2. Corporate Social
Responsibility
“a commitment to improve community well-being through discretionary
business practices and contribution of corporate resources”. – Philip Kotler
“CSR as a multi-layered concept that can be differentiated into four interrelated
aspects – economic, legal, ethical and philanthropic responsibilities”. – Archie
Carroll
Concept of CSR includes:
• Corporate philanthropy
• Giving back to host community
• Meeting preconditions set by society for business
• Holding business accountable
• Building essential social infrastructure
• Managing business drivers and risks
• Creating business value
Corporate
Social
Responsibility
Legal
Responsibility
Ethical
Responsibility
Discretionary
Responsibility
Economic
Responsibility
3. • Corporate sustainability
Triple Bottom Line in CSR
Drivers of CSR
1. Globalization: Due to cross border trade there is an increase awareness
on CSR concerns. Increased pace of global economy made CSR response
better.
2. International Legal Instruments and Guidelines: Certain guidelines
such as SA8000, a social performance standard based on international
labour organisation convention have been developed. UN & OECD made
many guidelines and provisions too.
3. Altering public expectations and corporate brand: The expectation
from global companies have been increased. They need to do more for
society and prepare public reports for social interest. More and more
company adopting same policy.
Use
sustainable
enivironmental
practices and
reduction of
environment
impact
Planet
Fair and
favourable
practices
toward
community
and labour
People
Economic
value
created by
company,
economic
benefit to
community
& society
Profit
4. Example of CSR by Hindustan
Unilever Limited
Hindustan Unilever have started in a
small way.
They have launched numerous
initiatives to improve hygiene and
access to sanitation across India.
Their rainwater harvesting and other water saving initiatives have helped us
save billions of litres of water. They are creating thousands of job
opportunities in remote villages, especially for women. They have also set
up a system of waste management and recycling to curb plastic waste from
polluting the oceans.
If too many of us start caring about how we affect things, we can make the
world cleaner, greener, safer and better.
HUL believe they can do so. They hope we do too.
Together, let’s START A LITTLE GOOD is their slogan.
THE ‘LITTLE GOOD’ HAVE STARTED
Start a little good with
water conservation
Start a little good with
plastic waste management
Start a little good by
empowering livelihoods
‘Start a little good by teaching
good hygiene habits’
5. Carroll’s Model of CSR
Economic Responsibility Includes:
• Using economic resources efficiently
• Sound commercial practices
• Fairly paid jobs
Legal Responsibility Includes:
• Paying tax, license fees and fines in time
• Follow economic and labour law of nation
• Provide necessary information to
government
Ethical Responsibility Includes:
• Fair trade practices
• Anti-pollution steps
• Reasonable price and good quality
product
Philanthropic Responsibility Includes:
• Contribute to welfare of society
• Contribute to healthy environment
• Help weaker section of society
This pyramid is actually a corporate social responsiveness which help in
understand that a fully responsible company should follow all these 4 aspects.
6. Environmental Aspects of Corporate
Social Responsibility
Environmental responsibility is an important aspect of social
responsibility. As with the growing industrialisation, society is facing many
environmental issues like depletion in natural resources, pollution, climate
change, loss of habitat, degradation of rural and urban human settlements.
It is expected from companies nowadays that they treat this issue seriously
and all comply with rules and regulation given by government.
energy use
water use
waste
management
recycling
emissions
eco-friendly
office & policies
7. ISO 26000
ISO 26000 is defined as the international standard developed to help
organizations effectively assess and address social responsibilities that are
relevant and significant to their mission and vision; operations and
processes; customers, employees, communities, and other stakeholders;
and environmental impact.
The seven key underlying principles of social responsibility:
• Accountability
• Transparency
• Ethical behaviour
• Respect for stakeholder interests
• Respect for the rule of law
• Respect for international norms of behaviour
• Respect for human rights
ISO 26000's aims are to:
• Assist organizations in addressing their social responsibilities while
respecting cultural, societal, environmental, and legal differences and
economic development conditions.
• Provide practical guidance related to making social responsibility
operational.
• Organisational Governance
• Human Rights
• Labour Practices
• The Environment
• Fair Operating Practices
• Consumer Issues
• Community Involvement
and Development
Core Subjects
of ISO 26000
8. • Assist with identifying and engaging with stakeholders and
enhancing credibility of reports and claims made about social
responsibility.
• Emphasize performance results and improvement.
• Increase confidence and satisfaction in organizations among their
customers and other stakeholders.
• Achieve consistency with existing documents, international treaties
and conventions, and existing ISO standards.
• Promote common terminology in the social responsibility field.
• Broaden awareness of social responsibility.
Provisions of the Indian Companies
Act, 2013 on Corporate Social
Responsibility
CSR India is the first country to legislate it.
1. Corporate Social Responsibility Committee: Every company
with net worth of Rs 500 crore or more; turnover of Rs 1000 crore
or more; a net profit of Rs 5 crore or more during any financial
year need to constitute a board with at least one independent
director.
Human rights: everyone treated
equally and with same rights.
Fair Labour practices: ILO rules
of work need to be followed
like safety at work.
Consumer issues: comapnies
need to br transparent and
accurate about the product
with customers.
9. 2. CSR Spending: Committee will ensure that 2% of net profits will
be utilize by company towards CSR activities.
3. Specific Activities regarded as CSR in schedule VII of the
companies act 2013 are below
✓ Eradicating extreme hunger and poverty
✓ Promotion of education
✓ Gender equality and empowering women
✓ Combating human immunodeficiency virus, malaria and other
diseases
✓ Environmental sustainability
✓ Social business project
✓ Contribution to Prime Minister’s Relief Fund or any such fund
set up by government for welfare of society
The CSR projects should focus on local area for social and environmental
priorities and process in order to create shared value. It shall not include
activities for benefit of employees and their family members.