The European Commission defines CSR as the responsibility of enterprises for their impacts

on society1
The United Nations Industrial Development Organisation (UNIDO) has defined corporate
social responsibility (CSR) as a management concept whereby companies integrate social
and environmental concerns in their business operations and interactions with their
stakeholders. CSR is a way in which companies achieve a balance of economic,
environmental and social imperatives.
Companies that have developed in a big way have been practicing CSR. A lot of
multinational companies contribute towards the development of societies in which they
operate. CSR is a lot more than just philanthropy. It is another aspect of CSR which is
generally done without expectations of any returns; it is ad-hoc giveaways, less related to the
core operations of the company. On the other hand, corporate social responsibility is more a
focused form of philanthropy directed towards specific stakeholders with clear expectations
of a continued profitability in the long run. Many large companies now give CSR a clear
strategic dimension and make it part of their core business activities. Rather than giving
simple cash donations, it proves more valuable to device ways to deliver leadership in society
through corporate expertise, insight and experience. It manifests, for example, in an airlines
investing in carbon reduction schemes, supermarkets targeting responsible sourcing and
energy and mining companies targeting environmental issues. In a similar vein, many
companies align their CR activities along their professional expertise. Technology firms
typically invest in technology-led projects, while pharmaceuticals companies focus on public
health issues and drug access issues. Thus, on their part, charities and community
organizations need to think more strategically about the prospective corporate partners which
can help them achieve their goals. They should consider a wide range of potential support
from corporate partners and not focus solely on short-term cash contributions.
The large scale philanthropic activities in India were undertaken post-independence, which
led to the setting up of some of the most prestigious institutions of professional education.
Companies also contributed by making donations to non-governmental organisations (NGOs)
and their own trusts, which were deductible under Section 80 G of the Income Tax (IT) Act.
However, the donations were not transparent and lacked accountability.
It was argued by the Popular business mindsets that companies should restrict their affairs to
maximizing profits for their shareholders and not take liberty of diverting their profits to
non-business activities; if the shareholders want they can use their money for social purposes.
This narrow focus on the welfare of shareholders alone is now increasingly criticized in
favour of adopting CSR related policies. A company makes profits with the help of
stakeholders like staff, suppliers, customers, communities and the environment; without them
it cannot survive or sustain in the long run. Shareholders alone cannot run the company or
make profits. Therefore, CSR initiatives are essential to ensure the well being of all
stakeholders and for the business to be sustainable.
After the enactment of Companies Act, 2013 (S.135) India has become the first country to
have legislation for compulsory CSR spending; most nations in the West enforce CSR only
through mandatory disclosure of CSR spending. However, regardless of the nature of CSR
provisions in the Companies Bill passed by the parliament, it is clear that Corporate will not
be able to ignore their social responsibilities for long.
Activities can be carried out by the companies either by collaborating with a NGO, or by
pooling resources with another company or through their foundations and own trusts. The law
also empowers setting up of a CSR committee which shall be responsible for decisions on
CSR expenditure and type of activities to be undertaken. This committee consists of three or
more directors, with at least one independent director whose presence will ensure a certain
amount of democracy and diversity in the decision-making process.
Since India is at the threshold of demographic dividend, the law becomes significant and
there is an urgent need for the creation of human and physical capital to reap its rewards.
Investment in education, health, skill development and social infrastructure will enhance
capabilities of the youth by improving their nutritional, skill and educational level, which in
turn will better their employment prospects. Traditionally, it is the responsibility of the
government, but in contrary the public delivery of goods and services has been riddled with
corruption and bureaucratic inefficiency and the welfare schemes are plugged with leakages,
CSR is being seen as an alternative to governmental provision of merit goods. It will increase
availability of funds for welfare activities and may lead to delivery of goods and services to
the people in a cost-effective manner. The clause on environmental sustainability will help in
bringing down pollution and emission of greenhouse gases and will help in compliance with
international norms and regulations. Therefore, the clause on CSR is a step towards achieving
social and environmental sustainability, which will benefit society in future.
On the contrary, the initiative by the Indian Companies Act in regulating CSR is brave but
foolish. The new Companies Act, 2013, which made spending 2% of their profits on CSR
mandatory, is actually unnecessary for two reasons:
One, its proper implementation is impractical and two, social pressures and adoption of
voluntary operational norms are more effective. International bodies also prophesize soft
norm rather than legal binding hard rules.
There is another reason against mandatory CSR spending. It is the changed nature of todays
world. The widespread penetration of Internet around the world has turned it as a powerful
platform for information dissemination and expressing concerns. This has increased pressure
on companies to mind their conduct and heed public opinion. Finally, more and more
companies are discovering that integrating CSR strategies make their operations more
profitable and sustainable. This presents an opportunity for NGOs and social organization.
They can expect greater partnership with the corporate world in the coming future. It is in
their interest to gear up for such collaborations and utilizes core competencies of the business
houses. It strongly oppose to favouring one set of public norms over another, arguing that
specific values should only be imposed in a private contract setting. Though, in view of the
incorporation of any single version of social responsibility indicators as undesirable or
unworkable, a streamlined set of requirements would allow for greater stability and
predictability. Still, to ease the tension created by a one-size-fits-all approach, the legislation
implementing a mandatory reporting regime could suggest the guidelines as a reporting
framework, rather than the necessary standards. Sectoral reporting may actually be the best
way to ensure that social reporting accomplishes its intentions. The absence of sectorial
reporting standards threatens to overwhelm stakeholders with realms of information having
little relevance within particular industrial sectors. The Companies Act could avoid a similar
quandary by providing for different standards for the financial services industry, the
extractive industry, and the manufacturing industry, for example. If the Indian Legislature
enacted this legislation for corporations of a certain size rather than sector, the reporting
standards could be adjusted accordingly. Another possibility is differentiating between
corporations of certain sector and a certain size. Finally, it could adopt a still more flexible
approach in following by providing for a "comply or explain" mechanism. This would give a
corporation that could not comply with the regulation an opportunity to justify itself. Another
concern is that publicizing social rights compliance, or the lack thereof, could expose the
companies to greatly increased liability by providing external parties with new information to
use against the companies2. Though the media may very well sensationalize an honest report
of its challenges in complying with sustainability standards, a corporation is better equipped
to correct its wrongs when they are discovered, and has every opportunity to garner public
support when it does come into compliance. Not least among the criticisms levied at
mandatory reporting could be that it ignores a fundamental tenet (if not the fundamental
tenet) of corporate philosophy:
"A corporation should have as its objective the conduct of business activities with a view to
enhancing corporate profit and shareholder gain."3 A reporting measure that requires
corporations to spend money gathering information, might expose them to litigation, and
could cost a corporation in popularity seems at loggerheads with corporate profit-and surely
any expense that does not run to the promotion of corporate profit must be avoided. Indeed, a
corporation's duty to its shareholders and a commitment to CSR seem mutually exclusive.
"Faster-better-cheaper" is ruining the world, yet no business ever made money selling things
that are slower, of lower quality, and more expensive. Business people have a great deal of
latitude in how they run their businesses, but no business person sets the conditions in which
business must be conducted4. In response to this predicament, it is inferred that greater
latitude than the business judgment rule be given to corporate executives to take
considerations like sustainable business practices into account. So the question of how to
reconcile the antithetical aims of social responsibility and corporate profit maximization may
be best answered by redefining corporate duties. Alternatively, the answer may lie in
recognizing these two aims as not necessarily antithetical. The many economic benefits
associated with a dedication to CSR are canvassed above. A corporation that is committed to
social responsibility may not be at any disadvantage in relation to its competitors, or even its
own potential, without such a commitment. Rather, it is the corporation that ignores the tenets
of social responsibility that stands to lose on at least two fronts: "[It] suffers in capital
markets if its shares lose value in an increasingly socially-conscious investment environment,
and it suffers in the retail market via consumer choices at the point of purchase (including
boycotts)." In the interest of its shareholders, stakeholders, and countless others, CSR is what
mandatory reporting aims to ensure.
Further, it can be figured out from the case studies on Corporate Social Responsibility as to
what extent the conflicts affect a companys Corporate Social Responsibility Policy.

COCA-COLA
Every year Coca-Cola publishes a directors report denominated The Coca-Cola Company
Annual Report; the last one was published in March 2011 and comprises the companys
activities during 2010.5In this report there is a small section dedicated to CSR and it includes
a brief description of the initiatives in community development and water preservation that
the company has developed. Since 2001, Coca-Cola also annually publishes a separate report
devoted to CSR called The Coca-Cola Company Sustainability Review. These reviews,
which are published every two years, are verified and assured by a third party, the
sustainability rating firm FIRA Sustainability Ltd.6 This verification provides moderate
assurance on the reliability of the information reported by Coca-Cola. Both reports the
annual company review and the sustainability reports are elaborated based on the GRI G3
guidelines, which were adopted by the company in 2001.7 Due to its relevance to Coca-
Colas business, the company also annually reports on the progress of the water stewardship
programmes targets.

Conflicts
Various demonstrations and campaigns followed the publication of a report issued by the
Indian NGO Centre for Science and Environment (CSE) in 2003. The report provided
evidence of the presence of pesticides, to a level exceeding European standards8, in a sample
of a dozen Coca-Cola and PepsiCo beverages sold in India.9 With that evidence at hand, the
CSE called on the Indian government to implement legally enforceable water standards. The
report gained ample public and media attention, resulting in almost immediate effects on
Coca-Cola revenues. The main allegations made by the NGO against Coca-Cola were that it
sold products containing unacceptable levels of pesticides, it extracted large amounts of
groundwater and it had polluted water sources.10

Post-conflict initiatives by Coca-Cola

The controversy in India was a learning experience for the company, and it motivated the
company to adopt a more proactive CSR policy on a global scale that focuses on water
management. In addition to the sustainability reports, Coca-Cola also published an annual
water report. In these reports the company publishes assessments of and the progress in its
water initiatives. Some of the assessments are made by the Global Environment &
Technology Foundation, an American NGO experienced in facilitating the creation of public-
private partnerships.
1 European Commission, Communication from the Commission to the European Economic and Social
Committee and the Committee of the regions: A renewed EU strategy 2011-14 for Corporate Social
Responsibility, COM(2011) 681 final, p. 6.
2 Report of the Social Representative
3 Principles of Corporate Governance: Analysis and Recommendations
4 The Coca-Cola Company, The Coca-Cola Company 2010 Annual Review, <http://www.thecoca-
colacompany.com/ourcompany/ar/pdf/TCCC_2010_Annual_Review.pdf>
5 The Coca-Cola Company, 2010/2011 Sustainability Report: Reasons to Believe,
<http://ww.colacompany.com/sustainabilityreport/TCCC_2010_2011_Sustainability_Report_Full.pdf>
6 See GRI, supra note 12. Also see more on Coca-Colas GRI reporting on The Coca-Cola Company,
GRI Index, http://www.thecocacolacompany.com/citizenship/gri_index.html
7 The CSE Report on pesticide residues in soft drinks in India used European norms on maximum
admissible pesticide concentration, regulated by the European Economic Communitys Directive
(80/778/EEC) on the quality of water intended for human consumption. This was the preferred
standard by CSE because it sets a maximum admissible concentration for individual pesticides and
related products in drinking water at 0.1 g/L (0.0001 mg/L). Although the report mentions the
existence of other international standards such as those of the World Health Organization (WHO), the
Food and Agriculture Organization (FAO) and the US Environment Protection Agency (USEPA)/
Food and Drug Administration Act (FDA) the report is not clear on why EU standards are more
adequate to make their analysis in Coca-Cola beverages. See Centre for Science and Environment.
8 Centre for Science and Environment (CSE), CSE Study on Pesticide Residues in Soft Drinks, 2003
Media Reports, vol. 1, pp. 12-14,http://www.cseindia.org/userfiles/SOFTDRINK.pdf
9 J. Hills & R. Welford, Case Study: Coca-Cola and Water in India, 2005 Corporate Social
Responsibility and Environmental Management, p.168.