Professional Documents
Culture Documents
SOC IA L
R ESP ONS IBI LI TY
DR. POONAM KAUSHAL
A S S I S TA N T P R O F E S S O R
I C FA I B U S I N E S S S C H O O L
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RESPONSIBILITY TOWARDS:
SOCIETY EMPLOYEE CONSUMERS
• Carrying on business with moral& • To provide a healthy working • Supplying socially harmless
ethical standards. environment. products.
• Prevention of environmental • To grant regular & fair wages. • Supplying the quality, standards,
pollution. • To provide welfare services. • as promised.
• Minimizing ecological imbalance. • To provide training & promotion • Adopt fair pricing.
facilities.
• Contributing towards the • Provide after sales services.
development of social health,
• To provide reasonable working
• Resisting black-marketing &
standard & norms.
• education profiteering.
• To provide efficient mechanism
• Making use of appropriate • Maintaining consumer’s
to redress worker’s grievances.
technology. grievances cell.
• Proper recognition of efficiency
• Overall development of locality. • Fair competition.
& hard work.
RESPONSIBILITY RESPONSIBILITY
TOWARDS TOWARDS
GOVERNMENT
SHAREHOLDERS
• Obey rules & regulations.
• To ensure a reasonable rate of
• Regular payment of taxes.
return over time.
• Cooperating with the Govt. to
• To work for the survival & the
promote social values.
growth of the concern.
• Not to take advantage of
• To build reputation & goodwill
loopholes in business laws.
of the company.
• Cooperating with the Govt. for
• To remain transparent &
economic growth &
accountable
development
CORPORATE SOCIAL RESPONSIBILITY
OF TESCO
• Tesco has made a commitment to corporate social responsibility, in the form of contributions of
1.87% in 2006 of its pre-tax profits to charities/local community organizations.
• In 1992 Tesco started a "computers for schools scheme", offering computers in return for
schools and hospitals getting vouchers from people who shopped at Tesco. Until 2004, £92
million of equipment went to these organizations. The scheme has been also implemented in
Poland.
• Starting during the 2005/2006 football season the company sponsors the Tesco Cup, a football
competition for young players throughout the UK. The cup now runs a boy's competition at
Under 13 level and two girl's cups at Under 14 level and Under 16 level. Over 40,000 boys alone
took part in the 2007/08 competitions.
• In 2009 Tesco used “Change for Good” as advertising, which is trade marked by Unicef for
charity usage but is not trademarked for commercial or retail use which prompted the agency to
say "it is the first time in Unicef’s history that a commercial entity has purposely set out to
capitalise on one of our campaigns and subsequently damage an income stream which several of
our programmes for children are dependent on”
VODAFONE
• Vodafone promised to cut down their carbon dioxide emissions in
half by 2020 through improving the energy efficiency of its global
mobile -phone networks. Additional points for Vodafone on CSR
because they are constantly updating us with the results of the
campaign; no matter whether it’s going well or not. Future promises
includes pledging to recycle 95% of network equipment waste and
plans to reduce work-related accidents that cause lost time by 10%.
On top of that, Vodafone is a leading business in socially
responsible products such as the text-to-speech software for blind
people and easy-to-use handsets for the elderly.
HSBC
• The bank’s head of corporate sustainability, Teresa Au, has said that
despite the economic situation, HSBC would continue to support its
sustainability campaign. Initiatives include providing small
businesses with sustainability insurance options and developing an
index for climate change. The business has also boosted its
management of ethical and socially responsible investing funds by
60% over the last two years. HSBC has an American unit that is
dedicated to assisting local communities by promoting affordable
homeownership, among other goals.
CSR EXAMPLES
• IBM UK - Reinventing Education Partnership programme
Interactions and sharing of knowledge through a web-based
technology - the “Learning Village” software. Culture of openness and
sharing of good practice
• AVON - a partnership with Breakthrough Breast Cancer, and its
Breast Cancer Crusade has raised over 10 million pounds since its
launch 12 years ago
• TOI’s Lead India campaign, campaign for contribution towards
educating the poor
A recent analysis of 170,000 company ratings from
respondents in 15 countries sheds light on which are
perceived by consumers as the most socially responsible.
Top 10
1. Lego
2. Microsoft
3. Google
4. Walt Disney Company
5. BMW Group
6. Intel Robert
7. Bosch
8. Cisco Systems
9. Rolls-Royce Aerospace
10. Colgate-Palmolive
https://www.forbes.com/sites/karstenstrauss/2017/09/13/the-10-companies-with-the-best-csr-reputations-in-2017/
WHICH INDIAN COMPANIES TOPPED CSR IN 2020?
• Tata Chemicals has dropped to the third position after being No. 1 for the past three years.
• Infosys has climbed one spot. ..\Infosys Foundation – Offering shelter to the homeless (1).mp4
• Mahindra & Mahindra has climbed two spots to claim the second rank in the top 10 Indian
companies for CSR in 2020.
https://thecsrjournal.in/top-indian-companies-for-csr-in-2020/
ARGUMENTS FOR & AGAINST THE CSR
ARGUMENTS AGAINST THE CSR
In Friedman’s
view business
has only one
social
responsibility
and that is to
maximize the
profits of its
owners. His very
famous statement
says it all, “The
business of
business is
business.”
ARGUMENTS AGAINST THE CSR
CSR projects will not be successful. As per the KPMG report, geographical
bias is also one of the major reasons for the failure of CSR. This discrepancy is
because of the simple reason that most companies tend to distribute their funds
to projects, which are located close to where they are based. This eventually
leads to the industrialization of the areas that are already developed or
developing.
ISSUES AT NIKE
• Nike Inc producer of footwear, clothing, equipment and accessory products for
the sports and athletic market.
Selling to approximately 19,000 retail accounts in the US, and approximately
140 countries around the world.
Manufactures in China, Taiwan, Korea, Indonesia , Mexico as well as in the US
and in Italy.
People working - 58% young adults between 20 and 24 years old, 83% -
women.
Few have work-related skills when they arrive at the factory.
Issue- unhealthy work environment – debates heated arguments, verbal abuse ,
7.8% of workers reported receiving unwelcome sexual comments, and 3.3%
reported being physically abused. In addition, sexual trade practices in
recruitment and promotion were reported
TRIPLE BOTTOM
LINE
1. Triple bottom line (or otherwise noted as TBL or 3BL) is an
accounting framework with three parts: social, environmental
(or ecological) and economic.
2. Some organizations have adopted the TBL framework to
evaluate their performance in a broader perspective to create
greater business value.
https://online.hbs.edu/blog/post/corporate-social-responsibility-
examples
https://b8f65cb373b1b7b15feb-
c70d8ead6ced550b4d987d7c03fcdd1d.ssl.cf3.rackcdn.com/cms
/reports/documents/000/002/327/original/Carbon-Majors-
Report-2017.pdf?1499691240
MAHATMA GANDHI’S VIEWS ON: PRINCIPLE OF
TRUSTEESHIP
• Few richest men in the world, especially, Bill Gates and Warren Buffet are practicing the
Gandhian Principle of Trusteeship. These noble philanthropists are distributing a huge percentage
of their wealth for social causes like public health improvement, funding AIDS research and
higher education, running programmes for poverty alleviation, etc. Their willingness to solve
community's problems as a moral responsibility is quite remarkable and deserves admiration.
PRINCIPLES OF TRUSTEESHIP
Reduce Inequalities : This concept tries to reduce inequalities. It tries to reduce the gap
between the rich and poor. It tries to reduce exploitation.
Change of Attitude of Businessmen : According to Mahatma Gandhi, businessmen should
change their attitude. They have no morale right to accumulate unlimited wealth while most of
their countrymen live in poverty and misery. Each businessman should take enough wealth to
live honorably. He should distribute the remaining wealth back to the society. Gandhi ji
advised the rich businessmen to voluntarily surrender their surplus wealth. If not done so, the
poor masses may revolt (fight) one day and plunder their entire wealth by force.
Social Pressure : People must put social pressure on businessmen to follow the principle of
trusteeship. They should boycott (not purchase) the products of those who do not practice
trusteeship.
Legal Pressure : If voluntary measures and social pressure do not work, legal pressure must be
put on the businessmen to follow the principle of trusteeship.
Socialism : This concept gives more importance to socialism. That is, the society is given
much more importance than an individual. So, the wealth of the society should be distributed
equitably to all its members.
Consider Social Needs : Businessmen should produce only those goods and services which
are useful for all members of the society. They should not produce goods and services, which
are used only by few individuals.
Equal distribution of wealth : According to Gandhi ji, all the wealth of the society should be
distributed equitably. There should not be concentration of wealth in few hands.
Earn money by Hard work : A person should earn his living by doing hard work. Earning
money without doing hard work is just like stealing.
No Right to Private Ownership : This concept does not give the right to private ownership
except when it is necessary.
Government Regulation : The Government should regulate trusteeship. No Individual should
be allowed to use his wealth for selfish satisfaction or against the interest of society.
INDIAN CORPORATE LEADERS AND
TRUSTEESHIP
• Infosys, particularly from its former CEO and current chief mentor, Narayana Murthy for
creating this company along with a small group of people (better sharing of wealth in society),
the involvement of employees in the company’s fortunes (through ESOPs) and his contentment
with a mere 7% of company stock (he prefers it that way) reflect a deep-rooted commitment
towards trusteeship.
• House of the Tatas with their corporatised initiatives for socio-corporate benefits
• “WIPRO Cares” Foundation, with a targeted corpus of Rs 100 crore for primary education;
• Birla foundation with its focus on socio-economic improvement in the lives of the people
touched by the corporation.
CSR MODELS
MODELS OF CORPORATE SOCIAL
RESPONSIBILITY
Ackerman Model
Carroll Model
ACKERMAN MODEL (1976)
The model has emphasized on the internal policy goals & their relation to
the CSR.
Four stages involved in CSR.
Managers of the company get to know the most common social problem & then
express a willingness to take a particular project which will solve some social
problems.
Intensive study of the problem by hiring experts & getting their suggestions to make
it operational.
Managers take up the project actively & work hard.
Evaluating of the project by addressing the issues.
Six Strategies in the adoption of CSR.
Rejection strategy
Adversary strategy
Resistance strategy
Compliance strategy
Accommodation strategy
Proactive strategy
Adversary strategy: Adopt CSR project only when pressure comes from external
sources
Rejection strategy : : reluctance to adopt any social work or project.
Proactive Strategy: self interest of the firm to adopt the CSR voluntarily.
Compliance strategy This CSR strategy provides a framework for managing risks,
manufacturing safe products, and establishing a record of compliance for
stakeholders to use in evaluating the safety and quality of goods and services that
underlie product positioning
Resistance Strategy: Adopt the CSR when pressurized by the government.
Accommodation Strategy: Accommodate the request of the shareholders or
government in fulfilling the CSR.
CARROLL'S CSR PYRAMID
•Carroll's CSR Pyramid is a simple framework that helps argue how and
why organizations should meet their social responsibilities.
PYRAMID OF CSR
Res
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Be ethical. Do what is
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right. Avoid
Legal Responsibilities
Obey the law
Economic Responsibilities
Be profitable.
• This is the responsibility of business to be profitable
ECONOMIC • Only way to survive and benefit society in long-term
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FOUR LEVELS OF COMMITMENT TO STAKEHOLDER APPROACH
The Basic Value Proposition
How do we make our stakeholders better off?
What do we stand for?
Ethical Leadership
What are the values and principles that inform my leadership?
What is my sense of purpose?
What do I stand for as a leader?
• Level 1: Basic Value Proposition
At this most basic level, the entrepreneur or manager needs to understand
how the firm can make the customer better off, while at the same time
offering an attractive value proposition to employees, suppliers,
communities, and financiers. It is important to note that it is not possible
to sustain making customers better off, without at the same time making
the stakeholders better off. What this example highlights is so obvious
that we too often take it for granted: a business model that simultaneously
satisfies the different stakeholders is a pre-requisite for any company to
start doing business profitably. Business failure and mediocre
performance are often attributable to the firm’s inability to articulate
strong enough value propositions simultaneously to all its stakeholders. in
the future.
Level 2: Sustained Stakeholder Cooperation
• Once the most basic level of stakeholder awareness has been achieved,
the entrepreneur or manager must understand that the continued survival
and profitability of the company depends on effectively sustaining the
cooperation amongst the stakeholders over time. The competitive, macro-
economic, regulatory, and political environments are so dynamic that they
make it necessary for the initial stakeholder arrangements to be revised
on a constant basis. It is important for the manager to have a deep
understanding of how these trade-offs affect each stakeholder, the
limits to the sacrifice a given stakeholder will accept, and how these
current sacrifices can be compensated in the future.
Level 3: An understanding of broader societal issues
According to Haaland – Matlary (2005), the manager today to be aware of
and responsive to more international issues, without the moral compass of
the nation state or religion to guide her any more. The insecurity caused by
the increase in terrorism further compounds matters. A pro-active behaviour
is necessary towards all stakeholder groups, both primary, i.e., those that
have direct dealings with the company, and secondary, such as NGOs and
political activists, who can affect its operations.
Level 4: Ethical leadership
Recent research points to a strong connection between ethical values and
positive firm outcomes such as sustained profitable growth and high
innovativeness. The Good Work Project, started in 1995 by three teams
of investigators led by Howard Gardner, Mihaly Czikszentmihalyi, and
William Damon, examined the relationship between ethics and
performance.
Damon (2002) proposes the three faces of morality: restrictive,
philanthropic, and generative. We believe that this form of proactive
ethical leadership is possible only if there exists a deep understanding of
the interests, priorities, and concerns of the stakeholders.
https://www.cbd.int/doc/pa/tools/Business%20and%20Biodiversity.pdf
CSR INDICES WORLDWIDE
• CSR indices are developed to establish benchmark for the
companies involved in the CSR activities. Secondly the CSR indices
are supposed to represent real reference for investors considering in
their investment decisions the ESG aspects (Environment, Social,
Governance).
• The first CSR indices were developed in the United States. The
pioneer in this field was Dow Jones that in September 1999 started
to publish SI (Sustainability Index). One year later Calvert fund
started to publish CSR index, whereas in July 2001 the first index
(FTSE4Good) was published by an English company FTSE.
CSR INDICES WORLDWIDE
Indices Description Link
Dow Jones Launched in September 1999 by Dow Jones, STOXX Limited and SAM Group – http://www.sustainability
Sustainability Sustainable Asset Management. Since that time more than a dozen various indices -index.com/
Index series have been created for the world, regions or industries. The DJSI methodology is
(DJSI) based on positive selection and aims at identification of best in class companies.
The basic criterion considered during selection of companies for indices is the
analysis of three aspects: economy, environmental protection and social
responsibility.
Calvert Social Calvert investment fund index has been calculated since 2000. It measures http://www.calvert.com/s
Index (CSI) economic situation of American companies defined as socially responsible. When ri-index.html
selecting companies for the index they are analysed from the perspective of their
products (type of created products), environment (protection and pollution), place
of work (compliance with rules and standards) and integrity.
Financial Times Index launched by London Stock Exchange and Financial Times in July 2001. At http://www.ftse.com/Indi
Stock Exchange present indices are calculated for the entire world, for selected markets and for ces/FTSE4Good_Index_
FTSE4GOOD selected regions. The index underlying companies undergo: negative selection Series/index.jsp
series (companies that are excluded are those dealing with weapons production, substance
production or violating social equality principles) and positive selection
(environmental protection activities, development of positive relations with
environment, maintenance and development of human rights, combating
corruption). These indices are the sole indices that enjoy special status recognized
Indices Description Link
FTSE Launched in May 2004 by Johannesburg Stock Exchange in collaboration with http://www.jse.co.za/Ab
Johannesburg EIRIS, FTSE4GOOD – FTSE International Ltd. and KPMG. The primary out-
Stock objective of index creators was to implement a benchmark for investors and Us/SRI/Introduction_to_
Exchange indirect support and promotion of responsible management in the RPA region. SRI_Index.aspx
Socially Johannesburg Stock Exchange Socially Responsible Index was the first of this
Responsible kind financial instrument implemented in emerging markets. In addition to
Index (JSE running socially responsible business the basic selection criterion for companies
SRI) was the respect for human rights.
Sao Paolo Implemented by BOVESPA, Sao Paulo Stock Exchange in collaboration with http://www.bmfbovespa.
Stock Centre for Sustainability Studies of Fundaçao Getulio Vargas (CES-FGV) and com.br/Indices/downloa
Exchange IFC (International Finance Corporation) in December 2005. The underlying idea d/ISE_ing.pdf
Corporate of index creators was to implement a benchmark for investors interested in
Sustainability responsible investment and to promote CSR amongst Brazilian companies.
Index (ISE) Methodology is based on positive selection (ESG criteria)
KLD Global Index launched by KLD Research & Analytics in October 2007.Index is a http://www.kld.com/inde
Sustainability benchmark created based on ESG criteria with reference to three geographical xes/gsindex/index.html
Index Series areas: North America, Europe, Asia and Pacific. Index methodology is based on
(GSI) positive selection (ESG criteria).
http://respectindex.pl/csr_indices_worldwide
LBG FRAMEWORK AND MEASUREMENT
• LBG is the global standard for measuring corporate community
investment and philanthropy. LBG measurement framework is used
by organizations around the world to effectively measure, report and
communicate their social contributions and investments.
In Progress
Tomorrow
Toda
y
What benefit has the 19d. were able to spend more time with clients
beneficiary 19e. could employ more staff / take on more volunteers
organisation been
able to report? 19f. could train their staff / volunteers
19g. benefited from cash savings
19h. were able to lobby for legislative change 2 6
Autor: Gonzalo Sales 19i. increased their profile
Genovés
LBG IN PROGRESS: ENVIRONMENTAL OUTPUTS & IMPACTS
ENVIRONMENTAL OUTPUTS AND IMPACTS
20a. Did the project return any environmental impacts?
20b. helped to protect and/or replant tree stocks
20c. protected endangered species
20d. improved or conserved seas/ rivers/ fisheries
20e. helped conserve land/ protected sites
20f. decreased waste to landfill
20g. reduced greenhouse gas emissions
20h. Did the project engage people on environmental issues/activity
20i. increased levels of recycling
20j. improved people's energy efficiency
20k. reduced people's water usage
20l. Number of trees planted
20m. Amount of land protected/ conserved (ha)
20n. Number of people engaged in environmental activity
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BUSINESS IN ENVIRONMENT (BIE) INDEX