Corporate Social Responsibility CSR is a win- win opportunity for companies, financial investors and society at large Corporate

e Social Responsibility CSR is about how companies manage the business processes to produce an overall positive impact on society. Business has a responsibility to give it back to society Corporate Social Responsibility Corporate social responsibility (CSR): An obligation, beyond that required by the law and economics, for a firm to pursue long term goals that are good for society. The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of the local community and society at large. Meaning of CSR Conducting business in an ethical way and in the interests of the wider community Responding positively to emerging societal priorities and expectations A willingness to act ahead of regulatory confrontation Balancing shareholder interests against the interests of the wider community Being a good citizen in the community Definitions: Corporate, Social, and Responsibility. In broad terms, CSR relates to responsibilities corporations have towards society within which they are based and operate, not denying the fact that the purview of CSR goes much beyond this. CSR is comprehended differently by different people. A commitment to improve community well being through discretionary business practices and contributions of corporate resource Millen Baker: A way companies manage the business processes to produce an overall positive impact on society. World Business Council for Sustainable Development: Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. Corporate Social Responsibility: Pyramid of CSR: Discretionary Responsibilities -Be a good corporate citizen. Ethical Responsibilities -Be ethical. Legal Responsibilities -Obey the law. Economic Responsibilities -Be profitable. In a nut shell we can state that Fundamentally , a firms responsibility is to produce an acceptable return on its owner investment Within a law based society, is a duty to act within the legal framework drawn up by the government and judiciary. Taken a step further, a firm has an ethical responsibility to do no harm to its stakeholders and within its operating environment. Finally, firms have a discretionary responsibility, which represents more proactive, strategic behaviors that can benefit the firm and society, or both.

Concept of CSR CSR (corporate social responsibility) is a concept in which organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities other stakeholders, future generation And on environment. The organizations voluntarily taking advance steps to improve the quality of life for employees and their families as well as for the local community and society. The purpose of CSR The purpose of Corporate Social Responsibility (CSR) is to make corporate business activity and corporate culture become sustainable in its three dimensions: economic, Social And environmental. They can achieve this by doing following activities like To engage with the internal and external stakeholders Treating the stakeholders ethically To create high standards of living To protect society and environment To take care of shareholders Philanthropic contributions to society Two views of corporate social responsibility The shareholder view The only social responsibility of business is to create shareholder wealth. Corporate management cannot decide what is in the social interest. The costs of social responsibility which do not increase the value of stock will be passed on to consumers. The multiple stakeholders view All customers and employees are treated with dignity. Relationships with suppliers must be based on mutual trust. Belief in fair economic competition. Business can contribute to social reform and honor human rights. CSR and its Nature Business & its Stakeholders: All those who participate in some way in the activities of the organization CSR

Responsibility towards Employees: Compensation Healthy Working condition Communication & sharing information Avoid discriminatory practices Protect from injury & illness Developing skills & listening their request Efficient mechanism to redress grievances Provide proper training and development Responsibility towards Shareholders: Return on their investment To work for the survival and the growth of the concern To build reputation and goodwill of the company To remain transparent and accountable Responsibility towards consumers: Producing according to consumers need Supplying quality goods and socially harmless products Resisting black marketing Reasonable price Proper service to consumer Health and safety of consumer Maintaining consumers grievance cell Responsibility towards suppliers: Proper supply from supplier Cost reduction Avoid unethical supplier Pay supplier on time Responsibility towards community: Respecting human rights Carrying on business with moral values and ethical standards Minimizing ecological imbalances Supporting public policies Improving standard of living Preserving & conserving the earths natural resources NEED OF CSR: To fulfill long term self interest To establish a better public image To avoid government regulation or control To minimize environment damage To avoid misuse of the national resource and economic power

Benefits of Corporate Social Responsibility It enhances brand image and reputations-Branding of products, gets an immense boost through social messages. Ads with social messages have a larger a and deeper appeal than general Ads. Spending on visible CSR activities is a cost effective means of achieving and sustaining a brand image. And good brand image leads to customer loyalty , which cannot be established overnight Ex. Surfs save two buckets of water benefitted tremendously from the use of public service communication Benefits of Corporate Social Responsibility It increases the ability to attract and retain employees-The extent of publicity and goodwill generated by CSR activities help in talent management as the average employee feels pride in being associated with good corporate citizens. A natural soft corner is developed in the mind of the employees towards employer. Ex. Mahindra & Mahindra has introduced Employee Social Options( ESOPs) through which a workforce of approx. 25,000 people employed at M & M could extend help in any of the social projects run by the company. The company offers its employees a wide menu of CSR projects which they can volunteer to participate in. Ford Motors follows a worldwide policy, which encourages every employee to spend 16 working hours annually on a social cause. It increases customer loyalty and sales Consumers not only want good and safe products, but would also like to know that what they buy was produced in a socially and environmentally friendly way, and are sometimes even willing to pay more for products that are produced in a socially and environmentally responsible manner. Loyalty is a combination of three crucial elements- product quality, price and intellectual or emotional bonding. Ex. ITCs e-Choupal venture, which was started as a supply- chain initiative by taking the internet to the villages and empowering rural India with information at the click of a button .It is the success of ITC in the rural market which has changed the total perception and dynamics of rural marketing in terms of agricultural inputs, FMCG, consumer durables as well a s business in farm and agriculture outputs. Now, every large business group wants to invest money in these sectors. It improves financial performance and reduces operating costs- The desire and urge in business to be sensitive about social responsibility has a significant and far- reaching impact on financial performance. If a sense of CSR pervades through the organization, it brings with it as sense of responsibility, which ultimately becomes a habit among the employees of the organization. Ex. A project undertaken to separate waste in Tata Steel cost the company Rs. 100 lakhs in the first year, as it invested in 400 bins, but selling the waste earned it Rs. 20 crore. It leads to reduced regulatory/ activists oversight-Businesses caring for their community responsibility get more co-operation and less queries from regulators, be it the administration or taxation officials or social and environment activists. Such business houses get preferential treatment when applying for the permits or licenses to undertake any projects. Ex. Recently the ministry of Labor government of UP, announced its decision to exempt businesses having SA8000 certificate from several inspections till such time the certificate in the force. Benefits of Corporate Social Responsibility It reduces risk thereby facilitating easier finance or access to capital-Businesses that show an environmental and social responsibility tend to be viewed as being less risky than those that do not, as that can translate into cost prevention, lower insurance premiums, reduced interest rates, reduced legal costs, greater investor appeals and so on.

Ex. Companies such as ABN AMRO, Deutsche bank are calling upon investors, asset managers and financial markets, in general, to include these nontraditional aspects in their decision making.

Social Responsibility Strategies Reactive Strategy Denying responsibility while striving to maintain the status quo by resisting change. Defensive Strategy Resisting additional social responsibilities with legal and public relations tactics. Accommodation Strategy Assuming social responsibility only in response to pressure from interest groups or the government. Proactive Strategy Taking the initiative in formulating and putting in place new programs that serve as role models for industry. How do we do it? Key CSR Steps Commitment and Vision Planning Implementation Monitoring Reporting Continuous Improvement Limitations of Approaches to CSR Lack of clarity of the definition of CSR Models of CSR not adopted properly by companies Lack of measures to innovate and evolve new CSR models Unidentified segment- need to identify the areas of interest & capability to take up CSR in a focused manner. Inadequately trained personnel Non availability of authentic data Principles of corporate citizenship Good corporate citizens strive to conduct all business dealings in an ethical manner, make a concerned effort to balance the needs of all stakeholders, while working to protect the environment. ) Engages in fair and honest business practices in its relationship with stakeholders. 2) Sets high standards of behavior for all employees. 3) Exercises ethical oversight of the executive and board levels. 4) Strives to manage the company for the benefit of all stakeholders. 5) Initiates and engages in genuine dialogue with stakeholders. 6) Values and implements dialogue. 7) Fosters a reciprocal relationship between the corporation and community. 8) Invests in the communities in which corporation operates. 9) Respects the rights of consumers. 10) Offers quality products and services. 11) Provides information that is truthful and useful. 12) Provides a family-friendly work environment. 13) Engages in responsible human-resource management.

14) Provides an equitable reward and wage system for employees. 15) Engages in open and flexible communication with employees. 16) Invests in employee development. 17) Strives for a competitive return on investment. 18) Engages in fair trading practices with suppliers. 19) Demonstrates a commitment to the environment. 20) Demonstrates a commitment to sustainable development. Limitations of Approaches to CSR Lack of clarity of the definition of CSR Models of CSR not adopted properly by companies Lack of measures to innovate and evolve new CSR models Unidentified segment- need to identify the areas of interest & capability to take up CSR in a focused manner. Inadequately trained personnel Non availability of authentic data

Sustainability Sustainability implies that the todays needs should not compromise the ability of the future generation to meet their needs. Sustainability idea has emerged from expectations regarding the firms performance in economic, environmental and social areas. Micro Sustainability at a micro level implies sustainability for a firm i.e. long run survival of the firm. Macro level Sustainability at a macro level has global perspective. It implies that conservation of resources and environment is necessary for long run survival of all living beings and businesses. CSR Sustainability CSR is not about digging wells and setting up schools and feeding babies. In order to make CSR sustainable, it is necessary to develop an ethical perspective in corporate manner. Ex. 63% of the capital of Tata Sons Ltd., is held by trusts for philanthropic purposes, and it is common knowledge how effectively the funds of this trust are employed for a variety of purposes, from health to education to building infrastructure facilities To make CSR sustainable, it is necessary to keep the business interests of the company upper most of the mind. If this is not done, then CSR programmes will run so long as the top executive is personally involved in them, and wither away when something more gripping comes around and grabs the leaders attention. CSR is not about obeying the law. Obeying the law is necessary but not sufficient condition for practicing CSR. Jamsetji Tata made that clear decades ago when he said that if after adherence to law one does not feel quite correct, then it is necessary to raise our standards even higher CSR is an evolving concern. CSR all initiatives must be stakeholder oriented and driven by business interests if they are to be sustainable. The three models of CSR are1. Competency driven 2. Community driven 3. Consumer driven Competency driven- In this the company reaches out to the society by depending on its core competencies. In doing so, it helps create potential stakeholders, and also adds to evolving higher efficiency standards. Ex. Lipton Company in Etah decided to help set up veterinary hospitals in the region from where it got its milk supplies, it helped the dairy farmers within its area of operation as well itself. There was a great awareness of how best to increase milk supplies and of the best ways of improving the quality of milk cattle. 2. Community driven- In this the companies invest in social welfare but again with the business interest. Ex. IKEA, the Swedish home furnishing multinational, has set up schools in carpet belt areas in east UP, as it sources a lot of material from there. IKEA is committed to keeping units it has business relations with free of child labor. By establishing such schools, it tries to create incentives for parents to keep their children away from the job market. At the same time, this pressures its suppliers to raises their performance standards. 3. Consumer driven- In this the process not only is the consumer benefitted, but the company too can hike up the competition in its own market sector. Ex.- If a cloth producing company insists that it will purchase cotton only when there is no child labor expended in fertilizing cotton seeds, or when the cotton is produced in an environmentally friendly fashion with the help of what is called integrated pest management , it immediately puts other companies that are not thinking on these lines, under pressure. It has both an edge over them and the satisfaction of adding of knowledge and the general environmental well being. .

Triple Bottom Line In normal day to day business when it comes to bottom line all what we recall is the profit level that is earned by an organization. But with the changes in the business world there is a new concept introduced called triple bottom line which includes This triple bottom line is also known as TBT (Triple Bottom Line), 3BL, and 3P (for Profit, Planet and people). To achieve sustainability the organization needs to strike a good balance between TBL and failure to do so will result in failure of organization and shutting down. The term was coined by Sustainability Ltd. (1987) International Business Consultancy headquartered in London and having offices in US, Europe and emerging countries. It focuses corporations not just on the economic value they add, but also on the environmental and social value they add and destroy. It is used as a framework for measuring and reporting corporate performance against economic, social and environmental parameters. Three parameters1- Economic 2. Environmental 3. Social factors Three Ps- People, Planet and Profit Triple Bottom Line Elements of TBL can be described as follows: Profit This is the starting point of the concept of bottom line where the managers only focused on a single bottom line. Company should be economically performing well by generating adequate income to cover up expenses and generate profits for shareholders. In the past when a manager said his main concern is the bottom line of the business his concern was solely on increasing the profits of the organization. This single bottom line concept is an outdated concept in the modern world where there are additions to this concept to fit into changes in the environment. Triple Bottom Line Elements of TBL can be described as follows: People With time managers realized that the single bottom line concept is not adequate to survive in the market as all the players in the market were able break even and mark profits. Therefore they decided to differentiate themselves with the concept called double bottom line which included a people component in addition to profits of the business venture. The people includes the employees of the organization and the community in which the organization operates. The organization should be able to treat their employees well and keep their employees satisfied to retain them and make use of their skills. And also the business should satisfy its stakeholders such as general public build their goodwill and reputation which will in turn bring them sales and unique identity in the market place. The process of satisfying community can be done in ways such as engaging in charities and providing sponsorships and so on. Most companies engage in CSR activities to make sure they serve the people well. Planet This is the latest addition to the bottom line concept which says that company should be concerned not only about profits and people but also about the environment in which operates. The environment should be protected in order to achieve sustainability as without an environment to operate there will not be

businesses existing. The concept such as green production, recycling, reusing and green marketing is emerged support the component of planets in the triple bottom line concept. How is TBL reporting accomplished? Economic Customers, Suppliers, Employees Social Bribery and corruption, Political contributions, Child labor, Security practices, Indigenous rights, Training and diversity Environmental 1. Energy, 2. Water, 3. Biodiversity 4.Emissions, effluents, and waste Through the application of what is called the Global Reporting Initiative 2002 or GRI and is defined as a common framework for sustainability reporting Started in 1997 by the Coalition for Environmentally Responsible Economies and the United Nations, GRI became independent in 2002, and is an official collaborating centre of the United Nations Environment Programme (UNEP) and works in cooperation with UN Secretary-General Kofi Annans Global Compact. GLOBAL REPORTING INITIATIVE (GRI) The Global Reporting Initiative attempts to make the Triple Bottom Line operational VISION The Global Reporting Initiatives (GRI) vision is that reporting on economic, environmental, and social performance by all organizations becomes as routine and comparable as financial reporting. GRI accomplishes this vision by developing, continually improving, and building capacity around the use of its Sustainability Reporting Framework. How organizations strategically manage CSR through triple bottom line reporting TBL reporting enables organizations to: Measure and manage their financial and non-financial performance and impacts. Have their performance and impacts verified independently Communicate effectively with consumers, governments, investors, employees, other stakeholders and watchdog groups How organizations strategically manage CSR through triple bottom line reporting The implementation of a TBL reporting approach to CSR is an incremental process, dealing with the complex and contestable issues involved in attempting to effectively integrate economic, environmental and social performance measurement into a single report Triple Bottom Line Triple Green rating A new concept is slowly emerging which has three parameters Being Water- positive Being carbon positive Having zero solid waste Being carbon positive is a much complicated task and can be achieved by conserving energy and opting for massive afforestation. Today the measurement of the success of any business has moved far away from merely earning profit to its all round sustainability in terms of its environmental and social performance.