Corporate Social Responsibility
Recently, the President of India has presented the first National Corporate Social Responsibility (CSR) Awards to selected companies.Consider the following given statements about the CSR:
- In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013.
- India is the second country after USA, in the world to make corporate social responsibility (CSR) mandatory, following an amendment to the Companies Act, 2013 in April 2014.
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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
