There is not any single universally accepted definition of Corporate Social Responsibility, but every definition revolves around the centre idea of responsibilities of corporate entities towards the society & environment. India has become the first country in the world to make Corporate Social Responsibility statutory as well as mandatory, through the new Companies Act 2013. Prior to it, CSR clause was voluntary at the end of companies, though it was mandatory to disclose their CSR spending to shareholders.
The new concept of Corporate Social Responsibility has been introduced under section 135 with Schedule VII of the Companies Act, 2013 and Companies (Corporate Social Responsibility) rules, 2014. The amendment notified in the Companies Act, 2013 requires companies with a net worth of INR 5 billion or more, or an annual turnover of INR 10 billion or more, or net profit of INR 50 million or more, to spend 2% of their average net profits of three years on CSR. The CSR initiatives of companies thrust on creating value in the lives of the communities around its areas of business.
Amid the coronavirus outbreak, the Ministry of Corporate Affairs has notified the companies contributing to expenditure to fight against the pandemic will be considered as CSR activities. The fund so raised shall be used in activities such as promotion of health case, sanitation and disaster management.
The importance and relevance of CSR is highly significant in today’s economy, to ensure the sustainability of life, environment and business for future generations. In India, the term Corporate Social Responsibility (CSR) is widely being used even to related concepts and terms, such as sustainable development, philanthropy, sustainability, corporate citizenship, business responsibility responsible business and corporate responsibility. CSR has been supplementary to implementation of the Sustainable Development Goals (SDGs), which are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. It is a self-regulatory form of corporate conscience included into corporate and business models guaranteeing that the business is accommodating ethical standards of national and international laws and contributing to societal development surrounding it. In common parlance, it is understood as companies providing funding for valuable social causes prevailing.
Importance of CSR –
The overall aim of Corporate Social Responsibility is to impact the society positively while getting the most out of the creation of shared value for the shareholders, stakeholders and even employees. For understanding CSR’s importance in today’s era following threads must be looked into-
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