INTRODUCTION
Corporate Social Responsibility is the most important than ever right now during the current global crisis. Even though the concept of CSR in the start was nothing but just an obligation for the companies but now as the firms are gradually growing into multi-national corporations which have more capital and value more than the GDP of certain countries across the world, CSR has become a critical part of business organizations. Such companies must take the concept of CSR also known as corporate citizenship very critically and perform the activities required on regular basis.
Since the pandemic has hit countries all over the world, the complete mechanism and process have been affected and changed since 2019. The way CSR was carried out before the pandemic hit us was different from the way it is performed now and what is expected from the companies now is more focused on labour and employee working conditions, helping poor people who are not able to earn enough to have 3 meals a day, poverty, healthy lifestyle, assisting in providing proper medical facilities to the ones who suffer from the deadly disease, etc.
I am going to discuss the Corporate Social Responsibility of the companies before the covid era and during and post-covid times. How CSR helped the company grow by building its image as well as through CSR help to improve the situation of the country by contributing a part of their profits for the needs of other people to help them survive in the difficult times. Some firms did not understand the exact concept of CSR and how are they supposed to give back to society, leading to the failure of CSR. In the end, I will conclude by mentioning some practices which can be followed so that the exact aim or goal behind the concept of CSR is fulfilled.
WHAT IS CORPORATE SOCIAL RESPONSIBILITY?
Corporate Social Responsibility is nothing but a way through which companies practice the policy to have a positive impact on the world, especially the shareholders. The main idea is to pursue the social objective in addition to profits. CSR has increasingly become the most important concept because it depicts the social and environmental practices of the companies which creates a good brand image in the eyes of the investors. It shows in what way the company is fulfilling its responsibility towards society.
WHY IS CSR IMPORTANT?
We all know that all companies and individuals have some ethical responsibility towards society and CSR can be understood as one approach through which a company can show an ethical commitment by striking a proper balance between the demands of shareholders and requirements of the society and the environment nearby. This enables the companies to build a strong brand image, improves customer loyalty, and bring in more customers which will fetch more profits.
CSR is of great value for companies. It also helps to develop a good bond between the employees and the management of the company, magnifies the morale of the employees, and lets both the employers and employees feel at home when they are working together. In one way CSR is a very effective component to building public relations with the corporate world.
CSR IN INDIA
In April 2014, India made an amendment to the Companies Act 2013, making Corporate Social Responsibility compulsory for business organizations. India is the first country all over the world to make CSR mandatory for companies. As a part of CSR, organizations can invest in education, poverty, hunger, gender equality, health, and hygiene, etc. The Ministry of Corporate Affairs has notified that the companies’ expenses spent during the coronavirus outbreak to fight the pandemic will be considered valid under CSR activities. Since the applicability of mandatory CSR provision in 2014, CSR spending by corporate India has increased significantly. In 2018, companies spent 47% higher as compared to the amount in 2014-15, contributing US$1 billion to CSR initiatives, according to a survey.[1] There was an increase of 139% in the contribution of CSR in the Prime Minister’s Relief Fund over last year. The maximums funds were received by the education sector (38%), hunger, poverty, and healthcare (25%), environmental sustainability (12%), rural development (10%).[2]
CSR STRATEGY OF TATA GROUP
Tata Group has been a pioneer in the Indian CSR area where it has always been able to give quality services to its consumers and at the same time it is also able to maintain its responsibility and give back to society by helping it whenever it had been in the time of need. Tata’s main focus has always been to improve the life of underprivileged people. Their key idea is on the plan to look after the health, education, and the environment. It follows six tenets of CSR strategy varying from health care to education. Keeping up the Sustainable Development Goals in mind it has programmes called Aarogya (health), Vidyadhanam (education), Kaushalya (employment), Vasundhara (environment), Amrutdhara (drinking water), etc. For the financial year 2019-20, Tata spent 22.9 crores on CSR. Tata also received various awards for their contribution through CSR which keeps them encouraging.
During the COVID times, when India first slipped into lockdown in March 2020, in Jamshedpur the Tata Steel Leaders gathered and planned to help the needy during the lockdown. They served around 3.36 lakh+ cooked meals and also distributed around 20,500+ grocery kits. For people who needed food, they established helpline numbers for requests related to food. They served 5,850+ truck drivers and their companions.[3] Through social media and other mediums, they helped to spread awareness through banners, posters regarding the importance of sanitation and measures to be taken to remain safe. Tata not only looked after people suffering in India but also extended their services across other countries like Sri Lanka, Bangladesh, Nepal, etc.[4]
Tata even merged two plans by a women empowerment initiative by being stitched masks with thread. This led to an awareness drive regarding how important is a mask to be safe and employed women in rural areas.[5] Tata also linked farmers to the marketing of their vegetables which helped them reach the markets. They also donated food grains to the needy who were not able to earn a living for their family and feed them. Well, the programmes through which Tata contributed to CSR in millions of ways is a perfect example to show the importance of CSR for a business organization to run profitably and also create a brand image, also contribute to building goodwill to attract the shareholders and keep the existing shareholders satisfied.
When firms carry on their activities like production there is always one question in mind that how are they going to dispose of the waste? Are they going to harm the environment by disposing of them through the wrong means? The companies should take this point which can be a disadvantage to their brand and turn it into an advantage by following a proper and environment-friendly method to dispose of it. This will help them inspire the people and set a perfect example of how through daily activities of your business one can contribute to CSR.
Not only Tata but various other large corporate firms are leading examples for contributing to CSR during these tough times. The companies who do not understand the importance of CSR today should learn from these large multinationals who try to manage both the activities of the firm as well as look after their responsibility towards society and nature.
CONCLUSION
Many firms today fail to perform their CSR activities and engage in multiple ways of stepping aside, escaping from the commitment. Companies need to understand that CSR assists in social growth and will in return benefit the company itself. To just avoid the expenses (which are considered to be unnecessary by the companies) in the form of CSR, they prefer indulging in various activities. This is a clear instance of the failure of CSR in India. It is a very important duty of firms to realize the importance of CSR and it plays an integral role in the overall development of the company. Government should make the laws stricter so that no one can escape from their duty. Certain initiatives should be taken by the Government to encourage and spread awareness regarding it.
This helps us understand that CSR is one of the most important processes which leads to the success of an organization and should not be ignored by the company whatsoever the situation they are in. CSR existed before COVID hit us but it has evolved during the pandemic which was much more required. Thus, CSR can be termed as one way to create a good image in eyes of society as well as earn profit in the future.
Author(s) Name: Nethraa Vaishnav Nimbawat (Student, NMIMS Bangalore)
References:
[1] Dezan Shira & Associates, Corporate Social Responsibility in India, India Briefing, March 23, 2020, available at https://www.india-briefing.com/news/corporate-social-responsibility-india-5511.html/ (Last visited on June 13, 2021)
[2] Ibid.
[3] COVID-19 7 Lakh People. 25 States. And counting, Tata, available at https://www.tata.com/newsroom/covid19/covid-19-community-initiatives-tata-steel (Last Visited on June 13, 2020)
[4] Ibid.
[5] Ibid.
