Corporate Social Responsibility

Corporate Social Responsibility (CSR) Arguments Against ‡ Restricts the free market goal of profit maximization ‡ Business is not equipped to handle social activities ‡ Dilutes the primary aim of business ‡ Limits the ability to compete in a global marketplace ‡ Cost ‡ Lack of accountability

Corporate Social Responsibility (CSR) Arguments For ‡ Community development ‡ Long run Profits ‡ Ethical obligations ‡ Public Image ‡ Better Environment ‡ Meet Public expectations .

3 1984. ‡ Exxon Oil and Valdez .Some slip-ups ‡ Bhopal Gas Tragedy & UnionCarbide: More than 3 Lakh people died leaving several other injured on decemebr.2 cr paid for compensation. An amount of Rs 1529.

Some Good Practices ‡ ‡ ‡ ‡ ‡ Project Shakti of HLL Ideas e-bill Tata Tea: Jago rae Advertisement campaign Tata s Community Development Aditya Birla Group??? .

Obligation (Legal & Economic) 2.Stages of CSR Intitaive 1. Responsibility (self driven ) . Responsiveness (adapt to changing societal conditions and social norms) 3.

Stages of CSR Intitaive 1. Responsibility (self driven ) (affordable schools for poor) . Obligation (Legal & Economic) (not employing children below 16) 2. Responsiveness (adapt to changing societal conditions and social norms) (child care for children of employees) 3.

Employee Welfare Activities and Health Care (education benefit and health support) ‡ Mc Donalds code of conduct for fair and safe working conditions for vendor employees and has independent experts to audit vendor code of conduct 3.CSR Categories 1. Community Development: ‡ Whirlpool donates refrigerator and appliance to every Home developed by Habitat for Humanity in North America ‡ Eli Lilly designates one day per year as Global Day service whereby all employees world wide undertake volunteer activities for the betterment of their local communities 2. Meeting Customers desire and protecting future generations ‡ P&G objective is to delight consumers with sustainable innovation that improve environmental profile of our products .

Meeting Legal Obligations (employees. using recycled material. reducing emission. shareholders and government) 6. ‡ Sony manages co2 emissions by setting targets for ‡ Eli Lilly designates one day per year as Global Day service whereby all employees world wide undertake volunteer activities for the betterment of their local communities 5. Using Green Technologies: conserving energy. reducing packaging materials. Obligation to competitors .CSR Categories 4.

CSR IN INDIA THE INITIAL STEPS ‡ Evolved through the concept of giving integral part of Indian culture ± Philanthropy ± Religious donation an ‡ Modern connotation ± Gandhian concept of Trusteeship ± Bombay Plan (1944-45) First initiative by leading business houses (Tata. Birla group through FICCI) ± Individual initiatives by corporates . Bajaj.

training ± Sustainable Development environmental protection ± Community Development education. girl child . health. poverty alleviation ± Social Challenges women's empowerment.CSR IN INDIA FOCUS AREAS ‡ Traditional ± Education ± Health ‡ Contemporary ± Capacity Building skill development.

IMPLEMENTING A CSR PLAN KEY CONSIDERATIONS .

healthcare o Affirmative action employment of backward sections o Corporate governance ‡ External (within vicinity or for society at large). o Community development o Capacity building o Environmental protection o Healthcare o Creating awareness . social issues o E-initiatives Online Information.INTERNAL v/s EXTERNAL ‡ Internal (carried out within the organization) viz. health.CSR . viz. education. o Energy and water conservation o Employee welfare training. etc. .education.

CHANNELS OF IMPLEMENTING CSR ‡ In-house team ‡ Trust or Foundation as an independent arm of the company ‡ Non-Governmental Organisation (NGO) ‡ Industry consortia ‡ Collaboration with on-going Government programmes .

IMPORTANCE OF NON-GOVERNMENTAL ORGANISATIONS (NGO) ‡ Grass-root level experience ‡ Awareness about local issues ‡ Ability to identify and target relevant stakeholders ‡ Possess experience for effective execution and coordination ‡ Help convert corporate responsibility plans into practice .

ineffective implementation Spreading resources too thin Weak monitoring mechanism Projected or perceived as a green wash or white wash ‡ Often mistaken for a Public Relations exercise ‡ ‡ ‡ ‡ ‡ .COMMON PITFALLS WHILE PLANNING A CSR PROGRAMME Selecting an inappropriate CSR activity Effective launch.

CSR PROGRAMME BENEFITS .

Higher productivity. reduction in costs and increase in profitability ‡ Positive engagement with government . enhancing employee morale.SOFT BENEFITS ‡ Positive public image ‡ Retaining staff.

FISCAL BENEFITS ‡ In-house CSR activities treated as a business expense ‡ Contributions to registered Non Profit Organisations eligible for benefits under Indian Income tax laws (Sections 80G. 35AC) ‡ Contributions to NGOs ± 100% deduction if NGO promotes social and economic welfare ± 125% deduction if NGO engaged in research in sciences/social sciences and statistical research .

education. skill development. ‡ Define the programme .BUILDING AN EFFECTIVE CSR PROGRAMME ‡ PHASE 1 CONCEPTUALISATION ‡ Identify key areas of focus viz.will it be Internal or External or Both ‡ Involve management from various levels in identifying focus areas (maybe create a committee. health. etc. selecting candidates from top. middle and lower management) .

‡ Define budgets ‡ Identify key people to implement and monitor the programme ‡ Define milestones to achieve ‡ Define monitoring mechanism . in-house team. etc.PHASE 2 RESOURCE ALLOCATION ‡ Define your channel viz. NGO.

Launch ‡ Launch the programme ‡ Run the programme ‡ Obtain necessary registrations .PHASE 3 .

PHASE 4 Running the Programme ‡ Annual/ bi-annual/ quarterly results and reviews ‡ Monitor and report success and/or failure ‡ Take corrective action .

protect and replenish resources? ‡ Company image ± Does it give the company s image a boost? .EVALUATING YOUR CSR PROGRAMME ‡ The test of a successful CSR activity : ‡ Sustainability ± Can it be continued and replicated? ‡ Capacity building ± Does it lead to development of skills. living standards? ‡ Environmental protection ± Does it help conserve.

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