CSR ? ? ? ? ? ? ? ? ? ? ? Mohiuddin Babar ► What is CSR ? ► Why should companies adopt it ? ► How can it be assessed that CSR brings good for the society.

CSRCSR

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Mohiuddin BabarMohiuddin Babar

►What is CSR ?What is CSR ?►Why should companies adopt it ?Why should companies adopt it ?►How can it be assessed that CSR How can it be assessed that CSR

brings good for the society ?brings good for the society ?►Are there any accepted global Are there any accepted global

yardstick to measure CSR ?yardstick to measure CSR ?► Is CSR a new tool of marketing or a Is CSR a new tool of marketing or a

new type of barrier ?new type of barrier ?

CSRCSR

Broadly applicable to business Broadly applicable to business sector, CSR is about meeting the sector, CSR is about meeting the growing social and environmental growing social and environmental expectations for improving business expectations for improving business performance and sustaining it.performance and sustaining it.

Definition

CSR is the continuing commitment by businessto behave ethically and contribute to economicdevelopment while improving the quality of lifeof the workforce and their families as well asof the local community and society at large.

------------- WBCSD

Definition

Being socially responsible means not only Fulfilling legal expectations but also goingbeyond compliance and investing more intohuman capital, the environment and relationswith stakeholders.

---- The European Commission

definition

The root and growth of CSR

Philanthropy ---- religious practices benevolence of the wealthy

Corporate Philanthropy

---- - growth of Trust/Foundations

CR/CSR/SR ----- business strategy

CSR/SA/GRI…----- visible felt contribution

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The root and growth of CSR

Philanthropy ---- religious practices benevolence of the wealthy

Corporate Philanthropy

---- - growth of Trust/Foundations

CR/CSR/SR ----- business strategy

CSR/SA/GRI…----- visible felt contribution

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8th c

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tury

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Bhopal tragedy in India

Shell bribing politicians

in Nigeria

Collapse of Enron,

Worldtel

Nike using child labour

The root and growth of CSR

Philanthropy ---- religious practices benevolence of the wealthy

Corporate Philanthropy

---- - growth of Trust/Foundations

CR/CSR/SR ----- business strategy

CSR/SA/GRI…----- visible felt contribution

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Rise of

environmentalism

Human rights

Consumer rights

etc

Today’s scenario

Resource management & pollution control prioritized

Health & Safety of workers underlined

Consumer interests addressedSocial needs of host communities served

Partnership with environmental NGOs

Commitments to international laws,protocols and guidelines made Reputation

Trust

Profit

GuidelinesOECD UN Global Compact

SRI

Convergence of guidelines, standards & benchmarks

Surbane Oxly

GRI ISO standards

The business of business is business ---- Milton Friedman

Business has no responsibilities other than to maximize profits for the shareholders

The business of business is business ---- Milton Friedman

Business has no responsibilities other than to maximize profits for the shareholders

Philanthropy

CSRE

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Difference between CSR & Philanthropy

Benefits of CSRBenefits of CSR

Reducing riskReducing risk

Enhanced reputation Enhanced reputation

Competitive edge over business rivalsCompetitive edge over business rivals Positive impact on society and Positive impact on society and

environmentenvironment

How to adopt CSR How to adopt CSR

► Is it included in the vision of the Is it included in the vision of the companycompany

►Who weaves the CSR action plan -- Who weaves the CSR action plan -- Board/chief executive/top management Board/chief executive/top management (executive (executive committee)/employees/external committee)/employees/external stakeholdersstakeholders

►The The bestbest is to do it after dialogue with is to do it after dialogue with stakeholdersstakeholders and involving and involving employeesemployees

Present status of CSRPresent status of CSR

≈ ≈ Growing incubation by businessGrowing incubation by business but mostly in the developed worldbut mostly in the developed world ≈≈ Developing/underdeveloped countriesDeveloping/underdeveloped countries feel this as a new barrierfeel this as a new barrier ≈≈ Developed/underdeveloped countries lackDeveloped/underdeveloped countries lack capacity to adopt CSR policies/strategiescapacity to adopt CSR policies/strategies ≈≈ CSR activities are mainly devoted to upliftCSR activities are mainly devoted to uplift programs in education and general healthprograms in education and general health services (reactive).services (reactive).

CSR is broadeningCSR is broadening

► ISO 26000 is coming up as guidelines ISO 26000 is coming up as guidelines for Social Responsibility and it will for Social Responsibility and it will encompass more areas than CSR.encompass more areas than CSR.

► It will be broad-basedIt will be broad-based► It will give more stress on worker’s It will give more stress on worker’s

welfarewelfare

Guidance for Social Responsibility ISO 26000 (in 2010)

Difference with CSR

ISO 26000ISO 26000

Organizational governanceOrganizational governance

Human Rights principlesHuman Rights principles

Environmental careEnvironmental care

Labour practicesLabour practices

Fair operating practicesFair operating practices

Respecting consumer concernsRespecting consumer concerns

Contributing to social upliftContributing to social uplift

CSR vs Financial Crisis

The ongoing financial crisis and its effects on the globaleconomy have made it clear that the stability of ourglobal market system depends on responsible behavior,sustainable business models and proactive managementof business impacts on society as well as regulatoryframeworks.

---- Prof Craig Smith Chair Ethics & Social Responsibility INSEAD

68 % business leaders in USA are using CSR to create new revenue streams

----- survey conducted by Environmental Leader (think tank) US. 69 % private and public organizations worldwide opt for increases in their CSR budget to have positive impacts

---- IBM survey 2008

Marks & Spencer to invest over US$ 300 million on green retailing

Case study -- BangladeshCase study -- Bangladesh

Readymade garments & textile industriesReadymade garments & textile industries

◘ ◘ Over 20000 industries of various sizesOver 20000 industries of various sizes ◘ ◘ Over two million workers, mostly female-illiterateOver two million workers, mostly female-illiterate ◘ ◘ Mostly situated in non-industrial areas thus not Mostly situated in non-industrial areas thus not incorporating industrial infrastructureincorporating industrial infrastructure ◘ ◘ Only 50 per cent have proper ventilationOnly 50 per cent have proper ventilation ◘ ◘ Only 40 per cent have hygienic toiletsOnly 40 per cent have hygienic toilets ◘ ◘ Over 70 per cent do not have proper emergencyOver 70 per cent do not have proper emergency exitsexits

Case study -- BangladeshCase study -- Bangladesh

Rice Mill tragediesRice Mill tragedies

► Over 40,000 rice mills (husking)Over 40,000 rice mills (husking)► 5 million workers (cheap labour, illiterate-mostly5 million workers (cheap labour, illiterate-mostly women or vagrant maleswomen or vagrant males► Deplorable working conditions – open air- no Deplorable working conditions – open air- no PPE- temporary employmentPPE- temporary employment► Boiler bursting – usual incidentsBoiler bursting – usual incidents► Over 1200 reported deaths due to boiler bursts. Over 1200 reported deaths due to boiler bursts.

5000 injured due to sun-stroke, respitory problems 5000 injured due to sun-stroke, respitory problems and overload carryingand overload carrying

◘ Length and breadth of CSR can not be measured mathematically.

◘ CSR is not about doing something which you expect or desire to do : It should be as per the expectations of the society or more precisely the Stakeholders.

◘ Assessment of effectiveness of CSR actions can be gauzed on the Benefits that the beneficiaries receive ---- tangible and visible.

◘ ISO 26000 will not be any standard but a guideline. It will not eclipse CSR but more likely to strengthen CSR.

CSR

Sustainable Development

Human well-beingEconomic growth

Social harmony

The smile of happiness ensured

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