CSR ? ? ? ? ? ? ? ? ? ? ? Mohiuddin Babar

► What is CSR ? ► Why should companies adopt it ? ► How can it be assessed that CSR brings good for the society ? ► Are there any accepted global yardstick to measure CSR ? ► Is CSR a new tool of marketing or a new type of barrier ?

CSR Broadly applicable to business sector, CSR is about meeting the growing social and environmental expectations for improving business performance and sustaining it. Broadly applicable to business sector, CSR is about meeting the growing social and environmental expectations for improving business performance and sustaining it. Definition

CSR 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 WBCSD Definition

Being socially responsible means not only Fulfilling legal expectations but also going beyond compliance and investing more into human capital, the environment and relations with stakeholders The European Commission definition

The root and growth of CSR Philanthropy ---- religious practices benevolence of the wealthy Corporate Philanthropy growth of Trust/Foundations CR/CSR/SR business strategy CSR/SA/GRI… visible felt contribution 17 th -18 th century 20 th century 21 st century

The root and growth of CSR Philanthropy ---- religious practices benevolence of the wealthy Corporate Philanthropy growth of Trust/Foundations CR/CSR/SR business strategy CSR/SA/GRI… visible felt contribution 17 th -18 th century 20 th century 21 st century  Bhopal tragedy in India  Shell bribing politicians in Nigeria  Collapse of Enron, Worldtel  Nike using child labour

The root and growth of CSR Philanthropy ---- religious practices benevolence of the wealthy Corporate Philanthropy growth of Trust/Foundations CR/CSR/SR business strategy CSR/SA/GRI… visible felt contribution 17 th -18 th century 20 th century 21 st century Rise of environmentalism Human rights Consumer rights etc

Today’s scenario Resource management & pollution control prioritized Health & Safety of workers underlined Consumer interests addressed Social needs of host communities served Partnership with environmental NGOs Commitments to international laws, protocols and guidelines made Reputation Trust Profit

Guidelines OECD UN Global Compact SRI Convergence of guidelines, standards & benchmarks Surbane Oxly GRI ISO standards

The business of business is business ---- Milton Friedman Business has no responsibilities other than to maximize profits for the shareholders

The business of business is business ---- Milton Friedman Business has no responsibilities other than to maximize profits for the shareholders

Benefits of CSR  Reducing risk  Enhanced reputation  Competitive edge over business rivals  Positive impact on society and environment environment

How to adopt CSR ► Is it included in the vision of the company ► Who weaves the CSR action plan -- Board/chief executive/top management (executive committee)/employees/external stakeholders ► The best is to do it after dialogue with stakeholders and involving employees

Present status of CSR ≈ Growing incubation by business but mostly in the developed world but mostly in the developed world ≈ Developing/underdeveloped countries ≈ Developing/underdeveloped countries feel this as a new barrier feel this as a new barrier ≈ Developed/underdeveloped countries lack ≈ Developed/underdeveloped countries lack capacity to adopt CSR policies/strategies capacity to adopt CSR policies/strategies ≈ CSR activities are mainly devoted to uplift ≈ CSR activities are mainly devoted to uplift programs in education and general health programs in education and general health services (reactive). services (reactive).

CSR is broadening ► ISO is coming up as guidelines for Social Responsibility and it will encompass more areas than CSR. ► It will be broad-based ► It will give more stress on worker’s welfare

Difference with CSR

ISO  Organizational governance  Human Rights principles  Environmental care  Labour practices  Fair operating practices  Respecting consumer concerns  Contributing to social uplift

CSR vs Financial Crisis The ongoing financial crisis and its effects on the global economy have made it clear that the stability of our global market system depends on responsible behavior, sustainable business models and proactive management of business impacts on society as well as regulatory frameworks Prof Craig Smith Chair Ethics & Social Responsibility INSEAD

 68 % business leaders in USA are using CSR to create new revenue streams survey conducted by Environmental Leader (think tank) US.  69 % private and public organizations worldwide opt for increases in their CSR budget to have positive impacts ---- IBM survey 2008  Marks & Spencer to invest over US$ 300 million on green retailing

Case study -- Bangladesh Readymade garments & textile industries Readymade garments & textile industries ◘ Over industries of various sizes ◘ Over industries of various sizes ◘ Over two million workers, mostly female-illiterate ◘ Over two million workers, mostly female-illiterate ◘ Mostly situated in non-industrial areas thus not ◘ Mostly situated in non-industrial areas thus not incorporating industrial infrastructure incorporating industrial infrastructure ◘ Only 50 per cent have proper ventilation ◘ Only 50 per cent have proper ventilation ◘ Only 40 per cent have hygienic toilets ◘ Only 40 per cent have hygienic toilets ◘ Over 70 per cent do not have proper emergency ◘ Over 70 per cent do not have proper emergency exits exits

Case study -- Bangladesh Rice Mill tragedies Rice Mill tragedies ► Over 40,000 rice mills (husking) ► 5 million workers (cheap labour, illiterate-mostly women or vagrant males women or vagrant males ► Deplorable working conditions – open air- no PPE- temporary employment PPE- temporary employment ► Boiler bursting – usual incidents ► Over 1200 reported deaths due to boiler bursts injured due to sun-stroke, respitory problems and overload carrying

◘ Length and breadth of CSR can not be measured mathematically. ◘ CSR is not about doing something which you expect or desire to do : It should be as per the expectations of the society or more precisely the Stakeholders. ◘ Assessment of effectiveness of CSR actions can be gauzed on the Benefits that the beneficiaries receive ---- tangible and visible. ◘ ISO will not be any standard but a guideline. It will not eclipse CSR but more likely to strengthen CSR.

CSR Sustainable Development Human well-being Economic growth Social harmony

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