, India (2012)- Corporate Social Responsibility
Initiatives Of Major Companies Of India With Focus On Health, Eduction And
Environment.

CSR has been assuming greater importance in the corporate world in 21th century. Indian Government has
drafted guidelines for CSR practices, which of late proposed companies to contribute a percentage
share towards that cause (CSR). This study compares the CSR activities of Tata Company and ITC
Company on different areas i.e. environmental friendliness, social accountability, employee’s safety,
human rights promotion and healthcare etc. The study also focuses on the reporting methods used by
these companies. From this study, it is observed that all the two big private companies of the country
are directly engaged in social responsibility in various areas, from innovation in agriculture &
education to saving the environment. It is concluded that environment, education, community
involvement and health care activities practiced as CSR by both companies.4

3. Dr. Arvind Jain, Senior Manager(Sme), Axis Bank Ltd., Rajkot (2012)-Corporate
Social Responsibility:An Explorative Review.

Over the time, CSR expanded to include both economic and social interests. Companies have become more
transparent in accounting and display „public reporting‟ due to pressures from various stakeholders. In
this research paper CSR status, challenges of CSR, policies for CSR in India are studied. The concept
of CSR is now firmly rooted on the global business agenda. But in order to move from theory to
concrete action, many obstacles need to be overcome. Many positive outcomes can arise when
businesses adopt a policy of social responsibility

4. Omweno Nyameyio Enock & Dr. Kundan Basavaraji, Kuvempu University (2013)
- Corporate Social Responsibility of Tata and Itc Company: A Comparative
Study

CSR has a wide ranging effect across the globe especially in emerging markets. CSR activities have been

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 posited to include incorporating social characteristics or features into products and manufacturing
processes(aerosol products with no fluorocarbons, environment friendly technologies), adopting
progressive human resource management practices(promoting employee empowerment), achieving
higher levels of environmental performance through recycling and pollution abatement (reducing
emissions), and advancing the goals of community organizations(working closely with groups such as
United Way). In this context this paper has studied the theoretical aspect of CSR including the Global
Reporting Initiative and CSR Legislation norms and globalization of CSR in India. In this paper few
specific cases of CSR activity and CSR violation in India have studied.

5. Parul Manchanda (2017) "Corporate Social Responsibility: Inventiveness by

various enterprises", JIMS 8M, July - September, 2017.

Corporate Social Responsibility in simple term means, "Giving back to the society from where an
organization operates its functions, employ resources and satisfy human wants by offering goods and
services. But in the recent times we have an amendment in the companies Act 2013. The purview for
practicing CSR has undergone a change it has not only helped the society but also is seen from the
different perspectives and has helped companies in building their brand image, gaining acceptance and
thus helping them earn higher amount of profits. The objective of research paper is to begin with
defining and understanding the meaning of CSR, understanding its significance in today's rapid
changing business environment and then examining the corporate social responsibility initiatives taken
by the four companies (HUL, Hero Motorcorp, HPCL and Tata steel Limited) from the various sectors
in accordance to the contribution made by these sectors towards CSR in the previous years. The
findings of paper confirm the various activities done (as per sec -135 (Schedule, VII) of CSR activities)
and also analyses the financial spending for the financial year 2014-2015 for the various projects and
the amount actually spent.16

6. George Pohle And Jeff Hittner In Their Study On “Attaining Sustainable Growth
Through Corporate Social Responsibility”

`Here they have highlighted that CEO’s have been long accountable to a varied group of stakeholders-
employees and communities as well as investors. The nature of these relationships is now changing in

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 ways that significantly affect corporate performance in part due to the emergence of the internet and
continuing globalization companies are becoming accountable for labor issues and working conditions
in their partners as well as their own.1

7. Martin Surya Mulyadi And Yanita Anwar, Binus University, Jakarta, Indonesia
(2012) - Impact Of Corporate Social Responsibility Towards Firm Value &
Profitability

. Corporate Social Responsibility is business contribution to sustainable development that corporate

behavior not only needed to ensure return to shareholders but also other stakeholders‟ interest. In
Indonesia, CSR currently is an obligation only for corporations in natural resources- related business.
This paper will examine impact of CSR towards firm value and profitability in selected 30 listed
Indonesian corporations. The impact of CSR on accounting performance (for example ROA) is a long-
standing but still unresolved question. While the impact of CSR on firm value relatively less examined.
This paper examined 30 selected Indonesian listed corporation to find out is there any relation between
CSR to firm value and profitability. Researchers have employed GRI method to measure CSR

8. Richa Gautam And Anju Singh, Industrial Safety & Environment Management
Group, National Institute Of Industrial Engineering (Nitie), India (2010) -
Corporate Social Responsibility Practices In India: A Study Of Top 500
Companies.

. Corporate Social Responsibility has become a pervasive topic in the business literature, but has largely
neglected the role of institutions. This introductory article to the Special Issue of Socio- Economic
Review examines the potential contributions of institutional theory to understanding CSR as a mode of
governance. This perspective suggests going beyond grounding CSR in the voluntary behaviour of
companies, and understanding the larger historical and political determinants of whether and in what
forms corporations take on social responsibilities. Institutional theory seems to be a promising avenue
to explore how the boundaries between business and society are constructed in different ways, and
improve our understanding of the effectiveness of CSR within the wider institutional field of economic
governance

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 CHAPTER: 3

DATA REPRESENTATION AND ANALYSIS

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 CHAPTER -5

FINDINGS

SUGGESTIONS AND CONCLUSION

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 FINDINGS

 Some of the key elements that emerge from the analysis and are relevant
for India, are:

 The government of India would need to create an appropriate enabling

environment (through policies, legislations, strategies and programmers) to

facilitate the transition towards resource efficiency for India businesses. The
strategy paper developed under the aegis of the ‘India Resource Panel’15
should come up with these recommendations.
 Some of the businesses have realized the advantages of resorting to resource

efficiency and have Nt only integrated this in their operations (recycling, re-
use, renewable energy use, etc.) but also as part of their business model/
strategy (waste to wealth).
 Consumer awareness and understanding is a key to enable market

transformation towards sustainable production and consumption.

 Businesses should realize this opportunity and communicate accordingly

to the Indian consumers, especially the middle-class.

 Engaging with India’s trade and ecoNmic partners to ensure that the gains

from resource efficiency is understood and utilized by the domestic suppliers

when they engage with partners from advanced countries like the EU
Member States.

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 SUGGESTIONS

1. Felicitations for CSR professionals

Many CSR professionals have been selflessly engaged in the domain and have been
instrumental in making a great impact at the grassroots. Since the awards have
been conceptualised for the programmes, it would be great value addition to
have a few professionals felicitated for exceptional work.
2. It’s the time for the businesses to the next level of CSR, which is

Individual Social Responsibility.

3. Ideally, the entire cycle from short-listing to awarding should be transparent,

and the companies that do Not get the award should know the reason for their
nott making it and work upon betterment of the project.

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 CONCLUSION

 This dissertation talks about the CSR in the today’s context scenario and the

various initiatives that have been taken by the various leading firms of the
industry from various sectors in the various community initiatives towards
the society.
 It provides a deep insight on the various activities that have been recently

classified under the domain of CSR.

 The various initiatives that have been taken by the various leading firms
HUL(FMCG), Hero Motocorp (Automobile), HPCL (Oil & Gas) and Tata Steel
Ltd (Iron and Steel) of the industry from various sectors in the various
community initiatives towards the society. It provides a deep insight on the
various, activities that have been recently classified under the domain of CSR
activities as per the latest amendment in the Companies Act. Also, it used this
as the basis for classifying the various efforts that have been put in by the
various firms into these categories specifically. Also the second section of the
paper, talks about the financial spending that is done by these companies on the
various community initiatives. For Hero Motocorp, HUL, Tata Steel deviations
have been observed between the actual and the observed outlay, but for HPCL,
the actual and observed outlay is the same. Thus companies are making more
rigorous attempts to make the CSR spending in line with the latest amendment
that has been given, for the interest of the society and also to save themselves
from any kind of legal actions. Companies in the Indian Context have realized
that they cannot sideline CSR any longer, but it is very much now a part of their
strategic business as it would involve 2% spending of their Net Profits.

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BIBILOGRAPHY

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 BIBLIOGRAPHY

Books:

1. Corporate Social Responsibility and Competitiveness( Essential of the Corporate India

and its Sustainability) Patron: Rusen Kumar, Editor: Saurabh Mittal, Publisher: Allied
Publisher Private Ltd., New Delhi.
2. Corporate Social Responsibility in India- A Study of Management Attitudes, Author:
C.Gopala Krishna, Publisher: K.M. Rai Mittal, Mittal Publications, New Delhi.
3. Corporate Social Responsibility, Author: David Crowther, Guler Aras & Ventus,
publisher: APS, Edition-1, ISBN: 978-87-7681-415-1

Journals:

1. Academy of Management Perspectives

2. African Journal of Basic & Applied Sciences

3. European Journal of EcoNmics, Finance & Administrative Sciences

4. Global Business & Management Research: An International Journal (GBMR)

Websites:

1. JuN Consulting “The importance of corporate social responsibility”, The EcoNmic

Intelligence Unit, 2005, www.juNconsulting.com.au.
2. GRI (2000) SD Reporting Guidelines & FS Sector Supplement, available at
http://www.globalreporting.org/ReporitngFramework/SectorSupplements.
3. Global Reporting Initiative guidelines, available at: http://www.globalreporting.org/Home.

4. Karmayoga website, available at: http://www.karmayog.org/csr

5. OECD Guidelines for Multinational Enterprises, available at:

http://actrav.itcilo.org/actravenglish/telearn/global/ilo/guide/oecd.html

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