4. Corporate Social Responsibility

Corporate Social Responsibility (CSR) is a management concept that helps businesses incorporate social and environmental concerns into their business operations and interactions with stakeholders. CSR is commonly understood as the process by which a company achieves a balance of economic, environmental, and social imperatives ("Triple-Bottom-Line-Attachment") while also meeting the expectations of shareholders and stakeholders. In this regard, it is critical to distinguish CSR, which can be a strategic business management concept, from charity, sponsorships, or philanthropy. Even though the latter can make a significant contribution to poverty reduction and directly improve a company's reputation and brand, the concept of CSR clearly goes beyond that.

A properly implemented CSR program provides several competitive advantages, including improved access to capital and markets, increased sales and profits, operational cost savings, improved productivity, and quality, an efficient human resource base, improved brand image and reputation, increased customer loyalty, and better decision-making and risk-management processes.

CSR policy in India

The CSR policy in India falls under Section 135 of the Companies Act 2013. It is mandatory for the companies covered under section 135 to comply with the CSR provisions in India.
This policy mandates every company with net worth (>500 Cr), Turnover (>1000 Cr) & Net profit (>5 Cr) during any financial year shall constitute a Corporate Social Responsibility Committee/ Board. This board must ensure that the company spends a minimum of 2% of their net profit over the preceding three years as CSR, in every financial year.
Some of the important points to note are:

• The companies shall give preference to the local areas and areas nearby its operation for spending the CSR funds.
• The activities should not be the same which are done by the company in its normal course of business.
• Contents of the CSR Policy should be placed on the company’s website by the board. The activities mentioned in the policy must be undertaken by the company.
• The company can join hands with other companies for undertaken projects or programs or CSR activities and report separately on such programs or projects.
  The CSR policy shall monitor the projects or programs.