This article has been written by Mr. Aditya Raj Pandey, a 2nd Year BA LLB student from Symbiosis Law School, Hyderabad

In today’s era, after liberalization, modernization and urbanization, the corporate firms or the company’s started growing rapidly but along with the growth and development, it is equally vital to give back to the society. The idea & notion of CSR (Company Social Responsibility) is based on it and it is also true that, if we take something from the society which helps in growth and upliftment then we have to give them back something and thus CSR is necessary. It is also important to penned down that, through Corporate Social Responsibility, the companies contributes to the welfare of the society in some way or the other. 

Corporate Social Responsibility, the term and the concept were first introduced by Howard Bowen in the year 1953 and thus he was known by the name of Father of CSR. In actual sense, if we looked into the history, we find out that, he coined the term Social Responsibility of Businessman and this was later changed by some renowned economists to CSR, which we still use today in a lot many ways. 

In our country, India, on the 1st Day of April 2014, the corporate social responsibility was embedded in Indian laws and legislations and according to the same, it is mandatory for the companies to gave 2 percent of their net profits from past three years on the CSR. Now, as I stated that CSR was incorporated in Indian Laws, so chiefly it is incorporated under Section 135 of Comapnaies Act, 2013 along with one more act which is solely related to corporate social responsibility named as, Companies (CSR Policy) Rules, 2014. In the present scenario, both of the rules guides and controls the corporate social responsibility and hence made it effective to the large extent. 

Overall, in general senses, we can state that, Corporate Social Responsibility is an act of the company or corporate firm through which it puts forward its concern as well as commitment for the society in general in which it functions or operates in connection with sustainable growth and upliftment of the society.  

Importance or the Need of Corporate Social Responsibility 

Today, with the increasing cases of unhealthy attitude of firms in the society, it is vital to enact and follow the corporate social responsibility policy of the government. Apart from this, there were many other reasons as well for which we needed the same, and the reasons are stated below: 

1. CSR policy is vital due to the reason because it depicts the consideration of a corporation towards the environment and society in general. Along with this, their image is also improved if they do CSR in definite manner. 
2. It is evident from the past few years, that those firms which undertake CSR and focus its working on developmental projects, then these companies are more favoured by the general public as well as customers in the market for them. Therefore, indirectly we can say that the profits of the company increases once it started following CSR properly. 
3. Also, Corporate social responsibility, helped a lot in making the brand value of any corporation as such and along with it, CSR aids to build a strong relationship with the customers of particular firm. 
4. After observing all the above mentioned points, it is very much clear that, CSR helped corporations a lot in order to gain profit from customers and hence we can say that corporate social responsibility provided free publicity or advertisement in the society among the valuable customers. 
5. Apart from all these needs and requirements, the CSR is equally needed in order to make employees of the corporation loyal to their works as well as making companies ethical in the best manner possible and also make it more genuine and authentic than it was before. All these helps directly or indirectly in fiscal matters through market shares and less legal issues. 

The above mentioned points are the typical need of the Corporate Social Responsibility. Now, is it possible that any company will give their some percent of share for the welfare of the society ? In today’s generation, its almost impossible. But in order to make impossible things into the possible matters, the laws related to Corporate Social Responsibility was drafted and enacted through Company Law, 2013 as well as a separate legislation. The set of rules and legislations ensures that, the social responsibility of the corporations is duly fulfilled by the firms and obeyed by all the employees irrespective of the position or designation.

Corporate Social Responsibility Committee 

Once the law has been made and enacted, it is not necessary that ever corporation would follow the laws or compliance with the same effectively without any issues. 

In the recent trends, we observe that there were many firms who are not complying with the laws and regulations of corporate social responsibility. Therefore, the government in order to enact these laws properly ordered the corporation to have a proper committee which vigilantly deals with CSR and sustainability related to it. 

Under section 135 of Companies Act, 2013, it is mandatory to form the group and the composition is in such a manner that, there must be three directors or two directors at least, as it deems fit. Also, if a firm is a foreign corporation, then one member must be an Indian and other can be someone who is nominated by foreign corporation. The two members provision are generally for private entities as sometimes they only have two directors rather than three. 

Now, moving on to the duties which is assigned to the committee or believe to be fulfilled by the group formed. The first one among that is, Policy creation. The committee formed have to create policies for the proper implementation of corporate social responsibility. In line with this, they also have to ensure that proper execution should takes place and the money allocated and audited should be used solely for this purpose. Apart from all these, the committee should make proper reports which depicts the work done in respect of social responsibility and ensures that at least 2% from the ample profits goes for the society. 

Last but not the least in this context, if any organisation failed to fulfilled the duties and shares under corporate social responsibility and they are liable to fine and punishment under Companies Act, 2013. The act provides that, the court of law can impose the fine from fifty thousand to twenty five lakhs and not only this much, the fine can be imposed on the concerned authority as well and the same ranges from 50,000 to 5 lakhs along with imprisonment for the term of three long years.

Now, an important aspect to penned down here is that, the compliance with the CSR is very much necessary for the companies or organization, not for the present only but also for the future benefits. For the sustainable growth and development, the policies helped all of us a lot and in today’s generation the importance of sustainability is very high. It is because the resources are draining much faster and in order to survive later, we need to use them in well defined manner and hence we need sustainable development and CSR contributes in sustainability in various different manners.

Conclusion 

Corporate Social Responsibility is a very vital aspect for the organization as they contributes for the society in one way or the other. It is drafted and enacted with a viewpoint that, the firms point of view will change towards the society and in turn the government will also get benefited because sometimes the localities will also help and provide aids to the them. Although CSR is implemented with the good intentions and motive to give something back to society, but all in all we observe that the CSR is quietly failed to delivered what it actually want to deliver in various different perspectives. The prime reason is that, the proper enactment or implementation didn’t takes place and also government have to be more vigilant along with the CSR committees then only some benefits to the society is possible in the real and genuine sense.  

REFERENCES 

1. Sustainability and Corporate Social Responsibility, Anil Kumar, University of Delhi
2. Corporate Social Responsibility, Nikunj Keyal, blog, Legal Services India. 
3. Corporate Social Responsibility Under Company Law, Sakina Khambati, Law Times Journal
4. Corporate Social Responsibility Under Companies Act, Preeti Verma, Tax Guru
5. Corporate Social Responsibility under Companies Act, 2013, Radhika, Legal Services India, e journal
6. Corporate Social Responsibilities under Companies Act, Saurabh Kumar, iPleaders
7. Corporate Social Responsibility and Sustainability: What is the difference?, Green Business Bureau

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