Corporate Social Responsibility

WHAT IS CORPORATE SOCIAL RESPONSIBILITY(CSR)?

• Corporate Social Responsibility (CSR) is a concept that suggests that it
is the responsibility of the corporations operating within society to
contribute towards economic, social and environmental development
that creates positive impact on society at large. Although there is no
fixed definition, however the concept revolves around that fact the
corporations needs to focus beyond earning just profits. The term
became popular in the 1960s and now is formidable part of business
operations.
Triple Bottom Line (TBL)

• The triple bottom line (TBL) is a concept which broadens a business'

focus on the financial bottom line to include social and environmental
considerations. A TBL measures a company's degree of social
responsibility, its economic value and its environmental impact.
THE COMPANIES ACT, 2013
• As per as Corporate Social Responsibility is concerned, the Companies Act, 2013
is a landmark legislation that made India the first country to mandate and
quantify CSR expenditure. The inclusion of CSR is an attempt by the government
to engage the businesses with the national development agenda. The details of
on corporate social responsibility is mentioned in the Section 135 of the
Companies Act, 2013.
• The Act came into force from April 1, 2014, every company, private limited or
public limited, which either
• has a net worth of Rs 500 crore
• or a turnover of Rs 1,000 crore
• or net profit of Rs 5 crore,
• needs to spend at least 2% of its average net profit for the immediately preceding
three financial years on Corporate social responsibility activities. The CSR
activities in India should not be undertaken in the normal course of business and
must be with respect to any of the activities mentioned in Schedule VII of the act.
 SCHEDULE VII
• (i) eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation including contribution
to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe
drinking water;
• (ii) promoting education, including special education and employment enhancing vocation skills especially among
children, women, elderly, and the differently abled and livelihood enhancement projects;
• (iii) promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up
old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced
by socially and economically backward groups;
• (iv) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry,
conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga
Fund set-up by the Central Government for the promotion of sanitation;
• (v) protection of national heritage, alt and culture including restoration of buildings and sites of historical importance
and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
• (vi) measures for the benefit of armed forces veterans, war widows and their dependents;
• (vii) training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports;
• (viii) contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for
socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward
classes, minorities and women;
• (ix) contributions or funds provided to technology incubators located within academic institutions which are approved by
the Central Government;
• (x) rural development projects;
• (xi) slum area development.
ISO 26000 –Social Responsibility
ISO 26000 provides guidance on how
businesses and organizations can operate in a
socially responsible way. This means acting in
an ethical and transparent way that
contributes to the health and welfare of
society.
• ISO 26000:2010 provides guidance rather than requirements, so it
cannot be certified to unlike some other well-known ISO standards.
Instead, it helps clarify what social responsibility is, helps businesses
and organizations translate principles into effective actions and shares
best practices relating to social responsibility, globally. It is aimed at
all types of organizations regardless of their activity, size or location.
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REACH
• Registration, Evaluation, Authorisation and Restriction of
Chemicals (REACH) is a European Union regulation dating from 18
December 2006. REACH addresses the production and use
of chemical substances, and their potential impacts on both human
health and the environment.
• Its 849 pages took seven years to pass, and it has been described as
the most complex legislation in the Union's history and the most
important in 20 years.
• It is the strictest law to date regulating chemical substances and will
affect industries throughout the world. REACH entered into force on 1
June 2007, with a phased implementation over the next decade.
Examples of CSR in India
• Tata Industries - Building toilets, adopting villages
• Tata group of companies have spent 8000 crores in CSR activites in
last decade
• Trent – Support Cancer children, Women skill development
• Infosys Foundation
• Writers Café Higginbotham
• Sakthi Masala – employee Blind people
• Mahindra & Mahindra – Nanhi Kali
• Mind Tree – employ physically challenged
Business Ethics and Values
• Business ethical values vary by company, and are defined largely by
the behaviors and values that govern a business environment. In
general, business ethical values are a set of guiding principles that
encourage individuals in an organization to make decisions based on
the company’s stated beliefs and attitudes toward business practices
within its industry.
CSR IN TEXTILE INDUSTRY
• Video
 Sweatshops
Sweatshop is a term for
a workplace that has very
poor, socially unacceptable working
conditions. The work may be difficult,
dangerous, climatically challenged or
underpaid. Workers in sweatshops
may work long hours with low pay,
regardless of laws mandating
overtime pay or a minimum
wage; child labor laws may also be
violated.
Triangle Building, New York. 1911. 146 dead
Rana Plaza Bangladesh 2013.
 MAS
• MAS Holdings is South Asia’s largest
manufacturer of lingerie. The company was
founded in 1987 by Mahesh, Sharad and Ajay
Amalean, deriving its name from the initials of
the three brothers. MAS Holdings began as an
intimate apparel manufacturer and later
diversified into sportswear, performance wear
and swimwear.
MAS
• The majority of the success has been achieved within the US market, which
accounts for almost 60% of sales. Europe and UK provides the majority of
the balance. In terms of customer focus, the company gains 50-55% of
turnover from Victoria Secret, 14% from Gap & another 10% from Marks &
Spencer. In terms of global presence, the company is present in more than
5 locations globally, including China, Vietnam, Indonesia, Mexico, India,
Hong Kong, United Kingdom, Maldives and US.
• From the beginning, MAS set out to be a good employer. In addition to
maintaining basic workplace standards (e.g. a limit on working hours and
overtime, age limits, safe working conditions), MAS gives its workers – over
90% of whom are women – benefits including free transport and a decent
breakfast to start their day, insists that managers eat in the same canteen
as everyone else and provides onsite health care services.
Code of ethics or code of conduct? (corporate or
business ethics)
• Many companies use the phrases ethical code and code of
conduct interchangeably but it may be useful to make a distinction. A
code of ethics will start by setting out the values that underpin the
code and will describe a company's obligation to its stakeholders. The
code is publicly available and addressed to anyone with an interest in
the company's activities and the way it does business. It will include
details of how the company plans to implement its values and vision,
as well as guidance to staff on ethical standards and how to achieve
them. However, a code of conduct is generally addressed to and
intended for employees alone. It usually sets out restrictions on
behavior, and will be far more compliance or rules focused than value
or principle focused.
Code of Conduct
Child Labour is not used
• Use of child labour is not permissible
• Child less than 15 years of age or
• Below the compulsory school age
• In accordance with the national legislation
defining the term child
• Adequate transitional economic assistance and
appropriate educational opportunities shall be
provided to any replaced child workers.
FORCED LABOUR
• Employment is freely chosen. There shall be no use of forced,
including bonded or prison, labour (ILO Conventions 29 and 105). Nor
shall workers be required to lodge "deposits" or their identity papers
with their employer.
There is no discrimination in employment. Equality of
opportunity and treatment regardless of race, colour, sex, religion,
political opinion, nationality, social origin or other distinguishing
characteristic shall be provided (ILO coventions 100 and 111).
Freedom of association and the right to collective
bargaining are respected. The right of all workers
to form and join trade unions and to bargain
collectively shall be recognised (ILO Conventions
87 and 98). Workers' representatives shall not be
the subject of discrimination and shall have
access to all workplaces necessary to enable
them to carry out their representation functions
(ILO Convention 135 and Recommendation 143).
Employers shall adopt a positive approach
towards the activities of trade unions and an
open attitude towards their organisational
activities.
 WAGES and BENEFITS

• Wages and benefits paid for a standard working week shall meet at least
legal or industry minimum standards and always be sufficient to meet
basic needs of workers and their families and to provide some
discretionary income.
• Deductions from wages for disciplinary measures shall not be permitted
nor shall any deductions from wages not provided for by national law be
permitted without the expressed permission of the worker concerned.
• All workers shall be provided with written and understandable information
about the conditions in respect of wages before they enter employment
and of the particulars of their wages for the pay period concerned each
time that they are paid.
 WORKING HOURS

• Hours of work shall comply with applicable laws and industry

standards. In any event, workers shall not on a regular basis be
required to work in excess of 48 hours per week.
• And shall be provided with at least one day off for every 7 day period.
• Overtime shall be voluntary, shall not exceed 12 hours per week, shall
not be demanded on a regular basis and shall always be compensated
at a premium rate.
 Working conditions
A safe and hygienic working environment
shall be provided, and best occupational
health and safety practice shall be
promoted, bearing in mind the prevailing
knowledge of the industry and of any
specific hazards. Physical abuse, threats of
physical abuse, unusual punishments or
discipline, sexual and other harassment,
and intimidation by the employer is strictly
prohibited.
The employment relationship is established.
• Obligations to employees under labour or social security laws and
regulations arising from the regular employment relationship shall
not be avoided through the use of labour-only contracting
arrangements, or through apprenticeship schemes where there is no
real intent to impart skills or provide regular employment. Younger
workers shall be given the opportunity to participate in education and
training programmes.