Importance of Corporate Social Responsibility
ate Social Responsibility (CSR) is the integration of social and environmental concerns in a company’s regular business operations. The motive behind a company abiding by its CSR is that everyone, be it a small or a large scale business, has a moral responsibility or an obligation towards the society, to bring about development and upbringing of the socially deprived.
In addition, climate change is a global issue and its effects are expected to be much more heinous to one and all in the upcoming decades. Thus, every company, in some or the other way, should acknowledge the environmental concerns and incorporate sustainable decisions in their strategic management.
The importance of CSR in India has increased many folds since the amendments introduced in the Companies Act 2013. This is particularly with regards to the Section 135 – clause on Corporate Social Responsibility obligations (CSR) for companies listed in India. The clause mandates companies to fulfil the essential prerequisites with respect to the fund allotment, execution and successful completion of CSR projects.
According to the Act, every company with a net worth more than or equal to ₹500 crore, a company having a turnover more than or equal to ₹1000 crore or a company with a net profit more than or equal to ₹5 crore before tax shall establish a CSR Committee involving a minimum of three directors out of which at least one director shall be independent.
Here are some of the top 100 companies known for their well-established CSR structure in India
Infosys:
It is quite enticing to know that Infosys spent a whopping ₹360 crore towards its CSR projects in 2020, with majority of them focusing on COVID-19 relief and other health-related programmes.
Mahindra & Mahindra:
Mahindra & Mahindra is known for its continuous effort towards sustainable development. The company considers climate change as one of the major issues and has contributed to various successful projects towards establishing peace with the environment. In the financial year of 2018-19, Mahindra & Mahindra reportedly spent ₹93.50 crores on CSR programmes.
ITC:
ough its CSR. In 2019-20, ITC reportedly spent about ₹326.49 crore on CSR initiatives. The company has been involved in multiple successful social projects in the fields of education, healthcare, environment conservation, digital literacy and sports.
Importance of CSR:
- Reduction of Costs
Operating sustainably can be quite expensive for companies. However, in the recent past, many corporations have found new technology for sustainable operation which in fact saves a lot on costs. For instance, the Cochin International Airport in Kerala is the first fully solar-powered airport in the world. By going solar, the airport saves a tremendous amount of cost and non-renewable energy, thus setting an example for others.
- Increases Brand Value
A well-structured CSR programme can help increase a company’s reputation in the society as it resonates with the culture and values that it believes in. By giving back to the society, companies earn the trust of the masses and that increases the value of the brand hugely. Additionally, once the trust and goodwill are built, it boosts the marketability and sales of the company’s products.
- License to Operate
A well-structured CSR programme can help increase a company’s reputation in the society as it resonates with the culture and values that it believes in. By giving back to the society, companies earn the trust of the masses and that increases the value of the brand hugely. Additionally, once the trust and goodwill are built, it boosts the marketability and sales of the company’s products.
- Employee Engagement and Retention
The young generations believe in the idea of working in a company that reflects good cause, a good image in the public and a sense of belongingness. CSR helps boost employee relations for the company and inspires the employees to stand with the values of the company and give their best to achieve the common goal. In such cases, the company can build a strong workplace environment which can also attract investors domestically as well as internationally.
- Boosts Government Relations
It is often a case in India where companies find it difficult to access good projects in suitable areas due to government restrictions. However, through CSR, companies can build a good rapport with the local politicians and government authorities to initiate potentially successful projects. Moreover, it also helps them gain a good stature within the government and might also be helpful in cases of certain investigations and probes.
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