CSR - A WIN - WIN BUSINESS
MODEL
Col. Prakash Tewari (Retd)
CSR and R & R
Tata Power Company
Prelude
• Impacts of Business
• Integrating Business and Society
• Emergence of CSR
• Mapping Social Impacts
• Responsive CSR vs Strategic CSR
• Moral Purpose of Business
1
“Human Beings are animals,
We are sometimes monsters,
sometimes magnificent,
But always animals.
We may prefer to think of ourselves as
fallen angels,
But in reality, we are risen apes.”
- Desmond Morris
3
Business and Society
Business can impact society in three ways
• Economic
• Environmental
Business
• Social
Impact of Business on Society
Impact on business on society can be
positive as well as negative.
Pollution
Deforestation
Climate change
Economic growth
Raising standard of
living
Business Impact on Human Development
• Business impacts poverty, literacy, education
and life expectancy.
• Economic growth is only a means, though an
important one, for human development.
• Human development is both an outcome and a
process of enlarging people’s choices to lead
lives they value.
Business and Environment
In today’s world, environment is an
increasingly sensitive issue.
This means that any failure to follow
environmental norms could promptly
result in a public litigation being
slapped on the corporate.
Economy Vs Ecology
Economy and Ecology
Impact of Business on Communities
• Change in livelihood patterns on account of
natural resources being impacted
• Change in land use / leading to socio-politicaleconomic impact (loss of identity, culture
change)
• Land owners become landless, or marginalised
farmers
• Socio-psychological impact thru contrast in living
standards
• Stress on local environment quality (air
emissions, effluent, etc)
Impact of Business on Communities
• Stress on local ecology (flora and fauna)
• Stress on local resources – water, land, rural
energy sources
• Increased dependence on the industry by the
community
• Influx of migrant labour
• Opportunities for Business to secure goods and
services
• Opportunities for community to improve their
quality of life
Scope of Collaboration
Environmental
Reducing carbon emissions and
hence decreasing the chance of
environmental irregularities.
Social
If people do not have the
resources to deal with today’s
stresses, then they are unlikely
to be able to deal with the
additional stresses associated
with climate change
Adaptability
Gap
Economic
Protect , enhance and diversify
asset base through economic
activities
3
Integrating Business & Society
• CSR understand interrelationship between
business & society
• Corporate need healthy society
• Society needs successful corporate
• Focus on intersection than friction
• Mutual dependence implying principle of shared
value
Emergence of CSR
• Issues that
shook corporate
• Corporate response
Justification
• Moral Obligation
Good citizens – ‘Do the right things’
• Sustainability
‘Meeting needs of present without
compromising future generation’
• License to Operate
Permission from Govt,
communities & stakeholders
• Reputation
Justify CSR initiatives – Brand,
image, morale & values of stock
School of Thought
•
•
•
•
•
•
•
Focus on tension than interdependence
Non strategically aligned
Fail to identify/prioritize/make impact
Uncoordinated & philanthropic
Not linked to internal/external activities
Lost opportunity
Social benefits dissipated
Identifying Points of Intersection
• Interdependence takes 2 forms
 Company impinges through its operations
 External social conditions influence
corporations
Mapping the Social Impact of Value Chain
•Air pollution
•Warm water discharge
•Ash disposal
•Impact on livelihoods
•Energy & water usage
•Worker safety & labour
relations
•Displacement
•Loss of livelihoods
•Loss of infrastructure
•Irreversible loss to
natural resources
LAND
ACQUISITION
technically
feasible location
identification,
purchase of land
LOGISTICS
incoming
material,
storage, data
collection,
service
•Transportation Impacts
(e.g., emission, congestion,
logging roads, safety)
•Pollution
•Dust (SPM)
•Health
•HIV/AIDS
OPERATIONS
Generation
(emission
measurement),
transmission
(decentralised),
distribution
(smart grid)
•Conservation
•DSM
•Efficiency
TRADING
advocacy, open
axis regulation,
short term
transactions,
REC, website
•Pricing practices (e.g.,
price discrimination among
customers, anticompetitive
pricing practices, pricing
policy to the poor)
•Consumer protection
•Global partnership for
development
CUSTOMER
MANAGEMENT
customer
support,
complaint
resolution, repair
Support Activities
•Financial Reporting practices
•Corporate Governance Practices
•Transparency
•Procurement &
•Supply Chain practices
•Education & Job Training
•Labour Standards
•*Gender equality
CORPORATE
INFRASTRUCTURE
financing, planning,
investor relations
HUMAN RESOURCE
MANAGEMENT
recruiting, training,
supervision system
PROCUREMENT
components,
machinery,
advertising and
services
TECHNOLOGY
DEVELOPMENT
product design,
testing, process
design, material
design, market
research
*R&D
*Relationships with
Universities
*Ethical Research
practices
*Product Safety
External Social Conditions
•Fair and open local competition
•Intellectual property rights
•Transparency
•Availability of human resources
•Availability of scientific and
technological infrastructure
•Sustainable natural resources
Input
Conditions
Presence of
high quality,
specialized
inputs available
to firms
•Availability of local suppliers
•Access to firms in related
field
Context for
Firm Strategy
The rules and
incentives that
govern
competition
Related and
Supporting
Industries
The local
availability of
supporting
industries
Local Demand
Conditions
The nature and
complexity of
local customer
needs
•Peculiarity of local
demand (e.g.,
cultural and society
specific needs)
•Demanding
regulatory standards
Choosing Social Issues
• Social issues that are
not significantly
affected by a
company’s operations
nor materially affect its
long-term
competitiveness
Generic Social
Impacts
Good Citizenship
RESPONSIVE CSR
• Social issues that are
significantly affected by
a company’s activities
in the normal course of
business
Value Chain
Social Impacts
Mitigate harm from value
chain activities
Transform value-chain
activities to benefit society
while reinforcing strategy
• Social issues in the
external environment
that significantly affect
the underlying drivers
of a company’s
competitiveness in the
location where it
operates
Social
Dimensions of
Competitive
Context
STRATEGIC CSR
Strategic philanthropy that
leverages capabilities to
improve salient areas of
competitive context
The Moral Purpose of Business
• Contribution to economic prosperity
• Corporate social integration towards building
shared value
• Leading to self sustaining solutions