Corporate social responsibility refers to business practices that involve initiatives, which benefit society in positive manner. It is a corporate self-regulation, which has been integrated into a business model and functions as a self-regulatory mechanism. A business CSR encompasses a wide variety of tactics and ensures it is in compliance with the law and ethical standards. A businesses' CSR may include donating away a portion of a company's profits to charity or implementing greener business operations. The strategy of CSR is to encourage the company to leave positive impact on society and environment, which also benefits consumers, employees and investors.
CSR implementation in India was done in the year 2014, under Companies Act 2013 of section 135. Companies that traditionally undertook CSR or were just performed but not deliberated needed to streamline whatever they have spent on specific activities related to this concept. Under the CSR, companies needed to scale up initiatives that they already had, benefiting to a wider population and replicating their solutions, and chose to see the broader perspectives at new areas and pilot some initiatives in the first year.
The relevance of CSR within an organization :
CSR not only aims at changing the environment but also to meet business objectives. Undertaking CSR initiatives, a company can socially do the following things:
- Strengthen the relationships and ability to manage stakeholders
- Encouraging continuous improvement and innovation
- As a socially responsible company, it can attract the best industry talent
- Giving motivation to the employees
- An effective corporate governance framework will help in risk mitigation