Corporate Social
Responsibility
Tool to create a
positive brand image

What will we discuss
• What do we mean by CSR
• The great debate about CSR
• CSR as a business strategy
• Tools to use CSR to build trust
• Effects of CSR

What is CSR
There is no single accepted
definition of CSR, which cause
confusion as what exactly
constitutes a CSR activity.

Definition 1
“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”.
World Business Council for Sustainable Development definition

Definition 2
“A concept whereby companies integrate social
and environmental concerns in their business
operations and in their interactions with their
stakeholders on a voluntary basis”.
European Union definition

CSR is called different things
Social
responsibility
Corporate Sustainable
Citizenship business
Corporate
Sustainability
Corporate
Responsibility

Stake holders
• Can be divided in two groups
– Contractual stakeholders (Employees, suppliers,
customers – has a legal relationship with the
business)
– Community stake holders ( Society and
community at large)

Debate on CSR
• Not all companies behave in a socially
responsible manner
• Two schools of thought:
– Free market view: The job of business is to create
wealth for share holders
– CSR view: Business should be concerned with
social issues

The case against CSR
The business of business……is business.
- Milton Friedman
The only one responsibility of business towards
society is maximization of profits to the share
holders within the legal frame work and ethical
custom of the country.
Time, 1970

The case for CSR
• In recent years business has been viewed as a
major cause of social, environmental and
economic problems. Companies are widely
perceived to be perceived as prospering at the
expense of the broader community…….
The legitimacy of business has fallen leading
to a diminished trust in business.
- Michael Porter
Harvard Business Review, 2010

2 questions raised
What is What
contribution
business should it make
for to society

But both are interdependent
Society needs Business
business needs society
Employment Create
& wages demand
Public assets
Investment &
and
innovation
infrastructure
Profits & Legal
taxes protection

How has CSR changed in the last
decade
2000 2012
CSR is a strategic /
CSR is a moral issue.
profit issue.
Ignoring CSR
We want to do the
potentially damages
right thing. We want
shareholder value.
to invest in the
Embracing it creates
community.
value.

New role for CSR
In today’s world where business have become
global but governments and society have
remained local, companies have to bear the
social responsibility for their actions.

CSR as a business strategy
What % of global CEOs are planning to change
strategies significantly in the next three years as
they expect stakeholders to factor in companies'
environmental and corporate responsibility
practices into purchasing decisions?
Source: PwC’s annual global CEO survey 2011

CSR as a business strategy
49% • Those that rely on consumers as
a primary source of revenue
53% • Those that rely on businesses as
a primary source of revenue
51% • Those that rely on governments
as a primary source of revenue
Source: PwC’s annual global CEO survey 2011

CSR as a brand aid
CSR aids the building of brand equity, especially
when there is a consistent commitment to CSR
efforts in the long term by an organisation. One
example is the company SalesForce.com who
donate 1% of company profits, 1% of employee
time and 1% of equity to other charities.
The SalesForce.com policy also attracts a
committed and high achieving team of employees.
In order to build this brand equity, consumers need
to have faith in the company commitment to CSR

CSR in practice
Cause Promotion • Increasing awareness and concern for social causes
Cause related marketing • Contribution to causes based on sales
Corporate social • Behaviour change initiatives
marketing
Corporate Philanthropy • Donating directly to causes
Community volunteering • Employees donating time and talent in community
Socially responsible • Discretionary practices and investment to support causes
business practices
Source: Kotler & Lee, CSR, 2005

CSR in practice
Cause Promotion • http://www.tesco.com/raceforlife/
• http://wildlife.dawn-
Cause related marketing dish.com/en_US/savingwildlife/home.do
Corporate social • http://www.drinkiq.com/en-IN/pages/home.aspx
marketing
• http://www.dell.com/Learn/in/en/incorp1/corp-comm/cr-
Corporate Philanthropy giving-philosophy?c=in&l=en&s=corp&delphi:gr=true
• http://www.hsbc.co.in/1/2/miscellaneous/about-
Community volunteering hsbc/corporate-sustainability/employee-volunteering
Socially responsible • http://www.lifebuoy.com/socialmission/global-
business practices handwashing-day/
Source: Kotler & Lee, CSR, 2005

One example

CSR and reputation

Effects of CSR
• According to the research carried by Cone Inc.,
79% of consumers would switch to a brand
associated with a good cause.
• According to a study by The Economic Times,
donations by listed companies grew 8% y-o-y.
• As many as 108 companies donated up to 20%
more than the previous year.

World’s most reputable companies
Walt
BMW SONY
Disney
Source: http://www.reputationinstitute.com/

World’s most reputable companies
Daimler Apple Google
Source: http://www.reputationinstitute.com/

World’s most reputable companies
Microsoft VolksWagen Canon
Source: http://www.reputationinstitute.com/

World’s most reputable companies
LEGO Adidas Colgate
Source: http://www.reputationinstitute.com/

World’s most reputable companies
Panasonic Nike Intel
Source: http://www.reputationinstitute.com/

World’s top ranked CSR companies
Microsoft Google Disney
Source: http://www.reputationinstitute.com/

World’s top ranked CSR companies
BMW Apple Daimler
Source: http://www.reputationinstitute.com/

World’s top ranked CSR companies
Volkswagen Sony Colgate
LEGO
Source: http://www.reputationinstitute.com/

To end
It takes 20 years to build a reputation. And only
5 minutes to destroy it.
- Warren Buffet
Thank you