CORPORATE SOCIAL RESPONSIBILITY: A GLOBAL

PERSPECTIVE

DISSERTATION SUBMITTED BY

Gagan Kumar Nagar

A50811115056

UNDER THE SUPERVISION OF

Mr.Pranshul Pathak

Head of Department

AMITY LAW SCHOOL

AMITY UNIVERSITY HARYANA

Batch-2015-2020

1
 DECLARATION

I hereby declare that the present dissertation entitled, “CORPORATE SOCIAL

RESPONSIBILITY: A GLOBAL PERSPECTIVE” embodies the original research
work carried out by me.

It is further stated that no part of this dissertation has been submitted either in part or full
for any degree of University of School of Law (AMITY UNIVERSITY) or any other
university/Institution.

Date: 15.05.2020 Gagan Kumar Nagar

Place: Gurugram A50811115056

BA.LLB

AMITY LAW SCHOOL

2
 CERTIFICATE

This is to certify that the dissertation entitled “CORPORATE SOCIAL

RESPONSIBILITY: A GLOBAL PERSPECTIVE” submitted by Gagan kumar
Nagar, (Enrollment No. A50811115056) for the degree of B.A.LLB for the academic
year 2015-20 of the Amity University Haryana, ALS, is the product of bona fide
research carried out by him under my guidance and supervision.

Date: 20.05.2020 PRANSHUL PATHAK.

Place: Gurugram Head of Deparment

Amity Law School

3
 ACKNOWLEDGEMENT

“I would like to express my sincere and heartfelt gratitude towards my honourable

supervisor Pranshul Pathak, Head of department, ALS, for his continuous guidance and
support throughout the study. He enlightened me with his experience as well as gave me
freedom of thought during work. This dissertation would not have been possible without
the regular guidance and valuable inputs provided by her. I feel privileged to have had
the opportunity to undertake my dissertation under her guidance.”

I express my deep appreciation and profound thanks to all my teachers and the Library
Staff whose blessings and cooperation enabled me to complete this work.

Finally, I express my very profound gratitude to my family members for providing me

with unfailing support and continuous encouragement. This accomplishment would not
have been possible without them.

Gururgram Gagan Kumar Nagar

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 LIST OF ABBREVIATIONS

 ASOCIO: Asian- Oceanian Computing Industry Organization

 BRICS:  Brazil, Russia, India, China and South Africa.

 CSR: Corporate Social Responsibility

 CSE: Centre for Science and Environment

 DPSP: Directive Principles of State Policy

 DTI: Driver Training Institute

 FAITH: Foundation to Assist Inculcating Traffic Habits

 GRI: Global Reporting Initiative

 GDP: Gross Domestic Product

 GDR: Global Depository Receipts

 HDI: Human Development Index

 IMF: International Monetary Fund

 IT: Information Technology

 ILO: International Labour Organization

 JSE: Johannesburg Stock Exchange

 MCA: Ministry of Corporate Affairs

 NGO: Non- Governmental Organization

 NASDAQ: National Association of Securities Dealers Automated Quotations

 OECD: Organization for Economic Co-operation and Development

 SRI: Socially responsible investment

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 SEBI: Securities and Exchange Board of India

 SEC: American Securities and Exchange Commission

 SD: Sustainable Development

 TBL: Triple Bottom Line

 TERI: The Energy and Resources Institute

 U.N.: United Nations

 WBSCD: World Business Council for Sustainable Development

 WWF: World Wildlife Fund

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 TABLE OF CONTENTS

Page No.

Declaration i

Certificate ii

Acknowledgement iii

Abbreviations iv

TABLE OF CONTENTS
Page Nos.

CHAPTER 1

Introduction 1-5

1.1 Concept
1.2 Hypothesis
1.3 Research Methodology
1.4 Objective of Study

CHAPTER 2

CSR: - It’s Evolution and Meaning 6 - 20

2.1 Meaning
2.2 Importance of CSR
2.3 Asia Pacific Perspective
2.4 The Key Drivers for CSR
2.5 Principles of Corporate Social Responsibility
2.6 Attributes of CSR
2.7 CSR Dimensions
3.7.1 Internal Policies

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 3.7.2. External Policies

CHAPTER 3

Legislative Measures 21 - 35

3.1 Position in India

3.1.1 The CSR Policy Core Elements
3.1.2 Implementation Guidance
3.2 International CSR Norms
3.2.1 UN Global Compact
3.2.2 ILO’S Tripartite Declaration on Multinational Enterprises and Social Policy
3.2.3 UN’S Guiding Principles on Business and Human Rights
3.2.4 Global Reporting Initiative
3.2.5 ISO 26000
3.2.6 Organization for Economic Co-Operation and Development (OECD)
3.2.7 Legislative reform in South Africa
3.2.8 Legislation and regulations relevant to CSR in UK
3.3 Quantitative global trends in corporate responsibility reporting

CHAPTER 4

Emergence of Mandatory CSR in India 36 - 54

4.1 History of Corporate Growth in India

4.2 CSR in India Today
5.2.1 Government under Pressure for Social Development
4.3 CSR under Companies Act, 2013
4.4 The Debate
4.5 Observation

CHAPTER 5

Judicial Response 55 - 82

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5.1 India
5.1.1 Case Study I
5.1.2 Case Study II
5.1.3 Case Study III
5.2 CSR in the United Kingdom
5.2.1 CSR Policies and Legislation
5.2.2 CSR Activities
5.3 CSR Reporting Regimes around the World
5.3.1 Strong-State regimes
5.3.2 Mixed-Method regimes
5.3.3 Emerging Market regimes
5.4 Cases Where CSR ‘Should Have Been Implemented’
5.4.1 Case I: Bhopal Gas Tragedy in India
5.4.2 Case II: Enron
5.5 Lessons from the mishaps: CSR is the way forward
5.5.1 Companies that saw a turning point after following CSR policies:
Proof that CSR is the way forward.
5.6 Applying the measurement CSR model

CHAPTER 6

Impact of CSR on Sustainable Development and Globalisation 83 -94

6.1 CSR and Sustainable Development

6.2 Defining CSR and its Relation to Sustainable Development
6.2.1 Problem 1
6.2.2 Problem 2
6.3 CSR and Globalisation

CHAPTER 7

Conclusion & Suggestions 95 - 101

7.1 Mandating CSR Spending is Beneficial

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7.2 Summary of Findings

BIBLIOGRAPHY 102 – 106

CHAPTER 1

Introduction

“Earth provides enough to satisfy every man’s need, but not every man’s greed”.

-M.K. Gandhi.

Capitalism is a diverse set of economic structures at the beginning of the

21st century. Capitalism is a mechanism in which a great many autonomous firms
work with each other. A business is the shareholders' property is a bursting myth.
According to the new socio-economic thinking, a company is a social institution
which is responsible to its community. Obviously, when it talks about the duties
and responsibilities towards the Community, the Hon'ble Supreme Tribunal of
India refers to corporate social responsibility. The main legislative text, the Indian
Constitution. The Union of India and the Act vests 297 natural capital. 39(b)
specifies that services be allocated to support the popular good, commercial
practice in the oil and gas industry 1 And a proviso to the clause135(5) of the
Companies Act. states that if the company fails to make the required CSR
spending, it shall specify the reasons for the same2.

As essential social institutions, industry owes its prosperity to the state and the
environment. So if a organization experiences damage in its surroundings, it needs
to make up for the failure as part of the CSR, be it technological or financial. That
explains why words such as corporate social responsibility have been common.
1
Pandey, J.N.the Constitutional Law of India, central law Agency, Ed.46(2011), p.390

2
Report of Standing Committee on Finance, July, 2012

10
Leaders of businesses recognized, in order to maintain their licenses and began
gradually to demonstrate corporate accountability, the value of involvement in
Community growth. Indeed, the first collection of environmental laws started in
the 1970s to be implemented by India (Sawhney2004). Nevertheless,
environmental compliance regulation has not been thorough.

Environmental Protection Act was enacted in 1986, followed by a number of

related environmental regulations3. As these are not implementing by the
enforcement authorities the Supreme Court of India has rightly observed while
dealing with Indian Council for Enviro Legal Action v. Union of India, that4:
However, because of the absence of an enforcement agency, the courts have
necessarily had the task of passing orders or instructions to the enforcement
authorities to implement the law to protect the fundamental rights of the
individual. It is not the court's role that the executive should consider the day-to-
day application of the law.

In addition, Dr Manmohan Singh recently addressed a Conference on Asian

Economic Development and Corporate Reform Environment 5, said It is important
to create a environment in which investment is attracted and creativity is
promoted and rewarded, and to set up equal and efficient regulatories and legal
processes. In the course of government, we are solely accountable for maintaining
honesty, openness and responsibility. In response to the changing situation of this
century, in particular for ensuring distributive shares and empowerment of the
marginalized sectors of Indian society, while expressing the government's
commitment to a large number of commercial and corporate laws, he highlighted
the importance of corporate social responsibility 6 which is linked to the concept of
sustainable development intrinsically. "Corporate management, including ethical
action towards all partners, both inside and outside the business, is seen as good
economical in addition to desirable moral conduct. Corporate Social
3
Divan and Rosencranz 2001.Page,43
4
(1996) 5 SCC 281
5
The Hindu, Saturday, Sep 22, 2012: Conference at Indian Law Institute, New Delhi.

6
The Mint, Sunday, Sep 23, 2012

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Responsibility ( CSR) has also gradually been considered and tried to be the focus
of public transparency and oversight as a central feature of human social
contracts. CSR contours and footprint are commonly debated, but there is
increasing agreement today that it is related fundamentally to the principle of
sustainable growth.

1.1 Concept

The term "CSR" in India is not new, but can be used to describe social corporate
responsibility. The method, while recently accepted, has been practiced informally
since ancient times. Philosopher such as India's Kautilya and western pre-
Christian thinkers have been teaching and advocating spiritual values. Much of
the old literature cited the concept of helping the poor and disadvantaged. The
theory was often endorsed by different sects, where moral principles were
interconnected. "Zakaat" is a contribution from our profits, followed by Muslims,
provided directly to poor and underprivileged citizens. Hindus likewise follow the
'Dhramada' principle and Sikhs, the 'Daashant.'

In this article, a vast number of books are rising to examine the effects of
corporate social responsibility and the beneficial association with a high degree of
financial success and many other advantages it offers businesses, which are
widely debated.

CSR discussions have been extremely relevant with the rise of globalization,
privatization and modernization over the last two decades. CSR investment is
important not just to businesses, but also to the society and its people (customers
and employees in the general community). The concept and detailed
documentation of corporate social responsibility were discussed thoroughly in
accordance with modernisation, economic development and globalization.

India is commonly perceived to have played a significant position for corporate

social responsibility. In the public debate in the business community and in the
media, national and international NGOs and UN agencies are involved.
Nonetheless, Indeed, there are no benefits or safeguards at all for jobs in this field,

12
and there is no evidence that attempts are made to counter hunger, support
employment, preserve the climate, or enable employees to be active in
entrepreneurial growth.

The United Nations Global Compact seeks to promote companies' CSR programs
in India. This has, though, declined to include big Organizations or, above all, the
unions. Therefore, in the private field or the network of NGOs, the UN Global
Compact is not well established.

This paper seeks to examine the benefits and drawbacks of S.135 and to explore
how this Legislation can be rendered without any loopholes and also to explain
the definition of "corporate social responsibility".

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1.2 “Hypothesis”

The hypothesis formulated that CSR spending is an ideal lever for development
making it mandatory globally is significant will be tested. The existence of a
positive relationship between mandated CSR spending and progress of a nation
will be examined through extensive research.

1.3 Research Methodology

Theoretical research based on studying & analyzing laws on CSR, reports &
papers, factual & statistical data of success rates of CSR & case studies nationally
& internationally.

1.4 Objective of Study

1. In order to explain the definition, importance and relevance of CSR today.

2. CSR under Section 135 of the Companies Act will be examined in depth.

3. Study of the advantages and disadvantages of compulsory CSR.

4. Exploring the global view of CSR.

5. To assess the CSR approaches of companies and to investigate whether India

is willing to pursue them.

6. The connection between CSR and environmental growth and globalization

must be examined.

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 CHAPTER 2

CSR: - It’s Evolution and Meaning

2.1 Meaning

As stated at the start of the article, a clear description of CSR does not exist. The
word "Financial Corporate Responsibility" derives from H. Bowen, who in 1953
authored "Businessmen's Social Responsibility." Corporate Social Responsibility (
CSR) defines the interaction of companies and decision-making, goals and
activities on social and environmental problems. CSR is directed primarily at
defining and optimizing the effect of an organization on community and the
climate, thus achieving better market outcomes, such as enhancing identities,
competitiveness and productivity of employees.

There has to date been no universal definition, though many analysts though
business fora have attempted, over a period of time, to define 'political corporate
accountability.'

It is necessary to list and understand this paper certain agreed CSR concepts for
academic purposes.

The social obligation of the business encompasses the fiscal, legal , ethical, and
financial requirements of society at all points of time. "The social duty of
corporations is one of the more detailed, frequently quoted concepts of the Archie
Carroll. Carroll defines these various positions as consecutive layers in a pyramid,
suggesting that a "true" social duty across all four levels involves succession.
Perhaps the definition most generally agreed and developed.

In the opposite, Frederick7 has described a shift from social corporate duty to
social reactivity, which determines a corporation's capacity to adapt to social
pressures

7
W.C. Frederick, “From CSR1 to CSR2”', Vol. 33, Business and Society, 150-166 (1994)

15
According to Frooman8, The interpretation of the CSR will be as follows:
intervention by a corporation the corporation chooses to take that has a direct
effect on the wellbeing of an established social stakeholder.

Corporate Social responsibility is best defined by the World Business Council9

as, “The company's ongoing contribution to responsible actions and sustainable
growth thus enhancing the standard of living of its workers, families and the
environment and the public in general. "CSR deals in developing capacity for
healthy livelihoods, for instance, respecting cultural differences and finding
business opportunities for building skills of employees, the community and
government," Holme and Watts' report "Corporate social responsibility: a sense of
the industry."

The philosophy of corporate responsibility includes essential ethical aspects that

direct people's quality of life in companies and give the business a sustainable
strategic edge..

According to Egels10, the area defined by advocates of CSR increasingly covers a

wide range of issues such as plant closures, employee relations, human rights,
corporate ethics, community relations and the environment. According to
Ruggie11, CSR is a strategy for demonstrating good faith, social legitimacy and a
commitment that goes beyond the financial bottom line.

Baker12, states that CSR is about how companies manage the business processes to
produce an overall positive impact on society. European Commission13 gave a
more concise definition, A concept whereby companies decide voluntarily to
contribute to a better society and a cleaner environment.

8
J. Frooman, “Socially irresponsible and illegal behaviour and shareholder wealth: A metaanalysis of
event studies”, 36, Business and Society, 221-249 (1997)
9
Lord Holme and Richard Watts, “Making Good Business Sense”, WBCSD (2005)
10
N.Egels, “Sorting out the mess: A review of definitions of ethical issues in business”, 4.60, Centre for
Business in Society, Gothenburg Research Institute (2005)
11
J.G.Ruggie, “The theory and Practice of Learning Networks: Corporate Social Responsibility and the
Global Compact”, 5, Journal of Corporate Citizenship, 27-36 (2002)
12
http://www.mallenbaker.net/csr/definition.php (Visited on March 1, 2013)
13
http://www.iiste.org (Visited on March 5, 2013)

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Beyer (1972) and Drucker (1974) originally supported the notion of CSR, arguing
that businesses perform social things for the benefit of the society and feel a ship
as a self-ombudsman.” The point is that businesses raise massive income from the
economy and destroy natural capital, thereby adding to the atmosphere and other
natural resources and helping to improve society.
Everywhere in the industrialized or emerging world, the fundamental definition of
CSR is the same. However, the fields of action that are usually required vary from
those of industrialized countries, which is especially important in developing
nations.

John Elkington invented the term during the time of Sustainability in 1995 which
then became the theme of the first Sustainability Report for the Anglo-Dutch
energy giants Shell in 1997. A three-pronged business aims at serving multiple
groups and not manipulating or endangering any party. Actually, a company of
the TBL should not utilize child labour and should track other contracting
companies for the misuse of child labor. It should provide a reasonable wage for
the workers, ensure a safe workplace atmosphere and tolerable operating hours.

A TBL company is also typically trying to 'give up "with things like health care
and education by contributing to the strength and growth of its community. It is
fairly recent, difficult and sometimes arbitrary to calculate this simple thread. The
GRI has developed guidelines for corporations and NGOs in order to report on the
social impact of a company in a comparable way.

17
 “Figure: Triple bottom line”

The idea is to balance the needs of people, the planet and the company's profits to
create long-term share-holder value. Thus, CSR expects a company to go much
further than required by law so as to:
 equal and equitable care of employees;
 Function integrely and honestly with clients, vendors, investors, and
others in all its corporate relationships;
 accordance with civil rights;
 Sustain the future generations' environment;
 BE a helpful neighborhood neighbor and a successful "business
resident."

2.2 Importance of CSR

Social corporate accountability (CSR) is one of the most common and generally
embraced ideas today in the business environment, from an obscure and
sometimes frowned notion. When globalisation heats up and major corporations
become global vendors, the benefits of having CSR services at their various
places become increasingly being recognised by these organizations. CSR is now
taking place all over the world. CSR has not only been "the best thing to do," but
even "successful." The intentional incorporation of the values of CSR in corporate

18
decision taking guarantees, in a threefold context: individual, environmental and
benefit, that corporations remain respectful of public interests. Stakeholders of the
world's largest corporations are continually seeking greater corporate
accountability from their businesses and requiring them to consider and comply
with social and environmental problems important CSR strategies such as the
creation of favorable natural and human capital are gradually adopted by
companies regulations.14

Strategy, security and altruism are the motivations for CSR firms. Many corporate
managers assume that CSR provides businesses with a strategic edge and will
result in a greater market share. By creating goodwill for consumers and
employees, CSR can distinguish a company from its competitors. CSR should
also be used to discourage rivals from winning. Once a company has successfully
pursued CSR policies in an industry, rival companies may also be obliged to
participate in CSR. These rivals are at risk of losing consumer loyalty if they do
not use CSR.

Most organizations are pushed to CSR, for example to better preserve their
atmosphere and their populations, which will inevitably become their human and
resource origins. In addition , it is necessary for certain businesses to achieve
social recognition for their operations. This is true for businesses in remote
regions like steel, oil and gas. Many aboriginal peoples also interact and
corporations need to work with them. Nevertheless, CSR has become a popular
concept on the market level, irrespective of the factors behind it.

“Like most other developing countries, the development strategy for India has
grown through successive periods of the Programme, representing our economy's
growth intensity, internal structural changes and also world-economic
developments. At the beginning of growth planning, the government was deemed
the key player in the creation of all significant industries and it tended, by import
substitution, to have a clear influence over private investments and to sustain the
14
“Sustainable and responsible business available at http://ec.europa.eu/enterprise/policies/sustainable-
business/corporate social responsibility (Visited on March 20, 2013)”

19
strategy of trade, backed by tight import controls and high tariff management. By
the end of the 1970s and early 1980s, the strategy was evidently lower than its
target, diminishing productivity , profitability and development. That was also
evident. While the government's activities in business are extensive, they do not
work in a number of fields , particularly social growth, which shows a slow
progress in key social issues indicators15.”

Therefore, shifts in corporate accountability seem inevitable in India owing to

regulatory and mainstream pressures. “India Inc. (the Indian Private Sector media
word, including domestic corporations and Foreign branchs) rises slowly and
becomes much more depressed by the lack of corporate stresses on the rich
Foreign who have seen their fortunes rising over recent years. years. 16 Still India
continues to develop and, as such, needs to strengthen the mechanisms of state
social and regulatory regulation because a large number of India's remain
economically disadvantaged.”

In the advancement of social justice, corporate social responsibility will serve the
poor, and companies have greater flexibility than taxation, thereby achieving a
better outcome. This is a feasible tactic for rising income or at least reducing the
negative impact of international investment while also providing social benefits.

They will insure that the gains of our age are spread uniformly among all strata of
society. Therefore, to be conscious of what CSR is and what function we should
play in it is quite important. As we will create significant impacts and make
improvements for our workers by the efforts of our respective businesses.

There is a position to play in corporate social responsibility in any person in an

organisation when a corporation consists of all citizens. It will also be a joint
endeavor, joined with all the members, to perform their role in this initiative such

15
Ninth Five year Plan Report of Planning Commission (1997)
16
“Forbes Magazine available at http://blogs.forbes.com/naazneenkarmali/ 2011/03/24/bill-gates-warren-
buffett-court-indias-richest/. (Visited on March 1, 2013)”

20
that it is a meaningful action work. Singleton isolation measures will make a
major difference for society as a whole.

CSR can be all about having a positive difference than just doing 'something nice.
The recipient of a Nobel Prize, Mr. Muhammad Yunus, talked at a lecture he gave
at Boston University of the scarcity of the single dollar of poverty, aside from
several other discussions, by claiming it just has a single life span, that is to say, it
does not take account of its own use.

From this concept, CSR should be targeted for us to have several lives for a single
currency. In other terms, it can be expended in a manner that generates a value
that is essentially another product itself in effect, such that it manages to
regenerate itself.

CSR is an important instrument among different social development methods and

initiatives. In our world, there is an disturbing division between the wealthy and
the poor. To remove people from the poverty line by one case. A non-
humanitarian can question what good it brings. If you inquire, there are several
explanations for this. Justice, for example, is among them since the degree of
deprivation usually depends on it. Peace is an measure of domestic growth and
peace that impacts all. The marginal social standing of everyone is accomplished
by decreased inequality and through reforming election bench practices, enhanced
state transparency and related effects.

2.3 Asia Pacific Perspective17

CSR has been an important corporate activity in recent years and gained
substantial support from CEOs, presidents, executive committees and
management teams in bigger multinational corporations. You recognize that a
robust CSR plan is a critical factor for positive corporate strategies and good
leadership. The companies determined that they directly affect their relation with
17
Asian-Oceanian Computing Industry Organization (ASOCIO) Policy Paper, “Corporate Social
Responsibility”, (2004)

21
 Stakeholders on economic , social and environmental issues , particularly with
investors, staff, consumers, business partners, governments and communities.

On the one hand, respect for social and family networks and relations , social
stability and education have long traditional traditions of high value. Various
faiths and societies often give various approaches to social comportment and
involvement in the society, as well as promotion and philanthropyWithin the
economy, policymakers also have clear roles and have a broader effect on
economic and social priorities, but in social support networks they are not so
advanced. This has contributed to a somewhat different engine of corporate
citizenship than in many countries. Most of Asian Pacific's major businesses are
private, and therefore are not exposed to the same public scrutiny on their
corporate conduct, as corporate social obligation public entities in Europe and
North America do, but that is increasing. Yet several of Asia Pacific's largest
corporations have good localized services.

In addition , national supply chains of major global corporates and local affiliates
of world companies from Europe and America have a clear business case and
strong pressure to establish policies and practices on corporate citizenship
throughout the country, particularly in the fields of climate, human rights, and
labor standards.

2.4 The Key Drivers for CSR

 “Enlightened self-interest”

22
 “Creating a synergy of ethics, a cohesive society and a sustainable global
economy where markets, labour and communities are able to function well
together.”

 Social investment

“Contributing to physical infrastructure and social capital is increasingly seen as a

necessary part of doing business.”

 Transparency and trust

Business has low ratings of trust in public perception. There is increasing

expectation that companies will be more open, more accountable and be prepared
to report publicly on their performance in social and environmental arenas

 Increased public expectations of business

Globally companies are expected to do more than merely provide jobs and
contribute to the economy through taxes and employment.

2.5 Principles of Corporate Social Responsibility18

The CSR incorporates a range of values and concepts from business policy,
organizational legal concerns, to economic sustainability to human rights and
environmental problems. You can find info below:

 Business ethics

Ethics businesses determine the social ramifications of their behavior in order to

preserve profitability, from product production to manufacturing and distribution.
There are other corporate ethics issues: civil rights, security of the community,
health and welfare for employees , job conditions, publicity, transparency and
monitoring. Compliance with internal legislation and policy orders is the subject
of corporate ethics. An ethical company also examines the practices of its

18
Research Journal of Finance and Accounting available at http://www.iiste.org (Visited on February 10,
2013)

23
 business partners and suppliers beyond its own ethical practices (see supply chain
management). Business ethics is also provided for undergraduate and
postgraduate students as an intellectual subject (Chryssides & Kaler 1993) 19.
Ethics are used as a guide in legal or religious compliance and in accomplishing
profit maximization. It is merely one form of decision making (Hartman, 2002).20

 Sustainable development

Many may see social responsibility as a subset of sustainable development and

some refer to and differentiate between the social aspects, since sustainable
sustainability has become a priority in the field of environment (Agenda 2001).
Among some, social responsibility is a subset of sustainable growth.

 “Corporate governance”

This helps to align organizational economic and social interests and society and
human expectations, on the one side, in businesses , organizations and industries.
The Cadbury Report (Committee on the Financial Aspects of Corporate
Governance 1995)21 and Greenbury Committee Report (Greenbury 1995) 22 Each
represent the foundation of the corporate governance codes, particularly for
companies published publicly. Cadbury claimed that the duty of a company's
manager to maintain a balancing of control and authority was explicitly
established, in such a manner that no entity has unlimited decision-making
powers. The key aspects of Greenbury is the salaries of the board of directors.

 The Environmental Concerns

Companies may be broken between local and foreign companies. E.g. all
corporations in the UK are expected to conform to regulations prohibiting gross
water , air and surface contaminants. In order to be able to pollute up to a certain
19
ibid
20
ibid
21
ibid
22
ibid

24
 limit, production companies could purchase permits or trade tariffs. They do have
to make clean-up arrangements.

Businesses must also tackle global environmental concerns; they realize their
practices will have far-reaching environmental consequences , especially for
global warming by greenhouse gas emissions. Green organizations and
policymakers are advised companies to increased their carbon emissions, get their
products from recycled suppliers and reduce emission.

 “Working in the community”

Businesses have often established a sort of interaction with their neighbourhoods,

typically because local workers are hired. Corporations invest energy and
resources in various fields, such as funding awareness campaigns and projects on
environmental consciousness benefiting urban neighborhoods.

 “Human Resource Management”

Recruitment and recruitment, fair opportunity, division of wealth and equity

participation schemes are included. The business legal problem is maintaining
consistency with human rights in the supply chain. Big corporations have been
blamed for utilizing sweat factories and for importing energy obtained by
employees poorly punished. That also contributed to a market for free trade goods
such as candy and coffee to adopt stringent labour practices for manufacturers.

 Political Responsibility

Trade of corporate social responsibility with authoritarian regimes is a

problematic problem. Several businesses say that partnering with such
governments would further support them and provide countries with freedoms.
Individuals and governments have requested the cessation of business with
authoritarian regimes, especially as a number of Western countries place an
embargo on the South African apartheid government throughout the 1980s. Oil's
complicit involvement with the Government of Nigeria that killed anti-oil activists

25
 has led to considerable consumer backlashes in the 1990s. These problems are
essential concern for corporate social responsibility when conducting business
with other governments.

 Supply chain management

Business participating with corporate responsibility review the policies of their

vendors and urge companies to address socially conscious market demands if they
want to continue to deal with them.

 Socially responsible investment (SRI)

In situations where SRI has been established for communities of men and women
religious (Quakers, Catholics and Muslims in the past), the question of citizens of
either religion or not can be discussed in several specific ways. The abundance of
socially conscious or ethical assets lead to socially acceptable corporations'
indexes being developed.

2.6 Attributes of CSR

 CSR is a programmatic and analytical method for guiding client decisions and
policies.
 CSR is more about solving challenges than a organization or commodity
development cycle, or building up an whole operating ecosystem.
 The CSR discusses the control of creditors rather than the management of
employees.

 As mentioned above, CSR appears to emphasize, for example , the company 's
behavior. In contrast to sustainability practices, CSR reports deal much more
with celebrating the past than with looking forward.

2.7 CSR Dimensions

2.7.1. Internal Policies

26
Internally, intellectual resources, wellness, defense and transformation are
concerned. Employee affects businesses by generating employment, employee
partnerships and finances in their development. Internal CSR policies will also be
focused on an holistic and sustainable strategy integrating a broad variety of
economic and social policy, experience and plan.

Companies, for example, also encounter immense difficulties in hiring and

maintaining professional staff. Such issues will be solved by the strengthening of
internal communication networks, the creation of specialized educational systems,
the availability of employment facilities, improved equitable access for men and
women and the implementation of pay packages. Better management of staff also
saves companies money by rising efficiency and raising recruiting costs.

2.7.2 External Policies

CSR 's external dimension covers local communities, business partners, providers
and consumers, human rights and the environment. For example: companies
frequently recruit people and get customers from the local community.
Participation in civic programs may serve to improve relations between the
organization and the people, and this, along with the image of the business as a
local employer, will have a beneficial impact on its profitability.

27
 CHAPTER 3

Legislative Measures

In the preceding chapters we have understood the meaning and importance of

CSR. Now we take a look at the prevailing situation and the current trends of CSR
practices. What has India been following so far? What are the International
standards that govern CSR? This chapter will focus its attention on the voluntary
CSR norms and practices that have been accepted and formulated as guidelines.”

3.1 Position in India

As we know the debate on mandated CSR spending has been around for a few
years now. Since not much progress was achieved in stipulating its spending, the
Ministry of Corporate affairs set a few voluntary guidelines that could be followed
by companies as their CSR strategy in the interim period between making CSR
spending mandatory or not.

These voluntary guidelines were brought forth in the year 2009 with the following
Fundamental Principles23.

The CSR driving strategies should be established for both companies and a plan
should be created for their CSR programs, a part of the overall corporate agenda
that is in line with their company's market goals. The strategy will be formulated
and authorized by the board with the input of different executives.

3.1.1 The CSR Policy Core Elements24

1. Care for all Stakeholders

All players, including shareholders, personnel, clients, suppliers, project

stakeholders, society in general, etc., should be respected and addressed and value

23
Corporate social responsibility Voluntary guidelines, Ministry of Corporate Affairs, Government of
India, New Delhi, (2009) available at http://www.mca.gov.in/Ministry/.../CSR_Voluntary_Guidelines_24d
(Visited on April 1, 2013)
24
ibid

28
created for all. It needs a framework to efficiently involve, communicate and
rising inherent risks for all stakeholders.

2. Ethical functioning

Ethics, openness and responsibility will help their governance structures. You
should not engage in abusive, unfair, corrupt or anti-competitive business
practices.

3. Respect for Workers' Rights and Welfare

Company companies should provide a safe , hygienic and humane workplace

environment that respects employee dignity. This will offer all workers fair and
non-discriminatory access to preparation and advancement of the expertise they
need to progress their careers. The freedom of association should be respected and
the right to collective bargaining for labor should be recognized effectively, the
compensatory scheme of appropriate claims does not extend to children and
forced labour and fair opportunity should not be guaranteed and sustained without
prejudice on the grounds of recruiting and work.

4. “Respect for Human Rights”

Companies will value everyone's civil rights and prevent their or third parties'
involvement in human rights abuses.

5. Respect for Environment

Enterprises will take emission prevention and protection steps and can use
renewable forms of processing and encourage an effective usage of carbon-saving
and environmentally safe technology to ensure integrated waste storage and
management and optimum use of natural capital, such as soil, water and
electricity. waste disposal, conservation and waste reduction.

6. Activities for Social and Inclusive Development

29
“Companies should conduct economic and social development activities, in
particular in the vicinity of their operation, in their core competence and business
interests. This may involve schooling, the production of skills for people's lives,
rehabilitation, cultural and social services, etc.”

3.1.2 Implementation Guidance25

1. An implementing strategy should be developed by the CSR policy of the

company, which should include project/activity identification, timeframe
measurable physical objectives, organizational mechanism, time schedule and
monitoring of projects and activities. Companies will collaborate in collaborations
with municipal councils, industry groups and NGOs. They will affect and inspire
workers for cooperative actions in social change in the supply chain for CSR
initiatives. They will establish a need analysis and effect evaluation method in a
specific field when performing CSR activities. Independent assessment may also
be carried out from time to time for selected projects / activities.

2. Within their CSR projects, organizations can delegate different sums. These
could involve tax benefit, expected CSR operating expenses or some other
relevant parameter.

3. The company has to participate in well-established and recognizable

programmes / platforms which encourage responsible business practices and CSR
activities to share its experience and networks. This will assist businesses to
develop their CSR policies and to create a socially conscious identity effectively.

4. In their website, annual reports, and other communication media the companies
should distribute information on CSR policy, activities and progress structurally
to all their stakeholders and the public at large.

3.2 “International CSR Norms”

25
ibid

30
Two legal rules of great importance:

• The United Nations Economic Agreement and

• ILO guidelines.
The OECD recommendations for global companies are the third most widely
quoted external outlets. The 1998 ILO Declaration on Democratic Values and
Human Conditions is now the universal social norm.

3.2.1 UN Global Compact26

The UN Secretary-General Kofi Anan set up the global impact in 2000 with the
aim of enhancing cooperation in society among United Nations, business and
other groups in order to contribute worldwide to more sustainable growth. It is the
multinational CSR program that is most commonly used. Different programs
involving thousands of participants have been undertaken by the World Bank, the
OECD and the ILO. The Global Compact serves as a catalyst that lifts the
consciousness of the global world regarding human rights concerns which is
articulated in rather nice terms without suggestions of penalties or criticism. In
adopting its ten basic values in their business operations, the businesses operating
within the UN Global Compact are dedicated to take better account of core
interest of human rights, civil rights and environmental norms.

 The Ten Principles of the UN Global Compact:

Human rights

1. Businesses will accept and value the security within their sphere of control
of internationally recognised human rights and
2. Make sure you are not complicit in violations of human rights.

Labor relations

3. The right of association, successful acceptance of collective bargaining

and promote businesses should be maintained, and
26
“UN Global Compact Principles available at http://www.unglobalcompact.org/ (Visited on March 15,
2013)”

31
 4. Elimination of all forms of compulsory and forced labor,
5. Total prevention of child labour;
6. Elimination of jobs and career inequality.

Environment

7. Companies will adopt a cautionary attitude to environmental issues,

8. Encourage more sustainable protection measures and
9. Encourage the creation and distribution of renewable technology.

Combating corruption

10. Organizations will combat all aspects of misconduct, including bribery and
theft.

More than 5,300 companies and 130 countries have entered the program since its
introduction. Each organization can participate in the Global Compact regardless
of its scale. The policy is not tracked, although the participating companies are
required to send an regular report to the Global Compact Secretary describing
their progress in the concepts' adoption. Small and medium-sized businesses that
seek an exception on this issue.

There is no clear CSR business scenario — there's little to streamline how CSR
enhances the performance.

Scientists have built multiple claims over the years. Such statements may usually
be categorized by method, subjects, and fundamental theory about how meaning
is generated and described. CSR is a viable business choice according to that
categorization, as it is a tool for:

 Reduction of costs and risk;

 Competitive benefit gain;
 Build the credibility and integrity of companies;
 Search for win-win results by creating synergistic value.

32
Organizations should often defend their CSR efforts on the grounds of their
integrity and good reputations, and their protection and preservation. If their
actions align with the aims and ideals of community under which the business
exists, a corporation is recognized as legal. “In other terms, if a corporation fulfills
its societal position it is treated as valid responsibilities27.”

3.2.2 ILO’S Tripartite Declaration on Multinational Enterprises and Social

Policy28

It is considered as the most appropriate ILO norm for CSR. The tripartite
argument, updated in 2002, includes:

1. Employment:

 Increasing employment possibilities and standards

 Promoting equality of opportunity and equal treatment in employment
 Avoiding arbitrary dismissal procedures

2. Training:

Adequate preparation for developing nation employees / incentives for local staff,
e.g. in terms of workplace connections, to improve their exposure within the
community as a whole.

3. Working and living conditions:

 No less favorable pay , benefits or working conditions than those enjoyed in a

host country by comparable workers
 Sufficient salaries to satisfy their basic requirements for employees and their
communities.

27
“ibid”
“ILO’s Tripartite Declaration on Multinational Enterprises and Social Policy available at
28

http://www.ilo.org/empent/Publications/WCMS_094386/lang--en/ (Visited on March 15, 2013).”

33
 Strong child labor emancipation
 Better levels in health and safety
 Health and welfare details complied with in many countries
 Instruction on certain hazards and appropriate safety measures in the
introduction of new products and/or processes

4. Labor relations:

 Free union and collaboration of staff

 Assistance to national operating groups
 Freedom to speak without drawbacks for staff

The political significance of the declaration lies in the absence of any minimum
requirements or specific actions, as opposed to other CSR instruments. This
allows the businesses the right to obey the rule, take individual leadership
according to their own needs.

3.2.3 “UN’S Guiding Principles on Business and Human Rights29.”

In its resolution 17/4 of 16 June 2011 the Council of Human Rights endorsed the
UN Guidance Principles on Business and Human Rights: Implementing the UN
Framework for 'The Defense, Respect and Remedy.'

Both States and transnational companies, irrespective of population, trade, place,

property and structure, follow these guiding principles. Such guiding principles
should be applied with particular consideration paid to the freedoms, wishes, as
well as the problems encountered by people from communities or societies who
are more likely to be disadvantaged or marginalised and in line with the various
threats posed by men and women. Such guiding principles should be enforced
without prejudice.

“UN’s
29
Guiding Principles on Business and Human Rights available at
www.ohchr.org/Documents/.../GuidingPrinciplesBusinessHR_EN.pdf (Visited on March 16, 2013)”

34
In addition, the UN has also established responsible investment standards as
recommendations for investors.

3.2.4 Global Reporting Initiative30.

The Global Reporting Initiative (GRI) was established in 1997 in order to improve
the sustainable reporting standards and make sure that the reporting of
information is comparable, reliable , timely and verifiable. Introducing
recommendations for the internationally agreed coverage of biodiversity that was
first released in June 2000.The Standards are being more widely adopted in many
countries to harmonize CSR data. Around 1000 organisations worldwide use in
their coverage the GRI Guidance.

3.2.5 ISO 2600031

To order to address the growing demand of businesses to corporate social

responsibility (CSR), the ISO 26000 Guidelines were built on a basis of
international agreement on the value of and application of best practice in social
responsibility. In November 2010 the ISO26000 handbook for social
responsibility was released to include concrete guidelines for identifying and
involving social responsibility actors and strengthen the quality of documents and
comments on social responsibility.

ISO 26000 is a voluntary guidance standard; not a regular ISO standard.

There are no requirements, therefore; they are not used as audit bases, tests of
conformity or statements of conformity. Therefore, like many more advanced
criteria, it is not certifiable.

Nonetheless, ISO 26000-based new certifiable management requirements have

been or are being created. For starters, the so-called CSR Quality Ladder, a
method for assessing 33 main metrics based on ISO 26000, has been developed in
The Netherlands.
30
Richa Gautam and Anju Singh, “Corporate Social Responsibility Practices in India: A Study of Top 500
Companies”, Vol.2, No.1, Global Business and Management Research: An International Journal, 41-56,
(2010)
31
ibid

35
Organizations using ISO 26000 should respect the following seven principles:

1. Responsibility for the social and environmental impact of the organization;

2. Transparency in actions and practices of the organisation that impact
society and the environment;
3. at all times ethical conduct;
4. Responsibility toward the needs of members in the company (e.g.
employees);
5. Grant that it is necessary to obey the rule of law;
6. Respect universal principles of ethics when upholding the rule of law and
7. value and accept the significance of civil rights and their universality.

To assess the organization's related concerns and goals according to seven

standards, an organization should address the following 7 core issues:

1. Organizational governance;

2. Human rights;

3. Labor practices;

4. Environment;

5. Fair operating practices;

6. Consumer issues; and

7. Community involvement and development.

3.2.6 Organization for Economic Co-Operation and Development (OECD)32

This includes guidance on key research, environmental protection, human rights,

trade, taxes, science and technology to counter inequality and protect consumer
rights. OECD principles include guidance.

32
ibid

36
Therefore, albeit loosely, the recommendations proposed by the Ministry of
Enterprise, aligned with the foreign CSR strategies, outlined briefly the UN
recommendations. It should also be noted, however, that the MCA has also
provided a structure for implementation guidance. We were not oblivious, though,
that given the fact that the subsequent CSR has several benefits, companies may
not be able to obey the guidance. The only problem is that the guidelines are
voluntary in nature and can not be strictly implemented and that the implementing
guidelines do not produce much results.

3.2.7 Legislative reform in South Africa

South Africa is a democratic country blessed with natural resources, a mild

climate and a diverse racially diverse society. Sadly, it retained many legacies
from the apartheid period when the nation attained independence in 1994. 19
years since the democratic transition of South Africa, the socio-economic systems
tend to be quite centralized. The removal of black citizens from economic activity
was one of the main effects of apartheid. The consequence was restricted
exposure for Black citizens to schooling, ability creation and employment. Today
political influence has been won by the historically oppressed Black population,
but the nation also has a predominantly minority economic base.

The legislative system within a government establishes the criteria for acceptable
business behaviour. For situations where consumers don't encourage
environmentally conscious actions by businesses, the importance of such
mechanisms is widely understood. Since the implementation of the system is
primarily voluntary, no mandatory sanctions and severe penalties and fines occur
for companies not liable. Therefore, the State took legislation on social issues in
its efforts to remedy the effects of Apartheid. Those pieces of legislation were
moduleled on the need to "heal the breakdowns of the past, and to create a
community founded on democratic principles, social justice and human rights," to
uphold the requirements in the Preamble on the Constitution of the Republic of
South Africa.

37
“Different pieces of law directly related to the implementation of CSR within the
economic sector of South Africa, i.e. the B-BBeE Act, the Economic Employment
Equity Act and the Company Act.”

“3.2.8 Legislation and regulations relevant to CSR in UK”

As per law and policy, the criteria for CSR and Corporate Governance also
overlap. Corporate governance involves the management and control structure of
businesses, and is regulated by legislation.” regulation and standards of conduct.
Alternatively, CSR is a charitable program that has not been implemented by law.

However, in addition to the provisions specified in the Company Act (2006),

“businesses which use the Triple Bottom Line approach to CSR will be regulated
by regulations affecting the social and environmental aspects of their activities.”
Sources of these regulations in the UK are:

 Rules of Practice 2001 Working Period

 Order 2001 for the Race Relations Act

 Order 1995 (2005) on Disability Discrimination

 Rules on childcare and parental leave (amendment)

 Labor Rule 2002

 Act 1974 on Employment Health and Education

 Corporate Law 2006 (including that the supervisors will consider their
corporate practices' economic and societal effects)Accounts Modernisation
Directive, which requires that large PLC companies now have to report
publically on environmentally significant matters.

The list is not complete and would likely rise with time. Of course, legislation will
be introduced in order to make CSR compulsory for all companies, big and small,
if some of the CSR advocates have their way.

38
In examining whether or not CSR should be required, it should be acknowledged
that legislation could eliminate a key driver of CSR: companies can increase their
competitiveness by increasing their brand value and they can be seen as
responsible business citizens. Voluntary CSR allows businesses to show better
practices and to lift their own standards for best practice objectively.

The CBI, the UK's main advocacy group, took a stance in the following
declaration in its role on mandatory and optional CSR:

The CBI is of the view that CSR will stay voluntary and market oriented if it
wants to grow effectively. This must be appropriate for organizations to describe
CSR in compliance with their own practices and circumstances. Therefore, we are
very concerned that some people and stakeholders are favoring the idea of
legislate on CSR activities of companies.

We may not agree that standardization will boost prices, because this removes the
economic opportunity to follow CSR practices and put an unmanageable strain on
small and medium-sized companies. Instead of a stick-driven approach to CSR,
public authorities should adopt carot-led approach. Legislation would simply
restrict corporate activity and reduce CSR to a low common denominator.

39
3.3 Quantitative global trends in corporate responsibility reporting35

The N100 refers to a worldwide sample of 4,900 companies

comprising the top 100 companies by revenue in each of the 49
countries researched in this study. These N100 statistics provide a
broadbased snapshot of CR reporting among both large and mid-cap
firms around the world.

The G250 refers to the world’s 250 largest companies by revenue

based on the Fortune 500 ranking of 2016. Large global companies
are typically leaders in CR reporting and their behavior often
predicts trends that are subsequently adopted more widely.

Since 2015, the fundamental results have risen by 2% for N100 companies: from 73% to
75%:

The N100 companies are therefore still catching G250 steadily. In the last four KPMG
studies, the G250 reporting average was steady at 90 to 95%.
40
For certain countries like Mexico (+32%), New Zealand (+17%) and Taiwan, where the
latest legislation contributed to higher reporting levels, there have been substantial
changes for 2015.

41
 CHAPTER 4

Emergence of Mandatory CSR in India

4.1 History of Corporate Growth in India

As seen in the previous chapters, corporate social responsibility became a popular

subject for discussion and received a lot of attention both internationally and
nationally. The current CSR expenditure in our country is not only a relatively
new concept, but also in its emerging stages, as no laws or legislation are
compulsory for CSR expenditure. The current corporate governance structure in
India is quite mixed. Like other postcolonial countries, it opted for a democratic
government system with many factories and companies regulated by the state
when India first achieved its independence in 1947. Yet there was a major
financial crisis in India in 1991. In order to liberalize the economy and privatize
several industries the IMF has decided to give India the requisite loans. The
economy of India has since grown exponentially. India also adapted much of the
newly adopted corporate legislation from mainstream American and British
models in order to encourage foreign direct investment. Today, while the system
is always democratic, the state is fundamentally capitalist. The Companies Acts in
2013 was essentially a division between a struggling, once communist world with
a poor populace and growing, imperialist ambitions. Navigate attempts. India
remains a very modern and young country, with just two big economic periods
since its independence in 1947.

Before 1991, regulations, government enterprises, and keynesian economies

characterized the era. India, in fact, worked largely through corporate law for the
first decade after independence from the British and later, it was replaced by the
company law in 1956. This Act appears to be the largest source of commercial
legislation to date. Because of the allocation structure and the complicated
licensing method, most industries remained state controlled until 1991, with a few
major family-owned companies working side by side with state-owned firms.

42
Growth was primarily encouraged by central planning by a set of five-year
strategies established by the government. The neoliberal and protectionist reforms
in India in 1991 were resisted by implementing a plan, restructuring and
integration, under its agreement with the IMF. At the beginning of the 90's, like so
many developing countries , India tackled the poor economy, inflation and
particularly the question of the balance of payments. Through 1991 the
government's debt soared to more than half Indian GDP, and India was no longer
able to seek foreign funding.

The government declared a financial crisis and committed 67 tons of gold to

securing MFI loans. The government agreed. Since learning that imports costing
more than a few weeks must be financed and are in inevitable default. The Bank
of England could guarantee the loan for the balance of this gold stock.

According to the OECD, "state intervention and control over economic activity
have been reduced significantly since the IMF intervened, and the role of the
private sector entrepreneurship has increased." In 1991, the government
introduced a new economic policy plan with a systemic reform system funded by
the IMF and the World Bank. Such reforms brought Indian company law more in
line with US legislation by abolishing most limitations on licenses.

“In 1992, India formed the Securities and Exchange Board of India ("SEBI"),
which became a regulator equivalent to the US Securities and Exchange
Commission ("SEC"), and in 2000 it introduced a significant reform to its
boilerplate listing arrangement, driven by the market , leading the Company. SEBI
accepted. Clause 49, based in different U.S. and U.K. contexts Securities
regulation, particularly the idea of an autonomous Board director and audit
Committee also incorporated many more Western business standards into Indian
law.”

"Professor Varottil Several of India's corporate law reforms are known as

economic transplants, i.e. foreign law transplants that have been successful in
reviving Indian economies, but can not be tailored to Indian contexts. Such

43
contribution to foreign corporate law transplants was possibly attributed to
expanded Indian competition on the global market. Most Indian inventories are
officially released as Global Depository Receipts (GDRs). As a pioneer in Indian
CSR, Infosys was also given an American Depository Receipts portfolio in 1999
and placed on NASDAQ and thus subject to the full scope of SEC rules. It is also
only fair for Indian businesses to place the same pressure on their Indian
counterparts, irrespective of their U.S. or U.K. operation, if subject to the rigor
and scope of US legislation. Indian meaning legislation.”

The implementation of these changes and the resulting rise in the Indian stock
exchange appear to suggest the signature presence in the western markets in
international corporate law. The west is the more stable and easier the legal
system may tend to be. This pattern is definitely acknowledged to the Indian
government. The government wants to say that India is "brilliing," thanks to
regulatory changes that have helped draw international investment in no small
section of the world during the past two decades.

OCED points out that, in the last three decades since Independence, India's annual
per capita GDP growth has been compounded from just 11⁄4% to 71⁄2%, a growth
pace that would double the national income in one ten decades. The GDP per
capita stands below $3,000, and over 20% of India 's people also reside in extreme
deprivation. India is the third largest economy in the world. This gives India
confidence that its fast growth can continue. In a competitive world environment,
India will be able to implement legislative changes that do not require a systemic
migration. While reaching America or the United Kingdom's wave, the modus
operandi appears matchless as it hates future buyers. Power.

4.2 “CSR in India Today”

India remains a socialist, democratic and constitutionally committed republic to

promoting equity. India has many governments establishing parties and heading
the nation and, in the budget for supporting social security and assistance for the
vulnerable and weak, large amounts have been earmarked for each party rule.

44
Many poverty alleviation, employment, nutrition, health and education programs
were initiated. The disparity between wealthy and poor remains, in view of all
these attempts and programs. The definition of CSR takes on a lot of meaning in
this regard. As a type of social security, CSR projects can be sustained and the
Government can be funded through numerous programs for society and the
environment.

4.2.1 Government under Pressure for Social Development

The Indian Government is under heavy external pressure, though retaining a

strongly liberalized economy and low taxes in order to cope with rising
inequalities and infrastructure deficits. Within the context of the administration's
implementation of a collection of sectoral programs, the business sector must take
responsibility for displaying socially responsible business practices which ensure
the prosperity and wellbeing of the business communities. It further advises that
big corporations should invest on mandatory social policy. This is an effort by the
government to develop a new strategy for both goals.33
The act is extremely economically liberal and pro-business. Much of it imports
additional legal structures from the West. After examining the Legislation, the
Finance Committee implemented the mandatory CSR clause and a new corporate
minister vigorously embraced this law. One of the few elements of the unique
Indian act requires a certain examination of its origin and context.

4.3 “CSR under Companies Act, 2013”

With the implementation of the corporations act 2013 under sec. 135 of the
mandatory CSR law effective 1 April 2014, Corporate India has entered a new age
of compulsory CSR.

The 2013 Business Act gives the CSR definition its validity. Section 135 of the
Corporate Social Responsibility Act 2013 contains specifically clauses
“Mandatory Corporate Social Responsibility: Is the Government Shifting its Failure to Corporate India?
33

available at http://socialissuesindia.files.wordpress.com/2012/12/mandatorycsrinindia.pdf (Visited April

15, 2013).”

45
surrounding corporate social responsibility. Schedule VII lists the activities an
organization can conduct in its initiatives as part of its CSR.

Corporate Social responsibility: bonds of total rupee valuation of five hundred

crores or more; or revenue of rupees 1,000 crores or more; or net income of
rupees of five crores or more for each financial year – Corporation shall, in three
financial years immediately intervening, pay at least two percent of its annual net
profit. If the company does not spend the amount, the reasons to be communicated
in the report of the Management Board [section 135].

AS PER THE PROVISIONS OF SECTION 135 -

(1) A Board of Directors Corporate Social Management Committee includes three

or four members, of which an independent director shall be at least one. (1) Every
entity with an annual revenue of 500 or more crore, or 1000 or more crore or a
minimum of five or more crore rupees in any fiscal year;

(2) The membership of the Corporate Social Responsibility Committee shall be

reported in compliance with subparagraph (3 ) of Section 134 of the Board report.

(3) The Commission on Economic Corporate Responsibility,

(a) formulate and recommend a corporate social responsibility policy to the Board
which stipulates the activities to be carried out by the company under the
provisions of Annex VII;

(b) proposes the number for the things related to in paragraph (a) of the
expenditure; and

(c) from time to time track the company's Corporate Social Responsibility
Program.

(4) In compliance with subparagraph (1), the Board of each organization shall,

46
(a) approve the corporate social responsibility policy for the company and
disclose the contents of this policy in its report and, where applicable, place it on
the company web site; and, if any; and (a) after taking into account
recommendations made by the Corporate Social Responsibility Committee;

(b) insure that the corporation undertakes the activities as laid out in the
organization's Corporate Social Responsibility Strategy.

(5) The Board of Directors shall insure that each organization referred to in
paragraph (1) expends at least two per cent in each financial year. Average net
profit of the company made in accordance with its Corporate Social
Responsibility Policy in the three immediately previous financial years:

In so doing, that the organization chooses to invest the sum available

towards corporate social responsibility programs in the local city and areas
surrounding it under which it operates:

Furthermore, if the Organization refuses to invest such an sum, the Board

must determine the reasons for not investing the sum, in its report prepared under
paragraph(o) of subparagraph (3 ) of Section 134.

Explanation. —"average net profit "shall be calculated for the purposes of

this section in accordance with Section 198 provisions.

APPLICABILITY OF THE PROVISION:-

Main features of the Act.

 Applicability

“As per Section 135 of the Companies Act, the company satisfying any of the
following conditions has to comply with the CSR provisions as stipulated
under the Companies Act.”

Criteria Threshold Definition

47
Net worth INR 500 crore or “Net Value is characterized as the net
more (USD 918 value, after removal of the accumulation
Million) value of the accrued losses, pause in
expenses, and miscellana expenditure
generated from the gains and securities
premium account not decreed, as per the
audited balance sheet, but involves not the
savings produced by the revaluation, the
rewrite of the capital asset.”
Turnover “INR 1000 crore “Turnover implies the net benefit of a
or more (USD discovery by the company during a fiscal
1836 Million)” year of the balance from the selling,
procurement or storage of the products and
the services offered.”
Net Profit INR 5 crore or “Net profit is defined to mean the total and
more (USD 9.2 final.”
Million) revenue of the company after deduction of
expenses, interests, dividends etc.

 CSR COMMITTEE

 CSR will be a team of atleast 3 executives, of which the autonomous director is

atleast 1. Many companies are not obligated, in accordance with the Companies
Act 2013, to appoint their independent directors, but CSR applicability may be
applicable to these companies. How will this independent manager criteria be met
in cases where they need clarification?

FUNCTIONS OF CSR COMMITTEE:

a. Formulate a corporate social responsibility strategy and propose to

the Board to define the practices that a corporation is to conduct as
provided for in Annex VII to the Legislation.

48
 b. Recommend the spending for the tasks alluded to in paragraph (a);
and
c. Monitoring from time to time the company's corporate social
accountability initiatives.
d. Preparation of a transparent monitoring mechanism to ensure the
execution of proposed companies' projects/ programs / activities.

RESPONSIBILITY OF THE BOARD OF DIRECTORS

 Insure that every year CSR operations are invested at least 2 percent of
total net income over the last 3 years.
 Net income, as per books of accounts, includes net profit before tax, which
does not involve the earnings of subsidiaries outside India.
 2 percent of CSR expenditure would be calculated as 2 percent of the
company's average net profit in each three-year block. Average net profit
of the preceding three fiscal years, which end on or prior to March 31,
2014, shall be for the purposes of First CSR reporting of net profit.
 CSR strategy acceptance after review of the CSR Committee
recommendations.
 Reveal CSR policies and initiatives in the Committee Report and website
of the Company.
 Ensure the activities are genuinely carried out by a organization as
expressed in CSR strategy.
 If a firm does not spend as required 2% of its net profits, the Board shall
give reasons in the report of the Board •.

 CONTENTS OF CSR POLICY

 The company's CSR strategy will reflect:

 CSR initiatives and services to be adopted by the organization.

49
  Compilation of CSR activities that take effect during the year of
implementation, identifies modalities for operation in the specified areas /
sectors and the schedules for implementation.
 Claim to the effect that CSR surpluses do not form part of a company's
market profits.

“A statement that the corpus would include the following.”

a. 2% of the average net profits,

b. any income arising there from

c. surplus arising out of CSR activities.

ACTIVITIES COVERED UNDER SCHEDULE VII OF THE COMPANIES

ACT , 2013

Below are the ten areas as worded in Schedule VII:

I. I. Eradicating hunger, deprivation and malnutrition, promoting food

protection and sanitation and making clean drinking water available;
II. Furthermore. Promoting education, including specific educational and
employment skills , especially among adolescents, youth, elderly people
and numerous projects for the development of livelihoods.
III. 3rd. Encouraging parity between men and women, educating children,
constructing women's and infant homes and hostels; establishing old-age
homes and day-care centres; and steps to eliminate inequities among the
socially and economically deprived groups;
IV. Five. Ensuring habitat preservation, environmental health, flora and fauna
safety, animal care, agroforestry, natural resources communication and the
conservation of land , air and water quality;
V. (V) Preserving national patrimony, arts and culture, including the
preservation of historic buildings and sites and works of art; founding
public libraries; promoting and improving traditional arts and crafts
50
 VI. VI. VI: Armed Forces survivors, war widows and their dependents
implements measures
VII. Seventh. Rural sports development school, national athletics, Paralympic
athletics
VIII. The 8th. Contribution to the National Assistance Fund of the Prime
Minister or any other fund developed by the Central Government for the
socio-economic welfare and relief of Scheduled Castes , Scheduled Tribes
or other backward classes;
IX. Contributions or funds given by incubator technologies situated inside the
Central Government's academic institutions;
X. O. Projects for agricultural growth

OTHER IMPORTANT POINTS RELATING TO CSR

 A company may form a Trust or Section 8 Company or a Company or any

other type of entity operating within India, so that CSR activities in
compliance with its CSR Policy can be implemented.
 The company can, via trusts, companies or Section 8 companies that are
not founded by the business itself can also enforce its CSR programs in
India.
 Companies may cooperate or pool their resources for CSR activities with
other companies, and any expenses related to this type of collaborative
efforts will qualify for CSR expenditure calculation.
 Only the CSR activities carried out in India will be taken into account.
 CSR operation is known primarily to involve actions that are not
exclusively for the benefit of client staff or their family members.
 The Organization shall contribute the sum allotted towards corporate
social responsibility programs to the local city and regions surrounding it.
 The regular report structure on CSR programs that the eligible
organizations need to include in the Board report has been set out in the
draft Regulations.

51
“4.4 The Debate”

“The question which has been heatedly deliberated and argued upon is whether
S.135 of the Bill which mandates CSR spending should be retained or not?
Though the Dissertation supports mandated CSR spending, to answer the above
question it is important to analyze both the arguments in favour as well as against
which will evidently prove that mandated CSR spending is the need of the hour in
our country and has a vast positive impact.”

Arguments in Support:

 Industries and organizations who pursue CSR steps, i.e. upholding

corporate practices or carrying out social security projects and events,
profit tremendously, as many reports have demonstrated that the
connection between social responsibility and financial results of businesses
occurs positively. The physical, climate and financial results are closely
associated. Consequently, in terms of credibility, good faith, moral
behaviour, for example, is an essential advantage of the business in the
sector, Corporate Social Moral conduct. The beneficial impact / rewards on
the business are often expressed in employees and consumer satisfaction.
Therefore, the business or organization generates a better profile and
prestige. As such, more customers, staff and buyers will be drawn and
profits will inevitably improve.

 “The product 's reputation on the market gives the business a good spot on
the market and therefore a comparative edge against certain morally
insensitive businesses or companies which do not pursue CSR measures..”

 • Reinvestment of firms can ultimately produce reputation, goodwill and

reciprocity to organizations. When neighborhood leaders and other
stakeholders believe like the organization is expanding its fiduciary duties
to involve their interests, they should consider they have a strong
52
 obligation to do so. For examples., when employees feel treated with
respect and fairness, less monitoring is required and the best efforts are put
in place. Lastly, the drop in management costs will reduce expenses and
build a safer working atmosphere.

 CSR programs are especially valuable for pushing further and into
emerging countries. Only since corporations are dedicated primarily to
optimizing income are they devoted to as many ventures that they may
apply to their skills. You need land, job, equipment, expenditure and so on.
At the point. Often their policies are impacting the State or a local
corporation, and this is avoided whether the organisation not just internally
but also has a reputation for corporate responsibility. This implies that the
government and the city can rely on a organization who, by Civic or
environmental services, is recognized to offer society back. For example,
when roads or barrages are built, canals always take place in India. This
can be avoided by supporting the companies carrying out the project by the
local community. This assistance may be achieved if the local population is
expected to be working in the project as a labor force and their children
will be trained or not relocated whilst they are at college, and to provide
decent accommodation. Schemes like these are certainly working, since the
two parties here are definitely a win-win situation. Locals that were well
treated or taught in their school or hospital are far less likely to organize
protests and create extra costs if and when the company makes a mistake.

 Companies may invest their money in ways which will contribute to their
long-term benefit more efficiently than the government would. The
primary advantage of mandating CSR expenditures is the preservation of
the company's discretion as it decides whether the assets will be spent and
the CSR operations that the organization participates in, as opposed to
levying extra taxation. The organization will have the ability to actively
spend its money in a particular cause. Of example, investing in schooling
tends to provide immediate gains for the business may clarify the value of

53
 education expenditure. Every industry , especially the informational
technology market, which is still rising in India, definitely benefits from an
educated local workforce. In addition , companies could be providing more
efficient public services than governments at a lower cost in spite of
pervasive poverty in many developing countries , such as India.

 One of the main factors is the biggest argument that a nation such as India
desperately needs infrastructure funds rather than coerced CSR
expenditure. The idea that India should maintain liberalism and dynamic
world markets can not enforce stealthy taxation or rigorous laws. It is
appropriate for businesses to be interested in the public good, whether they
are truly public organisations, primarily by collecting funds but also by
spending some of the profits in production. In India, the CSR program,
which is at least 2% to a small one, is largely unsustainable for the greater
part of the society and is in line with CSR investment in the United States..

 As indicated in the above paragraph, India has refused to increase

corporate taxes considerably or any type of regulations because its liberal
international market and a fear of competitive disadvantage. In this sense,
the compulsory CSR can be seen as the result of the dynamic collection of
economic forces and tensions in India. It is one of the few proposals in the
bill that embodies a breakthrough solution to the current economic
requirements of India.

 This may also be claimed that the mandatory CSR spending destroys two
birds with the same egg. It supports growth on the one hand and, on the
other hand, it succeeds in addressing various social issues that concern
human beings and the environment while supporting growth and
development.

 A number of people protest against expenses through CSR, arguing that the
government transfers its burden and obligation to prosperity, development
and its citizens, companies and businesses by CSR. Nonetheless, this is

54
 certainly a wrong way of doing things. Sustainable growth is the trend
today, that is to say production that takes the interests of potential
generations into account. It is definitely an essential part of the CSR too, as
it is critical that companies often recover what they spend whether they are
depleting natural capital or using them. The government should not
threaten the businesses unreasonably. It is probably the least company you
can do. The field of interest to both of us is sustainability and economic
growth, but not only governments and policymakers, this can only be done
with the assistance and cooperation of civil society and the CSR.

Figure 1: Benefits of CSR

Arguments against Mandatory CSR

 The key reason against compulsory CSR spending is that it could slow down
or reverse India's almost unprecedented development by placing India at

55
 competitive disadvantage in the global marketplace. Many that have no
influence are removed from the promise of a middle-class existence, counter to
the proposal 's goals.

 However, the law does not provide the required CSR goal specifics, and the
precise conditions for enforcement are ambiguous and uncertain. As the
legislation is too ambiguous and no systematic analysis is envisaged, the
legislation will scarcely contribute to the administrative ability or credibility of
the state. This ensures the "compulsory" CSR will proceed more on a voluntary
basis. Some claim that a tax could be better, such that the government gets
funds to consistently and democracy improve the infrastructure.

 The control job is going to be a hercules. Alone among the listed companies
520 have a net value higher than Rs 500 crore, 536 have a turnover greater than
Rs 1,000 crore and 1,068 have a profit greater than Rs 5 crore34.

 The other explanation is that there are easier strategies for motivating
businesses to make a commitment to CSR than by introducing institutional and
administrative frameworks such as CSR committees and compulsory CSR.

 Political coercion is also expected. Politicians can force businesses to make a

contribution or even demand the development of their constituency their
respective trusts.

 Some corporate groups regard this as a coercive extraction, akin to tax. That it
is unfair for companies where promoters already have sufficient CSR programs
to mandatorily spend towards CSR initiatives35.

 “Moreover why should companies be burdened to promote social growth. From

a public policy angle, this is equivalent to the Government trying to ‘outsource'
its responsibility towards the community.”

34
Supra note 1
Tina Edwin, “New Companies Bill: What India Inc should watch out for” The Economic Times, July 22,
35

2012

56
 There is also no clarity on the taxation angle. Will the amount invested towards
CSR spending be eligible for tax deduction?

 In comparison, the clause has been reported to be very strict. It would not be
simpler for companies to introduce another group to an increasingly diverse
collection of specifications.

 A proportion of the revenue or production of a business will be related to CSR.

It may prove better because profit is a derived figure and companies can
display "loss" to avoid obligations such as expenditure on CSR. It will not be a
shocking revelation if companies are found engaging in such practices, as
presently many companies do all what is possible to evade tax. If they
successfully manage to evade tax, avoiding CSR will not be very difficult for
them.

4.5 “Observation”

“Both arguments in favour and against have been carefully examined and the
Section 135 has also been studied elaborately.”

Firstly, “It is safe to say that S. 135 of the 2013 Act has been drafted and inserted
in good intent to promote social welfare desperately needed by our country.”

Secondly, “Such bill is clearly more advantageous than harmful as it is unjustified

and lacking clarity in its claims and its criticisms. In contrast with the advantages
of this rule, the claims are very irrelevant. The reasons regarding mandatory CSR
are not profoundly ingrained in the context of other problems and deficiencies in
this portion that can be taken into account or overcome. Legislation and
legislation would still be rejected, because every culture has various minds. There
is not ample excuse to absolutely remove the law. What must be seen is this which
brings better than harm to the insertion of S.135? And without a question, the
conclusion is yes. When CSR is made mandatory it would certainly have a
noticeable impact on the Indian community. It is an perfect lever for growth, and a
sure way to encourage social security.”

57
Thirdly, The government is in a sense selling its responsibilities to corporations,
as mentioned earlier, is incorrect. There are two Indian photos-one of which
includes millions of vulnerable, uneducated citizens and the other of the world's
fast-growing economy,We might have went through massive urbanization and
growth but it was not enough. The rate of economic development in the world
does not suit the speed at which we rise socially. So it is important to close the
ever-increasing distance. If India can not adequately support its poor through tax-
driven social protection programmes, companies and private wealth must
necessarily bear the burden.

Fourthly, “Fiscal regimes tend to wash the hand on average citizens, since they
may not appear appropriate to their growth and development rates. Therefore,
CSR has a substantial and beneficial impact because companies may invest their
resources directly on CSR programs and don't pay huge amounts of money as
taxes and still see a difference. The organization retains its freedom through the
usage and utilization of its funds for some cause, whether for social or
environmental purposes, to help CSR spending and eventually also profit for a
long time.

Fifthly, In India, it's acknowledged that there are actually many organizations that
pursue CSR measures on a voluntary basis, but obviously they have been not able
to bring radical improvements.

58
 CHAPTER 5

Judicial Response

“An study of the CSR history showed that until the 1990s, the idea of
philanthropy predominated. Since corporations view CSR as a philanthropy, they
are mostly restricted to one-time financing and have not dedicated their own
money to social service programs. In fact, during the preparation processes,
businesses have rarely taken the stakeholder into consideration, thereby
minimizing the quality and efficacy of the CSR initiatives. In recent years,
though, the definition of CSR has shifted. An obvious change was made from a
obligation or cause to a policy. A analysis of the cases in these chapters shows
that CSR is evading charities and reliance gradually through the research
performed by companies in India on CSR.”

Today, companies treat and pay attention to CSR as a separate entity. Many
organizations are also led by their dream and purpose statements at executive
level or at the CSR stage. Specific issues and initiatives are being discussed. The
field they choose is related to their core beliefs. It was observed. Today businesses
become more and more conscious of their social position. The businesses do not
only rely on the marketing or selling of their goods but also have a social strategy
as they believe that identities are formed on the basis not just of good product
content, but also of the feelings and beliefs that people provide to such items.

Nowadays, CSR is rightly accountable for the effect of its decisions on various
partners where companies feel they are liable. We believe that the underlying
motivation behind CSR today is to maximize the positive influence of the
organization on community and its stakeholders.

Many businesses have adopted CSR actively to support humanity and the
organization. In this context , it is important for a number of renowned companies
to note the social activities carried out in their CSR initiative, in many aspects
such as environment , health and safety, the assessment of life cycles and society.

59
6.1 “India”

5.1.1 Case Study I

Name: Ashok Leyland36

Thematic areas: Environment, safety and health and society

Environment

“In reality, rainwater rearing schemes have been widely introduced to raise the
groundwater level in Bhandara, a district of Maharashtria, and saved water is used
in the summer to avoid groundwater depletion. In the last few years, the bhandara
(Maharashtra) project has built two artificial dams with a capacity of 40,000 KL
and 10,000 KL and a control dam with a combined capacity of 30,000 KL.” Water
in these water sources flourishes all year long, and in these wetlands grow a large
variety of plants and animals. Heavy downpours were carried out throughout the
year 2005, and reservoirs were overflowing and overflowed. After rain, there have
been large numbers of deaths of living organisms in pools, including fish. In
coordination with some government agencies, extensive analyzes were conducted
to determine the reasons behind this. As a consequence of rapidly shifting weather
conditions that are following downpours, the underlying cause was an rise in
demand for 'biological oxygen' – a significant danger to live species in the
atmosphere. In order to improve the oxygen level in the water, the Nualgi solution
was a chemical called.

“Safety and health”

The old term, "what s not detected are not regulated," implies that a systematic
threat mapping program has been carried out and is close to being done in order to
insure that as many dangerous hazards are known. The mapping findings are used
at all locations to increase health. With regard to the enhancement of contractor
health, several new programs have been developed, such as an auditing of the use
36
Ashok Leyland Ltd. Report, “Corporate Social Responsibility” (2005-06)

60
of personal protective equipment by the contract employees, a compliance officer
for major contractors and rigorous training for all contract workers. An IT
platform on safety is being developed to increase access to security knowledge
and training. The Platform is open to all staff and consists of injury and event
management systems, training modules and general safety records. While
individual safety measures are short-term effective, accident avoidance needs a
complete program. To achieve this, it is accelerated and given an impetus to
introduce an OHSAS 18001 Occupational Health and Safety Management
System. Education systems have been launched and are approaching completion
for both administrators and employees.

Society

In collaboration with the National Capital Region Government of Delhi, Ashok

Leyland established the Driver Training Institute (DTI) of Burari, Delhi. It
operates revenue-neutrally under an FAITH (Foundation for Inculcating Habits of
Traffic), which is the governing body established by the Delhi government.
Practical guidance and advice on fuel usage and the treatment of hazardous items
are often offered in accordance with driving situations and existing needs of
drivers. The intensive program involves meditation and AIDS education. First,
The Institute gives heavy-duty vehicles a two-day refresher, heavy-duty vehicle
appraisal, PSV certification instruction and safe driving and fuel saving system. It
will provide new classes in the future.

5.1.2 Case Study II

Name: ACC Limited37

Thematic Areas: Education, Health, Environment, Livelihood and Waste

Management

37
KPMG in India, “Corporate Social Responsibility – Towards a Sustainable Future :A White Paper”
(2008) available at www.in.kpmg.com/pdf/csr_whitepaper.pdf (Visited on February 10, 2013)

61
“Case Study: In 2007 several CSR initiatives were taken by ACC Ltd. to meet
the requirements of various stakeholder groups.”

Community development

ACC Ltd. Beginning the new round of studies on Community needs external
agencies have been carried out in the neighborhood of all their facilities
throughout India. An significant collaboration for the launch of a sustainable
development group system for those residing near their Wadi Plant in Karnataka
was developed with Technology Alternatives, a trustworthy NGO. The timeframe
stretches across three year goals, developing local institutional and human
resources, creating small sector livelihoods, safer environments with adequate
physical facilities in the region, household services, and development of village-
based institutions.

HIV/AIDS Programme

The move taken by ACC to take part in the regional HIV / AIDS initiative
includes the creation of a wadi treatment facility and a collaboration with
Christian Medical College, which would cope with the problems shared by both
countries by the most prevalent epidemic. In March 2006, the Wadi Anti-
Retroviral HIV / AIDS Care Center started operations daily. This has qualified
medical and para-medical staff and represents the general population primarily.
ACC became the first organization in the world to set up such an autonomous
center. It is also the first non-government to be included in the country's list of
approved NACO ART centres.

Knowledge Development

A new educational program to supplement the ITI 's education was launched for
Kymore 's renowned Sumant Moolgaokar Technical Institute. Similarly,
Chhattisgarh was diverted to provide technical skill courses appropriate for
industries such as cement, in particular, the Regional Training Center in Jamul. At
its Thane (Maharashtra) site, an ultra-modern Learning Center, ACC Academy,

62
was built. They also started working in collaboration with industry and
government to develop the 7 ITIs close their plants.

Sustainable Construction

ACC partners closely with the Holcim Sustainable Building Foundation to foster
India 's idea of sustainable construction. They also committed to establish a
Center of Excellence for affordable housing and rural development projects
through technological assistance, capacity building and outreach programs to the
construction sector, and through funding for rural small businesses in rural
environments and facilities they are willing to develop a Center of Excellence.

Planning and measuring effectiveness

A CSR business strategy and roadmap were drawn up, which identified the annual
targets, focus areas and duties between 2008 and 2011. In the year 2006, ACC
implemented two sustainable practices. The first is a model that combines areas of
concern and impact on the company for various stakeholder groups. The second is
a scorecard that aims to measure qualitatively the effects and usefulness of
growing program of community growth. They have successfully checked this
method and can now calculate the output of all big schemes.

5.1.3 Case Study III

Name: Apollo Tyres Limited38

Thematic Areas: Health

Case Study:

HIV-AIDS Programme in Apollo Tyres Ltd.

Background

In a Healthy Highways project, Apollo began its fight against HIV-AIDS. In

collaboration with DFID, the project started in 2000, in Sanjay Gandhi Transport
38
ibid

63
Nagar. Heading through the staff, consumers and supply chain, today Apollo has a
broad-based system on HIV-AIDS. The aim of this initiative is to increase
consciousness and avoid the outbreak. It aims at forging strategic linkages with
organizations bringing into the partnership the aspects of technical skill and
capacity development.

Apollo Tyres Health Care Centers

Apollo Tyres Health Centers are focused trucker services. The clinics are situated
at the present rates of HIV incidence, the number of truckers and transient
communities, and other government agencies' existing job stage.

There are now seven clinics in North, Central and South India. All clinics in
transport nagars are geographically placed. These are marketed as general
hospitals to reduce HIV-AIDS stigma, but the facilities offered concentrate on
HIV-AIDS. The core software elements are:

(a) Behaviour Change Communication (BCC)

The correspondence seeks to increase knowledge regarding the basics of HIV /

AIDS. The correspondence discusses modes of dissemination, legends regarding
HIV, connections between sexually transmitted diseases and HIV by means of
human and community experiences.

(b) Peer Educators

The most critical element in the entire system is to create an effective peer
education network. The spatial range of transport centers and the transient
existence of the community make the peer educators invaluable.

(c) Condom Promotion

Promotion of condoms is carried out through free distribution and social

marketing of condoms. Such condoms are accessible at different points in
transport nagars and strategic locations. The public relations staff and the peer

64
educators often promote the proper use and removal of contraceptives and advise
the target group.

Sexually Transmitted Diseases and Infection Identification and Treatment

Reach staff and peer educators are educated in the detection of pathogens and
illnesses that are sexually transmitted. The network of reference is powerful and
patients are directed by physicians and peer educators. The hospitals care
primarily with illnesses and pathogens that are sexually transmitted. When the
doctor or the psychologist are not pleased, the individual is sent to community
clinics for clinical examination. Please check all the pre- and post-testing centers
in Apollo Tyres.

Workplace Programme

In June 2006, in cooperation with the International Labor Organization, the

workplace awareness system was created. The plan seeks 7,500 workers in the
company. A half-day knowledge of Apollo's top management began with the plan.
After the sensitization of top management a steering committee was formed. A
two-day workshop identified and trained some 26 ambassadors as master trainers,
and at the same time a survey was carried out to measure the company's existing
knowledge. To date, the system has benefited over 5,000 workers. Project
employees are the next step of this system.

Integration with Supply Chain

A logical change for ATL was to expand the HIV system into the supply chain.
Apollo also penetrated the whole production chain through the mitigation and
education project. The concept is like the workplace engagement scheme, in
which Apollo 's master teachers teach a network of peer educators. The goal is to
build a chain which will multiply the preventive message forward.

Monitoring, Reporting & Evaluation

65
 • The reporting method is consistent so all clinics may generate a monthly report
in a specific format. All BCC, STI and counselling information in 50 centers are
registered. All quantitative and qualitative elements are included in the study.

• The master organizational teachers send a monthly study in the style of the ILO.

• The supply chain collaborators and Apollo shall send a monthly survey.

• An ongoing review to assess effects of the initiative through the focus categories
has been sent to the Steering Committee for six months with a comprehensive
analysis. In December 2007 the first study performed.

6.2 CSR in the United Kingdom39

5.2.1 CSR Policies and Legislation

Businesses have not required the State to create a structure for fair business
practice, outside the regulatory standards that remain, after the restructuring of the
financial sector and the privatization of public services in the early 1980s. The
Government has thus named a CSR Minister, and its function is to direct and
encourage best practice. Therefore, companies are required to guide and adopt
best practice. The same applies both to local businesses and to international firms.
In reality, several businesses from abroad have shown fantastic practice and won
substantial UK awards in key research fields.

5.2.2 CSR Activities

 Environment
 National action plan: The Environment Minister has presented over time an
aggressive strategy to minimize British carbon emissions and establish
renewable energy sources. • National action plan:

39
CSR Europe's National Partner Network Report, “A Guide to CSR in Europe Country Insights”, 58-60
(2010)

66
  Environmental concerns: Potential pollution, rising the national carbon
emissions and erosion in the case of elevated sea level are the biggest
environmental threats in the UK.
 Power and eco-efficiency: the Uk government and utility companies promote
the country, by emphasizing the economic savings of consuming less fuel, to
reduce the carbon footprint. The primary priority is on home security, 'turn off'
and light bulbs saving electricity.

 General environmental consciousness: Public interest is relatively strong but

not widespread of environmental concerns. There is still considerable
skepticism about climate change.

 Human Rights

Businesses recognize their obligation to uphold human rights more and more.
Most organizations already have practices that explicitly apply to accepted
universal principles and are dedicated to protecting human rights. The Joint
Parliamentary Committee on Human Rights examines and reports year after year
on the question of business and human rights. British businesses will uphold all
human rights , particularly in the supply chain, wherever they work.

 Equal Opportunities

Fair laws are common to age, ethnicity , sex, impairment, faith, ideology and
orientation. In particular, employers may have to report on their gender pay gaps,
promote positive action, use of procurement for promotion of diversity in
employment and the extension of public sector duties to promote equity, as the

67
 UK's current government recently proposed a new equity law. The government is
dedicated to make sure that the UK workplace profile best matches the working
age population profile.

 Community Engagement

 Perceived role of businesses in local communities

Companies have taken their place as core players inside local communities
since the origins of CSR in the UK. Across the UK, the charitable employment
programs with workers are still very prominent. Cares, for example, has over
350 companies in 32 UK locations in BITC's volunteering programmes. About
25,000 people served with Cares with 2006.

 Cooperation between local communities and business

Some development priorities for urban resident engagement have been

implemented by government and business. Which involve increasing
adolescent performance and strengthening key employability capabilities;
eliminating job barriers and helping people and groups find employment, and
working with local actors in deprived or depleted regions to address serious
problems.

 Sustainable Products and Services

The financial and economic effect of renewable goods and services is taken into
consideration. The UK is well known in competition with other European
countries for these goods. There are instances in the United Kingdom of the
Responsible Marketing and Creativity Award this Year, where businesses have
created sustainable goods and services, realizing that this will offer a strategic
edge.

5.3 CSR Reporting Regimes around the World

68
Till now we have examined what CSR is, its importance, its positive impact on
developing nations like India and also analyzed several case studies. We shall
now take a glance at the CSR reporting regimes around the world.

5.3.1Strong-State regimes40

State-mandated CSR reporting exists today in:-

Indonesia was the first country in the world to state a law regarding CSR
performance in 2007, which makes CSR mandatory for all companies using
natural resources in some way.

France (In 2010), The monitoring duty on the part of CSR and social and
environmental details for listed companies and other entities, as specified by a
decree of the State Council, was provided for under Article 225. (Conseil d'Etat)41;

Malaysia {(2007) the Malaysian government law requires all listed companies to
publish corporate social responsibility information in their annual reports}42;

Denmark {(2007) Section 99A of the Danish Financial Reports Act allows state
owners and businesses with gross assets in excess of EUR 19 million, revenue of
over EUR 38 million and over 250 employees to disclose to society on their
obligations (CSR) by utilizing the GRI Sustainability Reporting Guidelines to
accomplish this aim. The financial reports applicable to pension fund, insurance
companies, credit institutions and funds are subject to special executive orders
brokers}43

Sweden (2008), Although others that need publication for particular CSR issues in
the U.S., these are the only countries to this day that need large CSR coverage for
all the mentioned enterprises (in the case of France and Malaysia), big enterprises

40
Matther Maguire, “The Future of Corporate Social Responsibility Reporting”, Issues in Brief, 1-8
(2011)
41
The Hauser Centre at Harvard University, “Current Corporate Social Responsibility Disclosure Efforts by
National Governments and Stock Exchanges” (2011)
42
ibid
43
ibid

69
(Denmark) or state-owned enterprises (Denmark and Sweden). (French and
Spanish).

The reason CSR investment in these countries was required is that corporations
are sincerely concerned with the climate and culture and feel that they will
ultimately become the source of human resources and the raw materials they need
for maintenance. Further, some businesses view it as an essential item for their
practices to be embraced by society. For businesses working in rural regions such
as coal, energy and gas firms, that is also real. Most families that reside there
indigenously visit them regularly, so companies will deal with them. It's not what
the business is compelled to do by regulation and everything else, but it's nice that
the organization does. Many of these organizations have actively adopted and
gained from CSR systems.

Green Cargo is pioneer in CSR and organizational integrity, and is the first
multinational cosmetics corporation to win a Ethical Cosmetics Quality Award
for "Counter Animal Research." In Sweden, for example , businesses such as
Body Shop and Hennes & Mauritz, H&M, become public shareholders.

Mandatory CSR initiatives are often driven by environmental concerns in

'Indonesia sense. Multinational firms across Indonesia have perpetrated many
human rights abuses. Lapindo fog volcanoes in East Java, Indonesia are the most
common example. In the province of East Java, however, Lapindo Brantas has
mined its oil mining region for oil quest which triggered mud volcanoes. This has
struggled. Geological concepts entail the modification and shipment of
argillaceous materials from the Earth's interior and displacement onto its
atmosphere. (Åkesson, 2008) "The climate is an integral human rights aspect and
must be completely preserved by the Government, and is also explicitly
recognized by the Universal Declaration of Human Rights (UD Human Rights),
Rights.44.”

44
Sabela Gayo, “Mandatory and Voluntary Corporate Social Responsibility Policy Debates in Indonesia”,
ICIRD (2012).

70
The obligatory CSR in Indonesia is also part of the State 's agenda to uphold the
people's universal human rights. Indonesia is reportedly one of the most people-
intensive nations in the world. The countries around the world should recognize
the action taken by the Indonesian Government to safeguard its climate for the
benefit of the needs of citizens around the world, and will certainly follow this
strategy. CSR policy.

5.3.2 “Mixed-Method regimes:”

Most countries tend to generate several CSR reports without creating the kind of
minimum requirements that have already been defined. For starters, as we saw,
the UK has been a pioneer in CSR coverage for a long time. The United
Kingdom Corporations Act 2006 mandates that listed firms provide in their
annual report a review of the related CSR records, but complete CSR reporting
remains voluntary. Throughout the United States, documentation is still largely
voluntary, although the Government acted to allow publication of the CSR on
some topics, as reported.
5.3.3 Emerging Market regimes:

CSRs in the developed world have been pioneers for emerging markets like
Brazil, China and South Africa. It was mainly achieved by the introduction of
mutual guidelines and the involvement of local stock markets. In 2004, the
Johannesburg Bourse (JSE), for instance, became the first emerging-market
exchange to establish an SRI index.

The Bovespa Bourse in Brazil followed in 2005 with its own tracker. Throughout
the Shanghai and Shenzhen Börse guidelines, China has even promoted the
coverage on CSR.

5.4 “Cases Where CSR ‘Should Have Been’ Implemented”

The case studies discussed in this article explain how businesses in India and
abroad have actively adopted CSR programs and how they have supported society
and the general population. Throughout the previous Chapters we have already

71
seen why CSR is increasing traction and prominence at the present time, but also
because of the shocks such as Enron and Bhopal Gas Tragedy there is a very
significant underlying trigger that has driven companies not just in India, but
across the world to participate in a powerful CSR strategy.

We would examine all these examples in this research and it would become very
obvious that, whether CSR legislation had been implemented or if certain
companies had behaved socially responsible, they might have prevented these
major accidents or even perhaps done less harm than was actually incurred.

5.4.1 Case I: Bhopal Gas Tragedy in India

The Bhopal incident took place in December of 1984 45, A spill of methyl
isocyanate gas from a tank in the Bhopal pesticide plant of Union Carbide was
distributed over many milles across the Company's urban industrial complex by a
poisonous cloud in the morning of 3 December 1984.

Given the extremely poisonous nature of the gas explosion, the death toll is
projected to be around 20,000, with 100,000 more suffering from debilitating
illnesses and about 3,000 deaths from spills reported to the State of Madhya
Pradesh in immediate aftermath. The victims and their advocates alleged the
disasters were caused by the large quantities of ultra-hazardous waste being stored
in bulk by the India's Union Carbide subsidiary without proper security or a
proper emergency plan. Union Carbide finally agreed in 1989 to pay the Indian
Government $470 million as a settlement but American executives continued to
deny trials to Indian courts. By 1991, the ruling had been challenged but upheld.

By 1984, the Bhopal plant began meeting with universal health requirements.
Because there were no Indigenous guidelines, protection reductions persisted.
45
“As recently as May of 2011, India’s Supreme Court issued an opinion upholding the resolution of the
case in response to continued protests over the “lenient” punishment the company’s executives received.”

72
Disaster claimants have not been happy with the final outcome for many reasons
and the investigation of the case has continued several years.

Mass torts46 like The Bhopal Gas Disaster in India urge that CSR policy be fully
enforced and that Companies take accountability for community and the
environment at large. Therefore it is based upon the principles of UN Global
Compact for Corporate Sustainability that the idea of corporate environmental
responsibility is inspired under the CSR veil. CSR is thus the umbilical cord
between sustainable growth and crisis management and the concept of
sustainability can only be socially and economically protected viable. 47.

5.4.2 Case II: Enron

Enron48, Beyond becoming the largest reorganization of bankruptcies in American

history, Enron is beyond a question the greatest audit debacle of the era. This is
still the world's most successful corporation, but it is still one of the businesses
that fall so fast. In the late 1990s, Enron became almost unanimously deemed one
of the most creative firms in the country — a Mapuche emerging industry that
forsaken old and obliging businesses with their burdensome riches for the e-
commerce free-wheeling world. The company kept constructing plants and
operating gas lines, but its special trading firms became well known. In addition
to the purchase and selling gas and energy futures, the firm developed major
opportunities for marketers, forecast futures and Web connectivity for these oddy
goods.
The business was founded in 1985. Before collapse in late 2001, total revenues
grew from about 9 billion dollars in 1995 to 100 billion dollars in 2000 as one of
the world's biggest pulp and paper businesses. At the end of 2001, it was
announced that its recorded financial condition was substantially supported by
institutionalised, systemic and imaginative financial shortcomings. Thomas 's

46
‘Mass Torts’ “can be put in plain words as ‘such activity of the defendant, the harm caused by which is
wide and a large number or sector of society gets affected simultaneously. A mass tort is a civil action
involving numerous plaintiffs against one or a few corporate defendants in state or federal court.”
47
Sukhvinder Singh Dari, “A study of Corporate Social Responsibility, Mass Tort and Environment
Protection” Vol.2, special issue, ARPN journal of science and technology (2012).
48
Enron Corporation, an American energy company based in Houston, Texas

73
article (2002)49, At the end of 2001, Enron's stock price fell by almost $11,000 per
share from $90 per share to less than $1 per share. Over the last five years, Enron
updated its annual reports and reported the damages total $586 million. On 2
December 2001, Enron went into bankruptcy. With a highly competitive, growing
business , the company projected itself-and it soon proved to be an insightful
error. Enron's financial figures were false and large obligations were hidden and
they could not show in the company's accounts.50
Enron has been a corporate irresponsibility by-phrase since the corporation
crashes. The misrepresentation of the financial condition has concealed the big
black hole in the corporate finance has growing curiosity in how such
corporations can be detected and kept accountable.
Yet financial reporting was not clear and comprehensive in adequate measure to
fix the Enron question – how much harder to define stakeholder engagement and
social impact measures?
The business over established net revenues and understated expenses, offering a
misleading image of the economic condition to the market and their shareholders.
The absence of insurance fund, primarily deposited in business shares, triggered
the reduction of jobs by billions of dollars. The key point is that the standards of
monitoring by the organization must not only be structured but simple, open and
accountable and that CSR performance must be upheld.

5.5 “Lessons From The Mishaps: CSR Is The Way Forward”

Therefore the solution appears to be to avert another CSR catastrophe like Bhopal
or Enron. The perception that businesses will no longer function as autonomous
entities that work independently from wider society is strengthened by traditional
concepts of competitiveness, sustainability, and productivity. The justification for
the liability of the management is to reduce the danger of placing the business in a

49
Cathey Thomas, Called to Account available at http://www.time.com/time/business/article/ (Visited on
February 12, 2013).
50
Yuhao Li, “The Case Analysis of the Scandal of Enron”, Vol.5, No. 10, International Journal of
Business and Management (2010)

74
disaster (as Enron). An incident in which workers or society are in risk would not
arise in a crisis; it may not entail inaccurate knowledge getting out of the business.
The successful CSR approach, for example, will mitigate and remove the
possibility of a problem if the correct standards and attitudes are articulated
internally and publicly by a 'code of ethics,' specifying what is agreed, and is not
embraced by businesses. Creating a real "doing the right thing" community in a
organization will therefore mitigate the likelihood that a disaster can arise.

The CSR approach will also lead to decision-making by deciding whether to cope
with the possibility of an incident. A business accused of fraud with programmes
to deter and detect abuse will be charged less than a corporation guilty of the same
crime without a prevention plan. Ethical principles should mitigate threats
correlated with corporate and personal wrongdoing, and not just economic issues.
Such principles are simply tools to discourage misbehavior with their civil,
financial and reputational threats. It is because CSR aims to deter massive errors
and damages of billions of dollars as the situation of Enron and Bhopal that CSR
attracts publicity.

This is a proactive endeavor to create a profitable business that is the idea behind
businesses' participation in CSR. "Cooperation importance is important,
encourages engagement, fosters ingenuity and imagination, and energizes the
leaders of the company to build an picture of themselves. (Paine, 2003).51.”

However, as we looked at earlier, the active role of a organization in community

where it can participate in Community projects has become extremely relevant.
Civic positioning is regarding the image of the organization and not just in the
markets in the society. The organization aims to develop the business as a positive
force for social change through their ideals and CSR contribution. By their
political role, many citizens seek to establish good connections with non ‐market

51
Lynn Sharp Paine, “Value shift: why companies must merge social and financial imperatives to achieve
superior performance”, (McGraw Hill, 1st edn, 2003)

75
 or democratic electoral classes, such as government , non-governmental
organisations and local communities process.52

5.5.1 “Companies that saw a turning point after following CSR policies:
Proof that CSR is the way forward”

Coca-Cola Case study53 is of vital importance to this dissertation as it gives positive

evidence of how a company suffered by not following CSR strategies and how it
saw a turning point not only in its revenue but also in its reputation and goodwill by
gaining consumer trust after it adopted and implemented a strong CSR policy.

 Coca-Cola’s CSR policies and reporting

The environmental structure Live was actively incorporated into the program at
all stages from manufacturing and production to delivery in 2007 by Coca-Cola.
The Live CSR strategy of the organization strongly identifies seven key fields on
which the company sets itself specific goals to enhance the sustainable practices
of the firm. The key fields are foods, safe living, the environment, resources and
atmosphere, efficient packaging, water conservation and workforce management.
Coca-Cola has a Code of Ethics to offer guidelines on trade concerns and anti-
corruption, among other items.

International CSR norms, such as the Global Compact and Ruggie 's Health,
Loyalty, and Solution Concepts have been adopted, but the values tend to be not
contained in the Business Code. Consequently, these CSR projects are separate
from any operations or policies of the organization. Of starters, the concept
Ruggie has been integrated in the 'Human Right Declaration' of the organization
in the regular Sustainability Reports. The values of the UN Global Element are
52
Setareh Korkchi and Azalee Rombaut, “Corporate Social Responsibility- A Case study on Private and
Public Corporations in Sweden” (2006) (Unpublished Bachelor dissertation, South Stockholm University-
Södertörn School of Economics and Business Studies).
53
Cristina A. Cedillo Torres, Mercedes Garcia-French, et. al., “Do Conflicts Affect a Company’s
Corporate Social Responsibility Policy?” Vol.8, Issue 3, Utrecht Law Review, 53-57 (2012).

76
 cross-referenced. In 2007, after the war in India, Coca-Cola formed an Partnership
with The World Wildlife Fund, and became the CEO of Water as water is a key
problem for the corporation.

The annual Coca-Cola study is released every year by Ceo, the latter being issued
in March 2011. The Company releases the financial statement. A brief CSR
section and a fast summary of the organization's programs for environmental
development and conservation of water is given in the report. The Coca-Cola
Annual Review (CSR) has been reported by Coca-Cola since 2001. Those reviews
are verified and guaranteed every two years by a third party, FIRA Sustainability
Ltd., to verify the reliability of Coca-Cola reporting with "moderate assurance."
The reviews are also prepared based on the GRI G3 recommendations, which
were adopted in 2001, and also on the business evaluations and the sustainability
studies. The corporation still reports quarterly on the advancement of its goals
owing to its importance to the Coca-Cola market.

 Coca-Cola’s conflicts

A study released by the Center of Science and Environment for the Indian NGO
(CSE) in 2003 has been accompanied by many initiatives and demonstrations. In a
study of one dozen Coca-Cola and PepsiCo drinks distributed in India, the
research revealed the prevalence of pesticides to a degree above Eu requirements.
The CSE called on the Indian government with these facts to adopt water
requirements legally enforceable. The report has gained widespread media
attention, which has affected Coca-Cola 's revenues nearly immediately.

The NGO's key argument against Coca-Cola was that it marketed goods that
included an inacceptable amount of pesticides, harvested vast amounts of soil and
polluted bodies of water.

1. The presence of pesticides

77
 In the Indian Government the issue of Coca-Cola beverages that contain
disproportionate levels of pesticide residues has been reviewed many times. A
collaborative board with its own alcohol reviews has been set up by the
Authorities. The findings have also shown that pesticides have not followed EU
guidelines but have nonetheless been found safe by local regulators. Coca-Cola
did not breach national laws. This was confirmed. The Indian government also
acknowledges the value of reasonable and enforceable standards for carbonated
beverages.

The CSE conducted a second study of Coca-Cola beverages in 2006 following

nearly three years of persistent claims, which have pointed to elevated rates of
pesticidal residues (24x over EU requirements that were later recommended by
the Indian quality office to be introduced in India). CSE released this study to
demonstrate that there was little improving on the grounds that tighter regulations
for carbonated drinks or other products have been either ignored or obstructed by
broad governmental interests.

2. Water pollution and the over-extraction of groundwater

“In the village of Plachimada and others, the Coca-Cola company in Kerala, South
India, has also been associated with the water scarcity. Coca-Cola has also
accused Coca-Cola of water pollution by distributing waste into fields and rivers
around Coca-Cola. Groundwater and land were badly contaminated to insure that
Indian PHC understood that water was not suitable for human consumption, so
that pipes so manual pumps needed to be equipped with signs. In 2000 , the
company founded its output in Plachimada. Locals indicated that they experienced
water shortages shortly after operations.

"Coca-Cola was launched in 2003 and barred from being ruled by the Kerala High
Court shortly afterwards. By 2004 , the company had ended its development
operations, while attempting to expand its authorisation to plays. Coca-Cola
argued that lower rainfall levels were the key cause of drag conditions in the

78
 region. After a prolonged legal process and ongoing demonstrations the company
managed to secure a license extension to resume activities. In 2006, Coca-Cola
officially resumed its operations after Coca-Cola government forbade the produce
and the selling of Coca-Cola goods in Kerala owing to their large concentrations
in pesticides. But the suspension did not last long, and Kerala 's judgment was
overturned later the same year by the High Court of India.

More recently, a state government panel in March 2010 recommended the fining,
due to water and soil damage in Kerala, of the Indian subsidiary of Coca-Cola for
a total of $47 million. There has also been formed a special commission to
investigate allegations by representatives of the society impacted by water
contamination. Not just the controversy was exacerbated by Coca-Cola 's lengthy
litigation against the Indian government.

In India and abroad, the company experienced a significant loss in customer

interest and prestige. In India, revenues decreased by 40% in the first two weeks
following the publication of the 2003 CSE survey. The annual effect was 15%
smaller than the prior annual growth trend of 25-30 percent in 2003 in overall
turnover. This widely publicized Indian war even drew market interest in the
USA. Ten American universities temporarily stopped selling Coca-Cola products
on campus after a series of demonstrations by students who joined 2 activistic
groups across the U.S.

 Coca-Cola’s CSR policies post-conflicts

Coca-Cola adopted the GRI principles two years before the Indian water crisis in
2003, and started focusing on sustainability. Back in 2003, CSR conflicts in many
areas of the world have already taken effect. All of them, though, was the direct
consequence of customer and general public loses of trust in the business and its
goods.

79
The key reason this debacle ended so terribly was Coca-Cola's answer to the issue,
according to Pirson and Malhotra. Coca-Cola also denied that beverages
containing excessive amounts of chemicals have been developed and that water
supplies are over-exploited and contaminated. Coca-Cola struggled to restore
public interest by rejecting any allegations and seeking to assert its credibility,
rather than voicing outrage about the case. The Indians viewed Coca-Cola as an
capitalist who was more worried with money than about public safety.

By fact, the past crises in the US and Belgium were managed stronger by the
company's interaction with stakeholders. This appears like after the uproar
continued for a few years , the organization was aware of its error.

Throughout 2008, the Vice President of Environment and Water Management of

Coca-Cola, Jeff Seabright, admitted that the organization was not properly
handling the conflict. He understood that the opinion of local people regarding
their corporation matters and that it is essential that the organization has
credibility within the community.

While Coca-Cola also disputes the bulk of the claims, Coca-Cola was pushed into
damage management by reputational losses during the uproar in India. In the
outset, there were comments supporting the credibility of Coca-Cola. In the 2006
Corporate Governance Study, for example , Coca-Cola dedicated a paragraph to
resolving the controversy. The statement primarily consisted of details promoting
its best practices and water conservation in India. However, the assertion did not
help much to tackle reduced revenue and higher investment losses.

Also in 1999, because of the study of more than 240 individuals in Belgium and
Frankreich who had intestinal issues following coke drink, the Belgian
government suspended Coca-Cola 's goods for ten days. Coca-Cola claims blame
– although later it was revealed that Coca-Cola drinks did not cause the recorded
medical issues. The company apologised and offered to cover all those affected by

80
the incident's health costs. A major publicity program has been introduced and
consumers have been increasingly pleased.

For eg, from 1999 to 2006 in India, it reported water usage was 35% lower and
over 300 rainwater collection systems were built in 17 countries.

Coca-Cola revised its strategy slowly in order to take damage prevention

measures to resolve the concerns of the aboriginal populations. In 2008 the
organization released its first operating environmental success study in India
documenting operations from 2004-2007. Anandana, which partners with local
people and NGO in resolving drinking waterways issues, was also founded by the
Coca-Cola India Foundation. Yet probably Coca-Cola's most impressive strategy
move was the introduction of many civic drinking initiatives in India. One
example is the rain water development initiative, where Coca-Cola 's efforts have
collaborated in rain water development by rainfall irrigation systems across 17
States in India, the National Land Water Agency, local irrigation commissions,
non-governmental bodies, and civic organizations. Such strategies are mostly to
capture and preserve rainwater thereby stopping its evaporation and hurry for
productive usage and conservation. The idea behind this is the accumulation of
vast amounts of water that would otherwise be wasted of good nature. The firm
aims to ultimately transform the corporation into a 'net zero' groundwater
customer by contributing to the atmosphere through Indian water mining.

Coca-Cola claimed in the 2012 study on water stewardship and replenishment that
it has 'completed the transition between freshwater used for the beverage
processing and refilled nature and ecosystems – ahead of the global objective.'

The chaos in India appears to have driven the company, dependent on water
supplies, to realize and adopt a more proactive strategic CSR strategy. In India,
this seems to be a obstacle. In June 2007 Coca-Cola launched a water
management program to raise the corporate water footprint and to reimburse local
customers for water consumption.

81
Coca-Cola has identified three concrete goals for the execution of these
commitments:

(1) Increasing water consumption by 20% by 2012 compared with 2004 rates, by
increased energy quality. The new 2010 results shows a 16 % increase in the
comparison era for 2004.

(2) Recycle water via wastewater treatment at a level that supports aquatic life and
agriculture by 2010, and return all water utilized in manufacturing processes. (2)
The success made on this goal was 96 percent by September 2011.

(3) Replenishing water used in finished drinks by programs benefiting local

society and environment by 2020 by the allowance of the liters of water used in
finished drinks (i.e. rainwater protection).

Coca-Cola already says it has a extensive list of 386 community-based water

collaborations or ventures. In 2011, nearly 35% of the water contained in finished
drinks was refilled.
In parallel to and apart from the Sustainability Reports, Coca-Cola releases an
regular water survey. The organization publishes in these papers reviews of its
water programs and development. The Global Environment & Development
Foundation, an american Organization that has been involved in the creation of
public-private collaborations, gives several comparisons.
Coca-Cola formed a agreement with WWF back in 2007. The main goals are to
raise knowledge of watersheds and water cycles in order to promote the use of
coca cola, collaborate with local populations worldwide and create a shared
climate for protecting bodies of water.

Finally, and also in the same year, the organization was named a part of CEO
Water Mandate, a public-private partnership to support businesses implement,
implement and report strategies and practices on water management.

5.6 “Applying the measurement CSR model”

82
An example54:

“Ben & Jerry’s is a Homemade Ice Cream company. Ben & Jerry’s founder, Ben
Cohen, explained one aspect of the ethical principles of the firm.”

“Businesses tend to exploit communities and their

workers, and that wasn’t the way I thought the game
should be played. I thought it should be the opposite –
that business had a responsibility to give back to the
community, that is because the business is allowed to be
there in the first place, the business ought to support the
community. What we’re finding is that when you support
the community, the community supports you back.”

“A number of tools, from overt group engagement to Ben & Jerry announcements
and public activities, search societal issues. Ben & Jerry has an effective screening
and problem management system sponsored by groups such as the South Dakota
Native American Community Board and the Central Massachusetts Clean Energy
Alliance.” As proclaimed and practical organizational practice, direct ties between
Ben Cohen 's ideals can be found.

One of Ben & Jerry's hundred challenges, due to its sourcing practices, has
obtained a certain outcome. The organization switched to the Greystone Bakery in
Yonkers, New York, to bak the brownies, a business that utilizes the income to
house and educate homeless people. This effect is rather precise and can be
calculated in different forms. It is important to calculate the volume and
percentage of needy people in the bakery and the amount of qualified bakers who

Michael Hopkins, “Corporate social responsibility”, Working Paper No. 27, International Labour Office,
54

“(2004) available at http:// papers.ssrn.com/sol3/papers.cfm?abstract_id=908181 (Visited on March 30,

2013)”

83
have graduated. And should the numbers now used in bakeries or other businesses
as bakers be investigated. Via business processes, there is a strong causal
connection to ethical values and the theoretical method should operate. More
inquiries could be produced at Ben & Jerry's in order to connect up multiple
elements and their metrics and assess for example whether the 7.5% share of Ben
& Jerry's pre-tax profits for philanthropic activities is influenced by
competitiveness.

On the other side, in other aspects, a possible measure, such as the "outcomes of
community participation," could also be taken and its comparative ties with other
indicators investigated. The first people concerned are outside the organization
where the elderly join in the educational system. The society into which street
persons are removed is a second set of stakeholders. Obviously, as a supplier to
Ben & Jerry the bakery itself benefits and in turn gives stakeholders advantages
that are made possible by its relationship with Ben & Jerry. It further supports
customers as the performance of the company increases as part of a very effective
social system. It is a typical example of innovative thought directions contributing
to improved income, prestige and employment and a much greater standard of
living in community in which Ben and Jerry operate.

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 CHAPTER 6

Impact of CSR on Sustainable Development and Globalisation

In the chapters before us, we have understood not only the significance of CSR
but also its significance in the 20th century. The study of its implications on
certain core principles, which still have a fundamental meaning in today's period ,
i.e. principles like "Sustainable growth" (SD) and "Globalisation," is important to
explain what CSR and its consequences are. Hence, the purpose of this chapter is
to focus on the interaction between the definitions above. As both concepts
continue to evolve and to be more widely understood, a wide-ranging discussion
is possible within the field of fiscal, science and management.

As a consequence, attempts will be made to clarify how CSR falls within the
aspects of sustainability defined in the Bruntland report, how CSR represents
sustainable growth at the corporate level or how both terms may be used in the
same way.

6.1. CSR and Sustainable Development

The word SD was first used in forestry in the 18th century. At the point, only a
handful of trees were permitted to be cut down in order to ensure long-term
protection for the tree community. It provides consistent timber supply to
potential generations without that money. Thanks to its 'Limits for Development'
study (Meadows, 1972), the Club of Rome has generated an international
dialogue. Through this discussion, an eco-development strategy has been
established that has taken to the forefront conservation of land and the climate.
This creation contributed to today's SD vision statement. In 1987, SD was the
most commonly cited definition of SD, defined as an ethical concept by the World
Commission on Environment and Growth. Two key principles are the notion of
'need,' in particular the basic needs of the poor society to which priority
requirements can be delegated and the notion of limits on communities capable of

85
addressing current and future needs placed by the state of growth and social
organisation. Therefore the priorities of economic and social growth in a
established or emerging, market-oriented or centrally planned nation should be
described in terms of sustainability. "The argument that companies should
concentrate on improving their value not only through the maximization of profit
and result, but on environmental and social questions equally goes into Elkington
's details. SD is thus known as a triple-fundamental model. The definition of
Brundtland 's three foundations was further developed at the 1992 United Nations
Environment and Development Conference in Rio de Janeiro and the 2002
Johannesburg Declaration on Sustainable Development.

"Interest has increased in importance over the years on topics such as CSR and
Sustainable Growth. Sustainability and CSR dialogue also includes groups like
the WBCSD. WBCSD views the CSR as a social aspect catalyst (financial
progress), helping businesses as responsible people in carrying out their
obligations. Throughout the previous chapters we have also discussed the
interpretation of CSR given by WBCSD. "Thus, the idea of sustainable
development is inherently related. The cultural, social and environmental effect of
businesses must be incorporated. operations.55

To examine the relationship between these two concepts let us first understand
what is meant by sustainable development.

The term sustainable development has been defined several times by several abut
the landmark definition was given in 1987 by the World Commission on
Environment and Development in the Brundtland Commission report titled “Our
Common Future”
published by Oxford University Press, 1987. The Brundtland Report is widely
regarded as a landmark in environmental development. It states that sustainable

Daniela Ebner and Dr. Rupert J. Baumgartner, “The relationship between Sustainable Development and
55

Corporate Social Responsibility” Corporate Responsibility Research Conference (2008)

86
development is “Development that meets the needs of the present without
compromising the ability of future generations to meet their own needs56.”

Thus CSR is one of the primary means of achieving the goal of sustainable
development for all nations today. The Brundland report highlighted three key
components of sustainable development, environment and economy and society.
A number of important sustainable development proposals have also been
highlighted and SD and CSR initiatives can be linked as follows:

Environment: SD states that the way we are developing and using technologies
should progressively be conserved and improved by our resource base. If
companies adopt CSR policies now

For example the introduction of e-rick was linked with Vodafone. These Eco-
Activate hybrid vehicles provide an alternative transport in the national capital
free of pollution. This helps to prevent environmental pollution and so the
relationship between CSR and SD can be said to be positive.

At all its retail shops, Vodafone has introduced the first smartphone recycling
project, where all discarded posterns, flyers where brochures were recycled. We
also launched eco-friendly SIM packs, including biodegradable rubber chips,
made of 100 percent recyclable content.

Social equity: SD says that developed countries need to provide access to

education, housing, electricity, water and sanitation for their fundamental needs.
When this is to be achieved in a fair manner, a sufficient population density would
be certainly expected. So the promotion of gender equality, healthy labor practices
etc. can be one of the CSR initiatives that companies can undertake.

56
Brundtland Report on Sustainable Development available at http://www.worldbank.org (Visited on
April 5, 2013)

87
For example For example. Tata Motors: several bursaries for higher education of
children have been launched. The company supports 211 pupils through a bursary
scheme. Among such graduates, 132 came from the disadvantaged parts of
society. The students are equipped with books, copies and other resources. They
also undergo different kinds of workshops, creative & outdoor sessions and
residential camps as well.57

For E.g., Tata Steel: As part of its Economic Empowerment CSR initiative
Three backward tribal blocs in Jharkhand, Orissa and Chhattisgarh have been
developed into a program to empower economically through improvised
agriculture. The budget is projected at Rs 100 crore, with 40,000 tribals residing
in over 400 villages in these three countries anticipated to benefit from the scheme
States.58

6.2 Defining CSR and its Relation to Sustainable Development

Over recent years, there have been many interpretations of CSR that have been
mentioned in the first several chapters of this study and the proof for companies
is, that the concept appears to suit their function. Nonetheless, two appropriate
concepts have been established that are important for research purposes under this
chapter in line with research related to CSR and sustainable growth.

Consequently, CSR being multi-dimensional includes the multi stakeholder

dimension as well, confirming that the agenda of businesses should not be skewed
only towards their shareholders.

This concept stresses that at any particular point, society requires firms to be
accountable and wants corporations to shift the burden towards them as the time
and circumstances alter. Now these concepts provide a good glimpse into CSR
and sustainability.

57
Amit Kumar Srivastava, Gayatri Negi, et al., “Corporate Social Responsibility: A case study of TATA
Group”, Vol.3, Issue 5, IOSR Journal of Business and Management, 17-27 (2012)

58
ibid

88
Now that the definition is clear we shall proceed to understand the relation
between CSR and SD.

6.2.1. Problem 1: whether CSR correlates with the dimensions of Sustainable

Development as defined by the Bruntland Report or the model of triple
bottom line? 59

Brundtland's ethical principle is perceived to be the most prevalent SD

interpretation. The benefit of the Brundtland concept is its systematic and
systemic perspective, whereas some perceive sustainability either as an individual
framework or as a specific feature. Environmental corporate responsibility is a
very valuable instrument for environmental growth when the measures are
enforced successfully.

6.2.2. Problem 2: Can CSR and SD be used synonymously?

The CSR and sustainable development are also frequently suspected of being
inconsistencies in terms: one of the premises is that companies are failure to
acknowledge moral accountability and the other of being inconsistent with the
economic (and, in some instances, spiritual) growth of the earth and its wealth and
dignity. These words are sometimes used interchangeably and loosely. Therefore,
their meaning and interaction emerges.

Sustainable SRD is basically a term that is disputed (Gallie, 1956), because its
importance is still part of the conversation on its execution (Moon et al, 2004).
They are important, internally complex and unambiguous (Connolly, 1983). The
two 'assessing variables' are CSR and environmental growth as they are respected
and not merely abstract principles. Therefore, none is perceived to be "socially
reckless" or "unsustainable." An agency or action is deemed to be called
environmentally conscious or to show environmental growth as a positive thing.
As a consequence, organisations or events could only be represented for image-
making purposes in these words. These are 'internally nuanced' definitions.“In

59
Supra note 3

89
CSR, a variety of actors have a struggle to reconcile various cultural, legal, ethical
and social roles, with specific beliefs and desires in relation to their relationships.
However, since CSR has specific financial , economic and ethical consequences,
it is impossible for organizations to generalize. Sustainable development does not
necessarily entail aligning two values that appear to be incompatible, but it goes
beyond human actors in doubt. Sustainable development Through nature, the
sustainability strategy discusses the implications of environmental vulnerability
and the global social effect of local action. The sustainable development plans.

CSR and guidelines or ideals of sustainable growth are fairly 'free,' and can not be
easily codified. CSR is not only an problem for individual businesses to consider.
Governments, industrial organizations, company consultants, nongovernmental
organisations, owners, workers and customers have all demonstrated a desire to
receive assistance, inspiration or vital voice in the definition. Moreover, the
concept of sustainable growth has no common authority. There are disputes
among scientists surrounding its meaning (and what constitutes risks to it) let
alone when states, non-governmental organisations and corporations join.

Both CSR and sustainable development are highly contextual in terms of their
temporal and social environment. We are also exposed to focal loops through
which incidents or tests immediately provide a reaction and change, new mothers
are 'as normal' and their production is decreased once more before the process re-
starts with a fresh collection of issues. CSR has grown as a dimension of modern
business and management itself as the basic philanthropy of corporate insiders
(Carroll, 1999). The regional financial , cultural, government and environmental
structures under which they are located are often distinguished from the CSR and
sustainable development agendas. In one nation, the obligation for an activity
every be treated as a duty of the Government, the society or the entity. It refers to
global firms such as Matten and Moon (in the press) and Western Europe (USA),
as well as to business Asia and others (Chapple and Moon 2005). When

90
fundamental disagreements emerge over the concepts of CSR and sustainable
development, it can be inferred that they can be unfounded and discarded.

The problem is that they deal with extremely important issues, such as other,
mainly controversial terms, like the justice system. These concepts can not be
ignored as companies increasingly impact on people's and societies' lives in social
, environmental and ethical terms and as development often absorbs change and
undermines the human and environmental resources on which future development
depends. In addition, provided that companies are sometimes the agents by which
creation is carried out, the relationships between concepts are as essential as the
partnership among the other mostly debated pairs of concepts such as
independence and equality. As a result , businesses become more and more
delegated or accountable for such things as organic production and use, climate
change and resources, biodiversity and environmental sustainability and healthy
societies. Few other scientists do not claim that SD and CSR are interchangeable
with them, but describe CSR as a 3D model (generally called SD), and describe
CSR as a lucrative word that meets the needs of the stakeholders through social
and environment engagement. Douglas (2004) also states it is important to take
care of religious and legal principles. Dawkins and Lewis (2003 ) describe
corporate responsibility as a synonym for CSR, which calls for workplace
support, community engagement, ethics and environment responsibility. They
claim that each organization has immense difficulty in CSR and requires to
operate on its own in the CSR market. Jenkins (2004) recognizes CSR as a
framework that allows organizations to 'orient their behaviors and policies around
an appropriate and common definition in and through customers, whether they be
owners, workers or societies." It has a range of obligations, and is more than just
the organization's legal and economic responsibility. Quazi and O'Brien (2000)
have various future CSR programs, for example social or environmental schemes,
which are not classified by themselves as CSR or SD. To summarize, while these

91
two terms have common meanings, they cannot be used by each one as synonyms
other60.

In my opinion, the two words should be used in their original semantic sense, to
avoid ambiguity and confusion which may ultimately result in altering the
meaning of these two concepts.

SD and CSR are therefore nearly similar, but a minor yet important difference
occurs. In order to meet the needs of future generations, sustainability growth is
linked to the organization concept which is structured to rely on "demand
creation, climate protection, environmentally responsible manufacturing
processes." In comparison, CSR has to do with individuals and organisations'
partnership facets and addresses things like "transparency, stakeholder interaction,
sustainable growth reporting61.
6.3 CSR and Globalisation

In the world economy today , it is important for businesses, in order to satisfy

their customers, buyers, workers and populations they represent, to claim social
and environmental accountability. CSR was generally limited to corporate
philanthropy before the 1990s. It was in the early 1990s when generalized CSR
principles and methods arose. In other terms, the CSR spectrum has been
broadened by the 1991 reforms of liberalisation , privatisation and globalization.
What led to the dramatic adjustments in the architecture and execution of CSR is
the question?

In the last two years, there have been considerable public debate over
environmental pollution and socioeconomic inequity resulting from globalization.
The CSR efforts have been crucial in these legitimate concerns. Compared to
previous years, today more customers are willing to help companies who respect
security of the climate and social obligations. As a result, almost every

ibid
60

61
M. Van Marrewijk, “Concepts and Definitions of CSR and Corporate Sustainability: Between Agency
and Communion”, Vol. 44, 2-3, Journal of Business Ethics, 95-105 (2003).

92
organization that currently embraced CSR carries out its core business interest,
rather than only as a philanthropic complement.

In addition , studies indicate that a modern politically generalized definition of

CSR needs to be established in a globalized environment. In addition,
globalization weakens the ability of (national) governmental authority to control
the actions of businesses exporting their market internationally. For instance,
globalization requires domestic policymakers to negotiate with others to gain
corporate and foreign direct investment. It is also believed that businesses should
be recognized as economic as well as political positions.

Furthermore, apart from the poor national borders dividing multinational firms
from domestics, another key distinction between operations and transactions
inside and beyond organizations in the world economic climate of the 21st century
is the limited differentiation: when companies shift most of their transactions
away from the position of internal businesses to purchase. In tandem with civil
society movements in reaction to the decreased power of national governments,
the role of CSR has shifted significantly: whilst businesses have increasingly
assumed accountability for their supply chain as a consequence of contributions
by the firms in their workers and societies where they are headquartered. The
emergence in anti-corporate protests in environmental and human rights concerns
has made it important for businesses to shift their approaches on social and
environmental problems. Throughout the 1970s and 1980s, the company's
vigorous dairy formula marketing tactics have been boycotted globally by
companies that invest throughout South Africa , particularly Nestlé. The Earth
Summit in Rio in 1992 was an significant moment in CSR growth as corporate
engagement succeeded in stopping the Summit 's aggressive mission of seeking
ways to avoid the degradation of natural resources and the contamination of the
environment.'

93
The globalisation, the capitalist world, in tandem with the self-rules consumer
system, has a shared impact between globalization and CSR. At present, foreign
organisations, such as the IMF and multinationals (MNCs) will view the position
of State as fulfilled. In the one hand, globalisation, which offers businesses the
positions of the state, calls for a corporate accountability, and, on the other hand,
for businesses to regulate society's retroactive conduct towards this new position,
a corporate social activity is required.

Globalisation has altered the moral duty of the firms and has contributed to the
corporation's position as both economic and political agent by fluttering the
boundaries between domestic and international entities and between domestic and
global operations. As a result, multinationals are held by an increasingly
politicized society responsible for the CSR practice of their suppliers. Moreover,
multinationals have on the one hand assumed the role of the state and thus should
behave responsibly through the mutual influence between CSR and globalization;
on the other, corporate-socially responsible conduct is necessary to protect that
new role.

Furthermore, Companies that do not undertake CSR initiatives or behave

irresponsibly are at a great risk of damaging their relations with their
investors/potential investors. If a company in India is not following ethical labour
practices and safe working conditions or not following international codes of
conduct, it will certainly have a bad reputation in the market. As a result foreign
companies will not be attracted to invest in such a company. Thus, resulting in
lower FDI’s, this is harmful for the country’s economy.

For E.g. during the 1990s, Nike faced criticism for use of child labor in
Cambodia and Pakistan in factories it contracted to manufacture soccer balls.
After facing a consumer boycott following the news that its suppliers were
exploiting child labour in developing countries, Nike had to make substantial
investments to promote improvements in the working conditions of its suppliers’
factories. Several companies and firms in a controlling position have undertaken

94
this duty and use power responsibly and influence the weaker parties by setting
codes of conduct and standards.62

Today, the world is almost one and markets are integrated, India therefore cannot
afford to lose its foreign investment. To attract or incentivise investors, Indian
companies have to have a well defined, systematic and evolved CSR policy, as
this is now a pre-requisite of globalisation.

62
Kim Kercher, “Corporate Social Responsibility: Impact of globalisation and international business”
available at http://epublications.bond.edu.au/cgej/ 4-12-2007

95
 CHAPTER 7

Conclusion & Suggestions

Corporate Social Responsibility is not just another new emerging trend. It is a

concept which encompasses solutions to several rising problems and issues we as
a community face together. The rationale behind implementation of mandatory
CSR spending by companies and firms seems just and sensible. Global laws and
legislations seem to be well drafted and stringent but the main reason why several
attempts especially concerning welfare legislations have repeatedly failed is
because of the problem of their poor implementation.

This is not just merely a debate of whether mandated CSR spending is good for
our country, this, also brings to light the unfortunate state of affairs of having a
law put into operation in India. Thus, to remedy this, our legislators should take
into account the problem of implementation and formulate the clause under
Section 135 of the Act in such a manner that it will be impossible and unworkable
for companies, or big corporate houses to subvert this initiative or escape this
reporting. The scope of having loopholes should be minimized by keeping a
review board and prosecuting those who fail to follow the section.

7.1 Mandating CSR Spending is Beneficial Because

 It shall achieve several goals and bring back the trust people of our country
reposed in the system of governance and justice as this, manifestly, will be
a community friendly legislation.

 In a country stricken by various social ills on one hand and immense

corruption, bribery and exploitation of the labour on the other hand, the
proposal for regulating CSR spending comes as giant relief. It will prove to
be a savior in the wake of innumerable corporate frauds and disasters
which have taken place in India, which have not only caused monetary
loss, but have also disappointed the people of our country.
96
 CSR is the means to the end, the end being Sustainable Development. We
have seen the direct correlation CSR activities have with SD. Companies
that have basic CSR policies like reducing carbon footprint or eco-friendly
practices serve the means to achieve SD. Thus, it is the key factor and ideal
lever for development of the nation.

 CSR is a highly respectable trend in today’s world and if India has opened
her market and economy to the world, to implement strong CSR policies is
in her best interests as companies all over the world will be attracted to
invest their capital in a company that has the same goals and policies as
them.

 CSR is a progressive concept and is one of the primary ways forward. India
cannot leave CSR spending voluntary, as not all of the companies may be
pro-society, many of them are concerned only with profit motive and
furthermore, it is unlikely that companies will be driven to accomplish
more than a minimum of social responsibility. Thus, the logical answer is
that it has to be regularized; so that companies will do ‘good’ and this in
turn will eventually benefit the companies as well. CSR importantly
doesn’t remain a concept for big corporate houses or firms, but is also
inclusive of small and medium enterprises. It is crucial that these
enterprises integrate socially and environmentally responsible concepts
into their business strategies if the CSR movement is to become
sustainable.

 Companies that don’t follow CSR and who behave socially irresponsible
suffer a great set back. As we have seen Coca-Cola learnt its lesson well as
it suffered a large dip in sales and revenue and also lost consumer trust.
Coca- Cola realized that goodwill and consumer trust is extremely
important to maintain its brand name and consumer loyalty. Thus, it made
sure that it rectified the mistakes it committed by not just implementing
strict CSR policies but by following them vigorously. For a company to be

97
 successful today not only are its profits important but its market reputation
and goodwill are even more important for it to retain its standing and
clientele.

7.2 Summary of Findings

This dissertation found that the hypothesis formulated “CSR should be made
mandatory globally” was tested in the affirmative. The positive impacts were also
studied, the advantages that mandated CSR spending brings are far more
substantial than the disadvantages. There is no doubt that the impact of having
CSR implemented as mandatory through law is different for developing and
developed countries and considering this, section 135 under the Act seems to be
tailor made for the conditions and circumstances our country presently faces. The
legislation is in keeping with international guidelines under the UN and ILO and
is also in keeping with countries around the globe, because several countries
where even though CSR is not mandated have very strong and efficient CSR
commitments.

From the peripheral findings it was also found that “Responsibility” and
“Accountability” have to be made the norm of our current system of governance
irrespective of a company’s performance or profitability, to prevent mishaps like
Bhopal and Satyam.

“As described in the opening chapters, companies with superior CSR results in the
past were well established, while companies with a weak CSR record were poorly
performing. Promoting CSR will help the competition as a whole in the domestic
economy. With India spreading from the center to the low income region, the
required contribution to CSR programs would definitely be used to achieve public
policy goals and priority.”

CSR is an alternative concept, even although the basic definition of CSR is almost
always the same, CSR programs will be population centered on the CSR programs
contained under the requirements of Schedule VII of the Act of 2013 in India even

98
possibly other developed countries as well. This is obviously a daunting
challenge, but the provision suggested seems to take the interests of our culture
into consideration. CSR is now a plurality of cultural, ethical and environmental
values, with the advent of growing disasters arising from industrial practices in
India and worldwide.

With a study of many case studies and detailed research on the impacts of CSR
via this thesis it has been apparent that CSR is an important remedial tool for
enhancing everything. It is now expected from businesses that revenue and profit
are the main goal of a company, and not the ultimate goal, but rather the gain of
society which gradually transforms India from an agricultural economy to an
industrialized one.

It is clear that social responsibility in the enterprises can be a "bridge" to integrate

and synthesize the different social and corporate interests in countries such as
India. The study discusses the state of the developing world in order to broaden
our understanding of the view and practices of CSR.

7.3 Suggestions

“The solution to the CSR provision is total, but a refusal to comply with CSR is a
potential reversal since there is no destructive power. The CSR provision is
detailed in nature. The CSR Committee's failure to implement the CSR policy can
not, however, promote the purposes of providing a framework for the forward
CSR road to companies because of its absence of competences, responsibilities
and duties. In fact, in the Businesses Law, the Board 's scope of responsibility is
not defined. The Companies Billot, apart from the shareholders, does not mention
that there is a need to reveal or submit to any regulatory body in terms of
transparency and reporting on the CSR policies of the organization. Strict reading
of the Companies Act implies that, in contrary to the requirement in other
countries , for instance in the Philippinen, a major taxpayer falls within the scope
of the CSR provisions, even banks, trusts and companies ar in Mauritius, CSR
must not be followed by corporate structures, like limited liability partnerships
99
and partnerships which are profit-making businesses as well. The Corporations
Act would involve these organizational arrangements because they are
accountable for the business under which they work.

Indian legislation is decided with a positive heart, but such rules are not often
granted the breath of light, and it is really easy to circumvent the legislation.
Contrary to the voluntary guidance of 2009, p. 135 of the Legislation, 2013
requires a clear framework for compliance and implementation. It clearly
stipulates that the Board will not invest the appropriate sum in the financial year.
This is an easy way out for corporations as they may resort to unethical tactics
like showing they haven’t incurred profits etc.

The following are a few possible suggestions to make this provision one with
deterrence and successful implementation:

 Make this provision a penal provision and ensure that strict action is taken
against those who fail to comply by the terms of S.135

 The reasons for non-compliance should not be mere reasons but should
show some sufficient cause for non-compliance

 If the company has proved diligently and in good faith that it had
sufficient reasons for not complying with the penal provisions there should
be a framework laid down by our legislators providing a mechanism
wherein the companies could pay the required amount over a span of 3, 4
years so that it is not a heavy burden on the companies and at the same
time the aim of CSR spending is fulfilled.

 Benefits vary. So, if a corporation generates strong money, will it invest

more on CSR and invest less on dumps? Thus, the percentage allocated
towards CSR spending should be calculated again to ensure that it is not
easy for companies to evade this provision.

 The extent of liability of the Board should be clearly drawn.

100
  The powers, duties and responsibilities of the CSR committee should be
well defined.

 The meaning of the term CSR should also be clearly defined in the Bill.

 The legislature should ensure that the CSR strategies of companies are in
sync with the international norms governing CSR.

 Incentivize this provision by providing a tax rebate scheme so that

companies are attracted and encouraged to spend towards CSR.

In conclusion, in Kent Greenfield 's words, "as is environmental and labor law,
corporate law is to be seen as public or society's more general law." Corporate
law," he says, is not just "determined in what we want to see in society but in what
is most effective for companies. Corporate law is to be preached to our collective
political decisions as regards our society." Greenfield believes that most people
require fair rights and individual integrity as they do for other public legislation to
play a role in corporate regulation. Increasing corporate regulation wouldn't carry
economically abysmal nations — after all, nations with more legislation than the
US, including Australia, Germany , the Netherlands, and Sweden, are
economically stable and willing to give their populations a chance to push
upwards towards the US. dream.63

CSR is not alien concept. It has proved to be a practical solution to combat several
social problems faced by the country. The clause of CSR under S.135 is an
attempt to update the laws in accordance with the best global practices. The Act
gives a clear guidance as to what constitutes CSR. Furthermore, Schedule VII of
the Bill lists several possible ways a company could spend towards CSR
expenditure ranging from eradicating extreme hunger and poverty to promotion of
education to ensuring environmental sustainability.

63
Kent Greenfield, “The Failure Of Corporate Law: Fundamental Flaws And Progressive Possibilities”(
The University of Chicago Press, Chicago, 2006)

101
In the wake of catastrophic incidents like Bhopal and other scandals like Satyam
companies in India already seem enthusiastic to implement CSR initiatives. The
surrounding society would definitely understand and support them because they
are investing on CSR to build meaningful externalities.
The state-based plan appears to be the first relatively feasible option, because
growth in social development needs to be regulated or the gap between economic
and social growth would reach a threshold during which the decline would be the
w. In India the country continues to be a developed economy, afflicted by
deprivation, analphabetism, inequality and weak public health.

Like India, every developing country should mandatory apply CSR policy or to
apply the suggested policies in this dissertation i.e. to make CSR policies with
penalty. That will definitely help developing countries to grow faster.
And in addition to it I would like to suggest that developed countries must
contribute to the world more through CSR. That will definitely will be good for
the better world. Developed countries being part of this globe has equal
responsibility or says more responsibility contribute as they are equipped with
more resources or ability to use those global resources.

102
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