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Submitted to: Dr.Rajul Singh
Submitted by: Ajay Raj Singh FT-09-708
Corporate Social Responsibility (CSR)
Corporate Social Responsibility is the action taken by a firm that appear to further some social causes beyond the interest of the firm and that which is required by law and ethics. Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business(SRB), or corporate social performance, is a form of corporate selfregulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honouring of a triple bottom line: people, planet, profit.
The term "CSR" came in to common use in the early 1970s, after many multinational corporations formed, although it was seldom abbreviated. The term stakeholder, meaning those on whom an organization's activities have an impact, was used to describe corporate owners.
An approach for CSR that is becoming more widely accepted is community-based development approach. In this approach, corporations work with local communities to better themselves. For example, the Shell Foundation has involvement in the Flower Valley, South Africa. In Flower Valley they set up an Early Learning Centre to help educate the community's children as well as develop new skills for the adults. A more common approach of CSR is philanthropy. This includes monetary donations and aid given to local organizations and impoverished communities in developing countries. Some organizations do not like this approach as it does not help build on the skills of the local people, whereas community-based development generally leads to more sustainable development. Another approach to CSR is to incorporate the CSR strategy directly into the business strategy of an organization. For instance, procurement of Fair Trade tea and coffee has been adopted by various businesses. Another approach is garnering increasing corporate responsibility interest. This is called Creating Shared
Value, or CSV. The shared value model is based on the idea that corporate success and social welfare are interdependent. A business needs a healthy, educated workforce, sustainable resources and adept government to compete effectively.
Potential Business Benefits
The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting business to adopt measures beyond financial ones. The business case for CSR within a company will likely rest on one or more of these arguments: Human resources: A CSR programme can be an aid to recruitment and retention, particularly within the competitive graduate student market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering. Risk management: Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media.
Building a genuine culture of 'doing the right thing' within a corporation can offset these risks. Brand differentiation: In crowded marketplaces, companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. License to operate: Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the wider public that they are taking issues such as health and safety, diversity, or the environment seriously as good corporate citizens with respect to labour standards and impacts on the environment.
Obey the Law Economic Responsibility Legal Responsibility Be a good Corporate Citizen Ethical Responsibilities Philanthropic Responsibilities Be Ethical
Pyramid of CSR
CSR Initiatives and Green Measures
• Reliance industries and two Tata groups firms, Tata Motors and Tata Steel are the country’s most admirable companies for their Corporate Social Responsibilities initiative. • IBM has joined hands with Tribal Development department of Gujarat for a development project aimed at up liftment of tribal in the Sesan area of Gir forest. • The Indian paint industries are making their product more environment friendly by opting for water based paints and making its carcinogens free.
Criticism and Concerns
Critics of CSR as well as proponents debate a number of concerns related to it. These include CSR's relationship to the fundamental purpose and nature of business and questionable motives for engaging in CSR, including concerns about insincerity and hypocrisy. NATURE
Milton Friedman and others have argued that a corporation's purpose is to maximize returns to its shareholders, and that since only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole.
MOTIVES Some critics believe that CSR programs are undertaken by companies such as British American Tobacco (BAT), the petroleum giant BP (well-known for its high-profile advertising campaigns on environmental aspects of its operations), and McDonald's to distract the public from ethical questions posed by their core operations. They argue that some corporations start CSR programs for the commercial benefit they enjoy through raising their reputation with the public or with government. ETHICAL
The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. As global population increases, so does the pressure on limited natural resources required to meet rising consumer demand. Industrialization, in many developing countries, is booming as a result of both technology and globalization. Consumers are becoming more aware of the environmental and social implications of their day-to-day consumer decisions and are therefore beginning to make purchasing decisions related to their environmental and ethical concerns. However, this practice is far from consistent or universal. SOCIAL
AWARENESS AND EDUCATION
The role among corporate stakeholders is to work collectively to pressure corporations that are changing. Shareholders and investors themselves, through socially responsible investing are exerting pressure on corporations to behave responsibly.
Ethics training The rise of ethics training inside corporations, some of it required by government regulation, is another driver credited with changing the behaviour and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. LAWS
Another driver of CSR is the role of independent mediators, particularly the government, in ensuring that corporations are prevented from harming the broader social good, including people and the environment. STAKEHOLDER
Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Key external stakeholders include customers, consumers, investors (particularly institutional investors), and communities in the areas where the corporation operates its facilities, regulators, academics, and the media.
What is the need for CSR?
While the interests of shareholders and the actions of managers of any business enterprise have to be governed by the laws of economics, requiring an
adequate financial return on investments made, in reality the operations of an enterprise need to be driven by a much larger set of objectives that are today being defined under the term CSR. The broad rationale for a new set of ethics for corporate decision making, which clearly constructs and upholds a organization's social responsibility, arises from the fact that a business enterprise derives several benefits from society, which must, therefore, require the enterprise to provide returns to society as well. A business cannot succeed in a society which fails. This, therefore, clearly establishes the stake of a business organization in the good health and well being of a society of which it is a part. More importantly, in this age of widespread communication and growing emphasis on transparency, customers of any product or service are unlikely to feel satisfied in buying from an organization that is seen to violate the expectations of what is deemed to be ethically and socially responsible behaviour. It is becoming increasingly evident that organizations that pay genuine attention to the principles of socially responsible behaviour are also finding favour with the public and are the preferred choice for their goods and services.
CORPORATE GOVERNANCE INITIATIVES IN INDIA
There is a very impressive growth of the corporate sector in India. To examine corporate governance issues and recommend a voluntary code of best practices, Confederation of Indian Industry (CII) set up a committee and started the initiative to improve corporate governance in India. The first draft of the code was prepared by April 1997, and the final document was released in April 1998. Considerably debate has taken place on reforming Indian corporate governance practices in recent times. Various committees have suggested Anglo-Saxon style of corporate governance reforms. However, such reforms are unlikely to improve the protection of minority shareholders. There is still a larger issue arising out of the pyramidal structures. The ordinary investors may find it difficult to differentiate a good investment from a bad one. Because the credibility of report earnings is suspect. In addition, the reported earnings may be a poor guide to future performance. To conclude, the complex organizational structures of many Indian business houses are a major impediment to good corporate governance. Mechanical measures such as increasing the number of independent directors on Board will do little to change the state of affairs unless cash flows and control rights are aligned. In the wake of
issues like these, the Government has initiated measures to arrest the future deterioration in the functioning of corporate sector as well as to heal the damage caused.
Coca Cola - CSR
Corporate Social Responsibility has always been an integral part of the Coca Cola India’s vision and the cornerstone of our Core Value of Good Corporate citizenship. The Coca Cola India defines Corporate Social Responsibility as making socially responsible products, engaging in socially responsible employee relations and making a commitment to the community around it. At the Coca Cola India’s, Corporate Social Responsibility is not just a duty; it's a way of life. MISSION To socially and economically empower communities
around our operations, by creating enabling environment around our plants, for the betterment of communities through sustainable projects PREAMBLE At Coca-Cola, we are committed to contribute our time, expertise and resources to help communities in partnership with local leaders. These guidelines shall help Division and bottling units to identify initiatives and projects that they could undertake in their respective areas of operation. CSR GUIDELINES
We will work towards attaining the most efficient and optimum usage of water
Endeavor to achieve Net Zero w.r.t. groundwater i.e. to strive to recharge ground water equivalent to the same used in our operations.
Trive to facilitate equitable access of clean drinking water to communities around our plants and support protection of watersheds in such areas.
Have measurable goals to conserve the environment in collaboration with local communities.
Endeavor to recycle all our solid wastes materials including PET articles.
Strive to conserve energy and would comply with national and applicable international standards/practices.
Dispose and manage bio solids, as per law of the land and prevailing regulations, to minimize the impact on the environment and adopt environmental friendly practices. Work for practical sustainable solutions for disposal of bio-solids and other wastes and help spread awareness of the same.
attempt to establish partnership with Government, NGOs and communities and other relevant agencies, to launch and manage projects in communities around our operations.
Work closely with our bottling partners and share resources - technical, human and financial - for the sustainable development of local
Promote Healthy and active living/lifestyle in workplace, in marketplace and in communities.
Incorporate our social responsibility as a part of the Company’s business plan.
Promote and encourage employee volunteerism in community work.
We stand committed towards our associates, their families and the communities around our operations, to improve their quality of life as a whole through health, education, and water management programs.
We shall commit a percentage of the company’s turnover for CSR initiatives.
The Company provides direct and indirect employment to more than 2500 people in its five bottling plants in
Andhra Pradesh situated in Ameenpur, Moula Ali (near Hyderabad), Vizag, Vijayawada, and Nellore. The Company has been recognized for Best HR practices like KO Role Model -Deferred Rewards program, reinforce performance and behavior, KO Key Contributor - Cash reward for superlative performance (CE & Solid Citizens) with citation & a gold pin, KO Vacations - A program to include the associate's family in celebrating his professional success by sending them on a vacation, motivational programs like Surge Beyond 100% to recognize team performance. In addition to the professional growth of the employees, the Company also focuses on personal and social growth by involving employees in various corporate social responsibility projects undertaken in Andhra Pradesh. These include blood donation camps, health camps for local communities around the bottling plant, education support to local community, etc in association with NGOs like Red Cross and Hyderabad Round Table. In addition to the above, the Andhra Pradesh team came forward to donate generously to Chief Minister's Relief Fund during the tsunami tragedy besides working on location to help the victims. Coca-Cola’s Concern for The Disabled The Company employs 88 people with hearing and speaking disability, who work as “Special Inspectors” at its Nemam plant near Chennai. They have been trained by the Company to observe the bottles and check for any foreign particles during quality
The "Abhyaasa Project" (Systematic on-the-job training) in particular, undertaken with the objective of enhancing technical skills of casual workers and as well as consistent harmonious industrial relations displayed by the workers as well as the management also helped the company The Coca-Cola plant in Kerala has been providing commercial waste to local farmers as fertiliser which has proved to be contaminated with toxic substances. The programme said it had discovered dangerous levels of cadmium and lead in the sludge produced by the plant which was lying on the fields of local farmers. It was alleged that the substance was actually useless as a fertiliser. BBC reporters also said they had seen waste leaving the factory to be dumped directly into a local river. The Vice-President of Coca-Cola in India, Sunil Gupta, said that the fertiliser was absolutely safe. However, Professor John Henry, consultant at St Mary's Hospital in London, said that the levels of toxins found in water samples taken near to the plant would cause serious problems of pollution that could have "devastating consequences". On January 20, 2009 SOS Children’s Villages of India, The CocaCola Foundation and Coca-Cola India announced a partnership to implement water conservation projects for a better life for children. This partnership will collaborate to ensure sustainable water resources by undertaking rainwater harvesting (RWH) projects at 39 SOS locations spread across the country. The partnership will also support creating or improving the awareness on Water conservation and artificial recharge.
In the beginning of 2008, a pilot project was initiated in SOS Children’s Village, Bawana, to collect rain water to replenish ground water by using funds from SOS-India budget. Coca-Cola India stepped in to fund this project and helped SOS save funds from its budget for other use. The success of the project in terms of professional implementation and impact on quality of life of SOS children prompted The Coca-Cola Foundation and Coca-Cola India to join hands with SOS for undertaking RWH projects in the remaining 39 SOS locations. Further, The Coca-Cola Company in India has been recognized for its community programs and environmental practices by prominent global organizations such as the Red Cross and has won prestigious Indian environmental awards for environmental practices. The rainwater harvesting technology it has established at many locations (including the plants at Plachimada in Kerala, Kaledera in Rajasthan and Varanassi in Uttar Pradesh). State Government figures have confirmed that since a Coca-Cola plant has been built, in some areas (including Kaladera in Rajasthan) groundwater levels have shown lower levels of depletion than other areas and in some areas (including Varanassi in UP) water levels have actually risen since the plants were built. We believe this is due, in part, to the rainwater harvesting technology employed at these plants In Kerala, where ground water levels have certainly decreased, the rainfall has been well below average for several years. The Kerala State Ground Water Department has said that any depletion in ground water was due to poor rainfall and could not be
attributed to the plant. The Central Ground Water Authorities have also confirmed there were no abnormal changes in groundwater levels around the plant that can be attributed to the Coca-Cola operation. Most recently the interim report of the Centre for Water Resources Development & Management (CWRDM) groundwater depletion and the Coca-Cola plant in Kerala.
Coca-Cola is one of the few companies in India to have made any contribution to recharging groundwater in India and uses less water, more efficiently, than many other industries in India and yet a small number of politically motivated groups have still chosen to target just The Coca-Cola Company, using the Coca-Cola brand name for the furtherance of their own anti-multinational agendas.
The Coca cola maintains a considerable involvement in philanthropy and in volunteering. It is considered to be an active participant in the Indian Corporate Social Responsibility field and received Award for CSR in 2007. When you’re serious about social change, the numbers speak for themselves. For the Coca Cola, Corporate Social Responsibility (CSR) is not just a duty. It's the unique way we work and live. The Coca cola focuses on the environment issues. They have taken several steps in its efforts to be an environment-friendly organisation..
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