SEMESTER
1V
CORPORATE SOCAL RESPONSIBILITY
UNT 1
Introduction to CSR :
Corporate Social Responsibility is a management concept whereby companies integrate
social and environmental concerns in their business operations and interactions with their
stakeholders. CSR is generally understood as being the way through which a company
achieves a balance of economic, environmental and social imperatives (“Triple-BottomLine- Approach”), while at the same time addressing the expectations of shareholders and
stakeholders. In this sense it is important to draw a distinction between CSR, which can
be a strategic business management concept, and charity, sponsorships or philanthropy.
Even though the latter can also make a valuable contribution to poverty reduction, will
directly enhance the reputation of a company and strengthen its brand, the concept of
CSR clearly goes beyond that.
Promoting the uptake of CSR amongst SMEs requires approaches that fit the respective
needs and capacities of these businesses, and do not adversely affect their economic
viability. UNIDO based its CSR programme on the Triple Bottom Line (TBL) Approach,
which has proven to be a successful tool for SMEs in the developing countries to assist
them in meeting social and environmental standards without compromising their
competitiveness. The TBL approach is used as a framework for measuring and reporting
corporate performance against economic, social and environmental performance. It is an
attempt to align private enterprises to the goal of sustainable global development by
providing them with a more comprehensive set of working objectives than just profit
alone. The perspective taken is that for an organization to be sustainable, it must be
financially secure, minimize (or ideally eliminate) its negative environmental impacts and
act in conformity with societal expectations.
Key CSR issues: environmental management, eco-efficiency, responsible sourcing,
stakeholder engagement, labour standards and working conditions, employee and
community relations, social equity, gender balance, human rights, good governance, and
anti-corruption measures.
A properly implemented CSR concept can bring along a variety of competitive
advantages, such as enhanced access to capital and markets, increased sales and profits,
operational cost savings, improved productivity and quality, efficient human resource
base, improved brand image and reputation, enhanced customer loyalty, better decision
making and risk management processes.
Definition
Business Dictionary defines CSR as "A company's sense of responsibility towards the
community and environment (both ecological and social) in which it operates. Companies
express this citizenship (1) through their waste and pollution reduction processes, (2) by
contributing educational and social programs and (3) by earning adequate returns on the
employed resources."
Concept
The emerging concept of Corporate Social Responsibility (CSR) goes beyond charity and
requires the company to act beyond its legal obligations and to integrated social,
environmental and ethical concerns into company’s business process.
Business has today, emerged as one of the most powerful institutions on the earth. Some
of the biggest companies in the world are in fact, bigger in size than some of the
developing countries of the world. Globalization makes the world smaller, and business,
worldwide, is expanding like never before. Companies are expanding their operations and
crossing geographical boundaries.
Indian companies too have made their way into the business boom and are today globally
acknowledged as major players. India is currently amongst the fastest growing countries
in the world. The globalization and liberalization of the Indian economy has helped in
stepping up growth rates. Integration of the Indian with the global economy has also
resulted in Indian businesses opening up to international competition and thereby
increasing their operations.
In the current scheme of things, business enterprises are no longer expected to play
their traditional role of mere profit making enterprises. The ever-increasing role of civil
society has started to put pressure on companies to act in an economically, socially and
environmentally sustainable way.
The companies are facing increased pressure for transparency and accountability, being
placed on them by their employees, customers, shareholders, media and civil society.
Business does not operate in isolation and there is today, an increased realization that not
only can companies affect society at large, but they are also in a unique position to
influence society and make positive impact.
Milton Friedman, Nobel Laureate in Economics and author of several books wrote in
1970 in the New York Times Magazine that “the social responsibility of business is to
increase its profits” and “the business of business is business”. This represented an
extreme view that the only social responsibility a law-abiding business has is to
maximize profits for the shareholders, which were considered the only stakeholders for
the company. However, time has given the term ‘stakeholder’ wider connotations.
Edward Freeman defines, ‘a stakeholder in an organization is any group or individual
who can affect or is affected by the achievement of the organization’s objectives.’ Thus,
the term stakeholder includes (apart from shareholders), but not limited to, customers,
employees, suppliers, community, environment and society at large.
These and a host of other such ideas have given rise to the concept of Corporate
Social Responsibility (CSR). The concept of CSR goes beyond charity or philanthropy
and requires the company to act beyond its legal obligations and to integrate social,
environmental and ethical concerns into its business process. Business for
Social Responsibility defines CSR as “achieving commercial success in ways that honor
ethical values and respect people, communities, and the environment.
It means addressing the legal, ethical, commercial and other expectations that society has
for business and making decisions that fairly balance the claims of all key stakeholders.
In its simplest terms it is: “what you do, how you do it, and when and what you say.” A
widely quoted definition by the World Business Council for Sustainable Development
states that “Corporate social responsibility is the continuing commitment by business to
behave ethically and contribute to economic development while improving the quality of
life of the workforce and their families as well as of the local community and society at
large”.
Though, there is no universal definition of CSR but the common understanding amongst
most of these definitions concern with how the profits are made and how they are used,
keeping in mind the interests of all stakeholders. The concept of Corporate Social
Responsibility is constantly evolving.
The emerging concept of CSR goes beyond charity and requires the company to act
beyond its legal obligations and to integrate social, environmental and ethical concerns
into company’s business process. What is generally understood by CSR is that the
business has a responsibility – towards its stakeholders and society at large – that extends
beyond its legal and enforceable obligations.
The triple bottom line approach to CSR emphasizes a company’s commitment to
operating in an economically, socially and environmentally sustainable manner. The
emerging concept of CSR advocates moving away from a ‘shareholder alone’ focus to a
‘multi-stakeholder’ focus. This would include investors, employees, business partners,
customers, regulators, supply chain, local communities, the environment and society at
large.
Need & Principle
1. Better Public Image:
Each firm must enhance its public image to secure more customers, better employees and
higher profit. Acceptance of social responsibility goals lead to improve public image.
2. Conversion of Resistances into Resources:
If the innovative ability of business is turned to social problems, many resistances can be
transformed into resources and the functional capacity of resources can be increased
many times.
3. Long Term Business Interest:
A better society would produce a better environment in which the business may gain long
term maximization of profit. A firm which is sensitive to community needs would in its
own self interest like to have a better community to conduct its business. To achieve this
it would implement social programmes for social welfare.
4. Avoiding Government Intervention:
Regulation and control are costly to business both in terms of money and energy and
restrict its flexibility of decision making. Failure of businessmen to assume social
responsibilities invites government to intervene and regulate or control their activities.
The prudent course for business is to understand the limit of its power and how to use
that power carefully and responsibly thereby avoiding government intervention.
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.
Labour
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 corruption in all its forms, including
extortion and bribery.
Scope
Initially, CSR emphasized the official behaviour of individual firms. Later, it expanded to
include supplier behaviour and the uses to which products were put and how they were
disposed of after they lost value.
Supply chain[edit]
In the 21st century, corporate social responsibility in the supply chain has attracted
attention from businesses and stakeholders. Corporations' supply chain is the process by
which several organizations including suppliers, customers and logistics providers work
together to provide a value package of products and services to the end user, who is the
customer.[36]
Corporate social irresponsibility in the supply chain has greatly affected the reputation of
companies, leading to a lot of cost to solve the problems. For instance, incidents like
the 2013 Savar building collapse, which killed over 1000 people, pushed companies to
consider the impacts of their operations on society and environment. On the other side,
the horse meat scandal of 2013 in the United Kingdom affected many food retailers,
including Tesco, the largest retailer in the United Kingdom,[37] leading to the dismissal of
the supplier. Corporate social irresponsibility from both the suppliers and the retailers has
greatly affected the stakeholders who lost trust for the affected business entities, and
despite the fact that sometimes it's not directly undertaken by the companies, they
become accountable to the stakeholders. These surrounding issues have prompted supply
chain management to consider the corporate social responsibility context. Wieland and
Handfield (2013) suggested that companies need to include social responsibility in their
reviews of component quality. They highlighted the use of technology in improving
visibility across the supply chain.[38]
Corporate social initiatives[edit]
Corporate social responsibility includes six types of corporate social initiatives:[39]
•
Corporate philanthropy: company donations to charity, including cash, goods, and
services, sometimes via a corporate foundation
•
•
•
•
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Community volunteering: company-organized volunteer activities, sometimes
while an employee receives pay for pro-bono work on behalf of a non-profit
organization
Socially-responsible business practices: ethically produced products which appeal
to a customer segment
Cause promotions: company-funded advocacy campaigns
Cause-related marketing: donations to charity based on product sales
Corporate social marketing: company-funded behavior-change campaigns
All six of the corporate initiatives are forms of corporate citizenship. However, only
some of these CSR activities rise to the level of cause marketing, defined as "a type of
corporate social responsibility (CSR) in which a company's promotional campaign has
the dual purpose of increasing profitability while bettering society." [40]
Companies generally do not have a profit motive when participating in corporate
philanthropy and community volunteering. On the other hand, the remaining corporate
social initiatives can be examples of cause marketing, in which there is both a societal
interest and profit motive.
Evolution of corporate social responsibility in India
The evolution of corporate social responsibility in India refers to changes over time in
India of the cultural norms ofcorporations' engagement of corporate social
responsibility (CSR), with CSR referring to way that businesses are managed to bring
about an overall positive impact on the communities, cultures, societies and environments
in which they operate.[1]The fundamentals of CSR rest on the fact that not only public
policy but even corporates should be responsible enough to address social issues. Thus
companies should deal with the challenges and issues looked after to a certain extent by
the states.[2]
Among other countries India has one of the oldest traditions of CSR. But CSR practices
are regularly not practiced or done only in namesake especially by MNCs with no
cultural and emotional attachments to India. Much has been done in recent years to make
Indian Entrepreneurs aware of social responsibility as an important segment of their
business activity but CSR in India has yet to receive widespread recognition. If this goal
has to be realised then the CSR approach of corporates has to be in line with their
attitudes towards mainstream business- companies setting clear objectives, undertaking
potential investments, measuring and reporting performance publicly.
The Four Phases of CSR Development in India
The history of CSR in India has its four phases which run parallel to India's historical
development and has resulted in different approaches towards CSR. However the phases
are not static and the features of each phase may overlap other phases.
The First Phase
In the first phase charity and philanthropy were the main drivers of CSR. Culture,
religion, family values and tradition andindustrialization had an influential effect on CSR.
In the pre-industrialization period, which lasted till 1850, wealthy merchants shared a part
of their wealth with the wider society by way of setting up temples for a religious cause.
Moreover, these merchants helped the society in getting over phases of famine and
epidemics by providing food from their godowns and money and thus securing an
integral position in the society. With the arrival of colonial rule in India from the 1850s
onwards, the approach towards CSR changed. The industrial families of the 19th century
such as Tata, Godrej, Bajaj, Modi, Birla, Singhania were strongly inclined towards
economic as well as social considerations. However it has been observed that their efforts
towards social as well as industrial development were not only driven by selfless and
religious motives but also influenced by caste groups and political objectives.[3] Or
studies
The Second Phase
In the second phase, during the independence movement, there was increased stress on
Indian Industrialists to demonstrate their dedication towards the progress of the society.
This was when Mahatma Gandhi introduced the notion of "trusteeship", according to
which the industry leaders had to manage their wealth so as to benefit the common man.
"I desire to end capitalism almost, if not quite, as much as the most advanced socialist.
But our methods differ. My theory of trusteeship is no make-shift, certainly no
camouflage. I am confident that it will survive all other theories." This was Gandhi's
words which highlights his argument towards his concept of "trusteeship". Gandhi's
influence put pressure on various Industrialists to act towards building the nation and its
socio-economic development.[4] According to Gandhi, Indian companies were supposed
to be the "temples of modern India". Under his influence businesses established trusts for
schools and colleges and also helped in setting up training and scientific institutions. The
operations of the trusts were largely in line with Gandhi's reforms which sought to
abolish untouchability, encourage empowerment of women and rural development.
The Third Phase
The third phase of CSR (1960–80) had its relation to the element of "mixed economy",
emergence of Public Sector Undertakings (PSUs) and laws relating labour and
environmental standards. During this period the private sector was forced to take a
backseat. The public sector was seen as the prime mover of development. Because of the
stringent legal rules and regulations surrounding the activities of the private sector, the
period was described as an "era of command and control". The policy of industrial
licensing, high taxes and restrictions on the private sector led to corporate malpractices.
This led to enactment of legislation regarding corporate governance, labour and
environmental issues. PSUs were set up by the state to ensure suitable distribution of
resources (wealth, food etc.) to the needy. However the public sector was effective only
to a certain limited extent. This led to shift of expectation from the public to the private
sector and their active involvement in the socio-economic development of the country
became absolutely necessary. In 1965 Indian academicians, politicians and businessmen
set up a national workshop on CSR aimed at reconciliation. They emphasized upon
transparency, social accountability and regular stakeholder dialogues. In spite of such
attempts the CSR failed to catch steam.
The Fourth Phase
In the fourth phase (1980 - 2013) Indian companies started abandoning their traditional
engagement with CSR and integrated it into a sustainable business strategy. In the 1990s
the first initiation towards globalization and economic liberalization were undertaken.
Controls and licensing system were partly done away with which gave a boost to the
economy the signs of which are very evident today. Increased growth momentum of the
economy helped Indian companies grow rapidly and this made them more
willing{Gajare, R.S. (2014). A conceptual study of CSR development in India. In D.B.
Patil & D.D. Bhakkad, Redefining Management Practices and Marketing in Modern Age
Dhule, India: Atharva Publications (p. 152-154).} and able to contribute towards social
cause. Globalization has transformed India into an important destination in terms of
production and manufacturing bases of TNCs are concerned. As Western markets are
becoming more and more concerned about labour and environmental standards in the
developing countries, Indian companies which export and produce goods for the
developed world need to pay a close attention to compliance with the international
standards. [5]
Current State of CSR in India
A story of CSR promoted by Azim Premji Foundation in India
playlist
As discussed above, CSR is not a new concept in India. Ever since their inception,
corporates like the Tata Group, the Aditya Birla Group,and Indian Oil Corporation, to
name a few, have been involved in serving the community. Through donations and
charity events, many other organizations have been doing their part for the society. The
basic objective of CSR in these days is to maximize the company's overall impact on the
society and stakeholders. CSR policies, practices and programs are being
comprehensively integrated by an increasing number of companies throughout their
business operations and processes. A growing number of corporates feel that CSR is not
just another form of indirect expense but is important for protecting the goodwill and
reputation, defending attacks and increasing business competitiveness.[6]
Carroll’s Model of CSR (Pyramid of CSR)
a Carroll's CSR Pyramid is a simple framework that helps argue how and why
organisations should meet their social responsibilities.
The key features of Carroll's CSR Pyramid are that:
•
CSR is built on the foundation of profit – profit must come first
•
Then comes the need for a business to ensure it complies with all laws &
regulations
•
Before a business considers its philanthropic options, it also needs to meet its
ethical duties
Carroll's CSR Pyramid
The four responsibilities displayed on the pyramid are:
ECONOMIC
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This is the responsibility of business to be profitable
•
Only way to survive and benefit society in long-term
LEGAL
•
This is the responsibility to obey laws and other regulations
•
E.g. Employment, Competition, Health & Safety
ETHICAL
•
This is the responsibility to act morally and ethically
•
With this responsibility, businesses should go beyond narrow requirements of the
law
•
E.g. Treatment of suppliers & employees
PHILANTHROPIC
•
This is the responsibility to give back to society
•
The responsibility is discretionary, but still important
•
E.g. charitable donations, staff time on projects
Evaluating Carroll's CSR Pyramid
Strengths
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The model is easy to understand
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Simple message – CSR has more than one element
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Emphasises importance of profit
Weaknesses
•
Perhaps too simplistic?
•
Should ethics be at the top?
•
Businesses don’t always do what they claim when it comes to CSR
Globalization and CSR
Globalisation is a dynamic set of social processes that is transforming our present social
condition of nationality into one of globality, characterised by tight global economic,
political, cultural, and environmental interconnections that make most of the currently
existing borders and boundaries irrelevant.
The economic dimension of globalisation is highly significant in shaping contemporary
societies and organisations through the intensification and stretching of economic
interrelations worldwide. Its key components include the deregulation of interest rates,
the removal of credit controls, and the privatisation of government-owned banks and
financial institutions. Globalisation of financial trading allows for increased mobility
among different segments of the financial industry, with fewer restrictions and greater
investment opportunities.
The enhanced role of international economic institutions such as the International
Monetary Fund (IMF), World Bank, and World Trade Organisation (WTO) enjoy the
privilege position of making and enforcing the rules of the global economy. In return for
supplying much-needed loans to developing countries these institutions implemented the
structural adjustment programs, mainly directed at countries with large foreign debts. It
can be observed the impacts that trade liberalisation policies have on industries in the
third world.
But globalisation is a multidimensional concept that is not easily reduced to just the
economic dimension. The intensification of global economic interconnections is set into
motion by a series of political decisions. The political dimension of globalisation refers to
the intensification and expansion of political interrelations across the globe. Recent
economic developments such as trade liberalisation and deregulation have significantly
constrained the set of political options open to states. Thus, global markets frequently
undermine the capacity of governments to set independent national policy restrictions.
However, the worldwide intensification of economic and political interaction does not
consider in sufficient detail the cultural feasibility of global democracy, which makes the
possibility of resistance and opposition just as real as the mutual accommodation and
tolerance of differences.
The cultural dimension of globalisation refers to the intensification and expansion of
cultural flows across the globe facilitated by the Internet and global media empires that
rely on powerful communication technologies to spread their message, giving rise of an
increasingly homogenised popular culture underwritten by western culture industry.
Corporate social responsibility (CSR) of business activity is strongly influenced by
globalisation, particularly through the change and erosion of national political
power. CSR has four kinds of social responsibilities, economic, legal, ethical, and
philanthropic. These four components of CSR might be represented as a pyramid with
economic responsibilities ‒ and profit motive as the primary incentive ‒ underpinning all
other business responsibilities.
Business organisations have also to comply with laws and regulations as the ground rules
under which they must operate. These legal responsibilities establish the ground of fair
operations and are represented as the next layer on the pyramid. In this way,
organisations are expected to perform in a consistent manner with the government and
law expectations.
However, society also expects from organisations other activities and practices that are
not codified into law. These ethical responsibilities embrace those norms that reflect a
concern for what consumers, employees, shareholders and community regard as right,
just, and fair (i.e. moral rights), and are represented as the next layer of the CSR pyramid.
Thus, corporate behaviour goes beyond mere compliance with laws and regulations.
Globalisation, as defined in terms of the deterritorialisation of economic activities, is
particularly affecting business ethics in three main areas – culture, law, and
accountability.
Within the cultural issues, it could be seen how corporations increasingly engage in
overseas markets, suddenly finding themselves confronted with new and diverse ethical
demands.
Moral values, which were taken for granted in the home market, may get questioned as
soon as corporations enter foreign markets.
The legal issues are closely linked with ethics and law. As soon as a company leaves its
home territory the legal framework becomes very different. Consequently, managers can
no longer simply rely on the legal framework when deciding on the right or wrong of
certain business practices.
Finally, globalization leads to a growing demand for corporate accountability where
business ethics can respond to the various stakeholders’ claims.
UNT II
CSR Policy
Policies related to CSR;
Designing a CSR policy
Any Sustainability or Corporate Responsibility policy should begin with the organisation.
It should consider your purpose and core operations, values and culture. This will create a
policy statement that is unique.
A Guide to the CR Policy Statement – not a template!
The following steps are not intended to be a template. Instead, they should be thought of
as a guide in putting together your CR Policy Statement:
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Who is the policy for? Before you start, you must be clear: is the policy for
employees to follow day-to-day, or for external stakeholders to understand the
business?
•
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What does the business do? Begin with a description of the company’s purpose,
operations and geography.
What scope is included? For example, does it apply to just one part of the
business, or all operating companies anywhere in the world?
What does the company believe in? Unless the organisation has something clear
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and compelling to say on what it stands for, the statement will end up being dull
and generic.
What standards have been consulted in preparing the policy? Global best
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practice guidelines and standards can help to inform relevant areas, such as
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the Dow Jones Sustainability Index (DJSI) or Global Reporting
Initiative (GRI).
What other supporting documents sit alongside the CR policy?Referencing
other codes, strategies or implementation manuals can ensure readers seeking
extra information are guided towards them.
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How will the policy be implemented? A policy is only as good as its
implementation. Having a great policy means very little if it’s not executed
consistently.
How will progress to monitored? Key Performance Indicators (KPIs) are
important for measurement and evaluation. The policy needs to be transparent
about how progress will be monitored and evaluated over time.
Benchmarking the CR Policy
When producing a Corporate Responsibility Policy, benchmarking against peers and
best practice standards can shed light on the issues to include. This is particularly
important to identify what topics to include that are relevant to your sector.
Benchmarking the CR policy can also ensure that your organisation has the right level of
ambition amongst peers.
Ultimately there is no template to follow. A sample of how other companies have written
their Corporate Responsibility Policies can be found from a quick internet search. But
whilst there are examples from other companies (and even some attempts at a template)
the best approach is to create an authentic CR Policy designed for your organisation.
Of course, a Corporate Responsibility policy is only one part of a company’s
responsibility and sustainability priorities. Although it’s often the first step, it should
form part of a strategy for addressing the issues. Policies and processes then flow from
the strategy and ensure that implementation delivers to agreed business aims.
Norms and standards of CSR
International CSR Standards and Guidelines:
# ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and
Social Policy
# OECD Guidelines for Multinational Enterprises
# UN Global Compact
# The Universal Declaration of Human Rights
I. ILO tripartite declaration of principles concerning multinational enterprises and
social policy:
The ILO is the first specialized agency of the UN in 1946. It is the only “tripartite”
United Nations agency3, bringing together representatives of governments, employers
and workers to shape policies and programmes jointly. Its mission, scope, audience,
governance and its relation with other instruments is briefly described below.
The purpose of the Declaration is to encourage the positive contribution which MNEs can
make to economic and social progress, and to minimize and resolve difficulties arising
from their operations. The Declaration was one of earliest international instruments
covering the social dimension of business.It was negotiated between the employees,
employers and workers in the year 1977. The Declaration sets out principles in the field
of general policies, employment, and training, conditions of work and life and industrial
relations. All government, employer and worker organizations are recommended to
observe the principles on a voluntary basis.
The main areas covered by the Declaration are:
# General policies (obey national laws and respect international standards)
# Employment (employment promotion; equality of opportunity and treatment; security
of employment)
# Training (policy development for vocational training, skills formation)
# Conditions of Work and Life (wages, benefits, conditions of work; minimum age;
safety and health)
# Industrial Relations (freedom of association and right to organize; collective
bargaining; consultation; grievances; settlement of disputes).
The Declaration was revised in 2000 to include the Fundamental Principles and Rights at
Work. It was further revised in 2006 to update references to other ILO instruments.
During this update, the list of ILO Conventions that member States are invited to ratify
was extended to all the fundamental ILO Conventions. Moreover, a specific
recommendation was added to encourage enterprises, both multinational and national, to
take immediate and effective measures within their own competence to secure the
prohibition and elimination of the worst forms of child labour, as a matter of urgency.
Multinational enterprises are a key audience; the Declaration’s principles regarding the
social aspects of MNEs are also for use by small and medium enterprises, as well as by
governments, employers and workers organizations. All the parties are encouraged to
contribute to the realization of the ILO Declaration on Fundamental Principles and Rights
at Work. In addition, governments are urged to ratify, along with the conventions already
referenced, the minimum age and child labour conventions. The ILO undertakes periodic
surveys on the implementation of the MNE Declaration. It does not have a membership
structure, so it does not require that user organizations report their use of the Declaration.
The ILO established a subcommittee of the Committee on Legal Issues and International
Labour Standards of the ILO Governing Body to oversee the Declaration, and to discuss
ILO policy concerning CSR issues4. The ILO focuses on improved information
collection, analysis and dissemination, and coherent action, drawing on its tripartite
strength and bringing together contributions from all parts of the organization. It also
conducts surveys on use of the Declaration. The MNE Declaration includes procedures
for the examination of disputes concerning its application. The ILO also has a standing
tripartite committee on Freedom of Association, which deals with complaints concerning
freedom of association and collective bargaining. The MNE Declaration is unique in
providing clear guidance of how companies and governments can work together, to help
advance national and local economic and social development goals – advocating publicprivate partnerships long before the term existed.
The MNE Declaration also encourages dialogue between home and host countries for
foreign direct investment, linking CSR initiatives to a broader dialogue concerning trade
and investment. By situating CSR in the broader context of government policies which
critically impact enterprise decisions, the MNE Declaration emphasizes that CSR is an
important complement to government regulation, but never a substitute.
The MNE Declaration references other authoritative international instruments, such as
the Universal Declaration of Human Rights. As a result of the thematic and sectoral
complimentarily of the ILO Declaration and the OECD Guidelines, there is a good
collaborative relationship between the two organizations. In June 2008 they will jointly
host a Conference on CSR, aimed at promoting responsible business conduct in the
globalizing economy. The MNE Declaration also references instruments such as the
Millennium Development Goals and the UN Global Compact. ILO is establishing a
helpdesk for companies, industry initiatives and employers, workers and governments to
promote full and accurate inclusion of the principles of the MNE Declaration.
II. OECD guidelines for multinational enterprises:
The OECD MNE Guidelines are subscribed to by all thirty members of the Organization
for Economic Co-operation and Development (OECD). A further ten non-member
countries (Argentina, Brazil, Chile, Egypt, Estonia, Israel, Latvia, Lithuania, Romania,
and Slovenia) have also adhered to the Guidelines. Four additional applications for
adherence are currently under consideration by the OECD5. The Business and Industry
Advisory Committee (BIAC) and the Trade Union Advisory Committee (TUAC) were
involved in their development and endorse the Guidelines. OECD Watch, a coalition of
more than 65 civil society organizations, also supports the Guidelines. The Guidelines
have been referenced by the UN Security Council and other interested non-OECD bodies.
The purpose of the OECD MNE Guidelines is to offer a balanced, multilaterallyendorsed, and comprehensive Code that expresses the shared values of adhering
governments. They are “recommendations jointly addressed by governments to
multinational enterprises” that provide “principles and standards of good practice
consistent with applicable laws”. By providing a clear set of expectations, the Guidelines
seek to encourage the positive contributions multinational companies can make to
economic, environmental and social progress6.
The Guidelines comprise a set of voluntary recommendations in all the major areas of
corporate citizenship, including employment and industrial relations, human rights,
environment, information disclosure, combating bribery, consumer interests, science and
technology, competition, and taxation. They form part of a broader OECD investment
instrument, the Declaration on International Investment and Multinational Enterprises,
which is designed to promote direct investment and international economic development
and growth. Implementation of the Guidelines involves a unique combination of binding
and voluntary elements7. Adhering governments commit to promote them among
multinational enterprises operating in or from their territories.
The instrument’s distinctive implementation mechanisms include the operations of
National Contact Points (NCP), which are government offices charged with advancing
the Guidelines and handling enquiries in the national context. NCPs also support a unique
mediation and conciliation procedure – called “specific instances” – involving claims that
the Guidelines have not been respected. Since 2000, some 160 such specific instances
have been considered by the NCPs. This process may be engaged whether or not a
company has recognized the Guidelines.
While the Guidelines are primarily addressed to MNEs, they are not aimed at introducing
differences of treatment between multinational and domestic enterprises. Accordingly,
multinational and domestic enterprises are subject to the same expectations in respect of
their conduct wherever the Guidelines are relevant to both. Likewise, while SMEs may
not have the same capacities as larger enterprises, they are invited to observe the
Guidelines “to the fullest extent possible”. The Guidelines are freely available to all user
organizations8. Since the Guidelines do not require users to publicize their use, the actual
number of users is not known. Nonetheless, surveys among large enterprises indicate that
a significant proportion refer to the Guidelines in their CSR policies.
The OECD Investment Committee, in consultation with BIAC and TUAC, is responsible
for oversight of the Guidelines. Adhering governments are individually responsible for
promoting use of the Guidelines, and for processing any “specific instances”, through
their NCPs. They meet annually at the OECD and report to the Investment Committee,
which conducts a “peer review” of implementation.
The Guidelines were expressly designed to strengthen the existing international
normative framework. Among other norms, they reference the Universal Declaration of
Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the
Rio Declaration on Environment and Development and Agenda 21, and the Copenhagen
Declaration for Social Development. The Guidelines can readily be used in conjunction
with other instruments9. Explanatory materials have been developed to outline their
relationship with the UN Global Compact, the Principles for Responsible Investment, and
with the GRI Guidelines.
III. UN Global Compact:
UN Secretary-General, one of the principal organs of the United Nations, with support
from UN agencies, governments, and representatives of business, labour and other civil
society bodies. It accepts new adherents on an ongoing basis from all major categories of
societal actors. The UN Global Compact has been recognized on a number of occasions
by the UN General Assembly, as well as by all Heads of States and Governments in the
UN World Summit Outcome document (2005) and the G8.
The UN Global Compact has two broad goals. These are to mainstream ten core
principles relating to human rights, labour standards, the environment, and anticorruption in business activities around the world; and to catalyse actions in support of
broader UN goals, such as the Millennium Development Goals (MDGs). A voluntary
initiative, it is not a code of conduct. It offers “a policy framework for organizing and
developing corporate sustainability strategies while offering a platform – based on
universal principles – to encourage innovative initiatives and partnerships with civil
society, governments and other stakeholders”. The UN Global Compact invites
companies to embrace, support and enact, within their sphere of influence, the following
ten principles10:
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.
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 corruption in all its forms, including
extortion and bribery.
The UN Global Compact is directed primarily to the business sector, but is a multistakeholder initiative and engages all kinds of societal actors, including public agencies,
labour and civil society organizations. Companies participating in the Compact initiate
their involvement by expressing their support in writing at CEO level. Among other
things, each participant commits to integrate the principles into organizational strategy,
culture and operations; to publicly advocate the UN Global Compact and its principles;
and to publish annually a “communication on progress”, a description of the ways in
which it is supporting the Global Compact and its ten principles. Since its launch in July
2000, the initiative has grown to over 5, 000 participants, including over 3,600 businesses
in 120 countries around the world. It is widely regarded as the world's largest global
corporate citizenship initiative.
The Compact has a “multi-centric” governance framework. This includes a triennial
Leaders Summit, annual local networks forum, the Global Compact Office and a UN
Inter-Agency Team, as well as a 20 person global Board comprising representation from
business, civil society, labour and the UN family. The Compact’s principles are derived
from the Universal Declaration of Human Rights, the ILO Declaration on Fundamental
Principles and Rights at Work; the Rio Declaration on Environment and Development,
and the UN Convention against Corruption. The Global Compact has developed guidance
materials that help users understand its relationship with the OECD MNE Guidelines, and
with the GRI Guidelines. The Compact endorses but does not require the use of the GRI
Guidelines in making “communications on progress”.
IV. The Universal Declaration of Human Rights:
The Universal Declaration of Human Rights states that “every individual and organ of
society” has the responsibility to strive “to promote respect for these rights and
freedoms” and “by progressive measures, national and international, to secure their
universal and effective recognition and observance”11. As important “organs” of society,
businesses have a responsibility to promote worldwide respect for human rights. The ILO
Conventions establish norms covering all aspects of working conditions and industrial
relations. Some of the most important cover12 core labour standards (i.e. basic human
rights in the workplace). These include the right to freedom of association, the right to
organize and to collective bargaining, and freedom from forced labour. ILO conventions
are binding on all countries that have ratified them.
The ILO Tripartite Declaration of Principles Concerning Multinational Enterprises
and Social Policy:
It is a global instrument designed to provide guidance to government, employer and
worker organizations in areas of employment, training, conditions of work and industrial
relations. All core labour standards are covered. Although it is a non-binding instrument,
its implementation is nevertheless the object of regular reviews.
The ILO Declaration on Fundamental Principles and Rights at Work:
It is based on the core labour standards outline in the ILO Conventions. The Declaration
is not binding but applies to all ILO member states. As part of a strategy to help countries
to have well-functioning labour markets, it provides for a mechanism for annual review
of the efforts made by member states that have not yet ratified the core labour standards.
The Declaration also reinforces the application of core labour standards in private
voluntary instruments. The 1992 Rio Declaration sets out 27 principles defining the rights
and responsibilities of states in relation to human development and well-being. The
Agenda 21 agreement provides guidance for governments, business and individuals on
how to contribute to efforts to make development socially, economically and
environmentally sustainable. Its Chapter 30 recognizes the value of promoting
“responsible entrepreneurship”.
The Millennium Development Goals
It identifies a series of government-agreed targets and timetables in relation to issues such
as poverty reduction, improvement of child health care and education, and the promotion
of gender equality.
The Johannesburg Declaration on Sustainable Development (2002)
It says that the private sector has “a duty to contribute to the evolution of equitable and
sustainable communities and societies”, and that “there is a need for private sector
corporations to enforce corporate accountability”. Its Plan of Implementation notes the
need to “enhance corporate environmental and social responsibility and accountability”.
The UN Framework Convention on Climate Change and Convention on Biodiversity
were also signed by a majority of governments.
The 2005 World Summit Outcome
It reiterated the importance of full respect for existing labour, human rights and
environmental commitments and encouraged “responsible business practices, such as
those promoted by the Global Compact”.
UN Convention against Corruption (2003)
It ratifies countries undertook to criminalize an array of corrupt practices; develop
national institutions to prevent corrupt practices and to prosecute offenders; co-operate
with other governments to recover stolen assets; and help each other to fight corruption.
CSR - The Indian Scenario:
In an economically globalized world, corporations are subject to global expectations, and
a globally accepted and broad concept like sustainable development fits well with the
economic, social and environmental responsibilities of global corporations. Accordingly,
the triple bottom line approach to CSR suggests that a business organization must strive
to balance these three areas of responsibility. Because of its alignment with the concept
of sustainable development, this approach is widely applied around the world.
Associating CSR with sustainable development has become so common that CSR
reporting is often called sustainability reporting. In India, till very recently, the focus was
on charity, which is not really CSR. Sustainable CSR programmes mean a cohesive mix
of economic, legal, ethical and philanthropic tenets.
In today's changed business scenario, there is an increased focus on giving back to
society and creating a model which works long term and is sustainable and it is
imperative that the best practices for inclusive growth are shared with the stakeholders.
Recent rash of scandals involving major corporate giants throughout the world have
brought to the attention of public and academia the need to analyze these issues.
Corporate Scandals:
Satyam Story:
Satyam was recognized for its work with the Byrraju Foundation, founded by Ramalinga
Raju, Chairman of Satyam Computers. Byrraju Foundation builds progressive, selfreliant rural communities in India through a holistic, transformational approach. The
foundation provides a broad range of services to villagers, including Healthcare,
Education, Literacy, Water, Environment, Sanitation, Livelihoods, and Disability
Rehabilitation. Satyam was specifically honored for its participation in The Byrraju
Foundation’s program to provide remote electrocardiograms (EKGs) check ups to
villagers all over Andhra Pradesh. So far, the Byrraju Foundation’s work has impacted
more than 3 million people in 199 villages in six districts of Andhra Pradesh, a state of 80
million people in Southern India. It will expand into other states shortly.
A spokesperson for UKTI said "This is the first year that we instituted a Corporate Social
Responsibility Award which was awarded to Satyam Computers for the work of its
foundations in rural India and the establishment of the Emergency Management Research
Institute (Popularly known as 108 services)which draws on Satyam's technology to
improve the responsiveness of India's emergency services. We believe that Corporate
Social Responsibility is about giving back to the community and promoting inclusive
values in corporate organizations and that Satyam Computers has demonstrated this in
full measure.
If we look at the present situation its chairman Rama Linga Raju is in the jail for
misleading stake holders and government for wrong accounting practices , the Bairaju
Foundation is about to close. This is the situation in India regarding CSR. In order to
tackle this case the Indian government should learn lessons from the western
governments who were successful in timely punishing the offenders.
Labor Law Problems:
labor law violations as a major problem in India's garment industry: "Workers are not
being paid even statutory wages, as payment is linked to reaching unreasonably high
production targets--simply put, unpaid overtime.” In short, the global outsourcing world
has a long way to go merely to attain legal compliance.
When subcontractors--even those that are subject to monitoring--still routinely violate
local labor law, CSR programs and their advocates may be muddying the waters. The
advocacy community presents wage demands--e.g. the demand that subcontractors pay a
“living wage”--which is asprational. But urging multinationals to pay higher wages
assumes that legal wages are already being paid."
Let's look at this situation in a real context. With its marketing strategy built on rhetoric
of “social justice,” The Timberland Company is a multinational that plays actively in the
CSR field. The company's recently released 2004 CSR report includes a breakdown of
factory violations by category that closely mirrors the FLA breakdown, with
"compensation (i.e., minimum wage)” the second highest category of violations (12%).
By definition, violations of this part of Timberland's code of conduct constitute primarily
violations of law. Timberland's CSR report claims the company is stepping up its
program "from compliance to enablement.” If companies merely ensured that their
suppliers obeyed the law that could bring economic restitution to millions of workers
whose pay is purposely miscalculated.
Human Rights Issues:
However, a legal linkage does exist through standard manufacturing contracts, which
contain compliance clauses, and a recent case suggests that such contract language can
have teeth. In Doe vs. Unocal, Burmese workers who suffered human rights abuses on a
pipeline project brought suit against Unocal, which was a partner in the project.
Commenting on the findings, the Chapman Law Review noted, “future plaintiffs seem on
firm ground for pursuing corporations in federal court…for their human rights abuses
abroad. Such plaintiffs may have even greater success pursuing comparable state claims
based on state constitutional and statutory provisions forbidding forced labor, unfair
competition, and unjust enrichment.”
The Unocal case "shows that corporations have both direct and indirect human rights
responsibilities," says Susan Aaronson, director of globalization studies at the Kenyan
Institute, a Washington think tank. Today, human rights cases usually stem from extreme
physical abuses, but society's concept of what constitutes "abuses” will likely continue to
expand. If labor laws are consistently broken with the knowledge of business partners,
this could conceivably be considered "unjust enrichment.” Apart from the above
situations the following examples are worth reading regarding MNC attitude towards
Indian people.
Factors influencing CSR policy
1. Increased Affluence: CSR becomes more relevant as economies grow and
stabilize. Therefore, the greatest attention to CSR is found in developed countries.
Stable work and security provide the luxury of choice and socially responsible
activism. No such luxury exists when basic needs are in question.
2. Ecological Sustainability: Perhaps the most obvious and most talked about of the
drivers, concerns over pollution, waste, natural resource depletion, climate change
and the like continue to fuel the CSR discussion and heighten expectations for
proactive corporate action. After all, it is in the best interest of firms to protect for
the sustainable future the long-term availability of the resources on which they
depend.
3. Globalization: Globalization has had considerable impacts. First, the increased
wealth and power of multinational corporations has led to questions on the
decreased authority of the nation-state, especially in developing areas. Further,
cultural differences have added to the complexity of CSR as expectations of
acceptable behavior vary regionally. With increased power comes increased
responsibility and globalization has fueled the need to filter all strategic decisions
through a CSR lens to ensure optimal outcomes for diverse stakeholders.
4. Free Flow of Information: Yes, blame the bloggers, but through the Internet and
other electronic mediums the flow of information has shifted back to the
stakeholders, especially in the case of three important groups: consumers, NGOs
and the general media. Easily accessible and affordable communication
technologies have permanently changed the game and only truly authentic and
transparent companies will profit in the long term.
5. The Power of the Brand: Brands are today the focal point of corporate success
and much of the health of the brand depends on public perception of the
corporation. In other words, reputation is key and honest CSR is a way to protect
that reputation and therefore the brand.
Managing CSR in an Organization
The practical methodology depicted below outlines the steps to be adopted to properly
manage CSR. In particular, the methodology advanced is aimed at companies interested
in introducing a coherent CSR program that fits organizational values and objectives. An
overview of the proposed methodology is provided in Figure 1.
Step 1: What Do We Stand For?
In order to fit in the business where it is developed, a CSR program must align with the
norms, values, and mission of the organization. The purpose of this first step is to identify
the organizational values and norms that are likely to have implications for CSR. In
particular, relevant existing values and norms are those that specify the stakeholder
groups and stakeholder issues that are deemed as most important by the organization.
Very often, relevant organizational norms can be found in corporate documents such as
the mission statement, annual reports, sales brochures, or web sites. Table 4 illustrates
how concrete corporate values and norms can be translated in terms of CSR objectives.
[Insert Table 4 here]
Formal documents may not be sufficient to elicit how the organization envisions its
relationships and contributions to stakeholders. Interviews of leading and senior
organizational members may yield fruitful insights. For example, a CEO we worked with
stated: “I have always thought about my grand children --even before I had any--; I worry
about what this company is going to leave behind for them; whether they will also have a
nice natural environment to live in.” If this viewpoint really inspires organizational
activities, then one would expect the firm to be concerned about the issues of
sustainability and protection of the environment. Similarly, the owner of a middle-sized
enterprise explained: “For me, it is important that the people who work here have fun;
they must be happy to come to work; they must enjoy collaborating and growing.” Such a
statement implies that employees are likely to be seen as an essential stakeholder group,
and that the quality of work life along with personal development are likely to be issues
valued in the company. While they clarify the stakeholders and issues they stand for,
businesses must also understand which corporate practices and impacts are of greatest
concern to their stakeholders. In order to generate this intelligence, businesses must first
identify powerful stakeholders.
Step 2: Who Are Powerful Stakeholders?
As earlier mentioned, stakeholders have some level of power over a business because
they are in the position to withhold, or at least threaten to withhold, organizational
resources. To assess the power of a given stakeholder community, it is useful to rate the
extent to which: (a) the firm depends on the resources of this stakeholder community for
its continued survival, and (b) the welfare of the stakeholder community depends on
organizational success. As illustrated in Figure 2, stakeholders have most power when
their own survival is not really affected by the success of the organization, and when they
have access to vital organizational resources. For example, most end customers do not
need per se to buy Nike shoes. Therefore, if they decide to boycott Nike, they have to
endure only minor inconveniences. Nevertheless, their loyalty to Nike is vital to the
continued success of the sport apparel giant.
[Insert Figure 2 here]
The proper assessment of the power held by a given stakeholder community also requires
an evaluation of the extent to which that community can collaborate with others to
pressure the firm. The more ties exist or can easily be developed between stakeholder
communities with similar norms, the more vulnerable the organization. This idea can be
illustrated with Shell’s Brent Spar crisis. Greenpeace had secured the support of several
televisions and newspapers outlets before it launched its offshore demonstrations against
Shell’s planned destruction of an oil platform. The NGO had also gathered beforehand
support among other environmental groups, church representatives, and political leaders
in several European countries. As a result, Greenpeace’s actions were highly visible and
led to broad-based and unified condemnations of Shell. The oil giant then had little
choice but to give into activists’ demands. Such contagion effects and collaboration help
stakeholders build power relative to the firm. At the end of Step 2, businesses should
have a list of stakeholder communities in hand, with a rough assessment of their
respective and common power.
Step 3: Which Stakeholder Issues?
Together, steps 1 and 2 lead to the identification of the stakeholders who are both the
most powerful and the most valued by the firm. Step 3 consists then in understanding the
nature of the main issues of concern to these stakeholders. Some of this knowledge is
often partially in-house, but has not been systematically integrated and analyzed.
Boundary spanners (e.g., sales representatives, customer-service representatives,
purchasing managers, public relations specialists) may be especially knowledgeable
about the main norms and concerns shared by customers, suppliers, and the public
opinion. Relevant information can also be found in secondary documents published by
stakeholder organizations such as professional associations, governmental agencies,
NGOs, or competitors. In spite of this existing knowledge, it may still be useful to
conduct panel discussions or interviews with stakeholders to better understand their
specific expectations. Topics to be tackled in these forums could include:
• Stakeholders’ views of CSR in general: What is CSR? What are examples of socially
responsible firms? What are examples of socially irresponsible firms? To whom are
businesses most responsible?
• Stakeholders’ views of the social responsibilities faced by the focal organization: To
whom is this firm responsible? What are negative impacts of the firm on society and on
its business associates? How can the organization actively contribute to the well-being of
different stakeholders?
Such a process of stakeholder intelligence generation is in place at General Motors with
“Community Impact Strategic Teams,” in charge of identifying internal and external
issues that may impact the company and its communities. The giant food retailer Ahold
has moved one step further by conducting a formal research in aimed at characterizing
stakeholder issues. Specifically, qualitative research was conducted in several countries
among customers, employees, opinion leaders, NGOs, and responsible investors. Overall,
step 3 should result in a clear list of powerful stakeholders and associated issues. Table 5
provides an example of such a list for a garbage treatment company we worked with.
[Insert Table 5 here]
Step 4: What Does CSR Mean For Us?
Steps 1 through 3 consist in generating information about CSR among a variety of actors
in and around the organization. Step 4 brings these three first stages together to arrive at a
concrete definition of CSR that fits specifically the organization of interest. This general
definition will then be used to evaluate current practices and to select concrete CSR
initiatives. Ideally, this chosen definition is then formalized in official documents such as
annual reports, web pages, or company brochures. The definition should at least clarify
two main points: (1) the motivation underpinning the commitment to CSR, and (2) the
stakeholders and issues that are perceived as priority by the organization. Table 6
introduces the definition of CSR adopted by the global food retailer Ahold.
[Insert Table 6 here]
The first element of the definition clarifies why CSR is of interest to the company, and
therefore places CSR in the context of the broader organizational objectives and mission.
From the analyses conducted in steps 1 and 2, it may become obvious that CSR is an
integral part of the organization’s values and norms. This is what is implied in Ahold’s
definition of CSR (see Table 6). Similarly, the financial services provider PNC clearly
states that community involvement programs are grounded in organizational values and
norms: “Giving back is a bedrock value at PNC. For us, that is business-as-usual.” In
contrast, CSR could be mainly the result of stakeholder pressures. This perspective is
adopted by the pharmaceutical company AstraZeneca: “We aim to be in tune with the
changing expectations of society and to conduct business in a way that meets widespread
approval.” In some firms, CSR is seen as an excellent instrument to achieve performance
objectives. For example, the global supermarket chain Carrefour states: “We firmly
believe that our responsible approach is the source of our financial success.”
The second element of a definition pinpoints the stakeholders and issues that will be the
main targets of CSR initiatives. These priorities are clearly stated in Ahold’s definition of
CSR where the natural environment, financial stakeholders, employees, customers,
suppliers, and communities are listed as relevant stakeholders. In addition, Ahold’s
definition points to core stakeholder issues including health and safety, sustainability, and
quality of life. This general definition of CSR can then be used as basis to survey current
practices.
Step 5: Auditing Current Practices
Two main questions can guide an audit of current CSR practices: (a) what does the
organization already have in place to address important stakeholder issues? and (b) which
practices need improvement? The first part of this inventory is necessary because most
organizations do not have a good overview of the various processes already in place to
tackle each specific stakeholder issue. For example, when considering the issue of quality
of work-life, managers may consider a broad range of initiatives such as working
schedules, ergonomics, organizational communications, along with employee
volunteerism and out-of-company outings.
The second part of the audit consists essentially in identifying which organizational
practices need to be modified in order to better address stakeholder issues. A systematic
review of all organizational processes along with surveys of different stakeholders could
be conducted to perform the second part of this audit. Objective indicators of the
organizational impacts on specific stakeholder issues (see those presented in Table 1) can
also be used. Businesses can rely on standardized audits such as those offered by the
Global Reporting Initiative and the Social Accountability Institute. These standards
provide a listing of issues to be surveyed, along with recommended indicators of impacts.
These standardized audits implicitly assume that all companies share similar values and
face about the same stakeholder communities and issues. As a result, they are most
adequate for large companies that confront a wide range of issues and can afford to tackle
this variety. Regardless of size, businesses should make sure that their audit centers on
the stakeholders and issues favored in their own definition of CSR. Such a focus best
enables businesses to concentrate their efforts and to establish a clear profile in the eyes
of stakeholders. At the end of Step 5, businesses should have a detailed inventory of
organizational activities that need improvement.
Step 6: Implementation of CSR Initiatives
The CSR implementation process starts with the prioritization of the challenging areas
outlined in Step 5. Two main criteria can be considered. First, the levels of financial and
organizational investments required by different actions should be considered. In
particular, one could distinguish between the challenges that require:
• Only small adaptations of current processes. For instance, philanthropic donations could
be re-organized to systematically target one specific social issue. Similarly,
communications to employees could be consolidated in order to yield greater
accessibility and clarity.
• The creation of new administrative processes. Examples would include the development
of a supplier selection program based on environmental criteria, and the adoption of a
process to give a personal answer to every customer complaint.
• The development of new production processes. For instance, businesses could attempt
to lower the non-recyclable content of products, or design ways to re-use old packaging.
A second criterion to consider when prioritizing CSR challenges is urgency. When the
challenge under consideration corresponds to a point listed in the definition of CSR, and
when stakeholder pressures on the issue could be expected, then the challenge can be
considered as urgent. It should therefore be tackled without delay. Once a depiction and
schedule of CSR challenges has been established, it is essential to allocate responsibility
both to individual initiatives, and to the CSR implementation process as a whole. Even
though it is often neglected, the designation of an individual or committee in charge of
overseeing all CSR efforts is the only way to ensure the coherence of diverse initiatives,
along with their fit with the stated definition of CSR.
Step 7: Generating Enthusiasm for CSR
Creating awareness. Given that one aspect of CSR consists in addressing stakeholder
issues, it is essential that businesses keep stakeholders aware of the initiatives undertaken
to address these issues. Environmental and social reports constitute an increasingly
popular means of keeping some stakeholders informed (mainly shareholders, investment
funds, business partners, and employees). An increasing number of companies also seem
to also use web sites to communicate their achievements. Besides these general
communication means, many businesses are eager to discuss their efforts within forums
dedicated to social responsibility and sustainability issues such as the World Summit on
Sustainable Development that took place in Johannesburg in 2002, or the regular
conferences organized by the Global Reporting Initiative. These forums give businesses
an opportunity to inform experts and activists in the CSR area of their progress. Another
example of this type of promotion is provided by General Motors: its foundation
organizes annually a scientific conference on cancer. This helps keep stakeholders aware
of GM’s commitment to cancer research, and highlights the firm’s dedication to
philanthropy and medical science.
Step 8: Stakeholder Feedback
The different activities mentioned in step 7 help stimulate a fruitful dialogue with
stakeholders. Other instruments can be employed to keep abreast of stakeholders’ views
of the firm and of their evolving issues. Additional stakeholder feedback can be generated
through a variety of means. First, stakeholders’ general assessment of the firm and its
practices can be obtained through satisfaction or reputation surveys.
Role of HR Professionals in CSR
Companies increasingly need to co-ordinate their CSR activities and demonstrate their
commitment to CSR. Effective CSR depends on being seen as important throughout an
organisation. Delivery, not rhetoric, is the key to stakeholders developing trust in an
organisation.
HR has a key role in making CSR work. CSR without HR runs the risk of being
dismissed as PR or shallow ‘window-dressing’. And CSR is an opportunity for HR to
demonstrate a strategic focus and act as a business partner.
CSR needs to be embedded in an organisation’s culture to make a change to actions and
attitudes and the support of the top team is critical to success. HR already works at
communicating and implementing ideas, policies, cultural and behavioural change across
organizations. Its role in influencing attitudes and links with line managers and the top
team mean it is ideally placed to do the same with CSR.
HR is also responsible for the key systems and processes underpinning effective delivery.
Through HR, CSR can be given credibility and aligned with how business run. CSR
could be integrated into processes such as the employer brand, recruitment, appraisal,
retention, motivation, reward, internal communications, diversity, coaching and training.
The way a company treats its employees contributes directly to it being seen as willing to
accept its wider responsibilities. Building credibility and trusting their employer are being
increasingly seen as important by employees when they choose who they want to work
for.
What are the risks in HR’s involvement with CSR?
The trust built through successful CSR is hard to regain if lost. HR needs to ensure that
their organisation’s CSR can stand up to the inevitable scrutiny by stakeholders, and that
training and communication mean it’s embedded throughout the culture of an
organisation.
HR needs to be an active business partner working with other functions, for example
finance, PR/marketing etc. It will need to look beyond the boundaries of usual practice
and arguably work on its own PR. CSR is a strategic opportunity which is market-led and
is restrained by bureaucracy. It needs dynamism, creativity, imagination and even
opportunism.
What to consider when starting a CSR strategy
Clarify your core values and principles.
Make sure you know who your key internal and external stakeholders are and which
issues affect your relationship with them.
Get the top team on board, and know how to sell the benefits of CSR to different
stakeholders.
Understand how the CSR strategy is aligned to your business strategy and HR practices.
Get endorsement for the CSR strategy from inside and outside your organisation.
Communicate, consistently.
Training is vital, as CSR will only have an impact if employees are engaged: attitudes or
behaviour won’t change otherwise.
Effectively measure and evaluate CSR, otherwise the time, effort and money invested are
based on assumptions, not results.
Direct results (such as saving fuel resulting in lower carbon emissions) and indirect
results (increased employee satisfaction) of CSR strategies can be shown to contribute to
business performance. One way outcomes can be measured is through a balanced
scorecard approach, which allows for the different types of factors that contribute to a
business’s bottom line including internal people, processes and customers.
A growing global role
One thing that is for sure - the pressure on business to play a role in social issues will
continue to grow. Over the last ten years, those institutions which have grown in power
and influence have been those which can operate effectively within a global sphere of
operations. These are effectively the corporates and the NGOs. Those institutions which
are predominantly tied to the nation state have been finding themselves increasingly
frustrated at their lack of ability to shape and manage events. These include national
governments, police, judiciary and others.
There is a growing interest, therefore, in businesses taking a lead in addressing those
issues in which they have an interest where national government have failed to come up
with a solution. The focus Unilever has on supporting a sustainable fisheries approach is
one example. Using the power of their supply chain, such companies are placed to have a
real influence. National governments negotiating with each other have come up with no
solutions at all, and ever-depleting fish stocks. That is not to say businesses will
necessarily provide the answers - but awareness is growing that they are occasionally
better placed to do so than any other actors taking an interest.
CSR has a wide range of potential meaning and the first module of this site addresses the
issue of definition as well the nature of the challenges calling for public and private
sector action on CSR.
Global Recognitions of CSR
Codes formulated by UN Global Compact
Corporate sustainability starts with a company’s value system and a principled approach
to doing business. This means operating in ways that, at a minimum, meet fundamental
responsibilities in the areas of human rights, labour, environment and anti-corruption.
Responsible businesses enact the same values and principles wherever they have a
presence, and know that good practices in one area do not offset harm in another. By
incorporating the Ten Principles of the UN Global Compact into strategies, policies and
procedures, and establishing a culture of integrity, companies are not only upholding their
basic responsibilities to people and planet, but also setting the stage for long-term
success.
The Ten Principles of the United Nations Global Compact are derived from:
the Universal Declaration of Human Rights, the International Labour Organization’s
Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on
Environment and Development, and the United Nations Convention Against Corruption.
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.
Labour
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 corruption in all its forms, including
extortion and bribery.
UNDP, Global Reporting Initiative
The Global Reporting Initiative (known as GRI) is an international independent
standards organization that helps businesses, governments and other organizations
understand and communicate their impacts on issues such as climate change, human
rights and corruption. As of 2015, 7,500 organizations used GRI Guidelines for the
sustainability reports. GRI Guidelines apply to multinational organizations, public
agencies, smaller and medium enterprises, NGOs, industry groups and others. For
municipal governments, they have generally been subsumed by similar guidelines from
the UN ICLEI.[1]
The GRI is an example of an organization that acts outside of the top-down power
command structures associated with government (e.g., quasi-autonomous bodies and
regulators). Environmental governance is the multifaceted and multilayered nature of
"governing" the borderless and state-indiscriminate natural environment.[2] Unlike major
protected policy areas such as finance or defence, the environment requires sovereign
states to sign up to treaties and multilateral agreements in order to coordinate action.
Sustainability reporting is a more recent concept that encourages businesses and
institutions to report on their environmental performance.[3]
GRI was formed by the United States-based non-profits Ceres (formerly the Coalition for
Environmentally Responsible Economies) andTellus Institute, with the support of the
United Nations Environment Programme (UNEP) in 1997. It released an "exposure draft"
version of the Sustainability Reporting Guidelines in 1999, the first full version in 2000,
the second version was released at the World Summit for Sustainable Development
in Johannesburg—where the organization and the Guidelines were also referred to in the
Plan of Implementation signed by all attending member states. Later that year it became a
permanent institution. In 2002 GRI moved its Secretariat toAmsterdam,[4] Netherlands.
Although the GRI is independent, it remains a collaborating centre of UNEP and works
in cooperation with theUnited Nations Global Compact.
A member of the board of the Dutch National Contact Point (NCP) of the OECD
Guidelines for Multinational Enterprises. Herman Mulderwas appointed as a Chairman of
the GRI in 2011. In the past Mr Mulder was a senior executive vice-president at ABN
AMRO, and is now a chairman of the True Price.[5]
Governance
The "GRI" refers to the global network of many thousands worldwide that create the
Reporting Framework, use it in disclosing their sustainability performance, demand its
use by organizations as the basis for information disclosure, or are actively engaged in
improving the standard.
The network is supported by an institutional side of the GRI, which is made up of the
following governance bodies: Board of Directors, Stakeholder Council, Technical
Advisory Committee, Organizational Stakeholders, and a Secretariat. Diverse geographic
and sector constituencies are represented in these governance bodies. The GRI
headquarters and Secretariat is in Amsterdam, Netherlands.
Reporting guidelines
Standards for guidelines
The GRI framework aims to enable third parties to assess environmental impact from the
activities of the company and its supply chain[6]The standardized reporting guidelines
concerning the environment are contained within the GRI Indicator Protocol Set. The
Performance Indicators (PI) includes criteria on energy, biodiversity and emissions.
There are 30 environmental indicators ranging from EN1 (materials used by weight) to
EN30 (total environmental expenditures by type of investment).[7]
The recent 3.1 guideline has been replaced by the materiality-based 4.0 guideline in 2014,
which has raised critical comments regarding the comparability and credibility.[8]
ESG metrics
examples of a company's internal and external stakeholders.
Sustainability reporting aims to standardize and quantify the environmental, social and
governance costs and benefits derived from the activities of the reporting companies
accordingly. Some of the examples of the reporting measures to be used would be the
quantified results of the CO2 emissions, working and payment conditions, financial
transparency and alike.[9]
For the assessment of the social impact created by the reporting organization, GRI
standards were created according to international labor practices and the environmental
impact by conducting an independent audit. ISO 14010, ISO 14011, ISO 14012 and ISO
26000 set out a standard for assessing the environmental impact, while OHSAS 18001
lays down a health and safety risk management system. For instance, the ILO's eight core
conventions outline specific groups or population that require special attention: women,
children, migrant workers and their families, persons belonging to national or ethnic,
linguistic, and religious minorities, indigenous peoples, and persons with disabilities. In
order to circumvent "greenwashing" or falsified reporting, the financial institution can
conduct an independent audit of the investee or enter into a dialogue with the top
management of the company in question.[10]
UNIT IV
Implementing CSR;
CSR in different Fields:
CSR in Marketplace
CSR Marketplace is a platform for corporates, social enterprises, and NGOs to engage
and interact with one another, further enabling long-term partnerships. The marketplace
becomes the medium for stakeholders and beneficiaries to gain insights about the needs
and demands of the social sector in order to drive larger social impact.
The Marketplace Responsibility Principles have been drawn up to frame two things. The
first is the question of what businesses should be aiming to achieve in the way they do
business. The second is to identify the management behaviours that make it more likely
that businesses will meet these aspirations successfully. The Principles cover relationship
with customers, with suppliers, with governments, and finally impacts of products or
services on third parties and the environment.
The Principles have been produced by a senior business leadership team the Marketplace
Taskforce, including a number of CEOs and other senior decision makers from
companies including global brands and UK-specific companies. The group was chaired
by Mike Clasper, former CEO of BAA, the international airports group.
The framework has been designed for decision makers, and has been kept as simple as
possible. So the key principles are:
* Respect your customers
* Support vulnerable customers
* Seek potential customers within excluded groups
* Manage the impact of product or service
* Actively discourage product misuse
* Actively manage responsibility in your supply chain
* Treat suppliers as partners
* Work with the rule makers
* Have consistent standards
Each of these covers a range of individual issues, many of which are very sector specific.
Every company would claim at a rhetorical level to respect its customers. But the specific
details are what counts. Does the company honour its contracts fully? Does it disclose
information covering areas about which the customer is concerned (such as, for instance,
the presence of genetically modified ingredients) or does it campaign to keep such
information off labels? Does it review the impacts of the chemicals it uses in products to
ensure that it is protecting its customers interests? Or does it follow the pack, and change
only when forced to by legislation?
Perhaps the most important part of the Marketplace Responsibility Principles, however, is
the management behaviours. These, again put simply are:
* Be consistent
* Anticipate trends
* Aim to deliver quality results
* Put at the heart of business strategy
* Part of the culture
* Encourage and motivate responsible behaviour
* Mainstream not niche
* Share best practice within the business
CSR in the workplace:
One of the last bastions of resistance to CSR programmes within corporates often seems
to be the HR department. Given the significant range of issues owned here, that can be a
real disadvantage. What are the corporate social responsibility issues that need to be
managed in the workplace?
The relationship between a company and its employees can have a big impact on that
other key relationship - that between the company and its customers. After all, whether
the customer trusts and values the company is likely to hinge on the impression created
by its human face. If the employees are disgruntled or cynical this will lose no time in
communicating itself to others who deal with the business.
So the first question comes down to how employees are dealt with, and whether they feel
a sense of motivation and pride in working for the company. Traditionally, this has come
down to areas such as the following:
•
Remuneration: does the company pay a fair wage (the concept of a 'living wage'
in developing countries is a point of some dispute, but the basic point being that
paying industry norms that do not provide enough to meet basic living
requirements is not good enough)?
•
Employee development: does the company invest in training and development for
its staff? Is employee development a consistent part of the appraisal process?
One factor of CSR in the workplace is how the company responds to extraordinary
circumstances.
•
•
•
•
•
Is the employee consulted about policies and procedures that may affect the
working environment?
Work-life balance: does the company enable working arrangements that suit the
individuals need through approaches such as home / flexi working, provision for
religious observance, support for carers etc.
Health and safety: does the company comply with all applicable health and safety
legislation? Does it go beyond this to show a genuine care about the health and
well being of its people?
Diversity: does the company respect all current and potential employees by
valuing them for themselves, and avoiding placing artificial barriers or
distinctions based on any aspect of the differences between them?
Consistency across different working environments: does the company apply
basic minimum standards - the respect for human rights and dignity - in all
countries where it operates and does business? Although local working conditions
may vary depending on the culture and practice of the country concerned, do the
core values still apply in how the company responds to these?
The best companies probably go beyond this, and succeed in making their employees
understand the value of their work in terms of the bigger picture. Nobody wants to be just
a cog in the machine. Good companies communicate their game plan throughout the
workforce, and how each individual is helping to achieve the goal. The line here, as is
often the case, between CSR and plain good management is rather blurred.
The second area is more difficult - how the company handles the implications of hard
times for the workplace. There is no immediate consensus on what constitutes good
practice in this case.
Do compulsory redundancies need to take place at all? Certainly, research by the
International Labour Organisation has suggested in the past that many of the redundancy
programmes of major companies fail to achieve the projected savings hoped for - largely
because of the impact of losing mature, talented people who know the business.
However, although some companies have done extremely well through a high profile 'no
compulsory redundancies' route, there is certainly no consensus that such a position is the
only port of call for the socially responsible company.
So if compulsory redundancies do occur, how can they be handled in an open, respectful
and supportive manner? Some companies have undertaken such exercises with active
employee placement services, counselling, retraining and generous redundancy terms.
The key factor not to forget is how you deal with those people left behind. It's easy to
focus solely on the people who leave - but the business is most often damaged by the
extremely low morale of the people left. The process of downsizing may have
fundamentally shaken the employees' faith in the company. They may be struggling to
cover a significantly increased workload. They may well fear that it is simply a matter of
time before they are next. As ever, good communication and consistent engagement is the
key.
The third area involves the role that employees have to play in ensuring that the company
stays true to its values, and delivers on its CSR programmes. This would involve such
features as:
•
A statement of values: giving clear direction on how employees are expected to
behave.
•
•
A code of conduct: explicitly giving direction on avoiding situations contrary to
the company's values - such as those involving the taking of bribes or other forms
of corruption.
A clear set of processes: good communication and training supporting a solid
•
management framework to achieve organisational objectives, such as reducing or
recycling the amount of workplace waste, and enforcing basic health and safety
rules.
Provision for, and the protection of, whistleblowers.
Finally, there are some rather important grey areas - issues that are held by some to be
highly contentious.
For instance, although everyone may agree in principle that stakeholder consultation is a
mighty fine thing, opinions are much more mixed of the European development of
employee councils - where employee representatives become an integral part of the
decision making of the organisation. Certainly the extent to which there is a mechanism
for genuine employee consultation and involvement is something for which there is no
single clear view on what constitutes good practice.
Also, there are issues such as privacy. Some companies routinely monitor employee use
of email and the internet. Others believe that such an open lack of trust fundamentally
damages the relationship. But likewise, it can be a sound part of due diligence by a
company that deals with sensitive matters seeking to reduce risk for its customers.
One of the other factors of CSR in the workplace comes down to how the company
responds to extraordinary circumstances. One of the most high profile instances of this is
the companies operating in South Africa who have adopted active policies to seek to
support employees who have contracted HIV/AIDS. It may also include how the
company responds to situations where employees are at a heightened risk of terrorist or
otherwise dangerous situations. For example, concern for the welfare of employees led
many companies to sever links with the animal research firm Huntingdon Life Sciences
following threats and assaults against staff by animal rights extremists. On the one hand,
this may be seen as socially responsible, since the safety of the employee comes first. On
the other, the action is extremely problematic, since it feeds and reinforces the aggressive
tactics which become seen as being successful tools to attack target companies.
At the end of the day, how a company relates to its own people will be make or break in
terms of its reputation as a corporate citizen. The issues affecting the workplace are wideranging and significant. Addressing them can go some way towards bridging the gap
between the rhetoric of being 'an employer of choice' and the reality. Alternatively,
having the HR Director as the last one on board for a company's CSR programme is a
sure-fire recipe for failure.
CSR in the community:
Community development (CD) refers to initiatives undertaken by the community with
partnership with external organizations or corporations to empower individuals and
groups of people by providing these groups with the skills they need to effect change in
their own communities. These skills are often concentrated around making use of local
resources and building political power through the formation of large social groups
working for a common agenda. Community developers must understand both how to
work with individuals and how to affect communities’ positions within the context of
larger social institutions.
CD is an organized effort of individuals in a community conducted in such a way to help
solve community problems with a minimum help from external organizations. External
organizations include government and non-government organizations, and corporations
of various types and sizes such as small and medium enterprises (SMEs) and
multinational corporations (MNCs). The implication of UN’s definition of CD is,
therefore, emphasizing creativity and self-reliance in the community for short and long
term goals, but not to defy the CSR roles of the various types of business firms. In
relation to the people, the definition of CD is essentially both an educational and
organizational process. Another term closely related to CD is community work, which is
about the active involvement of people in the issues that affects their lives and focuses on
the relation between individuals and groups and the institutions which shapes their
everyday experience. It is a developmental process that is both a collective and individual
experience. It is based on a commitment to equal partnership between all those involved
to enable sharing of skills, awareness, knowledge and experience in order to bring about
change. It takes place in both neighborhoods and communities of interest, whenever
people come together to identify what is relevant to them and act on issues of common
concern. The key purpose is to work with communities experiencing disadvantage, to
enable them to collectively identify needs and rights, clarify objectives and take action to
meet these within a democratic framework which respects the needs and rights of others.
Community work recognizes the need to celebrate diversity’ and appreciate differences
among ethnic and social groups in the community.
Common role of CSR in community development
Closer ties between corporations and community: Through CSR the existence of
corporations in the social system is felt beyond a perception that corporation is a place
just to get employment and procedures of goods and service. By doing so, corporations
and community would stay in peace and harmony. This becomes a social capital that is
essential in community development.
Helping to get talents: Organizations with a reputation for CSR can take advantage of
their status and strengthen their appeal as an attractive employer by making their
commitment part of their value proposition for potential candidates. It is also found that
when employees view their organization’s commitment to socially responsible behaviour
more favorably, they also tend to have more positive attitudes in other areas that correlate
with better performance. They believe their organizations recognize and reward great
customer service, act quickly to address and resolve customers.
Role in transfer of technology (TOT);Closer ties help in TOT between MNCs that give
concerns on CSR and communities in the host countries. Multinational Corporation
(MNC) is a corporation that has its facilities and other assets in at least one country other
than its home country. Such companies have offices and/or factories in different countries
and usually have a centralized head office where they co-ordinate global management.
CSR helps to protect environment: Some of the world’s largest companies have made a
highly visible commitment to CSR, for example, with initiatives aimed at reducing their
environmental footprint. These companies take the view that financial and environmental
performance can work together to drive company growth and social reputation.
Interdependency Between a corporation and community: The close link between a
corporation and community is another aspect of CSR role in CD because in long run it
creates sustainable development. This could be seen e.g. Shell Foundation involvement in
the Flower Valley in South Africa, Agip Green River Project in Nigeria and Marks and
Spencer in Africa. The CSR projects give aids to local organization and impoverished
communities.
A CSR program helps in data gathering for other public organization function: For
instance in the United States, Intel and IBM (examples of mega ICT firms) assisted
under-staffed police departments with information gathering and processing by installing
cameras with video processing abilities in areas where there are high rates of crimes.
For corporate sustainability goals: The world over, companies have been taking their
social role seriously for years, often under the banner of corporate sustainability. The EU
has developed a corporate sustainability framework, which identities a progressive set of
economic, social and environmental objectives that companies are encouraged to achieve
Skill Needed by CSR Managers in Community Development
The success of CSR is determined by both internal and external factors. Internal factors
are economic considerations, culture of the firm including the CEO and employees, and
ethical influences; while external factors are compliance with legal requirements and
technological influences as well as national culture (Bichta, 2003). Skills possessed by
CSR managers are among the internal factors determining the success of CSR practices
especially in helping community
Based on the above skills grouping, CSR managers should have six core competencies.
They are understanding community and community development, building capacity,
questioning business beyond profit making, stakeholder relations, strategic business and
community partnership, and harnessing diversity. Hence, CSR managers have a wide
range of career options such as in marketing, human resources, health and safety,
environmental management, ethical investment, public relations, ethical science,
community resource development and social research
Success and challenges of CSR activities
The prime purpose of including CSR in corporate business is to make the corporate
business activities as well as the corporate culture both sustainable in three ways:
economic, social and environmental. Paying equal amount of attention to all the
three dimensions, but many companies think that corporate social responsibility is a
much exterior part of their business, whereas most think it to be an irrelevant issue
for their business as satisfying their customers/clients is more important for them. It
is further felt that customer satisfaction is only about price and service, but
concentrating on only these aspects of business makes them blind folded towards
other important changes taking place worldwide that could blow the business out of
the water. The change is named as social responsibility which is an opportunity in
itself for the business.
Inefficiency of the Government
In the past, governments have relied only on legislation and regulation to deliver social and
environmental objectives in the business sector which has lead to certain failed initiatives.
Demands for Greater Disclosure
There is a growing demand for corporate disclosure from stakeholders, including customers,
suppliers, employees, communities, investors, and activist organizations.
Increased Customer Interest
It has been seen and proved through a survey conducted in the year 2002 in 25 countries
by Environics International1, it was found that more than one third of surveyed consumers
believed that large companies “should do more than give money to solve problems.”
The same study found that almost 50 percent of consumers had considered punishing a
company based on its social actions, and that nearly 30 percent had actually avoided a
company for that reason. Further it was proved that the ethical conduct of companies have a
growing influence on the purchasing decisions of customers.
Increased pressure from the Investor Investors are changing the way they analyze
companies' performance, and are making decisions based on ethical concerns too.
Change in employee behaviour
Employees are increasingly looking beyond paychecks and benefits and seeking out
employers whose operating practices match their own principles. In order to hire and retain
skilled employees, companies are being forced to improve working conditions.
Advantages of making CSR a part
The concept of corporate social responsibility is now firmly rooted around the globe as a
business agenda. But in order to move from theory to concrete action, many hurdles need to
be overcome. The positives of a CSR initiative are that it can bestow an organization both in
terms of finances as well as managerial talent and also attract right people to work on the
initiatives. Thus looking at the initiatives by Corporate around the world one feels that we
can expect more from them.
There is an urgent need to address the various CSR initiatives and also a need to build a
mechanism through which such efforts are recognized and rewarded. It would not be wrong
in saying that transparency and dialogue can help to make a business appear more
trustworthy, and push up the standards of other organizations at the same time.
Some of the positive outcomes that can arise when businesses adopt a policy of social
responsibility include:
CSR in the ecological environment
.
Corporate social responsibility (CSR)
Corporate social responsibility: environmental impact
Corporate social responsibility (CSR) can refer to a wide range of actions that businesses may make from donating to charity to ethical trading. One primary focus of CSR is the environment.
What is environmental CSR?
•
•
•
•
•
•
Environmental CSR aims to reduce any damaging effects on the environment from your business'
processes. Activities may focus on:
energy use
water use
waste management
recycling
emissions
eco-friendly office and business travel policies
Some of these are significant from both environmental and financial point of view.
Advantages of environmental CSR
•
•
•
Green CSR can reduce business risk, improve reputation and provide opportunities forcost savings.
Even the simplest energy efficiency measures can generate savings and make a difference to your
business. For example:
switching off lights and equipment when not in use
reducing the use of water
reducing the amount of paper you waste
Caring about the environment can increase revenue too. Many customers prefer to buy from
responsible companies.
For more information, find out how to improve your environmental performance.
How to reduce environmental impact
You can reduce your business' environmental impact in many ways. For example, you can:
•
•
•
•
•
•
•
create products that can be recycled
optimise your product life cycle
source responsibly (eg using recycled materials and sustainable timber)
reduce packaging
buy locally to save fuel costs
create an efficient (and fuel-efficient) distribution network
work with environmentally-conscious suppliers and distributors
Case Studies
Lifebuoy's “Swasthya Chetna” (LSC) was a five-year health and hygiene education
program initiated by Hindustan Lever Limited (HLL), the Indian arm of the fast moving
consumer goods (FMCG) major, Unilever. The program was formally launched in 2002,
in eight states across India.
The objective of this program was to educate around 200 million people in rural and
urban areas about the importance of adopting good 'health and hygiene'practices. The
program spread awareness about germs and their adverse effects on health, and how
proper 'health and hygiene'practices, such as bathing and washing hands with soap could
prevent diseases like diarrhea.
According to HLL, LSC was not a philanthropic activity, but a marketing program with a
social benefit. HLL sought to grow the Lifebuoy brand in India by attracting those
consumers who never used soap. In the process, the company sought to bring about a
behavioral change by convincing people to use soaps more frequently, thus creating more
users for its brand. This program was also seen as a successful case for public-private
partnership.
Issues:
» Understand the rationale behind the Lifebuoy “Swasthya Chetna” initiative by
Hindustan Lever Limited (HLL) in India.
» Understand the issues related to brand management and repositioning in the personal
wash soap segment in the fast moving consumer goods (FMCG) industry in India.
» Appreciate the role of public-private partnerships as a win-win situation for private
entities, governments, and individual consumers.
ITC’s e-choupal venture I
I. Background and approach to development E-Choupal is an initiative of the
International Business Division (IBD) of one of India’s leading private companies, ITC
Ltd. Beginning in 2000, ITC set up a network of ICT kiosks around the country, called eChoupal (an open meeting place in a village). According to Sachin Sahay, General
Manager at IBD, the aim was to ‘build an intelligent first mile and a low cost last mile for
agricultural products and services’. ICTs are the primary means of operationalising this
vision. Every e-Choupal centre is equipped with a computer, Internet connectivity
through satellite technology and solar power. In addition, it provides access to a web
portal with current agriculture commodity prices at the village level for produce
transactions. Additionally, e-Choupal supports best practices in farming through training
sessions, provides information on weather conditions, and supplies quality agricultural
inputs like seeds and fertilisers. E-choupal centres form part of IBD’s re-engineered
Tata Iron and Steel Company (TISCO) was established in 1907 by
J N Tata1 at Jamshedpur in Bihar, India. TISCO offered a wide
range of products (See Exhibit I) and services including Hot
rolled/Cold rolled (HR/CR) coils2 and sheets, tubes, construction
bars, forging quality steel, rods, structurals, strips and bearings. It
also manufactured material handling equipment, ferro alloys and
other minerals, software for process controls, and offered cargohandling services.
In the early 1980s, TISCO initiated a modernization program of its
steel plant (See Exhibit II). Explaining the need of modernization,
J J Irani, the then managing director of TISCO said, "We would
have been finished otherwise.... you cannot fight a modern-day war
with weapons of the Mahabharata. We would have been
annihilated had we not modernized. We realized this and embarked
on the four phases of modernization. We addressed our drawbacks
like the steel making process, our weakest link."
By mid-1990s, TISCO had become India's most cost-effective steel
plant. It also became Asia's first and India's largest, integrated steel
producer (ISP)3 in the private sector. By 2000, eight divisions of
Tata Steel were ISO-140014 certified, including Noamundi Iron
Operations, West Bokaro Collieries, Ferro Alloy Plant, Joda,
Sukinda Chromite Mines, Joda East Iron Mines, Tubes Division,
and Growth Shop & Steel Works.
UNIT – V
CSR in India
India`s new Companies Act 2013 (Companies Act) has introduced several new
provisions which change the face of Indian corporate business" Companies Act
2013 (Companies Act) has introduced several new provisions which change the
face of Indian corporate business. One of such new provisions is Corporate
Social Responsibility (CSR). The concept of CSR rests on the ideology of give
and take. Companies take resources in the form of raw materials, human
resources etc from the society. By performing the task of CSR activities, the
companies are giving something back to the society.
Ministry of Corporate Affairs has recently notified Section 135 and Schedule VII
of the Companies Act as well as the provisions of the Companies (Corporate
Social Responsibility Policy) Rules, 2014 (CRS Rules) which has come into
effect from 1 April 2014.
Applicability: Section 135 of the Companies Act provides the threshold limit for
applicability of the CSR to a Company i.e. (a) net worth of the company to be Rs
500 crore or more; (b) turnover of the company to be Rs 1000 crore or more; (c)
net profit of the company to be Rs 5 crore or more. Further as per the CSR
Rules, the provisions of CSR are not only applicable to Indian companies, but
also applicable to branch and project offices of a foreign company in India.
CSR Committee and Policy: Every qualifying company requires spending of at
least 2% of its average net profit for the immediately preceding 3 financial years
on CSR activities. Further, the qualifying company will be required to constitute a
committee (CSR Committee) of the Board of Directors (Board) consisting of 3 or
more directors. The CSR Committee shall formulate and recommend to the
Board, a policy which shall indicate the activities to be undertaken (CSR Policy);
recommend the amount of expenditure to be incurred on the activities referred
and monitor the CSR Policy of the company. The Board shall take into account
the recommendations made by the CSR Committee and approve the CSR Policy
of the company.
Definition of the term CSR: The term CSR has been defined under the CSR
Rules which includes but is not limited to:
•
•
Projects or programs relating to activities specified in the Schedule; or
Projects or programs relating to activities undertaken by the Board in
pursuance of recommendations of the CSR Committee as per the
declared CSR policy subject to the condition that such policy covers
subjects enumerated in the Schedule.
This definition of CSR assumes significance as it allows companies to engage in
projects or programs relating to activities enlisted under the Schedule. Flexibility
is also permitted to the companies by allowing them to choose their preferred
CSR engagements that are in conformity with the CSR policy.
Activities under CSR: The activities that can be done by the company to achieve
its CSR obligations include eradicating extreme hunger and poverty, promotion of
education, promoting gender equality and empowering women, reducing child
mortality and improving maternal health, combating human immunodeficiency
virus, acquired, immune deficiency syndrome, malaria and other diseases,
ensuring environmental sustainability, employment enhancing vocational skills,
social business projects, contribution to the Prime Minister's National Relief Fund
or any other fund set up by the Central Government or the State Governments
for socio-economic development and relief and funds for the welfare of the
Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and
women and such other matters as may be prescribed.
Local Area: Under the Companies Act, preference should be given to local areas
and the areas where the company operates. Company may also choose to
associate with 2 or more companies for fulfilling the CSR activities provided that
they are able to report individually. The CSR Committee shall also prepare the
CSR Policy in which it includes the projects and programmes which is to be
undertaken, prepare a list of projects and programmes which a company plans to
undertake during the implementation year and also focus on integrating business
models with social and environmental priorities and process in order to create
share value.
The company can also make the annual report of CSR activities in which they
mention the average net profit for the 3 financial years and also prescribed CSR
expenditure but if the company is unable to spend the minimum required
expenditure the company has to give the reasons in the Board Report for non
compliance so that there are no penal provisions are attracted by it.
Tata Model on CSR
NATIONAL CSR HUB AT TATA INSTITUTE OF
SOCIAL SCIENCES
The Department of Public Enterprises (DPE) under Ministry of Heavy
Industries & Public Enterprises introduced the CSR Guidelines in March 2010
for the Central Public-Sector Enterprises (CPSEs) to commit themselves to the
concept and practical implementation of Corporate Social responsibility.
These guidelines look deeper into the matter of Sustainability and Corporate
Social Responsibility.
Under these guidelines, the CSR interventions are required to be thoroughly
and scientifically researched and on this basis the intervention programmes
have to be formulated and implemented. For this, the Tata Institute of Social
Sciences was invited to set up the National CSR Hub in 2010 and hence the
HUB was formally launched on 21st March 2011.
The National CSR Hub has been a pioneering think-tank on corporate social
responsibility (CSR) and sustainable development in India for the last six
years. The National CSR Hub works with multiple stakeholders, the state,
industry, community, NGOs and all other development sector players, to
achieve our common goals of people-centric development. Housed at Tata
Institute of Social Sciences (TISS), a deemed centrally funded public
university that has always worked for social justice, equality, dignity and
rights of the marginalized, the National CSR Hub follows the value framework
of the institution.
As part of its mandate, TISS has been instrumental in giving policy inputs on
the development of frameworks, guidelines and laws pertaining CSR to the
Government of India. The Hub views CSR work as an instrument to
supplement government efforts in nation building. It provides strategic
direction to corporations for effective use of their CSR funds using a
convergence approach. Other than evidence based research informing
policies and practices of CSR, one of the foremost areas of focus for the
National CSR Hub has been in the capacity building of NGOs and
implementing agencies. The capacity building of implementing agencies is
crucial for CSR to achieve desired programme effectiveness and also
contribute towards creating a more professionalised and accountable
development sector in India.
TISS Mumbai
TISS was established in 1936, as the Sir Dorabji Tata Graduate School of Social Work, the
first school of social work in India. It was renamed to its current name in 1944. It was
recognised as a Deemed University in 1964 [4] by the University Grants Commission of India.
TISS started out as a small institute offering a post-graduate diploma in Social Work, but has
since expanded continuously in terms of educational programmes and infrastructure (see list
of programs). The first director of the institute was Clifford Manshardt, who aimed to
establish a post-graduate social work school of national stature that would engage in a
continuous study of Indian social issues and create meaningful interventions.
Over the years, the Institute has, among other thrusts, made a significant contribution to
policy, planning, action strategies and human resource development. It has done so in
several areas, ranging from sustainable rural and urban development to education, health,
communal harmony, human rights and industrial relations. TISS has earned recognition as
an institution of repute from different Ministries of the Government of India and various State
Governments, as well as international agencies such as the United Nations, and the nongovernment sector, both national and international.[citation needed]
Independent Centres
1. Centre for Education Innovation and Action Research
2. Centre for Excellence on Adolescents and Youth
3. Centre for Lifelong Learning
4. Centre for Studies in Sociology of Education
5. Centre for Study of Social Exclusion and Inclusive Policies
6. Centre for Library and Information Management & SDTM Library
Resource Centres
1. Computer Centre
2. Publications Unit
3. Sir Dorabji Tata Memorial Library
Student’s Support Services
Students’ Affairs Office
The Students’ Affairs Office is the fundamental link between students, faculty and
the administration of TISS. Headed by the Dean (Students’ Affairs). The purpose
of the Office is to create a climate which promotes personal and academic
development of students by offering them both support and challenges. Support is
provided by assisting students directly or through referrals. The Office seeks to
provide challenge by holding students accountable for their actions and by
assisting them in developing problem-solving skills. The Office, thus, strives to help
students in their adjustment to TISS life and help them to take full advantage of the
academic or social environment here.
Towards this, the Students’ Affairs Office looks into the physical and mental wellbeing of students through services such as counselling, extra-curricular activities
such and yoga and gymming, as well as promoting cultural activities.
Maintaining tolerance and respect for cultural diversity and plurality is an essential
cornerstone of student life at TISS. Students at TISS are welcomed regardless of
religion, caste, ethnic background, age, sexual orientation or physical status.
Several well-established committees for Student Aid, Gender Amity, Support
Facilities for Students, Medical Health Services, and also a team of professional
counsellors and male and female wardens — all coordinated by the faculty at TISS
— form the backbone of this Office.
The Institute expects that all student members of its community assume
responsibility for their conduct. However, when they infringe on the rights of others,
the Institute may intervene through the laid down established procedures.
Students’ Union
The Institute has a healthy tradition of electing a Students’ Union by secret ballot.
Returning Officers are appointed to oversee the process. Office bearers of the
Union have been responsible students who have contributed to student life through
their leadership. During critical periods, such as disasters and relief work, they
have been at the forefront of volunteering for tasks as well as mobilising their
colleagues.
Accommodation/Hostels
Admission to the hostels is restricted to full-time, bonafide, Master’s degree
students. Hostel admission is not guaranteed. Deputed candidates, holding
government accommodation in Mumbai (general category or SC/ST), will not be
allotted hostel accommodation. Due to limited seats in the hostel, accommodation
is not available for students who ordinarily reside in the Mumbai Metropolitan
Region. Out-of-town students, who have close relatives in Mumbai, will also not be
given hostel accommodation.
Dining Hall
The Dining Hall serves both vegetarian and non-vegetarian meals. It is managed
by the DH Committee with student representatives as members and with a
member of the Faculty as its Chairperson. It is open for all the Master’s degree
students, M.Phil. and Ph.D. scholars, Institute staff, participants of all the shortterm courses and seminars held at the Institute. The Dining Hall will be closed by
11.00 p.m. Default in the payment of dining hall charges will result in penalties and
cancellation of dining hall membership and even hostel residence. Re-admission
may be considered on payments of all dues as a fresh candidate. The Institute is
currently working with the students to encourage them to take greater control of
the management of the DHs.
Students on campus also enjoy a canteen facility which was initiated in June 2006.
In keeping with the overall ethos of the Institute, management of the canteen has
been given to an NGO devoted to women’s empowerment. The canteen is run by
a self-help group of woman rag-pickers.
Health Care
Two Medical Officers visit the Institute — one on every Monday, Wednesday and
Friday from 4.00 p.m. to 6.00 p.m., and the other on every Tuesday, Thursday and
Saturday from 4.30 p.m. to 6.30 p.m. The Institute provides free medical
consultation service only. The medical officers also provide referrals as and when
required. The programme is coordinated by the Coordinator (Medical and
Counselling), who is a faculty member of the Institute.
Counselling Services
Trained professionals provide counselling services from Monday to Saturday for 3
hours every day. The counsellors help the students in their day-to-day concerns
and also enhance their overall functioning. A senior faculty member from TISS
coordinates the Medical and Counselling services.
Workshops on topics relevant to increasing the capacities of the students are
regularly
conducted
by
the
counsellors.
‘Time
Management’,
‘Stress
Management’, ‘Building Emotional Resilience’, and ‘Enhancing Inter-personal
Relationships’. The Counselling Centre also has an established Peer-support
Programme and provides training to student volunteers.
The counsellors also maintain a notice board where posters, charts and cartoons
pertaining to various issues are exhibited. The E-mail is yet another medium of
communication for the students and the counsellors wherein the students can write
to the counsellors for appointments or asking for help. The counsellors use E-mails
to communicate information about workshops, send articles, and even for followup with students needing frequent attention. This has evoked a positive response
from the students.
Health Insurance
The Institute has a Group Mediclaim and Group Personal Accident Insurance
Policy for students, the details of which are hosted on wwww.tiss.edu/insurance.
The premium for the same is to be paid at the time of paying the first semester and
third semester tuition fees.
Sports and Recreation
The M.K. Tata Memorial Gymkhana and Recreation Centre includes facilities such
as gym, yoga, table tennis, carrom, badminton, etc.. An aerobics programme is
being introduced from this academic year to encourage physical fitness activities
amongst students.
CSR Awards in India
Objectives
The overall objectives of the CSR Impact Awards are to:
•
•
♦ Identify best CSR projects in key thematic areas and understand how
organization can deliver high impact CSR projects
♦ Highlight the success of CSR projects and commitment of the organizations by
recognizing them at the national level
•
♦ Motivate companies, CSR foundations and implementing partners to deliver
high impact CSR projects through collaborative approach
•
♦ Recognize businesses endeavor to partner with organizations delivering high
impact
•
♦ Enhance the exchange of CSR best practices
Five reasons to apply
1. Gain recognition in the corporate and development sector as a socially committed
organization
2. Increase your reputation and credibility at the national level
3. Showcase your organization’s innovation and commitment to delivering impacts in
alignment with Government’s focus on Water and Sanitation, Healthcare, Education,
Livelihood, Skills Development etc.
4. Celebrate winning partnerships at the prestigious award ceremony
5. Get media coverage and outreach for your project impacts
Eligibility
•
•
•
♦ The applicant organization must be a company or CSR foundation/trust or an
implementing partner for CSR project and the project must have been supported
by a company/CSR Foundation under its CSR initiative.
♦ The applicant entity must have legal status as company/NGO/Trust/LLP and be
registered in India or have a subsidiary/alliance in India
♦ The minimum duration of the project should be one week (Except Employee
Volunteering category) and project must have been assigned/renewed or have
been in continuation in Financial Year 2016-17
CSR Impact Awards 2017 shall be awarded in
following fifteen categories along with one
special category of Beyond CSR:
1 . He a lt hc a re : Pro j e c t s in h e a l th ca re , p u b l ic h e a l th , p re ve n t ive
h e a lth ca re , u se o f te ch n o l o gy in h e a l th ca re le a d in g to b e tte r h e a l th ca re
s e r vic e s o r o u t co me s
2 . Ed uc a t io n: Pro je c t in e d u ca tio n , sp e c ia l e d u ca tio n , a wa re n e ss
b u ild in g , e d u ca tio n in f ra s tr u c tu re .
3 . Sk il l De v e l op me nt: Pro je c t in vo c a t io n a l sk il ls a n d e mp lo y a b il i ty
e n h a n ce me n t a mo n g ch i ld re n a n d yo u th
4 . L iv e l ih oo ds : Pro je c t in a re a s o f c re a tin g l ive lih o o d s o p p o r tu n it ie s,
s u s ta in a b le l ive lih o o d s , e co n o mi c e mp o w e r me n t , ma rke t - lin ka ge s fo r
c o mmu n i ty p ro d u c ts , a g ri cu l tu re va lu e - ch a in , SH G s ca p a ci t y b u i ld in g
e tc .
5 . Env i ro nm e nt: Th i s ca te go ry co ve rs p ro je c ts in a re a s o f e n e r gy ,
re n e wa b le e n e r gy , e n viro n me n ta l su s ta in a b i li t y, e co lo g ic a l b a la n ce
s u s ta in a b le tra n sp o r t , wa s te to e n e r gy , re c y cl in g , n a tu ra l re so u r ce
ma n a g e me n t , co n se r va tio n , p la n ta ti o n e t c .
6 . WA S H: Pro je c ts in lin e wi th wa te r a n d sa n ita t io n , h y g ie n e , S wa ch h
B h a ra t M is sio n , b e h a vio ra l c h a n ge f o r u se o f sa n it a t io n a n d p u s h fo r
c le a n lin e ss i n p ro je c t/ p ro gra m me mo d e .
7 . Wo me n E m pow e rme nt: Pr o mo tin g ge n d e r e qu a li t y, E mp o we r in g
wo me n t o p a r ti cip a te fu ll y in e co n o m ic l i fe a c ro s s a l l se c to r s, se tt in g u p
h o me s a n d h o st e l s fo r wo me n
8 . R ura l De v e l op me nt a n d I nf ra s t ru c tu re : A ru ra l d e v e lo p me n t a n d
in f ra s tru c tu re p ro je c t fo r b e t te r p u b li c fa ci li t ie s , b e t te r l iv in g co n d i tio n s
a n d i mp ro ve me n t in te rm s o f a c ce ss , qu a l it y o f l i fe in ru ra l a re a . Fo r
e xa mp l e co n st ru c t io n o f ro a d , b rid ge , co mmu n i ty h a ll e tc .
9 . Spe c ia l Ca te g or ie s ( O ld A ge / Sp e cia ll y -a b le d / a rme d fo r ce s e t c) : Th is
i s a b ro a d ca te go r y co ve rin g a re a s o f o ld a ge re la te d wo r k , sp e cia ll y a b le d p e rs o n s , o rp h a n ch i ld re n , s tr e e t ch i ld re n , a r me d f o rce s re la t e d
p ro je c t . ( co v e rs a re a s n o t c o ve r e d in a n y o f th e a b o ve ca te go r ie s)
1 0 . Em p lo ye e V o lun te e ri ng In i tia t iv e A s e mp lo y e e vo l u n te e rin g h a s
b e e n l is te d a s o n e o f th e C SR p ro je c t /in te r ve n tio n a r e a a s p e r th e
Co mp a n ie s Ac t 2 0 1 3 , we wo u ld l ike to se e h o w co mp a n ie s a r e e n ga gin g
t h e i r e mp lo ye e fo r vo lu n te e r in g wi th co mmu n it ie s o r fo r a ca u se .
( P le a se n o te th a t th e re i s a sp e ci fi c fo rm fo r th i s c a te g o ry ).
1 1 . C SR P ro je c t of t he Ye a r 2 0 1 6 -1 7 Aw a r d: Fo r a n o u ts ta n d in g
p ro je c t th a t co mb in e s in n o va tio n w i th h i gh im p a c t s -d e l ive ry i n a n y o f
t h e th e ma ti c a re a s . Th e a p p l ica n t a ge n c y s h o u ld b e co n v in c e d th a t th e
p ro je c t a n d i t s imp a c t h a ve me ri t to b e re co gn ize d a s ‘C S R P ro je c t o f
t h e Ye a r 2 0 1 6 - 1 7 .
Special Awards
T h e re a re fe w sp e c ia l ca te go rie s o f Awa rd s th a t lo o k s a t o ve r -a ll
o r ga n i za t io n /s e n ga g e me n t in p ro je c t s o r p ro g ra mme s to ma x imi ze th e
i mp a c t s in re le va n t th e me o r o ve ra ll i mp a ct s . Th e se sp e cia l a wa rd s
lo o k s a t h o w o r ga n iz a tio n s h a ve wa l ke d a n e xt ra mi le to a ch ie ve v is ib le
a n d lo n g-la s tin g i mp a c t s a n d h o w th e i r e f fo r t s b e co me a mo d e l fo r
re p li ca tio n .
1 2 . C SR Fo un da t io n of t he Ye a r 2 0 1 6 -1 7 ( O nl y fo r C SR
F ou nda t ion s ): Th e fo u n d a t io n se t u p b y a n y co mp a n y o r co n so r tiu m o f
c o mp a n ie s e i th e r to m a n a ge C SR fu n d o r to i mp le me n t C S R p ro je c ts
c a n a p p l y in th i s ca te go r y . Th e b ro a d e r e va l u a t io n p a ra m e te rs a re h o w
t h e fo u n d a tio n h a s su c ce s s fu ll y fo l lo we d th e C S R ma n d a te o f th e
c o mp a n y a n d h o w th e y h a ve trie d to d e li ve r b e s t p o s sib le imp a c ts a t
t h e p ro je c t o r p ro g ra mme le ve l wh e th e r th ro u gh d ire c t i mp le me n t a t io n
o r th ro u g h b a n k in g o n th e e xp e r t ise o f th e o th e r i mp le me n t in g p a r tn e r s .
1 3 . C om pa n y w it h Be s t C S R I m pa c ts ( Onl y fo r c om pa n ie s ): Th is
c a t e go r y lo o k s a t t h e o ve ra ll i n i tia ti ve s, imp a c ts a n d su s ta in a b i li ty o f
i mp a c t s t h ro u gh C S R. Th i s i s a ll a b o u t o ve ra ll in te n d , e f fo r t s a n d
i mp a c t s t h a t a n o r ga n i za tio n h a s ma d e o r h a ve b e e n ma kin g th ro u gh it s
v a rio u s C S R p ro je c ts a n d p ro g ra mme s . Th e se in i t ia t iv e s ca n b e s ta n d
a l o n e o r t h ro u gh p a r tn e r s h ip s o r a ss o ci a t io n o f mo re th a n o n e
o r ga n i za t io n s.
1 4 . C SR I mp le me n t in g Age nc y of the Ye a r 2 0 1 6 - 1 7 : Th i s ca te go r y
c a t e rs to id e n t i fy in g o n e o f th e b e s t C SR imp le me n tin g a g e n c ie s i n
I n d ia . Th e a wa rd lo o k s a t C SR p a r tn e rsh ip s wi th c o mp a n ie s /C S R
f o u n d a tio n s , C SR p ro je c ts & p ro gr a mme s , f o c u se d a p p ro a ch to w a rd s
s o lu tio n to d e ve lo p me n t ch a l le n ge s , C SR imp a c ts a n d sc a la b i li t y o f th e
o p e r a t io n s in fu tu re .
1 5 . Be y on d C SR :Wo rk p la c e Di v e rs it y & In c l us io n (D &I ) Aw a r ds : A
d i ve r se a n d in clu si ve wo rk fo r ce i s n e ce s sa r y t o d ri ve in n o va tio n , fo s te r
c re a ti vi t y, a n d gu id e b u s in e ss st ra te gie s . Mu l tip le vo i ce s le a d to n e w
id e a s , n e w se r vi ce s , a n d n e w p ro d u c t s , a n d e n co u ra ge o u t -o f- th e b o x
t h in kin g (Fo rb e s) . Th e a wa rd re co gn ize s :
☞ I n n o v a t ive p ro gra m me s wh ic h a re ta r ge te d a t s tre n gth e n in g d i ve r si t y
a n d in cl u s io n a t th e wo rkp la ce
☞ E n d e a vo r s ma d e b y o r ga n i sa tio n s th ro u g h p o l ic ie s, p r o ce d u re s ,
t e c h n o lo g y a n d a d vo ca cy m e a su r e s to fo s te r in c lu s io n .
Award/Application Benefits
•
♦ O n e sp e cia l in vi te w ill b e se n t to th e C EO / To p ma n a ge me n t o f th e
A wa rd win n in g o r ga n iza t io n in e a ch o f th e c a t e go rie s
•
♦ E a c h a p p li ca tio n co me s wi th o n e d e le ga te p a ss fo r In d ia C SR Su mm i t
& E xh ib i tio n 2 0 1 7 (H ya tt Re ge n cy Gu r ga o n , 1 8 -1 9 Se p t 2 0 1 7 ) ,
e xc lu d in g a cce s s to p re miu m ma s te r cla s se s .
Assessment Process and the Methodology
Stage I: Screening round
T h i s wil l b e e n tire ly b a se d o n th e a p p l ica tio n fo rm fi lle d b y th e
o r ga n i za t io n . Th e d e ta i le d a p p l ica t io n fo rm h a s b e e n d i vid e d in t o
v a rio u s s e c tio n s a n d e a ch se c tio n h a s ce r ta i n we i gh t - a ge .
Stage II: Jury Round
A f t e r th e s cre e n in g ro u n d to p th re e e n trie s in e a ch o f th e ca te go r y
wo u ld b e se le c te d . Th e se le c te d o r ga n i za tio n co u l d b e ca l le d fo r a n
in te ra c ti o n ( Go o gle h a n go u t o r S kyp e ca l l) w ith th e Ju r y, if re qu ire d .
T h e ju r y wo u l d a s se s s th e o r ga n i za tio n s o n p re -d e c id e d e va lu a tio n
c ri te r ia .
T h e a p p li ca n t o r ga n iza t io n ma y h a ve to p re se n t p ro je c t in fro n t o f th e
ju ry me mb e r s (d u r in g th e ju r y ro u n d ) via te l e -co n fe re n c in g , Go o gle
h a n go u t o r S kyp e ca l l , i f re qu i re d . A p r io r n o ti ce o f th e sa me wil l b e
g i ve n 3 -5 d a y s b e fo re th e s ch e d u le d ca l l.
UNIT III
Based on these criteria the tools recommended for use in RRI are:
The examples below show how specific, well-established CR tools can be used
in the RRI context:
Using CR to promote sustainability
RRI Concept
CR Tools
Sustainability
Environmental Management Standards: ISO14001, EMAS
Energy
Management
Standards:
ISO50001
Corporate
Sustainability
Standards/Global
Initiatives/Principles: AA1000 series standards, GRI,OECD
Guidelines for Multinational Enterprises, CERES Roadmap for
Sustainability
ISO14001 & EMAS enjoin companies to develop a specific
methodology for identifying the environmental aspects of their
Implementation of activities and evaluating the environmental impacts stemming
the RRI concept from
their
operations/products.
ISO50001 assists companies to conserve resources and tackle
climate
change
at
large.
GRI requires from companies to report performance on
indicators covering economic, environment, labour practices and
decent work, human rights, society and product responsibility.
The CERES Roadmap for Sustainability demands companies to
embed sustainability issues in their production operations.
Using CR to achieve ethical acceptability
RRI Concept
CR Tools
Ethical Acceptability
Quality
Management
Standard:
ISO9001
Standards/Principles focusing on health and safety/workers’
rights: OHSAS18001, SA8000, Ethical Trading Initiative (ETI)
base
code
Corporate Social Responsibility Standard: ISO26000
Global Initiatives/Principles focusing on respect and uphold of
human rights: UN Global Compact, UN Guiding Principles on
Business and Human Rights,International Labour Organization
MultiNational Enterprises (ILO MNE) Declaration
ISO9001 requires that companies do not practice price gouging,
make misleading advertising claims or sell ineffective, unreliable
and
unsafe
products.
OHSAS18001 and SA8000 require the use of safe equipment
that does not threat employees integrity at all stages of companies
operations.
Implementation of
ISO26000, among other things, requires an ethical corporate
the RRI concept
conduct.
The ETI base code requires companies to apply practices that
respect workers’ rights and promote enhancement of their living
conditions.
The UN guiding principles refer to state and corporate obligation
to respect human rights.
Companies interested in changing their business conduct in a way that prioritises
CR also promote RRI, whether they are aware of the term or not. For
instance, Abengoa S.A. is a Spanish multinational corporation active in the
domains of energy, telecommunications, transportation, and the environment. In
their CR Report 2014 there is a good match between their CR norms and RRI
principles (summarized in italics):
•
CR norm relates to the implementation of the CR system, its management,
auditing and reporting (mapping onto ethical acceptability, societal
desirability, anticipation, reflexivity and responsiveness).
•
Quality and environmental management norm focuses on customer
concerns and environmental aspects of the firm’s operations and how these
are addressed (mapping onto risk management related to social, ethical and
environmental issues).
•
Human resources norm aims at ensuring a fair working environment for
employees and covers human rights, diversity, equality, training and
occupational risk (mapping onto diversity, inclusion, gender equality and
human wellbeing).
•
Management of legal affairs, risk analysis and insurance management
norm focuses on corporate governance, risk management -including
sustainability risks- and legal aspects of the firm’s operations such as
contracts with suppliers and partners (mapping onto risk management related
to social, ethical and environmental issues).
•
Consolidation, auditing and management of fiscal affairs norm deals
with anticorruption, auditing and internal control and transparency (mapping
onto anticipation, reflexivity, ethics, transparency and openness).
UNIT II
ISO 14000 is a family of standards related to environmental management that exists to help
organizations (a) minimize how their operations (processes, etc.) negatively affect the
environment (i.e., cause adverse changes to air, water, or land); (b) comply with applicable
laws, regulations, and other environmentally oriented requirements; and (c) continually
improve in the above.
ISO 14000 is similar to ISO 9000 quality management in that both pertain to the process of
how a product is produced, rather than to the product itself. As with ISO 9001, certification is
performed by third-party organizations rather than being awarded by ISO directly. The ISO
19011 and ISO 17021 audit standards apply when audits are being performed.
The requirements of ISO 14001 are an integral part of the European Union's EcoManagement and Audit Scheme (EMAS). EMAS's structure and material requirements are
more demanding, mainly concerning performance improvement, legal compliance, and
reporting duties.[1] The current version of ISO 14001 is ISO 14001:2015, which was
published in September 2015
Benefits[edit]
ISO 14001 was developed primarily to assist companies with a framework for better
management control, which can result in reducing their environmental impacts. In
addition to improvements in performance, organizations can reap a number of
economic benefits, including higher conformance with legislative and regulatory
requirements[15] by adopting the ISO standard. By minimizing the risk of regulatory
and environmental liability fines and improving an organization’s efficiency [16],
benefits can include a reduction in waste, consumption of resources, and operating
costs. Secondly, as an internationally recognized standard, businesses operating in
multiple locations across the globe can leverage their conformance to ISO 14001,
eliminating the need for multiple registrations or certifications. [17] Thirdly, there has
been a push in the last decade by consumers for companies to adopt better internal
controls, making the incorporation of ISO 14001 a smart approach for the long-term
viability of businesses. This can provide them with a competitive advantage against
companies that do not adopt the standard (Potoki & Prakash, 2005). This in turn can
have a positive impact on a company's asset value (Van der Deldt, 1997). It can lead
to improved public perceptions of the business, placing them in a better position to
operate in the international marketplace. [18][15] The use of ISO 14001 can demonstrate
an innovative and forward-thinking approach to customers and prospective
employees. It can increase a business’s access to new customers and business
partners. In some markets it can potentially reduce public liability insurance costs. It
can also serve to reduce trade barriers between registered businesses. [19] There is
growing interest in including certification to ISO 14001 in tenders for public-private
partnerships for infrastructure renewal. Evidence of value in terms of environmental
quality and benefit to the taxpayer has been shown in highway projects in Canada
The SA8000® Standard is the leading social certification standard
for factories and organizations across the globe. It was established
by Social Accountability International in 1997 as a multistakeholder initiative. Over the years, the Standard has evolved
into an overall framework that helps certified organizations
demonstrate their dedication to the fair treatment of workers
across industries and in any country.
SA8000 measures social performance in eight areas important to social
accountability in workplaces, anchored by a management system
element that drives continuous improvement in all areas of the
Standard. It is appreciated by brands and industry leaders for its
rigorous approach to ensuring the highest quality of social compliance in
their supply chains, all the while without sacrificing business interests.
The Standard reflects labor provisions contained within the Universal
Declaration of Human Rights and International Labour Organization
(ILO) conventions. It also respects, complements and supports national
labor laws around the world, and currently helps secure ethical working
conditions for two million workers.
Regular revisions ensure the Standard’s continuing applicability in the
face of new and emergent social and human rights issues.
Organizational buyers, independent codes of conduct, and private
sector initiatives have all recognized SA8000’s multi-sector applicability
and responded to growing public interest by integrating SA8000 criteria
into their compliance processes. Similarly, governments wishing to
encourage and strengthen social performance in the workplace have
created incentive programs specifically recognizing companies with an
accredited SA8000 certification.
In addition to publishing SA8000 and supporting documents, SAI offers
a wide selection of resources to help organizations maintain and
continually improve their social performance, including capacity building,
stakeholder engagement, collaboration between buyers and suppliers,
and the development of tools to ensure continued improvement. SAI
views independent accredited certification to the SA8000® Standard as
a critical element contributing to the company’s broader objectives of
improving global labor conditions.
The current version of the SA8000® Standard is SA8000:2014.
Certifications to SA8000:2008 must beupgraded to SA8000:2014 by
December 31, 2017.
Elements of the SA8000® Standard
1. Child Labor
2. Forced or Compulsory Labor
3. Health and Safety
4. Freedom of Association and Right to Collective Bargaining
5. Discrimination
6. Disciplinary Practices
7. Working Hours
8. Remuneration
9. Management System
AA 1000
AccountAbility’s AA1000 Series of Standards are principles-based Standards and
Frameworks used by a broad spectrum of organizations – global businesses, private
enterprises, governments and civil societies – to demonstrate leadership and performance in
accountability, responsibility and sustainability.
For over two decades, organizations have trusted and applied AccountAbility’s Standards to
guide their approach to sustainability strategy, governance and operational management.
The AA1000 Series represent a simple, practical and easy to use framework for
organizations’ to apply the Guiding Principles of AccountAbility along with robust
sustainability assurance and integrated stakeholder engagement.