Everything You Need To Know About Corporate Social Responsibility

Corporate social responsibility is a business concept that is based on self regulation. It helps a company stay accountable socially, to the company, the stakeholders and to the public. If a particular company is practicing corporate social responsibility, they appear to be more conscious about the kind of impacts they have on every aspect of the society, including social, economic and environmental impacts. In short, a company ensures that it is operating in a way that positively impacts the environment and society, by taking part in corporate social responsibility, as opposed to contributing to these things negatively. 

Corporate social responsibility can take many different forms depending on the company or the industry. Brands can boost their public image with the help of CSR policies. They can take part in philanthropic activities, volunteer work and other activities that benefit society. While CSR benefits the society in many ways, it is extremely beneficial for the company as well. When it comes to helping a company, CSR programs can help the employees of a company form a stronger bond with their corporations, improve employee morale and help the employers and employees be more connected to the world around them. 

The first step and the most important one about an organization that practices CSR is that it has to be accountable to itself and to its stakeholders. Very often, companies take part in CSR programs only when they have grown to an extent where they are capable of giving something back to the community. This means that CSR is most often implemented by large corporations. If a brand has more visibility, it becomes more important for them to be seen as having a positive impact on society. This helps them set a standard for other companies, peers and the industry in general. 

Let us take a look at corporate social responsibility in India, which is now a law in India. In 2014, India became the first country to make CSR mandatory by law. Some new rules in section 135 of India’s companies act make it a law for companies to spend 2% of their average profit in the previous three years on CSR, provided they have a certain turnover and profitability.

About Corporate Social Responsibility in India

All of the laws regarding corporate social responsibility in India state that all CSR related activities must take place in program or project mode. The law also has strict guidelines in place regarding what kinds of activities qualify for corporate social responsibility. Activities under a few categories are allowed. These categories include poverty, hunger, education, gender equality, health and many more. Businesses are permitted to invest their profits in these areas. 

During the pandemic, that is the COVID-19 outbreak, The Ministry of Corporate Affairs announced that any expenditure made by companies towards fighting the pandemic would be considered to be a part of corporate social responsibility activities. Funds that are spent on a host of COVID-19 related activities, like sanitation, healthcare, preventive medicine, disaster management and the promotion of healthcare, would be considered to be under corporate social responsibility. This amendment made corporate social responsibility a mandatory law for companies. Earlier it was an option. 

The process followed for corporate social responsibility

Corporate social responsibility analyzes the responsibility and impact any company has towards the community. This assessment is done in the following aspects of a business. 

• Suppliers
• Environment
• Customers
• Communities
• Employees

The corporate social responsibility laws in India ensure that every company complies with legal obligations, it also needs to be ensured that the development and growth of the marginalized communities in the country are respected. CSR activities in India should not only be sustainable, but should also support the organization’s development in a positive way. 

AISECT is a leading provider of skill development training and has been selected as one of the NSDC training partners to implement this scheme in nine states of India namely Haryana, Rajasthan, Madhya Pradesh, Jharkhand, Delhi, Chhattisgarh, Punjab, West Bengal and Odisha. It covers 289 schools in total.