Corporate Social

Responsibility
Corporate social responsibility (CSR)
Corporate social responsibility (CSR) is a broad business concept. It
usually describes a company's commitment to carry out its business in
an ethical way.
This means managing their business processes while taking account of
their social, economic and environmental impact, and considering
human rights.
Examples of corporate social responsibility
Corporate responsibility can cut across almost everything a business
does. It can involve a range of CSR activities, such as:
• environmental management, e.g. waste reduction and sustainability
• responsible sourcing, e.g. using only fair trade ingredients
• improvement of working standards and conditions
• contributing to educational and social programmes
• employee volunteering
• socially responsible investment
• development of employee and community relations
• Corporate social responsibility is a business strategy currently
used by many companies that attaches a social aspect to them.

• The public and businesses are subject to the many benefits of

corporate social responsibility. First, it benefits society, as
companies contribute a part of their revenue. Secondly, the
company gains by earning a reputation and thus, making profits.

• Firms make it a point to heavily publicize their CSR initiatives, as

making customers aware of it is equally important as doing good
to society.
TYPES OF CORPORATE SOCIAL RESPONSIBILITY
Corporate social responsibility is traditionally broken into four categories:
environmental, philanthropic, ethical, and economic responsibility.

1. Environmental Responsibility
Environmental responsibility refers to the belief that organizations should behave in
as environmentally friendly a way as possible. It‟s one of the most common forms
of corporate social responsibility. Some companies use the term “environmental
stewardship” to refer to such initiatives.

Companies that seek to embrace environmental responsibility can do so in several

ways:
Reducing harmful practices, such as decreasing pollution, greenhouse gas
emissions, the use of single-use plastics, water consumption, and general waste
Regulating energy consumption by increasing reliance on renewables, sustainable
resources, and recycled or partially recycled materials
Offsetting negative environmental impact; for example, by planting trees, funding
research, and donating to related causes
2. Ethical Responsibility
Ethical responsibility is concerned with ensuring an organization is
operating in a fair and ethical manner. Organizations that embrace
ethical responsibility aim to practice ethical behavior through fair
treatment of all stakeholders, including leadership, investors,
employees, suppliers, and customers.
Firms can embrace ethical responsibility in different ways. For
example, a business might set its own, higher minimum wage if the
one mandated by the state or federal government doesn‟t constitute a
“livable wage.” Likewise, a business might require that products,
ingredients, materials, or components be sourced according to free
trade standards. In this regard, many firms have processes to ensure
they‟re not purchasing products resulting from slavery or child labor.
3. Philanthropic Responsibility
Philanthropic responsibility refers to a business‟s aim to actively make
the world and society a better place.
In addition to acting as ethically and environmentally friendly as
possible, organizations driven by philanthropic responsibility often
dedicate a portion of their earnings. While many firms donate to
charities and nonprofits that align with their guiding missions, others
donate to worthy causes that don‟t directly relate to their business.
Others go so far as to create their own charitable trust or organization
to give back and have a positive impact on society.

4. Economic Responsibility
Economic responsibility is the practice of a firm backing all of its
financial decisions in its commitment to do good in the areas listed
above. The end goal is not to simply maximize profits, but make sure
the business operations positively impact the environment, people, and
society.
CSR and stakeholders
Stakeholders are the individuals or groups that have an interest in the business and are
influenced by its actions. Different CSR strategies can help make a positive impact on
different groups of stakeholders, including:

Consumers – e.g. through fair and open business practices and good customer
relations.

Suppliers – e.g. by choosing your suppliers carefully, looking at their labour, health,
safety, and environmental practices.

Communities - there are many ways to create positive change in the community, e.g.
through sponsoring local events, taking part in charity initiatives, volunteering, etc.

Employees - responsible business practices will often aim to do more than simply
comply with the law.

Reducing the environmental impact through different CSR initiatives, such as waste
and resource management, can also greatly benefit the business.
Advantages of CSR

• Investor Relations
In a study by Boston Consulting Group, companies that are considered leaders in
environmental, social, or governance matters had an 11% valuation premium over
their competitors. For companies looking to get an edge and outperform the market,
enacting CSR strategies tends to positively impact how investors feel about an
organization and how they view the worth of the company.

• Employee Engagement
In yet another study by professionals from Texas A&M, Temple, and the University
of Minnesota, it would found that CSR-related values that align firms and employees
serve as non-financial job benefits that strengthen employee retention. Workers are
more likely to stick around a company that they believe in. This in turn reduces
employee turnover, discontented workers, and the total cost of a new employee.
Risk Mitigation
Consider adverse activities such as discrimination against employee
groups, disregard for natural resources, or unethical use of company
funds. This type of activity is more likely to lead to
lawsuits, litigation, or legal proceeds where the company may be
negatively impacted financially and be captured in headline news.
By adhering to CSR practices, companies can mitigate risk by
avoiding troubling situations and complying with favorable
activities.
Disadvantages of CSR
• Conflicts with the Profit Motive
Even for larger companies, the cost of CSR can be an obstacle. Some critics believe
that corporate social responsibility can be an exercise in futility. A company's
management has a fiduciary duty to its shareholders, and CSR directly opposes this,
since the responsibility of executives to shareholders is to maximize profits. A
manager who forsakes profits in favor of some benefits to society may expect to lose
his job and be replaced by someone for whom profits are a priority.

• Consumers are Wise to Greenwashing

Greenwashing is term used to describe corporate practices that appear to be
environmentally responsible without actually representing a change in how a
company conducts its business. For example, a product may be labelled as "All
Natural", even though it is being manufactured just as it always has. Some dry
cleaning services label their operations as "Organic" which sounds similar to "organic
food" but really carries no specific meaning. Some customers may react positively to
these types of claims, but others are wary of corporate greenwashing.
• Rising Costs Of Operations
Investing in CSR, at any scale, can lead to high costs and expenses.
Organizations may have to reorganize their finances to accommodate
this budgetary change. They need investment to train employees,
launch campaigns and collaborate with external agencies to roll out
programs. It largely depends on the type of CSR initiative, but most
call for an effort to ensure things go to plan.
VOLUNTARY RESPONSIBILITY VS LAW REQUIREMENT The
voluntary approach to CSR implies that corporations may or may not
apply CSR practices in their activities as result of a lack of
enforceability of CSR standards, which in turn implies that
corporations have a high degree of flexibility in the way they wish to
conduct their businesses.

It's not just a regulation to promote or help companies who want to

be socially responsible. It's a law that decrees that companies should
dedicate a 2% of their net profits to CSR activities. In India,
mandatory CSR is a solution to reach places that the State cannot
reach on its own.
The Companies Act, 2013 made it mandatory for companies above a certain size
and profitability to contribute a percentage of their profits to social development,
talk of corporate social responsibility, or CSR, is everywhere.

The Companies Act, 2013, a successor to The Companies Act, 1956, made CSR
compulsory. Under the notification dated 27.2.2014, under Section 135 of the new
act, CSR is compulsory for all companies- government or private or otherwise,
provided they meet any one or more of the following fiscal criterions:
The net worth of the company should be Rupees 500 crores or more
The annual turnover of the company should be Rupees 1000 crores or more
Annual net profits of the company should be at least Rupees 5 crores.
Net Profit for CSR Applicability
Every company which needs to comply with the CSR
provisions have to spend 2% of the average net profits made
during the preceding 3 years as per the CSR policy.

The computation of net profit for CSR is as per Section 198

of the Companies Act, 2013.

Section 198 provides that while computing the net profits of

a company a credit should be given for the subsidies and
bounties received from any Government, or public authority
authorised or constituted on this behalf.
CSR Committee Applicability
Every company to which CSR criteria are applicable shall constitute a Corporate
Social Responsibility (CSR) Committee.

The CSR Committee should consist of 3 or more directors, out of which at least 1
director must be an independent director.

An unlisted public company or a private company shall have its CSR Committee
without any independent director if an independent director is not required.

A private company having only two directors on its Board shall constitute its CSR
Committee with two directors.

In the case of a foreign company, the CSR Committee shall comprise of at least 2
persons of which one person shall be a person resident in India authorized to accept
on behalf of the foreign company – the services of notices and other documents.
Also, the other person shall be nominated by the foreign company.

A company having any amount in its Unspent Corporate Social Responsibility

Account shall constitute a CSR Committee and comply with the CSR provisions.
The responsibilities/ functions of the CSR committee will be
Creation of an elaborate policy to implement its legally mandated CSR activities.
CSR acts should conform to Schedule VII of the Companies Act, 2013.
The committee will allocate and audit the money for different CSR purposes.
It will be responsible for overseeing the execution of different CSR activities.
The committee will issue an annual report on the various CSR activities
undertaken.
CSR policies should be placed on the company‟s official website, in the form and
format approved by the committee.
The board of directors is bound to accept and follow any CSR related suggestion
put up by the aforementioned committee.
The aforementioned committee must regularly assess the net profits earned by the
company and ensure that at least 2 percent of the same is spent on CSR related
activities.
The committee must ensure that local issues and regions are looked into first as
part of CSR activities.
Role of the Board in CSR
The role of the Board in Corporate Social Responsibility is:
• Approve the CSR Policy of the company after considering the
recommendations given by the committee;

• To disclose the contents of such a policy in its report and to place it on the
company‟s website, if prescribed;

• To ensure that the company spends, in every financial year, at least 2% of the
average net profits made during the three immediately preceding financial
years, in pursuance, of its CSR Policy;

• The Board shall specify in its report the reasons for not spending the amount if
the company fails to spend such amount.
CSR Reporting
With respect to CSR Reporting, the provisions are as follows :
The Board‟s Report referring to any financial year initiating on or
after the 1st day of April 2014 shall include an annual report on
CSR.

In the case of a foreign company, the balance sheet filed shall

contain an Annexure regarding a report on CSR.
CSR Policy
CSR Policy elaborates the activities to be undertaken by the Company
as named in Schedule VII to the Act and spend. The activities should
not be the same which are done by the company in its normal course of
business

Contents of CSR Policy should be placed on the company‟s website by

the Board.

The activities mentioned in the policy must be undertaken by the

company.

The Company can join hands with other companies for undertaking
projects or programs or CSR activities and report separately on such
programs or projects.
The CSR policy shall monitor the projects or programs.
List of Permitted Activities To Be Included in Accordance With
Schedule VII of the Companies Act, 2013

The Board shall ensure that the activities included by a company in its
CSR Policy fall within the purview of the activities included is
schedule VII. Some activities are specified in Schedule VII as the
activities which may be included by companies in their Corporate
Social Responsibility Policies. These activities are related to:
Sr. No. CSR Activities

Eradicating poverty, hunger and malnutrition, promoting health care which

includes sanitation and preventinve health care, contribution to the Swach
1
Bharat Kosh set-up by the Central Government for the promotion of
sanitation and making available safe drinking water.
Improvement in education which includes special education and
2 employment strengthening vocation skills among children, women, elderly
and the differently-abled and livelihood enhancement projects.
Improving gender equality, setting up homes and hostels for women and
orphans, setting up old age homes, day care centres and such other facilities
3
for senior citizens and measures for reducing inequalities faced by socially
and economically backward groups.
Safeguarding environmental sustainability, ecological balance, protection of
flora and fauna, animal welfare, agroforestry, conservation of natural
4
resources and maintaining a quality of soil, air and water which also
includes a contribution for rejuvenation of river Ganga.
Protection of national heritage, art and culture including restoration of
buildings and sites of historical importance and works of art; setting up
5
public libraries; promotion and development of traditional arts and
handicrafts.
 Measures for the benefit of armed forces veterans, war widows and their dependents,
6 Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF)
veterans, and their dependents including widows.
Training to stimulate rural sports, nationally recognized sports, Paralympic sports and
7
Olympic sports.
Contribution to the Prime Minister‟s National Relief Fund, Contribution to the Prime
Minister‟s National Relief Fund (PM-CARES) or any other fund set up by the Central
8
Government for socio-economic development providing relief and welfare of the
Scheduled Castes, the Scheduled and backward classes, minorities and women.
Contribution to incubators or research and development projects in the field of science,
technology, engineering and medicine, funded by the Central Government, State
9
Government, Public Sector Undertaking or any agency of the Central Government or
State Government.
Contributions to public funded Universities, IITs, National Laboratories and
autonomous bodies established under DAE, DBT, DST, Department of
Pharmaceuticals, Ministry of AYUSH, Ministry of Electronics and Information
10
Technology and other bodies, namely DRDO, ICAR, ICMR and CSIR, engaged in
conducting research in science, technology, engineering and medicine aimed at
promoting Sustainable Development Goals (SDGs).
11 Rural development projects.
12 Slum area development.
13 Disaster management, including relief, rehabilitation and reconstruction activities.
Difference Between Business Ethics and CSR
• Definition
Business ethics are moral principles that act as a framework for the
way a company or business conducts itself and its transactions, while
corporate social responsibility is the concept that a company should
be socially accountable to itself, its stakeholders, as well as the
public.
• Nature
Moreover, business ethics is the combination of business and ethics,
which results in good ethical decision-making practices in the
workplace, whereas corporate social responsibility is more about a
company‟s obligations to society.
• Impact
Business ethics mainly affect the employees, stakeholders,
shareholders, and consumers or clients of a company, but corporate
social responsibility affects the whole of society.
CSR vs. Corporate Governance
Corporate Philanthropy

Corporate philanthropy involves a corporation or organization supporting the

wellbeing of others, typically through charitable contributions or donations.

It involves investments and actions which a company voluntarily undertakes.

These actions are to manage and account for their effect on society appropriately.

It refers to the charitable donations and social responsibility activities that a

company engages in, beyond its core business functions. It involves the practice of
donating money, time, or resources to nonprofit organizations or community
programs with the goal of improving social or environmental issues. Corporate
philanthropy can take various forms, including monetary donations, employee
volunteerism, cause-related marketing campaigns etc. The objective of corporate
philanthropy is to give back to the community and to create a positive impact on
society while also enhancing the reputation of the company.
Benefits
• Enhanced reputation and brand image: Engaging in philanthropic activities can
help to improve the public perception of a company, and enhance its reputation
and brand image.

• Increased employee engagement: Employees are often proud to work for a

company that supports charitable causes, and may be more engaged and
committed to their work as a result.

• Improved customer loyalty: Consumers are often more loyal to companies that
are seen as socially responsible and engaged in philanthropic activities.

• Positive impact on society: Corporate philanthropy can help to address social or

environmental issues, and contribute to the betterment of society.

• Financial benefits: Philanthropic activities can also lead to tax benefits and cost
savings for the company.

• Attraction and retention of top talent: Companies that are engaged in

philanthropic activities are often more attractive to top talent, and can help to
retain current employees.
Types of Corporate Philanthropy
• Cash donations: This is the most common form of corporate philanthropy, where
companies donate money to nonprofit organizations or charitable causes.

• In-kind donations: Companies can also donate products, services, or other

resources instead of cash, which can be beneficial to nonprofit organizations.

• Employee volunteer programs: Many companies encourage their employees to

volunteer their time and skills to support charitable causes.

• Corporate foundations: Some companies establish their own charitable

foundations to support specific causes or communities.

• Cause-related marketing: This involves partnering with a nonprofit organization

or cause to raise awareness and funds for a specific social issue.

• Matching gift programs: Some companies match their employees' charitable

donations to double the impact of their giving.
Corporate philanthropy vs. corporate social responsibility
Corporate philanthropy and corporate social responsibility (CSR) are related
concepts, but they are not the same thing. While both involve a company's
engagement in social responsibility activities, there are some key differences
between them.

Corporate philanthropy refers specifically to the practice of donating money, time, or

resources to nonprofit organizations or community programs with the goal of
improving social or environmental issues. It is a subset of CSR, but it is a more
limited concept that does not necessarily involve a company's overall approach to
ethical and sustainable business practices.

CSR, on the other hand, refers to a company's broader commitment to social and
environmental responsibility. It encompasses a range of activities beyond
philanthropy, including efforts to reduce the company's environmental impact,
promote ethical business practices, and support social and economic development in
the communities where the company operates.

In summary, while corporate philanthropy is an important aspect of CSR, CSR

involves a more comprehensive approach to social responsibility that goes beyond
philanthropy.
Relationship of CSR with Corporate Sustainability
Business Sustainability
Business sustainability is a comprehensive approach to business management that
works to maximize long-term economic, social, and environmental value.
Sustainability aims to leave systems capable of continued existence.
There are three dimensions to a sustainable business model:
Environmental: This refers to the environmental systems within which the business
operates. Business operations can degrade nature and destroy ecological systems.
Examples include deforestation and burning fossil fuels. By harming environmental
systems, businesses prevent future generations from obtaining equal environmental
value. This is not sustainable. It includes the various actions companies can take to
reduce their environmental impact and carbon footprint.
Examples include reducing packaging waste, reducing water usage, recycling
materials, and using sustainable energy sources.
Social: This refers to a business‟s impact on social systems. Such systems include
society, local communities, employees, consumers and other stakeholders. If business
activities harm social systems, degrading the wellbeing of future generations, then
operations are not socially sustainable.
The social pillar focuses on a company seeking the approval of its stakeholders,
employees, and the local community. A big part of corporate sustainability is a
company's dedication to taking good care of people inside and outside of the business.
Economic: For a business to survive, it has to be financially stable.
Economic sustainability means meeting the financial needs of a
business, funding business operations and supporting sustainable
social and environmental initiatives.
Elements of the economic pillar include compliance and good
corporate governance. Meaning, the values of stakeholders and
management align in terms of how to spend resources. The economic
pillar makes it possible for a company to strategize and invest in new
corporate sustainability methods.
Corporate social responsibility (CSR) and corporate sustainability are closely
related concepts, as both involve a company's engagement in social and
environmental responsibility. However, there are some differences between them.

CSR refers to a company's broader commitment to social and environmental

responsibility, which includes efforts to promote ethical business practices, support
social and economic development, and reduce the company's environmental impact.
CSR involves a range of activities that go beyond philanthropy, such as
environmental stewardship, responsible supply chain management, and employee
well-being.

Corporate sustainability, on the other hand, is a more specific concept that focuses on
a company's ability to operate in a way that is economically, socially, and
environmentally sustainable over the long term. It involves integrating sustainability
into a company's core business strategy, operations, and decision-making processes,
and balancing the company's economic, social, and environmental impacts.

In summary, while CSR and corporate sustainability are related concepts, corporate
sustainability is a more comprehensive approach to sustainability that involves
integrating sustainable practices into a company's core business operations, while
CSR encompasses a range of social and environmental responsibility activities that a
company can engage in.
Models of Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a self-regulating business
strategy that helps businesses to be socially responsible and
accountable, to their stakeholders and to the public.

Several CSR models have been formulated over the years. The
purpose of these models is to design and execute the CSR process and
to enable its monitoring and control. Businesses by implementing CSR
models in their operations increase their adaptability to internal and
external changes in the environment. This helps to promote positive
changes and bring about progress in socio-economic parameters.
Carroll’s pyramid CSR model
This is one of the leading CSR models. It is formally known as the model of
Carroll‟s four-part pyramid. The major focus of the model is to embrace the
complete spectrum of expectations that society has from a business, defining them
and dividing them into different categories. The model can be represented with the
help of diagram-1 shown below.

Carroll‟s pyramid CSR model

This is one of the leading CSR models. It is formally known as the model of
Carroll‟s four-part pyramid. The major focus of the model is to embrace the
complete spectrum of expectations that society has from a business, defining them
and dividing them into different categories. The model can be represented with the
help of diagram-1 shown below.
As shown in the above figure, there are four kinds of social responsibilities that
constitute the concept of CSR. This involves economic, legal, ethical and
philanthropic. The pyramid is used to show the different responsibilities of a business
in the order of decreasing importance. The most basic responsibility representing the
bottom of the pyramid is economic responsibility. All the other responsibilities of the
business are predicted on the basis of this component.

Next comes the legal responsibility, all the businesses whether small or big expected to
operate within the framework that has been specified by the law of the land. Thus,
legal responsibility is depicted as a layer above economic responsibilities.

Followed by this in the hierarchy are the ethical responsibilities which cover activities
and practices which are expected by the society members even though they are not
enforced by law.

On top of the pyramid the philanthropic responsibilities, which are considered

discretionary in nature. Thus, the pyramid works towards describing the necessary and
sufficient obligations that socially responsible businesses should follow (Kaman,
2015).
Carroll‟s pyramid CSR model has been applied by several
researchers in order to assess an industry or a
company‟s CSR program, particularly in the field of social issues.
However, consecutively a modified model was proposed (Schwartz
& Carroll, 2003) called the “three-domain model of CSR”. The
authors critiqued Carroll‟s pyramid as he found that it was
insufficient to address the relationship between the four components,
it considers philanthropy separately and was theoretically
underdeveloped. The three-domain model consists of only three
categories; economic, legal and ethical. Philanthropy is assumed to
be a part of all these functions.
Intersecting Circle (IC) CSR model
The Intersecting Circle (IC) CSR model is very different from the pyramid model.
The major point of differentiation between the two models is that:
it recognizes that there is a possibility of interrelationships between the different
domains of CSR and second and,
it rejects the hierarchical order of importance.
Diagram 2 shows the pictorial representation of the model.
Carroll‟s pyramid model could not properly capture the interpenetrating nature of
the different domains of CSR nor does the model was successful in reflecting the
possible tension points. However, this mutuality has been considered an integral
characteristic of CSR. This model clearly includes all the possible domains
of CSR and hence could clearly depict the picture of the interrelationships between
the different domains.

The IC model refutes the notion that CSR is just a collection of contingent and
externally related topics. Rather, the model states that different responsibilities are
in dynamic interplay with each other. It is the responsibility of the corporates to
maintain harmony and resolve the conflicts between different responsibilities. The
main idea of the model is that no responsibility is more important than the other.
Rather everything is a social creation and the existence of everything depends on
the willingness of society to support them
Concentric Circle CSR model
The Concentric Circle model which is also known as the CON model shares some
similarities with Carroll‟s Pyramid and IC model. For instance, the CON model also
states economic responsibility as one of the core social responsibilities. Also, like the
IC model, the CON model also emphasizes the interrelationships among different
responsibilities
However, besides these similarities, there is a major difference as well. In contrast to
the Pyramid model and IC model, the CON model states that non-economic social
responsibilities are the one that embraces core economic responsibilities.
As shown in the figure above the inner circle represents the core responsibilities of
the business in terms of CSR. This basically includes responsibilities that focus on
the efficient execution of economic functions such as products, jobs and economic
growth.
The second circle represents the legal responsibilities that involve cooperating with
the government on the part of the businesses.

The intermediate circle which is the ethical circle includes responsibilities that help
to exercise economic functions but with a sensitive awareness of ethical norms as
well as values and priorities.

The outer circle that represents the philanthropic circle focuses on newly emerging
responsibilities that the business should focus on in order to become more broadly
involved in social responsibilities.

Furthermore, the concentric circle represents the system of inclusion rather than the
system of mutually exclusive domains. Thus every member of the inner circle is part
of the wider circle
Contemporary innovative CSR models

Although the above-discussed models find universal application in the domain

of CSR, many businesses have come up with customized models. For instance,
Coca-Cola has employed the CSR model known as the 5*20 Program which
focuses on employing 5 million women in developing countries by the year 2020 in
their bottling and distribution roles. This will not only benefit the women but also
the community as the company also aims to provide better access to healthcare
facilities and education to their employees.

Furthermore, Salesforce implements a 1-1-1 philanthropic model, which involves

giving one percent of the product, one percent of equity, and one percent of
employees‟ time to communities and the nonprofit sectors. Using this model, the
company not only achieved its CSR goals but also increased its revenues
 Comparison of CSR Models

CSR Pyramid Intersecting Circles Concentric Circles

General Description Hierarchy of separate Nonhierarchical set of Integration of
responsibilities intersecting responsibilities; all
responsibilities sharing a central core
Scope of Narrow split Wide
Responsibilities
Order of importance Hierarchy; Economic No prima facie order Inclusion system;
responsibility first economic circle at the
core
Role of Philanthropy “Icing on the cake” Subsumed under Integral part of CSR
economic/ethical
responsibilities
Codes and Standards on CSR
Universal Declaration of Human Rights – Adopted by United Nations, this declaration
paved way for many international human rights standards for all sectors entities.

UN Global Compact – An international multi-constituent, voluntary initiative based

on internationally accepted ten principles in pursuit of a more sustainable inclusive
global economy. The ten principles covers human rights forced labor, child labor,
environmental challenges and responsibility, non discrimination, freedom of
associations, collective bargaining, corruption, etc.

Global Reporting Initiative (GRI) – Since its founding in 1997, the GRI has been
addressing the need for standardized approaches to corporate sustainability reporting.
In 2006, GRI published Version 3.0 (G3) of its Sustainability Reporting Guidelines
emphasizing performance indicators, which contain a separate section titled “Human
Rights” with nine performance indicators. It is an international, multi-stakeholder
effort to create a common framework for voluntary reporting of the economic,
environmental and social impact of organisational activities. Its mission is to improve
the comparability and credibility of sustainability reporting worldwide.

Organization for Economic Co-operation and Development (OECD) – OECD

guidelines contains recommendations on core labor, environmental standards, human
rights, competition, taxation, science and technology combating corruption and safe
guarding, consumer rights.
Social Accountability 8000 -„SA 8000‟ standard for social accountability, created in
2000 by the Council on Economic Priorities Accreditation Agency (CEPAA).
SA8000 developed by an international coalition of businesses, trade unions and
non-governmental organizations (NGOs) on the basis of International Labor
Organization (ILO) conventions – the Universal Declaration of Human Rights and
the UN convention on the Rights of the Child. The SA8000 code of practice is
broken down into nine key areas child labor, management systems, working hours,
compensation, disciplinary practices, forced labor, health & safety, freedom of
association & collective bargaining and discrimination.

Principles for Responsible Investment (PRI) – A set of global best practice

principles for responsible investment. It provides a framework for achieving better
long term investment returns and more sustainable markets.

Equator Principle – Equator principle is a set of environmental and social

benchmarks for managing environmental and social issues in development project
finance globally. They were developed by private sector banks- led by Citigroup,
ABN AMRO, Barclays and WestLB and were launched in June 2003.
Role of International Labor Organization (ILO) – ILO seeks the
promotion of social justice and internationally recognized human and
labor rights. It formulates international labor standards in the form of
conventions and recommendations setting minimum standards of basic
labor rights.

International Organization for Standardization (ISO) 26000 – ISO an

International Standard setting body is developing a new standard on
Social Responsibility namely ISO 26000 to be published in Nov., 2009.
ISO 26000 is intended for use by all types of organizations and in all
countries and to assist organization to operate in a socially responsible
manner.

Occupational Health & Safety Advisory Services (OHSAS) Standard –

OHSAS 18001 is applicable to any organization which aims to
establish a health and safety management system at work.
Universal Declaration of Human Rights
The Universal Declaration of Human Rights is a milestone document
in the history of human rights. Drafted by representatives with
different legal and cultural backgrounds from all regions of the world,
the Declaration was proclaimed by the United Nations General
Assembly in Paris on 10 December 1948 as a common standard of
achievements for all peoples and all nations. It sets out, for the first
time, fundamental human rights to be universally protected and it has
been translated into over 500 languages. The UDHR is widely
recognized as having inspired, and paved the way for, the adoption of
more than seventy human rights treaties, applied today on a
permanent basis at global and regional levels.
UN Global Compact
The United Nations Global Compact is a strategic initiative that supports global companies that are
committed to responsible business practices in the areas of human rights, labor, the environment, and
corruption. This UN-led initiative promotes activities that contribute to sustainable development goals to
create a better world.
The UN Global Compact is based on 10 principles that should define a company‟s value system and
approach to doing business. These principles were collectively founded in the Universal Declaration of
Human Rights, the International Labor Organization‟s Declaration on Fundamental Principles and Rights
at Work, the Rio Declaration on Environment and Development, and the UN Convention Against
Corruption. Member companies are expected to engage in specific business practices that benefit
the people and the planet while pursuing profitability with integrity.
The United Nations Global Compact’s 10 Principles for Businesses
The 10 principles for businesses, as stated on the UN Global Compact‟s website, are the following:
Principle 1: Support and respect the protection of internationally proclaimed human rights.
Principle 2: Ensure that business practices are not complicit in human rights abuses.
Principle 3: Uphold the freedom of association and the effective recognition of the right to collective
bargaining.
Principle 4: Eliminate all forms of forced and compulsory labor.
Principle 5: Abolish child labor.
Principle 6: Eliminate discrimination in employment and occupation.
Principle 7: Adopt a precautionary approach to environmental challenges.
Principle 8: Conduct environmentally responsible activities.
Principle 9: Encourage the development and diffusion of environmentally friendly technologies.
Principle 10: Fight corruption in all its forms including extortion and bribery.
Global Reporting Initiative (GRI)
The Global Reporting Initiative (GRI) is an international independent organization that has developed a
comprehensive set of sustainability reporting standards. These standards provide guidance on how
companies can report on their economic, environmental, and social impacts.

The GRI Standards are designed to help organizations report on their sustainability performance in a
transparent and consistent way. They are used by companies of all sizes, sectors, and geographic locations to
report on their sustainability impacts and progress.

The GRI Standards are organized into three main categories: General Disclosures, Management Approach,
and Performance Indicators.
The General Disclosures category includes information on the organization's strategy, governance, and
ethics. This includes information on the organization's mission and values, its governance structure, and its
approach to managing sustainability issues.
The Management Approach category provides information on how the organization manages its
sustainability impacts. This includes information on how the organization identifies and prioritizes
sustainability issues, how it engages with stakeholders, and how it integrates sustainability into its business
strategy and operations.
The Performance Indicators category provides information on the organization's actual performance on
sustainability issues. This includes information on the organization's environmental, social, and economic
impacts, such as greenhouse gas emissions, labor practices, and financial performance.
The GRI Standards are used by organizations to measure and report on their sustainability performance in a
consistent and transparent way. This helps stakeholders, including investors, customers, employees, and the
public, to make informed decisions about the organization's sustainability practices.
In summary, the GRI Standards provide a framework for organizations to report on their sustainability
performance in a comprehensive and standardized way. By using the GRI Standards, organizations can
demonstrate their commitment to sustainability and transparency and provide stakeholders with valuable
information on their sustainability impacts and progress
Organization for Economic Co-operation and Development (OECD)
The Organization for Economic Co-operation and Development (OECD) is an international
organization made up of 38 member countries, including the United States, Canada, Australia,
Japan, and several European countries. The organization was established in 1961 to promote
economic growth and development, and to support the economic and social well-being of
people around the world.

The OECD conducts research, collects and analyzes data, and develops policies and
recommendations to address a wide range of economic, social, and environmental issues. Some
of the key areas of focus for the organization include education, employment, health, energy,
taxation, trade, and innovation.
One of the main objectives of the OECD is to promote responsible business practices and to
encourage multinational enterprises to adopt socially responsible policies and practices. The
organization has developed guidelines for multinational enterprises, which provide
recommendations for responsible business conduct in areas such as human rights, labor
practices, environmental protection, and anti-corruption.
The OECD also works to promote international cooperation and coordination on economic and
social issues. The organization provides a forum for member countries to share information,
exchange best practices, and collaborate on policy development and implementation. The
OECD also works with non-member countries and international organizations to promote
economic development and address global challenges.
Overall, the OECD plays an important role in promoting economic growth, development, and
social well-being around the world, while also encouraging responsible business practices and
promoting international cooperation and coordination on economic and social issues
Social Accountability 8000 -‘SA 8000’
Social Accountability 8000, or SA 8000, is an international standard for social accountability
developed by Social Accountability International (SAI). The standard provides a framework
for companies to ensure that their suppliers and subcontractors are complying with ethical
and social responsibility standards.

SA 8000 is based on international human rights standards, including the Universal

Declaration of Human Rights, and covers a range of social responsibility issues, including
labor rights, health and safety, and anti-discrimination.
The standard requires companies to implement policies and procedures to ensure that they
are meeting their social responsibility obligations, including regular monitoring and
reporting on their performance. Companies are also required to engage with their
employees, suppliers, customers, and other stakeholders to ensure that they are aware of and
committed to social responsibility principles.
To become certified to SA 8000, companies must undergo an independent audit by a
qualified third-party certification body. The audit assesses the company's compliance with
the standard's requirements, including its policies and procedures, documentation, and
performance.
By implementing the SA 8000 standard, companies can demonstrate their commitment to
social responsibility and ethical business practices, and can provide assurance to
stakeholders that their operations are meeting internationally recognized standards. The
standard is used by companies in a wide range of industries, including manufacturing, retail,
and service sectors, and is recognized around the world as a leading standard for social
accountability.
Principles for Responsible Investment (PRI)
The Principles for Responsible Investment (PRI) is a United Nations-supported international
network of investors working to promote responsible investment practices. The PRI was
launched in 2006 and has over 3,000 signatories, including asset owners, investment
managers, and service providers from around the world.
The PRI is based on six principles for responsible investment, which are:
Incorporating environmental, social, and governance (ESG) issues into investment analysis
and decision-making processes.
Being active owners and incorporating ESG issues into ownership policies and practices.
Seeking appropriate disclosure on ESG issues by the entities in which we invest.
Promoting acceptance and implementation of the Principles within the investment industry.
Working together to enhance our effectiveness in implementing the Principles.
Reporting on our activities and progress towards implementing the Principles.
Signatories to the PRI are required to report on their activities and progress towards
implementing the principles, which are designed to promote responsible investment practices
and to encourage companies to consider ESG issues in their decision-making processes.
The PRI provides a platform for investors to collaborate and share best practices for
responsible investment. The organization also conducts research, develops guidance and tools,
and engages with policymakers and other stakeholders to promote responsible investment
practices.
Overall, the PRI plays an important role in promoting responsible investment practices and
encouraging companies to consider ESG issues in their decision-making processes. By
incorporating ESG issues into investment decisions, investors can contribute to sustainable
economic growth, while also promoting social and environmental well-being
Equator Principle
The Equator Principles is a risk management framework for financial institutions to determine,
assess, and manage social and environmental risk in project finance. The principles are based
on the International Finance Corporation (IFC) Performance Standards on social and
environmental sustainability, as well as on other international standards and guidelines.
The Equator Principles were first introduced in 2003 and have been revised several times since
then. As of 2021, over 110 financial institutions in 38 countries have adopted the Equator
Principles.

The Equator Principles apply to project finance transactions with a total project capital cost of
$10 million or more. The principles cover a range of social and environmental risks, including
climate change, biodiversity, human rights, and labor rights. The principles also require
financial institutions to conduct due diligence on the projects they finance, including assessing
the potential social and environmental impacts of the project and ensuring that appropriate
mitigation measures are put in place.

If a project is found to pose a significant social or environmental risk, the financial institution is
required to develop an action plan to manage those risks. The Equator Principles also require
that financial institutions engage with project stakeholders, including affected communities, to
ensure that their concerns and perspectives are taken into account in decision-making.
Overall, the Equator Principles provide a framework for financial institutions to manage social
and environmental risks associated with project finance. By adopting the Equator Principles,
financial institutions can demonstrate their commitment to responsible lending practices and
contribute to sustainable economic development.
Role of International Labor Organization (ILO)
The International Labour Organization (ILO) plays an important role in promoting corporate
social responsibility (CSR) by setting and promoting international labor standards and
providing guidance to companies on labor issues. The ILO is a specialized agency of the
United Nations, founded in 1919, and has a mandate to promote social justice and promote
decent working conditions around the world.

The ILO's core function is to develop and promote international labor standards, which are
adopted by its member states. These standards cover a range of labor issues, including
freedom of association, forced labor, child labor, discrimination, and working conditions. The
ILO also provides technical assistance and guidance to its member states on implementing
these standards, and works with governments, employers, and workers' organizations to
promote social dialogue and cooperation on labor issues.

In addition to its work with governments, the ILO engages with the private sector to promote
CSR and responsible business practices. The organization has developed a number of tools
and guidance documents to help companies understand and address labor issues in their
operations and supply chains. These include the ILO Tripartite Declaration of Principles
concerning Multinational Enterprises and Social Policy, which sets out principles for
responsible business conduct, and the ILO Global Business Network on Forced Labour, which
brings together companies, employers' organizations, and trade unions to share knowledge and
good practices on addressing forced labor in global supply chains.
International Organization for Standardization (ISO) 26000
ISO 26000 is a voluntary international standard developed by the International Organization for
Standardization (ISO) to provide guidance on social responsibility and sustainable
development. The standard was published in 2010 and is intended to help organizations, both
public and private, to understand and address their social responsibilities.

ISO 26000 provides guidance on seven key principles of social responsibility: accountability,
transparency, ethical behavior, respect for stakeholder interests, respect for the rule of law,
respect for international norms of behavior, and respect for human rights. The standard also
provides guidance on identifying and engaging with stakeholders, assessing social
responsibility risks and opportunities, and developing and implementing social responsibility
strategies and programs.

ISO 26000 is designed to be flexible and adaptable to a wide range of organizations, regardless
of their size, sector, or location. The standard is not a certification or auditing standard, but
rather a set of guidelines for organizations to use in their efforts to be socially responsible.
By implementing the principles and guidance outlined in ISO 26000, organizations can
contribute to sustainable development and help to address a range of social and environmental
challenges. ISO 26000 can also help organizations to build trust with stakeholders and enhance
their reputation for responsible business practices.
Occupational Health & Safety Advisory Services (OHSAS) Standard
The Occupational Health and Safety Advisory Services (OHSAS) Standard is a set of voluntary
standards and guidelines designed to help organizations manage and improve their occupational
health and safety (OH&S) performance. The standard was first published in 1999 and was
updated in 2007.

The OHSAS Standard provides a framework for implementing an OH&S management system,
which is a systematic approach to managing occupational health and safety risks and improving
performance. The standard outlines the key elements of an effective OH&S management
system, including policy development, hazard identification and risk assessment, legal and
other requirements, objectives and targets, training and awareness, and performance evaluation
and continual improvement.

The OHSAS Standard is designed to be flexible and adaptable to the needs of different
organizations, regardless of their size, sector, or location. The standard is not a certification or
auditing standard, but rather a set of guidelines for organizations to use in their efforts to
improve their OH&S performance.
By implementing the OHSAS Standard, organizations can identify and manage occupational
health and safety risks, prevent workplace accidents and injuries, and enhance the health and
well-being of their employees. The standard can also help organizations to comply with legal
and regulatory requirements, improve their reputation and credibility, and reduce costs
associated with workplace accidents and injuries.
Overall, the OHSAS Standard provides a valuable framework for organizations to manage and
improve their occupational health and safety performance, and to create safer and healthier
workplaces for their employees.