“CORPORATE SOCIAL RESPONSIBILITY AND

SUSTAINABLE DEVELOPMENT IN INDIA”

Narayan Gowda ¹, Priyanka S N² and Deekshitha S3

1
Student of BBA, BGS Institute of Management Studies, Chickballapur – 562101,
E-mail: narayangowda05@gmail.com, Mob: 8746992059.
2
Student of BBA, BGS Institute of Management Studies, Chickballapur – 562101
E-mail: deekshi702@gmail.com, Mob: 9480646702.
3
Student of BBA, BGS Institute of Management Studies, Chickballapur – 562101
E-mail: priyankasn521999@gmail.com, Mob: 9494925223.

ABSTRACT:

Corporate Social Responsibility (CSR), also known as Corporate Responsibility, Corporate

Citizenship, Responsible Business, Sustainable Responsible Business (SRB) Corporate
Social Responsibility activities have the potential to create several distinct forms of value for
customers. CSR 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 the local community and society at large through good governance,
stakeholders’ responsiveness and environmental improvement.

Businesses have to focus on ensuring inclusive growth for all its stakeholders, specially the
community in which they operate. Community development initiatives are important to get
the ‘license to operate’ for the businesses. Corporate world has also realized that the society
is not just another stakeholder, but the prime purpose of its business and that good corporate
citizenship and good business performance go hand in hand and nurture each other through
good times and bad. This research studied the extent of various aspects of Community CSR
undertaken by companies.

Keywords: CSR, Economic Development, Stakeholders.

Introduction
Businesses worldwide are increasingly worried about the impact of their business activities
on society. They also recognize that the world they live in presents a growing array of
demands, pressures and risks that are not signalled through markets or the traditional political
processes on which they have relied for a very long time. Thus, many have implemented into
their operation the so-called corporate social responsibility (CSR) that aim to balance their
operations with the concerns of internal and external stakeholders such as employees,
customers, suppliers and business partners, labour unions, local communities, Non-
Governmental Organizations (NGOs) and Governments. By its very nature CSR is a

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complex, multiform phenomenon emerging as the interface between enterprises and society.
Social and environmental consequences have started to being weighed against economic
gains and short-term profit against long-term prosperity by the businesses in order to
maintain long-term sustainable growth and development.

With growing sensitivity towards social and environmental issues and shareholder and owner
concerns that can be effectively addressed through internal and external dimension of CSR,
businesses are increasingly striving to become better “corporate citizens”, i.e. appropriately
grasping and implementing CSR concept.

But whilst many agree that CSR is the right thing for businesses to implement and follow
proponents often grow uncomfortable when explaining the business case for “Doing Good”.
The costs associated with CSR programmes are clear but the positive correlation with better
financial performance is often hard to prove. In any case, proponents may argue and are
finding a solid ground that the objectives of CSR go beyond short-term economic gains and
are mainly focused on a long-term prosperity and sustainability of enterprises.

It is also important to mention a significant role of governments in fostering social justice and
environmental protection and ensuring social development. Hence, we have to avoid a
tendency to replace role of the government with role of companies. In this respect CSR
should be seen as extra opportunity for companies in competitive markets. On the other hand
also companies can, and in the author’s opinion should, undeniably complement and
supplement the efforts of governments at social and environmental development because
these matters concern all – citizens, governments, entrepreneurs, companies, and all kinds of
organizations.

Definition and Meaning of Corporate Social Responsibility

Philip Kotler. In his view, “CSR is a commitment to improve community well-being through
discretionary business practices and contributions of corporate resources”

Corporate social responsibility (CSR) is a business approach that contributes to sustainable

development by delivering economic, social and environmental benefits for all stakeholders.

The New Act of CSR

The 2013 Act, amongst other matters, requires that every company with a net worth of INR
500 crore or more, turnover of INR 1000 crore or more or a net profit of INR 5 crore or more
during any financial year will constitute a CSR committee. The said committee will consist of
three or more directors, out of which at least one director should be an ID. The 2017
Amendment Act contains the following key changes:

a) The meaning of the words ‘during any financial year’ used in section 135(1) is not clear. In
the absence of such clarification, differing views are possible as to whether a company should
consider net worth/turnover/net profit for the immediately preceding financial year or the
current financial year. To address this issue, the 2017 Amendment Act replaces the words
“during any financial year” with the words “during the immediately preceding financial

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year.” Hence, the applicability of CSR requirement will be decided based on net
worth/turnover/net profit for the immediately preceding financial year.

b) The 2013 Act contains different criteria for applicability of CSR and appointment of IDs.
Based on the prescribed criteria, a company that is not otherwise covered under the ID
appointment requirements may also need to appoint an ID for purposes of inducting into the
CSR committee. Considering this, the CSR rules have stated that a non-listed public company
or a private company, which is not required to appoint an ID, can have its CSR committee
without an ID.

Since the requirement to have an ID on the CSR committee was arising from the 2013 Act,
there was a concern that the CSR rules may be overriding the 2013 Act. The 2017
Amendment Act addresses this concern by including CSR rules clarification in the Act itself.
The 2017 Amendment Act states that where a company is not required to appoint an ID under
section 149(4), it will constitute the CSR committee with two or more directors.

CSR is a concept with many definitions and practices. The way it is understood and
implemented differs greatly for each company and country. Moreover, CSR is a very broad
concept that addresses many and various topics such as human rights, corporate governance,
health and safety, environmental effects, working conditions and contribution to economic
development. Whatever the definition is, the purpose of CSR is to drive change towards
sustainability.

The International Labour Organization (ILO) described on its website CSR as “a way in
which enterprises give consideration to the impact of their operations on society and their
principles and values both in their own internal methods and processes and in their interaction
with other actors” and further specified CSR as “a voluntary, enterprise-driven initiative,
which refers to activities that are considered to exceed compliance with law.”

CSR goes beyond making profits, companies and stakeholders are responsible for their
impact on people and planet. Increasingly, stake holders should expect that companies should
be more responsible both socially and environmentally in their conduct of their business. The
World Business Council for Sustainable Development has described CSR as the business
contribution to sustainable economic development.

Evolution of Corporate Social Responsibility

The history of CSR dates back many years and in one instance can even be traced back 5000
years in Ancient Mesopotamia around 1700 BC, King Hammurabi introduced a code in
which builders, farmers were put to death if their negligence caused the deaths of others, or
major inconvenience to local citizens. In Ancient Rome senators grumbled about the failure
of businesses to contribute sufficient taxes to fund their military campaigns, while in 1622
disgruntled shareholders in the Dutch East India Company started issuing pamphlets
complaining about management secrecy and "self enrichment". With industrialisation, the
impacts of business on society and the environment assumed an entirely new dimension. The

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"corporate paternalists" of the late nineteenth and early twentieth century’s used some of their
wealth to support philanthropic ventures. By the 1920s discussions about the social
responsibilities of business had evolved into what we can recognise as the beginnings of the
"modern" CSR movement. "The phrase Corporate Social Responsibility was coined in 1953
with the publication of Bowen's Social Responsibility of Businessmen" (Corporate watch
report, 2006). The evolution of CSR is as old as trade and business for any of corporation.
Industrialization and impact of businesses on the society led to a complete new vision. By
80's and 90's CSR was taken into discussion, the first company to implement CSR was Shell
in 1998. (Corporate watch report, 2006) With well informed and educated general people it
has become a threat to the corporate and CSR is the solution to it. In 1990 CSR was standard
in the industry with companies like Price Waterhouse Copper and KPMG. CSR evolved
beyond code of conduct and reporting, eventually it started taking initiative in NGO's, multi
stake holder, ethical trading. (Corporate watch report, 2006).

The concept of Corporate Social Responsibility (CSR)

The emerging concept of Corporate Social Responsibility (CSR) goes beyond charity and
requires the company to act beyond its legal obligations and to integrated social,
environmental and ethical concerns into company’s business process.

Business has today, emerged as one of the most powerful institutions on the earth. Some of
the biggest companies in the world are in fact, bigger in size than some of the
developing countries of the world. Globalization makes the world smaller, and business,
worldwide, is expanding like never before. Companies are expanding their operations and
crossing geographical boundaries.

Indian companies too have made their way into the business boom and are today globally
acknowledged as major players. India is currently amongst the fastest growing countries
in the world. The globalization and liberalization of the Indian economy has helped in
stepping up growth rates. Integration of the Indian with the global economy has also resulted
in Indian businesses opening up to international competition and thereby increasing their
operations.

In the current scheme of things, business enterprises are no longer expected to play
their traditional role of mere profit making enterprises. The ever-increasing role of civil
society has started to put pressure on companies to act in an economically, socially and
environmentally sustainable way.

The companies are facing increased pressure for transparency and accountability, being
placed on them by their employees, customers, shareholders, media and civil society.

Business does not operate in isolation and there is today, an increased realization that not
only can companies affect society at large, but they are also in a unique position to influence
society and make positive impact.

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Milton Friedman, Nobel Laureate in Economics and author of several books wrote in 1970
in the New York Times Magazine that “the social responsibility of business is to increase its
profits” and “the business of business is business”. This represented an extreme view that the
only social responsibility a law-abiding business has is to maximize profits for
the shareholders, which were considered the only stakeholders for the company. However,
time has given the term ‘stakeholder’ wider connotations.

Edward Freeman defines, ‘a stakeholder in an organization is any group or individual who

can affect or is affected by the achievement of the organization’s objectives.’ Thus, the term
stakeholder includes (apart from shareholders), but not limited to, customers, employees,
suppliers, community, environment and society at large.

These and a host of other such ideas have given rise to the concept of Corporate
Social Responsibility (CSR). The concept of CSR goes beyond charity or philanthropy and
requires the company to act beyond its legal obligations and to integrate social,
environmental and ethical concerns into its business process. Business for
Social Responsibility defines CSR as “achieving commercial success in ways that honour
ethical values and respect people, communities, and the environment.

It means addressing the legal, ethical, commercial and other expectations that society has for
business and making decisions that fairly balance the claims of all key stakeholders. In its
simplest terms it is: “what you do, how you do it, and when and what you say.” A widely
quoted definition by the World Business Council for Sustainable Development states
that “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”.

Though, there is no universal definition of CSR but the common understanding amongst
most of these definitions concern with how the profits are made and how they are used,
keeping in mind the interests of all stakeholders. The concept of Corporate Social
Responsibility is constantly evolving.

The emerging concept of CSR goes beyond charity and requires the company to act beyond
its legal obligations and to integrate social, environmental and ethical concerns into
company’s business process. What is generally understood by CSR is that the business has a
responsibility – towards its stakeholders and society at large – that extends beyond its legal
and enforceable obligations.

The triple bottom line approach to CSR emphasizes a company’s commitment to operating in
an economically, socially and environmentally sustainable manner. The emerging concept of
CSR advocates moving away from a ‘shareholder alone’ focus to a ‘multi-stakeholder’ focus.
This would include investors, employees, business partners, customers, regulators, supply
chain, local communities, the environment and society at large.

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The key components of CSR would therefore include the following:

Corporate Governance: Within the ambit of corporate governance, major issues are the
accountability, transparency and conduct in conformity with the laws. Good corporate
governance policy would enable the company to realize its corporate objectives, protect
shareholder rights, meet legal requirements and create transparency for all stakeholders.

Business Ethics: Relates to value-based and ethical business practices. ‘Business ethics
defines how a company integrates core values – such as honesty, trust, respect, and fairness –
into its policies, practices, and decision making. Business ethics also involves a company’s
compliance with legal standards and adherence to internal rules and regulations.

Workplace and labour relations: Human resources are most important and critical to a
company. Good CSR practices relating to workplace and labour relations can help in
improving the workplace in terms of health and safety, employee relations as well as result in
a healthy balance between work and non-work aspects of employees’ life. It can also make it
easier to recruit employees and make them stay longer, thereby reducing the costs and
disruption of recruitment and retraining.

Affirmative action/good practices: Equal opportunity employer, diversity of workforce that

includes people with disability, people from the local community etc., gender policy, code of
conduct/guidelines on prevention of sexual harassment at workplace, prevention of
HIV/AIDS at workplace, employee volunteering etc. are some of the good practices which
reflect CSR practices of the company.

Supply Chain: The business process of the company is not just limited to the operations
internal to the company but to the entire supply chain involved in goods and services. If
anyone from the supply chain neglects social, environmental, human rights or other aspects, it
may reflect badly on the company and may ultimately affect business heavily. Thus,
company should use its strategic position to influence the entire supply chain to positively
impact the stakeholders.

Customers: The products and services of a company are ultimately aimed at the customers.
The cost and quality of products may be of greatest concern to the customers but these are not
the only aspects that the customers are concerned with. With increased awareness and means
of communication, customer satisfaction and loyalty would depend on how the company has
produced the goods and services, considering the social, environmental, supply-chain and
other such aspects.

Environment: Merely meeting legal requirements in itself does not comprise CSR but it
requires company to engage in such a way that goes beyond mandatory requirements and
delivers environmental benefits. It would include, but not limited to, finding sustainable
solutions for natural resources, reducing adverse impacts on environment, reducing
environment-risky pollutants/emissions as well as producing environment-friendly goods.

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Community: A major stakeholder to the business is the community in which the company
operates. The involvement of a company with the community would depend upon its direct
interaction with the community and assessment of issues/risks faced by those living in the
company surrounding areas. This helps in delivering a community-focused CSR strategy –
making positive changes to the lives of the people and improving the brand-image of the
company. Involvement with the community could be both direct & indirect – through funding
and other support for community projects implemented by local agencies.

Purpose of CSR

Potential Benefits of Implementing CSR in Nature

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RESEARCH METHODOLOGY

The research commences by searching for the articles related to the topic CSR (Corporate
Social Responsibility).Then having a detailed knowledge of the same.

Then, studying the steps taken and efforts made in this field by various Indian companies.
Taking some examples of Indian companies and explaining the efforts made by listing their
contributions. After identifying them, there is study of the results it had on the business and
what positive results came out.

Then explaining by examples of various study that how it has leaded to increase in profits and
is one of the reason of corporate success. Also there is special emphasis on an Indian
company which can explain the topic better and help to achieve the objectives.

Although some companies may achieve remarkable efforts with unique CSR initiatives, it is
difficult to be on the forefront on all aspects of CSR. Considering this, the example below
provides good practices on one aspect of CSR – environmental sustainability.

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BOSCH

The company continues to operate by the values of founder Robert Bosch, who said “I have
always acted according to the principle that it is better to lose money than trust.” The credo
that “responsibility creates trust” carries through in the company’s efforts around ecological
and social improvement.

Bosch invests 50% of its R&D budget in technologies supporting conservation and
environmental protection. The Bosch exchange program remanufactures used car
components, generating 23,000 metric tons less CO₂ annually compared to new production.

The company believes in improving people’s quality of life with its products and services that
are as innovative as they are beneficial. The Bosch value of responsibility is practiced
towards society, the environment, products and customers, associates and young talent, and
for corporate governance. All its activities follow national laws and universally valid rules
and standards.

CSR Committee:

What gets measured gets managed! Bosch do not engage in CSR for the sake of it, but strive
to act responsibly across a wide range of social and environmental issues, and more
importantly integrate CSR into the day-to-day operations of the company. To demonstrate
this commitment, The Company have CSR oversight provided by the CSR Committee. The
CSR Committee has been formed to develop a long-term vision, identify thrust areas, and
support the various activities across all Bosch India locations. The Committee will facilitate
the conceptualisation and execution of projects, and the provision of budgetary support for
consolidated social engagement by Bosch in the future. The Committee also aims to improve
the sustainability and scalability of CSR projects, and to create synergy among all projects as
the key to building stronger and enhanced engagement with society. Above all, the
Committee encourages, and looks forward to, active involvement and volunteering by
Boschlers in order to actualize the higher vision of social action on which Bosch has set its
sights.

CSR Department:

There is also a dedicated team of full-time professionals at the CSR Department (at
Bangalore Plant location) who work on planning, implementing, monitoring, improving and
reporting on CSR activities and projects. The team works in close coordination with
colleagues at other Plant locations also, as well as coordinate with a range of external
stakeholders including the social sector and the government in ensuring long-term
sustainability and impact of the CSR projects undertaken by the company. Besides, a network
of project-specific staff has been placed by Bosch (for example, trainers and coordinators for
the BRIDGE Program) across India.

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Sustainability:

Short-term projects financed by one-time monetary support do not create permanent change.
Sustaining projects is a challenge. Therefore each project will be evaluated for long-term
sustainability before committing resources for it. Its progress will be reviewed against
intended objectives at regular intervals.

For the Bosch Group, sustainability means securing the company’s long-term success while
at the same time protecting the natural environment for future generations. Company aims to
make renewable energy more affordable and mobility even safer, cleaner, and more
economical, and to develop eco-friendly products across the board.

Bosch
Financial key figures

2008 2010 2012 2014 2016

Revenue (€ billion) 45.1 47.3 52.5 49.0 73.1
Earnings after tax (€ billion) 0.4 2.5 2.3 2.6 2.4
R&D expenditures (€ billion) 3.9 3.8 4.8 5.0 7.0
Investments in property, plant and equipment (€
billion) 3.3 2.4 3.2 2.6 4.3
Personnel expenses (€ billion) 13.0 14.1 15.7 15.3 21.3
Environmental protection investments (€ million) 23.2 43.8 46.3 36.5 46.5
Environmental protection costs (ongoing
expenditures) (€ million) 102.2 99.8 102.3 104.9 139.7

Scalability:

Bosch will design/support projects that could be up-scaled in the mid and long-term to create
scope for touching the lives of a large number of under-privileged people.

Promoting Volunteering:

Bosch will promote employee volunteering in every CSR project. The volunteers will be
trained to impact the necessary skills to run CSR projects successfully. This will be done to
ensure that the volunteers get first-hand insights on the socially relevant issues and the
requirements.

At Bosch, CSR is an integral part of our Business Strategy and organizational goal wherein
sustainable CSR programs are built around the active participation of our company’s team
members by fostering meaningful engagement and sustainable development in the areas of

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education and environment. Associates engage in various CSR activities throughout the year
contributing thousands of volunteering hours.

Our initiatives in the areas of education and environment are towards creating sustainable
benefits and ensuring a better and greener tomorrow.

Bosch Value Addition:

As far as possible, CSR projects would make use of Bosch’s competence (like Vocational
Training) in enriching the program for greater social impact. Bosch volunteers will add value
by sharing their knowledge, experience and expertise in specific domains, thereby adding
uniqueness to the programs.

CSR Committee

The CSR Committee of Bosch Limited consists of the following senior managers of Bosch:

Mr. Sumitra Bhattacharya Joint Managing Director, Bosch Limited

Mr. Suresh B R National Head, Human Resources, Bosch
Limited
Mr. Anil Kumar M R Regional President, Starter Motor and
Generators-India & Plant Manager of
Naganathapura Plant, Bosch Limited
Mr. Gopikumar A Vice President, Commercial Plant
Management, Bangalore Plant, Bosch
Limited
Mr. Vijay Pandey Regional President - Automotive Aftermarket
Division, Bosch Limited
Dr. O. P. Goel General Manager – Corporate Social
Responsibility & Head, Vocational Training,
Bosch Limited
Mr. Peter Saldanha Senior General Manager, Corporate Internal
Auditing

Looking to the Future

Bosch is reaching out to the society in a large way through its well-organised programs such
as BRIDGE, CHDP and Neighbourhood Projects. More and more needy people and
underprivileged youth are being benefited. Aim is to scale up all our projects and achieve
long-term sustainability.

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Quotes

“It is my intention, apart from the alleviation of all kinds of hardship, to promote the moral,
physical and intellectual development of the people.”

Robert Bosch

“In the long term, an honest and fair approach to doing business will always be the most
profitable.”

Robert Bosch, 1921

CONCLUSION

CSR clearly impacts our corporations, society, and educational organizations. Despite its
complexities, the numerous sustainability initiatives point toward continued, positive impact.
CSR policy should function as a built-in, self-regulating mechanism whereby businesses
would monitor and ensure their adherence to law, ethical standards and international norms.
In the recent years corporate business houses have substantially involved towards societal
responsibilities. Companies have started to realise the importance of CSR and initiating the
steps towards it.

It is found that there is a need for creation of awareness about CSR amongst the general
public to make CSR initiatives more effective. This effort will also motivate other corporate
houses to join the league and play an effective role in addressing issues such as access to
education, health care and livelihood opportunities for a large number of people in India
through their innovative CSR practices. It is difficult for one single entity to bring about
change, as the scale is enormous. Effective partnerships between corporate, NGOs and the
government will place India's social development on a faster track. The CSR regime in India
is in a nascent stage and there will be hitches, and a lot of fine-tuning will be required before
we hit the perfect balance. What is commendable is the spirit with which India has made her
corporate socially responsible and in that, led the world's most developed nations.

From the limited experience over the last few years, some lessons nonetheless emerge.
Government introduce CSR because they wants corporation to become more responsible for
the society or for its stakeholders itself. As we know, CSR offer real opportunities for the
corporations to contribute in various activities which directly or indirectly help welfare of the
society. Corporations are social entity so they must take care of all stakeholders, it is vital for
them to take charge of this responsibility in efficient way so that all participant of corporation
feel satisfied. As we know corporate can't stand alone they also needs the support of their
society at large which is important for their development and goodwill. Many large
corporations now taking steps to improve their environmental and social performance through

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the use of voluntary initiatives such as codes of conduct, environmental certification and
reporting, social audits, fair trading schemes and social investment programmes. Corporate
and government must work together and through this, they can bring changes in the welfare
schemes of society.

REFERENCES:
The prevailing approaches to CSR are so fragmented and so disconnected from business
and strategy as to obscure many of the greatest opportunities for companies to benefit
society.

An affirmative corporate social agenda moves from mitigating harm to reinforcing

corporate strategy through social progress.

1. www.corporatewatch.in/.../Corporate_Responsibility_in_India_2017_webversion.pdf
2. https://en.wikipedia.org/wiki/Corporate_social_responsibility
3. http://www.bl.uk/reshelp/findhelpsubject/socsci/topbib/csr/csr.html
4. http://www.indiacsrsummit.in/
5. https://www.bosch.com/
6. https://www.bosch.in/our-company/our-responsibility/corporate-social-
responsibility/
7. https://www.sciencedirect.com/science/article/pii/S2212567114001750
8. https://www.sciencedirect.com/science/article/pii/S1090951615000632
9. https://www.omicsonline.org/open-access/corporate-social-responsibility-csr-is-on-a-
sustainable-trajectory-2167-0374-1000132.php?aid=64986
10. https://economictimes.indiatimes.com/topic/CSR/news
11. https://jcsr.springeropen.com/articles/10.1186/s40991-016-0003-7
12. https://www.researchgate.net/publication/282746355
13. http://www.academicstar.us

Books:
1. Corporate Social Responsibility and Competitiveness (Essential of the Corporate
India and its Sustainability) Patron: Rusen Kumar, Editor: Saurabh Mittal,
Publisher: Allied Publisher Private Ltd., New Delhi.

2. Corporate Social Responsibility in India- A Study of Management Attitudes,

Author:

3. C.Gopala Krishna, Publisher: K.M. Rai Mittal, Mittal Publications, New Delhi.

4. Corporate Social Responsibility, Author: David Crowther, Guler Aras &

Ventus, a publisher: APS, Edition-1, ISBN: 978-87-7681-415-1

5. Corporate Social Responsibility in India, Author: Sanjay. K. Agarwal

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6. Corporate Social Responsibility in India, by Professor Leo Burke, Publisher:
Times Foundation.

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