Corporate Social Responsibility-The Most Effective Strategy

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We all know that companies take the resources from the environment to make a product. So they all have the corporate responsibility to give back something to society.

This concept is not new in the corporate world. It got implemented way back. So every company has to follow this.

Suppose you start a company producing a pencil. So you need resources such as land, labor, machines, materials, etc. All these things you get from society.

Hence, you are now under the obligation to return something to society. You carry a responsibility to serve people and the environment.

So this is what we call corporate social responsibility.

Now in this blog, we will be learning about corporate social responsibility in detail.

What is in it for me?

What is Corporate Social Responsibility?

By the term itself, you must have understood what social responsibility is. Corporate social responsibility meaning, one has the responsibility to serve society.

Apart from serving the company’s stakeholders, they also have to serve society. They should give back in return.

There are various ways through which they can serve the society and the environment. It depends on the type of product they deal with. They can also help those sections not related to business but are a significant issue to care for.

The root of social responsibility lies in activities such as charity or donation. Most social obligations get concerned with food, water, clothing, education, healthcare, and shelter.

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Importance of Corporate Social Responsibility

Companies must do social activities. However, it is not a legal need. But it a good practice to take social and environmental issues into account.

Thus social responsibility and ethical practices are vital for your company’s success.

Consumers are aware of the aware of its importance. Hence, they trust the product of those businesses more who is up in such activities.

In research, we found that customers buy the product of those companies who does social activities. It sends the message that you are not only interested in making a profit but also care for the society.

It increases your profit margin as people trust you and buy your products.

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Benefits of Corporate Social Responsibility

Benefits will tell you the importance of corporate social responsibility. You will also be clear about why you should make an effort to install it in your organization.

So here are some of its benefits.

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Improve Public Image

When your company does some social activities, it sends a positive message to the public. Apart from earning a profit, you also help in the betterment of society and its well being.

Hence, this builds trust in the public and improves your public image. So try to take on some activities that will help make your company’s goodwill.

Some of the social responsibility of business is:

a. Providing an education facility to poor children

b. Taking care of the cleanliness of the environment

c. Helps in waste management

d. Conducts women empowerment programs

e. Provide the farmers with agricultural equipment

f. Donating to certain charities

So these are some of the activities which your company can take. You can also think of some other activities if you find it a significant issue.

Increase in Brand Awareness

When you serve society, people start recognizing your business. It helps in increasing brand awareness. More and more people come to know about your brand.

It helps in gaining customers. Hence, this results in an increase in sales and your company start earning huge profits.

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Cost Saving

Now you must be thinking of how it leads to cost-saving. Suppose you are supporting the sustainability of the environment. So you will take up such kind of activities that will not hamper the environment.

In this process, you might change the packaging or lessen the packaging layer of the product. You will stop using plastic or less use of it.

Also, one more benefit that you will get is, you will have to spend less on marketing activities in the later stage. You have to invest in the initial step. Hence, it would be best if you conveyed to people about your social responsibility.

After people come to know about it and build trust in your company, you start getting the benefit of word-of-mouth. They spread positive words about your company, and hence your customer starts increasing.

Advantage Over Competitors

By doing social responsibility, your company stands out of the competition. Your competitors are also building the same product as you.

But here you get more benefit of building your public image.


By serving society, you show people that you also care about them. It is not only by providing products but also helping them in other ways without asking for anything in return.

That is selfless service. Hence, this becomes a plus point for your business. Finally, you stand out from the competition, and people start buying your product more.

Increase Customer Engagement

All these activities help in increasing customer engagement with your business. They start walking with your company.

So if your company is up for any social activity, try to convey it to people from wherever possible. Make the use of social media. Make a daily post on all social media platforms.

Try to reach out to people by some traditional methods like ads on television, billboards, posters, etc.

Hence, it will lead to more customer engagement.

Increase Employee Engagement

Today employees work more with those companies who take up some social responsibilities. It boosts their enthusiasm to work for the company.

They enjoy working in such an environment.

Also, when they come to know that your company follows the rules and guidelines of human rights, you build more trust in them. Hence, they work up to the mark.

You also get the benefit because of such activities you can attract more suitable candidates.

Employees Development

Again you must be thinking how. As I said that employees work more with those companies who take up social responsibilities.

So this creates a positive environment in the workplace. Sometimes you also send employees for volunteering activity.

Hence, this develops them personally and professionally. Also, they grow from both aspects, which help them in building their personality. So this is how corporate social responsibilities also benefit employee’s development.

Corporate Social Responsibility Companies Act 2013

The Companies Act 2013 has introduced the concept of corporate social responsibility. It came into effect from the financial year 2014-15.

According to the act, it is mandatory to disclose the activities you have taken as the CSR activity. There should be clear transparency related to it.

In schedule VII of the Act, there is a list of the CSR activities. It suggests that communities must be the focal point. If you take up any activities from this list, it will be considered a CSR activity.

List of CSR activities are:

  • Eradicating the hunger
  • Serving the malnutrition society
  • Reduction of poverty
  • Working for gender inequality
  • Women empowerment

Likewise, there are many more. It is a very long list. You can check out the list of CSR activities mentioned under the act.

Corporate social responsibility in Companies ACT 2013

Corporate Social Responsibility Provisions

Suppose there are 100 companies in the market. It comprises of small, medium, and large companies. So there are some rules and guidelines made by the Companies Act, 2013. It is not compulsory to report CSR activity.

So how to know which companies need to make the CSR report?

Let us have a look at it.

Every company including its holding and subsidiaries falling under any of the criteria given below:

  • The net worth of Rs 500 crore or more or
  • Turnover of Rs 1000 crore or more or
  • Net profit of Rs 5 crore or more

During the immediately preceding the financial year or where the company has not completed three fiscal years since its incorporation, during such immediately preceding financial years.

All such companies have to follow the provisions of CSR under Companies Act, 2013. Also, they have to file the CSR report.

Now you must be thinking………

How much to spend on CSR activities?

There is a provision about the amount to get spent on CSR activities by the companies.

The company must spend 2% of the average net profits of the company made during the three next financial years for CSR activities.

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So by now, you must have understood what corporate social responsibility is. I have tried to explain the term in a straightforward language and in a comprehensive way.

We have also discussed the corporate social responsibility policy, importance, benefits, laws, and provisions of corporate social responsibility. By this, we can conclude that it builds up the goodwill of the company and also gains the advantage of marketing.


1. Why corporate social responsibility is important?

Corporate Social Responsibility is essential because it builds up goodwill for your company. You take resources from society, so you should give back something.

2. Is corporate social responsibility mandatory?

Yes, corporate social responsibility is mandatory for the companies as per the Companies Act, 2013. There are specific provisions for it. If your company is eligible for it, then it is mandatory.

3. Is corporate social responsibility ethical?

Yes, corporate social responsibility is ethical until the company does it for a good cause.

4. How corporate social responsibility pays off?

By taking corporate social responsibility, your company gets the following benefits-
1. The loyalty of the customers
2. Increase in sales
3. Builds up goodwill
4. Ahead of competitors
5. Increase in profit

5. Give corporate social responsibility examples.

Some of the examples of corporate social responsibility are:
1. BMW
2. Amul
3. Levi Strauss & Co.
4. ITC
5. Survey Monkey
6. Starbucks Coffee
7. Ben & Jerry’s
So, these are some of the socially responsible companies. There are many more.

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