Trending: Call for Papers Volume 4 | Issue 4: International Journal of Advanced Legal Research [ISSN: 2582-7340]



In recent years, there has been a substantial rise in awareness regarding the notion of corporate social responsibility, known as CSR. The term “corporate social responsibility” (CSR) refers to the responsibility that a corporation has to operate in the way that is most beneficial to society as a whole, taking into account the effect that its business activities have on its clients, workers, communities, and the natural environment. This paper investigates the effects that CSR has had on society in terms of how it relates to corporation law. According to the findings of the study, corporate social responsibility plays an essential role in fostering sustainable growth and having a good influence on society. In addition to this, the research investigates the legislative frameworks that surround CSR and its implementation in a variety of nations throughout the world. The findings imply that corporate social responsibility has become an integral part of business strategy and is progressively becoming a legal obligation in a lot of different places. Overall, the study highlights the significance of CSR in promoting corporate accountability, social welfare, and environmental protection. Additionally, the study suggests that businesses should prioritise CSR as a means of enhancing their reputation, cultivating goodwill, and creating long-term value for all stakeholders.

Keywords: Corporate Social Responsibility, Section 135, Schedule VII


  • Background of the research

What is thrown out, is thrown back. Every aspect of the universe is interconnected. A guy will only get the amount of fruit from his sow that he deserves. This is how being responsible motivates one to act in a way that does not damage others. A decent citizen must give back to society what he receives. Like individuals, companies must assume responsibility for actions that have an influence on society and the environment. A business is accountable for the effects of its actions on the community, and it must take the necessary steps to right the wrongs it has caused. Success in company extends beyond profitability, speed of expansion, and brand awareness. Customers, employees, and other stakeholders evaluate a business today based on how its operations affect the local community, economy, environment, and society at large. By its concern for the larger good, as opposed to just more profit, in other words. Practices in corporate social responsibility can show how your company feels about a subject.

The idea of corporate social responsibility (CSR) first appeared in our culture a long time ago. The idea outlines the societal obligations that businesses in our nation have. This idea was implemented methodically through legal passage. In general, CSR lacks a precise definition that fully captures the meaning of the word. CSR was, however, eventually made enforceable by law.It was stated under the Section135 of Companies Act, 2013.[1]Considering popular wisdom, it is obvious that CSR and Sustainable Development are mutually beneficial. In a nutshell, CSR refers to actions made by businesses for the benefit of society, while sustainable development is the better use of resources that preserves them for future generations. At this time, corporate citizenship, sustainable business, corporate accountability, and business ethics were all associated with the idea of CSR.

A change to the Companies Act, 2013 in April 2014 made corporate social responsibility (CSR) mandatory, making India one of the first nations in the world to do so. As part of any CSR compliance, businesses are permitted to put their earnings towards causes including catastrophe assistance, sanitization, and societal advancement.[2]

The Ministry of Corporate Affairs has announced that businesses’ costs to combat the pandemic would be counted as CSR activities in the wake of the COVID-19 (corona virus) epidemic. Proceeds may be used for a variety of COVID-19-related initiatives, including donations to the PM-CARES Fund, the promotion of preventive healthcare, sanitation, and disaster management.

  • Section 135 of the Companies Act,2013

In accordance with Section 135 of the 2013 Companies Act;

A company must establish CSR committee if in the previous financial year, the company had:

  1. Net worth of 500 crores; or
  2. Turnover of 100 crores; or
  3. Net profit of 5 crores or more
  • The committee must include a maximum of three directors, one of whom must be an independent director.
  • The CSR committee’s membership must be disclosed in the board report.
  • The CSR committee will be accountable for:
  1. Create a CSR policy that outlines the actions the board will take and suggest it to the board.
  2. Suggest the costs that should be spent for that particular action.
  3. Observe the CSR policy sometimes.
  • The board must guarantee that actions are covered by the company’s CSR policy and must disclose the details of the policy in its report and on the internet.
  • In cases when the firm has not yet finished the three financial years following its establishment, the board must ensure that the company spends 2% of its net profit during those three years.
  • If the business does not use the funds for the project it has undertaken, it must transfer them within 30 days by creating a special Unspent CSR account in the bank, and they must be used within three years of the date of the transfer.
  • If a firm violates the clause, the company will be punished with a punishment that may reach $25,000 but may also reach $25,000 lakhs, and any officers who are in default will be subject to up to three years in jail and fines that must at least be $50,000 but may also reach $5 lakhs.
  • Schedule VII[3]

What a company’s corporate social responsibility policy may contain as activities Activities aimed at:

  • Eradicating extreme hunger and poverty;
  • Advancing education;
  • Advancing gender equality and women’s empowerment;
  • Lowering infant mortality and improving maternal health;
  • Ensuring environmental sustainability;
  • Enhancing vocational skills for employment; Social business projects; and
  • Contributing to the global community.


CSR project spending is not a reliable indicator of society welfare. Due to historically poor reporting of CSR expenditure, it is unclear if companies have actually raised their CSR spending in comparison to what they were doing voluntarily before to the law. According to some data, businesses that initially spent less than 2% on CSR boosted their CSR efforts whereas businesses that initially spent more than 2% on CSR decreased their CSR expenditures.


  1. To know the importance of CSR in corporate houses.
  2. To know the companies who have taken CSR activities given in Schedule VII.
  3. To know the impact of CSR in India.


  1. What is the importance of CSR for corporate houses?
  2. Which companies have applied CSR activities given in Schedule VII?
  3. What is the impact of CSR in India?


H1: CSR has positive impact on the corporate houses and society.

H01: CSR has negative impact on the corporate houses and society.


CSR initiatives are currently being carried out, and they are having an effect everywhere (Jo, 2011).[4] With their CSR efforts, businesses may have a significant impact on the marketability and credibility of their goods, which benefits society as a whole and boosts their bottom line. CSR is gaining importance for firms on a national and worldwide scale. Due to the dependence of the social environment on the business environment, society expects the corporation to be socially responsible. Nowadays, the phrase “socially responsible company” is widely used since society and business cannot exist independently (Cornell, 2017).[5]

Community builders need to know how to collaborate with people and influence communities’ viewpoints within the framework of broader social institutions based on social justice and respect for others (Carroll, 1991).[6] By CSR, businesses’ contributions to society go beyond the assumption that they exist just as places to find work and carry out business operations for goods and services. Businesses and the neighbourhood would remain peaceful and harmonious if this were done. This turns into a social capital that is critical to neighbourhood development(Casagrande, 2017).[7] Employees may regard their company’s commitment to socially responsible conduct more favourably thanks to CSR, and they also tend to have more positive attitudes in other areas, which are associated with greater performance (Jamali, 2017).[8]


7.1 Types of Corporate Social Responsibility

There are four primary categories of corporate social responsibility in general. A corporation can choose to participate in any of these independently, and not doing so does not automatically exclude it from being socially responsible.


The cornerstone of corporate social responsibility, which is anchored on protecting mother nature, is environmental responsibility. A business may guarantee that it leaves the environment better off than it found it by conducting its activities as efficiently as possible and supporting relevant causes. Environmental stewardship is frequently pursued by businesses through:

  • Reducing waste, emissions, consumption of natural resources, and pollution through its production process.
  • In all aspects of its operations, including customer outreach, it recycles products and resources.
  • Compensating for negative effects by restoring natural resources or aiding organisations that can help reduce the company’s impact. For instance, a company that cuts down trees can promise to plant as many or even more.[9]
  • Adopting ways of distribution with minimal negative effects on emissions and pollutants.
  • Establishing product lines that strengthen these principles. A firm that sells gas lawnmowers, for instance, may create an electric version.

The cornerstone of corporate social responsibility, ethical responsibility is based on doing things in a just and moral way. Although external factors or client demands may influence ethical aims, businesses frequently set their own standards. Examples of ethical responsibility are as follows:

  • Regardless of age, colour, culture, sexual orientation, or any other factor, all consumers will get fair treatment.
  • Positive treatment of all employees, including higher than required minimum salary and benefits. This involves treating everyone equally in the workplace, notwithstanding variances in personality.
  • Expansion of vendor utilisation to include suppliers of various racial backgrounds, genders, veteran statuses, and socioeconomic backgrounds.
  • Honest and courteous disclosure of operational problems to investors. A business may decide to handle its relationship with external stakeholders outside of what is legally necessary, albeit this is not necessarily needed.

The cornerstone of corporate social responsibility, philanthropic responsibility questions how a business behaves and how it contributes to society. Philanthropic duty, in its most basic definition, relates to how an organisation allocates its resources to improve the world. This comprises:

  • Whether a business distributes its profits to good causes or charity.
  • If a business exclusively conducts business with suppliers or vendors that share its charitable values.
  • If an employer provides time off or matches employee donations when it comes to charitable efforts.
  • If a business participates in community fundraising activities or sponsors them.

The pillar of corporate social responsibility that unites the three aforementioned categories is financial responsibility. A firm may have intentions to become more environmentally friendly, morally upright, and charitable, but it must support these objectives with cash contributions to programmes, charitable donations, or product development. This covers money spent on:

  • Developing innovative items that promote sustainability via research.
  • Securing a diverse staff by hiring a range of talent.
  • Initiatives that educate staff members about DEI, social responsibility, or environmental issues.
  • Processes that can cost more but produce better CSR outcomes.
  • Making sure financial reporting is accurate and timely, including external audits.

7.2 Importance of CSR for corporate houses


A company’s public image and connection with customers are both enhanced by engaging in positive social responsibility. Businesses are seen as being more generous when they show their dedication to a variety of causes than when they don’t engage in any CSR activities. The public perception of a company depends on its social responsibility initiatives and how well-informed consumers are about them. Consumers enjoy buying at businesses that support the community, so keep that in mind. Boost your public image (and tell the world about it!). Companies may enhance their public image by assisting non – profit organisations through financial contributions, volunteer work, in-kind gifts of goods and services, and solid alliances. Companies boost their chances of winning over consumers by making their charitable endeavours known to the public and by marketing them.[10]


Strong CSR initiatives might improve your company’s chances of receiving media attention. No matter how much a corporation works to protect the environment, if no one knows about it, it doesn’t matter. For local media outlets to be more inclined to cover the news that a certain firm has to give them, businesses need to establish ties with them. On the other side, the media will cover it if a firm engages in production or activities that have a detrimental influence on the community. Sadly, negative news spreads more quickly than positive news. Insofar as it promotes your company, media exposure is only somewhat helpful.


Business social responsibility aids in luring in and keeping motivated staff members. Workers prefer to work for organisations with positive public perceptions that frequently appear in the media. Better production nearly usually equates to content workers. Employee engagement is high among those who are proud of their company’s social responsibility—nearly 60%. Businesses that demonstrate their commitment to giving back to the community through corporate giving initiatives (like matching donations and volunteer grants!) are more likely to recruit and keep talented, devoted, and engaged workers. Job seekers are more inclined to submit applications and request interviews if a company has a charitable bent. Engaged workers are more likely to stay with a firm after being employed, to be more productive every day, and to be more innovative.


Companies should care about corporate social responsibility because investors do. Investors who pump cash into businesses want to know that their money is being well invested. This implies that businesses must not only have solid financial forecasts and goals, but they also need to be highly conscious of their corporate social responsibilities. Businesses that support charitable causes and encourage employee volunteerism show investors that they are concerned about more than just their bottom line. Instead, they demonstrate that they care about both the local and international communities. Investors are more likely to be drawn to and stay invested in businesses that show dedication to not just their staff and clients but also to social issues and charitable organisations.

  • CSR in India

Companies engage in CSR activities such as health fairs, population control initiatives, support for a small number of sick people, scholarship giving, organisation of a small number of SHGs, sports events, and training for a small number of livelihood practises without connecting these activities to future growth. Certain corporations have been discovered to work on issues related to people with disabilities, the elderly, and street children. All of them are either time-limited programmes, institutionally sponsored events, or contributions to a few Organizations. They also address the shortcomings of government-run schemes or programmes with the goal of raising the program’s level of quality.[11] Most short-term actions are corporate eye-washing campaigns where sustainable development strategies are frequently overlooked. Most participants in these schemes are government officials and representatives of the populace, and care is made to ensure that they are visible to the public. As a result, the corporation’s benefit from ongoing unlawful and expedited legal favours, which ultimately increases profit.

Several businesses in India have begun realising that engaging in CSR initiatives and integrating them into their company operations is a sensible course of action. Businesses are becoming more conscious of their responsibilities to society. They are accountable organisations with a feeling of responsibility for the environment and the wellbeing of all people. This is brought on by a rising awareness that they, as essential members of this society, can empower the entire nation by helping to lift it up. In order to define policies, objectives, and goals for their CSR programmes, companies are now creating specialised departments and teams, and allocating distinct money to do so. Instead of focusing on profit maximisation, the new generation of business executives in the current day believes that profit optimization is the key.Although if well implemented CSR will undoubtedly enhance the splendour of the country, some have questioned the necessity of such duties in a country like India where the majority of government initiatives aim to promote socioeconomic equality and growth. The imposition of such obligations appears to be justified in two ways: first, because the long-standing issues of socioeconomic inequality and environmental concerns have proven to be chronic; and second, because previous efforts have amply shown that greater participation is required to address the root causes of such issues. Both the general public and the business world would benefit from bringing the corporate world under the social and economic duties.

  • Negligence of CSR by the companies in India

CSR is now required, and if a corporation doesn’t follow the regulations, there might be serious repercussions. Few businesses were careless about CSR and environmental pollution. Several environmental problems are brought on by businesses’ reckless behaviour and inconsistencies in their conduct. Many lawsuits have been brought before the court to support these claims, and significant rulings that favoured the environment and the workers also helped them.

Environmental contamination is caused by companies’ irresponsibility, as was demonstrated in the infamous Yamuna River case, M.C. Mehta v. Union of India.[12]

In M.C. Mehta v. Union of India, it was decided that both numerous small industrial units and many major industrial units (22 in Haryana, 42 in Delhi, and 17 in Uttar Pradesh) contribute industrial waste to the river.

Interestingly, while making up only 2% of the catchment area, Delhi is responsible for 80% of the river’s pollution.

In this instance, as in M.C. Mehta v. State of Tamil Nadu (Sivakasi fireworks case), On the subject of child labour, the ruling is one of the landmark rulings. It goes into great depth regarding how child labour is now occurring in India. It describes the constitution’s perspective on children. The court’s ruling emphasises the link between child labour and poverty. It also sheds light on how the government has failed to end child labour in the nation and lacks the motivation to do so. The court also considers potential ways to end child labour in its decision.[13]

The federal government appears to have gone above its legal authority by eliminating “social business ventures” through the notification, and this action might one day be susceptible to court challenge. In the case of J.K. Industries Ltd. v. Union of India and Ors., this was noted.[14]

The company’s owners are its shareholders. The Board of Directors is in charge of management. The board of directors has unfettered authority to choose the CSR activity to be carried out and the CSR spending as a result of the establishment of CSR. The board of directors has the authority to invest corporate funds in CSR initiatives for their own gain. As an illustration, a director can authorise CSR projects related to building work at a school or college where he needs to secure his son’s entrance. As shareholders have no control over CSR activities in this situation, they are powerless to stop the director from using business funds for his personal gain. Furthermore, each region has certain requirements that must be met; if the board decides the type of CSR activity, neither the society nor the shareholders’ money will benefit, and the shareholders’ rights will be compromised. Because to the lack of shareholder input in CSR and the board of directors’ unrestrained authority, there is no check and balance. As a result, shareholder rights are compromised.

  • CSR Activities taken by company given in Schedule VII of the Act
  1. Tata Consultancy Services
  • Around INR 296 crores are included in the project budget.
  • Technology infrastructure and the Integrated Hospital Management System were delivered by Tata Consultancy Services.
  • It founded the Cancer Institute in Chennai and the Tata Medical Center in Kolkata.

Impact of this Project

  • The number of patients inside OPDs is reduced.
  • An automated childcare appointment system was implemented, and the Quick Track Management service was improved.
  • The National Cancer Grid’s Digital Nerve Center platform, which connects to the top research facilities and authorities, was launched.
  • It built cancer treatment facilities in Chennai, Kolkata, and Thiruvananthapuram.
  1. ITC Limited
  • More than INR 123.16 crores are allocated to the project.
  • The goal of this initiative is to promote public hygiene.
  • In 26 districts across 15 states, the business built 4,443 individual family toilets to combat water-borne infections and stop open defecation.
  • Also, 32 restrooms were repaired in the states of West Bengal, New Delhi, and Bihar.
  • In three districts of Andhra Pradesh, portable water was made available, and in areas with low water quality, purification programmes were set up. These plans supplied roughly 1,50,000 rural residents with clean drinking water.
  • In order to raise awareness of various health-related issues, Village Health Champions were established in seven districts of Uttar Pradesh and four districts of Madhya Pradesh. These districts served 3.22 lakh women, adolescent girls, and schoolchildren and primarily focused on sanitation, personal hygiene, family planning, prevention of diarrhoea, and nutrition.
  • To promote the health and nutrition of women, adolescents, and children, the Mother and Child programme was launched, benefiting close to 77,000 individuals.
  1. Reliance Industries Limited
  • Around INR 476.90 crore are allocated to the project budget.
  • The Jio Institute is being established by Reliance Industries as part of the 2017 Institution of Eminence Deemed to be Universities Regulation.
  • It offers a place where people may do research and learn.
  • The academic programme, curriculum, research agenda, research centre, institutional partnership, and campus growth are all actively being planned.
  1. Wipro Limited
  • More than INR 107.58 crores are allocated to the project.
  • Founded in 1995, the Wipro Academy of Software Excellence was created with the intention of assisting postgraduates in science and technology with their preparation for their master’s degree in software engineering.
  • The Birla Institute of Science and Technology is a partner in this programme.
  • Wipro Infrastructure Management school was established with the cultivation of the top talent in the IT industry as its central topic.
  • More than 30,000 students have benefited from its assistance since 1995 as they seek further education in the engineering sector.
  • More than 18,200 students have earned M.Tech degrees in various IT fields during the past 20 years.
  1. Johnson & Johnson

Johnson & Johnson is committed to minimising its environmental effect and has made investments in alternative energy sources. Johnson & Johnson aims to provide communities with access to clean, safe water on a global scale.


8.1 Findings


The general public is not very interested in supporting and engaging in corporate social responsibility (CSR) efforts. The reason for this is that there is little to no awareness about CSR. The problem is made worse by a breakdown in communication between CSR-engaged businesses and the general population at large.


While there is a severe lack of skilled and competent organisations that can significantly contribute to the continuing CSR initiatives launched by corporations, there is a need to develop the capacity of local voluntary organisations. This severely restricts the scope of CSR programmes and makes it difficult for them to scale up.


Lack of transparency on the side of small businesses, which fails to make sufficient steps to reveal information about their programmes, audit difficulties, impact assessments, and money use, is one of the major challenges for the corporate world. This has a detrimental effect on the firms’ ability to develop trust, which is essential for any CSR project to succeed.


In isolated and rural regions, there are few well-organized nongovernmental groups that can evaluate and identify the community’s true needs and collaborate with businesses to ensure the successful implementation of CSR initiatives.

8.2 Suggestions

  • It has been determined that raising public knowledge of CSR is necessary to increase the efficacy of CSR activities. To emphasise the excellent work done by business houses in this area, a variety of stakeholders, including the media, can take on this awareness generating. This will effectively alter how the public perceives and feels about CSR activities made by corporate entities.
  • Several CSR activities and programmes are discovered to be implemented in metropolitan regions and municipalities. As a result, the needy and the destitute in rural regions are not affected by such programmes. This does not imply that there are no poor and needy people in urban India; on the contrary, they too experience the lack of essential amenities and services. Although concentrating on urban regions, it is advised that businesses actively examine their initiatives in rural areas with female child, health, education, and child labour since this will immediately benefit rural residents. After all, more than 70% of India’s population still lives in rural areas.
  • It is mentioned that the government should take into account awarding and honouring business organisations and their affiliated non-governmental groups for putting forth programmes that efficiently assist the disadvantaged and the destitute.


The demands of society from businesses’ social development are rising. In order to improve their reputation in society, businesses must now engage in social responsibility. Although while businesses are making significant efforts for long-term growth, some detractors continue to cast doubt on the CSR notion. Some individuals contend that hidden objectives lay at the heart of corporate social responsibility, while others reject this idea as a fallacy. In actuality, CSR is not a strategy for establishing brands; but, it does help workers develop an internal brand. Participating in endeavours that benefit society in some way only enhances a business’s reputation. Everyone, including business corporations, governments, and individuals, has a responsibility to practise corporate social responsibility because: wealth is meant to be used by both the individual and the public; all types of business are primarily driven by the desire to sate humanity’s hunger; and all business have as their sole purpose the improvement of humankind. CSR cannot be an add-on; it must be integrated into a company’s core values, including how it treats its customers and workers. As a result, the sector of CSR is expanding quickly and becoming more competitive. Being a responsible corporate citizen is becoming more and more important for business success. The secret is to meet public expectations and goals and to effectively and broadly communicate participation and accomplishments.

A budget of between INR 15,000 and 20,000 crores might be allocated to CSR once the Companies Act of 2013 was passed, which is thought to have affected about 2,500 enterprises. The new regulation is extremely likely to affect the way CSR is thought of and handled in India by introducing new investments, strategic initiatives, and accountability. All parties now have new chances to come up with creative methods to support fair social and economic growth, including the corporate sector, the government, not-for-profit groups, and the general public. As a result of the existence of several enabling institutions and regulatory authorities, including the Department of Public Enterprises (DPE), the Ministry of Corporate Affairs (MCA), and the Indian Institute of Corporate Affairs, CSR in India is now moving in the right path (IICA). Some organisations have already started the process and are crucial to making CSR a common practise and achieving success in decreasing inequality without jeopardising company development.


[1] Section 135, Companies Act, 2013

[2] Corporate Social Responsibility in India India Briefing News, https://www.india-briefing.com/news/corporate-social-responsibility-india-5511.html/  (last visited Feb 28, 2023)

[3] Schedule VII, Companies Act, 2013

[4] Jo, H.,( 2011). “Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility.” Journal of Business Ethics 103 (3): 351–383.

[5] Cornell, B., and A. Shapiro. (2017). “Corporate Stakeholders and Corporate Finance.” Financal Management 16: 5–14.

[6] Carroll, A.  B.,  (1991).  “The  Pyramid  of  Corporate  Social  Responsibility:  Toward  the  Moral  Management  of Organizational Stakeholders.” Business Horizons 34 (4): 39–48.

[7] Casagrande M., (2017). “Corporate Social Performance Revisited.” Academy of Management Review 16: 691−718.

[8] Jamali, D., and R. Mirshak., (2017). “Corporate Social Responsibility (CSR): Theory and Practice in a Developing Country Context.”Journal of Business Ethics 72 (3): 243–262.

[9]Corporate Social Responsibility (CSR) mandatory impact India CSR, https://indiacsr.in/corporate-social-responsibility-csr-mandatory-impact/  (last visited Feb 28, 2023)

[10] (PDF) the impact of CSR on corporate-society relations – researchgate The Impact of CSR on Corporate-Society Relations, https://www.researchgate.net/publication/337566698_The_Impact_of_CSR_on_Corporate-Society_Relations  (last visited Feb 28, 2023)

[11] Cabinet gives Green Signal to revised companies Bill NDTV.com, https://www.ndtv.com/business/cabinet-gives-green-signal-to-revised-companies-bill-311687  (last visited Feb 28, 2023)

[12] M.C. Mehta And Anr vs Union Of India &Ors (1986), 1987 AIR 1086

[13] M.C. Mehta And Anr vs State of Tamil Nadu (1996), SC 1576

[14] J.K Industries vs Union of India, 2005(103) ECC152