Corporate social responsibility(CSR) is part of the companies act 2013, implemented by the Corporate Affairs Ministry which states that a private firm or a public sector company should spend at least 2% of their three-year average annual net profit towards CSR on each financial year.
As per the Companies Act 2013, each entity having a net worth of at least Rs 500 crore, minimum turnover of Rs 1,000 crore or a net profit of Rs 5 crore or more are required to spend on CSR.
The private companies will be classified on the basis of annual profit — those having Rs 5 crore or more and entities having less than that level.
Any company can carry out CSR works through a registered trust like us or a society or a separate company.
A Company can also collaborate with other companies for CSR activities provided they have to separately report about spending on such project programmes. And they can utilize 5% out of total CSR expenditure for manpower.
CSR projects can include livelihood enhancement projects, rural development projects, promoting preventive healthcare, sanitation and drinking water. UNWO is involved in all the said projects and has expertise network in executing them all.
Within the world of business, the main “responsibility” for corporations has historically been to make money and increase shareholder value. In other words, corporate financial responsibility has been the sole bottom line driving force. However, in the last decade,a movement defining broader corporate responsibilities–for the environment, for local communities, for working conditions, and for ethical practices–has gathered momentum and taken hold. This new driving force is known as corporate social responsibility (CSR).
What is Corporate Social Responsibility in detail ?
While there is no universal definition of corporate social responsibility, it generally refers to transparent business practices that are based on ethical values, compliance with legal requirements, and respect for people, communities, and the environment. Thus, beyond making profits, companies are responsible for the totality of their impact on people and the planet.1 “People” constitute the company’s stakeholders: its employees, customers, business partners, investors, suppliers and vendors, the government, and the community. Increasingly, stakeholders expect that companies should be more environmentally and socially responsible in conducting their business. In the business community, CSR is alternatively referred to as “corporate citizenship,” which essentially means that a company should be a “good neighbor” within its host community.
Why do companies decide to get involved in CSR, and how do they benefit?
Today, more and more companies are realizing that in order to stay productive, competitive, and relevant in a rapidly changing business world, they have to become socially responsible. In the last decade, globalization has blurred national borders, and technology has accelerated time and masked distance. Given this sea change in the corporate environment, companies want to increase their ability to manage their profits and risks, and to protect the reputation of their brands. Because of globalization, there is also fierce competition for skilled employees, investors, and consumer loyalty. How a company relates with its workers, its host communities, and the marketplace can greatly contribute to the sustainability of its business success.