ALL YOU NEED TO KNOW ABOUT CSR

CSR(Corporate Social Responsibility) is a critical mission that is the heart of every business
committed to integrate environment, social and ethical principles into the core business, thereby
contributing to economic development while improving the quality of life of the workforce and their
families as well as of the local community and society at large.

ISO 26000 or simply ISO SR is the recognised international standard for CSR. Guidance on social
responsibility is launched from ISO, International Organisation for Standardisation , which was
released on November 1, 2010.

From the 1950s to the present the concept of CSR has gained considerable acceptance and the
meaning has been broadened to include additional components. Carroll says that CSR encompasses
four responsibilities that are interrelated-economic (Make a profit), legal ( Obey the law), ethical(Be
ethical), & discretionary or philanthropic ( Good corporate citizen) expectations that society has of
organisations at a given point of time.

CSR requires company to acknowledge that they should be publicly accountable not only for their
financial performance but also for their social and environmental record.

It is responsibility of corporations to go above and beyond what the law requires them to do about
how companies manage the business processes to produce an overall impact on society.

Many other names are used to refer to CSR such as Socially responsible business, Responsible
business conduct, Responsible entrepreneurship, Corporate citizenship, Corporate accountability or
Corporate sustainability.

According to Geoffrey Lantos, there are three types of CSR-

Ethical CSR- It is about the responsibility to avoid harms or social injuries.

Altruistic CSR- It is contribution to common good at the possible expenses of business for altruistic,
humanitarian, or philanthropic causes.

Strategic CSR- It is about firm’s social welfare responsibilities that benefit both the corporation and
stakeholders.

CSR is one way to achieve social license by enhancing company’s reputation that acts as a pole star
for it in order to maintain the integrity of moral fabrics both inside and outside the corporation while
conducting socially responsible business.

TBL ( Triple Bottom Line) i.e., People, Planet & Profit forms one way to evaluate CSR. It is an attempt
to align out enterprises to the goal of sustainable global development by providing them with
comprehensive set of objectives than just profit alone.
“People”: Social Responsibility involves fair labour practices & the community region where business
operates.
“Planet”: Environmental Responsibility involves sustainable environmental practices.
“Profit”: Economic Responsibility involves economic value created by the organisation after
deducting the cost of all inputs, including the cost of the capital.

Some models of CSR are: Friedman model (1926-73), Ackerman model(1976), Carroll model(1991),
Environment Integrity & Community model(by Redman), etc.
The Sachar Committee was appointed in 1978 to look into CSR issues concerning Indian companies
which suggests openness in corporate affairs and behaviour.

Some responsible business corporations that have applied CSR model includes:

ALCOA (The Aluminium Company), Coca-Cola, a leading manufacturer of beverages emphasizes

global water stewardship, sustainable packaging, climate protection, energy management and
economic innovation in packaging. Johnson & Johnson, which is an employee focused, involves
balanced work and family programmes help employees manage work and family life. Cadbuary India
has a tradition of caring for the environment and enriching the lives of the communities we are living
and work in through a variety of result oriented programmes, which has installed solar powered
street lights.

CSR is known for increased employee loyalty & retention, increased quality of products & services,
increased customer loyalty, increased reputation & brand image, access to market &capital, limits
risk of reputation loss avoiding corruption scandals & environment accidents (one of Bhopal Gas
Tragedy), public support.

It has also been argued by critics that CSR limits the ability of management focus from core business,
it dilutes the primary aim of business, restricts the free market goal of profit maximisation.

CSR is all about thus developing additional skills, knowledge and understanding. The point is that
whatever we do today will have a impact on future generation. The thing is that to live and keep
aside one’s selfish needs to address the need of next generation. It is the commitment of businesses
to contribute to sustainable economic development working with employees.. That’s what CSR is
about!