Protecting our communities and our planet is the top priority now more than ever.
Corporate Social Responsibility (CSR) is becoming an increasingly important aspect of many businesses’ policies all over the planet. The demonstrate that the practice helps not just workers and the society, but also the firm and the country in which it works. This is why it is often in governments’ best interests to promote these initiatives.
In India, CSR is treated extremely seriously. In fact, it is the world’s first country to enact a required CSR spending law. Companies having annual revenue of 1,000 crore INR or more, a net worth of 500 crore INR or more, or a net profit of five crore INR or more are required to spend at least 2% of their average net profit in the previous three years on CSR initiatives, according to the Companies Act 2013.
The Bureau of Economic and Business Affairs’ (EB) CSR team is in charge of the Department’s interaction with US firms in order to promote responsible and ethical business practices. Business, according to the State Department, is a valuable diplomatic and development resource. For American organizations trying to implement excellent CSR programs, the EB acts as a source of direction and help. It connects corporations with non-profits and other members of civil society who want to make a difference. EB also assists enterprises in adhering to global business behaviour requirements such as the Guidelines for Multinational Enterprises of the Organization for Economic Cooperation and Development. The EB is responsible for deciding the Secretary of State’s Award for Corporate Excellence, which honours exceptional global citizens.
In the UK, Corporate Governance includes CSR. The Companies Act of 2006 has contributed to these constraints by forcing directors to consider community and environmental problems when assessing their duty to promote the success of their firm, as well as through the disclosures required in the Business Review.
In the case of Europe, The European Commission’s CSR action plan consists of the following steps:
- Increasing CSR visibility and promoting best practices.
- Increasing and measuring levels of business trust.
- Improving self-control and co-regulation.
- Increasing the market reward for corporate social responsibility
- Improving social and environmental information disclosure by businesses.
- Incorporating CSR into education, training, and research to a greater extent.
- Highlighting the significance of national and subnational CSR initiatives.
- Bringing European and global approaches to CSR closer together.
Added to that, The United Global Compact, United Nations Guiding Principles on Business and Human Rights, ISO 26000 Guidance Standard on Social Responsibility, and OECD Guidelines for Multinational Enterprises all serve as foundations for the CSR strategy.
For Denmark – Companies of a particular size must either publish their CSR practices in an annual report or state that they do not have a CSR policy, according to the Danish Financial Statement Act (Accounting for CSR in Large Businesses). Companies must report on three topics in particular: their CSR policies, which include standards, guidelines, and principles; their plan of action to translate CSR policies into results, which includes all planned procedures and systems; and their evaluation of CSR achievements in the current fiscal year, as well as expected results of future plans.
The Danish government has amended the legislation to include clauses encouraging businesses to account for their human rights policies as well as their climate effect. Institutional investors, mutual funds, and financial enterprises have all been affected by the law. These CSR policies, according to the government, enable Danish firms to compete more effectively worldwide and encourage them to make beneficial contributions to society.
Similar compulsory reporting obligations on the total expenditure on CSR initiatives exist in France, South Africa, and China.
Is it time for unified legalization for CSR in Bangladesh?
Presently, there is no coordination among the agencies concerned regarding the spending of CSR funds in absence of comprehensive guidelines as well as the legal regimes. Without any obligations or monitoring and reporting systems in place, different corporate sectors are carrying out the CSR activities on their self-initiative.
With the rise of socio-economic development crises following the CoVID-19 pandemic as well as trickling foreign funds for our development sector, legislation incentivising and unifying CSR initiatives is becoming a pressing need.
As Bangladesh moves into its fifth decade of independence, we will need all sectors to collaborate in harmony to help our communities grow together.