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Corporate Social

Responsibility

Dr Safdar A Butt

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Concept

Business decision making linked with:

Ethical values

Compliance with the law Respect for people, communities and the

environment.

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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 countrys economic development

While improving the quality of life of: the workforce

as well as the community and society at large.

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The American &

European Concepts

American businesses mostly think CSR is onlyabout giving money for worthy causes.

Europeans think CSR is a tool for promotingbusiness. Treat the society well so that societycan buy your products. Do more CSR whentimes are bad.

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Trusteeship Theory

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 intrust on behalf of not just shareholders but thesociety at large.

A company is a social asset.

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Historical Perspective

In fact, CSR came much after Business Ethics.

Business have learned that chasing only profitdoes not give enough profit.

CSR can actually improve their profitability andsustainability of their ventures.

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Philanthropy

Financial donations to worthy causes:

Do not just throw away moneybe careful

Do not wait for disasters to show your kindness

Setting, running or supporting socially desirablebodies:

Monitoring and evaluating them in the process

Supplementing the governmental effortstowards social welfare

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Doing business responsibly

Essentially being ethical

Integrity in all that you do

FairnessTo 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

Compliance with law.

Paying your dues

No tax evasion, directly or indirectly Investment in community:

Capital nature rather than just recurrent

Concern for environment

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Concern for Environment

Eco-balance

Deforestation

Soil degradation

Atmospheric changes

Pollution

Waste/Discharges management

Depletion of resources

Emphasis on creating re-usable resources

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Environmental Risk Management

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

Assign specific responsibility

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ERM -2

Define means of handling it.

Preventing it through:

Better technology

Better materials

Better maintenance

Insurance:

Actual loss

Claims against the company

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Strategies for

Prevention of Industrial Pollution

Environmental processes auditWaste management audit

Material usage review

Non-solid effluents audit

Financial considerations Cost benefit analysis of being eco-balanced

Use of new cleaner technology Life cycle assessments

Spreading awareness among users

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Resource Management

Energy resources (fossil fuels vs. others)

Re-cycling of materials

Using re-cycled material

Using bio-degradable material

Conservation of life supporting systems

Forests, trees, water sources, mountains

Wild life

Responsible use of land

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EP Law

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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Shades of CSR

Official posture and reality

Spending more money on publicizing CSR thanactual CSR work.

Lip service: strings attached help

IPPR says most CSR is lip service

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CSR Who is watchingwhat?

Institutional investors

PIRC provide web based data on howcompanies are acting on CSR, ethics,environment, etc.

Regulators / Kings Report in SA

Disclosure Requirements

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Formulating CSR Policy

Set a Code of Ethics outlining CSR Valuesto be upheld

Establish current position on CSR values

Discuss with relevant stakeholders

Employees

Pressure groups

Clients

Draw up a formal CSR Policy

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CSR Policy

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

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Bench Marking in CSR

You do as much as others are doing.

Can any one set minimums?

Who ensures compliance? How to monitor compliance?

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CSR in Pakistan

Mostly companies consider philanthropy to bethe only means of CSR.

However change is coming.

Telenors Karo Mumkin

PTCs tree planting

Mobilinks medical helpline

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CSR Survey

People in Pakistan want companies to:

Promote education

Create employment Provide health care to public

Reduce pollution

Provide better work place

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Thank you

Dr S A Butt