Question

Does the concept of social responsibility have a role in finance? Briefly, describe its role in your own words.

Answer 1

Yes, the concept of social responsibility has a role in finance. Social responsibility is where corporations take the responsibility to contribute towards social cause. The methods of social responsibilities are many and can include any work of corporate which can create a better society, improve environment, health, education, awareness etc. Active participation of the companies through the corporate social responsibility helps it in sustainable development.

For financial point of views it is important for companies to incorporate social responsibility into their strategic plans as it will help them in sustainable development and value addition. The value addition can be done through the increased customer loyalty and reduction in costs of compliance with regulations. It helps them to raise the financial performance over the long run. The company can also benefit from greater co-operation from the communities and gain support from community when their decisions can influence the business in long run.