Mukesh Chavan

Introduction to Sustainable Development & Corporate Sustainability

Corporate Social Responsibilities (CSR) &

Engaging Employees in (CSR)
ABSTRACT
There various definitions for CSR. Some of them are as under.
Some defines CSR as the responsibility of enterprises for their impacts on society. To completely
meet their social responsibility, enterprises should have in place a process to integrate social,
environmental, ethical human rights and consumer concerns into their business operations and core
strategy in close collaboration with their stakeholders
The WBCSD defines CSR as the continuing commitment by business to contribute to economic
development while improving the quality of life of the workforce and their families as well as of the
community and society at large.
From the above definitions, it is clear that the CSR approach is holistic and integrated with the core
business strategy for addressing social and environmental impacts of businesses. CSR needs to
address the well-being of all stakeholders and not just the companys shareholders. Charitable or
generous activities are only a part of CSR, which otherwise constitutes a much larger set of activities
entailing strategic business benefits. CSR and sustainability (corporate sustainability) is derived from
the concept of sustainable development which is defined by the Brundtland Commission as
development that meets the needs of the present without compromising the ability of future
generations to meet their own needs .Corporate sustainability essentially refers to the role that
companies can play in meeting the agenda of sustainable development and entails a balanced
approach to economic progress, social progress and environmental stewardship. CSR in India tends to
focus on what is done with profits after they are made. On the other hand, sustainability is about
factoring the social and environmental impacts of conducting business, that is, how profits are made.
Hence, much of the Indian practice of CSR is an important component of sustainability or responsible
business, which is a larger idea, a fact that is evident from various sustainability frameworks. An
interesting case in point is the NVGs for social, environmental and economic responsibilities of
business issued by the Ministry of Corporate Affairs in June 2011. Principle eight relating to inclusive
development encompasses most of the aspects covered by the CSR clause of the Companies Act,
2013. However, the remaining eight principles relate to other aspects of the business. The UN Global
Compact, a widely used sustainability framework has 10 principles covering social, environmental,
human rights and governance issues, and what is described as CSR is implicit rather than explicit in
these principles.
INTRODUCTION
Among other countries India has one of the oldest traditions of CSR. But CSR practices are regularly
not practiced or done only in namesake. specially by MNCs with no cultural and emotional
attachments to India. Much has been done in recent years to make Indian Entrepreneurs aware of
social responsibility as an important segment of their business activity but CSR in India has yet to
receive widespread recognition. If this goal has to be realized then the CSR approach of corporates
has to be in line with their attitudes towards mainstream business- companies setting clear objectives,
undertaking potential investments, measuring and reporting performance publicly.
HISTORICAL PROSPECTIVE

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Introduction to Sustainable Development & Corporate Sustainability
The history of CSR in India has its four phases which run parallel to India's historical development
and has resulted in different approaches towards CSR. However the phases are not static and the
features of each phase may overlap other phases.
In the first phase charity and generosity were the main drivers of CSR. Culture, religion, family
values and tradition and industrialization had an influential effect on CSR. In the pre-industrialization
period, which lasted till 1850, wealthy merchants shared a part of their wealth with the wider society
by way of setting up temples for a religious cause. The industrial families of the 19th century such
as Tata, Godrej, Bajaj, Modi, Birla, Singhania were strongly inclined towards economic as well as
social considerations. However it has been observed that their efforts towards social as well as
industrial development were not only driven by selfless and religious motives but also influenced by
caste groups and political objectives.
In the second phase, during the independence movement, there was increased stress on Indian
Industrialists to demonstrate their dedication towards the progress of the society. This was
when Mahatma Gandhi introduced the notion of "trusteeship", according to which the industry leaders
had to manage their wealth so as to benefit the common man. Gandhi's influence put pressure on
various Industrialists to act towards building the nation and its socio-economic development.
[4]
According to Gandhi, Indian companies were supposed to be the "temples of modern India". Under
his influence businesses established trusts for schools and colleges and also helped in setting up
training and scientific institutions. The operations of the trusts were largely in line with Gandhi's
reforms which sought to abolish untouchability, encourage empowerment of women and rural
development.
The third phase of CSR (196080) had its relation to the element of "mixed economy", emergence
of Public Sector Undertakings (PSUs) and laws relating labour and environmental standards. During
this period the private sector was forced to take a backseat. The public sector was seen as the prime
mover of development. Because of the stringent legal rules and regulations surrounding the activities
of the private sector, the period was described as an "era of command and control". The policy of
industrial licensing, high taxes and restrictions on the private sector led to corporate malpractices.
This led to enactment of legislation regarding corporate governance, labour and environmental issues.
PSUs were set up by the state to ensure suitable distribution of resources (wealth, food etc.) to the
needy. However the public sector was effective only to a certain limited extent. This led to shift of
expectation from the public to the private sector and their active involvement in the socio-economic
development of the country became absolutely necessary. In 1965 Indian academicians, politicians
and businessmen set up a national workshop on CSR aimed at reconciliation. They emphasized upon
transparency, social accountability and regular stakeholder dialogues. In spite of such attempts the
CSR failed to catch steam.
In the fourth phase (1980 - 2013) Indian companies started abandoning their traditional engagement
with CSR and integrated it into a sustainable business strategy. In the 1990s the first initiation
towards globalization and economic liberalization were undertaken. Controls and licensing system
were partly done away with which gave a boost to the economy the signs of which are very evident
today. Increased growth momentum of the economy helped Indian companies grow rapidly and this
made them more willing{Gajare, R.S. (2014). A conceptual study of CSR development in India. In
D.B. Patil & D.D. Bhakkad, Redefining Management Practices and Marketing in Modern Age Dhule,
India: Atharva Publications (p. 152-154).} and able to contribute towards social cause. Globalization
has transformed India into an important destination in terms of production and manufacturing bases of
TNCs are concerned. As Western markets are becoming more and more concerned about labour and
environmental standards in the developing countries, Indian companies which export and produce
goods for the developed world need to pay a close attention to compliance with the international
standards.

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CURRENT STATE OF CSR IN INDIA
As discussed above, CSR is not a new concept in India. Ever since their inception, corporates like
the Tata Group, the Aditya Birla Group,and Indian Oil Corporation, to name a few, have been
involved in serving the community. Through donations and charity events, many other organizations
have been doing their part for the society. The basic objective of CSR in these days is to maximize the
company's overall impact on the society and stakeholders. CSR policies, practices and programs are
being comprehensively integrated by an increasing number of companies throughout their business
operations and processes. A growing number of corporates feel that CSR is not just another form of
indirect expense but is important for protecting the goodwill and reputation, defending attacks and
increasing business competitiveness.
Companies have specialized CSR teams that formulate policies, strategies and goals for their CSR
programs and set aside budgets to fund them. These programs are often determined by social
philosophy which have clear objectives and are well defined and are aligned with the mainstream
business. The programs are put into practice by the employees who are crucial to this process. CSR
programs ranges from community development to development in education, environment and
healthcare etc.
For example, a more comprehensive method of development is adopted by some corporations such
as Bharat Petroleum Corporation Limited, Maruti Suzuki India Limited. Provision of improved
medical and sanitation facilities, building schools and houses, and empowering the villagers and in
process making them more self-reliant by providingvocational training and a knowledge of business
operations are the facilities that these corporations focus on. Many of the companies are helping other
peoples by providing them good standard of living.Also, corporates increasingly join hands with nongovernmental organizations (NGOs) and use their expertise in devising programs which address wider
social problems.
LAW
Under the Companies Act, 2013, any company having a net worth of rupees 500 crore or more or a
turnover of rupees 1,0000 crore or more or a net profit of rupees 5 crore or more has to spend at least
2% of last 3 years average net profits on CSR activities as specified in Schedule VII of the Companies
Act, 2013 and as amended from time to time. The rules came into effect from 1 April 2014.
BIBLIOGRAPHY
Applicability
Role of the board and the CSR committee
Net worth > 500 Crore INR
Turnover > 1000 Crore INR
Net profit > 5 Crore INR

Role of the Board

CSR

Form a CSR committee

Approve the CSR policy
Ensure implementation of the activties under CSR
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Introduction to Sustainable Development & Corporate Sustainability

Ensure 2% spend
Disclose reasons for not spending the amount (if applicable)
CSR Committee

Three or more directors with at least one independent director.

Formulate and recommend a CSR policy to the board.
Recommend activities and the amount of expenditure to be incurred.
Monitor the CSR policy from time to time.

Activities which may be included by companies in their corporate Social responsibilities policy
Activities related to

Eliminating extreme hunger and poverty

Promotion of education
Promoting gender equality
Empowering women
Reducing child morality
Ensuring environment sustainability
Employment enhancing vocational skill

Engaging Employees in Corporate Social Responsibility (CSR)

As a move towards improving employee retention, companies are finding newer and innovative ways
of engaging their employees - one leading example is engaging employees with corporate social
responsibility (CSR). With efficient employee-engagement tools, employees are found to be more
energized and productive at work. The CSR engagement tool is a great way to make the employees
realise that the company cares about the workers' general interests and social commitment as well.
As a part of their CSR engagement activity, organizations partner with NGOs and allow their own
work force to work closely with these NGOs. Keeping the employee's interest in mind, they are then
assigned skills based projects. For Cummins India, with offices located all over the country, it's not
different. According to S. Ravichandran, head, corporate responsibility, "CSR is one of our core
objectives. Our idea is to identify employees who are passionate about their own field of operation,
viz.: education, energy, environment, infrastructure - and willing to contribute towards CSR."
Not only does this work as an engagement tool, but brings in a sense of social responsibility among
the employees. "It is all about having a sense of fulfillment among the employees for giving back to
the society; for being a responsible corporate and spreading awareness about environmental impacts
within the community," says Ravichandran.
Infact, in a recent TimesJobs.com Boardroom Dialogue at Pune Renuka Krishna, AVP-HR, KPIT
Cummins said that CSR is such a great way to connect with the youth that their company pages in
Facebook and LinkedIn enlist the social causes that the organization is involved with. Deepak Kapoor,
chairman, PwC India, adds, "We have partnered with NGOs across India in the areas of education and
environmental sustainability and have undertaken projects with them and these are supported through
employees volunteering." According to Kapoor this engagement has helped the employees become
more socially responsible citizens. The CSR activities also lead employees to believe that they are not
only working for an organization that provides a good career, but one that 'cares'.

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At Cummins India, employees have the option to work for a minimum of 4 paid hours in a year on a
social project of their choice. In some cases these employees are found to take part in rural activities
(example: rural health care facilities, sanitation, etc.), engage with the community's overall
educational system; work with the NGOs to create a sustainable livelihood for the rural people, and
other such initiatives. Whether it is about helping the community with a better way of education,
working towards the betterment of the infrastructure, training the community members along with the
NGOs or generating awareness within the community, employees are contributing at every level. This
proves to be an efficient way not only to engage employees on a social level, but also allows them to
do or create something that they feel strongly about or are passionate for.
Some CSR projects taken up by Cummins India:
Education - Cummins College of Engineering aims at providing student upgradation, faculty
upgradation and infrastructure. The aim is to attract the youth to top industrial practices and provide
employment opportunities. They run a scholarship program for the needy children - 60% goes to girls
and 40% to boys
Energy - Facilities are given to rural people, such as electricity (from local fuel) and one kind of nonedible vegetable oil to run generators; provide rice mills, etc. Employees work closely with NGOs
where the latter identify the requirement and the company bring forth their trainers to train these
community people and make them self-sufficient infrastructure - The company did a community
assessment to understand the need. They went ahead and created awareness of using toilets and
constructed 80,000 household toilets.
Research paper / Articles / Websites Referred
1. Article of Mr. Dhanpal from www.caclubindia.com
2. https://en.wikipedia.org/wiki/Companies_Act_2013
3. https://www.pwc.in/assets/pdfs/publications/2013/handbook-on-corporate-socialresponsibility-in-india.pdf
4. https://www.pwc.in/assets/pdfs/publications/2013/companies-act-2013-key-highlights-andanalysis.pdf
5. http://articles.economictimes.indiatimes.com/2013-05-24/news/39502148_1_csr-projectsemployees-cummins-india - Srilagna Saha, TimesJobs.com Bureau

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