A Project Report

On
Corporate social responsibility
With reference to Society or shareholders’ interest

Subject: Governance and ethics

Section: F

Done by Group 2:
BHAVYA 17FMUCHH010046 +91 9515624352 bhavyaraoxx@gmail.com
MURIKIPUDI
RAKESH REDDY 17FMUCHH010041 +91 8008926267 Rakeshreddy.dpsvja@gmail.com
DUBBA SWANEETH 17FMUCHH010049 +91 9618311384 swaneethdubba@gmail.com
SYED OSAMA 17FMUCHH010056 +91 7013430188 Syed.osama488@gmail.com
M RACHANA 17FMUCHH010095 +91 7702933515 Mrachanareddy99@gmail.com
OSIRI AJAY KUMAR 17FMUCHH010098 +91 7989874159 Ajajay062@gmail.com
SR. NO TITLE PAGE NUMBER

1. What is CSR? 3
Introduction

2. Literature review 4

2. CSR: History 4-5

3. How CSR benefits the 6-7

society?

4. How CSR benefits the 8-9

businesses?

5. How CSR benefits other 10-12

interest groups?

6. Examples of companies 13-14

7. Conclusion 15

8. References 16

TITLE/QUESTION
How does CSR serve the interest of the society/shareholders?
INTRODUCTION

A management concept where the companies inculcate social and environmental factors into
their operations by following ethical practices that keep a balance between both the worlds,
this concept is known as Corporate Social Responsibility (CSR).

What is Corporate social responsibility? Explain in detail

.
- CSR can be defined as the ethical, legal, economical and feasible expectations that
society has of all the organizations at some point.
- It is basically that organizations should have moral, ethical and philanthropic
responsibilities in mind including their personal organizational goals in mind.
- This means that as always, the organizations primary role is the responsibility of its
owners or stockholders. So instead of just those responsibilities adding and keeping
up with other constituencies in mind is a major key note. For example, its suppliers,
customer, environmental teams, govt etc.
- The economical responsibilities that have been mentioned in the definition that
society expects the organizations to provide goods and services of good quality and
for a reasonable price. Organizations are usually expected to practice ethical, efficient
and profitability as factors to keep their shareholders’ interests in mind.
- The legal responsibilities are those that the organizations comply with the laws that
are set by the society.
- The ethical responsibilities are those that society expects them to perform i.e
providing a fair approach or practicing their affairs in a fair manner.
- If a company has to be socially responsible, it must first be accountable to itself and t
its shareholders.
- Most of the companies who implement Corporate social responsibility systems
usually grow to the point where they give something back to the society.
- Therefore, corporate social responsibility is a primary strategy taken up by large
organizations.
- Even small and medium size organizations also do implement corporate social
responsibility but their initiatives or programs are not well publicized at that of larger
organizations.
- A well maintained corporate social responsibility strategy/concept or program can
show a drastic improvement in the competitive side by showing intensified access to
the capital and market, increased sales in the organization, increased profitability,
reduction of extra costs in operations and improved profitability and quality, brand
and reputation increases, better decision making and risk taking.

Customer perspective:
 Most of the customers believe that companies who deal with CSR by doing charity
work might receive a positive response. If the company’s social goal is not aligned to
other companies then a negative impact is caused.

LITERATURE REVIEW

- The idea of Corporate social responsibility has been an important topic in the study of
academics, scholars and industrialist, over the past few decades.
- Organizations have been forced to adapt to different approaches to thrive in the
competitive business world, one of them being CSR into their business models.
- CSR is one of the crucial element in enhancing profit margin in any organizations
- Social responsibility and business ethics usually go hand-in-hand for all the
companies into business.
- It also observed that organizations that engage in CSR activities or programs
especially with issues related to their workplace have a greater chance of getting
skilled and more qualified personnel.
- Every company has different approaches to social responsibility and sustainability,
- In the future survival of every organization, the result is harmony between the goals
of the business, the goals of the state system and the individuals. Any tension between
these 3 factors will put the business in the middle of the road.
- Therefore, corporations are responsible for workers’ human dignity their status and
their training and development ad businesses resources and not cost.

HISTORICAL BACKGROUND OF CSR

- The new corporate social responsibility definition was implemented by Companies

Act, 2013.
- India is the first country to implement formal corporate social responsibility through
the new Companies Act 2013.
- CSR was not a new idea in India and can be traced in the past.
- While doing a lot of research on CSR and CSR policies apparently one feels that a lot
of things have been done in foreign countries and India borrowed the concept but for
a fact its wrong the concept of CSR has existed in ancient India and a platform has
been made for CSR and it is applicable to all enterprises and industries.
- The ancient practice of CSR can be traced from Upanishads, puranas and Vedic
literature like Ramayana, Mahabharata and Bhagavad gita.

How did CSR work pre-2013?

- Daan, seva and zakat religious practices worked in India for centuries helping form
the relationship between the wealthy and the dispossessed.
- In India, the vast majority of philanthropy has been to religious institutions and the
continuous to still be the case.
- In early 19th century industrialists introduced the methods of giving via trusts etc.
 - Whether it was the factories that were investing in the communities around them to
reduce a migratory workforce and having happier employees, having happier families
or organizations building places for worship to bring communities together or
different methods where we has institutes giving back something to the society in
some way or the other. In most situations these acts were treated as charity or
philanthropy.
- After the first world war, a new phase of Philanthropy took place, when leaders were
fighting for the independence. Gandhi ji proposed of trusteeship for business where
they had to understand themselves as fiduciaries of society’s wealth.
- After independence the Indian state expanded greatly but had withdraws in some
areas due to which it led to dissatisfaction since they couldn’t reduce the poverty
level.
- After this period, the liberalization took place in 1991 were things very slowly falling
into place with rapid growth in overall wealth and also in inequality.
- The rising gap between the wealthiest and those in the bottom have lightened up the
spirit in innovations by the corporate sectors to understand the issues and concerns.

A small gist of a table shall illustrate how CSR worked pre-2013::

TIME PERIOD ECONOMIC STATE ROLE CSR

CURRENTS

Industrialization Colonial, extraction Dynastic charity

1850-1914

Trade barriers for Colonial, Support freedom

1914-1947 new industries Exploitative struggle

Support new state;

1947-1960 Socialism, Five-year plan launch own rural
protectionism initiatives

License raj;
1960-1990 Heavy regulations development Corporate trusts
failures

1991-2013 Liberalization Shrinking in NGO sponsorship,

production family trust etc

Need to manage Introduction of 2%

2013-present Globalization inequality new rule
reforms to liberalize
HOW CSR BENEFITS THE SOCIETY?

- Corporate social responsibility has a mutual way by benefiting the society as well as
their own companies at the same time.
- We can’t expect CSR to suddenly let all the problems to disappear at once but it does
good to the community in which they perform.
- When a company is adopting to CSR, they should make sure they let the consumers
know about it. CSR efforts go pointless if you don’t let the consumers acknowledge it.
- For example, Walmart does it all right since it has established itself as a leader on
environmental efforts and has led the role perfectly for the past couple of years.
- Walmart was careful by informing the consumers about their CSR efforts, in 2008,
they made a ad campaign to raise awareness about the environment.
- CSR is the best way to connect with consumers and keep them engaged with your
brand because through CSR campaign’s since you are talking to them about
something good which will benefit everyone.
- CSR is the way the company displays the human image. Businesses are interacting
with people so that you can only communicate with them through human language by
having a certain humanity.
- It makes sense for most companies to participate in group development only, based on
CSR programs specifically to the product or service.
- The easiest way to contribute to society and its residents would be by CSR programs.
- Businesses may support the community by providing local or national charitable
donations.
- Businesses may become active in society and help to change by taking social actions
on behalf of the organization, such as participating in education programs for the poor
and street children and care for the homeless people or refugees.
- They can also support local charity making financial contributions for future
charitable projects.
- If you are a owner of a restaurant you can provide food for the local homeless groups
or also provide them to orphanages free of cost.
- Businesses can pay attention to recyclability, develop better product durability and
functionality and use more of renewable resources to keep the ecology in balance and
keep the environment as clean as possible.
- When businesses decide to take up all positive contributions to society, they are
actually benefitting the company as the companies benefit by lowering cost of
operations, increased sales and increased customer trust and loyalty hence this will in
turn get more skilled employees into the organization and more capital through
investors.
- When organizations take up an extra mile to do good to the people and the society in
large it shows the practicality of repaying to the society. Therefore, CSR is a very
thoughtful act.
- Trainings, organized for people outside the organizations are a great advantage to the
society. They raise the populations knowledge and equip it in useful skills that can
help local citizens in life.
- CSR actions such as increased health awareness in society helps people by convincing
them to go to their medical examinations and teaching them prevention is always
 better than treatment. These activities produce output that is healthier and better
educated society.
- Protection of natural environment and decreasing it damage is a benefit to all. Every
green action is supposed to save planet and every living thing on it.
- Reducing Co2 emission and waste, reducing the use of the non-renewable resources
and few of the way companies can lower their environmental impact and improve the
relations with society.
- For example: reducing or lowering air pollution so that the local community can be
healthier.
- Social responsibility of firms have made them develop new technology, innovations,
infrastructures that can be used by the society.
- It also help the society in large by providing them employment opportunities, security
and also a standard of living.
HOW CSR BENEFITS THE BUSINESSES?

- CSR is so strong that if you take up CSR programs your company is likely
recommended by the consumer by 9%
- Contributing to social responsibilities has become the first and foremost condition in
creating a business.
- Companies need to establish themselves as socially responsible and good corporate
citizen to add up greater value to the businesses.
- Engaging with CSR values will help organizations to maintain good relations with the
governments.
- Furthermore, most of the times increasing number of investors only invest in
responsible companies.
- Ethical values of organizations can attract wealthy businessmen that would like to
contribute or invest to the company’s successful venture.
- Through this the goodwill of the company will grow impeccably after implementing
CSR in the company’s practice.
- Increases employee’s morale to work since he gets motivated and does his/her work
efficiently and effectively.
- Implementing CSR policies and living by it forces organizations to set more standards
and control over workers. Thus, the greatest advantage here is mitigating risks.
- A company that boasts of responsible behavior attracts new talent and retains more of
good workers into the organizations.
- The organizational commitment of workers increases which results in increasing
protection of human rights.
- Social responsibility necessarily forces businesses to obey the law, thus problems
might not occur to a CSR reputable company.
- With CSR the company can come up as a leader position in the sector.
- Adapting to the social responsibility is a great move since it helps as a positioning
strategy, as it increased the brand value.
- Many researches claim that adapting to the CSR polices or strategies might help the
firm the grow their profitability.
- This is the main motivation for businesses for implementing the sustainability.
- Companies usually want to have a massive positive brand image and social
responsibility does it.
- More over saving water, energy and reducing waste result in a drastic cost reduction
for the companies.
- Also, few companies do get tax benefits that are being offered by the government due
to their CSR activities which also helps save money.
- Therefore, CSR helps and improve company’s financial performance.
- Apart from just financial help, CSR also helps in everyday managerial decisions and
strategy development.
- It directs managers and all the higher decision-making authority to develop
sustainable strategies which in the end create more value to the firm.
- Implementing CSR policy, companies set the norms by themselves hence, they can
change it according to their conditions.

To summarize the above:

- Helps in building a brand image.

- Helps in making profits
- Gives them the license to operate
- It gives them an advantage to avoid government regulations
- Helps to motivate the employees
- Makes them different than other brands
- Helps in attracting huge investors
- Helps in reducing unnecessary cost
- Lets them have good relations with stakeholders
- To produce good quality products or services
- Makes them prone to less risk i.e risk mitigation
HOW CSR BENEFITS VARIOUS INTEREST GROUPS?

- INVESTORS/SHAREHOLDERS:

- CSR is more important for investors because they are more concerned about where
and how their money is used.
- 83% of professional investors are more inclined to invest in companies that are more
socially responsible. Since such indicators help them the transparency levels of the
organization and also the results in lower risk.
- Hence, they have a direct stake in business and thus a business has the following
social responsibilities towards them:

 To invest the capital of shareholders judiciously

 To ensure the safety of their investment

 To provide regular interest and dividend

 To provide accurate and adequate information on the financial position of the

business

 To give opportunities to shareholders for participation in policy decisions

 To give equal treatment to all shareholders

EMPLOYEES:

- Employees are the work force of a business. A business has the following social
responsibilities towards its employees:

 To pay a regular and proper wage.

 To provide good and safe working conditions

 To provide opportunities for training and development

 To motivate them enough to work hard

 To give facilities like medical, insurance, security etc.

CUSTOMERS:

- A business has many social responsibilities towards its customer also because they are
the ultimate users of their products or services. The following are the responsibilities:

 To provide good quality products

 Provide the products at fair and reasonable price

 To supply socially produced products that meet the needs of the consumers

 To ensure a fair and proper distribution of products especially when is the time of
shortage

 To ensure adequate supply of products

 To offer good service

 To avoid unfair trade and malpractices like adulteration, hoarding, black

marketing, false advertising etc.

 To supply useful information about new products and their use.

 To give warning about some products like expiry date, edible items and non-
edible items etc.

- SUPPLIERS & COMPETITORS:

- Suppliers help in completing the process of production hence, the following social
responsibilities are to be taken:

 To make fair and on time regular payments to the suppliers

 To adopt fair practices regarding pricing, quality, service etc.

 To protect and promote small scale industries

- GOVERNMENT:

- A business has the following social responsibilities to be taken:

 To pay all the taxes on time and promptly

 To abide by the laws

 To adopt fair dealings in foreign trade

  they assist or help the government in solving national crisis like poverty, illiteracy,
over population etc.

 Not to get involved in corrupting public and bribes.

- ENVIRONMENT:

- Businesses should keep in mind to stay committed for providing a clean and healthy
environment, it is one of the greatest social responsibility to adapt to ‘go green’
concept. Companies should take up the following:

 Set aside a significant part of the revenues to make sure emissions are reduced
and that they do a bit to pollution free society.

 Gardens should occupy 1/3rd to the total factory area to contribute to the green
environment.

 Plantation of trees should be there all through near industrial houses, factories,
offices etc.

 Proper management to dispose the wastage should be carried out cleanly and
regularly so that none of the living things get affected

 Companies should make sure they reduce the plastic usage and not pollute the
environment
COMPANIES THAT HAVE INCORPORATED CSR ACTIVITIES:

1. Ambuja cements

- It is committed to providing quality lives for the underprivileged and also utilizes
hidden talents of people.

2. Infosys

- Infosys is a software company they focus on providing quality education to their

citizens and help them to develop their IT skills etc. They make sure they are sensitive
to the usage of energy since it has direct impact on the environment.

3. Mahindra & Mahindra ( M&M)

- They support quality of life, education and health. Their recent initiative is “rise for
good” where they support youth, girls and farmers.

4. Tata motors

- Their initiatives are locally, nationally and globally it is centered to providing health,
primary education, women empowerment and support services for specially-abled.

5. Google

- They use 50% less energy than others in the world, they also have committed over $1
billion worth for energy projects.

6. Coca-Cola

- Coca-Cola’s delivery trucks produced 3.7 million tons of greenhouse gases to the
world. Their new initiatives are intended to reduce 25% in their carbon footprint by
2020.

7. Ford motor company

- They have plans to reduce their greenhouse emissions and it also plans to intorduce 40
electric vehicles by 2022. American Ford usually use PV solar systems which indeed
reduces their usage of electricity.
 8. Wells Fargo

- Wells Fargo donates 1.5% of its revenue to charitable causes every year, in 2017 it
has raised $286.7 million for 14,500 nonprofits through philanthropy and such.
-

9. Lego

- They are going to invest around $150 million over the next 15 years to focus on
climate change and reducing waste.

10. Starbucks

- Starbuck is looking for diversifying their workforce. By 2025, they are planning oh
hiring 25000 veterans as a part of their social responsibility. They will usually look
into hiring younger people by giving them their kick-start job opportunities.
-
CONCLUSION

CSR is an admirable notion that every organization should follow. Some companies proclaim
their devotion to social responsibility and still use toxic materials or treat their workers
incorrectly. Since CSR does have certain bad claims but it has a huger advantage for the
society and the businesses in general. The corporations can gain financial benefits through
working for the good of the society and at the same time gain more reputation for the firm.
Therefore, the well-being of the society and growth of the business should not be put against
one another. As this report tells us in how many ways it helps not just the society and
shareholders interest but other aspects of the world too.
Hence inculcating or adapting CSR activities or programs into a firm’s practice is always
beneficial to the nation in large.
REFERENCES

https://www.nbs.net/articles/does-csr-boost-shareholder-value
http://indianresearchjournals.com/pdf/IJSSIR/2013/June/4.pdf
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https://www.transparenthands.org/what-are-benefits-of-corporate-social-responsibility-csr-
towards-society/
https://www.provokemedia.com/research/article/investors-see-benefits-of-corporate-social-
responsibility
https://blogs.wsj.com/experts/2014/10/22/four-ways-corporate-social-responsibility-helps-
shareholders/
https://www.ftadviser.com/investments/2018/06/14/why-is-csr-important-for-investors/
https://www.nbs.net/articles/does-csr-boost-shareholder-value
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business.asp
https://www.referenceforbusiness.com/management/Comp-De/Corporate-Social-
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https://www.cfo.com/risk-management/2015/02/shareholder-value-csr-friends-foes/
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Business ethics and corporate Governance text book by Dr. S. S khanka