why stakeholders like government, suppliers and investors are important for this/these companies mentioned in the background and how have they influenced the company’s Corporate Social Responsibility actions?
This is a governance in global world group assignment, the topic is Corporate Social Responsibility is now embedded in corporate practice and my part is as followed. Please answer this question with 1200 words, and have at least 6 references with Harvard reference style why stakeholders like government, suppliers and investors are important for this/these companies mentioned in the background and how have they influenced the company’s Corporate Social Responsibility actions? Background In today’s time, there is a growing concern about sustainability of the environment. Since, the time of origin, human beings have always strived for making their lives easy to live. For this purpose, the humans have made all possible efforts to make innovations in variety of fields. This has made human reach till moon and come back. Till today’s date millions of innovations have happened with the help of which variety of products and services have evolved. All these activities were done at the cost of natural resources available in the environment. All these efforts by humans have made their lives very easy to live while on the other hand there is huge impact of all these activities on our environment in several ways. These impacts may include depletion of natural resources, reduced water qualities, increased pollution and emission of greenhouse gases. These effects are contributing to overall change in the global climate. This global climate change is an issue of concern which should be taken care of. Hence, it a needed that the resources shall be sustainable so that future generations would also be able to use them. Such growing concern about environmental sustainability have gained importance in terms of sustainable product innovations. Hence, companies are striving hard so that innovations and sustainability go hand in hand. These practices are beneficial for the companies in terms of organisational legitimacy, reputation and performance. (Varadarajan, 2015, p. 14) In addition to that, one of the standards business practices adopted by companies is “Corporate Social Responsibility”. According to (W. Timothy Coombs, 2011, p. 8) “Corporate Social Responsibility” is defined as “Voluntary action that a corporation implements as it pursues its mission and fulfils perceived obligations to stakeholders including employees, communities, the environment and society as a whole”. This definition focusses on aspects of “triple bottom line” which are concern for “people”, “environment” and “profit”. It can be said that CSR initiative by a company is a voluntary action. According to (W. Timothy Coombs, 2011, p. 8) If the CSR initiatives are not done voluntarily but enforced by law then such activities does not qualify to be socially responsible activities. Voluntary contribution contributes to involvement in social issues which does not have any connection with the profit margin. These issues may include local, national or global level issues. In contrast with this argument, India is one such country where CSR is mandatory and enforced by Law. According to Companies Act 2013, in India, under section 135, the company having; 1. Net worth of Rs. five hundred crores or more, or 2. Turnover of Rs. One thousand crores or more, or 3. Net profit of Rs. Five crores or more During any financial year shall constitute CSR committee of the board which will be responsible for; 1. Formulating and recommending CSR policies to be implemented by the company 2. Recommend the amount of expenditure to be incurred for the CSR activities and; 3. Monitor the CSR activities conducted by the company from time to time. (Affiars, n.d.) According to CSR legislation in India, the law mandates all the companies to give 2 % of their net profits to charitable clause. (Chhabra, 2014) In India, ITC Limited is one such company which is highly engaged in CSR activities. Basically, ITC Limited is one of India’s multi-business enterprise which is rated among world’s best big companies. The company also features one of the world’s largest sustainable value creator in the consumer goods industry. (Value, 2017) The company has diversified its business into six major sectors which are “Fast moving consumer goods”, “Hotels”, “paperboards and speciality papers”, “packaging”, “Agri-business” and “Information technology”. (Value, 2017) The company is widely perceived as “dedicatedly nation oriented organisation” since it is acknowledged as global exemplar in sustainability. (Value, 2017) The company believes that performance of the company should be measured with respect to “triple bottom line” aspects in terms of contribution to build economic, social and environmental capital to enhance societal sustainability. (Values, 2017) Therefore, ITC strives to craft unique models to generate livelihood and environmental capital. So, it implements such CSR practices which are sustainable, and have significant impact on livelihood creation and environmental replenishment. The CSR practices adopted by the company are mentioned as follows: 1. Promoting education, contribution to rural development in India, providing preventive healthcare, sanitation and drinking water, creating livelihood for the disadvantaged section of the society in rural India etc. 2. Efforts to develop required capability and self- reliance beneficiaries particularly for women with a belief that these are the prerequisites for social and economic development. 3. To conduct CSR programs in the areas which comes in the economic vicinity of operations of the company to enable close supervision and make sure that there is a significant impact on maximum development. 4. To conduct CSR programs in relevant local areas to fulfil the commitments which arise out of the requests from regulatory bodies or government authorities. 5. To promote sustainability with partnership with industry association such as “Confederation of Indian Industry” relating to CII-ITC Centre of Excellence for sustainable development so that there will be a huge impact on the activities. 6. To provide training for skill building and vocational training to increase the employability and generate livelihood for the disadvantaged section of the society. (Values, 2017) The company implements all the above- mentioned activities with the help of either company personnel or external agencies or through “ITC Education trust”, “ITC Rural development trust”, “ITC Sangeet research academy” and many more. (Values, 2017). Governance of these activities is carried lawfully. The committee for CRS and sustainability places a brief plan to board to approve for the CSR activities to be conducted in a financial year along with the specified budget for it. The bodies wo which implementation is assigned carry out such CSR programs as determined within the specified budget and timeframe. In the end of every financial year, the CSR and sustainability committee does submit its report to the board. (Values, 2017) This can be viewed as a good practice of corporate social responsibility activities. Works Cited Affiars, M. o. C., n.d. 135. Corporate Social Responsibility. [Online] Available at: http://www.mca.gov.in/SearchableActs/Section135.htm [Accessed 25 September 2017]. Chhabra, E., 2014. Corporate Social Responsibility: Should It Be A Law?. [Online] Available at: https://www.forbes.com/sites/eshachhabra/2014/04/18/corporate-social-responsibility-should-it-be-a-law/#28cccc533736 [Accessed 25 September 2017]. Value, I. E., 2017. Our Profile. [Online] Available at: http://www.itcportal.com/about-itc/profile/index.aspx [Accessed 25 September 2017]. Values, I. E., 2017. Corporate Social Responsibility Policy. [Online] Available at: http://www.itcportal.com/about-itc/policies/corporate-social-responsibility-policy.aspx [Accessed 25 September 2017]. Varadarajan, R., 2015. Innovating for sustainability: a framework for sustainable innovations and a model of sustainable innovations orientation. Jornal of Academy of Marketing Science, 18 August.pp. 14-36. W. Timothy Coombs, a. S. J. H., 2011. Managing Corporate Social Responsibility : A Communication Approach. 1 ed. s.l.:John Wiley & Sons, Incorporated.