IMPACT OF BUSINESS ETHICS & CSR IN RELIANCE INDUSTRIES

LIMITED

FY MCOM (BANKING AND FINANCE) – FINANCIAL SERVICES

SUBMITTED TO:
PROF. Prachi Ahuja

SUBMITTED BY:

NAME: DISHA AGARWAL

ROLL NO.: 1
 HSNC University, Mumbai
H.R COLLEGE OF COMMERCE AND ECONOMICS
CHURCHGATE, MUMBAI

NAME: DISHA AGARWAL

ROLL NO: 01

CLASS: M.COM (Banking Finance)

SEMESTER – I

DATE: 10TH November, 2022.

TOPIC: IMPACT OF BUSINESS ETHICS & CSR IN RELIANCE

INDUSTRIES LIMITED
 INDEX

SERIAL TOPIC
NO.

1. Introduction
2. Types of CSR
3. Advantages and disadvantages of CSR

4. Sustainable development
5. Relationship between CSR and sustainable
development

6. Case study – Reliance industries Limited

7. Conclusion
8. Acknowledgement
 INTRODUCTION

Corporate Social Responsibility is a management concept whereby companies

integrate social and environmental concerns in their business operations and
interactions with their stakeholders. CSR is generally understood as being the
way through which a company achieves a balance of economic, environmental
and social imperatives, while at the same time addressing the expectations of
shareholders and stakeholders. In this sense it is important to draw a distinction
between CSR, which can be a strategic business management concept, and
charity, sponsorships or philanthropy. Even though the latter can also make a
valuable contribution to poverty reduction, it will directly enhance the
reputation of a company and strengthen its brand, the concept of CSR clearly
goes beyond that. It is an attempt to align private enterprises to the goal of
sustainable global development by providing them with a more comprehensive
set of working objectives than just profit alone. The perspective taken is that for
an organization to be sustainable, it must be financially secure, minimize (or
ideally eliminate) its negative environmental impacts and act in conformity with
societal expectations.
 TYPES OF CORPORATE SOCIAL RESPONSIBILTIY

1. Environmental Responsibility
Environmental responsibility refers to the belief that organizations should
behave in as environmentally friendly a way as possible. It’s one of the most
common forms of corporate social responsibility. Some companies use the term
“environmental stewardship” to refer to such initiatives.

Companies that seek to embrace environmental responsibility can do so in

several ways:

 Reducing pollution, greenhouse gas emissions, the use of single-use

plastics, water consumption, and general waste

 Increasing reliance on renewable energy, sustainable resources, and

recycled or partially recycled materials
 Offsetting negative environmental impact; for example, by planting
trees, funding research, and donating to related causes
2. Ethical Responsibility
Ethical responsibility is concerned with ensuring an organization is operating in
a fair and ethical manner. Organizations that embrace ethical responsibility aim
to achieve fair treatment of all stakeholders, including leadership, investors,
employees, suppliers, and customers. For example, a business might set its own,
higher minimum wage if the one mandated by the state or federal government
doesn’t constitute a “livable wage.” Likewise, a business might require that
products, ingredients, materials, or components be sourced according to free
trade standards. In this regard, many firms have processes to ensure they’re not
purchasing products resulting from slavery or child labor.

3. Philanthropic Responsibility
Philanthropic responsibility refers to a business’s aim to actively make the
world and society a better place.In addition to acting as ethically and
environmentally friendly as possible, organizations driven by philanthropic
responsibility often dedicate a portion of their earnings. While many firms
donate to charities and nonprofits that align with their guiding missions, others
donate to worthy causes that don’t directly relate to their business. Others go so
far as to create their own charitable trust or organization to give back.
4. Economic Responsibility:Economic responsibility is the practice of a firm
backing all of its financial decisions in its commitment to do good in the areas
listed above. The end goal is not to simply maximize profits, but positively
impact the environment, people, and society.

ADVANTAGES AND DISADVANTAGES OF CORPORATE SOCIAL

RESPONSIBILITY (CSR)

 ADVANTAGES

1. Improves the image of a business

CSR tasks reflect positively on the image of a firm. When you carry out CSR
policies in your company, it increases your goodwill. Customers will be a lot
more happy to avail your products/services because of the tidy image of your
company.

2. Aids draw in as well as preserve potential workers

Companies which are involved in serious CSR activities are extra well-known.
This makes it much easier for your firm to bring in possible prospects that look
for employment possibility. Additionally, when your business starts gaining
goodwill through substantial CSR activities, the employees are more probable to
proceed with the company for a much longer period. Millennials usually prefer
organizations where they have a flexible job society as well as they are able to
really feel excellent in working with the organization. The organization’s beliefs
and value let the employees gain a level of self pride.

3. You get into the good publications of regulatory authorities

It is the job of the regulatory authorities to scrutinize the operations of different
companies. However, when your business starts doing CSR tasks on a large
scale, these regulatory authorities become much less aggressive in the direction
of your business. Besides, any firm that has a solid CSR typically stays within
the regulations to gain the advantages. So does the Governments and the
Regulatory authorities. As the business gets the acknowledgment of being
trustable, lower number of regulations as well as legal ramifications haunt it.
 4. Draws in new financiers
A business’s online reputation in the marketplace establishes whether it will
certainly get new investments or otherwise. With CSR programs, you can
absolutely increase your company’s picture. And when your company starts to
grab adequate eyeballs, it likewise brings in a number of financiers. Be prepared
to get investment proposals from venture capitalists, other firms, and even from
the government.

5. An all new means to advertise your brand name

It is commonly claimed that any promotion is excellent publicity. When your
business starts a CSR program, it immediately gives your company a particular
level of publicity. It will not be wrong to call such publicity as an advertisement.
You just require to make sure your service or products are aligned with the CSR
tasks you are associated with.

 DISADVANTAGES

1. It needs greater prices and expenses

Among the major downsides of implementing CSR plans and also policy is to
bear high costs in connection with install CSR strategies as well as applying it,
particularly for small entities. Whereas, large firms have the capacity to bear
such high cost pertaining to the allotment of a set budget plan to CSR
coverage. In addition, there is a common thinking that the high expenses of CSR
would certainly lead to the decline of little entities as bulk of them can not
consider the required spending plan to be socially responsible. According to the
critics, these entities does not have capacity to bear the high costs of social
media sites services, devices, as well as training sessions called for to meet the
social responsibility.

2. It can enhance investor’s resistance

While several investors are attracted to grab shares in entities that are publicly
responsible, bulk of them would consider for investment with the hope of
creating high profits. Besides, while couple of organizations have developed
reasonable earnings from CSR, others that take into consideration such a strategy
always show as probable to shed cash money source.
 3. It promotes Greenwashing
Based on the doubters, CSR can be considered a method that could result in
ineffectiveness, discussing that it can result to green-washing. They shows that
an entity’s management labor force has inefficient duty to its capitalists, which is
straight contradicting by CSR plans. They additionally focus that the
accountability of senior monitoring to their investors is to boost earnings, and
also executives that emphasize on producing massive revenue for the culture and
also their work. Hence, this is the main intention why some entities suggest
regarding such plan, but would certainly not do anything or take action
concerning it.

4. Client can become impatient

Everyone will certainly value you for adopting CSR program for the business at
the beginning. Actually, it can gain your firm a substantial quantity of popularity
on the market for being connected with an excellent reason. However, if the
program does not provide instant outcomes, people might assume this is nothing
but a Public Relations stunt. That won’t benefit your business’s track record.

5. Shift in the profit-making goal

Financial expert Milton Friedman typically criticized CSR by stating that it shifts
the company’s emphasis of the profit-making goal. For any type of monetary
entity, profit-making is miraculous priority. However, when you obtain involved
in CSR tasks, you require to reduce on the earnings margin, which can make
your shareholders miserable.
 SUSTAINABLE DEVELOPMENT

Sustainable development is an organizing principle for meeting human

development goals while simultaneously sustaining the ability of natural
systems to provide the natural resources and ecosystem services on which the
economy and society depend on. The desired result is a state of society where
living conditions and resources are used to continue to meet human needs
without undermining the integrity and stability of the natural system.
Sustainable development can be defined as development that meets the needs of
the present without compromising the ability of future generations to meet their
own needs.[1]

Sustainability goals, such as the current UN-level Sustainable Development

Goals, address the global challenges, including poverty, inequality, climate
change, environmental degradation, peace, and justice. While the modern
concept of sustainable development is derived mostly from the 1987 Brundtland
Report, it is also rooted in earlier ideas about sustainable forest
management and 20th-century environmental concerns. As the concept of
sustainable development developed, it has shifted its focus more towards
the economic development, social development and environmental protection
for future generations.

The guiding principle of sustainable development is development that meets

the needs of the present without compromising the ability of future generations
to meet their own needs. Sustainable development recognises the
interdependence of environmental, social and economic systems and promotes
equality and justice through people empowerment and a sense of global
citizenship. Whilst we cannot be sure what the future may bring, a preferable
future is a more sustainable one.
 RELATIONSHIP BETWEEN SUSTAINABLE DEVELOPMENT AND
CORPORATE SOCIAL RESPONSIBILITY

A business engaging in CSR should not be considered a luxury that one might
or might not be able to afford. Corporations that practice CSR and sustainable
development need to operate in ways that are respectful to the general
population and their surrounding environment. Doing these things successfully
requires businesses to pay special attention to product quality and the impact
their activities might be having on their community, something that might
initially be considered a simple operational cost.

However, not all costs are equal and some corporations have learned that by
acting responsibly, they can become more innovative, increase their revenue by
producing higher quality products, and reduce costs by making smarter business
decisions.

The Sustainable Development Goals, adopted by the United Nations (UN)

General Assembly in September 2015, contained 17 global goals, such as “no
poverty, zero hunger, good health and well-being, quality education, gender
equality, clean water and sanitation, and affordable and clean energy”.
Collective efforts to address these issues can be triggered by individuals with
innovative ideas and the support of the private and/or public sector.
Corporations need to take action to improve the economy, society as a whole,
and the environment. The way to do so is to innovate. Innovation can uncover
new ways to foster societal progress and when it comes to innovation, the
private sector has a crucial role by engaging in CSR.

SD and CSR are therefore nearly similar, but a minor yet important difference
occurs. In order to meet the needs of future generations, sustainability growth is
linked to the organization concept which is structured to rely on “demand
creation, climate protection, environmentally responsible manufacturing
processes.”
In comparison, CSR has to do with individuals and organizations’ partnership
facets and addresses things like “transparency, stakeholder interaction,
sustainable growth reporting.

CASE STUDY –
RELIANCE
INDUSTRIES LIMITIED

INTRODUCTION

1. Reliance Industries Limited (RIL) is India's largest private sector enterprise

with
businesses across the energy and materials value chain and a strong presence in
the
rapidly expanding retail, telecommunications, and media sectors.
2. RIL's diverse projects and operations touch lives of people in many ways and
create
value by helping in overall and holistic development of communities across
multiple
geographies. Through its various initiatives, the group endeavours to play a
relevant role
by serving communities and projects that address gaps in basic societal
requirements.

OBJECTIVES
Enabling lives, living and livelihood for a stronger and inclusive India
This policy is applicable to RIL in India. The following are the key elements of
the policy:
 Vision and framework of Corporate Social Responsibility and its
approach towards the same.
 Key focus areas of inclusive development
 Overview of the implementation strategy of various CSR initiatives
 Methodology of measuring and reporting outcomes and impact
 Governance Structure

POLICY
According to Reliance Corporate Social Responsibility policy, sustainable
development is at the core of its business decisions, and therefore it has aligned
its sustainability strategy with its business goals. RIL CSR works with
underserved people who often do not have access to knowledge or information
on best practices and continue to be vulnerable.

Reliance engages directly, which creates multiple opportunities to empower the

marginalized and deprived sections of the society ending up making a
meaningful difference in the lives of the people. The companies’ social
initiatives have impacted 26 million people across India in more than 18,000
villages and 200 urban locations.

AMOUNT OF EXPENDITURE
Reliance Industries Ltd spent Rs 1,140 crore in the fiscal ending March 2021 on
corporate social responsibility (CSR) initiatives including Covid-19 support,
rural transformation, education, health, sports and disaster response.

According to the company's latest annual report, Reliance had spent Rs 1,022
crore in 2019-20 on CSR initiatives.

Focus Areas of Engagement

For a company with diversified businesses like RIL, there are several
opportunities to increase and deepen social impact at scale and generate value
for all. RIL seeks to strategically consolidate the company's CSR initiatives to
focus on discrete social problems, all aimed at enabling lives, living and
livelihoods. Owing to its long tradition of social responsibility, the value of
sustainable social impact at scale is instilled across the conglomerate

 Rural Transformation
a) Supporting Farm and non-farm livelihoods
b) Improving water conservation and rain-water harvesting
c) Developing community-based initiatives like VFAs and producer companies
towards
building capacity of the community and ensuring sustainability.
d) Using technology towards delivering need-based information for improving
quality of life.
e) Improving food security and enhancing nutrition

 Healthcare
To address issues around affordability and accessibility of quality healthcare
and bring about
improvement in awareness and health seeking behaviour in various parts of
India, enabling a better
living, through initiatives such as:
a) Primary, secondary and tertiary care facilities
b) Conducting need-based health camps and providing consultation, medicines
etc.
c) Working on maternal and child health
d) Behavioral change for improved mother and child health
e) Improving healthcare delivery through innovative outreach programmes
f) Working for the visually impaired
g) Working in the areas of Communicable and non-communicable disease.

 Education
To work on several educational initiatives to provide quality education, training,
skill enhancement for improving the quality of living and livelihood. Initiatives
are aimed at:
a) Promoting primary and secondary education
b) Enabling higher education through merit cum means scholarships, including
for differently abled across the country.
c) Using sports as a tool for development of students in both urban and rural
settings
d) Promoting higher education including setting up and supporting universities

 Environment
To enable enhanced livelihood and quality of life, promote environment
sustainability through various initiatives for:
a) Ecological sustainability
b) Promoting biodiversity
c) Conservation of natural resources
d) Promoting renewable energy
e) Developing gardens and river fronts

 Protection of national heritage, art and culture

To work towards preserving the rich heritage, arts and culture of India for its
future generation-and make conscious efforts to ensure its continuity and
enhance avenues for livelihoods of traditional artisans and craftsmen. Key
initiatives include:
a) Working towards protecting and promoting India's art, culture and heritage
through various promotional and developmental projects and programmes.
b) Support and promotion of artists and craftsman
c) Promotion and preservation of traditional art and handicraft
d) Documenting India's rich heritage for the benefit of future generation
 IMPLEMENTATION STRATEGY

1.

Engagement Model- RIL is committed towards improving the lives of India's

most-marginalized and vulnerable communities.
a) Direct Engagement: RIL to have a direct engagement strategy- most
initiatives to-be conceptualized and executed directly through a team of
professionals.
b) Partnerships: In addition to direct engagement, in specific cases, to partner
with-other organizations who have the technical expertise and experience to
undertake various programmes in the identified core focus areas of operation, to
improve our outcomes.

2. The following summarizes the core model of engagement:

a) Working towards improving lives of India's most marginalized and
vulnerable communities.
b) Direct engagement with the communities through a team of trained
professionals
c) Focus on local needs, community ownership and long-term sustainability
d) Outcome and impact orientation
e) Creating demonstrable models of development for replication
f) Leveraging technology for development solutions
 CONCLUSION

The study has shown that corporate social responsibility is an element for
business corporations. It has been shown that there are many different areas in
which area may choose to focus its corporate social responsibility.
The first area of focus in corporate social responsibility is regarding the
environment.
Other areas that should be considered in the development of corporate social
responsibility programs are education, health, nutrition, and responsibilities.
The CSR activities of the Reliance industries limited are very diverse and
covers almost every area where development is the need of the hour.
The company has ensured that the maximum benefits of the programme reach to
every person who is in the need through various strategies like creation of
Reliance Industries Foundation which primarily focuses on implementing CSR
initiatives across the India which has helped the company in getting better
results and delivering maximum benefits.
The company should now focus on increasing the area of coverage in India for
CSR and make sure that its benefits reach to maximum people in India.

BIBLIOGRAPHY
https://www.investopedia.com/terms/c/corp-social-responsibility.asp

 https://www.reliancegroupindia.com/corporate-social-responsibility

 https://www.csr.gov.in/content/csr/global/master/home/home.html

 https://taxguru.in/company-law/corporate-social-responsibility-csr-
companies-act-2013.html

 https://www.ril.com/OurCompany/CSR.aspx

ACKNOWLEDGEMENT
 I take this opportunity to thank my subject teacher Ms Prachi Ahuja, for her
moral support and guidance. I would also like to express my sincere gratitude
towards all the teachers whose guidance has made the project successful.

Lastly, I would like to thank each person who directly or indirectly helped me in
the completion of the project who supported me throughout my project.

Thank you