Module 01

MODULE 01
Framework of Social Orientation

PROGRAM: MBA SEMESTER: II
COURSE CODE: 2T6 COURSE TYPE: CORE
COURSE: ORGANISATION NAME OF THE FACULTY: PROF. DEEPIKA SONI
CO1 Given the concept of CSR, the future manager will be able
to identify the various activities which can benefit the
organization under the banner of CSR.
A. Introduction to CSR
1. The Relationship Between Management and Corporate Social Responsibility
Components of Corporate behaviour:
i. Obligations to follow law of the land and world: The expectations of “corporate behavior” are
usually overseen by governmental agencies in the form of regulations, legislation, and other
public policy initiatives. For example, automobile designs, fuel efficiency, and safety features
have become the joint responsibility of the firms in the industry and government agencies. So one
aspect of management is the ability to deal successfully with government agencies and regulatory
bodies worldwide.
ii. Responsibility to conform to societal standards of goodness: Strategic Management involves
the relationship of the organization to the larger environment in which it is embedded. As
organizations grow in size, cross national borders, and impact more and more of society, the
public feels and demands that managers, management, and organizations should act in ethical and
socially responsible ways. This goes beyond the mere production of goods and services. Society
demands the protection of the environment, equal employment opportunities for women and
minorities, and the protection of consumers against the risks of unsafe products.
Organizations operate with a formal license from government and an informal acceptance by
society. The informal acceptance by society cannot be ignored and holds organizations
accountable. Organizations that ignore this social contract may find their operations restricted or
eliminated.
iii. Contribution towards society: Contrast to the traditional belief that the only obligation firms
have to society, is to create jobs, the situation has changed now. The ethics and core values
become the main component of purchasing decision of the consumer and investment decision of
clients. In this regards, the performance of the organizations (both public and private) and their
employees will continue to be closely monitored and scrutinized by government, by society at
large, by the media and by public interest groups.
The repute of organizations nowadays plays a very important role in attracting, maintaining and
creating jobs.For the general public and stakeholders, the repute of an organization is about its
broader role and impact on society at large, beyond job creation and return to shareholders.
They have an obligation to maintain and enhance society, to be part of solving social problems,
and not just deal in the economic sphere. This meant, for example, that an organization was
responsible for cleaning up the environment (water, air, land) and taking an active role in
addressing other social problems (education, employment, health, safety).
Dr. Ambedkar Institute of Management Studies and Research, Deekshabhoomi, Nagpur (For internal circulation only)
RTM Nagpur University MBA - 2022-23 / Semester – II /prof. Deepika Soni/ Dr. Dhanashree Katekhaye
iv. Workplace diversity: The issue of diversity (gender, race, and education) in management is also
of importance. Much of the management of large organizations worldwide can be generally
characterized as white male individuals. Women and minorities need to break through the gender
and race ceiling and become visible leaders of organizations worldwide. There are clearly notable
exceptions where such managers are currently leading organizations, but their numbers are far too
few.
v. Education: Education is becoming an increasingly important issue for organizations and society.
As we move more deeply into a knowledge-based society, the skills and education of workers
assumes new importance. The numbers of low-paid, low skills jobs are declining – as a result,
those individuals without access to affordable education (either college or trade based) will find
themselves facing decreasing employment opportunities. The unfolding challenge facing
management is the proper role of the organization in furthering general education for society as a
whole and how they might partner with governments and other entities.
vi. Ethical component: The ethics of both individual managers and organizations has come into
question, and the standards for successful management and performance now must include an
ethical component. There are numerous examples of organizations who have behaved in a manner
not consistent with the public trust placed in organizations (British Petroleum, Chernobyl, Enron,
Bhopal, Exxon Vadez, the ongoing crisis at the Fukushima Nuclear Power Plant in Japan).
2. Introduction to CSR
Globalisation is the process that has come to dominate the world since nineties of the last century.
It opened up the economies of the world and also opened up the opportunities for the developing
nations for to participate globally in socio-economic and cultural affairs. Greater access to
markets of developed countries and technology transfer hold out the promise of improved
productivity and higher standard of living. The cons of such growth has been that it has thrown up
new challenges like growing inequality across and within nations, volatility in financial markets,
environmental degradation and competition amongst corporations. To overcome these challenges,
the practice and concept of Corporate social responsibility has been conceptualized.
CSR is commitment by the organization to balance financial performances with contributions to
the quality of life of their stakeholders, employees, local community and society at large gaining
worldwide value as a business branding tool. Organizations are increasingly called upon to evolve
beyond focusing on the financial bottom line and consider the social and environmental impact of
their business decisions. CSR include a broad range of practices and activities to cause branding
to business strategies addressing human rights and labor issues.
Corporate Social Responsibility (CSR) has been described as ‘an oxymoron’ by all too many
dinner party pundits who are suspicious of business claims about its sociability. They point to a
compendium of cases of corporate irresponsibility, from Union Carbide’s Bhopal explosion to the
Enron fraud; from Siemens’ corruption to BP’s Deepwater Horizon disaster; from adverse
business impacts upon climate change to financial sector irresponsibility; and all too many more.
CSR has also been described as ‘a fundamentally subversive doctrine’ by Nobel Prize-winning
economist, Milton Friedman, the most prominent modern standard-bearer for Adam Smith.
Friedman and his acolytes worry about CSR distracting from the prime social purpose of business
as they see it: maximizing profits for the company shareholders. It is through profitmaking, they
argue, that business provides core social contributions of employment and taxation, and
expeditiously meets customer demands for goods and services.
Friedman, like former US Secretary of Labor, Robert Reich, and countless others on the left of
politics, also sees CSR as intruding upon, or occluding, the proper responsibility of government.
B. What is CSR?
Pioneering CSR scholar, Howard Bowen, defined it as ‘obligations … to pursue those policies, to
make those decisions, or follow those actions which are desirable in terms of the objectives and values
of our society’. At its core, CSR concerns the ways in which companies manage their relations with
society.
The C in CSR refers to policies, practices, and impacts of corporations. There are special reasons for
expecting corporations, as opposed to other businesses, to be socially responsible. Historically this
was by virtue of the special licences that corporations were granted by governments to pursue large
public projects like canal or road building. Subsequently, this was because of the limited liability
status granted to corporations which meant that society needed additional assurance about their
sociability. More recently, the sheer size of corporate social impacts (e.g. through employment,
provision of public utilities and critical infrastructure, global supply chains, the consequences of the
financial crisis) has justified special attention to CSR.
The S in CSR captures the location, dependence upon, and responsibility of business to society.
Businesses employ, sell to, and are owned by members of society. This suggests that socially
egregious behaviour risks social punishment through, for example, boycotts or targeted action or
social media critique. It also suggests that there may be rewards for companies that meet and even
exceed broad societal expectations. The S is usually taken to include environmental responsibility,
reflecting CSR’s broadly anthropomorphic assumptions about the environment.
The R in CSR signals the assumption of an obligation to be accountable or liable for something. In
other words, CSR signals that companies take responsibility for, and are answerable for, their actions
and impacts. Systems of accountability usually rest on such ethical concepts as stewardship and trust,
or more sociological and political concepts such as reciprocity, social contracts, and citizenship.
Accountability in CSR is now associated with formal reporting of social and environmental actions
and impacts, either within general company reports or through dedicated CSR reports.
i. Definitions of CSR
Although it is not easy to give a satisfying definition of CSR, the common idea put forward in various
definitions of CSR is that companies should conduct their business in a manner which demonstrates
consideration for the broader social environment in order to serve constructively the needs of society.
This is, for example, articulated by the definition of CSR as given by the Dutch Social Economic
Council: “CSR is the conscious direction of business activities towards creating value in three
dimensions in the longer term: not only in terms of financial-economic variables, such as profitability
and share value, but also in ecological and social sense”.
‘the firm’s consideration of, and response to, issues beyond the narrow economic, technical, and
legal requirements of the firm’ (Keith Davis, 1973).
CSR is defined as a strategy in which operating a business in a manner that meets or exceeds the
ethical, legal, commercial and public expectations that society has of business.
‘the economic, legal, ethical and discretionary expectations that society has of organizations’ (Archie
Carroll, 1979).
‘policies and practices of corporations that reflect business responsibility for some of the wider
societal good. Yet the precise manifestation and direction of the responsibility lie at the discretion of
the corporation’ (Dirk Matten and Jeremy Moon, 2008).
The definitions capture the following key features:
1. business responsibility to society (i.e. being accountable)

2. business responsibility for society (i.e. in compensating for negative impacts and contributing to
societal welfare);
3. business responsible conduct (i.e. the business needs to be operated ethically, responsibly, and
sustainably);
4. business responsibility to and for society in broad terms (i.e. including environmental issues); and
5. the management by business of its relationships with society.
ii. Who is involved in CSR?

The CSR ethos and its practices have been embraced by all sorts of businesses. Thus, not only
national corporations and multinational corporations (MNCs), but also a wider range of businesses
(e.g. small and medium-sized enterprises (SMEs), state-owned enterprises (SOEs)) also claim to
practice CSR. Contemporary CSR is taken seriously, engaged in, and promoted by a much wider set
of organizations including labour, finance, governmental, civil society, and professional
organizations. The involvement of the wider range of organizations in CSR reflects both their interest
in the social impacts of business and their view that CSR is a means of addressing a wider set of
societal concerns, such as labour standards, human rights, and climate change. These non-business
organizations have become involved in CSR through a variety of roles, such as being involved in CSR
standard setting, collaborating with companies’ CSR policies, and auditing and evaluating company
CSR performance. As a result, CSR now features in a growing set of networks and organizations
which institutionalize business behaviours and relate these to societal challenges.
Organizations adopting/engaging with CSR.
Sr. No. Category of Organisation Description

national corporations; MNCs; SMEs; SOEs; family-
1 Business owned
businesses; business associations (e.g. Institute of
Directors, Chambers of
Commerce)
national trade unions; international trade union
2 Labour organizations (e.g.
ILO; International Trade Union Confederation,
IndustriaALL Global Union,
the International Union of Food Workers)
3 Finance national stock exchanges; Dow Jones Index, FTSE
Index
local, provincial, national governments; international
4 Government governmental organizations (e.g. the UN, the OECD,
the World Bank)
law firms; accounting, human resources, purchase &
5 Professional supply
associations
C. History and evolution of CSR?
i. Origin and evolution of the concept of CSR
Universal history of CSR relates with social and environmental concern about business which is as
old as trade and business itself. The laws to protect forests can be traced as back almost 5000 years.
In Ancient Mesopotamia around 1700 BC, the King Hammurabi introduced a code in which builders,
innkeepers or farmers were put to death if their negligence caused the deaths or major inconvenience
to local citizens.
With industrialisation, the impact of business had evolved into what we can call as ‘beginning of
modern CSR’. Growing criticisms of the emerging factory system, working conditions, and the
employment of women and children were being brought to light, especially in the United States. The
consensus among reformers was that current employment practices were contributing to social
problems, including poverty and labor unrest.
In the late 1800s, the rise of philanthropy combined with deteriorating working conditions made some
businesses reconsider their current production models. Business tycoons began donating to
community causes, and some business owners (although somewhat reluctantly) reduced working
hours and improved factory conditions, laying the foundation of responsible corporations. Industrialist
Andrew Carnegie, who made most of his fortune in the steel industry, was known for donating large
portions of his wealth to causes related to education and scientific research. In 18th century,
employers had begun to realize the value of having an efficient workforce and that a lack of food,
housing and healthcare had a negative impact on the workforce. Medical facilities, subsidized food,
and housing facilities were created more out of necessity than philanthropic improvements. In 18 th
century, people started witnessing positive economic results of CSR activities. As America and
Europe emerged from World War II and confronted the emerging Cold War tensions, thinking about
business strategies, actions, their effects and future course of actions intensified.
ii. The Catalyst for Modern Corporate Social Responsibility

Although responsible companies had already existed for more than a century before, the term
Corporate Social Responsibility was officially coined in 1953 by American economist Howard
Bowen in his publication Social Responsibilities of the Businessman. As such, Bowen is often referred
to as the father of CSR.
However, it wasn’t until the 1970s that CSR truly began to take flight in the United States. In 1971,
the concept of the ‘social contract’ between businesses and society was introduced by the Committee
for Economic Development. This contract brought forward the idea that companies function and exist
because of public consent and, therefore, there is an obligation to contribute to the needs of society.
In the 1960s, concerns over environmental degradation and social issues, such as civil rights and
poverty, began to grow. This led to increased pressure on companies to take responsibility for their
impact on society and the environment.
During the 1970s, companies began to respond to this pressure by developing CSR policies and
initiatives. This was also a time when some companies faced public backlash over their environmental
and social practices, which further fuelled the push for CSR.
iii. Universal Acceptance of Corporate Social Responsibility

In the 1980s and 1990s, CSR continued to evolve as a concept. Many companies began to view CSR
not just as a social obligation but as a way to create value for their business. This led to a shift towards
more strategic and integrated CSR initiatives, such as sustainability reporting and stakeholder
engagement.
The 1990s marked the beginning of widespread approval of CSR. In 1991, University of Pittsburgh
professor Donna J. Wood published Corporate Social Performance Revisited, which expanded and
improved on early CSR models by providing a framework for assessing the impacts and outcomes of
CSR programs.
In the same year, business management author and professor at the University of Georgia Archie B.
Carroll published his article The Pyramid of Corporate Social Responsibility. In his paper, Carroll
expanded on areas he believed were crucial when implementing CSR in an organization.
By the early 2000s, CSR had become an essential strategy for many organizations, with multi-million
dollar companies, such as Wells Fargo, Coca-Cola, Walt Disney, and Pfizer incorporating this concept
into their businesses processes.
In the 2000s, CSR became more mainstream, with many companies incorporating CSR into their core
business strategy. This was driven in part by increasing pressure from stakeholders, such as investors,
customers, and employees, who were increasingly interested in companies' social and environmental
impact.
Today, CSR has become a key aspect of business strategy for many companies, with a focus on
sustainability, social responsibility, and stakeholder engagement. Companies are expected to take
responsibility for their impact on society and the environment and to contribute to the development of
a sustainable future.
iv. Evolution of Corporate Social Responsibility in India
Evolution of corporate social responsibility in India refers to changes over time in India of the cultural
norms of corporations' engagement of corporate social responsibility (CSR), with CSR referring to
way that businesses are managed to bring about an overall positive impact on the communities,
cultures, societies and environments in which they operate. The fundamentals of CSR rest on the fact
that not only public policy but even corporate should be responsible enough to address social issues.
Thus companies should deal with the challenges and issues looked after to a certain extent by the
states.
Among other countries India has one of the most richest traditions of CSR. Much has been done in
recent years to make Indian Entrepreneurs aware of social responsibility as an important segment of
their business activity but CSR in India has yet to receive widespread recognition. If this goal has to
be realised then the CSR approach of corporates has to be in line with their attitudes towards
mainstream business- companies setting clear objectives, undertaking potential investments,
measuring and reporting performance publicly.
v. The four phases of CSR development in India
India had a very well-developed commercial and industrial sector since ancient times. The concept of
helping the poor and disadvantaged was cited in much of the ancient literature. The idea was also
supported by several religions where it has been intertwined with the religious laws. Zakaat followed
by Islam, is two percent donations from one’s earnings specifically given to poor and disadvantaged.
Similarly, Hinduism follows the principle of Dhramada and Sikhs Daashaant. The great Indian
philosopher Kautilya (in 4th century BC), in his book Arthshastra has described in detail the trade and
crafts, manufacturing, agricultural, mining and forestry sector present during the times of Maurya
Empire. Reference to presence of trade and craft is also found in Vedic Literature, the Jataka tales
and in Mahabharata. The history of CSR in India has its four phases which run parallel to India's
historical development and has resulted in different approaches towards CSR. However, the phases
are not static and the features of each phase may overlap other phases.
A. The First Phase: In the first phase charity and philanthropy were the main drivers of CSR.
Culture, religion, family values and tradition and industrialization had an influential effect on
CSR. In the pre-industrialization period, which lasted till 1850, wealthy merchants shared a part
of their wealth with the wider society by way of setting up temples for a religious cause.
Moreover, these merchants helped the society in getting over phases of famine and epidemics by
providing food from their godowns and money and thus securing an integral position in the
society. With the arrival of colonial rule in India from the 1850s onwards, the approach towards
CSR changed. The industrial families of the 19th century such as Tata, Godrej, Bajaj, Modi,
Birla, Singhania were strongly inclined towards economic as well as social considerations.
However it has been observed that their efforts towards social as well as industrial development
were not only driven by selfless and religious motives but also influenced by caste groups and
political objectives.
B. The Second Phase: In the second phase, during the independence movement, there was
increased stress on Indian Industrialists to demonstrate their dedication towards the progress of
the society. This was when Mahatma Gandhi introduced the notion of "trusteeship", according to
which the industry leaders had to manage their wealth so as to benefit the common man. "I desire
to end capitalism almost, if not quite, as much as the most advanced socialist. But our methods
differ. My theory of trusteeship is no make-shift, certainly no camouflage. I am confident that it
will survive all other theories." This was Gandhi's words which highlights his argument towards
his concept of "trusteeship". Gandhi's influence put pressure on various Industrialists to act
towards building the nation and its socio-economic development. According to Gandhi, Indian
companies were supposed to be the "temples of modern India". Under his influence businesses
established trusts for schools and colleges and also helped in setting up training and scientific
institutions. The operations of the trusts were largely in line with Gandhi's reforms which sought
to abolish untouchability, encourage empowerment of women and rural development.
C. The Third Phase The third phase of CSR (1960–80) had its relation to the element of "mixed
economy", the emergence of Public Sector Undertakings (PSUs) and laws relating labour and
environmental standards. During this period the private sector was forced to take a backseat. The
public sector was seen as the prime mover of development. Because of the stringent legal rules
and regulations surrounding the activities of the private sector, the period was described as an
"era of command and control". The policy of industrial licensing, high taxes and restrictions on
the private sector led to corporate malpractices. This led to enactment of legislation regarding
corporate governance, labour and environmental issues. PSUs were set up by the state to ensure
suitable distribution of resources (wealth, food etc.) to the needy. However the public sector was
effective only to a certain limited extent. This led to shift of expectation from the public to the
private sector and their active involvement in the socio-economic development of the country
became absolutely necessary. In 1965 Indian academicians, politicians and businessmen set up a
national workshop on CSR aimed at reconciliation. They emphasized upon transparency, social
accountability and regular stakeholder dialogues. In spite of such attempt, its the CSR failed to
catch steam.
D. The Fourth Phase In the fourth phase (1980 until the present) Indian companies started
abandoning their traditional engagement with CSR and integrated it into a sustainable business
strategy. In the 1990s the first initiation towards globalization and economic liberalization were
undertaken. Controls and licensing system were partly done away with which gave a boost to the
economy the signs of which are very evident today. Increased growth momentum of the economy
helped Indian companies grow rapidly and this made them more willing {Gajare, R.S. (2014). A
conceptual study of CSR development in India. In D.B. Patil & D.D. Bhakkad, Redefining
Management Practices and Marketing in Modern Age Dhule, India: Atharva Publications (p.
152-154).} and able to contribute towards social cause. Globalization has transformed India into
an important destination in terms of production and manufacturing bases of TNCs are concerned.
As Western markets are becoming more and more concerned about and labour and
environmental standards in the developing countries, Indian companies who export and produce
goods for the developed world need to pay a close attention to compliance with the international
standards.
vi. Approaches to CSR evolution

(a) The first approach originates in classical economic theory as expressed in the hypothesis that
the firm has one and only one objective, which is to maximize profit. By extension, the objective
of a corporation should be to maximize shareholders’ wealth. It is asserted that in striving to attain
this objective, within the constraint of the existing legal and ethical framework, business
corporations are acting in the best interests of the society at large.
(b) The second approach developed in the 1970s, and recognizes the significance of social
objectives in relation to the maximization of profit. In this view, corporate managers should make
decisions which maintain an equitable balance between the claims of shareholders, employees,
customers, suppliers and the general public. The corporation represents, a coalition of interests,
and the proper consideration of the various interests of this coalition is the only way to ensure that
the corporation will attain its long-term profit maximization objective.
(c) The third view regards profit as a means to an end and not as an end in itself. In this view, ‘the
chief executive of a large corporation has the problem of reconciling the demands of employees
for more wages and improved benefit plans, customers for lower prices and greater values,
shareholders for higher dividends and greater capital appreciation; all within a frame work that
will be constructive and acceptable to society’.
Accordingly, organizational decisions should be concerned with the selection of socially

responsible alternatives. Instead of seeking to maximize profit generally, the end result should be
satisfactory level of profit which is compatible with the attainment of a range of social goals. The
change from the second to the third approach to social responsibility is characterized as a move
from a concept of the business corporation based on shareholders’ interest to one which extends
the definition of ‘stakeholder’.
The former concept views the business enterprise as being concerned with making profits for
its shareholders and treats the claims of other interested groups, such as customers,
employees and community, as constraints on this objective. The latter concept acknowledges
that the business enterprise has responsibility to all stakeholders, that is, those who stand to
gain or lose as a result of the firm’s activities.
There are a number of common objectives which express the expectations of a large
company.
Some of these can be stated as follows:
(a) Rebuilding of public trust and confidence by increased transparency in its financial as
well as non- financial reporting and thereby increasing the shareholder value.
(b) Establishing strong corporate governance practices to enhance the brand reputation of the
company.
(c) Giving adequate support to the health, safety and environment protection policies of the
company both within the manufacturing operations as well as while dealing with outsiders.
(d) Making substantial improvement in its relationship with the labour force thereby
showing its concern for human rights and making it known as an ideal employer.
(e) Contributing to the development of the region and the society around its area of
operation.
(f) Addressing the concerns of its various stakeholders in a balanced way so as to

maintaining a strong market position.
The corporate sector will have to integrate the concepts of CSR and sustainability with their
business strategy.
This can be achieved by making certain commitments such as:
(a) By making a quantum shift in their vision statement from profit maximization to social,
environmental and economic sustainability.
(b) By adopting sound corporate governance practices both in letter as well as in spirit.
(c) By minimizing the socially and environmentally detrimental impact of their operations.
(d) By creating a conducive atmosphere for the working class and accepting the human
rights of the labour force.
(e) By showing a greater degree of transparency in it’s reporting of both financial as well as
non-financial matters.
(f) By establishing a chain of suppliers having similar CSR values.
D. Benefits, motives and Internal scope of CSR
i. Motives of CSR
The practice of CSR is most often explained in terms of the “business case.” The argument is that
CSR contributes to the financial performance of the company. Research has indeed shown that there
is much evidence that the financial performance of companies is positively related to CSR. But, if
CSR is basically a matter of a “business case,” why do governments put so much stress on stimulating
CSR? Because if CSR is always in a company’s own interest, we would expect that companies take
sufficient responsibility for the society’s welfare by developing CSR initiatives. We would moreover
expect that social and environment challenges that the world faces would be solved in a natural way
by the market, provided that the reputation mechanism is working well and companies devise rational
strategies that guarantee their economic success.
A company’s contribution to the welfare of society does not only consist of economic value creation,
but concerns value creation in three spheres which is referred to as the Triple-P bottom line: profit
(the economic dimension), people (the social dimension), and planet (the ecological dimension).
Whereas managers traditionally focused on the profit dimension, the new challenge is to integrate the
social and ecological dimension in the strategy of the company. The social dimension includes a
variety of aspects concerning the impact of company operations on human beings inside and outside
the organisation, such as good labor relations, health and safety, etc. The ecological dimension relates
to the effects of company operations on the natural environment. The company can take several
actions that may protect the natural environment such as minimizing contamination, recycling solid
residuals, efficiently managing energy resources, etc.
In 1994, John Elkington (who founded a British consulting firm called Sustainability) was the first to
argue for what he termed “the triple bottom line” which includes measurement of the impact of the
organization in terms of profits, on people, and on the planet as discussed below.
1. “the first bottom line” reflected the profitability of enterprise. Profitability (or a positive bottom
line) was a standard measure of success. He argued that this was simply not enough and did not
reflect the proper role and expectations for organizations in our society.
2. “the second bottom line” is the people, meant to measure the social responsibility of the firm and
how it treats people both internally and externally.
3. “the planet bottom line” was meant to measure the firm’s environmental responsibility. The
argument was (and is) that the focus on profits is too narrow, that we should hold our
organizations accountable for how they treat people and how they treat the environment.
Accounting for profits, people, and planets is the full measure of the costs of operations of an
organization and their full impact on society as a whole. This view has evolved into what is now
called the Balanced Scorecard.
a) Extrinsic/Economic Motive
The organisations contribute to CSR for various reasons, but the most basic and primary reason is the
financial motive. Many empirical studies find a positive relationship between CSR and profitability
(shareholder value). The financial motive is an extrinsic motive of CSR. It encourages CSR because it
has instrumental value for profit or income.
There are several ways in which CSR can affect profitability. For example, CSR can improve the
company’s reputation in the consumer market and help companies to differentiate themselves from
their competitors with the aim of increasing sales and market share. Investment in social initiatives
can be as important as investment in advertising or R&D. Furthermore, a good reputation may also be
rewarded by potential employees and the current workforce. A sound work climate may lead to more
trust in the company, stronger commitment from employees, lower absenteeism and turnover rates,
higher profitability and productivity, and a more positive attitude to work and good conduct Firms
investing in pollution prevention may reduce the costs for energy, waste, packaging and
transportation, and the risks for accidents. Furthermore, voluntary engagement in CSR can potentially
help business to avoid regulation. For example, when attempting to enter new markets, companies
with a good CSR reputation rarely face the same level of resistance as companies with poor CSR
reputations.
b) Intrinsic Motives
Besides financial-strategic reasons, organizations may also contribute to CSR for non-financial
reasons. Management’s personal values and beliefs can be an important motivating factor for CSR,
particularly in SMEs, but also for larger companies. While empirical evidence supports the view that
CEOs tend to establish the ethical norms for corporations, middle managers can also play an
important role in acting as socially responsible change agents and are able to exhibit their personal
values through the exercise of managerial discretion.
ii. Benefits of CSR
1. Increased Brand Recognition

Tapping into the zeitgeist with a socially-conscious CSR effort can bring your brand to the attention
of people who may have otherwise never heard of it.
People are hungry for positive stories. If you associate your brand with positive social and political
change, you can earn the type of media coverage you can’t buy from advertisers.
2. Boosted Company Reputation

Recognition isn’t worth much if your reputation is tarnished. Lending a helping hand, making
sacrifices in the name of fairness, and engaging in sustainable business practices paint your
organization as worthy of its growing recognition among consumers.
3. Bolstered Public Trust

Once your reputation for CSR work is established, you can’t rest on your laurels. Many people
intrinsically don’t trust corporations and think they’re “just in it for the money.”
By supporting community initiatives with ongoing funding and producing public proof of your
egalitarian organizational principles, you can keep the trust you earned by building yourself as a
socially responsible brand.
4. Improved Customer Loyalty

If you can show that you give back, customers are willing to come back repeatedly. A study by
Statista found that 70% of customers are more loyal to companies that showcase CSR efforts.
Something as simple as hosting a fundraising event for a local food bank can reinforce the public
perception that you have the community’s back and encourage the community to have yours.
5. Accelerated Capital Growth

If you’re boosting your brand, enhancing your reputation, gaining public trust, and inspiring customer
loyalty, this may positively impact your bottom line.
Positioning yourself as “part of the team” gives you a chance to reach a wider customer base and price
your products and services with a social consciousness premium.
6. Deepened Competitive Advantage

Maintaining a reputation as a giving, grateful, and socially conscious organization is not an approach
every business takes.
When you adopt a CSR strategy, you set your business apart from more seemingly traditional
concerns that are “all about the money.” By earning more community trust, you can position yourself
as the preferred option in any saturated market.
7. Higher Employee Retention Rates
Today’s employees find fulfillment in working for a socially responsible company, which means your
CSR efforts will make them less likely to quit. According to a recent study, 95% of employees who
work for purpose-driven companies report that they are more loyal to their employer.
With employee retention being more difficult to achieve than it’s been in a generation, refusing to
address CSR concerns can have a caustic effect on your company’s ability to attract and keep top
talent.
8. Invigorated Employee Engagement

Your motivation to make a difference in society motivates your employees to engage more in their
work. In a whitepaper published by America’s Charities, CSR practices are directly linked to
improved job performance and productivity among employees. Due to this increase in employee
retention rates and engagement, companies also stand to benefit from reduced costs.
9. Revitalized Relationship Building

Whether it’s with your customer base, workforce, business associates, or the world at large, strong
CSR efforts will help you forge relationships that can be beneficial to everyone involved.
The benefits of CSR to companies may be larger than you’d expect. Stuart Goldstein described this
on the same Team Building Saves the World podcast when he pointed out that “it’s actually
something that consumers are looking for.”
“There was a Nielson study in 2015 saying that more than 50% of consumers are willing to pay more
for a product or service if the business prioritizes sustainability. These are all things that companies
need to think about if they want to be successful in the future.”
10. Greater Sustainability

Destroying the environment will ultimately negatively impact your business, so environmental CSR
makes sense in a real way. However, it also makes economic sense.
Transitioning to sustainable options can require some large upfront costs, but sustainable systems tend
to be cheaper to operate over the long run. As fuel and other inputs inevitably get more expensive,
companies that transition away from costly technologies first will see the greatest financial advantage.
Case study:
On April 20, 2010, the British Petroleum (BP) rig, the Deepwater Horizon in the Gulf of Mexico,
exploded killing 11 workers. BP took weeks to ascertain the exact amount of oil spilling into the Gulf
and as such lost credibility with the government, media, and society as a whole. The New York Times
reports that: “a half-dozen current and former agency scientists” for the Minerals Management
Service (MMS) claim they were “regularly pressured by agency officials to change the findings of
their internal studies if they predicted that an accident was likely to occur or if wildlife might be
harmed.” The article states that the MMS has allowed hundreds of drilling projects without obtaining
legally required permits. At one time the CEO of BP complained that “he wanted his life back” and
that BP’s response was seen as “fumbling and incompetent.” It also came to light later that BP had a
similar blowout in Azerbaijan Gas 18 months prior to Gulf explosion but never apparently learned
from that event or communicated those problems to other well sites around the world.
This failure of management to assess the problem and fully comprehend the seriousness of the
situation caused billions of dollars of damage to BP, its business partners, various governmental
entities along the Gulf Coast, millions of citizens and small businesses, the natural environment, and
its own stakeholders. It is not clear that BP management fully realized that the overall context of the
spill changed dramatically and was not just a technological or process crisis, but also a crisis with the
media, with society, with government and its regulators, and with its other stakeholders. The CEO
underestimated the inflammatory impacts of his statements and actions and the need for rapid,
decisive management action and leadership. There were enormous spillover effects on BP’s
credibility, corporate philanthropic activities (protestors wanted the “Tate” art gallery in London to
repudiate any links with BP), reputation, and business acumen. BP lost business opportunities;
angered partners and other industry competitors were threatening lawsuits as a consequence of the
temporary ban on Gulf drilling. BP’s brand was damaged, its financial position eroded, and its own
pensioners were damaged.
iii. Scope of Corporate Social Responsibility
1. Environmental conservation and protection: This area involves the environmental aspects of
production, covering pollution control in the conduct of business operations, prevention or repair
of damage to the environment resulting from processing of natural resources and the conservation
of natural resources. Corporate social objectives are to be found in the abatement of the negative
external social effects of industrial production, and adopting more efficient technologies to
minimize the use of irreplaceable resources and the production of waste.
2. Energy: This area covers conservation of energy in the conduct of business operations and
increasing the energy efficiency of the company’s products.
3. Fair Business Practices: This area concerns the relationship of the company to special interest
groups: employment, support & upliftment of minorities, and socially responsible practices.
4. Community development
5. Human rights in relation to labour
6. Customer satisfaction and fair competition
7. Health and safety: This includes workplace injury, customer and supplier injury and harm to
third parties.
8. Staff welfare: Issues such as stress at work, personal development, achieving work/life balances
through flexibility, equal opportunities for disadvantaged or minority groups. Medical assistance
may fall also under the scheme of staff welfare.
9. Customer welfare: Through content and description of products, non-exclusion of customer
groups, fair dealing and treatment.
10. Supply-chain management: Insisting that providers of bought-in supplies also have appropriate
CSR policies, ethical trading, elimination of pollution and un-recycled packaging, eliminating
exploitative labor practices amongst contractors.
11. Ethical conduct: Staff codes for interpersonal behavior, prohibitions on uses of data and IT,
management forbidden from offering bribes to win contracts, ensuring non-exploitation of staff
12. Engagement with social causes: This includes secondment of management and staff, charitable
donations, provision of free products to the needy, involvement in the local community, support
for outreach projects such as cultural improvement or education.
13. Products: This area concerns the qualitative aspects of the products, for example their utility,
life- durability, safety and serviceability, as well as their effect on pollution. Moreover, it includes
customer satisfaction, truthfulness in advertising, completeness and clarity of labelling and
packaging. Many of these considerations are important already from a marketing point of view. It
is clear, however, that the social responsibility aspect of the product contribution extends beyond
what is advantageous from a marketing angle.
14. Accountability and transparency in financial reporting
E. Concept of sustainability & Stakeholder Management
A new era of business competitiveness is emerging. Success will be determined by the ability
of leadership teams to transform their organizations via the twin engines of technology and
sustainability. This change demands a new set of individual and organizational capabilities that fuse
environmental and social impact with shareholder value. A critical element of the equation –
cultivating closer stakeholder relationships – still remains largely untapped.
Sustainable organizations are those that positively impact all stakeholder groups. Stakeholders can be
defined as “any group or individual who can affect or is affected by the achievement of the firm’s
objectives”.
However, it is not always obvious how organizations can impact all stakeholders positively or how
they can maximize this impact. In fact, it is not uncommon for organizations to antagonize certain
stakeholder groups while completely ignoring others. Organizations can become sustainable only by
engaging with their stakeholders to understand and respond to their needs.
The bonds between sustainability and financial performance are strengthening. Leadership teams see
revenues growing where they build products and services to address social challenges. They see costs
falling when they increase employee engagement and use resources more efficiently. Their
organizations thrive in environments which foster compassion, loyalty and trust.
But for the relationship to become symbiotic, organizations need to become truly stakeholder-centric.
However, our research confirms that many leadership teams have yet to fully commit to engaging
with and learning from the people they are trying to help and influence. This exacerbates the current
lack of good sustainability data, leading to “consensus gaps” developing between what organizations
do and what stakeholders want.
Moving sustainability from being “bolted on” to “built in” requires fundamental organizational
change. Accenture and the Forum have identified the maturity of the core capabilities and practices
required to embrace such change, which we call “Sustainability DNA”. Such transformation requires
comprehensive planning, measurement and management.
How Stakeholders Can Make or Break Companies’ Sustainability Efforts

As climate change has become a top concern among consumers, activists, employees and other
important stakeholders, business leaders are taking notice. In Deloitte Global’s 2021 Climate Check
report, executives shared their greatest concerns about climate change after another year of significant
climate disasters ranging from wildfires and droughts to record-setting blizzards and floods.
“This past year has shown us how external factors, like a pandemic, can negatively impact
sustainability efforts,” says Kathy Alsegaf, Deloitte Global internal sustainability leader. “However,
on the flip side, our survey found that the intensification of climate-related disasters was among the
top motivators for organizations to increase their sustainability efforts.”
Increased media coverage of the climate issue, and business’ role in addressing it, also ranked as a top
motivator for respondents to increase their sustainability efforts, as did experiencing direct operational
or financial damage because of climate.
Although many organizations’ sustainability efforts stalled during the COVID-19 pandemic, 34% of
executives surveyed said they were not changing—or were actually accelerating—their sustainability
efforts.
What’s Driving Sustainability Efforts
According to Deloitte Global’s Climate Check report, two forces emerged as the primary drivers for
organizations’ sustainability actions: shareholder demands and a marked increase in societal and
employee activism.
The survey shows that environmental sustainability initiatives are primarily being driven by
stakeholder pressure. Investor demands became the top motivating factor for these efforts, up five
percentage points from last year’s survey.
Additionally, activism—by people who are calling for change—and ongoing media coverage of this
issue are vital to ensuring that climate threats stay top of mind for business leaders and policymakers.
In Deloitte Global’s 2020 Millennial Survey, for example, a third of respondents said they stopped or
lessened business relationships because they perceived companies were doing harm to the
environment. “As climate protests and activism increase, it will be even more important for
organizations to embed environmental sustainability into business strategy,” Alsegaf says.
While all stakeholders are influencing the ongoing climate conversation, regulators in particular hold
a lot of weight, according to the Climate Check survey, as do investors and customers who influence
near-term strategies that impact the bottom line. In fact, executives named shifting regulatory and
political environments as one of the top three environmental sustainability/climate change issues most
impacting their organization.
Finding Balance
“What does the organization see as a priority, where are the overlaps with stakeholders’ priorities and
where are the differences?” she asks. “Where stakeholders are demanding action that does not appear
on the organization’s list of priorities, it may be helpful to understand why those differences exist and
if it is an early warning signal of change in societal expectations or potential activism. It may also be
helpful to understand what risks those differences might indicate.”
While it’s natural for stakeholders to have varied sustainability goals, businesses should take notice
when alignment occurs between different stakeholder groups. Stakeholders might not all be aligned
on demands, but when many of them are, that’s a signal that should influence internal goals.
Even when internal goals and stakeholder demands are aligned, however, it may still take time for
internal processes to be put in place, which is why sharing milestones or progress is vital to
transparency and accountability while the journey is underway.
Business Benefits of Sustainability Initiatives
As organizations consider their responses to climate change, it’s important to note that sustainability
efforts not only benefit people and the planet but also businesses. As a result of their environmental
sustainability initiatives, for example, surveyed organizations say their customer satisfaction has
improved and that they’re seeing a measurable impact on the environment (such as reduced
emissions)—up eight percentage points from last year’s survey.
Executives also noted improvements in employee recruitment and morale, which indicates that
environmental sustainability efforts are becoming core tenets of organizational culture and brand
identity.
Perhaps the most significant positive outcomes of organizations’ sustainability efforts are increased
profitability and revenue growth, according to the Deloitte Global survey. Nearly half of companies
surveyed saw improved financial metrics because of these initiatives, which is a key consideration as
leaders work to justify and measure the return on their investments in climate efforts.
“When organizations align their goals with their employees and other stakeholders, they can also
leverage the power of collective action to magnify impact,” says Alsegaf. “At Deloitte, we believe we
can make a positive environmental impact by not only addressing our own contributions to global
emissions but also by empowering our professionals and engaging our broader ecosystem to create
solutions that facilitate the transition to a low-carbon economy,” she says.
“By engaging and educating Deloitte people on climate change impacts—decisions about what they
consume, use and buy—we will enable our people to make positive climate choices at home and at
work, and amplify these through their personal networks.”
Classification of Social Responsibility

1. Responsibility towards itself It is the responsibility of each corporate entity run business and
to work towards growth, expansion and stability and thus earn profits. If the corporation is to
achieve social and economic ends, organizational efficiency should be boosted up.
2. Responsibility towards Employees Employees are the most important part of an
organization. Following are some of the responsibilities which a business entity has towards
its employees
 Timely payment
 Hygienic environment
 Good and impartial behavior
 Health care through yoga
 Recreational activities
 Encouraging them to take part in managerial decisions
3. Responsibility towards shareholders: It is the responsibility of corporate entity to safeguard
the shareholders‘ investment and make efforts to provide a reasonable return on their
investment.
4. Responsibility towards state Out of the profit available, the state is entitled to a certain share
as per the income tax laws. Utmost transparency has to be exerted regarding the profit &loss
account and the balance sheet.
5. Responsibility towards consumers The Company should maintain high quality standards at
reasonable prices. It should not resort to malpractices such as hoarding and blackmarketing.
6. Responsibility towards environment It is the responsibility of the organization to contribute
to the protection of environment. It should produce eco -friendly products. Moreover,
industrial waste management must be taken care of.
F. Enterprise Social Responsibility
What is a social enterprise?
A social enterprise refers to a business with certain social objectives as its primary goal while using a
commercial structure to run the organization. Social enterprises usually attempt to make a strong
societal impact while maximizing their profit as well, which is then used to fund their social
programs.
1. A social enterprise refers to a business with certain social objectives as its primary goal while
using a commercial structure to run the organization.
2. All social enterprises usually adopt two main goals – the first is to generate profits, while the
second is to reach its social, cultural, economic, or environmental outcomes outlined in the
company’s mission.
3. Some
categories of social enterprises include trading enterprises, financial institutions, community

organizations, and NGOs and charities.
Social enterprises can be both non-profit or for-profit organizations and may take the forms of many
different types of organizations. What is common in all social enterprises is the fact that they usually
adopt two main goals – the first is to generate profits, while the second is to reach its social, cultural,
economic, or environmental outcomes outlined in the company’s mission.
It is important to note that social enterprises operate under the structure of a traditional business, and
on the surface, they may seem to look, feel, and operate like any other traditional business. However,
the key to understanding a social enterprise is to understand its mission, which outlines its key social
objectives.
Profit generation is still extremely important to social enterprises, as earnings are important to sustain
the livelihood of the venture but the important difference is that instead of using its profit to distribute
among shareholders, the profits are used to reinvest in the enterprise to help it achieve its social
mission.
We should note that social enterprises usually offer some sort of good or service to consumers at a
price,, it is not considered a social enterprise if it does not sell anything; instead, it instead is
considered to be a social program.
Social enterprises will often have strong links to a registered charity or non-profit organization –
sometimes a parent company –which feeds its profits to help better support its social mission.
Social Enterprise and Employment
An important differentiator of social enterprises is the fact that they often employ individuals coming
from at-risk backgrounds and those from disadvantaged communities, such as visible minorities or
indigenous groups. Often, such groups face discrimination and prejudice in society historically.
The goal of training and employing such individuals is to allow them to earn a living wage while
enabling them to create self-sufficiency and rely less on government payouts and the social safety net.
Sometimes, creating employment for disadvantaged individuals form the central mission of some
social enterprises.
Types of Social Enterprises
Social enterprises are usually categorized into four main categories, although they are constantly
evolving and may change over time as new areas are created. Despite their individual differences, all
types of social enterprises attempt to operate while balancing both profit generation and the
achievement of its social objectives.
1. Trading Enterprises
Trading enterprises refer to cooperatives, collectives, and other organizations that are worker- or
employee-owned. They vary significantly in terms of size and organizational structure, but their joint
ownership structure allows a higher degree of economic resiliency in comparison with other forms of
enterprises.
2. Financial Institutions
Some types of financial institutions also fall into the social enterprise category, including
organizations such as credit unions, cooperative banks, and revolving loan funds, which are
membership-owned. Credit unions, for example, are structured so that members automatically become
owners when they deposit money into the union as a customer and the credit union uses the deposited
money to help other members.
Credit unions offer higher savings rates, low interest rates, and focus less on making profits and more
on helping its respective members. Cooperative banks are another institution – which, similar to
traditional banks – takes deposits and provides loans to its customers but operates on a cooperative
basis meaning that they are owned by their customers.
Cooperative banks are criticized for diluting their principles, as they sometimes offer an opportunity
for non-members to use their services, as many are traded on public stock exchanges. They also raise
money in public stock markets, which gives rise to the issue of a separate class of shareholders who
compete with cooperative members for control of the bank.
3. Community Organizations
Community organizations refer to registered social enterprises, which may include community
enterprises, community centers, housing cooperatives, community interest organizations, certain
smaller shops, and sports clubs.
They are typically membership organizations that exist for a particular purpose and trade
commercially with the goal of operating to reinvest profits into the community. Often, the
membership is quite large, and the members are supporters of the organization’s mission.
4. Non-Governmental Organizations (NGOs) and Charities
NGOs and charities operate on both a large and small scales and are usually established to support a
specific social, environmental, or political goal. The profits are used to further the social or
environmental aims of the organization or to provide salaries for people who provide free services to
specific groups of people.
G. CSR through triple bottom line
Corporate Social Responsibility (CSR)

The aptly named CSR view is that corporations are members of the moral community. Instead of
separating them from society, they are viewed as integral part of the society. They have
responsibilities that are analogous to those of other members of the moral community, and these
responsibilities fall into following groups:
A. Towards society
1. Economic responsibility (creating job opportunities)
2. Legal responsibility
3. Ethical responsibility
4. Philanthropic responsibility
B. Towards stakeholders
1. Value creation through vision, mission & objectives
2. Employee growth (involvement in community service, alignment of personal values of employee
with organizational values, ethos etc.)
3. Inclusive hiring processes
4. Managing workplace diversity
5. Communication of CSR values to various stakeholders through relationship-building.
The Economic Responsibility is the responsibility of a business to make money. "Required by simple
economics, this obligation is the business version of the human survival instinct. Companies that
don’t make profits are—in a modern market economy—doomed to perish. " 2 So, as long as we believe
that the business ought to exist, it must be allowed to try and make a profit. Otherwise, we are
condemning it to death.
the Legal Responsibility is the responsibility to obey the letter and the spirit of the law. This is not
just the obligation to follow the law as it is written, but "this obligation must be understood as a
proactive duty. That is, laws aren’t boundaries that enterprises skirt and cross over if the penalty is
low; instead, responsible organizations accept the rules as a social good and make good faith efforts to
obey not just the letter but also the spirit of the limits.
This responsibility is a heavier one than it may seem. Many corporations have broken the rules when
the profits that they stand to gain are much higher than the penalties that they might have to pay for
breaking the rules. According to this responsibility, they must not do so, because they are required to
view obeying the law as something that creates the best results for everyone.
The Ethical Responsibility is the responsibility to do the right thing even when neither the spirit nor
the letter of the law apply to the situation. This is a key obligation, and it requires the firm to act as
any other citizen must. We might make allusions to the Good Samaritan or to handing our change to
someone who asks for it on the street, but the core of the responsibility is that firms ought to act like
persons who live in a civil community. This requires that we view firms (and that they view
themselves) as responsible members in a community.
The last category, the Philanthropic Responsibility, is a responsibility "to contribute to society's

projects even when they're independent of the particular business." 4 This responsibility requires the
business person to do some things which stem from generosity towards the community that they exist
in. This is likely to be a controversial requirement, but it speaks to the connections between the
community and the firm. "[T]hese public acts of generosity represent a view that businesses, like
everyone in the world, have some obligation to support the general welfare in ways determined by the
needs of the surrounding community." It might require that an affluent business person stop and buy a
lemonade or a hotdog from a stand that contributes to a neighborhood project or to buy some cookies
from the local Girl Scout troop. It might require that they open their business to local youth who want
to learn about how it works and get inspired to become entrepreneurs. Whichever form it takes, it
requires that businesses do something that benefits the community without having anything to gain,
directly.
These four principles are ordered from the most pressing to the least. This means that businesses
must attend to the Economic, Legal, Ethical, and Philanthropic responsibilities in that order. This
does not mean that the economic responsibility to maintain a profitable business always trump the
other three. It means that a business which is profitable must also act within the bounds of the law,
and that they must act within the bounds of ethics. At the bottom of the list, a business might be
required to behave philanthropically. This only applies to a business that has already met the other
three responsibilities, however. A struggling business lacks any meaningful responsibility for
community outreach. When they consider a possible course of action they must weigh the benefits
and burdens according to these weighted responsibilities. If an action would keep the firm profitable,
but it bends a law in a way that is not ethically objectionable, they might be allowed to do it.
Triple Bottom Line

The traditional bottom line of business
The main purpose of a business is to generate a profitable income for its shareholders. That’s why
traditionally, making a profit is known as the bottom line of business.
However, companies usually leave a negative impact on the environment and communities when they
only focus on making money. Because of this, it is important to encourage them to behave more
responsibly.
An explanation of the triple bottom line
In 1994, John Elkington—the famed British management consultant and sustainability guru—coined
the phrase "triple bottom line" as his way of measuring performance in corporate America. The idea
was that a company can be managed in a way that not only makes money but which also improves
people's lives and the well-being of the planet. The triple bottom line consists of the 3Ps (People,
Planet, Profit). It is a tool that is used to measure the sustainability of a business. It is important in
CSR because it holds businesses responsible for their effect on the people (within and outside the
business) and the planet (natural environment).
In finance, when speaking of a company's bottom line, we usually mean its profits. Elkington's TBL
framework advances the goal of sustainability in business practices, in which companies look beyond
profits to include social and environmental issues to measure the full cost of doing business. Triple-
bottom-line theory says that companies should focus as much attention on social and environmental
issues as they do on financial issues.
TBL theory also says that if a company focuses on finances only and does not examine how it
interacts socially, it is not able to see the whole picture and therefore cannot account for the full cost
of doing business.
Triple Bottom Line Sustainability
Profit
In the context of the triple bottom line, profit can mean more than just how much money a company
makes. A company must ensure it earns its income in ethical, fair manners. This includes soliciting
business partners and vendors with which it aligns philanthropically. It also defines how a company
develops its strategy or financial operating plan. For instance, profit also ties to a company's
responsibility to pay its lenders, creditors, and employees what is due to them and to have a sense of
financial responsibility for these obligations.
Some users of the triple bottom line may also say profit refers to not only a company's profit but the
profit of those around the company. This specifically refers to the community in which the business
operates. This may include:
 Ensuring the company is paying its fair share of local, state, or federal income taxes on a
timely basis
 Making sure the company is fostering economic wealth within its community by shopping
local or utilizing small businesses.
 Committing to financially investing in the community through partnerships, developments,
or corporate sponsorships.
People
In the context of triple bottom line, people refers to every individual that is in touch with a company.
This includes but is not limited to:
 Employees. This means ensuring workers receive a fair wage in a safe environment that
encourages professional development.
 Vendors. This means ensuring a diverse set of suppliers are used and prioritizing small
businesses or minority-owners when appropriate.
 Customers. This means ensuring customers have fair access to products and their feedback
regarding equity or safety are considered.
Traditionally, a company would prioritize investors or shareholders. Triple bottom line shifts the
focus to individuals potentially not financially invested in the company but still tangentially involved
with its operations. Now, instead of attempting to create value by only increasing investor returns,
triple bottom line strives to create value by encouraging volunteerism of its employees or support or
business success of small suppliers, for example.
Planet
The largest deviation from purely financial reporting relates to reporting on environmental impacts.
Often, a company must be forced between a lower-cost option or a more environmentally-friendly
alternative. A company may also choose between a less favorable alternative; for example, eco-
friendly transit will likely be slower than aircraft.
Instead of reporting a company's positive changes to the planet, it is often much easier to assess the
impacts of the alternatives elected by the company. Imagine a company that redesigned its distribution
channels to reduce its energy use; such an activity would be reported as saving a certain amount of
greenhouse gas emissions.

Some users of triple bottom line may replace 'profit' with 'prosperity'; both terms are meant to be
interchangeable and refer to the long-term health of the company and its programs.
How to Measure the Triple Bottom Line
Companies may need to get creative when measuring the triple bottom line. Traditional accounting
rules provide very strong guidance on how a company must record its accounting profit.
Alternatively, there may be minimal to no structure in place on how a company must measure its
triple bottom line, especially considering these may be no external reporting requirement to do so.
Measuring Profit
A company will still usually report company-wide net income as part of its triple bottom line. For this
reason, profit is the easiest component of triple bottom line to report as it already has strong guidance.
However, it may also report or call out several other profitability or financial metrics such as:
 Gross margin by geographical region to demonstrate consistent or equitable pricing across
different demographic groups.
 Historical federal income tax payments, demonstrating its effective rate.
 Historical information (or lack of) late payments or penalties as a demonstration of financial
responsibility.
Measuring People
Also referred to as social measures or social metrics, the people component of triple bottom line may
contain financial or non-financial measurements. Again, some may be stipulated by generally
accepted accounting principles (GAAP) or other reporting rules, while others may be internally-
sourced data. Examples of measurements of people include:
 Average employee payroll to demonstrate livable wages that exceed local expectations for
pay.
 Average employee benefits per employee beyond pay to demonstrate the full benefit package
per worker.
 Average number of vacation hours earned and used per employee to ensure workers can and
have been stepping away from work.
 Employment demographics such as proportion of employees in different age, race, sexual
orientation, or religious groups. Note that some of this information may be sensitive and must
be provided voluntarily by employees (as employers are not entitled to some demographic
information.
 Vendor demographics such as businesses identifying as small businesses, LGBTQ-owned,
Veteran-owned, or minority-owned.
 Number of product returns by geographical regions to ensure certain demographics are still
receiving quality products.
Measuring Planet
Perhaps the most difficult triple bottom line component to measure is planet. As a company may need
to know its existing impact as well as its "eco-friendly" impact, measuring impacts to the planet may
require the most expertise or effort. However, there are very common environmental measurements
such as:
 Reductions in greenhouse gas emissions based on the difference between former processes
and forecasted changes in new processes.
 Amount of waste generated in pounds; this may also include amount of recycled product over
a period of time.
 Amount of energy consumption, adjusted for seasonality.
 Amount of fossil fuel consumption (may be adjusted for per-employee or per-sales lead
should the company be growing).
 Proportion of raw materials sourced ethically.
Advantages and Disadvantages of the Triple Bottom Line
Advantages of Applying the Triple Bottom Line
The obvious reason to apply the triple bottom line is to have a greater positive impact on the world.
Instead of focusing on paper profit, companies can quantifiably determine how the business is
favorably changing the world and the people it engages with. Having a greater philanthropic presence
may encourage employee retention and decrease attrition. Workers may be more likely to commit to a
company if its environmental impacts are communicated. In addition, favorable working conditions
including competitive wages, training, and time off to volunteer may keep employees around; this
may reduce recruiting, training, onboarding, and general costs of new employees.
A greater triple bottom line plan may also entice customers and investors interested in prioritizing
certain non-financial metrics over financial metrics. Some customers may be torn between two similar
products; the deciding factor may be the ESG prioritization of the companies. In addition, investors
may actively seek to put their money into a company that has social and environmental plans.
Last, triple bottom line strategies may result in increased long-term profitability. Though short-term
costs may increase, a company may become more efficient in the long-run. Consider a company
converting its fleet to electric vehicles. Short-term, this will be a massive capital investment. In the
long-term, the company may reap the benefit of lower energy costs, less maintenance, or better
equipment durability.
Disadvantages of Applying the Triple Bottom Line
A key challenge of the triple bottom line is the difficulty of measuring certain social and
environmental bottom lines.2 Profitability is inherently quantitative, so it is easy to measure.
However, consider the example of attempting to evaluate the economic impact of preventing an oil
spill. A company may easily be able identify the input costs, but it may be more difficult to pinpoint
non-financial inputs or outcomes.
It can also be difficult to switch gears between priorities that are seemingly antithetical—such as
maximizing individual financial returns while also doing the greatest good for society. Some
companies might struggle to balance deploying money and other resources, such as human capital, to
all three bottom lines without favoring one at the expense of another.
In addition, electing to prioritize the triple bottom line will likely be more expensive. Consider a
clothing manufacturer whose best way to maximize profits might be to hire the least expensive labor
possible and to dispose of manufacturing waste in the cheapest way possible. These practices might
well result in the greatest possible profits for the company but at the expense of miserable working
and living conditions for laborers, and harm to the natural environment and the people who live in that
environment.
Pros
 Aims to have positive impact on the world
 May boost employee retention as workers may appreciate favorable working conditions
 May result in greater external funds from investors seeking ESG investments
 May result in greater sales from customers seeking to support ESG companies
 May result in long-term efficiencies that reduce costs in the long-run
Cons
 May be more difficult to assess non-financial inputs or outputs
 Lack of comparability across impact groups (i.e. companies may need to choose one bottom
line over the other)
 May result in competing strategies, making it difficult to easily pivot from one plan to another
 Will likely increase the cost of operations due to needing to find alternative products or
processes
Examples of Companies That Subscribe to TBL or Similar Concepts
Today, the corporate world is more conscious than ever of its social and environmental responsibility.
Companies are increasingly adopting or ramping up their social programs. Consumers want
companies to be transparent about their practices and to be considerate of all stakeholders. Many
consumers are willing to pay more for clothing and other products if it means that workers are paid a
living wage and the environment is being respected in the production process.
The number of firms—of all types and sizes, both publicly and privately held—that subscribe to the
triple-bottom-line concept, or something similar, is staggering. Here are a handful of these companies:
Ben & Jerry's
Ben & Jerry's is the ice cream company that made conscious capitalism central to its strategy. As
stated on its website, "Ben & Jerry's is founded on and dedicated to a sustainable corporate concept of
linked prosperity."3 The company opposes the use of recombinant bovine growth hormone (rBGH)
and genetically modified organisms (GMOs) and fosters myriad values such as fair trade and climate
justice.4
LEGO
The LEGO Group (privately held; Billund, Denmark) has formed partnerships with organizations like
the nongovernmental organization (NGO) World Wildlife Fund. In addition, LEGO has made a
commitment to reducing its carbon footprint and is working towards 100% renewable energy capacity
by 2030.
Starbucks
Starbucks Corporation (SBUX), has been socially and environmentally focused since its inception in
1971. The company has hired more than 30,000 veterans since 2013 and is committed to hiring 5,000
more per year going forward
Environmental aspect of CSR
The World Health Organization (WHO) has observed that over 70 percent of all human ailments are
influenced by environmental deterioration. The industries are the sources of hazardous emissions and
effluents. The use of chemical insecticides and pesticides in agriculture also leaves dangerous
residues. Transport, either by land or water or air contaminates the environment. Public health
infrastructure – sewage, garbage, and drainagehas a detrimental impact on the environment. The food
we eat, the water we drink and the house we live in are not free from contaminants, affecting our
health, and causing a spectrum of ailments. Noble Laureate Paul Crutzen- one of the first scientists to
identify the causes of the hole in the ozone layer – said up to two million people in India alone were
dying each year from atmospheric pollution.
CER (Certified emission reductions) in current scenario

Nature has turned into a conspicuous issue at the worldwide level in the ongoing occasions. The
advancement activities ought to be executed intentionally with a view to keep the contamination of
condition. The present procedure of advancement has achieved ecological contamination everywhere
throughout the world without appropriate feasible formative concerns and methodologies. The
environmentalism turned into an overall development in the time of 1970s. New measurements are
added to the procedure of condition insurance which essentially incorporate – moral, social,
instructive, social, political, financial, lawful, administrative, informative et cetera. Saving the earth
has turned into the notable element of contemporary improvement designs over the globe. A few
natural developments have featured the requirement for accomplishing feasible advancement based on
methodical condition insurance. The media of interchanges have likewise assumed a prominent part in
making natural mindfulness among the general population. In the new thousand years, all countries on
the planet need to address the ecological issues truly and cooperate keeping in mind the end goal to
accomplish the objective of economical advancement. The approach producers and others are required
to strike an important harmony amongst natural and improvement. The present worldview of natural
direction faces expanding challenges under the strain of a growing populace and blossoming clashes
over asset amount and quality. The idea of CSR has recovered wide interest because of saw negative
social and ecological impacts from advertise globalization and exchange advancement in the course of
the most recent decade or somewhere in the vicinity. However, various biological communities and
the world stay in unfaltering decay regardless of what is seen as an intensely directed field. The laws
that conveyed these unique ecological victories neglect the more unavoidable and undeniably
inconspicuous natural issues of today, including species decrease and environment misfortune, among
others. Along
these lines, this current time's test will be to moderate contamination sources and biological
community corruption not all that agreeable to direction, for example, worldwide environmental
change, the mass exportation of natural debasement abroad, and non-feasible asset utilization. As a
result of industrialization and urban development, there is air pollution, water pollution, noise
pollution, land pollution and so on. The list is virtually endless. Moreover, the seriousness of
environmental problem may be judged in terms of the knowledge and skills required to understand a
particular issue demanding solution. Humanity is in danger. Mankind faces overwhelming
environmental problems which are large scale, long term and strike directly at most intimate links to
the biosphere where human beings live. Biosphere is a thin shell of lifeonly about five miles thick-
covering the planet like the skin of an apple. The task of environmental pollution has assumed
disproportionate dimensions and disturbed the environmental balance which is necessary for human
life. Chief Justice Bhagwathi in M.C.Mehta v. Union of India3 declared in unambiguous terms that
we have to evolve new principles and lay down new norms, which would adequately deal with the
new problems which arise in a highly industrialized economy. CER is a subcategory of the more
extensive idea of corporate social responsibility (CSR). In definitional terms, this is of little help,
since there is similarly no agreement with respect to what the last includes. Fundamentally, it alludes
to willful and unenforceable activity past that which is required by law (since there is little obligation
or ethicalness in basically following legitimate commitments). Be that as it may, regardless of
whether this must be a result of moral contemplations or whether lead spurred by open weights, social
desires or financial selfintrigue ought to likewise be included remains a disputable issue (Baron, 2003,
pp. 8-11 ). So also, CER is generally acknowledged to suggest activity 'past consistence', for the most
part with the desire that it will add to 'reasonable advancement'. Notwithstanding, this takes us
minimal further since the last is itself an equivocal, and maybe vacuous, term. For some it epitomizes
the move in intuition from condition versus advancement to condition and improvement, however for
other people, it is no more than a 'popular expression without content'. Likewise with CSR, the focal
definitional question moves toward becoming whether self-intrigued activity, (for example, key
natural activities to cut expenses, ensure a corporate brand or moderate social weight) would comprise
CER or whether just activity which is occupied with for charitable reasons should fall inside the
definition.
Environmental CSR is the duty to cover environmental consequences of a particular company’s

operations, products and facilities. The major components of environmental CSR are elimination of
waste and emissions, maximizing energy efficiency and productivity and minimizing practices that
may adversely affect utilization of natural resources by coming generations.
Sustainability and carbon footprint occupies an increasingly important position on the corporate
agenda around the world. Growing number of companies are
realizing the importance of environmental initiatives in
business development.
Decrease in energy and raw material usage combined with
reduced emissions and waste generation can tackle the
environmental challenges facing the world. Leading IT
companies, like Microsoft, Adobe, Apple and Google, are
investing in renewable sources of energy that can generate
power directly on-site. Clean manufacturing practices and
energy-efficient design of equipment are also hallmarks of
environmental sustainability.
Major aspects of environmental CSR:
Role of Packaging
Packaging is an important concern for consumers, particularly those who are interested in converting
to eco-friendly buying behaviors. Packaging plays a great role in environmental sustainability
by protecting products, preventing waste and enabling efficient business conduct. Reduction in the
amount of packaging and use of eco-friendly packaging material provide an attractive opportunity to
promote environmental sustainability.
Sustainable packaging is a relatively new addition to the environmental considerations for CSR.
Companies using environment-friendly packaging materials are reducing their carbon footprint, using
more recycled materials and minimizing waste generation. Companies that highlight their
environmental initiatives to consumers can increase sales as well as boost product reputation.
For example, Cisco outsources all of its manufacturing and has over 600 suppliers. To avoid any
problems, Cisco’s packaging team undertakes a painstaking process to create more effective and
environmentally friendly packaging. In 2012, the company eliminated 757,000 pounds of paper and
plastic waste for one product line alone. For its total shipments during 2012, Cisco reduced its use of
cardboard, plastic and paper by as much as 466 metric tons.
Role of Clean Energy

Deployment of renewable energy systems can make a big impact on CSR activities of companies as
clean energy is one of the best methods to mitigate climate changes. Decentralized power generation
using renewable resources is rapidly gaining popularity among world’s top companies. Most of the
world’s largest companies, like Microsoft, Apple and Google, are adopting renewable energy as it
makes good business sense to lower emissions, diversify energy supply, mitigate fuel cost and above
all portray a green image.
World’s leading IT companies are rushing to develop renewable energy projects to power their giant
data centres, Google has entered a 10-year deal with utility company Grand River Dam Authority to
supply 48 MW of wind power to its Oklahoma data center. Apple’s data center in Maiden (North
Carolina), which draws staggering 20MW power, will run entirely on solar energy and biogas.
Likewise, to meet tremendous energy needs, Adobe has invested in alternative energy sources that can
generate power directly on-site, such as wind turbines and fuel cells at its California facilities.
Microsoft has also unveiled plans to utilize biogas generated from wastewater treatment facilities to
power its research center at Wyoming.
Role of Environmental Reporting

Environmental reporting, voluntary as well as mandatory, is also getting prominence in the context of
corporate social responsibility. Environmental information like greenhouse gas emissions, waste
generation, energy consumption, use of transport can improve the transparency of industrial activities,
thereby, providing a powerful tool to fight environmental degradation. Business can save significant
in areas like use of raw materials and supplies, reduction in waste, water, energy use, transport, travel
and packaging.
There are several countries in which the private sector is required to report greenhouse gas emissions
and energy consumption to the government. Australia’s National Greenhouse and Energy Reporting
Act requires corporations to report information on their greenhouse gas emissions, energy production
and energy consumption to the Greenhouse and Energy Data Officer.
United Kingdom’s Carbon Reduction Commitment Energy Efficiency Scheme forces all
organizations and companies having electricity demand greater than 6,000 MWh per year to
participate in the mandatory scheme, which applies to more than 5,000 entities until now. The
Perform, Achieve and Trade scheme in India has established consumption targets for energy-intensive
industries as well as the cap-and-trade structure.

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MODULE 01

Framework of Social Orientation

1. The Relationship Between Management and Corporate Social Responsibility

Components of Corporate behaviour:

The definitions capture the following key features:

1. business responsibility to society (i.e. being accountable)

ii. Who is involved in CSR?

Organizations adopting/engaging with CSR.

Sr. No. Category of Organisation Description

C. History and evolution of CSR?

i. Origin and evolution of the concept of CSR

ii. The Catalyst for Modern Corporate Social Responsibility

iii. Universal Acceptance of Corporate Social Responsibility

iv. Evolution of Corporate Social Responsibility in India

v. The four phases of CSR development in India

vi. Approaches to CSR evolution

Accordingly, organizational decisions should be concerned with the selection of socially

(f) Addressing the concerns of its various stakeholders in a balanced way so as to

This can be achieved by making certain commitments such as:

(f) By establishing a chain of suppliers having similar CSR values.

D. Benefits, motives and Internal scope of CSR

ii. Benefits of CSR

1. Increased Brand Recognition

2. Boosted Company Reputation

3. Bolstered Public Trust

4. Improved Customer Loyalty

5. Accelerated Capital Growth

6. Deepened Competitive Advantage

8. Invigorated Employee Engagement

9. Revitalized Relationship Building

10. Greater Sustainability

iii. Scope of Corporate Social Responsibility

E. Concept of sustainability & Stakeholder Management

How Stakeholders Can Make or Break Companies’ Sustainability Efforts

What’s Driving Sustainability Efforts

Business Benefits of Sustainability Initiatives

Classification of Social Responsibility

F. Enterprise Social Responsibility

categories of social enterprises include trading enterprises, financial institutions, community

Social Enterprise and Employment

Types of Social Enterprises

4. Non-Governmental Organizations (NGOs) and Charities

G. CSR through triple bottom line

Corporate Social Responsibility (CSR)

The last category, the Philanthropic Responsibility, is a responsibility "to contribute to society's

Triple Bottom Line

Environmental aspect of CSR

CER (Certified emission reductions) in current scenario

Environmental CSR is the duty to cover environmental consequences of a particular company’s

Major aspects of environmental CSR:

Role of Clean Energy

Role of Environmental Reporting

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