Corporate Social Responsibility

Across India as well as around the globe, Corporate Social Responsibility (CSR) is emerging as a significant concept in the arena of business. It is becoming an important constituent of the mainstream corporate agenda. The growing importance of CSR has rewritten the relationship of business with not just the shareholders, but its various stakeholders including employees, supply chain partners, government, creditors, customers and surrounding communities. Engaging in CSR is thus a desired investment in 21 st century knowledge economy to further the developmental process and garner business benefits.

CSR, an eclectic concept in itself, is still evolving. There are many different names for the same or similar concept - such as Corporate Social Responsibility, Corporate Citizenship, Business Sustainability and Corporate Responsibility. While there is incongruity over these terms, but at the core they all point towards the same fundamental principle: that a company is responsible for providing more benefits than just profits for shareholders. In general, what is understood by CSR is that business has a responsibility towards its stakeholders and society at large that extends beyond its legal and enforceable compliances by aligning business operations with social values and integrates the interests of stakeholders into the company's business policies and actions. Thus, a Business can adopt initiatives like treating its employees well, preserving the environment, developing sound corporate governance, fostering human rights, respecting cultural differences and helping to promote fair trade, amongst others. The ultimate aim of CSR is to positively impact communities, cultures, environment and society at large in which companies operate

CSR in the Global spectrum

In the global spectrum, the debate over the concept of Corporate Social Responsibilities was initiated way back in the early 20 th century. The debate intensified with the growing power of business on their shareholders, politics, other groups and the society at large in achieving equitable and sustainable development. Since, the concept of CSR is still evolving, the need for synchronization, mapping and aligning corporate activities internationally have emanated to the development of a number of auditable instruments as well as reporting guidelines, code conducts, charters and benchmarking with the purpose to serve as frameworks for social accounting, auditing and reporting. Some of the significant monitoring indicators that have earned global credibility are listed below:

• The United Nations Global Compact
• Global Reporting Initiative's Sustainability Reporting Guidelines
• AccountAbility's AA1000 standard
• HRCA 2.0 - Human Rights Compliance Assessment Tool
• Equator Principles - a financial benchmark for determining, assessing and managing social and environmental risk in project financing
• Electronic Industry Citizenship Coalition (EICC) - set of tools and methods that support code of conduct throughout the electronics and information Communication Technology (ICT) supply chain

CSR in India

CSR in India is still more about philanthropy and is primarily considered external to business, as opposed to an internal process, which is mainstreamed into core operations, strategy and long-term planning. However, global influence of business rendered by globalization, growing trade links and technological proliferation in the last century, drive towards incorporating CSR into the core business strategy.

There has been a growing trend among Indian companies towards adopting the stakeholder model of Corporate Social Responsibility as their core business strategy. This movement can be gauged through the number of activities being carried by the business enterprises. In a recent study it has been estimated that 57% of the companies in India are reported to have formal engagement processes for stakeholders in place. Indian enterprises are also taking forward the concept of participatory business model by undertaking stakeholder engagement for initiation of business sites and partnership with apex bodies to address national/local societal issues. However, while the organised sector in India is gradually steering towards understanding their social obligations, we still have a long way to go. Despite the US$ 27.3 billion Foreign Direct Investment in India, we still have a large number of our population (approximately 320 million people) dependent on the unorganized sector to earn a living and over 300 million people still grappling to earn a living, meeting the objective of sustainable development through CSR in its truest form, is still a distant dream. The scope and reach of CSR is further constrained, especially amongst the small and medium enterprises, by lack of information and skills, technological gaps, financial in-capacities, inadequately trained CSR personnel, non availability of authentic data and specific information about CSR initiatives, coverage and policies.

Despite the existing challenges, the roadmap for consistent sustainable development has been prepared and the initial steps been taken. The seed for undertaking socially responsible initiatives have already been sown amongst the business enterprises. As part of public-private-partnership initiatives, a joint movement has thus begun to address and solve social, environmental and economical problems, through CSR in a collaborative way.