INTRODUCTION

Corporate social responsibility, or CSR, alludes to the conviction that organizations have a
commitment to society past their responsibilities to their investors or financial backers. As well
as creating benefits, organizations are required to have some duty to stakeholders like workers,
clients, networks, and the environment . CSR incorporates organizations being financially
mindful, improving labour practices, accepting reasonable exchange, moderating natural harm,
rewarding the local area, and expanding worker fulfillment.

Organizations can accomplish this reverence through waste and contamination depletion and
lowering measures, by contributing instructive and social projects, by being harmless to the
ecosystem and by embraced activities of corresponding nature. CSR is not a noble cause or
gratuity. CSR is a method of leading business, by which corporate elements noticeably adds to
the community good. Socially mindful organizations do not restrict themselves to utilize assets to
participate in exercises that leads to the expansion of just their own benefits. They use CSR to
incorporate financial, ecological and social targets with the company's tasks and development.
CSR is said to build notoriety of an organization's image among its clients and society.

HISTORICAL BACKGROUND

While there has been a new spike in the recognition of CSR, proof of businesses
regards,implication and anxiety for society can be trailed back from the emergence of Industrial
Revolution. In the latter half of 1800s, there was an enlarged solicitude about workers benifits,
prosperity and efficiency among industrialists.
The looming Factory System and its spreading criticism of its framework, working conditions,
and the work of women and the children were being exposed and disclosed, particularly in the
United States. The agreement among reformers was that current work practices were adding to
social issues, including destitution and work turmoil. Notwithstanding, industrial improvement
and government assistance developments at the time were seen as a blend of philanthropy and
business astuteness.

Inspite of the fact that corporations had already existed for quite a century before, the
term corporate Social Responsibility was formally coined in 1953 by an American economic
expert Howard Bowen in his publication Social Responsibilities of the Bussinessman. As such,
Bowen is generally reffered as   father of CSR.

However, it wasn’t till the Nineteen Seventies that CSR actually began to require flight within

the us. In 1971, the conception of the ‘social contract’ between businesses and society was
introduced by the Committee for Economic Development. This contract brought forward the
concept that corporations perform and exist owing to public consent and,
therefore, there's Associate in Nursing obligation to contribute to the wants of society.

By the Nineteen Eighties, early CSR continuing to evolve as further other organizations began

incorporating social interests in their business practices whereas receptiveness
to additional receptiveness to the stakeholders. 

The Companies Act, 2013  has formulated Section 135, Companies (Corporate Social

Responsibility) Rules, 2014 and Schedule VII which prescribes mandatory provisions for
Companies to fulfil their CSR. 
Meaning of Corporate Social Responsibility (CSR)

Corporate social responsibility may be a broad idea which will take several forms reckoning

on the company and business. Through CSR programs, financial aid, and volunteer efforts,
businesses will profit society whereas boosting their brands.
As necessary as CSR is for the community, it's equally valuable for an organization. CSR
activities will facilitate forge a stronger bond between workers and companies, boost morale
and facilitate each workers and employers feel a lot of connected with the globe around them.

For an organization to be socially accountable, initially it has to be responsible to itself and its

shareholders. Often, corporations that adopt CSR programs have mature their business to the
purpose wherever they will repay to society. Thus, CSR is primarily a technique of huge firms.
Also, the more visible and flourishing a company is, the a lot of responsibility that it has to
set standards of moral behavior for its peers, competition, and business.
The term corporate social responsibility (CSR) refers to practices and policies undertaken
by firms that ar supposed to own a positive influence on the globe. The key plan behind CSR is
for firms to pursue different pro-social objectives, additionally to maximising profits. samples
of common CSR objectives embrace minimizing environmental externalities, promoting
volunteerism among company staff, and donating to charity

IMPORTANCE OF CSR

Many corporations prospect CSR as associate integral component of their whole image, basic

cognitive process that customers are a lot of seemingly to try and do business with brands that
they understand to be a lot of moral. during this sense, CSR activities are often a very
important element of company PR. At an equivalent time, some company founders also
are driven to interact in CSR thanks to their personal convictions.
By rehearsing corporate social responsibility, conjointly called corporate citizenship, firms may
be responsive to the sort of impact they're having on all aspects of society, as well as economic,
social,and.environmental.To engage in CSR implies that, within the normal course of business, a
 corporation is working in ways in which enhance society and therefore the setting, rather
than conducive negatively to them.

FUNCTIONS, COMMITTEES AND DUTIES OF CORPORATE SOCIAL

RESPONSIBILITY

FUNCTIONS:

The United Nations Industrial Development Organization notes that the common functions of
corporate social responsibility include:

 Responsible sourcing of materials and supplies

 Employee, vendor, customer and community engagement and relations
 Adherence to labor standards
 Environmental protection and management
 Anti-corruption measures
 Upholding social equity, gender equity and other human rights goals
 Conservation of resources, like water and energy, in production

COST SAVINGS BENEFITS

Sustainable business practices can benefit a company's bottom line as well as the
environment. By developing products that use less energy or less packaging, a company can
also save on utility bills and materials expenses. One notable example is General Mills, which
the Office of Energy Efficiency and Renewable Energy reports has reduced a third of its
energy costs by using more efficient lighting and equipment and cutting heat waste.

BRAND PERCEPTION BENEFITS

Investing in the community and supporting local organizations can set a business brand apart
from the rest. Responsible business practices can improve public perception of a company's
brand, which can increase its customer base and overall sales. It can also garner interest from
investors that only invest in socially-responsible companies.

INCREASED EMPLOYEE LOYALTY

Corporate social responsibility helps companies attract and retain top-quality talent. Employees
often look for employers that display ethical behavior and have values that align with their
own. The firm notes that a variety of companies saw employee motivation and loyalty increase
after engaging them in corporate social responsibility initiatives, and these companies felt they
were able to obtain better-quality employees as a result.

LONG-TERM FINANCIAL SUCCESS

Executives who receive quarterly or annual performance-based incentives -- a common

practice among corporations -- often focus primarily on a company's short-term financial
results. While this is an important component ensuring profitability, it doesn't necessarily mean
that profits are sustainable for the long-term.

Functions of corporate social responsibility help a company ensure long-term, sustainable

financial health. For example, reinvesting profits into the local community and universities
helps create a thriving local economy, which makes it easier to find talented employees and
contractors. Committing to sourcing inventory and materials in a sustainable, environmentally-
friendly way ensures that the company won't run out of resources in the future for developing
products.

COMMITTEES

Total Members of CSR Committee

The CSR Committee shall consist of 3 (Three) or more Director, out of which at least one
director shall be an Independent Director.
 Relaxation from having Independent Director in CSR Committee:

All unlisted public limited companies on which the appointment of Independent Director is not
mandatory, are exempted from having Independent Director in their CSR Committee.

*Where Following companies are required to have Independent Director Directors on their
Board

1. Every Listed Public Company

2. Unlisted Public Company

The Central Government may prescribe the minimum number of independent directors in case of
any class(es) of public companies.

However, As per Rule 4 of the Companies (Appointment and Qualification of Directors)

Rules, 2014, the following classes of companies shall have at least 2 directors as independent
directors.

 Public Companies with paid-up share capital of Rs. 10 crores or more.

 Public Companies with turnover of Rs. 100 crore or more.
 Public Companies with aggregate outstanding loans, debentures, and deposits, exceeding
Rs. 50 crore
Relaxation from having 3 Directors in CSR Committee

Private Limited Companies, where there are only 2 directors on their board, are also exempted to
have 3 directors for CSR committee i.e. private limited companies can form the CSR Committee
with 2 directors only.

IN CASE OF FOREIGN COMPANY

In case of Foreign companies, The CSR committee should have at least Two person, out of
which One person shall be specified under section [2]380(1)(d) of the 2013 Act and Another
person nominated by the Foreign Company.

DUTIES:
1.To share the negative consequences as a result of industrialization: This is related to
increasing conscience-focused marketplaces necessitating more ethical business processes.

2. Closer ties between corporations and community: Through CSR the existence of
corporations in the social system is felt beyond a perception that corporation is a place just to get
employment and producers of goods and services.

3. Helping to get talents: Organizations with a reputation for CSR can take advantage of their
status and strengthen their appeal as an attractive employer by making their commitment part of
their value proposition for potential candidates.

4. CSR helps to protect environment: Some of the world's largest companies have made a
highly visible commitment to CSR, for example, with initiatives aimed at reducing their
environmental footprint. These companies take the view that financial and environmental
performance can work together to drive company growth and social reputation

5. CSR is for human right corporate sustainability: The United Nations have launched the
“Global Compact” – an initiative to convince international companies to commit themselves to
universal principles in relation to protection of human rights (UN Global Compact, 2009). Being
the world's largest voluntary corporate responsibility initiative, the UN Global Compact is also
seen a strategic policy for businesses that are committed to aligning their operations and
strategies within the areas of human rights, labor, and environment.

6.A CSR program can be seen as an aid to alleviate poverty: An example is a Malaysian
reality program Bersamamu of TV3 which is sponsored by Syarikat Faiza Sendirian Berhad
(SFSB), a local enterprise-cum-philanthropist who responds to government’s appeal to help
impoverished community to improve their livelihoods (SFSB, 2009). SFSB gets help from the
local media company TV3 for publicity and audience support

7. For corporate sustainability goals: In Europe and elsewhere outside the U.S., companies
have been taking their social role seriously for years, often under the banner of corporate
sustainability. The EU has developed a corporate sustainability framework, which identifies a
progressive set of economic, social and environmental objectives that companies are encouraged
to achieve.

WHETHER CORPORATE SOCIAL RESPONSIBILITY SUCCESSFUL IN INDIA?

Although, CSR is proved to be fruitful yet we cannot say that it has achieved its objects in
totality. One of the major reasons for this is the lack of effective enforcement of these provisions.
Simply mandating them will not be helpful. One of the major stumbling blocks is finding
credible projects that these companies can support under the amit of their CSR requirements.

India is driving the way that multinational companies think about their corporate social
responsibility (CSR) work. As one of the first countries to mandate CSR spending, India has
seen social impact spending grow by nearly 50% since implementing the “2% law” in 2014

This rapid growth in spending on India’s social impact projects outstrips growth in corporate
profits.  In other words, an increasing number of top companies are spending more than their
required 2% target.  As the Government of India lays out an ambitious slate of development
goals, many companies have embraced CSR spending as a way to give back to local
communities and position themselves – and industry broadly – as important GOI partners.  At
major companies, CSR committees are growing in size and increasingly include company CEOs
and Board directors, demonstrating a new integration of CSR with traditional business decision-
making.
Companies are also taking more active ownership of the projects that their CSR spending
supports, with an increasing number going beyond the legal mandate to disclose beneficiary and
impact data. Over 90% of major companies now publicly report their CSR focus areas, with
many tied to companies’ strategic objectives.  In 2017-18, over 80% of these companies reported
details of the people impacted by their projects, a 400% increase since 2014-15.  The number of
companies publicly reporting their CSR expenditures has doubled over the same period.

 While India’s CSR trends are largely positive, India will need to address some structural
challenges as it seeks to transform the mindset of companies across the country.
 The Company Size Problem: Large companies have adapted quickly to the new CSR
mandate, in most cases easily reaching (or exceeding) the mandated expenditure and
structural requirements and aligning programs with broader corporate strategic goals.
Smaller or less well-resourced companies have been less successful, in some cases
reporting that they were unable to meet the 2% target because they “did not find the right
project.”While CSR spending is on the rise, that growth is primarily driven by the largest
companies giving more.
 Focus on 2% Misses the Mark: In some cases, companies focus on meeting the
minimum spending requirement to the exclusion of incorporating the mindset of social
impact into their operations. While more companies met the 2% spending requirement in
2017 than prior years, there was a dip in compliance on governance and transparency
markers compared with previous years.
 NGOs Drive CSR Spending: With NGOs increasingly handling the bulk of CSR project
spending – managing the funds of 74% of companies in 2017, compared with 62% in
2016[8] – due diligence is an increasing challenge. As a result, CSR funds tend to be
concentrated with large and well-known NGOs.  This creates challenges for locally
impactful but smaller NGOs across India.

Nearly five years after the 2% Law, India’s legislative framework on CSR remains in flux. 
Last April, the Indian Ministry of Corporate Affairs set up a committee to review CSR
compliance and provide recommended changes.  The submitted recommendations tighten the
screws on companies, disallowing the practice of carrying forward unspent CSR funds to the
next financial year and requiring stricter adherence of projects to the set list of CSR
activities.  These changes may push more companies towards technical compliance, but it
will take changing minds in the Boardroom for many companies to see a full-scale embrace
of the CSR mindset across company operations.

CONCLUSION
Finally we can conclude that concept of corporate social responsibility is now firmly rooted on
the global business agenda.Various positives have been seen in different abovementioned
sectors, such as:

In environmental field, somr benefits such as 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-labeling.

Government is playing a very significant role in facilitating the formulation and implementation
of CSR policies and practices, but when it comes to monitor the activities of CSR by government
the companies are against it. They think that the role of government in regulating their CSR
activities should be limited. Proper observing and assessment of such practices can give better
results as it will help in finding out the loopholes where the companies are deficient. CSR holds a
very important place in the development scenario of the world today and can pose as an
alternative tool for sustainable development.

With increasing and widespread commitment of corporate resources to CSR, attention is now
shifting to the strategic formulation, implementation, and measurement of the market returns to
CSR initiatives. But still a concern to companies is whether their focus on “doing good,” will
provide positive returns to their CSR actions. This emphasize the need for better measurement
models of CSR that capture and estimate clearly the effects of a company’s CSR actions on its
stakeholders as well as the nations in which they are operating.