Corporate Social Responsibility

Stakeholder Concept

Who are the Stakeholders of Business?

• Shareholders and Promoters

• Customers

• Employees

• Suppliers and Partners (incl Contractors, Agents etc)

• Government

• Society

Most Admired Business

“Balancing and Exceeding the Expectations of all it’s
Stakeholders.”

Effectiveness of Business
Achievement of Objectives.

Efficiency in Business
Achievement of Results with the least amount of
Resources.

Systems Approach
Alignment & integration

Innovation: The NDB Concept

Managing Change: Jack Welsh Theory

Organizational Renewal & Revitalisation: Continuous Process brought by internal incumbents

Emerging Waves

Factor Yesterday Today

Economy Protected Open

Characteristic Monopolistic Competitive
Market Sellers Buyers
Players Few Several
Kind of Players National Global
Price Level High Dropping
Consumer No choice Multiple Choice
Technology Low High
Quality Average High
Delivery Weeks/Months/Years Off the shelf
Pricing High Cut-throat
Needs Limited Enhanced
Response Sluggish Quick
Relation Curt Respect
Approach Mass Personalised
Style Arrogant Understanding
Changing Characteristics of Corporates

Old New
Goal Oriented Vision oriented
Price focused Value focused
Product quality Total quality
Product driven Customer driven
Shareholder focused Stake holder focused
Finance oriented Speed oriented
Efficient, Stable Innovative, entrepreneurial
Hierarchical Flat, empowered
Machine based Information based
Functional Cross functional
Rigid, Committed Flexible, learning
Local/regional/National Global
C S R makes Business Sense
“The earth has enough resources to meet the needs of people but will never have enough
to serve their greed.”
Mahatma Gandhi

• Triple Bottom Line Concept

• Corporate Behaviour

• CSR as Core value of the Business

• Natural Resources for Business

• Core Competency of Business

• Millennium development goals

CSR Makes Business Sense

Corporate Social Responsibility (CSR) is a business strategy that works. In a world where brand
value and reputation are increasingly seen as a company’s most valuable assets, CSR can build
the loyalty and trust that ensure a bright sustainable future. In our complex, global society,
corporations are becoming increasingly visible. They are not judged on their results but on their
behavior too, and this can be an opportunity. By integrating CSR into your business as core
value, you are not only making a significant contribution to a better society, but just as importantly
you are recognized for doing so. And this has obvious benefits for the company
If one is to be successful in 21st century, one must simultaneously excel in all three elements of
sustainable development: Economic Prosperity, CSR and Environmental Stewardship. The right
way to approach social responsibility is not in rules and regulations but in a high level ethical code
that could be built into an organization’s value system.CSR is an approach that helps us to get
away from the old idea that economic, social and environmental goals are always and invariably
in conflict. What we need to work out is how progress on any one of those
fronts can support progress on the others.
We want to see business, the voluntary sector, and public bodies all working together, not doing
so grudgingly, but because each sees it as advancing its own key interests to do so, as well as
advancing the interests of others.

Benefits of CSR are :

1. Enhanced Brand Image and Reputation
2. Increased Trust and Customer Loyalty
3. Sustainable Development

The Millennium Development Goals… as defined by UN

• Eradicate extreme poverty and hunger

• Achieve universal primary education
• Promote gender equality and empower women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, malaria and other diseases
• Ensure environmental sustainability
• Develop a global partnership for development
• Stop Child Labour

• Key Communities
• Need Assessment
Participatory rural Appraisal (PRA)
Social Impact Analysis
• Thrust Areas
 • Thrust Areas

1. Healthcare
2. Education
3. Environment
4. Income Generation
5. Infrastructure

Healthcare
• PHCs

• Lifeline Express experience

• Mobile Medical Services

• Single point program

- agenda in millenium goals of UN

Education
• Schooling : Primary/ Secondary/ HS

• Building capacities : ITI, Tech training

• Need based education – Rural technicians

• Industry specific – explorations, Mechanics

• Earn while learn

Income Generation (Vocational Guidance)

• Rural BPO

• SHG concept

• Sericulture/ Beekeeping

• Tata Steel experience – archery

Advertising and CSR

Consumers Vs Community

Religion, Sex, Children, Stunts.

Role of Media in propagating CSR

Polio Eradication
Global Warming & Environmental ethics
Prevention of cruelty to Animals
Family Planning

Social Entrepreneurship: Finding a purpose

Volunteering Activities: Joy of Giving

• National priorities & Trends

 • Setting up new Projects /
Development of SEZs
• Class exercise

Meetings with Community Heads, Govt., NGOs

• Need Assessment
• Setting up Goals / Planning
• Opportunities
• Review Meetings
• Share Ideas / Brainstorming
• Problem solving
• Knowledge sharing
• Decision making
• Resource Allocation
• Volunteering

Creating a Most Admired Business by Work Ethics

Recently, there has been an increasing awareness, and more importantly, an increasing
interest in the field of Business Ethics. This is indeed a welcome trend! In fact, perhaps, there has
not been any time in the history of business development where the concepts and an
understanding of the nature of business ethics has been so urgently needed, never before had
the need for ethical practices in business so widely felt! Business Ethics proves that business can
be, and have been, ethical and still make profits. Till the last few decades, Business Ethics was
thought of as being a contradiction of terms. The popular concept was that if it is business, then it
cannot be ethical, and if it is ethical, it does not represent business at all. This amounts to saying
that business can make profits only through immoral ways, by being unethical! Nothing can be
more further from the truth. Thankfully such thoughts are not prevalent any more. There are
examples galore where not only have ethical companies made profits, but more importantly, it is
only ethical companies which discharged its social responsibilities, that have survived competition
and turbulent changes through the years and have contributed to social welfare and have
continued to flourish undiminished. Hence, today, more and more interest is being given by
corporate houses and business leaders to the application of ethical practices in business
dealings.
A business or company is considered ethical only if it tries to reach a trade-off between pursuing
its economic objectives and its social obligations, i.e., between its commercial objectives and its
welfare obligations. What are obligations of a business is open to interpretations. The list of
obligations that a company must perform is long and complex and hence is costly to the
company; yet they must be discharged if a company wants to survive and grow in the long run
and is not satisfied in making short term profits. While discharging its obligations to the society,
the company not only fulfils its own duties, but also paves the way for a stronger and more ethical
foundation.
In fact, it is unethical for companies NOT to make profits. It is unethical to make losses. A
company which cannot make profits and make losses, misutilises scarce national resources,
cannot pay back creditors, upsets the economy, promotes inefficiency and most importantly,
cannot, at any cost discharge its social responsibilities, meet its welfare commitments and
jeopardises the future of its employees and drives them into the unemployment market. Such a
loss-making company becomes nuisance and a burden to the economy and has no right to exist
in the market place. Moreover, it has no business to force its employees into economic insecurity,
which is highly unethical. Thus, instead of profits being contradictory to ethics, business ethics
dictates that the first responsibility of business is to remain profitable and generate revenue for
the shareholders and the society.
Why business ethics has assumed so great a part in our market economy is partly due to the fact
that unethical decisions are not limited only to themselves, but affects a wide range of other
situations and have widespread ramifications. One unethical action is like a pebble thrown into a
pond of water, it produces endless ripples in the pond until the water of the entire pond gets
disturbed by it. Similarly the single unethical action is not limited to the individual in the company
who commits it, but spreads within the entire organisation; one unethical organisation affects the
entire industry; and one unethical industry in turn, affects the entire economy and ultimately the
entire nation.
Since business exists and operate within the society and is a part of a subsystem of society, its
functioning must contribute to the welfare of the society. To survive, develop and excel, business
must earn social sanction of the society wherein it exists and functions. Without social sanction, a
business can not earn loyal customers, cannot operate in the marketplace and will soon wither
and die away. Thus, business can earn social sanction only through being ethical in its dealings,
working for the welfare of the society and by discharging its social responsibilities.
In spite of India having an ancient culture and philosophy about worklife, we in India have not yet
managed to develop our own management styles in consonance with our own cultural ethos and
have been systematically importing management systems and styles from foreign countries.
Indian tradition and heritage, its culture and philosophy, its ethos and values are a treasure
house, where the richest and the rarest of gems are stored. It is ours only for the asking. If we
can apply even a few of these gems to the management of the modern organisation, we will be
doing a great service, not only to ourselves, or to our organisations, but also to our future
generations of entrepreneurs and managers.

Meaning of Business Ethics

Business ethics are those principles, practices or philosophies that are concerned with moral
judgement and good conduct as they are applicable to business situation. Business ethics refers
to right or wrong behavior in business decisions. Business ethics involves morally accepted
behavior in business practices.

Importance of Business Ethics

Customer will be satisfied only if the business follows all the business ethics.
Business ethics is needed in order to make members of the business conscious as regards their
duties and responsibilities towards consumer and other social groups.
Business ethics is needed to make business activities fair to consumers. It checks business
malpractices and offers protection to consumers.
Business ethics is needed in order to improve the confidence of consumers as regards quality,
price, reliability, etc of goods and services supplied.
Business ethics is needed in order to protect the interest of all those concerned with business –
the shareholders, employees, dealers, and suppliers. It avoids their exploitation through unfair
trade practices.
Business ethics is needed in order to create good image in the society and also for avoiding
public criticism. Ethical business gets public support.
Business ethics leave a long-lasting impression on the customers and the impression on their
minds builds trust, fetching a business more customers while retaining the older ones.
Without following certain ideals in business, one cannot become successful. Success that is
attained without a foundation of strong ethics is bound to be short-lived. A business cannot
continue to prosper without an ethical base. A few successes can be coincidences or flukes but
persistent success can only be a result of a strong foundation of ethics.
Public will be ready to invest or lend money only if they are convinced that the organization is
following fair business practices.
Business in the long run, do require social recognition and support.

Ethics and Law

Ethics concentrates on the Do’s whereas Law concentrates on Don’ts.
Ethics is not backed by power but Law is backed by power.
Ethics does not use force whereas Law uses force when necessary.
Ethics is broad concept whereas Law is narrow concept.

Following things will fall within the ambit of ethics but not of law
Look after the aged.
Be considerate to your workers.
Obey your elders.
Do not tell a lie.
Do not misguide for personal benefits.
Keeping promises

Business Ethics is now a management discipline

Ethical issues are there everywhere, at all levels of business activity. Business ethics concern the
ground rules of individual company and social behavior.
(a) At Stakeholder’s level

• Shareholders

Ensure capital appreciation

Ensure steady and regular dividends

Disclose all relevant information

Protect minority shareholders interests

Not to window dress balance sheets

Protect interest in times of mergers, amalgamations and takeovers

• Banks and Lending institutions

Guarantee safety of borrowed funds

Prompt repayment of loans

• Customers

Better quality of goods

Goods and services at reasonable price

Not to corner stocks and create temporary shortage

Not to practice discriminatory pricing

Not to make false claims about products in advertisements

• Employees

Security of job

Better and safe working conditions

Better recommendation

Participative management

Welfare facilities

• Suppliers and partners

Prompt Payments

Fair practices of business

Creating a level playing field

• Government

Complying with rules and regulations

 Honesty in paying taxes and other dues

Acting as partner in progress of the country

• Society / Community

Concern for poor and down trodden

No discrimination against any particular section or group

Concern for clean environment

Preservation of scarce resources for posterity

Contributing to better quality of life

(b) Internal Policy Level

• Fair practices relating to recruitment, compensation, lay-offs, perks, promotion,

etc.

• Transformational leadership to motivate employees to aim at better and higher

things in life

• Better communication at all levels

(c) Personal Policy Level

• Not to misuse others for personal ends

• Not to indulge in politics to gain power

• Not to spoil promotional chances of others

• Not to use office car, stationary and other property for personal use

• Not to fall prey to shortcuts and easy money

• Promise keeping

• No violence, i.e. preventing or not causing physical harm to others

• Mutual help

• Respect for persons and property

Development of Business Ethics

1. Involvement of the senior management

Every company needs a champion or role model or mentor to guide the corporate ethics
programme. A senior person mostly CEO or Chairman should take the responsibility to
lead the ethics programme. The board and senior management should show the
enthusiasm and commitment and always provide the guidance to the employees.
2. Involvement of the employees

No programme can be successful without involvement of the grass root employees. It is

important to know what bothers people while making the code of ethics. Each and every
person should know the code of the ethics and should be made to follow it.

3. Corporate codes

Corporations have to operate within the ethics and moral principles of the society to
which it belongs. Those principles or actions should be selected which are considered as
just, normal or fair. In such a situation they are unlikely to be rejected by the employees,
the customers, the suppliers, the government and the society.

Corporate Governance

According to SEBI committee, “Corporate Governance is the system by which the

companies are directed and controlled by the management in the best interest of the
stakeholders and others, ensuring greater transparency and better and timely financial
reporting.”

Objectives of Corp Governance

• To enhance the long term value and economic efficiency of the company. It
encompasses all shareholders and integrates all the participants involved in the
process.

• To elevate the reputation of the company and the esteem of its management

• To attract, employ and retain talent and motivate employees to give their best. A
more open and participative style of management ensures free exchange of
ideas and frank appreciation at all levels.

• To create and adopt, code of conduct with wholehearted commitment and

improve the moral and ethical standards of performance to the utmost level.

• To have a right balance, knowledge and competence to set strategies and lead
the organization.

• To use the resources entrusted to the management, in most economic and

efficient productive and effective ways, for the benefit of shareholders as well as
for the society at large.

• To set the high standards of business ethics based upon humanity, honesty and
hardwork.

• To improve the standard of living and life of the society, industry, commerce,
services and professionals.

• To generate accurate and reliable information.

• To make decision-making process transparent.

Important Issues : Sexual Harassment

It is important to know what constitutes sexual harassment.

Verbal

• Sexual or gender-based jokes or teasing or comments about clothing, personal

behavior, or a person’s body.

• Requesting sexual favours

• Pressure for date

• Graphic description of pornography

• Obscene phone calls

• Spreading rumours about a person’s personal or sex life

• Turning work discussions into sexual topics (such as by using “puns”)

Non-Verbal
• Staring or sizing up a person’s body

• Derogatory gestures of a sexual nature

• Suggestive looks (winking, licking lips)

Physical
• Unwelcome hugging, kissing

• Standing too close to or brushing against another person, leaning over

• Patting, stroking, grabbing or pinching

• Blocking someone’s path with the purpose of making a sexual advance

• Stalking

Visual
• Presence of posters, cartoons, drawings, calendars, pinups, pictures, computer
programmes of sexual nature

• Notes or e-mails containing sexual comments

• Knick-knacks and other objects of a sexual nature

A bill was drafted two and a half years ago to frame a sexual harassment law, but has
since faded into oblivion.
Whistle Blowing Policy
When an employee thinks that his/ her firm is resorting to some act that is unethical or
harmful to public, he/she “blows the whistle” by reporting alleged organizational
misconduct to the public or to top executives. Whistle blowing refrains the firm from
indulging in unethical and harmful practices.
 Corporate Social Responsibility makes business sense
Corporate Social Responsibility (CSR) is a business strategy that works. In a world where brand
value and reputation are increasingly seen as a company’s most valuable assets, CSR can build
the loyalty and trust that ensure a bright sustainable future. In our complex, global society,
corporations are becoming increasingly visible. They are not judged on their results but on their
behavior too, and this can be an opportunity. By integrating CSR into your business as core
value, you are not only making a significant contribution to a better society, but just as importantly
you are recognized for doing so. And this has obvious benefits for the company. If one is to be
successful in 21st century, one must simultaneously excel in all three elements of sustainable
development: Economic Prosperity, CSR and Environmental Stewardship. The right way to
approach social responsibility is not in rules and regulations but in a high level ethical code that
could be built into an organization’s value system. CSR is an approach that helps us to get away
from the old idea that economic, social and environmental goals are always and invariably in
conflict. What we need to work out is how progress on any one of those fronts can support
progress on the others. We want to see business, the voluntary sector, and public bodies all
working together, not doing so grudgingly, but because each sees it as advancing its own key
interests to do so, as well as advancing the interests of others.
Benefits of CSR are :
1. Enhanced Brand Image and Reputation

2. Increased Trust and Customer Loyalty

3. Sustainable Development

Evolution of CSR

Historical Background
In 1948, the United Nations created the Universal Declaration of Human Rights.
CSR as a concept originated in 1950 as the American Corp. increased in size and
power,academics & corporate leaders began to recognise and articulate the impact of
corporations on society.
specifically social problems like poverty, slavery, child labour,unemployment,women
empowerment and racial discrimination. By 1970 environment was added as an area of
concern.

Philosophy
Paternalism – honesty, ethical & fair treatment
Philanthropy – for the love of humanity
Community Wellbeing – industrial/labout welfare
Foundations – specially dedicated charities of businesses
Socially Responsible Business
- voluntary innitiative
- integral part of business
- towards cleaner environment

WHY CSR? Two Perspectives

The Immediate View

“…Imagine this: if a large proportion of the workforce was illiterate, if half lived in
shack settlements without adequate shelter; if more than 80% could not afford basic
health care; if a thousand people joined the economy every day of the year and fewer
than a hundred found work in the formal sector. If that can be imagined, then imagine
what the position of the company will be in ten, fifteen or twenty years hence.
“ It would have to be concluded that without change in those social conditions,
the company would not survive. It is on these grounds that the business community
 has a vital role in developing countries, not only to respond to the plight of the poor
out of a sense of charity or as good citizens, but to do so in order to secure its own
survival.”
Brian Whitaker -National Business Initiative - South Africa

WHY CSR? Two Perspectives….

The Long View

“Development can be seen…as a process of expanding the real freedoms that people
enjoy…and (removing) the sources of unfreedom: poverty, tyranny, poor economic
opportunities, systematic social deprivation, neglect of public facilities, intolerance,
repressive states...
“The relation between individual freedom and the achievement of social
development ...is influenced by economic opportunities, political liberties, social
powers, and the enabling conditions of good health, basic education, and the
encouragement and cultivation of initiatives,... by the exercise of people’s freedom,
through the liberty to participate in social choice and in making of public decisions
that impel the progress of these opportunities.”
Amartya Sen - Nobel Prize Winner in Economics “Development as Freedom”

Some Definitions
CSR is about how companies manage the business processes to produce an overall positive
impact on society.
CSR is a commitment to improve community well being through discretionary business practices
and contribution of corporate resources. Philip Kotler
‘CSR’ is about business giving back to society
It is an accepted fact, that, there are crucial linkages between economic growth, human
development, social cohesion and environmental sustainability
"CSR is about capacity building for sustainable livelihoods. It respects cultural differences and
finds the business opportunities in building the skills of employees, the community and the
government"
“We think, we started on sound and straight forward business principles, considering the interests
of the shareholder, our own and the health and welfare of the employees the sure foundation
of our prosperity “ Jamsetji Tata in 1895 , on the opening of new extension of the Empress
Mills.
Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public
expectations that society has of business (BSR 2003)
European Commission’s green paper, CSR is defined as “companies integrating social and
environmental concerns in their daily business operations and in their interactions with their
stakeholders on a voluntary basis.”
“ The aim is to align as nearly as possible the interest of individuals, corporations and society “ –
Sir Adrian Cadbury in GCG F 2000.

CSR – Concept

Triple Bottom Line – evaluating corporate performance according to financial, social and
environmental value added or destroyed (3P/3E)
Corporate Sustainability – business approach that creates long term stakeholder value by
embracing opportunities and managing risks deriving from economic, environmental and
social developments. The leaders use strategy, innovation, governance and stakeholders to
harness the markets’ potential for sustainability products & services as well as reducing and
avoiding sustainability costs and risks

Social responsibility of business:

Economic Performance: Profit – need & result
Negative Impact arising out of business
 - eliminate/ drop activity
- reduce / minimize impact
- alternate profitable business opportunity
- enactment of right regulation (cost- competitive disadvantage)
3. Progressive Social Development

Arguments against Corporate Social Responsibility

Businesses are owned by their shareholders - any money they spend on so-called social
responsibility is effectively theft from those shareholders who can, after all, decide for
themselves if they want to give to charity.
The leading companies who report on their social responsibility are basket cases - the most
effective business leaders don't waste time with this stuff.
Our company is too busy surviving hard times to do this. We can't afford to take our eye off the
ball - we have to focus on core business.
It's the responsibility of the politicians to deal with all this stuff. It's not our role to get involved

CSR- Key Drivers

Globalisation
Transnational investments
Regulatory demands
Communication revolution: Technology and communication has shifted authority and power from
states to markets
Good governance – partnership / supply chain management
Larger and more complex interface with govt. and non govt. stakeholders (WBCSD, ILO, UNEP,
UNDP, OECD etc)
Convergence of interests (Government, Business, Civil Society)
Intense Competition
Human development Goals
Non Governmental Organisations
NGO – media partnership, a power to reckon with.
Greater stakeholder awareness (pressure/interest grps)
Stakeholder value maximisation
Environmental degradation / challenges
GRI – Global Reporting Initiatives / 3P concept
Global Compact
SRI- socially responsible investing
CERES
"The earth has enough for everyone's need, but not for everyone's greed."

CSR – Partnerships
Need for experience, competence, credibility & legitimacy offered by stakeholder universe has
led to innovative multi stakeholder partnerships with,
Government
Labor unions
Coalition/ interest groups
Communities
Institutions (ILO, IMF,WB, ADB, WTO, UNDP, WBCSD)
NGO’s
Advocacy groups

Convergence has brought a Shift From

“Is there a role for Business…” to
“What is the role of Business in addressing social issues

From
“How to help Government deal with public problems?” to
“Are there market solutions to public problems?”
 Public Private Partnership

Probably the best form of discharging CSR for sustainable Development

Most companies with Global aspirations, make ‘CSR’

as a part of their mainstream business strategy

Partnership Impact
Work with corporate instead of against them.
Corporates have turned into key resources for their partners.
Inherent strengths of leadership, financial and organisational skills as well as pool of trained
individuals, market access and experience on the table.
Equal commitments speeds up delivery time and performance.
Win – Win situation.

CSR- Some Global Concerns

Defining the issue – some confusion
Partnership dilemmas
Challenges for government
Not reduced to high visibility projects
Implementation as an integrated process not activity
CSR to be linked with sustainable development
Whether CSR should be mandatory and CSR reporting standardised
Supply chain responsibility

CSR in India – Some concerns

Lack of conviction of the necessity of CSR in Corporates
Lack of partnership approach between Corporates & NGOs
Lack of interest in Non Financial Expertise from Corporates by NGOs

CSR – Indian Perspective

Vedic period (daan - Merchant charity) -Scriptures advocate people and environment friendly
codes of conduct. Traditionally a eco friendly society – conscious of eco systems and its
equilibrium
Trusteeship- gandhian philosophy practiced by social & industry leaders like Vinoba
Bhave,Jayprakash Narain JRD Tata, Ramkrishna Bajaj, Kasturbhai Lalbhai etc
Corporate Citizenship – to bring about social change and progress in this era of
industrialisation. Fair Trade Practices Association was launched by JRD Tata, Ramakrishna
Bajaj and others followed
Managerial Trusteeship: recognition of the businesses' responsibility of creation of wealth as
well importance of ethical business practices and concern for the environment in which the
business operates led to creation of enterprises like Tata Group, Wipro, Infosys, Birla Group,
Biocon, Cadbury India, Ford India, etc
Public Private Partnership: Dynamic, mutually beneficial virtuous cycle leading to exponential
growth in performance delivery.

Driving concerns for Corporate Indian

Poverty
Population
Education
Unemployment
Health
Child labor
Gender Equality
Child & maternal mortality
Under utilisation of human & natural resources
Environmental degradation

CSR Current Scenario in India

Indian companies, MNCs and PSU's feel and say; “ CR focusing on people and planet in addition
to profit has the potential to be an extremely positive force that can fuel business growth,
contribute to social, environmental and sustainable development.”
Yet very few companies in India have a written CR policy and across different business segments
most companies do not perceive its importance.
Companies are normally expected to invest 3% -5% of their profits in to CR programs. The
present scenario ranges from 0.1% to 2 % and an exceptional 14% by Tata steel.
Given the context of outsourcing, small and medium enterprises and supply/assembly chains
attention to labour norms, employee welfare, health, safety and quality standards and internal
governance and disclosures need to be emphasized as much as CR.
Most companies cite constraints and challenges to practicing CR such as
overall absence of policy and linkage between CR and financial success,
lack of capacity and comprehension to implement CR,
mechanisms to measure and monitor and evaluate in discharging their responsibility.
These are some of the areas where non profits & foundations working in CR today have a
significant role to play.
Though India has the lowest level of per capita income among the seven Asian countries as
compared to South Korea, Thailand, Singapore, Malaysia, Philippines and Indonesia it has
the highest level of CSR practices. Education, health and community development are some
of the most popular areas of CR engagement followed by natural resource management, IT
and livelihood based activities.

Corporate Social Initiatives - Philip Kotler

Overlapping into each other
Corporate Philanthropy
Cause Promotion
Cause Related Marketing
Corporate Social Marketing
Community Volunteering
Socially Responsible Business Practices

CSR –Emerging Perspective

Three emerging perspectives :
Reputation Capital
- capturing & sustaining markets
- use in advertising & social marketing initiatives
Eco – Social perspective
- shareholder accountability to stakeholder accountability
- maximization to optimization of profits
Rights based perspective
- stresses accountability, transparency and social and
environmental investment

CSR – Model
Three co-existing models
Ethical : moral responsibility towards its stakeholder population
Altruism : Growing rights based perspective stresses accountability, transparency and social and
environmental investment by businesses leading to sustainable development
Strategic : CSR for Competitive Advantage: In competitive context of – factor conditions, demand
conditions, related & supporting industries, strategy & rivalry

CSR – Business Advantage

Protect “licence to operate”
Increased sales & market share
Strengthened Brand Positioning
Reduce cost, risks, liabilities, litigation cost
Access to large talent pool – corporate & brand reputation advantage
Better employee retention – reduced cost of training
Availability of growing pool of international capital
Customer satisfaction, loyalty, advocacy.
Improved Corporate Image
Improved stakeholder value
Sustainable development
Status of preferred supplier / partner
Environmental sustainability
Newer markets / opportunities
Stakeholder support in times of crisis
Competitive mileage

Emerging Areas of CSR

Purpose & Values

Workplace & Human Rights
Marketplace
Corporate Governance
Environment
Community

Environmental impact, benefits or costs, of companies core products and services

Positive and negative media comments for environmental activities

CSR – New Paradigms

(Michael Porter)
Corporate Philanthropy – diffuse, unfocussed
- communal obligation
- goodwill - employees, customers, local community
- strategic giving- promote company’s image through
high profile sponsorship / cause association
Strategic CSR – focused, competitive context
Variables:
Availability of skilled & motivated employees
Efficiency of local infrastructure ( road, telecom)
Size and sophistication of local market
Extent of government regulation

Four Elements of Competitive Context

factor conditions: - raw material, people, infrastructure, capital resource, information
infrastructure, natural resource
demand conditions: local customers, specialised segments, future needs
related & supporting industry: suppliers, related industries, clusters
context for strategy & rivalry : local policies & incentives, IPR, vigorous local competition

Strategic CSR -New Approach (Michael Porter)

Examine the competitive context in each of the company’s important geographic locations
- tightly targeted objective
- well defined contextual initiative
Review the existing philanthropic portfolio to see how it fits this new paradigm
Assess existing & potential corporate giving initiatives against the four forms of value creation
- select most effective grantee
- signal other funders
- improve grantee performance
- advance knowledge & practice
Seek opportunities for collective action within a cluster & with other partners
- focusing on social change and not PR will expand the potential for partnership
Rigorously track and evaluate results
- successful programs will be long term commitments and will continue to grow in scale &
sophistication

Sustainable Business Development

 Sustainable competitiveness demands the simultaneous improvement of economic,
environmental and social performance in the short and the long term.

Objectives
1. Innovation and entrepreneurship
2. Skills and competence building
3. Equal opportunities and diversity
4. Health and safety
5. Environmental protection

Strategies to achieve these goals

Corporate responsibility in the mainstream of business
Stakeholder engagement
Leadership and governance
Communication and transparency
Business-to-business co-operation and alliances

Additional Reference Material

International SR Audits, Benchmarks & Funds..

Global Reporting Initiative
Dow Jones Sustainability Indexes
FTSE4 Good index
The Domini 400 Social Index
Pax World Funds
EIRIS (Ethical Investment research Services)
Calvert Social Investment Fund
Sierra Club Mutual Funds
New Alternatives Fund
Pro-Conscience Funds own FEMMX, Women’s Equity Mutual Fund
Social Funds.com

About OECD

The OECD groups 30 member countries sharing a commitment to democratic government and
the market economy. With active relationships with some 70 other countries, NGO’s and civil
society, it has a global reach.
The OECD plays a prominent role in fostering good governance in the public service and in
corporate activity.
The OECD produces internationally agreed instruments, decisions and recommendations to
promote rules of the game in areas where multilateral agreement is necessary for individual
countries to make progress in a globalised economy. Sharing the benefits of growth is also
crucial as shown in activities such as emerging economies, sustainable
development,territorial economy and aid.

About SRI
Integrating personal values and societal concerns with investment decisions is called Socially
Responsible Investing (SRI). SRI considers both the investor's financial needs and an
investment’s impact on society. With SRI, you can put your money to work to build a better
tomorrow while earning competitive returns today.
Social investors include individuals and institutions such as corporations, universities, hospitals,
foundations, insurance companies, pension funds, nonprofit organizations, churches and
synagogues.
Three key SRI strategies have evolved over the years: Screening, Shareholder Advocacy,
Community Investment.

SRI Screens
Judged as ;
No Screens
Positive investment
Restricted investment
No investment
Industries like ; Alcohol,tobacco,gambling,defenses/weapons, animal testing, environment,
products & services, etc.
About SA 8000
Established in 1987, SustainAbility is a strategy consultancy and independent think tank
specializing in the business risks and market opportunities of corporate responsibility &
sustainable development
Coined the terms ‘green consumer’ and ‘triple bottom line’ to describe new types of markets and
innovative business approaches that would be needed to achieve success.
Clients : Ford India, Abbot Labs, Body Shop, BMW Grp, ABN Amro, BA, BT, Canon, Chevron
Texaco, DuPont, HP, IBM , Nike, P&G etc
SA 8000 is a comprehensive, global, verifiable standard for auditing and certifying compliance
with corporate responsibility. It is applicable to both small and large companies that want to
demonstrate to customers and other stakeholders that they care. The heart of the standard is
the belief that all workplaces should be managed in such a manner that basic human rights
are supported and that management is prepared to accept accountability for this.
The standard was initiated by Social Accountability International (SAI). SAI is a non-profit
organization dedicated to the development, implementation, and oversight of voluntary
verifiable social accountability standards.

Corporate responsibility services offered

Strategy Development & Business Case
Corporate Governance
Operational Effectiveness
Issues and Trends Analysis
Non-financial Risk Management
Innovation
Stakeholder Engagement
Dilemma resolution
Corporate Reporting
Emerging Economies

ETI – Ethical Trading Initiatives

The Ethical Trading Initiative (ETI) is an alliance of companies, non-governmental organizations
(NGOs) and trade union organizations. They exist to promote and improve the
implementation of corporate codes of practice which cover supply chain working conditions.
Their ultimate goal is to ensure that the working conditions of workers producing for the UK
market meet or exceed international labor standards.
ETI has developed a code of labor practice – the Base code - reflecting the most relevant
international standards with respect to labor practices which will be used as the basis of its
work.
ETI member companies are expected to adopt this Base Code, or to adopt their own code so
long as it incorporates the Base Code. The Base Code which is accompanied by a set of
general principles concerning implementation, provides a foundation for ETI's philosophy of
learning.
It’s a multi stakeholder code like SA 8000

ISO 14000 with EMS

Started in 1997, the ISO 14000 is primarily concerned with "environmental management". This
means what the organization does to:
- minimize harmful effects on the environment caused by its activities, and to
- achieve continual improvement of its environmental performance.
"certification" refers to the issuing of written assurance (the certificate) by an independent,
external body that has audited an organization's management system and verified that it
conforms to the requirements specified in the standard
The Environmental Management System (EMS) is the part of the overall management system
that includes organizational structure, planning activities, responsibilities, practices,
procedures, processes, and resources for developing, implementing, achieving, reviewing
and maintaining the environmental policy.
An Environmental Management System Audit is a systematic and documented verification
process of objectively obtaining and evaluating evidence to determine whether an
organization's environmental management system conforms to the environmental
management system audit criteria set by the organization, and for communication of the
results of this process to management.

CERES

Coalition of Environmentally Responsible Economies

coalition of investment funds (representing over $400 billion in invested capital), environmental
organizations, and public interest groups.
CERES has developed ten principles of environmental ethics and sustainable development, to be
used as a framework by groups working toward solutions to environmental concerns:

1. Protection of the Biosphere.

2. Sustainable Use of Natural Resources.
3. Reduction and Disposal of Wastes.
4. Energy Conservation.
5. Risk Reduction.
6. Safe Products and Services.
7. Environmental Restoration.
8. Informing the Public.
9. Management Commitment.
10. Audits and Reports.

GRI is the result of a partnership between CERES and the United Nations Environment Program
(UNEP). GRI was established to help develop guidelines for reporting on businesses’
economic, environmental, and social performance.

Global Compact

In January 1999, UN Secretary-General Kofi Annan proposed a Global Compact between

the UN and business to uphold and promulgate a set of core values in the areas of
human rights, labour standards and environmental practice.
The Global Compact was formally launched on 26 July 2000 at a meeting at the United
Nations chaired by Kofi Annan and attended, among others, by senior officers of some
50 major companies.
The Compact is open for adherence by any company, large or small, wishing to do so. No
formalities are involved. Companies are asked to demonstrate their adherence by
taking corporate action to support the core values of the Compact.

Global Compact……
The Ten Principles
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed
human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Global Compact……
Labour Standards
Principle 3: Businesses should uphold the freedom of association and the effective recognition of
the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies
Anti-Corruption
Principle 10: Businesses should work against all forms of corruption, including extortion and
bribery.

Millennium Development Goals:

Launched in July 2002, the Millennium Project is an independent advisory project commissioned
by UN Secretary-General Kofi Annan and supported by the UN Development Group.
1. Eradicate extreme poverty and hunger.
2. Achieve universal primary education
3. Reduce child mortality
4. Promote gender equality and empower women
5. Improve maternal health
6. Combat HiV / Aids, malaria and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development.

Tenth Five Year Plan:

Reduction of poverty ratio by 5 percentage points by 2007 and by 15 percentage points by 2012;
Providing gainful and high-quality employment at least to addition to the labour force over the
Tenth Plan period; ( current unemployment figure is 9 percent )
All children in school by 2003; all children to complete 5 years of schooling by 2007;
Reduction in gender gaps in literacy and wage rates by at least 50 per cent by 2007;
Reduction in the decadal rate of population growth between 2001 and 2011 to 16.2 per cent;
Increase in Literacy rates to 75 per cent within the Plan period;
Reduction of Infant mortality rate (IMR) to 45 per 1000 live births by 2007 and to 28 by 2012;
Reduction of Maternal mortality ratio (MMR) to 2 per 1000 live births by 2007 and to 1 by 2012;
Increase in forest and tree cover to 25 per cent by 2007 and 33 per cent by 2012;
All villages to have sustained access to potable drinking water within the Plan period;
Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012.

CASE STUDY FOR CSR INITIATIVE

Agricultural Raw Materials Direct Procurement

Organisation Name: Nestlé Headquarters

Problem

Nestlé relies on the long-term supply of agricultural raw materials at competitive cost so that
finished products remain affordable. At the same time, consumers' confidence depends on
the quality and safety of the food supply chain. Damages to natural resources and
environment will affect agricultural productivity.

Solution

Nestlé's decision to set up Direct Procurement depends on a number of factors. These

include the company's requirements in terms of:
 • quality
• safety
• quantity and cost
• the characteristics of individual raw materials
• the reliability in supply
• the local conditions for sustainable production.

The direct procurement system is based on the set up of the local Nestlé operational
company's network, and the raw materials purchased are processed at Nestlé
manufacturing sites in the country itself.
Nestlé is more involved in the direct procurement of green coffee and fresh milk. Nestlé
implemented direct procurement for coffee beans in six countries, Thailand, Ivory Coast,
Indonesia, China, Mexico and the Philippines. In 2003, Nestlé purchased about 1.8 million
bags or 110,000 tons of green coffee from over 100,000 farmers. In 2003 Nestlé
implemented direct procurement for fresh milk in 37 countries (among others China,
Bangladesh, India, Pakistan, Sri Lanka, South Africa, Turkey, Brazil, Argentina, Colombia
and Mexico) covering about 6,600,000 tons of fresh milk from over 325,000 farmers.

Benefits

• The direct procurement system provides farmers with an alternative sales channel that
is transparent, fair and based on quality. Farmers receive a better price for their produce,
as there are no intermediaries.
• It induces quality improvement by basing payment on quality.
• Where appropriate (particularly in developing countries), Nestlé provides various
technical assistance to farmers to improve the quality of their produce and farm in a
sustainable manner.
• For Nestlé, it ensures a long-term supply of agricultural raw materials that are of the
right quality, safe and at a competitive cost.
• Direct procurement empowers the local economy and supports rural development.

Period Of Implementation 2003

Place Of Implementation Varied developing countries
Themes Health and Safety
Mainstreaming CSR

CASE STUDY FOR CSR INITIATIVES

 "Don’t See A Great Night Wasted"

Promoting responsible attitudes towards alcohol

Organisation Name: Diageo Ireland

Problem: Alcohol is a product that is positive for society when consumed in moderation and
enjoyed responsibly by the vast majority of people who choose to drink. Diageo is proud of the
role their brands play in the lives and celebrations of so many people. Whenever people
choose to drink, Diageo wants them to think of their brands first.

The company also acknowledges however that excessive or inappropriate alcohol

consumption can lead to personal and social problems. As Ireland’s leading drinks company
it is determined to play its role in promoting sensible drinking and providing consumers with
the information and awareness they need to make responsible choices about their alcohol
consumption.

Diageo is also committed to working in partnership with other stakeholders, including

Government, the NGO sector, and industry bodies, to tackle the complex problem of alcohol
misuse and abuse.

Solution

• Diageo Ireland, and its Guinness brand in particular, have a recognised expertise in
marketing and advertising. Diageo Ireland wanted to leverage this expertise and
creativity to promote its responsible drinking message.
• Working with an established Irish design and advertising agency, the concept for the
‘Don’t See A Great Night Wasted’ campaign was developed. The advertisement is the
first responsible drinking message produced specifically for the Irish market.
• The campaign goal is to promote the concept of responsible consumption in Ireland
with young adults by researching and leveraging the highest impact motivations that
would lead to consumer consideration of this behavoir.
• When designing the campaign, Diageo Ireland invested significant resources in
research to understand its consumers’ motivation, attitude and behaviour towards
responsible drinking.
• The first phase of the 'Don't See A Great Night Wasted' campaign began in November
2003 with the launch of the 'Many Me' execution which was launched across a range of
 media including TV, outdoor, press and internet. This phase of the campaign ran until
June 2004.
• In December 2004 the 'Many Me' campaign was extended with the core message
being tailored to tie-in with the Christmas/New Year period and other key periods of
consumption in Ireland. Radio was included for the first time in addition to TV, press,
outdoor adverts, strategic use of washroom advertising and ad mobiles at key weekends.
• The third phase of the ‘Don’t See A Great Night Wasted’ campaign was launched in
August 2005. The 'Wake Up Call' execution further develops the initial campaign's
consumer insights, the erosion of social capital and the impact of a person's behaviour
on their friends' night out. Additionally, we leveraged the importance of the mobile phone
to lend credibility and resonance to the target audience within all aspects of the
marketing materials. This phase of the campaign will run up to June 2006, with intensive
media activity planned for key social events such as festivals and bank holidays.
• We also engage in formal and informal discussions on the campaign with other key
stakeholders, such as MEAS (Mature Enjoyment of Alcohol in Society) and Drinks
Industry Ireland.

Constraints

• Mainstreaming the sensible drinking message to appeal to a young, mobile target

audience who are media ‘savy’.
• Updating the themes and content to address feedback and emerging issues identified
through ongoing research at all stages of the campaign.
• Since Winter 2003, the campaign has required an investment in excess of €5m.

Benefits

• The ‘Don’t See A Great Night Wasted’ campaign has marked Diageo Ireland out as an
innovator among alcohol beverage companies in the Irish market.
• The campaign has demonstrated how the skills and talents of Diageo Ireland in the
fields of research, advertising and marketing can be applied to a different scenario and
produce real results among consumers.
• For the first time in Ireland there is a sustained and effective campaign promoting
sensible drinking and asking consumers to review their attitudes towards alcohol.
• According to independent research,
76% of those who saw the TV ad would be more likely to drink responsibly as a result.
 • Prompted recall for the outdoor element of the campaign was 78% in the target 18-34
year old market.
• 96% of those who were aware of the campaign got the intended message and found it
easy to understand.
• 84% said it was the type of ad that would make them think about their drinking
patterns.

Period Of Implementation Launched in 2003

Place Of Implementation Ireland
Themes Health and Safety
Stakeholder Engagement

"Impact Malaria" Programme: Ensuring Sustainable Access to Medicines for Poverty-

Related Diseases

Organisation Name: Sanofi-Aventis

Problem

Malaria is caused by parasites transmitted to humans by mosquitos. It affects 500 million

people and leads to 1 to 2 million deaths per year, primarily in young African children. It
represents a tremendous human, but also economic, burden on many developing countries.
Effective treatments exist but are often not accessible to those who need it, due to price,
inappropriate distribution channels, or lack of information.

Solution In 2001, Sanofi Aventis created Impact Malaria, a team dedicated to the fight
against malaria, that follows 4 strategic axes:

• Research and develop new antimalarial drugs, to anticipate resistance to existing

compounds. Re-activated research efforts in this field, that have resulted in one
compound entering trials in humans, and several others at earlier stages of development.
• Improve existing drugs to meet the needs and requirements of the patients. As an
example, Impact Malaria develops, in partnership with the Drugs for Neglected Diseases
Initiative (DNDi), a fixed-dose combination of two existing antimalarial drugs. This new
formulation will greatly reduce the number of tablets taken by patients, and will decrease
the likelihood of development of resistance. Moreover there will be no patent registered
for this compound.
 • Develop Behavioral Change Communication tools. The team develops tools to help
patients understand what causes malaria and, therefore, how they can prevent it through
simple measures such as using insecticide-impregnated bednets. The team works with
several NGOs on communication tools tailored to the target populations, that take into
account their local structures, conditions, specificities, literacy rates, etc.
• Develop pricing policies that give access to high quality drugs to all population
segments. Production costs have been optimised to offer the lowest possible prices to
the public market (countries, UN agencies, NGOs, etc.). For patients who cannot afford
brand-name antimalarial drugs, the “CAP Program” has been developed, to give them
access to our drugs at a “no profit-no loss” price through local pharmacies.

The Impact Malaria team comprises 18 full-time persons and benefits from multiple internal
and external collaborations. This successful organisation is being used as a blueprint to
develop similar programs on diseases of the developing world for which access to medicines
is an issue, such as tuberculosis, leishmaniasis, sleeping sickness and epilepsy.

Constraints: Effective and affordable drugs against malaria are indispensable. However,
drugs alone will not significantly reduce the burden of disease in a sustainable way. Many
other interventions are also needed in the field of information, prevention, diagnosis, fight
against mosquitos, etc. Impact Malaria is actively involved in programs that integrate all
aspects of the fight against malaria and will demonstrate what organisation and investment
levels are needed.
Benefits

• Concrete sustainable solutions have been designed to give access to quality drugs to
all populations affected by malaria.
• The company's involvement goes beyond the provision of drugs, through a thorough
understanding of what is required for an effective and sustainable fight against malaria.
• The company's experience in malaria will serve to build programs against tuberculosis
and other major poverty-related diseases, which affect the developing world, but also
some populations of industrialised countries.

Period Of Implementation : Launched in 2001

Place Of Implementation: France and Malaria affected countries in Africa, Asia and Latin
America.
Themes: Innovation
Health and Safety
CASE STUDY CSR INITIATIVE

Antwerp Harbour Safety Project

Organisation Name : Manpower

Problem: In Antwerp, Manpower supplies temporary staff for the Port Trust whenever there
is a shortage of certificated harbour workers. To ensure that these temporary recruits work
safely, it developed a special course in line with its personnel values (We Care about
People) and safety policy.
Solution: In collaboration with the safety department of the Port Trust, Manpower's Safety
Manager developed a course designed to highlight the potential risks these workers would
encounter. Its Service Representatives in Antwerp were first taken on a guided tour of the
harbour by the Port Trust in order to have a better idea of the work environment.

For the course, Manpower opted for a powerpoint presentation to be shown to all its
temporary workers that would be hired by the Port Trust in order to introduce them to their
future work environment including:

• the job, its requirements, the goods to be handled, the right attitude to be adopted, how
to board a ship and other practical information, including some of the specific 'harbour
terminology'.
• They also discover the whereabouts of most important places, like t'Kot, and where to
go to get safety equipment.

Pictures say more than words: Awareness of this helpful information considerably reduces
stress levels generated on the first day at work and temps are made more sensitive to the
risks that will be all around them in the workplace.

Constraints

Workers did not wear life preserving safety helmets. Now they do!

Benefits

Workers appreciated the comprehensiveness of the course.

the Port Trust appreciated this initiative and called it worth being congratulated.
Manpower gained competitive advantage in the harbour, being the only temporary work
company that:
 • had contacted the safety department of the Port Trust,
• had taken positive steps to procure safety equipment for its people,
• really paid attention to the safety of temporary staff.

Place Of Implementation Belgium

Year Of Submission 2005
Themes Health and Safety