Corporate Social
Responsibility
1
Concept
Business decision making linked with:
 Ethical values
 Compliance with the law
 Respect for people, communities and the
environment.
2
Another definition
Lord Holme and Richard Watts define CSR as:
 CSR is the continuing commitment
 By a business firm (company)
 To behave ethically, and
 Contribute to country’s economic development
 While improving the quality of life of:
the workforce
 as well as the community and society at large.
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3
The American &
European Concepts
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American businesses mostly think CSR is only
about giving money for worthy causes.
Europeans think CSR is a tool for promoting
business. Treat the society well so that society
can buy your products. Do more CSR when
times are bad.
4
Trusteeship Theory
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Companies really do not belong to any one.
Shareholders own share of “what remains” but
not specific assets of the company.
Directors hold the assets of the company in
trust on behalf of not just shareholders but the
society at large.
A company is a social asset.
5
Historical Perspective
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In fact, CSR came much after Business Ethics.
Business have learned that chasing only profit
does not give enough profit.
CSR can actually improve their profitability and
sustainability of their ventures.
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Scope of CSR
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Philanthropy
Doing Business Responsibly
Being a good citizen
7
Philanthropy
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Financial donations to worthy causes:
Do not just throw away money – be careful
 Do not wait for disasters to show your kindness
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Setting, running or supporting socially desirable
bodies:
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Monitoring and evaluating them in the process
Supplementing the governmental efforts
towards social welfare
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Doing business responsibly
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Essentially being ethical
Integrity in all that you do
Fairness
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To every one: employees, clients, suppliers, all
Protection of all stakeholders’ interest
Serving the common interest of all stakeholders
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Being a good citizen
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Compliance with law.
Paying your dues
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Investment in community:
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No tax evasion, directly or indirectly
Capital nature rather than just recurrent
Concern for environment
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Concern for Environment
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Eco-balance
Deforestation
 Soil degradation
 Atmospheric changes
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Pollution
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Waste/Discharges management
Depletion of resources
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Emphasis on creating re-usable resources
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Environmental Risk Management
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Identify and define risks being posed (or faced)
by the company.
Establish the extent and probability of risks.
Assess cost of:
The consequences of the risk after it takes place
 preventing it from happening

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Assign specific responsibility
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ERM -2
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Define means of handling it.
Preventing it through:
Better technology
 Better materials
 Better maintenance

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Insurance:
Actual loss
 Claims against the company
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13
Strategies for
Prevention of Industrial Pollution

Environmental processes’ audit
Waste management audit
 Material usage review
 Non-solid effluents audit

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Financial considerations
Cost benefit analysis of being eco-balanced
 Use of new cleaner technology
 Life cycle assessments
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Spreading awareness among users
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Resource Management
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Energy resources (fossil fuels vs. others)
Re-cycling of materials
Using re-cycled material
 Using bio-degradable material
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Conservation of life supporting systems
Forests, trees, water sources, mountains
 Wild life
 Responsible use of land
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15
EP Law
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The law is there.
EPA has been set up.
But law does not make any one responsible.
Companies have to want to be environmentally
responsible.
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Some Big
Environmental Disasters
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Chernobyl Nuclear Disaster (1986)
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Exxon Valdez (1989) in Alaska
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Nuclear radiation leaked
Bhopal Tragedy (1984)
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11.5 million barrels of crude spilled
Tokiamora Accident (1999)
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Nuclear reactors went berserk
Leakage of poisonous gas, killing 300 and affecting 400,000
persons
Gulf of Mexico (2010)
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Leakage of crude oil, polluting virtually the entire gulf
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Shades of CSR
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Official posture and reality
Spending more money on publicizing CSR than
actual CSR work.
Lip service: strings attached help
IPPR says most CSR is lip service
18
CSR – Who is watching
what?
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Institutional investors
PIRC provide web based data on how
companies are acting on CSR, ethics,
environment, etc.
Regulators / Kings Report in SA
Disclosure Requirements
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Formulating CSR Policy
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Set a Code of Ethics outlining CSR Values
to be upheld
Establish current position on CSR values
Discuss with relevant stakeholders
Employees
 Pressure groups
 Clients
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Draw up a formal CSR Policy
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CSR Policy
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Formally promulgate the CSR policy
Prescribe systems
Establish responsibility for each party
Set realistic strategies and targets
Keep all concerned informed
Monitor achievements
Revise policy or targets as necessary
21
Bench Marking in CSR
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You do as much as others are doing.
Can any one set “minimums”?
Who ensures compliance?
How to monitor compliance?
22
CSR in Pakistan
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Mostly companies consider philanthropy to be
the only means of CSR.
However change is coming.
Telenor’s Karo Mumkin
PTC’s tree planting
Mobilink’s medical helpline
23
CSR Survey
People in Pakistan want companies to:
 Promote education
 Create employment
 Provide health care to public
 Reduce pollution
 Provide better work place
24
Thank you
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