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Corporate Social Responsibility (CSR) refers to transparent business practices that are based on ethical values, and respect for people, communities, and the environment. While there is no universally accepted definition of the term, United Nations Industrial Development Organisation (UNIDO) defines CSR as a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.
The basic question which CSR answers is the ways in which companies can contribute towards a better society through good business practices. CSR is about how companies make profit in a sustainable environment rather than how they spend it. As more and more companies are realizing the relevance of moral practices in their businesses, CSR is adding new dimensions to its definition by adapting to different cultures, communities and countries.
The first generation CSR was about philanthropic ways of making use of profit, second was to minimizing negative impacts of companies’ operations and currently the third generation CSR is evolving with social, ecological and economical factors being a starting point of the business activity rather than the end. The emerging concept of CSR has gone beyond charity and is becoming more about capacity building for sustainable livelihoods which means creating shared values for business and society, for example, treatment of employees, organization of production process, offered and produced products and services in the market etc.
At the time when resources are becoming scarce and population is increasing the major challenge being faced by people, governments and businesses is to find more sustainable forms of growth possible. For this purpose CSR can also be looked at as a catalyst for development of risk and compliance management. It acts not only as the repair system of corporate economy but also as a systematic change of market economy. What is required is stronger integrated perspective based on the system of moral values which are closely related to the company’s core strategy. It takes appropriate organised structures and also employees with utmost integrity to truly realize CSR. Therefore it becomes a matter of individual and institutional ethics.
CSR if treated as an integral part of the company’s core business could enhance the competitiveness of business, increase efficiency of human resources, improve brand image and reputation, strengthen customer loyalty and maximise value of wealth creation to the society.
