SOCIAL RESPONSIBILITY

OF BUSINESS
According to The World Business Council for Sustainable
Development

“Corporate Social Responsibility is the continuing commitment

by business to behave ethically and contribute to economic
development while improving the quality of life of the
workforce and their families as well as of the local
community and society at large"
Approaches to CSR
 Self-regulation approach
 the role of the state is limited, liability is limited, too.

 Legal regulation
 Government important player.

 binding legal commitments.

 Multi-stakeholder initiatives
 stakeholders involved in CSR policy-making process.

 Examples : Global Compact or the OECD Guidelines

for Multinational Companies

EVOLUTION OF CSR
18th Century 19th Century 20th Century
 Development of CSR Concept
 “Social Responsibilities of the Businessman”
H R Bowen ,1953
 1980’s
 Bhopal disaster
 CSR activities incorporated in organizational
setting
 linkages between business’s social and financial
performance
The 1990s
 Globalization
 WTO
 ‘reactive’ corporate social responsible
initiatives
 Enron
 Strategic CSR
 Corporate Sustainability, Corporate Social
Performance, Triple Bottom Line
21st century
 CSR fusion and merger with marketing ,
operations, human resources,
entrepreneurship (social entrepreneurship)
 Codes ,regulations and legal
frameworks(Global compact, AA1000)
CSR TOWARDS THE
INTEREST GROUPS
 yees
Emplo

Society

Business organization
Customers
shareholders

Suppliers Government
CORPORATE GOVERNANCE AND CSR

 Corporate governance enables corporations to realise

their corporate objectives, protect shareholder rights,
meet legal requirements and demonstrate to a wider
public how they are conducting their business
 an instigator of tight internal control mechanisms
 sound CG framework allows managers to put in place
various milestones and monitoring mechanisms for CSR
INTERNATIONAL GUIDELINES
ON CSR
UN Global Compact,1999

 voluntary initiative
 Mainstream Ten principles in business
activities
 human rights,
 labor standards,

 the environment,

 anti-corruption
Social Accountability 8000
 voluntary, universal standard for companies
interested in auditing and certifying labor practices in
their facilities
 independent third party certification
 measures the performance areas: child labor, forced
labor, health and safety, free association and
collective bargaining, discrimination, disciplinary
practices, working hours and compensation
 AA1000 Assurance Standard
 guidance to investors in how to assess an organizations'
degree of sustainable business practice
 OECD Guidelines for Multi national Enterprises
 voluntary recommendations in all the major areas of
corporate citizenship, including employment and industrial
relations, human rights, environment, information
disclosure, combating bribery, consumer interests, science
and technology, competition, and taxation
 ISO 26000
 encourage voluntary commitment to social responsibility ,
lead to common guidance on concepts, definitions and
methods of evaluation
 Global Reporting Initiative (GRI)
CSR - THE INDIAN SCENARIO
 Sunil Mittal,, Shiv Nadar and NGO activist Rohini
Nilekani featured in Forbes list of '48 Heroes of
Philanthropy‘
CSR Initiatives and Green Measures

 CII-TVS Centre of Excellence for Responsive Corporate

Citizenship. providing consultancy services and technical
assistance on social development and CSR.
 IBM has joined hands with Tribal Development
Department of Gujarat for a development project aimed
at upliftment of tribals in the Sasan area of Gir forest.
 Sustainable Technologies and Environmental Projects
Ltd (STEPS) is planning to start a project to change
plastic, organic and electronic waste into petroleum
 Aircel has recently started Save OurTigers Campaign
Rural Development
 ITC's e-Chaupal
 HDFC 'village adoption' scheme to
improve the investment climate in Indian
villages.
 Mahindra Shubhlabh
Violation of CSR principles
Satyam Scandal
 Byrraju Foundation
 impacted more than 3 million people in 199
villages in six districts of Andhra Pradesh, a
state of 80 million people in Southern India.
Bhopal Gas Disaster

 40 tons methyl iso cyanate escaped

 20,000 have died

 More than 120,000 people still continue to suffer

 In 2001 Dow Chemical purchased Union Carbide
 Union Carbide dumped waste in the surrounding areas,
after the disaster, many tons of highly toxic simply
abandoned. Greenpeace label the site a ‘Global Toxic
Hotspot’.
THE IRONY
 The Dow Chemical Company says in its
web site: it is “committed to the principles
of Sustainable Development and its
approximately 50,000 employees seek to
balance economic, environmental and
social responsibilities.”
Unilever 2001
 Dumped 300 metric tones of mercury at
Kodaikanal
 The Unilever website states, “We are committed
to conducting our operations with integrity and
with respect for the interests of our
stakeholders…..We are also committed to
making continuous improvements in the
management of our environmental impacts and
to working towards our longer term goal of
developing a sustainable business.”
Coca Cola ,2002
 Plachimada, Kerala
 was drawing 1.5 million liters/day

 parched lands of more than 2000 people

residing within 1.2 miles of the factory

 supplying poisonous waste as fertilizer,

the sludge contained high levels of Lead

and Cadmium (courtesy BBC)
 similar accusations in Varanasi

 world wide protests

The 2006 CSE
 57 samples of 11 soft drink brands, of Coca-Cola &
PepsiCo, spread over 12 states were tested
 found cocktail of 3-5 different pesticides in all

samples — on an average 24 times higher than BIS

 Coca-Cola bought in Kolkata — exceeded the

BIS standards by 140 times for the deadly

pesticideLindane.
 Similarly, a Coca-Cola sample manufactured in

Thane contained the neurotoxin Chlorpyrifos, 200

times the standard
 Coca Cola responded to these by litigations in the court
and applying pressures through its power centers in US.
Public Relations agencies were hired to neutralize the
situation. The company also issued releases which
mentions about its socially responsible behavior and
good corporate citizenship.
Government of India Initiatives
 Corporate Responsibility for Environmental
Protection (CREP) in 2003
 Governance Voluntary Guidelines
2009
 the Corporate Social Responsibility
Voluntary Guidelines 2009
 CSR credit exchange
Industry Association Initiatives
 Social Development Council (SDC) set up by CII
 focuses on community development, disaster

management, education and literacy

 Indian Business Trust for HIV / AIDS was set up by CII
 CII has established Environment Management
Department (EMD)
 FICCI set up Socio Economic Development Foundation
(SEDF) to deal with CSR. FICCI has an Environmental
Information Centre that complies and disseminates
 information on environmental issues.