Social Responsibility, Ethics,

and Sustainable
Development
Social
Responsibility
Social responsibility is an ethical framework and suggests that an entity, be
it an organization or individual, has an obligation to act for the benefit of
society at large.

Conscience - Individual
●
Corporat
e ● groups of individuals – group

● conscience citizen of community

●
legal entity
● Social
● Responsibili
ty
●
Old
concept
●
There is one and only one social responsibility of business
resources
— toand engage
use its in activities designed to increase its
profits.
● Only human beings have a moral responsibility for their actions

●
Social issues and problems are the matters of the state rather than
manager
corporate
s
●
Balance profit-making activities with activities that benefit
society
Corporate Social Responsibility
(CSR)
●
Corporate social responsibility (CSR) refers to business practices involving
that benefit
initiatives
society.
●
It can be defined as the continuing commitment by business to behave
ethically to
contribute and
economic development while improving the quality of life of the
workforce and their families as well as the local community and society at large.
Why should companies be socially
responsible?

●
It is a critical factor if businesses want to remain in business
● Investors use a company's social responsibility, or lack thereof,
criterion
as an investment
It inspires consumers to purchase goods and services from the company
●

It is a big factor in where today's top talent chooses to work.

●

Socially responsible individuals are demanding companies and organizations to

●

become more socially responsible.

 Approaches to
CSR
Obstructionist approach – companies and their managers choose not to behave
●

in a socially responsible way and instead behave unethically and illegally

Defensive approach - companies and their managers behave ethically to the
●

degree that they stay within the law and abide strictly with legal requirements
Accommodative approach - companies and their managers behave legally and
●

ethically and try to balance the interests of different stakeholders as the need
arises.
Proactive approach - companies and their managers actively embrace socially
●

responsible behavior, going out of their way to learn about the needs of different
stakeholder groups and utilizing organizational resources to promote the
interests of all stakeholders
Provisions of Corporate Social Responsibility under
section 135 of the Companies Act, 2013

Every company having net worth of rupees five hundred crore or more, or
turnover of rupees one thousand crore or more or a net profit of rupees five
crore or more during any financial year shall constitute a Corporate Social
Responsibility Committee of the Board consisting of three or more directors, out
of which at least one director shall be an independent director.
The Board of every company referred to in sub-section (1), shall ensure that the
company spends, in every financial year, at least two per cent. of the average net
profits of the company made during the three immediately preceding financial
years, in pursuance of its Corporate Social Responsibility Policy.
 Activities which may be included by companies
in their Corporate Social Responsibility
Policies
Activities relating to:—
i Eradicating hunger, poverty & malnutrition, promoting preventive health care & sanitation &
making available safe drinking water;
ii.Promoting education, including special education & employment enhancing vocation skills
especially among children, women, elderly & the differently able & livelihood enhancement
projects;
ii.Promoting gender equality, empowering women, setting up homes & hostels for women &
orphans, setting up old age homes, day care centers & such other facilities for senior citizens &
measures for reducing inequalities faced by socially & economically backward groups;
v.Reducing child mortality and improving maternal health by providing good hospital facilities
and low cost medicines;
v.Providing with hospital and dispensary facilities with more focus on clean and good
sanitation so as to combat human immunodeficiency virus, acquired immune deficiency
syndrome, malaria and other diseases;
vi.Ensuring environmental sustainability, ecological balance, protection of flora & fauna, animal
 Activities which may be included by companies
in their Corporate Social Responsibility
Policies Activities relating to:—
vii.Employment enhancing vocational skills
iii.Protection of national heritage, art & culture including restoration of buildings &
sites of historical importance & works of art; setting up public libraries; promotion & development of
traditional arts & handicrafts;
ix. Measures for the benefit of armed forces veterans, war widows & their dependents;
x. Training to promote rural sports, nationally recognized sports & Olympic sports;
xi.Contribution to the Prime Minister‘s National Relief Fund or any other fund set up by the Central
Government for socio-economic development & relief & welfare of the Scheduled Castes, the Scheduled
Tribes, other backward classes, minorities & women;
xii.Contributions or funds provided to technology incubators located within academic

institutions, which are approved by the Central Government;

xiii. Rural development projects, etc

Ethics
Ethics are the inner guiding moral principles, values and beliefs
that people use to analyze or interpret a situation and then
decide what is the right or appropriate way to behave.

Business ethics
Business ethics are moral principles that guide the way a
business behaves.
Acting in an ethical way involves distinguishing between
“right” and “wrong” and then making the “right” choice.
The word ‘ethics’ comes from the Greek word ‘ethos’
 Drivers of Unethical Business Behavior

Unscrupulous pursuit of personal gain and self-interest

Heavy pressures on company managers to meet or beat short-term performance targets

A company culture that puts profitability and business performance ahead of ethical
behavior.
Are they universal or dependent on local
norms?
The School of Ethical Universalism
•

• The School of Ethical Relativism

• Ethics and Integrative Social Contracts Theory

 Rules for ethical decision
making
● Utilitarian rule – a decision that produces the greatest good
for the greatest number of people
● Moral rights rule – a decision that best maintains and protects
the fundamental rights and privileges of the people affected
by it.
● Justice rule – a decision that distributes benefits and harms
among people and groups in a fair, equitable or impartial
way.
● Practical rule – a decision that a manager has no reluctance
about communicating to people outside the company
Ethical behavior behavior help companies achieve:
● Stronger financial performance over the long run
● Greater sales, brand image and reputation
● Employee loyalty and commitment
● Less vulnerability to activist pressure and boycotts
● Fewer or no fines, court-imposed remedies or criminal
charges
● Higher levels of trust
Common unethical
activities
Lying and withholding needed
•

information
Discrimination and harassment
•

Stealing
•

Breaking environmental and safety

•

laws
Falsifying records
•

Giving or accepting bribes

•
Sustainabili
tySustainability canbe defined as the practice of maintaining
processes of productivity indefinitely—natural or human
made—by replacing resources used with resources of equal or
greater value without degrading or endangering natural biotic
systems.
Is there a relationship between economic growth and
development and environmental degradation?

What is an unsustainable situation?

Environmental degradation
Environmental equilibrium
Sustainable
Development
Brundtland Commission defined sustainable development as -
“Development that meets the needs and aspirations of the
current generation without compromising the ability to meet
those of future generations”.
Formally known as the World Commission on Environment and Development (WCED), the mission
of the Brundtland Commission is to unite countries to pursue sustainable development together. The
Chairperson of the Commission, Gro Harlem Brundtland, was appointed by United Nations in December
1983. At the time, the UN General Assembly realized that there was a heavy deterioration of the human
environment and natural resources. To rally countries to work and pursue sustainable development
together, the UN decided to establish the Brundtland Commission. Gro Harlem Brundtland was the
former Prime Minister of Norway and was chosen due to her strong background in the sciences and
public health.The Brundtland Commission officially dissolved in December 1987 after releasing Our
Common Future, also known as the Brundtland Report, in October 1987, a document which coined, and
defined the meaning of the term “Sustainable Development".

The modern concept of sustainable development is derived mostly from this 1987 Brundtland Report.

Since the Brundtland Report, the concept of sustainable development has developed beyond the initial
intergenerational framework to focus more on the goal of "socially inclusive and environmentally
sustainable economic growth”

In September 2015, the United Nations General Assembly formally adopted the "universal, integrated
and transformative" 2030 Agenda for Sustainable Development, a set of 17 Sustainable Development
Goals (SDGs). The goals are to be implemented and achieved in every country from the year 2016 to
2030.
The Sustainable Development Goals (SDGs), otherwise known as
the Global Goals, are a universal call to action to end poverty,
protect the planet and ensure that all people enjoy peace and
prosperity.

The SDGs need business and business needs the SDGs

The three spheres of sustainable

development are: environment,
economy
and
society.
Sustainable
business
Sustainable business, or green business, is an enterprise
that has minimal negative impact on the global or local
environment, community, society, or economy—a business
that strives to meet the triple bottom line.