Abstract
Corporate Social Responsibility (CSR) has evolved from a voluntary philanthropic activity to a strategic and legal obligation in the Indian corporate sector. With the enactment of Section 135 of the Companies Act, 2013, India became the first country to mandate CSR spending, marking a significant shift in corporate governance and accountability. This research paper critically examines the implementation and maintenance of CSR practices in the Indian corporate sector, focusing on the legal framework, compliance mechanisms, and practical challenges faced by corporations. The study explores how companies integrate CSR into their core strategies and assess the impact of their initiatives on stakeholders and sustainable development. By analyzing case studies of leading Indian corporations, the paper identifies best practices and gaps in execution, emphasizing the role of transparency, stakeholder engagement, and ethical leadership. The paper concludes by offering policy recommendations for enhancing CSR effectiveness and aligning corporate activities with national development goals and global sustainability agendas.
Keywords: Corporate Social Responsibility, Indian Companies Act 2013, CSR Implementation, Corporate Governance, Sustainable Development, Legal Compliance, Stakeholder Engagement
Introduction
“If you are not sensitive and responsible to the society you operate in, you’d be soon out of business” –Indra K. Nooyi, CEO and President of PepsiCo.[1]
The concept of Corporate social responsibility entails that firms must conduct their operations in an ethical and accountable manner, rather than solely be involved in charitable activities. The company’s triple bottom line approach demonstrates its commitment to corporate social responsibility, which encompasses sustainability in the economic, social, and environmental aspects. The fundamental concept underlying corporate social responsibility (CSR) is that large, prosperous corporations should exhibit social responsibility by conducting their operations with the primary objective of maximizing profitability and shareholder wealth, while simultaneously contributing to the resolution of societal issues. The theory encompasses concepts of human well-being and emphasizes the interconnection between company operations and societal wellbeing. [2]
Businesses were perceived as having an obligation to address social problems and contribute more than simply financial products and services to the communities in which they operate, as indicated by the use of the term “responsibility.” Companies that embrace this concept proactively incorporate social and environmental issues into their day-to-day operations and engagements with stakeholders. [3]The primary objective of a business is to generate value through the production of goods and services that fulfill the needs of individuals. This, in turn, enables the firm to generate profits for its owners and shareholders while also contributing to the betterment of society as a whole, particularly by consistently generating employment opportunities. In order for a corporation to establish it as socially responsible, it must acknowledge that it has obligations beyond only generating profits to its suppliers, customers, employees, shareholders, and the general public. This principle of running a business that adheres to legal requirements and demonstrates concern for the well-being of individuals, communities, and the environment.
In order for economies to function effectively, firms must possess the capacity to manufacture goods, offer services, and engage in other economic activities. They achieve this by generating employment opportunities and offering additional benefits. Despite their numerous advantages, they can harm the environment through pollution and the depletion of natural resources. Globalization has not only facilitated economic growth but has also engendered social and environmental challenges. Due to these concerns, significant efforts are being made in the field of corporate social and environmental responsibility. The objective is to encourage firms to exhibit responsibility by adhering to legal statutes, regulations, and guidelines, engaging in self-regulation, and undertaking voluntary initiatives.[4]
Company social responsibility, or CSR, is a crucial tool for company strategy. Whether they are private or public, social and environmental issues are increasingly accorded significant weight in businesses’ strategic planning. CSR is an essential tool of public policy in the Indian corporate structure because it has struck a balance between its authoritative beliefs and its financial resources and the larger society. The obligation to better society as a whole is the definition of responsibility according to the social responsibility concept. Corporate social responsibility, or CSR, has grown in significance in promoting the sustainability of business, the environment, and human existence because capitalism is the foundation of most of the world’s economies. India and the UK interpret the concept of corporate social responsibility differently, despite having worked on it together. The deeper understanding of the corporate social responsibility (CSR) policies that are being implemented in India and the UK, as well as the methods by which these countries’ firms are working to accomplish CSR. By applying a comparative study approach, we will gain a greater understanding of the crucial factors that are most likely to influence organisational decisions on social responsiveness.
[1] Corporate Social Responsibility in India by Sanjay K. Agarwal-SAGE Publications Ltd,1st edition, page 18.
[2] McAdam, R., and Leonard, D. (2003). Corporate Social Responsibility inaTotal Quality Management Context: Opportunities for Sustainable Growth. Corporate Governance: The International Journal of Business In Society, 3(4), 36-45.
[3] Zhang, F. (2008). Corporate Social Responsibility in Emerging Markets: The Role of Multinational Corporations. Foreign Policy Centre.
[4] Blaikie, P., Cannon, T., Davis, I., and Wisner, B. (2014). At risk: natural hazards, people’s vulnerability and disasters. Routledge.