Corporate Social Responsibility

Stakeholder Concept Who are the Stakeholders of Business? Shareholders and Promoters Customers Employees Suppliers and Partners (incl Contractors, Agents etc) Government Society

Most Admired Business Balancing and Exceeding the Expectations of all its Stakeholders. Effectiveness of Business Achievement of Objectives. Efficiency in Business Achievement of Results with the least amount of Resources. Systems Approach Alignment & integration Innovation: The NDB Concept Managing Change: Jack Welsh Theory Organizational Renewal & Revitalisation: Continuous Process brought by internal incumbents Emerging Waves Factor Economy Characteristic Market Players Kind of Players Price Level Consumer Technology Quality Delivery Pricing Needs Response Relation Approach Style Yesterday Protected Monopolistic Sellers Few National High No choice Low Average Weeks/Months/Years High Limited Sluggish Curt Mass Arrogant Today Open Competitive Buyers Several Global Dropping Multiple Choice High High Off the shelf Cut-throat Enhanced Quick Respect Personalised Understanding

Changing Characteristics of Corporates Old Goal Oriented Price focused Product quality Product driven Shareholder focused Finance oriented Efficient, Stable Hierarchical Machine based Functional Rigid, Committed Local/regional/National New Vision oriented Value focused Total quality Customer driven Stake holder focused Speed oriented Innovative, entrepreneurial Flat, empowered Information based Cross functional Flexible, learning Global

C S R makes Business Sense The earth has enough resources to meet the needs of people but will never have enough to serve their greed. Mahatma Gandhi Triple Bottom Line Concept Corporate Behaviour CSR as Core value of the Business Natural Resources for Business Core Competency of Business Millennium development goals

CSR Makes Business Sense Corporate Social Responsibility (CSR) is a business strategy that works. In a world where brand value and reputation are increasingly seen as a companys most valuable assets, CSR can build the loyalty and trust that ensure a bright sustainable future. In our complex, global society, corporations are becoming increasingly visible. They are not judged on their results but on their behavior too, and this can be an opportunity. By integrating CSR into your business as core value, you are not only making a significant contribution to a better society, but just as importantly you are recognized for doing so. And this has obvious benefits for the company If one is to be successful in 21st century, one must simultaneously excel in all three elements of sustainable development: Economic Prosperity, CSR and Environmental Stewardship. The right way to approach social responsibility is not in rules and regulations but in a high level ethical code that could be built into an organizations value system.CSR is an approach that helps us to get away from the old idea that economic, social and environmental goals are always and invariably in conflict. What we need to work out is how progress on any one of those fronts can support progress on the others. We want to see business, the voluntary sector, and public bodies all working together, not doing so grudgingly, but because each sees it as advancing its own key interests to do so, as well as advancing the interests of others. Benefits of CSR are : 1. Enhanced Brand Image and Reputation 2. Increased Trust and Customer Loyalty 3. Sustainable Development The Millennium Development Goals as defined by UN Eradicate extreme poverty and hunger Achieve universal primary education Promote gender equality and empower women Reduce child mortality Improve maternal health Combat HIV/AIDS, malaria and other diseases Ensure environmental sustainability Develop a global partnership for development Stop Child Labour

Key Communities Need Assessment Participatory rural Appraisal (PRA) Social Impact Analysis Thrust Areas

 1. 2. 3. 4. 5.

Thrust Areas Healthcare Education Environment Income Generation Infrastructure

Healthcare PHCs Lifeline Express experience Mobile Medical Services Single point program - agenda in millenium goals of UN

Education Schooling : Primary/ Secondary/ HS Building capacities : ITI, Tech training Need based education Rural technicians Industry specific explorations, Mechanics Earn while learn

Income Generation (Vocational Guidance) Rural BPO SHG concept Sericulture/ Beekeeping Tata Steel experience archery

Advertising and CSR Consumers Vs Community

Religion, Sex, Children, Stunts. Role of Media in propagating CSR Polio Eradication Global Warming & Environmental ethics Prevention of cruelty to Animals Family Planning Social Entrepreneurship: Finding a purpose Volunteering Activities: Joy of Giving National priorities & Trends

Setting up new Projects / Development of SEZs Class exercise

Meetings with Community Heads, Govt., NGOs Need Assessment Setting up Goals / Planning Opportunities Review Meetings Share Ideas / Brainstorming Problem solving Knowledge sharing Decision making Resource Allocation Volunteering Creating a Most Admired Business by Work Ethics Recently, there has been an increasing awareness, and more importantly, an increasing interest in the field of Business Ethics. This is indeed a welcome trend! In fact, perhaps, there has not been any time in the history of business development where the concepts and an understanding of the nature of business ethics has been so urgently needed, never before had the need for ethical practices in business so widely felt! Business Ethics proves that business can be, and have been, ethical and still make profits. Till the last few decades, Business Ethics was thought of as being a contradiction of terms. The popular concept was that if it is business, then it cannot be ethical, and if it is ethical, it does not represent business at all. This amounts to saying that business can make profits only through immoral ways, by being unethical! Nothing can be more further from the truth. Thankfully such thoughts are not prevalent any more. There are examples galore where not only have ethical companies made profits, but more importantly, it is only ethical companies which discharged its social responsibilities, that have survived competition and turbulent changes through the years and have contributed to social welfare and have continued to flourish undiminished. Hence, today, more and more interest is being given by corporate houses and business leaders to the application of ethical practices in business dealings. A business or company is considered ethical only if it tries to reach a trade-off between pursuing its economic objectives and its social obligations, i.e., between its commercial objectives and its welfare obligations. What are obligations of a business is open to interpretations. The list of obligations that a company must perform is long and complex and hence is costly to the company; yet they must be discharged if a company wants to survive and grow in the long run and is not satisfied in making short term profits. While discharging its obligations to the society, the company not only fulfils its own duties, but also paves the way for a stronger and more ethical foundation. In fact, it is unethical for companies NOT to make profits. It is unethical to make losses. A company which cannot make profits and make losses, misutilises scarce national resources, cannot pay back creditors, upsets the economy, promotes inefficiency and most importantly, cannot, at any cost discharge its social responsibilities, meet its welfare commitments and jeopardises the future of its employees and drives them into the unemployment market. Such a loss-making company becomes nuisance and a burden to the economy and has no right to exist in the market place. Moreover, it has no business to force its employees into economic insecurity, which is highly unethical. Thus, instead of profits being contradictory to ethics, business ethics dictates that the first responsibility of business is to remain profitable and generate revenue for the shareholders and the society. Why business ethics has assumed so great a part in our market economy is partly due to the fact that unethical decisions are not limited only to themselves, but affects a wide range of other situations and have widespread ramifications. One unethical action is like a pebble thrown into a pond of water, it produces endless ripples in the pond until the water of the entire pond gets disturbed by it. Similarly the single unethical action is not limited to the individual in the company who commits it, but spreads within the entire organisation; one unethical organisation affects the entire industry; and one unethical industry in turn, affects the entire economy and ultimately the entire nation.

Since business exists and operate within the society and is a part of a subsystem of society, its functioning must contribute to the welfare of the society. To survive, develop and excel, business must earn social sanction of the society wherein it exists and functions. Without social sanction, a business can not earn loyal customers, cannot operate in the marketplace and will soon wither and die away. Thus, business can earn social sanction only through being ethical in its dealings, working for the welfare of the society and by discharging its social responsibilities. In spite of India having an ancient culture and philosophy about worklife, we in India have not yet managed to develop our own management styles in consonance with our own cultural ethos and have been systematically importing management systems and styles from foreign countries. Indian tradition and heritage, its culture and philosophy, its ethos and values are a treasure house, where the richest and the rarest of gems are stored. It is ours only for the asking. If we can apply even a few of these gems to the management of the modern organisation, we will be doing a great service, not only to ourselves, or to our organisations, but also to our future generations of entrepreneurs and managers. Meaning of Business Ethics Business ethics are those principles, practices or philosophies that are concerned with moral judgement and good conduct as they are applicable to business situation. Business ethics refers to right or wrong behavior in business decisions. Business ethics involves morally accepted behavior in business practices. Importance of Business Ethics Customer will be satisfied only if the business follows all the business ethics. Business ethics is needed in order to make members of the business conscious as regards their duties and responsibilities towards consumer and other social groups. Business ethics is needed to make business activities fair to consumers. It checks business malpractices and offers protection to consumers. Business ethics is needed in order to improve the confidence of consumers as regards quality, price, reliability, etc of goods and services supplied. Business ethics is needed in order to protect the interest of all those concerned with business the shareholders, employees, dealers, and suppliers. It avoids their exploitation through unfair trade practices. Business ethics is needed in order to create good image in the society and also for avoiding public criticism. Ethical business gets public support. Business ethics leave a long-lasting impression on the customers and the impression on their minds builds trust, fetching a business more customers while retaining the older ones. Without following certain ideals in business, one cannot become successful. Success that is attained without a foundation of strong ethics is bound to be short-lived. A business cannot continue to prosper without an ethical base. A few successes can be coincidences or flukes but persistent success can only be a result of a strong foundation of ethics. Public will be ready to invest or lend money only if they are convinced that the organization is following fair business practices. Business in the long run, do require social recognition and support. Ethics and Law Ethics concentrates on the Dos whereas Law concentrates on Donts. Ethics is not backed by power but Law is backed by power. Ethics does not use force whereas Law uses force when necessary. Ethics is broad concept whereas Law is narrow concept. Following things will fall within the ambit of ethics but not of law Look after the aged. Be considerate to your workers. Obey your elders. Do not tell a lie. Do not misguide for personal benefits. Keeping promises Business Ethics is now a management discipline

Ethical issues are there everywhere, at all levels of business activity. Business ethics concern the ground rules of individual company and social behavior. (a) At Stakeholders level Shareholders Ensure capital appreciation Ensure steady and regular dividends Disclose all relevant information Protect minority shareholders interests Not to window dress balance sheets Protect interest in times of mergers, amalgamations and takeovers Banks and Lending institutions Guarantee safety of borrowed funds Prompt repayment of loans Customers Better quality of goods Goods and services at reasonable price Not to corner stocks and create temporary shortage Not to practice discriminatory pricing Not to make false claims about products in advertisements Employees Security of job Better and safe working conditions Better recommendation Participative management Welfare facilities Suppliers and partners Prompt Payments Fair practices of business Creating a level playing field Government Complying with rules and regulations

Honesty in paying taxes and other dues Acting as partner in progress of the country Society / Community Concern for poor and down trodden No discrimination against any particular section or group Concern for clean environment Preservation of scarce resources for posterity Contributing to better quality of life (b) Internal Policy Level Fair practices relating to recruitment, compensation, lay-offs, perks, promotion, etc. Transformational leadership to motivate employees to aim at better and higher things in life Better communication at all levels

(c) Personal Policy Level Not to misuse others for personal ends Not to indulge in politics to gain power Not to spoil promotional chances of others Not to use office car, stationary and other property for personal use Not to fall prey to shortcuts and easy money Promise keeping No violence, i.e. preventing or not causing physical harm to others Mutual help Respect for persons and property

Development of Business Ethics 1. Involvement of the senior management Every company needs a champion or role model or mentor to guide the corporate ethics programme. A senior person mostly CEO or Chairman should take the responsibility to lead the ethics programme. The board and senior management should show the enthusiasm and commitment and always provide the guidance to the employees.

2. Involvement of the employees No programme can be successful without involvement of the grass root employees. It is important to know what bothers people while making the code of ethics. Each and every person should know the code of the ethics and should be made to follow it.

3. Corporate codes Corporations have to operate within the ethics and moral principles of the society to which it belongs. Those principles or actions should be selected which are considered as just, normal or fair. In such a situation they are unlikely to be rejected by the employees, the customers, the suppliers, the government and the society.

Corporate Governance According to SEBI committee, Corporate Governance is the system by which the companies are directed and controlled by the management in the best interest of the stakeholders and others, ensuring greater transparency and better and timely financial reporting.

Objectives of Corp Governance To enhance the long term value and economic efficiency of the company. It encompasses all shareholders and integrates all the participants involved in the process. To elevate the reputation of the company and the esteem of its management To attract, employ and retain talent and motivate employees to give their best. A more open and participative style of management ensures free exchange of ideas and frank appreciation at all levels. To create and adopt, code of conduct with wholehearted commitment and improve the moral and ethical standards of performance to the utmost level. To have a right balance, knowledge and competence to set strategies and lead the organization. To use the resources entrusted to the management, in most economic and efficient productive and effective ways, for the benefit of shareholders as well as for the society at large. To set the high standards of business ethics based upon humanity, honesty and hardwork. To improve the standard of living and life of the society, industry, commerce, services and professionals. To generate accurate and reliable information. To make decision-making process transparent.

Important Issues : Sexual Harassment It is important to know what constitutes sexual harassment. Verbal Sexual or gender-based jokes or teasing or comments about clothing, personal behavior, or a persons body. Requesting sexual favours Pressure for date Graphic description of pornography Obscene phone calls Spreading rumours about a persons personal or sex life Turning work discussions into sexual topics (such as by using puns)

Non-Verbal Staring or sizing up a persons body Derogatory gestures of a sexual nature Suggestive looks (winking, licking lips)

Physical Unwelcome hugging, kissing Standing too close to or brushing against another person, leaning over Patting, stroking, grabbing or pinching Blocking someones path with the purpose of making a sexual advance Stalking

Visual Presence of posters, cartoons, drawings, calendars, pinups, pictures, computer programmes of sexual nature Notes or e-mails containing sexual comments Knick-knacks and other objects of a sexual nature

A bill was drafted two and a half years ago to frame a sexual harassment law, but has since faded into oblivion. Whistle Blowing Policy When an employee thinks that his/ her firm is resorting to some act that is unethical or harmful to public, he/she blows the whistle by reporting alleged organizational misconduct to the public or to top executives. Whistle blowing refrains the firm from indulging in unethical and harmful practices.

Corporate Social Responsibility makes business sense Corporate Social Responsibility (CSR) is a business strategy that works. In a world where brand value and reputation are increasingly seen as a companys most valuable assets, CSR can build the loyalty and trust that ensure a bright sustainable future. In our complex, global society, corporations are becoming increasingly visible. They are not judged on their results but on their behavior too, and this can be an opportunity. By integrating CSR into your business as core value, you are not only making a significant contribution to a better society, but just as importantly you are recognized for doing so. And this has obvious benefits for the company. If one is to be successful in 21st century, one must simultaneously excel in all three elements of sustainable development: Economic Prosperity, CSR and Environmental Stewardship. The right way to approach social responsibility is not in rules and regulations but in a high level ethical code that could be built into an organizations value system. CSR is an approach that helps us to get away from the old idea that economic, social and environmental goals are always and invariably in conflict. What we need to work out is how progress on any one of those fronts can support progress on the others. We want to see business, the voluntary sector, and public bodies all working together, not doing so grudgingly, but because each sees it as advancing its own key interests to do so, as well as advancing the interests of others. Benefits of CSR are : 1. Enhanced Brand Image and Reputation

2. Increased Trust and Customer Loyalty 3. Sustainable Development

Evolution of CSR Historical Background In 1948, the United Nations created the Universal Declaration of Human Rights. CSR as a concept originated in 1950 as the American Corp. increased in size and power,academics & corporate leaders began to recognise and articulate the impact of corporations on society. specifically social problems like poverty, slavery, child labour,unemployment,women empowerment and racial discrimination. By 1970 environment was added as an area of concern. Philosophy Paternalism honesty, ethical & fair treatment Philanthropy for the love of humanity Community Wellbeing industrial/labout welfare Foundations specially dedicated charities of businesses Socially Responsible Business - voluntary innitiative - integral part of business - towards cleaner environment WHY CSR? Two Perspectives

The Immediate View Imagine this: if a large proportion of the workforce was illiterate, if half lived in shack settlements without adequate shelter; if more than 80% could not afford basic health care; if a thousand people joined the economy every day of the year and fewer than a hundred found work in the formal sector. If that can be imagined, then imagine what the position of the company will be in ten, fifteen or twenty years hence. It would have to be concluded that without change in those social conditions, the company would not survive. It is on these grounds that the business community

has a vital role in developing countries, not only to respond to the plight of the poor out of a sense of charity or as good citizens, but to do so in order to secure its own survival. Brian Whitaker -National Business Initiative - South Africa WHY CSR? Two Perspectives. The Long View Development can be seenas a process of expanding the real freedoms that people enjoyand (removing) the sources of unfreedom: poverty, tyranny, poor economic opportunities, systematic social deprivation, neglect of public facilities, intolerance, repressive states... The relation between individual freedom and the achievement of social development ...is influenced by economic opportunities, political liberties, social powers, and the enabling conditions of good health, basic education, and the encouragement and cultivation of initiatives,... by the exercise of peoples freedom, through the liberty to participate in social choice and in making of public decisions that impel the progress of these opportunities. Amartya Sen - Nobel Prize Winner in Economics Development as Freedom

Some Definitions CSR is about how companies manage the business processes to produce an overall positive impact on society. CSR is a commitment to improve community well being through discretionary business practices and contribution of corporate resources. Philip Kotler CSR is about business giving back to society It is an accepted fact, that, there are crucial linkages between economic growth, human development, social cohesion and environmental sustainability "CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government" We think, we started on sound and straight forward business principles, considering the interests of the shareholder, our own and the health and welfare of the employees the sure foundation of our prosperity Jamsetji Tata in 1895 , on the opening of new extension of the Empress Mills. Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business (BSR 2003) European Commissions green paper, CSR is defined as companies integrating social and environmental concerns in their daily business operations and in their interactions with their stakeholders on a voluntary basis. The aim is to align as nearly as possible the interest of individuals, corporations and society Sir Adrian Cadbury in GCG F 2000. CSR Concept Triple Bottom Line evaluating corporate performance according to financial, social and environmental value added or destroyed (3P/3E) Corporate Sustainability business approach that creates long term stakeholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments. The leaders use strategy, innovation, governance and stakeholders to harness the markets potential for sustainability products & services as well as reducing and avoiding sustainability costs and risks Social responsibility of business: Economic Performance: Profit need & result Negative Impact arising out of business

- eliminate/ drop activity - reduce / minimize impact - alternate profitable business opportunity - enactment of right regulation (cost- competitive disadvantage) 3. Progressive Social Development Arguments against Corporate Social Responsibility Businesses are owned by their shareholders - any money they spend on so-called social responsibility is effectively theft from those shareholders who can, after all, decide for themselves if they want to give to charity. The leading companies who report on their social responsibility are basket cases - the most effective business leaders don't waste time with this stuff. Our company is too busy surviving hard times to do this. We can't afford to take our eye off the ball - we have to focus on core business. It's the responsibility of the politicians to deal with all this stuff. It's not our role to get involved CSR- Key Drivers Globalisation Transnational investments Regulatory demands Communication revolution: Technology and communication has shifted authority and power from states to markets Good governance partnership / supply chain management Larger and more complex interface with govt. and non govt. stakeholders (WBCSD, ILO, UNEP, UNDP, OECD etc) Convergence of interests (Government, Business, Civil Society) Intense Competition Human development Goals Non Governmental Organisations NGO media partnership, a power to reckon with. Greater stakeholder awareness (pressure/interest grps) Stakeholder value maximisation Environmental degradation / challenges GRI Global Reporting Initiatives / 3P concept Global Compact SRI- socially responsible investing CERES "The earth has enough for everyone's need, but not for everyone's greed." CSR Partnerships Need for experience, competence, credibility & legitimacy offered by stakeholder universe has led to innovative multi stakeholder partnerships with, Government Labor unions Coalition/ interest groups Communities Institutions (ILO, IMF,WB, ADB, WTO, UNDP, WBCSD) NGOs Advocacy groups Convergence has brought a Shift From Is there a role for Business to What is the role of Business in addressing social issues From How to help Government deal with public problems? to Are there market solutions to public problems?

Public Private Partnership Probably the best form of discharging CSR for sustainable Development Most companies with Global aspirations, make CSR as a part of their mainstream business strategy Partnership Impact Work with corporate instead of against them. Corporates have turned into key resources for their partners. Inherent strengths of leadership, financial and organisational skills as well as pool of trained individuals, market access and experience on the table. Equal commitments speeds up delivery time and performance. Win Win situation. CSR- Some Global Concerns Defining the issue some confusion Partnership dilemmas Challenges for government Not reduced to high visibility projects Implementation as an integrated process not activity CSR to be linked with sustainable development Whether CSR should be mandatory and CSR reporting standardised Supply chain responsibility CSR in India Some concerns Lack of conviction of the necessity of CSR in Corporates Lack of partnership approach between Corporates & NGOs Lack of interest in Non Financial Expertise from Corporates by NGOs CSR Indian Perspective Vedic period (daan - Merchant charity) -Scriptures advocate people and environment friendly codes of conduct. Traditionally a eco friendly society conscious of eco systems and its equilibrium Trusteeship- gandhian philosophy practiced by social & industry leaders like Vinoba Bhave,Jayprakash Narain JRD Tata, Ramkrishna Bajaj, Kasturbhai Lalbhai etc Corporate Citizenship to bring about social change and progress in this era of industrialisation. Fair Trade Practices Association was launched by JRD Tata, Ramakrishna Bajaj and others followed Managerial Trusteeship: recognition of the businesses' responsibility of creation of wealth as well importance of ethical business practices and concern for the environment in which the business operates led to creation of enterprises like Tata Group, Wipro, Infosys, Birla Group, Biocon, Cadbury India, Ford India, etc Public Private Partnership: Dynamic, mutually beneficial virtuous cycle leading to exponential growth in performance delivery. Driving concerns for Corporate Indian Poverty Population Education Unemployment Health Child labor Gender Equality Child & maternal mortality Under utilisation of human & natural resources Environmental degradation CSR Current Scenario in India

Indian companies, MNCs and PSU's feel and say; CR focusing on people and planet in addition to profit has the potential to be an extremely positive force that can fuel business growth, contribute to social, environmental and sustainable development. Yet very few companies in India have a written CR policy and across different business segments most companies do not perceive its importance. Companies are normally expected to invest 3% -5% of their profits in to CR programs. The present scenario ranges from 0.1% to 2 % and an exceptional 14% by Tata steel. Given the context of outsourcing, small and medium enterprises and supply/assembly chains attention to labour norms, employee welfare, health, safety and quality standards and internal governance and disclosures need to be emphasized as much as CR. Most companies cite constraints and challenges to practicing CR such as overall absence of policy and linkage between CR and financial success, lack of capacity and comprehension to implement CR, mechanisms to measure and monitor and evaluate in discharging their responsibility. These are some of the areas where non profits & foundations working in CR today have a significant role to play. Though India has the lowest level of per capita income among the seven Asian countries as compared to South Korea, Thailand, Singapore, Malaysia, Philippines and Indonesia it has the highest level of CSR practices. Education, health and community development are some of the most popular areas of CR engagement followed by natural resource management, IT and livelihood based activities. Corporate Social Initiatives - Philip Kotler Overlapping into each other Corporate Philanthropy Cause Promotion Cause Related Marketing Corporate Social Marketing Community Volunteering Socially Responsible Business Practices CSR Emerging Perspective Three emerging perspectives : Reputation Capital - capturing & sustaining markets - use in advertising & social marketing initiatives Eco Social perspective - shareholder accountability to stakeholder accountability - maximization to optimization of profits Rights based perspective - stresses accountability, transparency and social and environmental investment CSR Model Three co-existing models Ethical : moral responsibility towards its stakeholder population Altruism : Growing rights based perspective stresses accountability, transparency and social and environmental investment by businesses leading to sustainable development Strategic : CSR for Competitive Advantage: In competitive context of factor conditions, demand conditions, related & supporting industries, strategy & rivalry CSR Business Advantage Protect licence to operate Increased sales & market share Strengthened Brand Positioning Reduce cost, risks, liabilities, litigation cost Access to large talent pool corporate & brand reputation advantage Better employee retention reduced cost of training Availability of growing pool of international capital Customer satisfaction, loyalty, advocacy.

Improved Corporate Image Improved stakeholder value Sustainable development Status of preferred supplier / partner Environmental sustainability Newer markets / opportunities Stakeholder support in times of crisis Competitive mileage Emerging Areas of CSR Purpose & Values Workplace & Human Rights Marketplace Corporate Governance Environment Community Environmental impact, benefits or costs, of companies core products and services Positive and negative media comments for environmental activities CSR New Paradigms (Michael Porter) Corporate Philanthropy diffuse, unfocussed - communal obligation - goodwill - employees, customers, local community - strategic giving- promote companys image through high profile sponsorship / cause association Strategic CSR focused, competitive context Variables: Availability of skilled & motivated employees Efficiency of local infrastructure ( road, telecom) Size and sophistication of local market Extent of government regulation Four Elements of Competitive Context factor conditions: - raw material, people, infrastructure, capital resource, information infrastructure, natural resource demand conditions: local customers, specialised segments, future needs related & supporting industry: suppliers, related industries, clusters context for strategy & rivalry : local policies & incentives, IPR, vigorous local competition Strategic CSR -New Approach (Michael Porter) Examine the competitive context in each of the companys important geographic locations - tightly targeted objective - well defined contextual initiative Review the existing philanthropic portfolio to see how it fits this new paradigm Assess existing & potential corporate giving initiatives against the four forms of value creation - select most effective grantee - signal other funders - improve grantee performance - advance knowledge & practice Seek opportunities for collective action within a cluster & with other partners - focusing on social change and not PR will expand the potential for partnership Rigorously track and evaluate results - successful programs will be long term commitments and will continue to grow in scale & sophistication Sustainable Business Development

Sustainable competitiveness demands the simultaneous improvement of economic, environmental and social performance in the short and the long term. Objectives 1. Innovation and entrepreneurship 2. Skills and competence building 3. Equal opportunities and diversity 4. Health and safety 5. Environmental protection Strategies to achieve these goals Corporate responsibility in the mainstream of business Stakeholder engagement Leadership and governance Communication and transparency Business-to-business co-operation and alliances Additional Reference Material International SR Audits, Benchmarks & Funds.. Global Reporting Initiative Dow Jones Sustainability Indexes FTSE4 Good index The Domini 400 Social Index Pax World Funds EIRIS (Ethical Investment research Services) Calvert Social Investment Fund Sierra Club Mutual Funds New Alternatives Fund Pro-Conscience Funds own FEMMX, Womens Equity Mutual Fund Social Funds.com About OECD The OECD groups 30 member countries sharing a commitment to democratic government and the market economy. With active relationships with some 70 other countries, NGOs and civil society, it has a global reach. The OECD plays a prominent role in fostering good governance in the public service and in corporate activity. The OECD produces internationally agreed instruments, decisions and recommendations to promote rules of the game in areas where multilateral agreement is necessary for individual countries to make progress in a globalised economy. Sharing the benefits of growth is also crucial as shown in activities such as emerging economies, sustainable development,territorial economy and aid. About SRI Integrating personal values and societal concerns with investment decisions is called Socially Responsible Investing (SRI). SRI considers both the investor's financial needs and an investments impact on society. With SRI, you can put your money to work to build a better tomorrow while earning competitive returns today. Social investors include individuals and institutions such as corporations, universities, hospitals, foundations, insurance companies, pension funds, nonprofit organizations, churches and synagogues. Three key SRI strategies have evolved over the years: Screening, Shareholder Advocacy, Community Investment. SRI Screens

Judged as ; No Screens Positive investment Restricted investment No investment Industries like ; Alcohol,tobacco,gambling,defenses/weapons, animal testing, environment, products & services, etc. About SA 8000 Established in 1987, SustainAbility is a strategy consultancy and independent think tank specializing in the business risks and market opportunities of corporate responsibility & sustainable development Coined the terms green consumer and triple bottom line to describe new types of markets and innovative business approaches that would be needed to achieve success. Clients : Ford India, Abbot Labs, Body Shop, BMW Grp, ABN Amro, BA, BT, Canon, Chevron Texaco, DuPont, HP, IBM , Nike, P&G etc SA 8000 is a comprehensive, global, verifiable standard for auditing and certifying compliance with corporate responsibility. It is applicable to both small and large companies that want to demonstrate to customers and other stakeholders that they care. The heart of the standard is the belief that all workplaces should be managed in such a manner that basic human rights are supported and that management is prepared to accept accountability for this. The standard was initiated by Social Accountability International (SAI). SAI is a non-profit organization dedicated to the development, implementation, and oversight of voluntary verifiable social accountability standards. Corporate responsibility services offered Strategy Development & Business Case Corporate Governance Operational Effectiveness Issues and Trends Analysis Non-financial Risk Management Innovation Stakeholder Engagement Dilemma resolution Corporate Reporting Emerging Economies ETI Ethical Trading Initiatives The Ethical Trading Initiative (ETI) is an alliance of companies, non-governmental organizations (NGOs) and trade union organizations. They exist to promote and improve the implementation of corporate codes of practice which cover supply chain working conditions. Their ultimate goal is to ensure that the working conditions of workers producing for the UK market meet or exceed international labor standards. ETI has developed a code of labor practice the Base code - reflecting the most relevant international standards with respect to labor practices which will be used as the basis of its work. ETI member companies are expected to adopt this Base Code, or to adopt their own code so long as it incorporates the Base Code. The Base Code which is accompanied by a set of general principles concerning implementation, provides a foundation for ETI's philosophy of learning. Its a multi stakeholder code like SA 8000 ISO 14000 with EMS Started in 1997, the ISO 14000 is primarily concerned with "environmental management". This means what the organization does to: - minimize harmful effects on the environment caused by its activities, and to - achieve continual improvement of its environmental performance. "certification" refers to the issuing of written assurance (the certificate) by an independent, external body that has audited an organization's management system and verified that it conforms to the requirements specified in the standard

The Environmental Management System (EMS) is the part of the overall management system that includes organizational structure, planning activities, responsibilities, practices, procedures, processes, and resources for developing, implementing, achieving, reviewing and maintaining the environmental policy. An Environmental Management System Audit is a systematic and documented verification process of objectively obtaining and evaluating evidence to determine whether an organization's environmental management system conforms to the environmental management system audit criteria set by the organization, and for communication of the results of this process to management. CERES Coalition of Environmentally Responsible Economies coalition of investment funds (representing over $400 billion in invested capital), environmental organizations, and public interest groups. CERES has developed ten principles of environmental ethics and sustainable development, to be used as a framework by groups working toward solutions to environmental concerns: 1. Protection of the Biosphere. 2. Sustainable Use of Natural Resources. 3. Reduction and Disposal of Wastes. 4. Energy Conservation. 5. Risk Reduction. 6. Safe Products and Services. 7. Environmental Restoration. 8. Informing the Public. 9. Management Commitment. 10. Audits and Reports. GRI is the result of a partnership between CERES and the United Nations Environment Program (UNEP). GRI was established to help develop guidelines for reporting on businesses economic, environmental, and social performance. Global Compact In January 1999, UN Secretary-General Kofi Annan proposed a Global Compact between the UN and business to uphold and promulgate a set of core values in the areas of human rights, labour standards and environmental practice. The Global Compact was formally launched on 26 July 2000 at a meeting at the United Nations chaired by Kofi Annan and attended, among others, by senior officers of some 50 major companies. The Compact is open for adherence by any company, large or small, wishing to do so. No formalities are involved. Companies are asked to demonstrate their adherence by taking corporate action to support the core values of the Compact. Global Compact The Ten Principles Human Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses. Global Compact Labour Standards Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation. Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies Anti-Corruption Principle 10: Businesses should work against all forms of corruption, including extortion and bribery. Millennium Development Goals: Launched in July 2002, the Millennium Project is an independent advisory project commissioned by UN Secretary-General Kofi Annan and supported by the UN Development Group. 1. Eradicate extreme poverty and hunger. 2. Achieve universal primary education 3. Reduce child mortality 4. Promote gender equality and empower women 5. Improve maternal health 6. Combat HiV / Aids, malaria and other diseases 7. Ensure environmental sustainability 8. Develop a global partnership for development. Tenth Five Year Plan: Reduction of poverty ratio by 5 percentage points by 2007 and by 15 percentage points by 2012; Providing gainful and high-quality employment at least to addition to the labour force over the Tenth Plan period; ( current unemployment figure is 9 percent ) All children in school by 2003; all children to complete 5 years of schooling by 2007; Reduction in gender gaps in literacy and wage rates by at least 50 per cent by 2007; Reduction in the decadal rate of population growth between 2001 and 2011 to 16.2 per cent; Increase in Literacy rates to 75 per cent within the Plan period; Reduction of Infant mortality rate (IMR) to 45 per 1000 live births by 2007 and to 28 by 2012; Reduction of Maternal mortality ratio (MMR) to 2 per 1000 live births by 2007 and to 1 by 2012; Increase in forest and tree cover to 25 per cent by 2007 and 33 per cent by 2012; All villages to have sustained access to potable drinking water within the Plan period; Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012.

CASE STUDY FOR CSR INITIATIVE Agricultural Raw Materials Direct Procurement Organisation Name: Nestl Headquarters Problem Nestl relies on the long-term supply of agricultural raw materials at competitive cost so that finished products remain affordable. At the same time, consumers' confidence depends on the quality and safety of the food supply chain. Damages to natural resources and environment will affect agricultural productivity. Solution Nestl's decision to set up Direct Procurement depends on a number of factors. These include the company's requirements in terms of:

 quality safety quantity and cost the characteristics of individual raw materials the reliability in supply the local conditions for sustainable production. The direct procurement system is based on the set up of the local Nestl operational company's network, and the raw materials purchased are processed at Nestl manufacturing sites in the country itself. Nestl is more involved in the direct procurement of green coffee and fresh milk. Nestl implemented direct procurement for coffee beans in six countries, Thailand, Ivory Coast, Indonesia, China, Mexico and the Philippines. In 2003, Nestl purchased about 1.8 million bags or 110,000 tons of green coffee from over 100,000 farmers. In 2003 Nestl implemented direct procurement for fresh milk in 37 countries (among others China, Bangladesh, India, Pakistan, Sri Lanka, South Africa, Turkey, Brazil, Argentina, Colombia and Mexico) covering about 6,600,000 tons of fresh milk from over 325,000 farmers. Benefits The direct procurement system provides farmers with an alternative sales channel that is transparent, fair and based on quality. Farmers receive a better price for their produce, as there are no intermediaries. It induces quality improvement by basing payment on quality. Where appropriate (particularly in developing countries), Nestl provides various technical assistance to farmers to improve the quality of their produce and farm in a sustainable manner. For Nestl, it ensures a long-term supply of agricultural raw materials that are of the right quality, safe and at a competitive cost. Direct procurement empowers the local economy and supports rural development. Period Of Implementation 2003 Place Of Implementation Varied developing countries Themes Health and Safety Mainstreaming CSR CASE STUDY FOR CSR INITIATIVES

"Dont See A Great Night Wasted" Promoting responsible attitudes towards alcohol Organisation Name: Diageo Ireland Problem: Alcohol is a product that is positive for society when consumed in moderation and enjoyed responsibly by the vast majority of people who choose to drink. Diageo is proud of the role their brands play in the lives and celebrations of so many people. Whenever people choose to drink, Diageo wants them to think of their brands first. The company also acknowledges however that excessive or inappropriate alcohol consumption can lead to personal and social problems. As Irelands leading drinks company it is determined to play its role in promoting sensible drinking and providing consumers with the information and awareness they need to make responsible choices about their alcohol consumption. Diageo is also committed to working in partnership with other stakeholders, including Government, the NGO sector, and industry bodies, to tackle the complex problem of alcohol misuse and abuse. Solution Diageo Ireland, and its Guinness brand in particular, have a recognised expertise in marketing and advertising. Diageo Ireland wanted to leverage this expertise and creativity to promote its responsible drinking message. Working with an established Irish design and advertising agency, the concept for the Dont See A Great Night Wasted campaign was developed. The advertisement is the first responsible drinking message produced specifically for the Irish market. The campaign goal is to promote the concept of responsible consumption in Ireland with young adults by researching and leveraging the highest impact motivations that would lead to consumer consideration of this behavoir. When designing the campaign, Diageo Ireland invested significant resources in research to understand its consumers motivation, attitude and behaviour towards responsible drinking. The first phase of the 'Don't See A Great Night Wasted' campaign began in November 2003 with the launch of the 'Many Me' execution which was launched across a range of

media including TV, outdoor, press and internet. This phase of the campaign ran until June 2004. In December 2004 the 'Many Me' campaign was extended with the core message being tailored to tie-in with the Christmas/New Year period and other key periods of consumption in Ireland. Radio was included for the first time in addition to TV, press, outdoor adverts, strategic use of washroom advertising and ad mobiles at key weekends. The third phase of the Dont See A Great Night Wasted campaign was launched in August 2005. The 'Wake Up Call' execution further develops the initial campaign's consumer insights, the erosion of social capital and the impact of a person's behaviour on their friends' night out. Additionally, we leveraged the importance of the mobile phone to lend credibility and resonance to the target audience within all aspects of the marketing materials. This phase of the campaign will run up to June 2006, with intensive media activity planned for key social events such as festivals and bank holidays. We also engage in formal and informal discussions on the campaign with other key stakeholders, such as MEAS (Mature Enjoyment of Alcohol in Society) and Drinks Industry Ireland. Constraints Mainstreaming the sensible drinking message to appeal to a young, mobile target audience who are media savy. Updating the themes and content to address feedback and emerging issues identified through ongoing research at all stages of the campaign. Since Winter 2003, the campaign has required an investment in excess of 5m. Benefits The Dont See A Great Night Wasted campaign has marked Diageo Ireland out as an innovator among alcohol beverage companies in the Irish market. The campaign has demonstrated how the skills and talents of Diageo Ireland in the fields of research, advertising and marketing can be applied to a different scenario and produce real results among consumers. For the first time in Ireland there is a sustained and effective campaign promoting sensible drinking and asking consumers to review their attitudes towards alcohol. According to independent research, 76% of those who saw the TV ad would be more likely to drink responsibly as a result.

 Prompted recall for the outdoor element of the campaign was 78% in the target 18-34 year old market. 96% of those who were aware of the campaign got the intended message and found it easy to understand. 84% said it was the type of ad that would make them think about their drinking patterns. Period Of Implementation Launched in 2003 Place Of Implementation Ireland Themes Health and Safety Stakeholder Engagement

"Impact Malaria" Programme: Ensuring Sustainable Access to Medicines for PovertyRelated Diseases Organisation Name: Sanofi-Aventis Problem Malaria is caused by parasites transmitted to humans by mosquitos. It affects 500 million people and leads to 1 to 2 million deaths per year, primarily in young African children. It represents a tremendous human, but also economic, burden on many developing countries. Effective treatments exist but are often not accessible to those who need it, due to price, inappropriate distribution channels, or lack of information. Solution In 2001, Sanofi Aventis created Impact Malaria, a team dedicated to the fight against malaria, that follows 4 strategic axes: Research and develop new antimalarial drugs, to anticipate resistance to existing compounds. Re-activated research efforts in this field, that have resulted in one compound entering trials in humans, and several others at earlier stages of development. Improve existing drugs to meet the needs and requirements of the patients. As an example, Impact Malaria develops, in partnership with the Drugs for Neglected Diseases Initiative (DNDi), a fixed-dose combination of two existing antimalarial drugs. This new formulation will greatly reduce the number of tablets taken by patients, and will decrease the likelihood of development of resistance. Moreover there will be no patent registered for this compound.

 Develop Behavioral Change Communication tools. The team develops tools to help patients understand what causes malaria and, therefore, how they can prevent it through simple measures such as using insecticide-impregnated bednets. The team works with several NGOs on communication tools tailored to the target populations, that take into account their local structures, conditions, specificities, literacy rates, etc. Develop pricing policies that give access to high quality drugs to all population segments. Production costs have been optimised to offer the lowest possible prices to the public market (countries, UN agencies, NGOs, etc.). For patients who cannot afford brand-name antimalarial drugs, the CAP Program has been developed, to give them access to our drugs at a no profit-no loss price through local pharmacies. The Impact Malaria team comprises 18 full-time persons and benefits from multiple internal and external collaborations. This successful organisation is being used as a blueprint to develop similar programs on diseases of the developing world for which access to medicines is an issue, such as tuberculosis, leishmaniasis, sleeping sickness and epilepsy. Constraints: Effective and affordable drugs against malaria are indispensable. However, drugs alone will not significantly reduce the burden of disease in a sustainable way. Many other interventions are also needed in the field of information, prevention, diagnosis, fight against mosquitos, etc. Impact Malaria is actively involved in programs that integrate all aspects of the fight against malaria and will demonstrate what organisation and investment levels are needed. Benefits Concrete sustainable solutions have been designed to give access to quality drugs to all populations affected by malaria. The company's involvement goes beyond the provision of drugs, through a thorough understanding of what is required for an effective and sustainable fight against malaria. The company's experience in malaria will serve to build programs against tuberculosis and other major poverty-related diseases, which affect the developing world, but also some populations of industrialised countries. Period Of Implementation : Launched in 2001 Place Of Implementation: France and Malaria affected countries in Africa, Asia and Latin America. Themes: Innovation Health and Safety

CASE STUDY CSR INITIATIVE Antwerp Harbour Safety Project Organisation Name : Manpower Problem: In Antwerp, Manpower supplies temporary staff for the Port Trust whenever there is a shortage of certificated harbour workers. To ensure that these temporary recruits work safely, it developed a special course in line with its personnel values (We Care about People) and safety policy. Solution: In collaboration with the safety department of the Port Trust, Manpower's Safety Manager developed a course designed to highlight the potential risks these workers would encounter. Its Service Representatives in Antwerp were first taken on a guided tour of the harbour by the Port Trust in order to have a better idea of the work environment. For the course, Manpower opted for a powerpoint presentation to be shown to all its temporary workers that would be hired by the Port Trust in order to introduce them to their future work environment including: the job, its requirements, the goods to be handled, the right attitude to be adopted, how to board a ship and other practical information, including some of the specific 'harbour terminology'. They also discover the whereabouts of most important places, like t'Kot, and where to go to get safety equipment. Pictures say more than words: Awareness of this helpful information considerably reduces stress levels generated on the first day at work and temps are made more sensitive to the risks that will be all around them in the workplace. Constraints Workers did not wear life preserving safety helmets. Now they do! Benefits Workers appreciated the comprehensiveness of the course. the Port Trust appreciated this initiative and called it worth being congratulated. Manpower gained competitive advantage in the harbour, being the only temporary work company that:

 had contacted the safety department of the Port Trust, had taken positive steps to procure safety equipment for its people, really paid attention to the safety of temporary staff. Place Of Implementation Belgium Year Of Submission 2005 Themes Health and Safety