Corporate sector: wealth and employment vs climate and sustainability. Is CSR enough? Critically examine.

UPSC CSE 2022 Ethics Paper Answer writing.

In contemporary world, corporate sector's contribution in generating wealth and employment is increasing . In doing so, they are bringing in unprecedented onslaught on the climate, environmental sustainability and living conditions of human beings. In this background, do you find that corporate social responsibility (CSR) is efficient and sufficient enough to fulfill the social roles and responsibility needed in the corporate world for which the CSR is mandated? Critically examine.

Answer 

Corporate social responsibility (CSR) is a form of self-regulation by which companies voluntarily integrate social and environmental concerns into their business operations and interactions with their stakeholders. CSR aims to contribute to societal goals of a philanthropic, activist, or charitable nature, such as poverty alleviation, environmental protection, human rights promotion, community development, etc. CSR also aims to enhance the reputation, brand image, customer loyalty, employee engagement, and competitive advantage of the companies that practice it.

CSR is mandated by various laws, regulations, standards, codes, and guidelines in different countries and industries. For example, in India, the Companies Act 2013 requires certain companies to spend at least 2% of their average net profits on CSR activities. In the European Union, the Directive 2014/95/EU requires certain large companies to disclose information on their environmental, social, and governance (ESG) performance. In the United States, the Securities and Exchange Commission (SEC) requires certain public companies to report on their ESG risks and opportunities.

However, CSR is not sufficient or efficient enough to fulfill the social roles and responsibilities needed in the corporate world for several reasons. Some of these reasons are:

 CSR is often driven by profit motives rather than genuine social commitment. Many companies use CSR as a marketing tool or a public relations strategy to improve their image or reputation, rather than addressing the root causes or impacts of their business activities on society and the environment. CSR may also be used as a way to avoid or evade taxes, regulations, or accountability for their negative externalities. 

CSR is often selective and superficial rather than comprehensive and transformative. Many companies focus on certain CSR issues or activities that are easy, popular, or visible, rather than those that are complex, controversial, or critical. CSR may also be limited to donations, sponsorships, or partnerships with NGOs or other organizations, rather than changing their core business practices, policies, or values. CSR may also be inconsistent or contradictory with their other actions or interests. 

CSR is often voluntary and unregulated rather than mandatory and enforced. Many companies adopt CSR policies or initiatives that are not legally binding or externally verified. CSR may also lack clear standards, indicators, benchmarks, or reporting mechanisms to measure and monitor its performance, impact, or effectiveness. CSR may also face challenges of transparency, accountability, participation, or stakeholder involvement .

Therefore, CSR is not sufficient or efficient enough to fulfill the social roles
and responsibilities needed in the corporate world for which the CSR is mandated.
CSR needs to be more than a cosmetic or symbolic gesture; it needs to be a strategic and systemic change in the way businesses operate and interact with society and the environment. CSR needs to be more than a compliance or charity exercise; it needs to be a commitment and contribution to the sustainable development and well-being of all stakeholders. CSR needs to be more than a voluntary or unregulated practice; it needs to be a mandatory and enforced norm
that is aligned with the universal principles and values of human rights, social justice, and environmental stewardship.


nandosir

I am a civil services teacher. I teach online / offline for UPSC CSE / WBCS

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