Corporate Social Responsibility or Corporate Serious Responsibility: Revisiting CSR Law

Abstract

Corporate Social Responsibility in India does not have its beginning from the Companies Act, 2013. The concept of Corporate Social Responsibility has evolved over a period of time. Starting from the concept of corporate philanthropy much water has flown till the recognition of corporate social responsibility. The corporate philanthropy was in existence in India since last so many decades. The corporates like Tatas, Birlas etc. have been engaged in philanthropic work even on a voluntary basis and have spent crores of rupees towards the betterment of society. The corporate philanthropy was done purely on a personal basis and monitored through their close aides without any interference from the government or any other administrative authority. The concept of this corporate philanthropy was, however, different from the concept of corporate social responsibility as we understand now in 2019. Corporate Social Responsibility is basically a societal obligation on business organizations to function ethically and contribute to the economic development of society. According to the dictionary meaning, CSR can be defined as “a company's sense of responsibility towards the community and environment (both ecological and social) in which it operates”. Their ethical obligation towards society is not only restricted to increasing the quality of life of its workforce but also towards the local community and society at large. It is basically a business concept whereby companies incorporate societal and environmental concerns in their business operations and interactions with their stakeholders. Through this, it aims to strike a balance between its environmental and social duty towards society and also fulfilling the expectations of its stakeholders. There is a fundamental difference between CSR, which is a strategic business management concept, and philanthropy which is a purely humanitarian concept. CSR’s contribution to the society will help in building up the reputation of a company and also in strengthening its brand thus establishing its base for a business concept. Therefore, it attempts to align private enterprises to the goal of sustainable global development by providing them with a more comprehensive set of working objectives than just profit alone. CSR, if properly implemented, can be highly beneficial to a company as it enhances the companies access to capital and markets, increases its turnover, reduces working cost, improves productivity, develops customer loyalty and also helps in decision making and risk management process. The earliest recognition of Corporate Social Responsibility as a concept came from the Apex Court’s decision in 19831. The Apex court while deciding a dispute between workmen and a company categorically observed that the traditional view that a company is the property of shareholders is an exploded myth. Today the social scientists and the thinkers regard a company as a living, vital and dynamic, a social organism with a firm and deep-rooted affiliations with the rest of the community in which it functions. The Apex Court also quoted the observation made by the same court in 19502 where it held that “We should bear in mind that a corporation, which is engaged in the production of a commodity vitally essential to the community, has a social character of its own, and it must not be regarded as the concern primarily or only of those who invest their money in it.” In this background, the author makes a humble attempt to study the recent developments in the law relating to Corporate Social Responsibility.