Academic journal article IUP Journal of Corporate Governance

Corporate Social Responsibility: An Analytical Study

Academic journal article IUP Journal of Corporate Governance

Corporate Social Responsibility: An Analytical Study

Article excerpt

The globe is facing a serious threat of environmental degradation owing to indiscriminate development. "We do not inherit the Earth from our ancestors; we borrow it from our children". The chief purpose of business is to supply "continually improving goods and services for increasing number of people at prices they can afford" which should be connected with today's challenges, for instance, pollution, threats of rising temperatures, water shortages and crop failures which should be addressed together with governments and international bodies as risks for our business,2 as the competency of the environment is limited both in terms of service... growth in furnishing raw materials and in assimilating by-product wastes owing to consumption.3

Corporate Social Responsibility (CSR) policies must address economic, environmental and social concerns whereby global problems can be resorted to. According to Business Dictionary, CSR is a company's sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources.4

According to United Nations Industrial Development Organization (UNIDO), "CSR is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (Triple-Bottom-Line-Approach), while at the same time addressing the expectations of shareholders and stakeholders. In this sense, it is important to draw a distinction between CSR, which can be a strategic business management concept, and charity, sponsorships or philanthropy. Even though the latter can also make a valuable contribution to poverty reduction, will directly enhance the reputation of a company and strengthen its brand, the concept of CSR clearly goes beyond that."5

The World Business Council for Sustainable Development defines CSR as the "commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life."6

In the era of globalization, both the civil and political societies have come to realize the grave effect caused by the corporations on our day-to-day life both positively and negatively.

If the policy of CSR is implemented, the reputation or brand equity of the company is founded on values, such as trust, credibility, reliability, quality and consistency. It also improves the morale and loyalty of the employees, relations with stakeholders and regulators. As the corporate houses have to discharge three obligations, namely, international obligations, constitutional obligations, duties and obligations under various Acts, rules, GOs and notifications, the present discussion is divided into three parts.

Against this backdrop, the present paper through some relevant case laws addresses the potential negative impact on the society and the environment owing to the pollution caused by the corporate sector and the indifference of the government towards it. These case laws represent the real situation which demonstrates that there is an immense need of imbibing the feeling of being compassionate and accountable towards them. If the companies do not have the sense of commitment towards the society and the environment in connection with the CSR, there will be serious ramifications as elucidated through the case laws enumerated in the present paper, which may in turn become a challenge for the existence of the company as well.

Corporate Social Responsibility and Environment

Unplanned and unscientific development, without having commitment towards future generations, will have grave consequences for the natural resources and for the existence of the company itself. …

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