CORPORATE SOCIAL RESPONSIBILITY
Value the You of the World
Corporate Social Responsibility (CSR) is when a company operates in an ethical and sustainable way and deals with its environmental and social impacts. This means a careful consideration of human rights, the community, environment, the society in which it operates and the world at large. CSR is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple Bottom Line Approach”).
THE COMPANIES ACT, 2013
As per as Corporate Social Responsibility (CSR) is concerned, the Companies Act, 2013 is a landmark legislation that made India the first country to mandate and quantify CSR expenditure. The inclusion of CSR is an attempt by the government to engage the businesses with the national development agenda and the details is mentioned in the Section 135 of the Companies Act, 2013. The Act came into force from April 1, 2014, every company, private limited or public limited, which either has a net worth of Rs 500 crore or a turnover of Rs 1,000 crore or net profit of Rs 5 crore, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate social responsibility activities. The CSR activities in India should not be undertaken in the normal course of business and must be with respect to any of the activities mentioned in Schedule VII of the act.
The corporations are required to setup a CSR committee which designs a CSR policy which is approved by the board and encompasses the the corporations is willing to undertake. The act also has penal provisions for corporations and individuals for failure to abide by the norms. The details of the same are highlighted in the act.
- Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director;
- The Corporate Social Responsibility Committee shall, formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII and recommend the amount of expenditure to be incurred on the activities referred;
- Monitor the Corporate Social Responsibility (CSR) Policy of the company from time to time after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility(CSR) Policy for the company and disclose contents of such Policy in its report and also place it on the company’s website, if any, in such manner as may be prescribed;
- Ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company.
In exercise of the powers conferred by sub-section (l) of section 467 of the Companies Act, 20l3 (18 of 2013), the Central Government hereby makes the following amendments to Schedule Vll of the said Act, namely:
- Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government;
- Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently-abled and livelihood enhancement projects;
- Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centers and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
- Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for the promotion of sanitation;
- Protection of national heritage, alt and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
- Measures for the benefit of armed forces veterans, war widows and their dependents;
- Training to promote rural sports, nationally recognized sports, Paralympic sports and Olympic sports;
- Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;
- Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;
- Rural development projects and Slum area development.
The Indian companies in the last two years have invested majorly in education & skill development, healthcare & sanitation, rural development projects and environment after being mandated to allocate a portion of their profits towards community development.
In a written reply to Rajya Sabha, Corporate Affairs Minister Arun Jaitley on 1st March 2016 said a total of 460 listed firms have so far disclosed spending Rs 6,337.36 crore in 2014-15. This included 51 PSUs that spent Rs 2,386.60 crore. Of the 460 companies, 266 firms spent less than 2 per cent of the average profit. Hence recognizing how important corporate social responsibility is to their customers, many companies now focus on and practice a few broad categories of CSR like:
One primary focus of corporate social responsibility is the environment. Businesses regardless of size have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society.
Businesses can also practice social responsibility by donating money, products or services to social causes. Larger companies tend to have a lot of resources that can benefit charities and local community programs.
Ethical Labor Practices
By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.
Attending volunteer events says a lot about a company's sincerity. By doing good deeds without expecting anything in return, companies can express their concern for specific issues and support for certain organizations.
Well the benefits of CSR speak volumes about how important it is and why an organization should make an effort to adopt it in business. Some clear benefits of corporate social responsibility are:
Improved Public Image
This is crucial, as consumers assess your public image when deciding whether to buy from you. Something simple, like staff members volunteering an hour a week at a charity, shows that you’re a brand committed to helping others. As a result, you’ll appear much more favorable to consumers.
Increased Brand Awareness and Recognition
If you’re committed to ethical practices, this news will spread. More people will therefore hear about your brand, which creates increased brand awareness.
Many simple changes in favour of sustainability, such as using less packaging, will help to decrease your production costs.
An Advantage over Competitors
By embracing CSR, you stand out from competitors in your industry. You establish yourself as a company committed to going one step further by considering social and environmental factors.
Increased Customer Engagement
If you’re using sustainable systems, you should shout it from the rooftops. Post it on your social media channels and create a story out of your efforts. Furthermore, you should show your efforts to local media outlets in the hope they’ll give it some coverage. Customers will follow this and engage with your brand and operations.
Greater Employee Engagement
Similar to customer engagement, you also need to ensure that your employees know your CSR strategies. It’s proven that employees enjoy working more for a company that has a good public image than one that doesn’t. Furthermore, by showing that you’re committed to things like human rights, you’re much more likely to attract and retain the top candidates.
More Benefits for Employees
There are also a range of benefits for your employees when you embrace CSR. Your workplace will be a more positive and productive place to work, and by promoting things like volunteering, you encourage personal and professional growth.
As a corporate we do abide by Corporate Social Responsibility (CSR) and the modus operandi of Delphi Leather in this context is pretty basic as we indulge in the following activities:
- Plant a saplings for every recruit in Delphi Leather thus creating a Greener Environment;
- Using recycled products thus decreasing the usage of new products;
- Conducting cleanliness awareness campaigns for a safe and healthy environment;
- Emphasizing the importance of education to employees for a skilled labor jobs prospect;
- Maintaining the Provident Fund Account of every employee as ordained by the Govt. of India as a fail safe for an assured retirement plan.
Having said the above what we at Delphi leather wants to promote and adapt the most is the right to education for each and every individual being linked to us. They are negligent about the impact and exposure which can be extracted through academics hence we at Delphi Leather connect to the right to education and relay the same to one and all employees within our organization and to the society we reside in.