Considered at the organizational level, CSR is generally understood as private firm policy. As such, it must align with and be integrated into a business model to be successful. With some models, a firm’s implementation of CSR goes beyond compliance with regulatory requirements and engages in “actions that appear to further some social good, beyond the interests of the firm and that which is required by law”.
CSR is titled to aid an organization’s mission as well as serve as a guide to what the company represents for its consumers. Business ethics is the part of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment.
Most consumers agree that while achieving business targets, companies should engage in CSR efforts at the same time. Most consumers believe companies doing charity work will receive a positive response. Somerville also found that consumers are loyal and willing to spend more on retailers that support charity. Consumers also believe that retailers selling local products will gain loyalty.
Corporate social responsibility includes six types of corporate social initiatives:
Corporate philanthropy: company donations to charity, including cash, goods, and services, sometimes via a corporate foundation
Community volunteering: company-organized volunteer activities, sometimes while an employee receives pay for pro-bono work on behalf of a non-profit organization
Socially-responsible business practices: ethically produced products which appeal to a customer segment
Cause promotions and activism: company-funded advocacy campaigns
Cause-related marketing: donations to charity based on product sales
Corporate social marketing: company-funded behavior-change campaigns
All six of the corporate initiatives are forms of corporate citizenship. However, only some of these CSR activities rise to the level of cause marketing, defined as “a type of corporate social responsibility (CSR) in which a company’s promotional campaign has the dual purpose of increasing profitability while bettering society.
The board of directors of a company plays a significant role in the CSR activities of the company. The role of the Board is as follows:
Approval of the CSR policy.
Ensuring its implementation.
Disclosure of the contents of CSR policies related to its report.
Placing the same on the Company’s website.
Ensuring that a statutorily specified amount is spent by the company with reference to CSR activities.
It’s significant to note that there is no penalty if the particular amount is not spent on CSR activities. In such a case, the board’s report must identify the reason for such short spending.
The following activities can be performed by a company to accomplish its CSR obligations:
Eradicating extreme hunger and poverty
Promotion of education
Promoting gender equality and empowering women
Reducing child mortality
Improving maternal health
Combating human immunodeficiency virus, acquired, immune deficiency syndrome, malaria, and other diseases
Ensuring environmental sustainability,
Employment enhancing vocational skills, social business projects
Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development, and
Relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women and such other matters as may be prescribed.