How does CSR make your business the profit Magnet?

How does CSR make your business the profit Magnet?



This Blog is written by Balabavithra | Column Editor


There is no business on a dead planet

– David Brower

A few weeks ago, right before this lockdown started, on March 6th to be very precise, I took my niece to a nearby supermarket to get the necessary grocery and she brought a Vicks vaporub box and dropped it inside the cart. Just before billing, I found that she had replaced the regular washing powder with Tide, I did not ask her then, While we were walking back home I got a little curious and asked her about this and she told me that she wanted Bittu to go to school.

Now I started burning with curiosity and asked her to explain. She asked me for my mobile and showed me the P&G Ad.  The ad showed how P&G contributes in collaboration with Shiksha to building more accessible education to the deprived persons of the society. If you can make a 9-year-old think that you are a very responsible organization and by buying from you will let her be a part of your good deed. You won P&G. You made a 9 year old choose your products by showcasing your corporate social responsibility plus you inspired me to write this article.

A company that makes nothing but money is a poor business

– Hendry Ford

Can a company fulfill its societal responsibility & moral obligations and gain a chance to comply with the constitution by being a corporate citizen and at the same time win more consumers & gain profit for its stakeholders? Well! Technically it can. Here’s How it can and will be a win-win situation for both the company and society. The answer is, “Corporate Social Responsibility / CSR”.

What is CSR and what does the company’s Act say?

Corporate Social responsibility / CSR is the basic responsibility or obligation of the organization towards society. The CSR is aimed at uplifting the living standards of the people of this society and the community that is in its vicinity.

CSR is the Art of balancing the stakeholder’s demands and the societal demands, at the same time rendering the best towards the conservation of the environment. Surprisingly, the most successful companies are the ones that give serious compliance with CSR.

Every company, irrespective of its size has some ethics, morality, and obligations to be fulfilled in order to gain credibility in the minds of the customers. The Company that gives zero regards and puts zero efforts here, will face legal actions in some form and will also lose a great opportunity to gain customers.

Goodness is the only investment that never fails

– Hendry David Thoreau

CSR makes your customers your brand ambassadors! Now, let’s have a quick glimpse at what the companies Act 2013, holds for CSR.

CSR – Dissected:

Sec. 135 of the Companies Act, 2013 deals with the CSR, however, for a better understanding let us dissect it with the help of the circular released by the Ministry of Corporate affairs in 2015 with regards to the CSR activities. The significance of this circular is that it lets the High Level Committee provide the insights for the CSR compliance by monitoring and further implementation.


The Section is found to be applicable to all the companies registered under the Companies Act. And for the companies with Rs.500 crore or more as the net worth, or Rs.1000 as a turnover or Rs. 5 crores as a net profit in the financial year ( any of the previous 3 financial years ) CSR becomes the mandatory compliance.


The Circular states that the government does not play any role in the appointment of any authority for monitoring, implementing, and approving any CSR activity or program in a company.

Moreover, neither the company nor any of its external experts will be monitored for its CSR expenditure or its impact assessments in this regard.

The Board Members of the company or the third parties whom the company proposes to carry on the CSR program will be the validating authority for the future CSR compliance thereon.

Tax Exemptions:

The Finance Act of 2014 makes sure that any funds spent on CSR does not form the part of the company’s business expenditure.

The companies contributions for the PM relief fund, Scientific research, rural development, and skill development projects, or the agricultural extension projects, etc are found to have tax exemptions under the Income Tax Act, 1961.

Companies should encourage their employees to participate in the CSR activities but this will not amount to the company’s CSR expenditure,

Customer magnets in the present corporate world:

Not just P&G there are a lot of other wonderful companies that have mastered the art of blending their business with the CSR programs.  “Project Shakti” by Hindustan Unilever Limited (HUL) where CSR funds were spent on environmental substantiality research which highlighted the aspects of HUL at the same time improved the reach of the company to the rural areas is one great example.

Building a green environment for the workplace or a fully functioning GREEN BUILDING for the office could also amount to the CSR activity if we have a look at this closely.

A CSR program could be any form of good deed the company chooses to do, to improve the society in which the customer lives. This way the customer will feel included in the business, the employee will feel committed to the business and the stakeholders will value the profit and the company will, in turn, start growing with it.  CSR to the company is like the sunlight to the plant. Without sunlight, there will be no growth irrespective of how rich the soil is.

At the end of the day, it all sums up to one point where Albert Einstein says, “Only a life lived for others is a life worthwhile”.

One Thought to “How does CSR make your business the profit Magnet?”

  1. Veeramani V

    thank you for your knowledge!

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