1. CSR - A WIN - WIN BUSINESS MODEL
Col. Prakash Tewari (Retd)
CSR and R & R
Tata Power Company

2. Prelude Impacts of Business Integrating Business and Society
Emergence of CSR
Mapping Social Impacts
Responsive CSR vs Strategic CSR
Moral Purpose of Business
Seeting n
Impacts of business 1

3. “Human Beings are animals, We are sometimes monsters,
sometimes magnificent,
But always animals.
We may prefer to think of ourselves as fallen angels,
But in reality, we are risen apes.”
- Desmond Morris 3

4. Business can impact society in three ways
Business and Society
Business can impact society in three ways
Economic
Environmental
Social
Business

5. Impact of Business on Society
Impact on business on society can be positive as well as negative.
Pollution
Deforestation
Climate change
Economic growth
Raising standard of living

6. Business Impact on Human Development
Business impacts poverty, literacy, education and life expectancy.
Economic growth is only a means, though an important one, for human development.
Human development is both an outcome and a process of enlarging people’s choices to lead lives they value.

7. Business and Environment
In today’s world, environment is an increasingly sensitive issue.
This means that any failure to follow environmental norms could promptly result in a public litigation being slapped on the corporate.

8. Economy Vs Ecology Economy and Ecology

9. Impact of Business on Communities
Change in livelihood patterns on account of natural resources being impacted
Change in land use / leading to socio-political-economic impact (loss of identity, culture change)
Land owners become landless, or marginalised farmers
Socio-psychological impact thru contrast in living standards
Stress on local environment quality (air emissions, effluent, etc)
Make 2 slides

10. Impact of Business on Communities
Stress on local ecology (flora and fauna)
Stress on local resources – water, land, rural energy sources
Increased dependence on the industry by the community
Influx of migrant labour
Opportunities for Business to secure goods and services
Opportunities for community to improve their quality of life

11. Scope of Collaboration
Environmental
Reducing carbon emissions and hence decreasing the chance of environmental irregularities.
Social
If people do not have the resources to deal with today’s stresses, then they are unlikely to be able to deal with the additional stresses associated with climate change
Adaptability Gap
Economic
Protect , enhance and diversify asset base through economic activities
Scope of Collaboration
Adaptibility gap
Economic stresses are problems caused by natural irregularities and disasters, which in turn occur due to climatic change. For example less rain or floods effecting crops and hence economic effect of less income in that season.
If people do not have the resources to deal with today’s stresses, then they are unlikely to be able to deal with the additional stresses associated with climate change, a condition known as the ‘adaptation deficit’. Adaptation to climate change must start with reducing this deficit. To this end, many strategies currently used for development and poverty reduction have an important role to play.
It can be reduced through two measures – using of clean energy to reduce the climatic change and hence the environmental irregularities.
Microfinance services can enhance the livelihood asset base through direct income effects, indirect income effects (from education and training), and non-pecuniary effects (i.e. stronger social networks and increased confidence). Micro Credit, insurance and savings therefore help households protect and build up enough assets so that the impact of a shock or stress is not as immediate or damaging, i.e. they are able to minimise or entirely avoid depleting their asset base, or have a larger asset base from which to draw in order to deal with variances in income and consumption.
Methods of Collaboration
Financing of clean energy choices by Microfinance clients
Many microfinance clients presently use inefficient energy sources. If we can change their energy sources to make an immediate impact on the environment and also give a positive effect to them. Also many of them do not have energy for their use, providing them with renewable energy would increase their productivity and will lead to increased income and hhence increased development.
Carbon trading aggregation
Carbon credits can be aggregated from these clean energy products and then these can be used to generate additional income. Also this would need a value chain for selling and also people on the ground to aggregate – which would lead to more jobs. This income can either subsidize equipment or be used to pay back the loan.
Earning carbon credits
Projects approved by designated CDM (Clean Development Mechanism) in the developing countries could earn carbon credits and sell them to the countries that required reducing the greenhouse gas emissions under the international agreement. Any project that was set up after January 1, 2000, was eligible for CDM recognition. Basically CDM projects are divided into three categories.
Large scale projects.
Forestation and reforestation projects.
Small scale CDM projects.
Projects with less than 15 MW Electrical output or projects with less than Tons of CO2 emission reductions belong to this category.
UNFCCC's agencies have established methodology, tools and procedures for approving, monitoring and calculating the CER's for various types of CDM projects. 3

12. Integrating Business & Society
CSR understand interrelationship between business & society
Corporate need healthy society
Society needs successful corporate
Focus on intersection than friction
Mutual dependence implying principle of shared value

13. Emergence of CSR
Issues that
shook corporate
Corporate response

14. Justification Moral Obligation Sustainability License to Operate
Reputation
Good citizens – ‘Do the right things’
‘Meeting needs of present without compromising future generation’
Permission from Govt, communities & stakeholders
Justify CSR initiatives – Brand, image, morale & values of stock

15. School of Thought Focus on tension than interdependence
Non strategically aligned
Fail to identify/prioritize/make impact
Uncoordinated & philanthropic
Not linked to internal/external activities
Lost opportunity
Social benefits dissipated

16. Identifying Points of Intersection
Interdependence takes 2 forms
Company impinges through its operations
External social conditions influence corporations

17. incoming material, storage, data collection, service
Mapping the Social Impact of Value Chain
Air pollution
Warm water discharge
Ash disposal
Impact on livelihoods
Energy & water usage
Worker safety & labour relations
Displacement
Loss of livelihoods
Loss of infrastructure
Irreversible loss to natural resources
Conservation
DSM
Efficiency
LAND ACQUISITION
technically feasible location identification, purchase of land
LOGISTICS
incoming material, storage, data collection, service
OPERATIONS
Generation (emission measurement), transmission (decentralised), distribution (smart grid)
TRADING
advocacy, open axis regulation, short term transactions, REC, website
CUSTOMER MANAGEMENT
customer support, complaint resolution, repair
Transportation Impacts (e.g., emission, congestion, logging roads, safety)
Pollution
Dust (SPM)
Health
HIV/AIDS
Pricing practices (e.g., price discrimination among customers, anticompetitive pricing practices, pricing policy to the poor)
Consumer protection
Global partnership for development

18. Support Activities Hbr study take paper Cut 2 3 points frm tech dev
Financial Reporting practices
Corporate Governance Practices
Transparency
Education & Job Training
Labour Standards
*Gender equality
CORPORATE INFRASTRUCTURE
financing, planning, investor relations
HUMAN RESOURCE MANAGEMENT
recruiting, training, supervision system
*R&D
*Relationships with Universities
*Ethical Research practices
*Product Safety
Procurement &
Supply Chain practices
PROCUREMENT
components, machinery, advertising and services
TECHNOLOGY DEVELOPMENT
product design, testing, process design, material design, market research
Hbr study take paper
Cut 2 3 points frm tech dev

19. External Social Conditions
Fair and open local competition
Intellectual property rights
Transparency
Availability of human resources
Availability of scientific and technological infrastructure
Sustainable natural resources
Context for Firm Strategy
The rules and incentives that govern competition
Input Conditions
Presence of high quality, specialized inputs available to firms
Local Demand Conditions
The nature and complexity of local customer needs
Peculiarity of local demand (e.g., cultural and society specific needs)
Demanding regulatory standards
Related and Supporting Industries
The local availability of supporting industries
Change colour
Availability of local suppliers
Access to firms in related field

20. Choosing Social Issues
Social issues that are not significantly affected by a company’s operations nor materially affect its long-term competitiveness
Social issues that are significantly affected by a company’s activities in the normal course of business
Social issues in the external environment that significantly affect the underlying drivers of a company’s competitiveness in the location where it operates
Generic Social Impacts
Value Chain Social Impacts
Social Dimensions of Competitive Context
Good Citizenship
Mitigate harm from value chain activities
STRATEGIC CSR
Hbr courtesy
Strategic philanthropy that leverages capabilities to improve salient areas of competitive context
Transform value-chain activities to benefit society while reinforcing strategy
RESPONSIVE CSR

21. The Moral Purpose of Business
Contribution to economic prosperity
Corporate social integration towards building shared value
Leading to self sustaining solutions
Deepak apte