a business approach that contributes to sustainable

development by delivering economic, social and

environmental benefits for all stakeholders.

What is Corporate Social Responsibility (CSR)?

Corporate social responsibility (CSR) is a self-regulating business model that
helps a company be socially accountable—to itself, its stakeholders, and the
public. By practicing corporate social responsibility, also called corporate
citizenship, companies can be conscious of the kind of impact they are having
on all aspects of society, including economic, social, and environmental.

To engage in CSR means that, in the ordinary course of business, a company

is operating in ways that enhance society and the environment, instead of
contributing negatively to them.

Corporate social responsibility (CSR) is a type of international private business self-

regulation[1] that aims to contribute to societal goals of a philanthropic, activist, or charitable
nature by engaging in or supporting volunteering or ethically-oriented practices. [2] While once it
was possible to describe CSR as an internal organisational policy or a corporate ethic strategy,
[3]
 that time has passed as various international laws have been developed and various
organisations have used their authority to push it beyond individual or even industry-wide
initiatives. While it has been considered a form of corporate self-regulation[4] for some time, over
the last decade or so it has moved considerably from voluntary decisions at the level of individual
organisations, to mandatory schemes at regional, national and international levels.
Considered at the organisational level, CSR is generally understood as a private firm policy. As
such, it must align with and be integrated into a business model to be successful. With some
models, a firm's implementation of CSR goes beyond compliance with regulatory requirements
and engages in "actions that appear to further some social good, beyond the interests of the firm
and that which is required by law".[5][6] The choices of 'complying' with the law, failing to comply,
and 'going beyond' are three distinct strategic organisational choices. While in many areas such
as environmental or labor regulations, employers may choose to comply with the law, or go
beyond the law, other organisations may choose to flout the law. These organisations are taking
on clear legal risks. The nature of the legal risk, however, changes when attention is paid to soft
law.[7] Soft law may incur legal liability particularly when businesses make misleading claims
about their sustainability or other ethical credentials and practices. Overall, businesses may
engage in CSR for strategic or ethical purposes. From a strategic perspective, the aim is to
increase long-term profits and shareholder trust through positive public relations and high ethical
standards to reduce business and legal risk by taking responsibility for corporate actions. CSR
strategies encourage the company to make a positive impact on the environment
and stakeholders including consumers, employees, investors, communities, and others. [8] From
an ethical perspective, some businesses will adopt CSR policies and practices because of ethical
beliefs of senior management. For example, a CEO may believe that harming the environment is
ethically objectionable.[9]
Proponents argue that corporations increase long-term profits by operating with a CSR
perspective, while critics argue that CSR distracts from businesses' economic role. A 2000 study
compared existing econometric studies of the relationship between social and financial
performance, concluding that the contradictory results of previous studies reporting positive,
negative, and neutral financial impact, were due to flawed empirical analysis and claimed when
the study is properly specified, CSR has a neutral impact on financial outcomes. [10] Critics[11]
  questioned the "lofty" and sometimes "unrealistic expectations" in CSR. [13] or that CSR is
[12]

merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over

powerful multinational corporations. In line with this critical perspective, political
and sociological institutionalists became interested in CSR in the context of theories
of globalization, neoliberalism and late capitalism. Some institutionalists viewed CSR as a form of
capitalist legitimacy and in particular point out that what began as a social movement against
uninhibited corporate power was transformed by corporations into a "business model" and a "risk
management" device, often with questionable results.[14]
CSR is titled to aid an organization's mission as well as serve as a guide to what the company
represents for its consumers. Business ethics is the part of applied ethics that examines ethical
principles and moral or ethical problems that can arise in a business environment. ISO 26000 is
the recognized international standard for CSR. Public sector organizations (the United Nations
for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to
similar principles, but with no formal act of legislation

Understanding Corporate Social Responsibility (CSR)

Corporate social responsibility is a broad concept that can take many forms
depending on the company and industry. Through CSR programs,
philanthropy, and volunteer efforts, businesses can benefit society while
boosting their brands.

As important as CSR is for the community, it is equally valuable for a

company. CSR activities can help forge a stronger bond between employees
and corporations; boost morale; and help both employees and employers feel
more connected with the world around them.

For a company to be socially responsible, it first needs to be accountable to

itself and its shareholders. Often, companies that adopt CSR programs have
grown their business to the point where they can give back to society. Thus,
CSR is primarily a strategy of large corporations. Also, the more visible and
successful a corporation is, the more responsibility it has to set standards of
ethical behavior for its peers, competition, and industry.

Definition[edit]
Since the 1960s,[18] corporate social responsibility has attracted attention from a range of
businesses and stakeholders. A wide variety of definitions have been developed but with little
consensus. Part of the problem with definitions has arisen because of the different interests
represented. A business person may define CSR as a business strategy, an NGO activist may
see it as 'greenwash' while a government official may see it as voluntary regulation." [1] In addition,
disagreement about the definition will arise from the disciplinary approach." [1] For example, while
an economist might consider the director's discretion necessary for CSR to be implemented a
risk of agency costs, a law academic may consider that discretion to be an appropriate
expression of what the law demands from directors.[19][20]
Corporate social responsibility has been defined by Sheehy as "international private business
self-regulation."[1] Sheehy examined a range of different disciplinary approaches to defining CSR.
The definitions reviewed included the economic definition of "sacrificing profits," a management
definition of "beyond compliance", institutionalist views of CSR as a "socio-political movement"
and law's own focus on directors' duties. Further, Sheehy considered Archie Carroll's description
of CSR as a pyramid of responsibilities, namely, economic, legal, ethical, and philanthropic
responsibilities.[21] While Carroll was not defining CSR, but simply arguing for classification of
activities, Sheehy developed a definition differently following the philosophy of science—the
branch of philosophy used for defining phenomena.
Carroll extended corporate social responsibility from the traditional economic and legal
responsibility to ethical and philanthropic responsibility in response to the rising concerns on
ethical issues in businesses.[21] This view is reflected in the Business Dictionary which defines
CSR as "a company's sense of responsibility towards the community and environment (both
ecological and social) in which it operates. Companies express this citizenship (1) through their
waste and pollution reduction processes, (2) by contributing educational and social programs and
(3) by earning adequate returns on the employed resources

Corporate social responsibility (CSR) is how companies manage their

business processes to produce an overall positive impact on society. It
covers sustainability, social impact and ethics, and done correctly should
be about core business - how companies make their money - not just
add-on extras such as philanthropy.

Getting into the detail

One of the most frequently asked questions at this site - and probably for
all those individuals and organisations dealing with CSR issues is the
obvious - just what does 'Corporate Social Responsibility' mean anyway?
Is it a stalking horse for an anti-corporate agenda? Something which,
like original sin, you can never escape? Or what?

Different organisations have framed different definitions - although

there is considerable common ground between them. My own definition
is that CSR is about how companies manage the business processes to
produce an overall positive impact on society.

Take the following illustration:

Companies need to answer to two aspects of their operations. 1.

Other definitions
The World Business Council for Sustainable Development in its
publication Making Good Business Sense by Lord Holme and Richard
Watts, used the following definition:
Corporate Social Responsibility is the continuing commitment by
business to behave ethically and contribute to economic development
while improving the quality of life of the workforce and their families as
well as of the local community and society at large
The same report gave some evidence of the different perceptions of what
this should mean from a number of different societies across the world.
Definitions as different as CSR is about capacity building for sustainable
livelihoods. It respects cultural differences and finds the business
opportunities in building the skills of employees, the community and the
government from Ghana, through to CSR is about business giving back
to society from the Phillipines.

Traditionally in the United States, CSR has been defined much more in
terms of a philanphropic model. Companies make profits, unhindered
except by fulfilling their duty to pay taxes. Then they donate a certain
share of the profits to charitable causes. It is seen as tainting the act for
the company to receive any benefit from the giving.

The European model is much more focused on operating the core

business in a socially responsible way, complemented by investment in
communities for solid business case reasons. Personally, I believe this
model is more sustainable because:

1. Social responsibility becomes an integral part of the wealth

creation process - which if managed properly should enhance the
competitiveness of business and maximise the value of wealth
creation to society.
2. When times get hard, there is the incentive to practice CSR more
and better - if it is a philanphropic exercise which is peripheral to the
main business, it will always be the first thing to go when push comes
to shove
Is CSR similar to company charity work?
Do not confuse CSR with charity work or sponsorships as there is a clear distinction between the
two. Whilst the latter makes a valuable contribution and is an excellent way to enhance the
reputation of the company and brand, CSR goes way beyond that. For example, a CSR policy
might include funding scholarships, encouraging staff to volunteer in the community by working
closely with a specific charity, or giving funds to community organisations. It may also be used to
promote diversity in the workforce or aim to reduce the company’s carbon footprint and increase
sustainability. It can also focus on socially responsible investment. CSR can be carried out on a
national or international basis.

Benefits of CSR
Besides the obvious benefits to society, a properly implemented CSR concept can also go a long
way to enhancing a company’s public image. It also has a positive effect on employees, either as
a result of being able to attract better talent, or the CSR programs helping to develop better
employees.

Here we look at a breakdown of the benefits to a company of having in place a strong CSR:

o Enhanced public image and reputation: Any company who is considered socially
responsible will benefit from its enhanced reputation with the public as well as its reputation
within the industry.
o Customer loyalty and increased sales: In order to succeed, businesses must satisfy their
customers’ key buying criteria, which includes; price, quality, availability and convenience.
However, studies show an increasing and growing desire to buy based on more ethical
values. A survey carried out by the Better Business Journey shows that 88% of consumers
said they were more likely to buy from a company that supports and engages in activities to
improve society.
o Increased ability to attract and retain employees: A company with a strong CSR
commitment will often find it easier not just to recruit employees, but attract a higher standard
of talent. A CSR commitment often results in a reduction in turnover and associated
recruitment and training costs.

It is the company’s “sense of responsibility” towards the community and surrounding

in which it operates. Also called corporate citizenship, it is a self-regulating business

model developed by companies with the aim to create a positive impact on society.

CSR addresses various issues like human rights, education, health, and safety. It

also covers corporate governance, working conditions, environmental sustainability

and more. Along with economic development, CSR also focuses on social and

environmental development (the triple bottom line).

India, too, is actively involved in practicing corporate social responsibility. Section

135 of the Indian Companies Act mandates companies to “CSR spend of 2 percent

of average net profits … during the three immediately preceding financial years.”

Effective from 2013, this rule is applicable for all companies “having net worth of

rupees five billion or more, or turnover of rupees ten billion or more or a net profit of

rupees fifty million or more during any financial year.”

The Benefits of Corporate Social

Responsibility For Businesses

Deloitte says “organizations are no longer assessed based only on traditional metrics

such as financial performance, or even the quality of their products or services. They

are increasingly judged…their impact on society at large—transforming them from

business enterprises into social enterprises.”

Moreover, a study shows that only 18 percent of organizations put social

responsibility as a top priority, yet 77 percent say it’s “important”.

Corporate Social Responsibility initiatives benefit both the company as well as the

environment (ecological and social) in which they live in.

Improves Brand Value

Being socially responsible brings recognition into the company. It shows that your

company is more than just profits. More people start knowing about your company

and the good work that it is doing. Customers start trusting your business and it

builds an overall positive image of the brand.

Builds Customer Loyalty

A research shows that 55 percent of consumers are willing to pay more for products

from socially responsible companies. Your customers want to feel that they are a
part of something. Even if not directly, they feel good to be part of a company with a

vision and the willingness to do good.

Engages Millennials

“7 in 10 young adults consider themselves social activists.” Everyone wants to feel

they are part of a bigger cause that helps shape lives. They want employers who

match their ideals and are doing something to help those in need. A survey found

that 78 percent of millennials said that CSR directly influences their decision to join

an organization.

Helps Attract and Retain Talent

When employees feel they are part of an organization that is more than just about

profits, they’ll definitely want to stick around. To help them achieve this, a lot of

companies are now providing their employees with the benefit of taking time off to

volunteer in their organizations of choice.

Increases Employee Engagement

CSR requires employee assistance. Right from designing and developing the CSR

program to actually volunteering for a cause. So, when you include your employees

in such important events, they feel valued and appreciated. It helps improve your

relationship with them, helps build the team’s dynamics and increases the

overall engagement level of the workforce.

Benefits of CSR towards Society

CSR is the way to show the human face of your business. Businesses
deal with humans so you can only connect with them through human
language by showing some humanity. For most businesses, it makes
sense to get involved in progression of the community solely, depending
on CSR initiatives related to your product or service.

CSR initiatives can be the best way to contribute to the society and its
people. Through local or national charitable contributions businesses
can help the society. Businesses can get involved in the society and
help it to progress by taking social initiatives on behalf of the company
such as investing in education programs for the poor and street children
and homeless care activities for homeless people or refugees. They can
support a local charity making financial contributions in effective
charitable projects. If you are a restaurant owner you may provide food
to local homeless groups or to orphanages free of cost.

Businesses can pay attention to material recyclability, develop better

product durability and functionality and use more renewable resources at
lesser costs to keep the environment as clean as possible and contribute
to the ecology of the country. 

When businesses decide to make positive contributions to the society

they are actually benefitting the company in the process. The companies
benefit through lower operating costs, increased sales and customer
loyalty, greater productivity, gaining ability to attract and keep skilled
employees, getting access to more capital through more willing investors
etc.

CSR is the thoughtful and practical way to give back to the society.
When businesses are walking extra miles to do good to the people, do
good to the environment and society .  

CSR has strong and direct impact on business performances as well.

According to, CSR RepTrak® studies, if businesses improve their CSR
perception ;chances are higher that consumer recommendation will go
up to 9% for the company.

Contributing to social value has become the first and foremost condition
to creating a successful business. Companies need to establish
themselves as socially responsible and good corporate citizens to add
greater value to their business.  

Conclusion

Today almost all businesses are incorporating CSR initiatives in their

business strategies to benefit the company, increase its sales and create
a brand more appealing and friendly to the consumers by contributing to
the society. 

Nestle can be a great example in this context. Nestle has a great and
positive tagline which completely upholds the brand’s motto- “Good food.
Good Life.” This is not a mere tagline just used for promoting the brand.
It actually summarizes their CSR initiatives and shows their commitment
to the betterment of public health.

Nestle has made 41 public commitments to enhance the quality of life

and ensure a healthier future for all. These commitments contribute to
the UN’s Sustainable Development Goals. The details of Nestlé’s
progressive CSR initiatives are published in their Annual Review of the
company almost every year.

Nestle has struck the right balance between sustainable growth and
efficiency, and creating long term value for the shareholders and society
on the whole. In 2016 Nestle made operating profit up to 16% which
increased to 17.5% in the following years and now they are committed to
expand the trading operating profit margin to 18.5% by 2020.
At present CSR holds no separate department at corporate houses and
CSR professionals are housed in communications and PR departments
which is an inappropriate practice. CSR experts suggest that it should be
incorporated into every department of the company starting from supply
chain, procurement, innovation, manufacturing, to HR so that company
can reap a good harvest from the investments that it makes.

Responsibility on Society

CSR simply refers to strategies corporations or firms

conduct their business in a way that is ethical and society
friendly. CSR can involve a range of activities such as
working in partnership with local communities, socially
sensitive investment, developing relationships with
employees, customers and their families, and involving
in activities for environmental conservation and
sustainability. There are various factor of society which
is affected by the CSR.

•
I
mpact of Corporate Social Responsibility on
employees: CSR has a major effect on
employee’s behaviors and working attitude.
CSR could develop employees' attitudes, job
satisfaction and behaviors, contribute to
corporations' success. Therefore, corporations
should attach importance to CSR practice so as
to benefit employees. In addition, four
dimensions of CSR, namely economic, legal,
ethical, and discretionary responsibilities
deserve equal attention.

•
I
mpact of Corporate Social Responsibility on
stakeholders: stakeholders are taking an
increasing interest in the activity of the
company are predominantly focused - as well as
past financial performance - on quality of
management as an indicator of likely future
performance. Stakeholders are the individuals
or groups that have an interest in the
organization and are affected by its actions.
Stakeholders have a vested interest in how the
organization performs and the actions it
engages in to conduct business.

•
I
mpact of Corporate Social Responsibility on
company’s financial performance: Socially
responsible companies have a good brand
image and a positive reputation among
consumers. They also have the ability to attract
more skilled employees and business partners.
Companies that adopt the CSR principles are
more transparent and have less risk of bribery
and corruption. The CSR activities are treated
as an investment not as a cost or expense. CSR
has positive impact with each variable of
origination’s financial performance.

•
I
mpact of Corporate Social Responsibility on
consumer trust: CSR actions have potentially
positive influence on customer’s trust. A
company can gain benefits from CSR activities
through customer loyalty, customer trust,
positive brand attitude, increased profits, and by
preventing negative publicity. Concept of CSR
in condominium development in order to
measure the relationship between CSR,
consumer trust, and purchase intention.
Perspective of consumers based on their
emotional, rational, and individual judgments
towards their willingness to purchase a
condominium in the context of the concept
CSR