CSR for Sustainable business

1. CORPORATE SOCIAL
RESPONSIBILTY
For
Sustainable Business
Dr R Ramakrishnan ramakrish54@gmail.com
For my research papers please visit www.ssrn.com/author=646193

3. Business and Society
Relationship
Business is the collection of private, profit-oriented
organizations.
Society is a broad group of people and other organizations,
interest groups, a community, a nation. Business and society
interrelate in a macroenvironment as stakeholders.
Business
Community
Consumers
Owners
Government
Employees

4. CSR
CSR has been defined in several ways.
A good definition refers to a company's
commitment to operating in an
economically, socially and
environmentally sustainable manner,
while recognizing the interests of its
stakeholders, including investors,
customers, employees, business
partners, local communities, the
environment and society at large.

5. Four Dimensions of business
strategy implied by CSR
 The foundation of a responsible company is to be
profitable, but not at any cost.
 Society also demands the company obey the law,
 Expects it to act in an ethical manner toward all
stakeholders and
 To be a good corporate citizen in the communities in
which it lives and operates

6. 1. Stakeholders are demanding it
Customers/ Employees/ Investors/ NGO’s/ government
2. Increased Role of Business
• Size/ influence of business vs. governments
3. Globalisation: New CSR issues
• Diverse cultures/ norms/ jurisdictions
• Need to achieve consistency globally
4. Complexity and risks
• Increasing complexity, likelihood and significance of risk and wrongdoing
• New laws and regulations
• Greater influence of NGO’s and other stakeholders
• Increased merger and acquisitions
5. Greater likelihood of discovery
• 24 hour global news, media more aggressive
• High speed info access and dissemination
6. Greater cost of misconduct
• Fines, penalties, reputation damages
• Growing interest on softer CSR issues- social and environmental
Growing Importance of CSR

7. CSR Components
CSR
WORKPLACE
- Equal Opportunity
- Working Hours
- Staff Training and
Development
- Health and Safety
- Freedom of Association
and Human Rights
- Bribery and Corruption
MARKETPLACE
- Suppliers
- Customers
COMMUNITY
- Community
Investment
(cash/in-kind/
volunteering)
- Community
protection
ENVIRONMENT
- Environmental
protection
- Impact on air,
water,
biodiversity etc
Leadership Commitment
Integration into business
• Engage with stakeholders
• Communicate CSR

8. Key Issues in CSR
• Labour rights:
– child labour
– forced labour
– right to organise
– safety and health
• Environmental conditions
– water & air emissions
– climate change
• Human rights
– cooperation with paramilitary forces
– complicity in extra-judicial killings
• Poverty Alleviation
– job creation
– public revenues
– skills and technology

9. What does CSR mean in
different regions?
USA
JAPAN
EUROPE
CHINA
INDIA.
Legal compliance
Environmental focus
Less stakeholder
pressures
Risk Mgt/compliance
Philanthropy
Opening global economy
Export Driven
Philanthropy
Community
development
Stakeholder approach
Anti standard
BUSINESS
CASE?
AFRICA
Health & sanitation; Dvlt
Attracting investments

10. CSR
• Despite the lack of a single definition, by
examining different definitions from around
the world, it is clear that there are commonly
held understandings about what constitutes
CSR
• CSR is now a mainstream approach to
business:
“The movement for CSR has won the battle
of ideas …CSR commands the attention of
Executives Everywhere.” (Economist 2005)

11. HOW COMPANIES DEMONSTRATE
THEIR COMMITMENT TO CSR
• Top-level involvement (CEO, Board of Directors)
• Policy statements
• Programs
• Staffing resources
• Signatories to voluntary standards
– Principles (UN Global Compact – www.unglobalcompact.org; Ceres
Principles – www.ceres.org; SA8000 – www.sa-intl.org)
– Reporting (Global Reporting Initiative – www.globalreporting.org)

12. “Every company harms the environmentEvery company harms the environment!”
(Just as an individual does)
Corporate Social Responsibility is thus only about
two aspects:
1) Reducing the Negative Effects: Steps taken by a
company to neutralise, minimise or offset the
harmful effects caused by its processes and
product-usage
2) Increasing the Positive Contributions: Further
steps taken using its resources, core competence,
skills, location and funds for the benefit of people
and the environment

13. Easy everyday examples of
social responsibility…
No Type of Organisation Examples of socially responsible activities
1 Movie Theatres /
Multiplexes / Malls
-Screening of social message films
-Special shows for underprivileged groups
-Offering table space for NGOs
-Adopting a nearby garden / open space and
maintaining it
2 Petrol Pumps -Promoting accident awareness, pedestrian safety
-Checking and offering fuel efficiency tips
3 Shops
e.g.: Chemists
-Awareness posters of symptoms of different diseases
-Collecting & donating old medicines to charitable
hospitals
-Offering discounted medicines for poor patients
4 Private Hospitals -Creating a Patients’ Information Centre & Library
-Encouraging citizens to help accident victims by taking
care of legal aspects of accidents / emergency cases

14. Easy everyday examples of
social responsibility
No. Type of Organisation Examples of socially responsible activities
5 Private Schools & Colleges -Getting Alumni to institute scholarships & prizes
-Offering space for training / classes / sports, etc.
-Adopting a local garden
6 Housing Societies -Suggesting solutions for local problems to govt & media
-Maintaining nearby public spaces, including footpaths
-Offering space in society (garage, etc.) for use for
training/classes. etc. and as a material collection centre
7 Hotels and Restaurants -Donating excess food responsibly
-Composting food waste
8 Media (TV, print, radio) -Featuring profiles and achievements of NGOs / citizens
-Spreading social service messages

15. TATA Group
Britannia
Amul
Nestle
ITC – Sunfeast & e-choupal
Examples

16. CSR at TATA Group
The term 'corporate social responsibility' or sustainability is of relatively recent vintage. Not so
the philosophy of social responsibility that underlines the Tata way of conducting its
businesses, and the manner of its interactions with all the constituents that come under the
canopy of corporate social responsibility. The multitude of initiatives the Tata Group has
nurtured from its earliest days flows from a wellspring of voluntary, as opposed to obligatory
commitment
Principles first
An implicit sense of ethical business conduct has been the
cornerstone of the Tata way in the corporate governance sphere. On
issues ranging from customer care and business excellence to
financial propriety and more, explicit rules and regulations supplement
the traditional values on which the Tata Group companies has been
shaped.
A feel for people
With some 2,46,000 members in its diverse and widespread family, the
Tata Group is more than just another employer. The Group's many
pioneering initiatives to benefit and empower employees have few
parallels anywhere in the world, and it has blended its traditional
benevolence with evolving human resource methodologies to deliver a
whole lot beyond mere jobs

17. Green at heart
The Tata ethos places a special emphasis on environmental and
ecological issues. The Group's efforts to preserve and regenerate
the environment find expression in the slew of projects and
programmes in has undertaken in and around its facilities and
operations.
Caring and sharing
From health and education to livelihoods and women-children welfare,
from tribal hamlets in Jharkhand and the rural outback of Gujarat to
the high ranges of Kerala and disadvantaged villages in Andhra
Pradesh — the community work being undertaken by the companies
and trusts of the Tata Group touches a multitude of Indians across the
land. Beyond purely social work, this support extends to individuals
and institutions pursuing artistic and sporting excellence.
CSR at TATA Group……..

18.  Bai Jerbai Wadia who single mindedly and commitedly set
out to construct low cost baugs or housing colonies in Bombay
for lower and middle-class Parsis.
 Health care facilities was another area close her heart . With
her inspiration, her sons Ness and Cusrow set about building
much needed hospitals in Bombay.
 The Sir Ness Wadia Foundation, a charitable trust set up in
1969. The trustees have disbursed funds to a broad
spectrum of causes from scholarships for the disabled to
drought relief in Bombay.
 Their income was Rs1700 cr. Spent 3.4% on CSR. Net profit
was Rs.150 cr. Karmayog CSR rating – 2/5
 Principal CSR activity done in :- healthcare, disaster, general
donations
BRITANNIA

19. AMUL is a three tier co-operative organization.
1st
tier :- Co-operative society at the village, of which; milk
producers are voluntary members. They purchase milk
form member & sell it to the district level co-operative.
2nd
tier :- The district co-operative that processes milk into milk
products, markets locally & sells surplus to the state
co-operative for national & international marketing.
There are 12 district co- operatives managed by a 15
member board elected by nominated representatives or
chairmen of the village co-operatives.
3rd
tier :- The state level co-operative - the Gujarat Co-operative
Milk Marketing Federation (GCMMF) responsible for
national and international marketing of milk and milk
products produced and sold to it.
AMUL
ANAND MILK UNION LTD

20. .
CSR-Sensitive Business Philosophy
 The first step towards discharging the CSR is the business
philosophy of the GCMMF. It is two-fold: one, to serve the
interests of milk producers and second, to provide quality
products to consumers as value for money. The milk producers
are paid for their milk in accordance with market forces and
realisation of value for their produce.
.

21. Earnings Of GCMMF
 Nurturing its primary members - the milk producers - is
the first mission of the GCMMF. Discharge of this
responsibility is reflected in the manner in which the
GCMMF conducts its business and shares its earnings.
 The milk from the village co-operatives is purchased at
an interim price. So as to maximize the earnings of the
milk producers. The GCMMF changes the product profile
during the fiscal and directs its sales and marketing
activities towards those products that would bring in
maximum returns.

22. Expenditure done on CSR by GCMMF
(Gujarat Co-operative Milk Marketing Federation)
PROFITS:-
Profit of the GCMMF is very low.
The net profit (PADT) of the GCMMF during 2003-04 was Rs
7.31 crore against a turnover of Rs 2,947 crore, a meagre
0.25%. Further out of the net profit of Rs 7.31 crore, Rs 4
crore was given as share dividend to the co-operatives.
To fulfil its corporate social responsibility towards its milk
producers and co-operatives the GCMMF works on razor thin
profits and retention of funds

23.  Nestlé India has always focused on long term,
sustainable and profitable growth and helped communities
around its factories to improve their quality of life in a
similar manner.
Nestlé Agricultural Services has used the experience
gained by Nestlé across the world to set up a system of
direct and efficient contact with the farmers.
 Milk storage facilities have been set up close to the
farmers.
Veterinary services are provided free, and medicines
provided at wholesale cost & helps them in procuring

24. CSR-Safe Drinking Water
Water is a scarce resource.
Almost 200 million people do not have access to clean drinking
water.
 They are committed to improving the situation and believes that the
first step is to create awareness in the communities around its
factories.
 A key Focus area of Nestle’s Corporate initiatives is to help provide
Clean Drinking Water and educate children in schools to conserve this
scarce resource.
Principal CSR activity done in :- health , community
projects, infrastructure.

25. CSR-Education and Training
 Nestlé create awareness about the right to
education & encourages the communities around its
factories to send their children to school.
 Their employees have developed a special play
'Let Us Go to School' for this purpose.
 It supports local schools, helps in the maintenance
of public parks and green belts, facilitates blood
donation camps and health awareness programs.
All these initiatives strengthen the bond between
Nestlé India and the community.
 Their LOGO says “GOOD FOOD GOOD LIFE”
 Their income was Rs2200 cr. Spent 4.4% on CSR.
Net profit was Rs.250 cr.

26. ITC Ltd. - Sunfeast
 ITC Limited – Foods Division announced the
launch of the 'Sunfeast' range of high quality
biscuits with offerings in Glucose, Marie and
Cream segments at a function in Chennai on
April 20, 2004.
 The Company continued to intensify its
footprint in the social sector by expanding to
newer districts during the year. It continued to
focus on the three main areas of interventions
under ‘Mission Sunehra Kal’
(a) Natural resource management
(b) Sustainable livelihoods
(c) Community development, with focus on primary
education and health and sanitation.
 Their income was Rs8000 cr. Spent 16.0% on CSR.
Net profit was Rs.2000 cr.

27.  The collaboration between ITC and the Government of AP
for wasteland development under ‘Indira Kranti Patham’
was sustained during the year – 830 hectares of
plantations were promoted through this public-private
partnership.
 In the area of environment, health and safety, ITC is
moving towards achieving ‘zero solid waste’ status
through recycling of all solid wastes. Recycling of waste
in 2006-07 was 93% as compared to 2005-06 (78.7%)
 Reduction in usage of plastic bags: School children were
given practical lessons on the disadvantages of plastic
bags and the adversities faced thereof.
 Encourage butterfly gardens: A team of experts educated
and introduced children to the concept of 'Butterfly
Gardens', wherein special plants are grown whereby
creating a natural habitat for butterflies to breed.

28. ITC’s e-Choupal’
• ‘e-Choupal’ also unshackles the potential of Indian farmer
who has been trapped in a vicious cycle of low risk taking
ability > low investment > low productivity > weak market
orientation > low value addition > low margin > low risk taking
ability. This made him and Indian agribusiness sector globally
uncompetitive, despite rich & abundant natural resources.

29. In cyclical natural systems, waste does not
exist. Waste = Food.
6%
ProductManufacturing
Process
Raw
Materials
94% Waste
(Attributed to Paul Hawken, Factor 4, 1997)
80% of products
discarded after
single use
Material Flows
Linear Industrial Processes: Waste is created faster than it can be
reconstituted to quality resources. Take-make-waste.
It is estimated that 99% of the original materials used in the production
of, or contained in, the goods made in the US become waste within 6
weeks of sale.

30. Being Sustainable is Often Just
Being Efficient, Which Adds
Significant Economic Value
In
(cost) Out
(revenue)
Waste (cost)
Basic Economics: What comes in must equal what
goes out -reducing waste adds output or reduces
input- thus adding revenue or cutting costs!
Industrial
Process/Service

31. Sustainability Issues Affect
Business Responsibility & Ethics:
• “Business cannot succeed in societies that fail.
There is no future for successful business if
the societies that surround it are not working.
Governments and business must create
partnerships to deliver essential societal
services like energy, water, health care and
infrastructure.”
- Bjorn Stigson, President, the World Business Council for
Sustainable Development, 2008
GIFFORD PARK ASSOCIATES