Business Ethics, Social Responsibility and Sustainable Enterprise
What the domain tests
Questions test ethical reasoning, CSR law and sustainability concepts, often through a dilemma.
Core rules
- Business ethics: fairness, honesty, transparency, respect for stakeholders and compliance; ethics goes beyond legality.
- CSR under Section 135, Companies Act 2013: applies if net worth is at least ₹500 crore, turnover at least ₹1,000 crore or net profit at least ₹5 crore; spend 2% of average net profit of the preceding three financial years; CSR committee and reporting apply.
- Triple bottom line: people, planet and profit.
- Sustainability: resource efficiency, circular economy, waste reduction, ESG and the SDGs.
- Stakeholders: owners, workers, customers, suppliers, community and environment.
Worked example
A dyeing unit discharges untreated effluent. The cheapest option is to keep discharging; the ethical and legal option is to install effluent treatment. The decision is justified by compliance, worker and community health, and long-term licence to operate. If the firm's CSR obligation applies, treatment plant capex is not automatically CSR-CSR is a separate 2% spend on specified activities; environmental compliance is a business cost.
Traps
CSR is not charity or donation at will; it is a statutory obligation with eligible activities. The 2% is not a tax. Ethics is not the same as legality-lawful conduct can still be unethical. Do not count core business capex as CSR. Do not reduce sustainability to tree-planting.