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 THE PRINCIPLES OF CSR
Dr Nandini Srivastava
June 2020

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 CLASSIFICATION OF CSR

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Key Concepts

Key concepts covered in this Unit

o Principles of CSR
o the prominence of CSR
o changing emphasis in companies,
o sustainability,
o environmental issues,
o externalising cost
o The social contract
o Tripple Bottom line
Academics - Developing Course Plan
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 Principles of CSR

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THE PRINCIPLES OF CSR
 
there are three basic principles which together comprise all CSR activity.
These are:
 
Sustainability
 
Accountability
 
Transparency
 

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SUSTAINABILITY
 

 
This is concerned with the effect which action taken in the present has upon the options
available in the future.

If resources are utilised in the present then they are no longer available for use in the
future, and this is of particular concern if the resources are finite in quantity.

Sustainability therefore implies that society must use no more of a resource than can be
regenerated.

Can be defined in terms of the carrying capacity of the ecosystem (Hawken 1993) and
described with input – output models of resource consumption.

 
 
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ACCOUNTABILITY
Accountability necessitates the development of appropriate measures of environmental performance
and the reporting of the actions of the firm

 implies a quantification of the effects of actions taken, both internal to the organisation and
externally.

specifically the concept implies a reporting of those quantifications to all parties affected by those
actions.

implies a reporting to external stakeholders of the effects of actions taken by the organisation and
how they are affecting those stakeholders  

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 TRANSPARENCY

Transparency, as a principle…..
means that the external impact of the actions of the organisation
can be ascertained from that organisation’s reporting and pertinent
facts are not disguised within that reporting.

Transparency is of particular importance to external users of such

information as these users lack the background details and
knowledge available to internal users of such information.
THE PROMINENCE OF CSR
 
A lot of factors which have led to this interest – such things as:
 
Poor business behaviour towards customers
 Treating employees unfairly
 Ignoring the environment and the consequences of organisational action.

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ENVIRONMENTAL ISSUES
When an organisation undertakes an activity which impacts upon the external environment then this affects that
environment in ways which are not reflected in the traditional accounting of that organisation.

The environment can be affected either positively, through for example a landscaping project, or negatively,
through for example the creation of heaps of waste from a mining operation

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THE CONCEPT OF EXTERNALITY
Is concerned with the way in which these costs and benefits are externalised from the organisation and imposed upon others.

SPATIAL EXTERNALISATION
 
describes the way in which costs can be transferred to other entities in the current time period. Examples of such spatial
externalisation include:
 
Environmental degradation though such things as polluted – and therefore dead – rivers or through increased traffic imposes
costs upon the local community through reduced quality of life;
 
Causing pollution imposes costs upon society at large;
  Waste disposal problems impose costs upon whoever is tasked with such disposal;
  Removing staff from shops imposes costs upon customers who must queue for service;
  Just in time manufacturing imposes costs upon suppliers by transferring stockholding costs to them .

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 TEMPORAL EXTERNALISATION
 
The temporal externalisation of costs describes the way in which costs are transferred from the
current time period into another - the future.
enables reported value creation, through accounting, to be recorded in the present.  

Failing to provide for asset disposal costs in capital investment appraisal and leaving such costs
for future owners to incur
 
Failure to dispose of waste material as it originates and leaving this as a problem for the future;
Causing pollution which must then be cleaned up in the future;
Depletion of finite natural resources or failure to provide renewable sources of raw material will cause problem for the future viability of the organisation;
  Lack of research and development and product development will also cause problems for the future viability of the organisation;
 

 Eliminating staff training may save costs in the present at the expense of future competitiveness.

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 THE SOCIAL CONTRACT

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Social Responsibility Model

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Carroll’s Model
Archie B. Carroll has defined CSR as the complete range of duties business has towards the society.
Four categories of obligations of corporate performance

Economic Primary responsibility is to satisfy economic needs of the

society and generation of surplus for rewarding the investors
and further expansion and diversification.

The laws of the land and international laws of trade and

Legal
commerce has to be followed and complied with

Ethical Norms which the society expects the business to observe like
not resorting to hoarding and other malpractices

Discretionary The voluntary contribution of the business to the social cause

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 Ackerman’s model
Three Phases

First Phase Second Phase Third Phase

Top management The company appoints staff Implementation of the strategy
recognizes social problem. specialists to look into the issue derived by the specialists.
and find measures to tackle it.

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 CSR as a STRATEGY
Step by step implementation
• Andrew (1980)
• four questions determining level of CSR activity

Determining Looking at Industry

Organizational threats and
Competencies: opportunities: what
what can we do? might we do.?

Determining the Examining the values

social of key implementers:
responsibility: what do we want to
what ought we to do?
be doing?

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 CSR as a Strategy
Burke Lee and Jeanne M. Logsdon (1996) suggest five dimensions of corporate strategy
critical to CSR

01 02 03
Centrality Specificity Proactivity
CSR initiative activities Strategic CSR initiatives CSR initiatives capture the
should be close to the firm's should specifically benefit changes in socio-
mission and objectives the firm environmental, political and
technological factors

04 05
Voluntarism Visibility
CSR decisions discretionary and voluntarily CSR initiative build image

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CSR PRINCIPLES & STRATEGIES

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CSR PRINCIPLES & STRATEGIES

• Respect for human rights.

• Respect for the differences of views.
• Diversity & non-discrimination should be the guiding principle.
• Make some social contribution.
• Self-realization & creativity.
• Fair dealings & collaboration. Feedback from the community.
• Positive value- added
• Long term economic & social development

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 TRIPPLE GREEN RATING
A newer concept, far superior to the TBL concept, called ‘Triple Green Rating’ is slowly emerging. Triple Green
Rating involves three parameters

Being water-positive

Being carbon-positive

Having zero solid waste

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 TRIPPLE BOTTOM LINE
The term ‘Triple Bottom Line’ was coined by Sustainability Limited (www.sustainability.com), an international business
consultancy, founded in 1987, headquartered at London

Both these awards are administered by the Golden Peacock Global Awards Secretariat, a London-based organisation with a
significant presence in India through its New Delhi office. (www.goldenpeacockwards.com)

Economic
Environmental

Social Factors

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Burke Lee And Jeanne M. Logsdon (1996)
Suggest Five Dimensions Of Corporate Strategy Critical to CSR

a. Centrality - CSR initiative activities should be close to the firm's mission and objectives.
b. Specificity- Strategic CSR initiatives should specifically benefit the firm.
c. Proactivity- CSR initiatives capture the changes in socio-environmental, political and technological
factors.
d. Voluntarism- CSR decisions discretionary and voluntarily.
e. Visibility- CSR initiative build image
TATA GROUP AND CSR

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 TATA GROUP- CSR

Rules for Sustaining CSR Clause No. 10 of Tata Group

A Tata Company shall be committed to be a good corporate citizen not only in compliance with
all relevant laws and regulations but also by actively assisting in the improvement of the quality
of life of the people in the communities in which it operates with the objective of making them
self reliant.
Such social responsibility would comprise, to initiate and support community initiatives in the
field of community health and family welfare, water management, vocational training, education
and literacy and encourage application of modern scientific and managerial techniques and
expertise.
his will be reviewed periodically in consonance with national and regional priorities.
The company would also not treat these activities as optional ones but would strive to
incorporate them as integral part of its business plan.

The company would also encourage volunteering amongst its employees and help them to work
in the communities. Tata companies are encouraged to develop social accounting systems and
to carry out social audit of their operations

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 TATA GROUP- CSR
Tata Steel spends 5-7 per cent of its profit after tax on several CSR initiatives

Self-Help Groups (SHG’s) Supports Social Welfare Org

Over 500 self-help groups are Tata Steel supports various social welfare
currently operating under organizations. They include; Tata Steel
various poverty alleviation Rural Development Society, Tribal Cultural
programs; Women Society ,Tata Steel Foundation for Family
empowerment programs Initiatives etc
through Self-Help Groups have
been extended to 700 villages.
Economic Empowerment
Healthcare Projects
A program aiming at economic empowerment
The healthcare projects of Tata through improvised agriculture has been taken
Steel include facilitation of up in three backward tribal blocks in
child education, immunization Jharkhand, Orissa and Chhattisgarh. An
and childcare, plantation expenditure of Rs 100 crore has been
activities, creation of estimated for the purpose and this program is
awareness of AIDS and other expected to benefit 40,000 tribal living in over
healthcare projects.. 400 villages in these three States

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 TATA STEELS

Economic Capital
In Lucknow, two Societies – Samaj Vikas Kendra & Jan
Parivar Kalyan Santhan have been formed for rural
development & for providing healthcare to the rural
areas. These societies have made great efforts for
health, education and women empowerment in rural
areas.
Restoring Ecological Balance
Tata Motors has planted 80,000 trees in the works
and the township and more than 2.4 million trees
have been planted in Jamshedpur region. Over half
a million trees have been planted in the Poona
region.
Human Capital
Tata motors has introduced many scholarship
programs for the higher education of the children.
These students get books, copies and other study
materials.
Pollution Control
Tata Motors’ joint venture with Cummins
Engine Company, USA, in 1992, was a
major effort to introduce emission control
technology in India

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 TATA GROUP- CSR

Dedication to the Nation at a Glance Tata Sports Infrastructure

• Tata athletics academy
• Tata archery academy
• Tata Football academy
• Tata steel adventure foundation
• Sports feeder centres
• Stadium at keonjhar Preservation of culture & Heritage

Contribution to setting up national Center for performing arts Mumbai

• Tribal cultural centers showcases legacy of nine tribes Jharkhand and Orissa
• Gramshree mela activities

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 Dedication to the Nation at a Glance Tata Educational Infrastructure
• Institute of mathematics
• Sukinda college
• Joda college centenary Learning centre at XIMBJ N Tata Technical Education centre
• School of hope

Dedication to the Nation at a Glance Tata Health Infrastructure

• Tata main hospital at Jamshedpur
• ICU in Joda and Balangpur
• CHC in Bari and Kuhika
• Hospitals in Gobarghati, sukinda, joda, belpahar, belipada and bamnipal
• Lifeline Express- the hospital on wheels
• Mobile health clinics
• Centre for hearing impaired children

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