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Corporate Social Responsibility and Sustainable Development

Priya Mistry

Academic Associate

Navrachana University

Abstract

Society and business are complimentary to each other in their goal for sustainable
development. One cannot thrive without the other. India is the only country to have made
CSR activity mandatory for large and profitable companies incorporated into law.In order for
companies to become more sustainable entities, they need to incorporate sustainability
principles through goals and objectives, vision, mission, strategies, management practices,
and operations. Companies can apply different methods to achieve this, such as changing
their organizational structure, updating their policies and codes of conduct, having their
practices verified and certified, and communicating any changes in management, operations,
and progress towards more sustainable business practices to their employees and customers.
The biggest challenge of CSR is that the corporate should have a holistic approach and it can
no longer be confined to its financial concerns alone but should also address concerns of the
society and environment at large. Due to lack of awareness, various organizations have
accepted CSR activities in a narrow perspective and there is a general lack of concern in
pursuing CSR activities. Lack of specific areas of focus, and rules and regulations is one of
the most important challenges to implement CSR most effectively.

Keywords: Corporate social responsibility (CSR), Sustainable Development

INTRODUCTION

Over the past few years CSR, as a concept, has been the focus of many discussions and
research. It has grown in importance both academically as well as in the business sense. It
captures a range of values and criteria for measuring a company’s contribution to social
development. As the term “CSR” is used continually, many complementary and overlapping
concepts, such as corporate citizenship, business ethics, stakeholder management and
sustainability, have emerged. These extensive ranges of synonymously used terms indicate
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that multiple perspectives and by those in facilitating roles such as the corporate sector,
government agencies, academics and the public sector.

The concept of CSR is also closely linked to the emerging concept of sustainable
development. More and more business organizations are increasingly becoming aware that
they are accountable for the social and environmental impact of their businesses. While it is
very well accepted that business organizations exist to create and maximize shareholder
wealth, it is also well known that in this process of wealth creation, organizations exploit the
natural resources in existence. The supply of these natural resources on the earth is limited
and hence it is very important to save these for future business sustainability. There is only
one way to ensure that businesses grow in a sustainable way and that is enrichment of nature
by addressing the responsibility towards society and nature.

One of the major developments that formalized and institutionalized the concept of CSR on
the global level was the evolution of the United Nation’s Global Compact. This was a major
initiative by the United Nations (UN) aimed towards encouraging businesses worldwide to
adopt sustainable and socially responsible policies, and to report on their implementations.

A widely cited definition of CSR in the business and social context has been given by the
European Union (EU). It describes CSR as “the concept that an enterprise is accountable for
its impact on all relevant stakeholders. It is the continuing commitment by business to behave
fairly and responsibly, and contribute to economic development while improving the quality
of life of the work force and their families as well as of the local community and society at
large.
In other words, CSR refers to ensuring the success of the business by inclusion of social and
environmental considerations into a company’s operations. It means satisfying your
shareholders’ and customers’ demands while also managing the expectation of other
stakeholders such as employees, suppliers and the community at large. It also means
contributing positively to society and managing your organization’s environmental impact.
Hence, CSR is a contribution to sustainable development, implying the way a company
balances its economic, environmental and social objectives while addressing stakeholder
expectations and enhancing shareholder value. Sustainable development, implying the way a
company balances its economic, environmental and social objectives while addressing
stakeholder expectations and enhancing shareholder value.
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CSR not only includes the activities that a company undertakes in order to utilize their profit
to enable social and environmental Development, but also includes the methods that a
company employs in order to earn these profits including socially responsible investments,
and transparency to various stakeholders among others. Realizing the importance and the
long term benefit of being socially responsible business practices. They have incorporated
socially responsible business practices. The basic objective of CSR is to maximize the
company’s overall impact on the society and stakeholders while considering environment and
overall sustainability.

The corporate social responsibility (CSR) movement is not new and has been gathering
impetus for well over a decade (Crawford & Scaletta, 2005). CSR is about how companies
manage their business processes to produce an overall positive effect on society. This growth
has raised questions—how to define the concept and how to integrate it into the larger body
of an organization’s goals and objectives. The Dow Jones Sustainability Index created a
commonly accepted definition of CSR: “a business approach that creates long-term
shareholder value by embracing opportunities and managing risks deriving from economic,
environmental and social developments.” Specifically, the Dow Jones Sustainability Index
looks at competence in five areas:

 Strategy: Integrating long-term economic, environmental, and social

aspects in their business strategies while maintaining global
competitiveness and brand reputation.
 Financial: Meeting shareholders’ demands for sound financial returns,
long-term economic growth, open communication, and transparent
financial accounting.
 Customer and Product: Fostering loyalty by investing in customer
relationship management, and product and service innovation that
focuses on technologies and systems, which use financial, natural, and
social resources in an efficient, effective, and economic manner over
the long term.
 Governance and Stakeholder: Setting the highest standards of
corporate governance and stakeholder engagement, including corporate
codes of conduct and public reporting.
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 Human: Managing human resources to maintain workforce

capabilities and employee satisfaction through best-in-class
organizational learning and knowledge management practices and
remuneration and benefit programs.

Research Methodology

Data Source Used: The present study is based on Secondary data. The required information
has been derived from various related web-sites which deal directly or indirectly with the
topics related to CSR and sustainable Development.

Objectives

 To understand CSR in an Indian scenario.

 To study the challenges in implementation of CSR and recommendations for
effective implementation.

CSR, sustainability reporting and standards

While CSR and Corporate Sustainability have become popular concepts and companies are
coming up with more and more innovative ways to create social and environmental value,
this has also highlighted the need for standardization in these areas.

One of the earliest felt needs in this area was to have standardization in the area of reporting
sustainability performance. The sustainability report of company typically comprises an
assessment of the impact of its everyday activities, economy, environment and society.
Corporate sustainability reporting has a long history going back to environmental reporting.
The first environmental reports were published in the late 1980s by companies in the
chemical industry which had serious image problems.

CSR – Corporate examples

ITC Limited- Nielsen Corporate Image Monitor in the year 2012-13 ranked ITC number 1
for the second consecutive year for CSR activities. ITC’s CSR activities were acknowledged
in the category – “Most active in CSR” for its sustainability initiatives which have created
large scale livelihoods and augmented natural resources. ITC’s business and value chains
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have created sustainable livelihoods for 5 million poorest people of the society. ITC’s role in
terms of scarce natural resources as well as combating climate change has been recognized
globally. ITC’s women’s empowerment program has benefitted over 40000 rural women and
primary education program has benefited over 3,00,000 children. The company has also
introduced a farmer development program as a vital part of its business strategy to improve
the livelihood standards of rural communities.

Other IT companies like TCS and Wipro have developed software to help teachers
and children in different schools across India for the cause of education. TCS is also one of
the India’s largest software service companies and has won Asian CSR award for community
development, various programs and devoting leadership and commitment in incorporating
ethical values, developing environmental friendly products and services, supporting
children’s hospital in Mumbai. The women of Wipro council of company have taken many
initiatives to empower women. Besides, that three main CSR activities are environmental
sector, education sector and energy conservation.

Aptech Limited - It is known as one of the global leading education players. From the
beginning, Aptech limited has been encouraging and fostering education across India. The
company has a long history of participating in community activities. The company has
associated with leading NGOs and provided computers at schools, education to the
underprivileged community and conducted training and awareness camps throughout India.

Infosys Foundation – This software company has special program in fulfilling the social
responsibility by supporting and encouraging the underprivileged sections of the society. The
company also donates carom, chess boards, and chocolates to the needy ones. The company
is also working with Kaliyuva Mane, an informal school for dropouts. Infosys has multiple
initiatives such as providing medical facilities to remote rural areas, organizing nvel pension
schemes, aiding orphans and street children. Infosys has a large rural education program
titled ‘A library for every school’ and 5500 libraries have been set up in different government
schools as well as in many villages.

CSR Challenges

Some companies consider that CSR is a secondary issue for their business and customer
satisfaction is most important for them. These companies have failed to show important
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changes that are taking place worldwide that could blow the business out of the water. Some
of the drivers pushing business towards CSR include the following:

1) Lack of community participation in CSR activities: there is a lack of interest of the

local community in participating and contributing to CSR activities of the companies.
Besides that, there is a communication gap between the company and the community
at the grassroots.
2) Need to build local capacities: There is dearth of trained employees and efficient
organizations. Therefore, there is a need for capacity building of the local NGOs.
3) Issues of transparency: Lack of transparency is one of the key issues on the part of
the local implementing agencies. Agencies do not make adequate efforts to disclose
information on their programs, audit issues, impact assessment and utilization of
funds that creates lack of trust building between the companies and the local
communities.
4) Non availability of well- organized nongovernmental organizations: There is also
a lack of availability of well organized NGOs in remote and rural areas. As a result, it
creates problems in assessing and identifying real needs of the community and to
work along with companies to ensure successful implementation of CSR activities.
5) Visibility factors: Media only highlights good cases of successful CSR initiatives.
Therefore, some nongovernmental organizations are missing visibility and branding
exercise to involve them in event based programs at the grass root level.
6) Narrow perception towards CSR initiatives: NGOs and government agencies
usually possess a narrow outlook towards the CSR initiatives of the companies which
creates problem about whether they should participate in such activities at all in the
medium and long run.
7) Non-availability of clear CSR guidelines: There are no clear cut statutory guidelines
or policy directives direction to CSR initiatives of the companies. Therefore, CSR
initiatives of the companies should depend upon their business size and profile.
8) Lack of consensus on implementing CSR issues: There is a lack of harmony among
the local agencies regarding CSR projects and activities of the corporate houses which
result in the duplication of activities from time to time.
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Suggestions/Recommendations:

 All corporate houses should come forward to undertake various CSR activities.
 The HR, in specific, should plan special modules to encourage employees to initiate
CSR programs.
 The government should encourage special plans to boost the corporate houses for
CSR. As a result, the employees and local residents would be benefited.
 Each and every citizen of the society should be made and held responsible for the
development of his/her surroundings.
 Every citizen must uplift the morality of his/her fellow citizen and encourage
following the footsteps of top leaders who have sacrificed their lives for the
betterment of the society and nation.

Conclusion

From the above discussion, It is observed that in the age of globalized world, the
concept of CSR cannot be ignored by the corporate and business firms have to change their
work culture as per the market demands. Business houses all over the world are engaging
themselves in various social and environmental activities according to their company’s
history, its content, peculiarity in relationship with its different stakeholders to achieve its
goals- sustained environmental, social and economical growth. In other context of India, it is
noticeable that several companies are involved in diverse activities such as healthcare,
education, rural development, sanitation, women empowerment and CSR seems to be in a
confused state.
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REFERENCES

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with-corporate-social-responsibility/ retrieved on 3/10/17
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Social-Responsibility-in-India/$File/EY-Corporate-Social-Responsibility-in-India.pdf
retrieved on 1/9/17
 Dwivedi,D.,Yadav,D.(2016)Corporate Social Responsibility: Emerging issues and
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