Q1.

Carroll's Model of CSR

Archie B. Carroll introduced The Social Performance
Model' in 1979. The model regards CSR as a multi-layered
four interrelated aspects joined together into one Corporate
Social Performance. Carrol stated a four-dimensional
definition that describes the social responsibility of business
in more exhaustive and complete way than previous
definitions. "The social responsibility' of business
encompasses the economic, legal, ethical and discretionary
expectations that society has of organizations at a given,
point of time. This suggests that responsibility of the
business encompasses not only basic responsibilities such as
economic and legal ones but also ethical which goes beyond regular activities of companies and
philanthropic acts which although voluntary, are desired by the society. The definition consists of all
social expectations for the business. Carrol regards CSR as a multi-layered four inter-related aspects:
(a) Economic,
(b) Legal,
(c) Ethical, and
(d) Philanthropic responsibilities.
The four aspects of CSR are presented in layers within a pyramid which can be seen as follows:
Philanthropic Desired by Society Responsibilities
Ethical responsibilities (Expected by Society)
Legal responsibilities (Required by Society)
Economic Responsibilities (Required by Society)
The total corporate social responsibility of business entails the simultaneous fulfillment of the firm's
economic legal, ethical. And philanthropic responsibilities. Stated in more static to the CSR firm
should strive to make a profit, obey the law, be ethical, and be a good corporate, citizen. For example,
a Food Company which has decided to produce healthy yogurts and donate part of the sales income to
the destitute in an area This is an example of the action
which falls under every single responsibility suggested in the model. These can be explained as
follows:
The four responsibilities displayed on the pyramid are:
ECONOMIC
• This is the responsibility of business to be profitable
• Only way to survive and benefit society in long-term
LEGAL
1. This is the responsibility to obey laws and other regulations
2. E.g. Employment, Competition, Health & Safety
ETHICAL
• This is the responsibility to act morally and ethically
• With this responsibility, businesses should go beyond narrow requirements of the law
• E.g. Treatment of suppliers & employees
PHILANTHROPIC
• This is the responsibility to give back to society
• The responsibility is discretionary, but still important
• E.g. charitable donations, staff time on projects
Evaluating Carroll's CSR Pyramid
Strengths
• The model is easy to understand
• Simple message – CSR has more than one element
• Emphasises importance of profit
Weaknesses
• Perhaps too simplistic?
• Should ethics be at the top?
• Businesses don’t always do what they claim when it comes to CSR

Q2. Linkages between Society and Corporate world

Before understanding the Corporate Social Responsibility, let us first understand how the corporate
world links with the society. For better understanding we take the help of a two sector and two market
model that is Circular-Flow Diagram from economics which explains how the economy is organized
and shows the way participants interact with one another in the economy for fulfilling their
requirements.

(Principles of Economics, N. Gregory Mankiw)

In this model we consider two sector firms and households as the decision maker. Firm represents
the business houses, corporate world and companies which are known as producing sector while
household represents the society which is known as consuming sector. Firms produce and sell
different variety goods and services that are needed by the people of the society. For producing such
goods and services it requires certain input like capital ,land and labour are called as factors of
production. Households buy the goods and services that firms produce. In market for factors of
production, household sells those factors that needed by the farms to produce the desire outputs
and firms buys that factors of production from the household. The two loops in diagram depict the
inner loop representing the flows of input and outputs and the outer loop representing the flow of
corresponding money. The firms receive the same money by selling goods and services is known as
revenue of the firm and use those to pay for the elements of manufacturing, such as the wages and
salaries to their workers, house rent paid interest on capital, etc. The firms use some of the revenue
to pay for the elements of production, inclusive of the wages of their workers. What’s left is the
profit of the company proprietors, who themselves are participants of households.

Q3. Drivers Of CSR

1. Globalization: The consequence of cross-border trade, multinational enterprises and global supply
chains, there is an increased awareness of CSR concerns related to HR management practices,
environmental protection, and health and safety, among. Other things. In a the increasingly fast-paced
global economics initiatives. Enable corporate to engage in more meaningful and regular stakeholder
dialogue and thus be in a better position to anticipate and respond to regulatory, economic, social and
environmental changes that may. Occur.
Financial investors are increasingly incorporating social and environmental criteria when making
decisions about where to place their money, and are looking to. maximize the social impact of the
investment at local or regional levels.
2. International Legal Instruments and Guidelines: In the recent past, certain indicators and
guidelines such as the SA8000, a social performance standard based on International Labour.
Organization Conventions have been developed UN&OECD agencies have developed compacts,
declarations, guidelines principles and other instruments that set the tone for social norms for
organizations, though these are advisory for organizations and not mandatory. The Global Compact is
a framework issued by UN, for businesses that are committed to aligning their business operations
and strategies with ten universally accepted principles that postulate that companies should embrace,
support and enact a set of core values in the areas of human rights, labour standards, the environment,
and anti-corruption.
3. Altering Public Expectations Corporate Brand: Globally companies are 'expected to do more
than merely provide jobs and contribute to the economy through taxes and employment. This has led
to an increasing expectation that companies will be more open, more account. able and .be prepared to
report publicly on their performance in social and environmental arenas. Businesses are recognizing
that adopting an effective approach to CSR can open up new opportunities, and increasingly
contribute to the corporates ‘ability to attract passionate and committed workforces.

Q4.Millennium Development Goals (MDG)

In September 2000, leaders of 189 countries gathered at the United Nations headquarters and signed
the historic Millennium Declaration, in which they committed to achieving a set of eight measurable
goals that range from halving extreme poverty and hunger to promoting gender equality and reducing
child mortality, by the target date of 2015.
The MDGs were revolutionary in providing a common language to reach global agreement. The 8
goals were realistic and easy to communicate, with a clear measurement/monitoring mechanism.
The Millennium Development Goals (MDGs)
Goal 1 Eradicate extreme poverty and hunger

Goal 2 Achieve universal primary education

Goal 3 Promote gender equality and empower women

Goal 4 Reduce child mortality

Goal 5 Improve maternal health

Goal 6 Combating HIV/AIDs, malaria, and other diseases

Goal 7 Ensure environmental sustainability

Goal 8 Develop a global partnership for development

Substantial progress has been made regarding the MDGs. The world has already realized the first
MDG of halving the extreme poverty rate by 2015. However, the achievements have been uneven.
The MDGs are set to expire in 2015 and the discussion of a post-2015 agenda continues. The focus is
now on building a sustainable world where environmental sustainability, social inclusion, and
economic development are equally valued.
The MDG fund contributed directly and indirectly to the achievement of the MDGs. It adopted an
inclusive and comprehensive approach to the MDGs. The approach was guided by the Millennium
Declaration and its emphasis on development as a right, with targeted attention directed towards
traditionally marginalized groups such as ethnic minorities, indigenous groups, and women.

The Global Consultation of Sustainable Development Goals (SDG)

The Rio+20 conference (United Nations Conference on Sustainable Development) in Rio de Janeiro,
June 2012, galvanized a process to develop a new set of Sustainable Development Goals (SDGs)
which will carry on the momentum generated by the MDGs and fit into a global development
framework beyond 2015.
In the interest of creating a new, people-centered, development agenda, a global consultation was
conducted online and offline. Civil society organizations, citizens, scientists, academics, and the
private sector from around the world were all actively engaged in the process. Activities included
thematic and national consultations, and the My World survey led by the United Nations
Development Group. Specialized panels were also held and provided ground to facilitate
intergovernmental discussions. The UN Secretary General presented a synthesis of the results of these
consultation processes.
In July 2014, the UN General Assembly Open Working Group (OWG) proposed a document
containing 17 goals to be put forward for the General document set the ground for the new SDGs
and the global development agenda spanning from 2015-2030.

Goal 1 End poverty in all its forms everywhere

End hunger, achieve food security and improved nutrition, and promote sustainable
Goal 2
agriculture

Goal 3 Ensure healthy lives and promote well-being for all at all ages

Ensure inclusive and equitable quality education and promote life-long learning
Goal 4
opportunities for all

Goal 5 Achieve gender equality and empower all women and girls

Goal 6 Ensure availability and sustainable management of water and sanitation for all

Goal 7 Ensure access to affordable, reliable, sustainable, and modern energy for all
 Promote sustained, inclusive and sustainable economic growth, full and productive
Goal 8
employment, and decent work for all
Difference between MDG and SDG
MDG SDG
1. Full form Millennium Development Goal(MDG) Sustainable Development
Goal(SDG)
2.Number of 8 goals (limited goals) 17 goals (more comprehensive)
Goals
3.Number of 21 169
Targets
4.Scope General scope,focus Social Economic growth, social inclusion
& environmental protection
5.Implication 2000-2015(MDGs are the predecessor 2015-2030(SDGs are successor to
framework of SDG) the MDGs)
6. Target Developing countries, particularly the All countries
poorest
7.Approach Top-Down Process Inclusive goal setting process
8.Target Target Developing countries, Entire world (rich and poor)
particularly the poorest (The MDGs
were in the context of “rich donors
aiding poor recipients.”)
9.Formulation Produced by a group of experts Result of consultation process
among: -193 UN Member States -
Civil society -Other stakeholders
10.Focused areas MDG could not focus holistically on SDG focuses holistically on
development. It mainly focused on development.
social dimensions and better health
11.Source of MDGs were largely envisioned to be SDGs put sustainable, inclusive
funding funded by aid flows, which did not economic development at the core
materialize of the strategy
12.Delivery focus Narrow: Poverty reduction Broad: Global development with
and for sustainability. Beyond the
symptoms of poverty to issues of
peace, stability, human rights and
good governance.
13.Statistics used Traditional Statistics Traditional Statistics + data
revolution
14.Focus The MDG targets for 2015 were set to The SDGs are designed to finish the
get us “half way” to the goal of ending job – to get to a statistical “zero” on
hunger and poverty, with similar hunger, poverty, preventable child
proportional goals in other fields. deaths and other targets.
15. Funds for The MDGs were largely envisioned to SDG address the ability of countries
implementation be funded by aid flows. and also social challenges largely
through improving their own
revenue generating capabilities.
16.Prioritization Prioritized social needs over economic Three dimension: Economic, Social
of goal and environmental ones (Seven social and Environmental Aspects
goal and just one environmental goal)
17. Disabilities No reference to person with disabilities 7 references in SDG: education(2),
concern employment inequalities, inclusive
cities(2), disaggregation of data by
disability.
 18.Nature of goal Simplicity Single set of goals of 21st century
Universal goal
19.Scope of work MDG only emphasized on the SDG emphasizes on present and
prevalent challenges upcoming challenges
20.Cost MDGs were less costly compared to SDGs are much more costly
SDG compared to MDGs

Q5. What is the United Nations Global Compact?

The United Nations Global Compact is a strategic initiative that supports global companies that are
committed to responsible business practices in the areas of human rights, labour, the
environment, and corruption. This UN-led initiative promotes activities that contribute to sustainable
development goals to create a better world.
• The UN Global Compact has 10 operating principles outlining these values.
For example, a corporation that is part of the UN Global Compact could commit to providing free
Wi-Fi access in remote areas of the world.
Understanding the United Nations Global Compact
• The UN Global Compact is based on 10 principles that should define a company’s value
system and approach to doing business. These principles were collectively founded in the
Universal Declaration of Human Rights, the International Labor Organization’s Declaration
on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and
Development, and the UN Convention Against Corruption. Member companies are expected
to engage in specific business practices that benefit the people and the planet while pursuing
profitability with integrity.
Member Company Responsibilities of the UN Global Compact
• Member companies of the UN Global Compact are expected to act in environmentally
responsible ways with regard to climate change, water and sanitation, energy, biodiversity,
and food and agriculture. They are also expected to recognize the link between
environmental issues, and social and development priorities.
• Member companies must also be focused on social sustainability, particularly human rights
as they apply to labor, women’s empowerment and gender equality, children, indigenous
peoples, people with disabilities, and people living in poverty. The compact believes that
protecting human rights is primarily a government responsibility but businesses should
contribute or, at a minimum, avoid harm.
Ways in which businesses can contribute to human rights include creating jobs, developing goods
and services that help people meet their basic needs, promoting public policies that support social
sustainability, partnering with other businesses to have a greater impact, and making strategic social
investments.
Incentives for Businesses to Support the UN Global Compact
• Companies might choose to join the compact because of the importance of corporate codes of
conduct for developing and maintaining positive relationships with customers, employees, and
other stakeholders, and to avoid regulatory and legal problems. Businesses may support the
compact for the greater good but also because operating in environments associated with poverty
and inequality where the rule of law is weak can harm the company’s reputation and bottom line.
• Further, companies that commit to sustainability may have an advantage in accessing untapped
markets, attracting and retaining business partners, developing innovative new products and
services while operating in a lower-risk environment, and encouraging employee satisfaction and
productivity.
• An example of sustainable activity by a member company is to support inclusive, equitable
quality education and promote lifelong learning opportunities for all. A company might
partner with governments and other companies to create open-source technology. This
technology can deliver education to hard-to-reach communities and develop low-cost learning
materials for under-resourced schools.
The Ten Principles of the UN Global Compact
Derived from core United Nations conventions and declarations, the Ten Principles of the UN Global
Compact are recognized and endorsed in numerous intergovernmental resolutions and outcome
documents, including General Assembly resolutions. To join the UN Global Compact, a company’s
highest-level executive publicly commits to the Secretary-General that the company will take a
responsible, principle-based and integrated approach to addressing United Nations development
goals guided by the Principles, signalling the company’s potential to be a strong, long-term partner
of the Organization. The Ten Principles of the UN Global Compact are:
1. Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed
human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
2. Labour
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the
right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
3. Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.
4. Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and
bribery.
• With more than 9,500 companies and 3,000 non-business signatories based in over 160
countries—including a majority based in developing countries—and 70 local networks, we are
spreading the word far and wide that businesses everywhere can play an important role in
improving our world. By bringing to the table a diverse range of stakeholders from government,
investor groups, academia, civil society and beyond, we provide opportunities for strong
partnerships and a framework through which the private sector can take concrete action to do
business responsibly and keep their commitments to society.
• As the current United Nations Secretary-General, António Guterres, has said, “The private sector
can and must play a central role in this effort by advancing international cooperation, engaging
in public-private partnerships, finding innovative solutions to shared challenges and doing
business responsibly.”
• At this pivotal moment in United Nations development system reform, taking partnerships to the
next level has never been more important. A recent study shows that while 100 per cent
of United Nations leaders surveyed believe that greater collaboration across sectors will be
critical in advancing the 2030 Agenda for Sustainable Development, only 59 per cent think
that the Organization is currently doing enough to engage with the private sector.1
• Transforming Partnerships for the SDGs: -
In the UN Global Compact-Accenture Strategy CEO Study, the largest study of CEO opinions
on sustainability, we described an emerging pathway for business on sustainability. The adoption
of the Sustainable Development Goals, said CEOs, gave business a clear mandate and roadmap
to scale up their efforts

Q6. Indian Company Law in CSR

Corporate Social Responsibility (CSR) in India is primarily governed by the Companies Act, 2013. The
relevant provisions related to CSR are outlined in Section 135 of the Act along with Schedule VII.
Below is an overview of the key aspects of CSR in Indian Company Law:
1. Applicability:
• CSR provisions apply to companies meeting certain criteria:
o Net worth of INR 500 crore or more,
o Turnover of INR 1,000 crore or more,
o Net profit of INR 5 crore or more during the immediately preceding financial year.
2. Constitution of CSR Committee:
• Every qualifying company must constitute a Corporate Social Responsibility Committee consisting
of:
• Three or more directors, including at least one independent director.
3. Formulation of CSR Policy:
• The CSR Committee is responsible for formulating and recommending the CSR policy to the
Board for approval.
4. CSR Expenditure:
• Companies falling under the specified criteria must spend at least 2% of their average net profits
made during the three immediately preceding financial years on CSR activities.
5. CSR Activities:
• Schedule VII of the Companies Act, 2013, outlines a list of activities that can be undertaken by
companies for CSR. These include, but are not limited to, eradicating hunger, promoting
education, gender equality, environmental sustainability, and more.
6. Reporting Requirements:
• The Board's report must include an annual report on CSR containing particulars specified in the
Companies (Corporate Social Responsibility Policy) Rules, 2014.
7. Role of CSR Committee:
• The CSR Committee is responsible for ensuring that the company spends the prescribed CSR
amount and monitors the implementation of CSR projects.
8. CSR Impact Assessment:
• The CSR Committee is required to monitor and evaluate the impact of the CSR activities
undertaken by the company.
9. Surplus from CSR Activities:
• Any surplus arising out of the CSR activities shall not form part of the business profit of the
company.

10. Penalties for Non-Compliance:

• Companies failing to spend the required amount on CSR are required to provide reasons for the
same in their Board report. Non-compliance may lead to penalties.

11. CSR Amendments:

• Amendments to the CSR provisions may occur, and companies are advised to stay updated with
any changes in the law.

Q7. Corporate Social Responsibility Under Section 135 of Companies Act 2013
Corporate Social Responsibility (CSR) implies a concept, whereby companies decide voluntarily to
contribute to a better society and a cleaner environment – a concept, whereby the companies integrate
social and other useful concerns in their business operations for the betterment of their stakeholders and
society in general in a voluntary way.
CSR Applicability in India
The provisions of CSR applies to:
• Every company
• Its holding company
• Its subsidiary company
• Foreign company
Having in the preceding financial year:
• Net worth > 500 crore
• Turnover > 1000 crore
• Net profit > 5 crore
Sr.No CSR Activities

1 Eradicating poverty, hunger and malnutrition, promoting health care which includes sanitation and
preventinve health care, contribution to the Swach Bharat Kosh set-up by the Central Government
for the promotion of sanitation and making available safe drinking water.

2 Improvement in education which includes special education and employment strengthening vocation
skills among children, women, elderly and the differently-abled and livelihood enhancement projects.

3 Improving gender equality, setting up homes and hostels for women and orphans, setting up old age
homes, day care centres and such other facilities for senior citizens and measures for reducing
inequalities faced by socially and economically backward groups.

4 Safeguarding environmental sustainability, ecological balance, protection of flora and fauna, animal
welfare, agroforestry, conservation of natural resources and maintaining a quality of soil, air and
water which also includes a contribution for rejuvenation of river Ganga.

5 Protection of national heritage, art and culture including restoration of buildings and sites of
historical importance and works of art; setting up public libraries; promotion and development of
traditional arts and handicrafts.

6 Measures for the benefit of armed forces veterans, war widows and their dependents, Central Armed
Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents
including widows.

7 Training to stimulate rural sports, nationally recognized sports, Paralympic sports and Olympic
sports.

8 Contribution to the Prime Minister’s National Relief Fund, Contribution to the Prime Minister’s
National Relief Fund (PM-CARES) or any other fund set up by the Central Government for socio-
economic development providing relief and welfare of the Scheduled Castes, the Scheduled and
backward classes, minorities and women.

9 Contribution to incubators or research and development projects in the field of science, technology,
engineering and medicine, funded by the Central Government, State Government, Public Sector
Undertaking or any agency of the Central Government or State Government.
 10 Contributions to public funded Universities, IITs, National Laboratories and autonomous bodies
established under DAE, DBT, DST, Department of Pharmaceuticals, Ministry of AYUSH, Ministry
of Electronics and Information Technology and other bodies, namely DRDO, ICAR, ICMR and
CSIR, engaged in conducting research in science, technology, engineering and medicine aimed at
promoting Sustainable Development Goals (SDGs).

11 Rural development projects.

12 Slum area development.

13 Disaster management, including relief, rehabilitation and reconstruction activities.

Role of Board of Directors

The role of the Board of Directors is as follows:

• After considering the recommendations made by the CSR Committee, approve the CSR policy

for the Company.

• The Board must ensure only those activities must be undertaken which are mentioned in the

policy.

• The Board of Directors shall make sure that the company spends in every financial year, a

minimum of 2% of the average net profits made during the 3 immediately preceding financial

years as per CSR policy.

• In case a company has not completed 3 financial years since its incorporation, the average net

profits shall be calculated for the financial years since its incorporation.

• The Board’s Report shall disclose:

• CSR Committee’s composition

• The contents of CSR Policy

• In case CSR spending does not meet 2% as per CSR Policy, the reasons for the

unspent amount, and details of the transfer of unspent amount relating to an

ongoing project to a specified fund (transfer within a period of six months from

the expiry of the financial year).