The Corporate Responsibility Ball Should Be In The Corporations Court

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    Aug 23, 2013
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applying thought behind barbed wire
applying thought behind barbed wire
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Corporate responsibility, also known as corporate social responsibility or CSR, is a common term used to denote, primarily, voluntary initiatives by an organisation in environmental and social areas, which may be to mitigate impacts caused by its product, service or operations. A workable view of corporate citizenship should be based on the belief that businesses must get involved in social issues because it is the right thing to do, and not because of any mandate that is passed towards this.

This matter becomes important in light of the government of India having proposed, through the Companies Bill 2012, a mandatory spend of 2% of profits after tax on Corporate Social Responsibility by companies that are of a certain size. The fact is, credible and sincere work in the areas of sustainability and social responsibility must come from within, whether it is at an individual level or born from a company’s deeply held convictions and vision. External factors like passing mandates will only succeed in coercing every company into CSR, not necessarily achieve any fruitful results from it.

Good policies and regulations help catalyze social change and environ- mental protection by aligning the incentives and benefits of all stakeholders. A good policy can be differentiated from a mediocre or bad one by how easy it is to implement and duplicate elsewhere, and by whether benefits derived from it outweigh the costs of compliance. In the short history of social and environmental responsibility and regulation, the position taken has often been. a ‘Business Vs Government’ one. This means that the dialogue has always been one of compliance and coercion rather than collaboration between the government and a corporation. This paradigm needs to change to a more constructive dialogue of partnership and teamwork. In the area of sustainability and responsible ecological practices, enlightened regulation can be the clear differentiator between passive inertia and active positive change.

A great example of this is the Clean Air Act, which was implemented in the USA in 1963. Over the years, it has signalled a shift in the attitude towards regulating air quality standards and compliance by the government.

Corporate Responsibility cannot be thrust upon a corporation; rather, government policy should encourage corporations to consider the long-term and universal benefits of taken such steps. This will vest formal accountability for sustainability at the corporate level, rather than putting the sustainability ball back in the court of the government. Because sustainability is everyone’s business; not just the government’s.

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S Kirti is a web enthusiast and a writer. Kirti has afforded her articles and write-ups autonomously and through various online forums. Get more information on: Corporate Responsibility & CSR Activities

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