When a company along with a profit-making business indulges in social activities to improve the lives of people is called CSR. It may either do so by providing free product samples in rural areas or funding schools to provide free child education in remote areas. In the process of undertaking activities of CSR, it gains the trust of people. The brand image is created in the minds of the people and remains forever which boosts its brand loyalty along with its goodwill. The activities of CSR undertaken by companies has an unmatched powerful impact that no other medium could do.
What is the full form of CSR and CSR meaning?
The full form of CSR is Corporate Social Responsibility. CSR usually means giving back to society in some or another way. A corporate that starts its journey from a place to produce products and services to meet the needs of the consumers, must also understand the socio-economic needs of that area and undertake activities of CSR to improve the overall living standards of the people around. The corporate‘s existence and growth are interdependent on the income and living standard of the people around it. In fact, by undertaking activities of CSR, any corporate would end up gaining the trust of the people, creating a brand value for itself, and boosting its brand loyalty. In the end, the corporate gets to enjoy the tax rebates applicable to activities of CSR, which is like a cherry on the cake.
Many people believe it to be the private sector’s way of integrating the economic, social, and environmental imperatives of their activities. From this viewpoint, CSR closely resembles the concept of sustainable development and the so-called triple bottom line. The Triple Bottom Line of 21st century Business. It represents the net profits from economic, environmental, and social activities of the public corporation during the reporting period.
Below are CSR myths that should be busted:
- CSR is not the same as philanthropy
- Not true that CSR comes after profits
- Not true that CSR is only for big players
- CSR is coupling social and business interests which makes it different from philanthropy.
Corporate Social Responsibility is thus only about two aspects:
- Reducing the Negative Effects: Steps taken by a company to neutralize, minimize, or offset the harmful effects caused by its processes and product usage.
- Increasing the Positive Contributions: Further steps by a company using its resources, core competence, skills, location, and funds for the benefit of people and the environment.
Models of CSR
There are 3 models of CSR which tell you which activities of CSR are undertaken by the companies in order and why?
- Competency Driven CSR Model
The company reaches out to society by depending on its core competencies. In this CSR model, the activities of CSR undertaken are mainly those in which the company is mastered, thus providing quality service to the society.
Example: Lipton company in Etah decided to set up veterinary hospitals from where it gets milk supplies. IT companies have set up computer literacy programs.
- Community Driven CSR Model
Organizations invest in social welfare but with a business interest again. In this type of CSR model, the activities of CSR undertaken by the company are for the betterment of the community in which these companies are located or thrive. The activities of CSR have a two-fold effect. The community benefits, and so does the benefits trickle down to the company itself in the process.
Example: Tata Chemicals and TELCO have created recreational facilities around artificial lakes that are filled with water purified from industrial affluents.
IKEA has set up bridge schools in carpet belt in East UP and is committed to keeping units it has business relations with free of child labor.
- Consumer-Oriented CSR Model
The activities of CSR undertaken by the company are for the betterment of the consumers. Those consumers who consume the products or receive the services provided by the company are focused on.
Example: A cloth producing company insists that it will purchase cotton when there is no child labor expended in fertilizing cotton seeds or when cotton is produced in an environmentally friendly fashion with the help of integrated pest management. This is one way will ensure quality products to the consumers, with organic quality ingredients.
List of Activities of CSR
There are plenty of activities of CSR which that companies can indulge in. Let us discuss the type of activities of CSR in detail:
- Education for employee families
- Plant trees to offset own pollution
- Provide training courses to employees to help them develop their skill sets and acquire knowledge
- Creating and supporting the nearby hospitals, schools, for employees and their families
- Donating to charitable trusts to promote socio-economic development
- Providing health insurance coverage for the employees as well as their families covering all the medical expenses.
- Providing life insurance coverage for employees
- Reimbursement of certain bills like internet bills, transportation bills
- Providing free meals or subsidized food to the employees in offices
- Providing free transport services to offices
- Organizing events for employees and their families to participate
- Funding orphanages and old age homes
- Mandating activities of CSR for every employee
- Donating amounts as relief funds for catastrophic calamities and uncertain times
- Creating awareness campaigns about social issues
- Increasing women employee numbers compared to the total number of employees, to promote women’s empowerment
- Treating garbage or wastage generated in a sustainable way
- Providing career opportunities like Return for Work for Women to encourage those taking a career breaks to start working again and gain financial freedom.
Examples of activities of CSR
Tata Steel activities of CSR
Tata Steel believes that the primary purpose of a business is to improve the quality of life of people. Tata Steel will volunteer its resources, to the extent that it can reasonably afford, to sustain and improve a healthy and prosperous environment and to improve the quality of life of the people of the areas in which it operates.
Mother and Infant Survival Project
In an attempt to bring down infant and maternal mortality rates, the project has undertaken the following interventions in its areas of activity comprising 40 villages:
- Antenatal & Postnatal Care
- Birth Spacing
- New-born Care
Regional Initiative for Sexual Health for Today’s Adolescents. This initiative is aimed to safeguard the youth. It focuses on extending basic health services
As early as the 1990s, Tata Steel initiated a policy recognizing the importance of HIV/AIDS interventions.
- Counseling at Sneh Kendra, Jamshedpur, which has helped over 1440 people ‘at risk’ to discuss their issues openly.
- Project “Kavach” – This is an important step considering that Jamshedpur is a transportation hub in eastern India.
- Project ‘SATHI’ – This partnership project with Orissa State AIDS Control Society, Bhubneshwar.
IKEA activities of CSR
IKEA is the world’s largest retailer of furniture and home furnishings. IKEA actively protects its entrepreneurial and innovative traditions.
- Innovation has extended to the incorporation of its ‘Natural Step’ framework for assessing the ecological and social sustainability for its commercial activity.
- IKEA has set up bridge schools in carpet belt in East UP and is committed to keeping units it has business relations with free of child labor.
Aditya Birla’s activities in CSR
- They support ballad is which are non-formal education centers, we run primary schools, named ‘Aditya Bal Vidya Mandir’, and also help schools run by the district authorities or Panchayats
- The Group runs 41 formal schools in proximity to our plants, where over 45 thousand students enjoy the learning and growing process. Our schools are affiliated with the State Education Boards, CBSE, ICSCE, and IGCSE.
- The Aditya Birla Rural Technology Park at Renukoot, Uttar Pradesh, fosters people empowerment through capacity building. It is a huge campus with a multitude of training centers, where the thrust is on building, upgrading, and honing competencies.
LUPIN activities of CSR
- In the last 14 years since it was set up, LHWRF has put up 125 schools (either singly or with government help).
- It has provided drinking water facilities in 80 villages.
- It has helped 25,000 people cross the ‘poverty line.
Benefits of activities of CSR
Corporate Social Responsibility if followed with the intention of contributing to society, will create a far-reaching impact on a business’s growth. Let us discuss some of the benefits of undertaking CSR activities:
- Increase revenue or sales
- Build trust among the people
- Boost brand loyalty
- Boost brand image
- Increased goodwill
- Employee retention for a longer time
- Sustainability in the long run
- Smooths out seasonal fluctuations in demand and supply
- Spend less on marketing activities
- Increased acceptability of products and services among people
4 main justifications for CSR: –
1. Moral obligation
2. Logic of sustainability
3. License to operate
1. Moral obligation: moral obligations implies doing the right things, achieving commercial success in ways that honor ethical values, and respecting people’s communities and environment. Example- Pharmaceutical (medicine) company selling medicines at MRP, not overcharging.
2. Logic of sustainability: – It means meeting the needs of the present without compromising the ability of future generations to meet their own needs. Sustainability is enlightened self-interest. Using paper-made containers for packing food while avoiding plastics by food delivering companies. These smart business decisions create environmental benefits.
3. License to operate: – Fact or explicit permission from government communities and numerous other stakeholders to do business.
4. Reputation: -It’s got to do with the company’s image, strengthens its brand, enlivens morale, and even raised the value of its stock. Reputation seems to be more of insurance to protect them.
In the end, cooperative social responsibility is turned up into cooperating social integration. There is a symbiotic relationship. Reinforces one for others’ sustainability. The glossy report does not say that the company is good. Good corporate look for a good society and vice versa might turn deceptive. They are symbiotic in this way or interrelated with each other. Good deeds done by the corporate cannot be measured quantitatively. There is a difference between image and substance.
Philanthropy + strategy + contribution = CSR
Today is the age of strategy and strategies are made according to the needs and demands of society to bring in profits.
Exterminators Ltd., Sri Lanka’s premier environmental enhancement solutions provider, announced that the company was awarded the ‘International CSR Excellence Award’. Since March 2020 Exterminators has disinfected 151 properties throughout Sri Lanka, free of charge. These properties include elders’ homes, children’s homes, police stations, schools, religious venues, public transport stations, etc. Since July 2020 salaries of Exterminators and employees were increased by 10%-40% according to the performance also donated five company motorbikes to the high-risk COVID-19 disinfection team and further donations were given for children’s education, employee higher studies, and renovating homes.
What do you think about CSR activities?