Corporate Social Responsibility

Explanation :

• 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.
• In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013.
• As per as CSR is concerned, the Companies Act, 2013 is a landmark legislation that made India the first country to mandate and quantify CSR expenditure.
• The amendment notified in the Companies Act, 2013 requires companies with a net worth of INR 500 crore (US $70 million) or more, or an annual turnover of INR 1000 crore (US $140 million) or more, or net profit of INR 5 crore (US $699,125) or more, to spend 2 percent of their average net profits of three years on CSR.
• The corporations are required to setup a CSR committee which designs a CSR policy which is approved by the board and encompasses the CSR activities the corporations is willing to undertake.

Examples of CSR

• Environmental management, ex- waste reduction and sustainability
• Responsible sourcing, ex- using only fair trade ingredients
• Improvement of working standards and conditions
• Contributing to educational and social programs
• Employee volunteering
• Socially responsible investment
• Development of employee and community relations