CSR in Today's Business: Examining the Impact on Tax and Investment

This essay critically evaluates the role and importance of Corporate Social Responsibility (CSR) in modern business organizations, using Tesco as a primary example. It explores how CSR practices, encompassing economic, social, and environmental considerations, contribute to sustainable development and competitive advantages. The report analyzes how an organization's CSR policies directly influence its corporate tax and investment decisions, particularly in areas such as environmental conservation, social initiatives, and economic policies. It examines how CSR initiatives like waste management, recycling, and employee training impact tax aggressiveness and investment strategies. The conclusion emphasizes that CSR is a crucial commitment for businesses seeking to be socially accountable and gain sustainable competitive advantages, influencing both corporate tax and investment decision-making processes.

Corporate Social
Responsibility

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK...............................................................................................................................................4
Roles of corporate social responsibility.................................................................................4
Importance of corporate social responsibility........................................................................5
Analyse how an organisation’s CSR policy may directly influence its corporate tax and
investment decisions...............................................................................................................7
CONCLUSION ...............................................................................................................................9
REFERENCE.................................................................................................................................10

INTRODUCTION
Corporate social responsibility is defined as the self-regulating business model that is
used by organisation to become socially accountable for its relative stakeholders, public and
others. Through adopting the concept of corporate social responsibility business become
conscious regarding the impacts on society, economic, social as well as environmental
conditions. Business includes CSR practices in business operations, business contribute in
enhance society and environmental conditions instead of contributing negativity to them. The
concept of corporate social responsibility is important for both community and organisation
through developing strong bond between employees and corporations. It boost moral of
employees and develop connection of organisation with that world that is around them. In this
report chosen organisation is Tesco which is British multinational grocery organisation founded
in the year of 1919 by jack Cohen. It is the third largest retaining organisation according to its
gross revenue. Headquarter of Tesco situated in Hertfordshire, England, UK. This report covers
concept of corporate social responsibility and their role and important in business. Along with
that, influences of organisational CSR policy on business corporate tax and investment decisions
are mentioned.
TASK
Roles of corporate social responsibility
Corporate social responsibility is the practices that are described as the organisational
voluntary commitment for improving corporate practices that are related to economic, social,
environmental as well as legislative requirements. Business can conduct its operation in
sustainable and ethical manner identifying business operations as well as impacts on socially,
economically and environmentally aspects through executing CSR friendly policies and practices
at workplace (Gallego‐Álvarez, and Pucheta‐Martínez, 2020). Implementation of corporate
social responsibility plays important role in providing benefits and advantages to organisation to
attain determined goals and objectives in efficient manner. There are various corporate social
responsibility concepts and policies are used by the organisation to sustain in competitive
business environment.

The concept of corporate social responsibility provides greater ability to attain
sustainable development. It provides various benefits to Tesco as well as its stakeholder
regardless size of business. Tesco follows guidelines to enforce the concept of CSR within
organisation that is related to its surrounding community provides competitive advantages. It
helps Tesco to gain success and attain sustainable business approach. CSR plays important role
in business to create the sense of sustainability without creating negative impact on environment
and society.
There is regular changes are occur in organisation with accepted corporate social
responsibility guidelines that also determined what changes are required to attain the objective of
sustainability. Size of investment that is required by business to accept guideline also affected by
the type of organisation. It is very important for organisation to correlated the policies of
corporate social responsibility and business success (García‐Sánchez, and Martínez‐Ferrero,
2019). If business adopts clear and well defined CSR policies that protect environment enable
business to sustain in competitive environment and attain success. Tesco ensures that
organisation merge social and environmental concerns in business and develop effective
relationship with stakeholders. Respective organisation adopt the CSR concept in business which
is important for enhance responsible behaviour towards society as well as impacts of these CSR
activities on investors, customers, environment, employees, stakeholders and business
sustainability. Through engaging in social responsibility, business can improve its economic
value, brand image, reputation, enhance social value as well as provides various benefits to
society.
Importance of corporate social responsibility
Corporate social responsibility is the concept that is highly important for business to
capitalist economy as well as ensure sustainability of business in competitive business
environment. It is related to how business manage their processes to develop positive impacts on
society. CSR is the management concept that describe the integration of business in social as
well as environmental concerns in different types of business operations and in the process of
interacting with business stakeholders. In current business environment, it is important for
business in various manner. Well-managed CSR programmes facilitates Tesco to improve its
brand value, equity and awareness in market (Harjoto, and Salas, 2017). Now these days, people
or customers not appreciate organisation for only its quality products and services but also for its

activities that are performed by it for greater good of people that create trust and strong image in
market. Adopting the concept of corporate social responsibility is important for Tesco to increase
sales through having positive impact on communities. It facilitates respective organisation to
enhance employees retention and engagement because employees enjoy working with
organisation that have positive public image. As Tesco takes initiatives to incorporate
volunteering programmes that foster the value of loyalty and empathy among employees and
customers. Organisation develop CSR policies such as waste management and run various
programmes to protect environment. It lead employees higher satisfaction and maintain positive
image of Tesco. Cost saving is the factor that enhances the importance of corporate social
responsibility for organisation (Harjoto, 2017Mao, 2019). Tesco adopts various latest
technologies that reduces organisational operating cost. Social and environmental risk impacts
business performance and functionality in various manner so, it become important to adopt
corporate social responsibility to manage these risk and gain sustainable competitive advantages.
Implementation of SCR policies help Tesco to gain competitive advantages over other
competitors in industry. Organisation enable to go for one step further through considering social
ans environmental factors in its business operations and decision-making process. Through
adopting CSR policies, organisation can develop positive and productive working environment
that encourage employees in personal as well as professional growth and retain them with
organisation for longer period of time.
Corporate social responsibility is important for Tesco because it provides various benefits
to organisation through enhancing awareness of customers, suppliers and local community
regarding organisational actions towards society and environment. Respective organisation
promote these policies through websites and advertisements. Through applying CSR policy,
Tesco provides good treatment to employees and make promises that enhance their feeling that
they are valuable for organisation. It helps business to reduce the rate of staff turnover and retain
them with organisation for longer period of time that reduce the requirement of recruiting new
employees and providing them training that reduces cost of overall organisation. Corporate
social responsibility that is adopted by the Tesco that provides benefits to environment (Planer-
Friedrich, and Sahm, 2020). Respective organisation trying to reduce carbon footprints as well as
recycling. Along with that Tesco uses health and well-being methods that create strong

reputation of organisation. Respective organisation reduce the prices of healthy food products in
order to make them affordable for individual for buy their products.
Analyse how an organisation’s CSR policy may directly influence its corporate tax and
investment decisions
Corporate social responsibilities is defined as the way through which organisation
regulate operations to ensure that activities of organisation impacts society in positive manner.
This concept provides guarantee to organisation to run business operations in ethically right
manner and consider human rights, social, environmental as well as economic impacts on
organisation. There is number of corporate social responsibilities strategies are developed by the
Tesco. Respective organisation evaluates the performance on regular bases to ensure that these
policies and strategies are implemented in appropriate manner. In Tesco, corporate responsibility
community was established in the year of 2001 that includes cross functional executives.
Steering Wheel framework is used by the Tesco to measure the performance and effectiveness of
CSR policies (Popescu, 2019). Some CSR policies are used by the organisation that direct
influence the corporate taxes and investment decisions of organisation.
Tesco believed that policies that impacts environment in negative way would damage
organisational brand image as well as its customers and society. Environmental conversion is the
particular concern of Tesco, there are various actions are taken to protect environment from
harmful or negative impacts. Respective organisation committed towards maintaining healthy
environment as well as motivates employees to take active initiatives to protect environment.
Tesco is committed towards improving the efficiency of resources and adopt practical approach
for maintaining environment sustainability through reducing the consumption of energy,
transport, water and adopt recycling to reduce waste (Tesco's Corporate Social Responsibility
Initiatives, 2020). Tesco adopts environmental strategy in may 2007 that includes recycling that
reduced carbon emission on environment. Respective organisation measures carbon footprints in
business operations that allow organisation to develop planning for reducing them for protecting
environment. Corporate social responsibilities influence the tax aggressiveness in efficient
manner. As Tesco adopts environment related CSR policies that protect environment from
harmful impacts so it influence the decision of taxation. Government provide relaxation to
organisation in taxation rate because it work for the well-being of organisation. The higher
environmental activities are adopted by the organisation the lower tax aggressiveness is faced by

organisation. Environmental practices of organisation influence the investment decisions that
through enhancing the investment in protecting organisation organisation can maintain effective
or strong brand image and gain sustainable competitive advantages. Tesco invest in waste
management strategies, recycling practices and adopt latest technologies. Investment protecting
in environment is depends on the requirements of environment.
Tesco cares about people in different manner such as it encourage healthy living and take
initiatives towards education, support charities, promote inclusive, developing good working
environment as well as advancing human rights in the supply chain. Activities of social
dimension of corporate social responsibilities are interrelated with corporate tax aggressiveness
such as if greater social dimensions creates lower level of tax aggressiveness on organisation
because charge low rate of corporate tax from the organisation that involve in social activities
such as charity and improving healthy living of people. Tesco invest in charity which is
important part of working with local communities as well as provide chance to employees and
customers to pool their all strengths or support the social cause which is close to their hearts.
Investment decisions of organisation are getting influenced by the CSR policies such as Tesco
assembles millions of amount in charity and well-being programmes.
Another corporate social responsibility of Tesco is economic policies that are related to
being positive economic benefits through employment, skills training as well as creating value
for customers and develop long-term partnership with suppliers. Economic policies of
organisation influence the taxation policies such as higher activities in economic dimension
associated with high level of tax aggressiveness on the other hand low economic activities
associate low level of tax aggressiveness (Qa’dan, and Suwaidan, 2019). Tesco invest in training
to it employees for developing their skills for working towards corporate social responsibilities
in efficient manner as well as organisation maintains effective relationship with suppliers that
required high investment. CSR policies of organisation complies to invent in the direction to
making the environment more pleasant place to live and reduce the carbon emission that protect
environment from harmful impacts.
These all are the aspects that clearly determines that the concept of corporate taxation and
investment decisions are largely influenced by the organisational corporate social responsibility
policies or strategies (Does corporate social responsibility affect corporate tax aggressiveness.
2021). Organisation must consider all these aspects in organisational decision making that help

business to gain sustainable advantages and maintain strong brand image in competitive
environment. Nature of tax aggressiveness of organisation depends on the corporate social
responsibility dimension. Organisation investment decisions also getting affected by the
organisational corporate social responsibilities. So, it is required for organisation to analyse these
needs than take appropriate decisions that lead business towards right direction.
CONCLUSION
As per above report, it can be concluded that corporate social responsibility is the
commitment of business that enable it to become socially accountable for its actions towards
society, environment and stakeholder that help business to gain sustainable competitive
advantages over other competitors. In current business environment, organisation adopts various
corporate social responsibility practices that enable business to maintain strong reputation in
market, reduce overall organisational cost and manage risk in efficient manner. CSR policies that
are adopted by the organisation directly influence business corporate tax as well as investment
decision making process. It is important for organisation to analyse current requirements of
environment and develop policies accordingly that help business to gain competitive advantages.

REFERENCE
Book and journal
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and corporate governance mechanisms: An international outlook from emerging
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García‐Sánchez, I.M. and Martínez‐Ferrero, J., 2019. Chief executive officer ability, corporate
social responsibility, and financial performance: The moderating role of the
environment. Business Strategy and the Environment, 28(4), pp.542-555.
Harjoto, M.A. and Salas, J., 2017. Strategic and institutional sustainability: Corporate social
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Harjoto, M.A., 2017. Corporate social responsibility and degrees of operating and financial
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Mao, C.W., 2019. Effect of corporate social responsibility on corporate tax avoidance: evidence
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Planer-Friedrich, L. and Sahm, M., 2020. Strategic corporate social responsibility, imperfect
competition, and market concentration. Journal of Economics, 129(1), pp.79-101.
Popescu, C.R.G., 2019. Corporate social responsibility, corporate governance and business
performance: Limits and challenges imposed by the implementation of Directive
2013/34/EU in Romania. Sustainability, 11(19), p.5146.
Qa’dan, M.B.A. and Suwaidan, M.S., 2019. Board composition, ownership structure and
corporate social responsibility disclosure: the case of Jordan. Social Responsibility
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Online:
Does corporate social responsibility affect corporate tax aggressiveness. 2021 [Online] available
through:<https://www.sciencedirect.com/science/article/abs/pii/S0959652615006149>
Tesco's Corporate Social Responsibility Initiatives.2020 [Online] available through
:<https://www.icmrindia.org/casestudies/catalogue/Business%20Ethics/Business
%20Ethics%20-%20Tesco%20Corporate%20Social%20Responsibility
%20Initiatives.htm>./