Social and Economic Responsibility

Module 4
 Table of contents
• Corporate Social Responsibility
– ISO 26000
– Individual social responsibility
– Socially responsible companies. Understanding the origin from
European and American models.
– National and international certifications of social responsibility.
• Social and environmental awareness.
– Responsible consumption models.
• Economics and social responsibility.
– Commercial strategies
– Social entrepreneurship. Social companies and organizations of social
innovation.
– Investment return of social entrepreneurship responsibility.
• Social involvement and civil participation.
– Individual and corporate volunteering.
– Social marketing.
Corporate Social Responsibility
 CSR defined
• CSR ensures company conduct is ethical. This means their
social, economic, environmental impact, and consideration of
human rights. It involves:
Working in partnership with local communities

Socially responsible investment (SRI)

Developing relationships with employees and customers

Environmental protection and sustainability

 Types of CSR
Environmental Sustainability
Initiatives

Direct Philanthropic Giving

Ethical Business Practices

Focus on Economic Responsibility

 Activity 1: Video Discussion
• Activity 1: Introduction Discussion: Corporate Social Responsibility
(CSR)
– Video 1 Intro: https://www.youtube.com/watch?v=E0NkGtNU_9w
(From 0 – 5:30 minutes, then 8:25 onwards )
or
• Video 2
– https://www.youtube.com/watch?v=caLfKHZ-qak
 ISO 26000-2010
• Provides guidance rather than requirements.
• Not certified, unlike other ISO standards.
• Clarifies CSR
• Translates principles into actions
• Shares best practices
• Aimed at all types of organizations regardless of their activity, size
or location.
• Launched in 2010 following five years of negotiations.
 Individual CSR
• Every individual has a responsibility to act in
manner that is beneficial to society and not
solely to the individual.
 USA verses European CSR
United States: Europe:

• philanthropic model • Operating the core business

• companies make profits,
unhindered (Minus tax)
• donate a certain share of
the profits to charitable
causes.
in a socially responsible
way, complemented by
investment in communities
for solid business case
reasons.
 Origin: CSR
John D. Rockefeller co-
founder of the Standard Oil
Company
1884, provides major funding
for a college in Atlanta for
black women, that was
renamed Spelman College in
honor of Mr. Rockefeller’s in-
laws. It would be the first of
Rockefeller’s many initiatives
to improve education at all
levels in the United States.
1970’s definition
Europe’s Nestlé V/S USA’s Union Carbide

1. Int Council of Infant Food Industries
2. Code of ethics (1981) compliance
3. UNICEF Baby friendly hospital initiative (1991)
4. Established the healthy kids program
1. $2 million in aid
2. Provided medical equipment and supplies
3. $2.2 million grant to Arizona State University
4. $5 million to the Indian Red Cross 5.Charitable
trust for a Bhopal hospital
 Activity 2: Case examples
• Identify the differences between a socially and environmentally responsible
company and one that does not uphold the corporate social responsibility. These are
real-word examples that made headlines:

Case 1 : VolksWagon Greenwashing (faking their green efforts): Environmental and

ethical malpractice
In 2015, Volkswagen had become the world’s leading car manufacturer behind their green
initiative. People around the world were drawn to the company because their green standards were
better than any other company. Except they weren’t. Volkswagen cars weren’t green at all – in fact,
they were emitting pollutants well above the limit and lying about it.The company has equipped a
staggering 11 million diesel cars since the 2009 model year with software – called a “defeat device”
-- used to cheat on emissions tests; when not being tested, the cars emit up to 40 times the
allowable levels of nitrogen oxide pollution. This emissions scandal is a disturbing case of
systematic corporate fraud that has harmed customers, governments, and the health and well-
being of citizens in the societies in which Volkswagen has been given the license to operate.

• Reading material:
https://www.forbes.com/sites/enriquedans/2015/09/27/volkswagen-and-the-
failure-of-corporate-social-responsibility/#230884dc4405
 Activity 2:Case 2
Nike owning up to its controversial labor practices:
Social and ethical malpractice
Often companies try to hide or avoid controversy by pointing to their corporate
social programs. The idea is that people won’t look at the problems lurking under
the surface if you enact social programs that do lots of good.
In the 1990’s Nike was confronted about the working conditions of their factories
in Asia. Their shoes were being created by employees being drastically underpaid,
and the pressure was mounting for them to address the issue.

• Reading material:
https://www.theguardian.com/world/2001/may/20/burha
nwazir.theobserver
 Activity 2:Case 3
Ethical malpractice, Fake News. Claim: Pope endorses Trump as
presidential candidate
Reports said the Pope had endorsed the presidential candidate, he hadn't. Around the
world, millions turn to the Pope for guidance in their daily lives. So when an article
stating the religious leader had endorsed Donald Trump as president, it was shared
more than 960,000 times, analysis from Buzzfeed shows.But the article, published by
the now-defunct WTOE5 News, was fake.In reality, the Pope rarely speaks on politics.
Following the story, the Catholic leader told reporters: "I never say a word about
electoral campaigns", adding that voters should "study the proposals well, pray and
choose in conscience."A week later, during an interview with Belgian media, the Pope
said fake news is a "sickness".
Current CSR policies
Certifications for CSR-International
Sedex and SMETA: Proving responsible supply chain
practices

AIM-PROGRESS: Verifying responsible sourcing

SA8000: Demonstrating social accountability

ISO 45001: Improving workplace health & safety

Social and environmental awareness
Sustainable consumption model 1
Economics and social responsibility
Strategies for CSR
Return on investment & CSR
 Activity 3:Presentation + report
As a new member of the PEMEX drilling team, you are going to help locate and drill a
new underground oil well onshore (on land). Working in a team of 10 engineers and
scientists, you have discovered a well location in the state of Chiapas, Mexico. The drill
site is in the middle of the forest and is as big as a football field. Alongside the forest
are farms and a local village. Drilling the well will mean clearing the forest above,
disrupting the village and farm life, and contributing to noise pollution.

• Submit a drilling strategy to PEMEX which explains:

– How you can drill the well in the shortest amount of time (cost-effective) with minimal harm
and disruption to the socio-and-environmental surroundings (using an ethical corporate social
responsibility scheme).
– Take into account any international standards of CSR that are related to this case.
– Mention what responsibilities lie with the individuals and with the company as a whole i.e.
what efforts people should make on an individual basis and what efforts the drilling team as a
whole should make while performing this operation.

• Presentation Time: 15-20 minutes, 2 min per student and they all take turns,
including solutions to What If Scenarios. Ideal group size 4.
 Activity 3:Presentation + report
• Topic 2: Prepare what you should do, justifying
your choice in case of the following (What If
Scenario):
1. News reports spread news that PEMEX has
destroyed another forest. What actions should
you recommend PEMEX to take to restore their
reputation?
2. There is an oil-leak which has spread to the
nearby lake used by farmers and animals for
drinking and irrigation purposes. What should
you recommend PEMEX do to minimize further
harm to the surrounding community?
3. Cost of production becomes too high with taking
care of the environment and locals during and
before the project. You must suggest only 3
actions that fall in being ethically, socially and
environmentally responsible before starting to
drill the well (will take 1 year to drill, take out
crude oil, and leave the area).
• Presentation Time: 15-20 minutes, 2 min per
student .Ideal group size 4.
 Social Entrepreneurship
• Applies results-driven principles of business
toward solving social challenges.
Social Companies
 Activity 4: Assignment
• Find out the CSR program of a company of your interest. Your report must
include:
– What the company’s CSR core values are.
– What activities show that they are being responsible socially and
environmentally.
– Any scandals/problems they faced in the past with unethical, non-social or
non-environmental practices.
– Are they doing enough/What they should also be doing to promote a good
corporate responsibility strategy towards the people and environment.
Social involvement and civil participation
 Individual and corporate volunteering

• Involves getting employees and companies to

help with NPO’s in charitable/social causes.
 Social Marketing
• Use of commercial marketing principles and techniques
to improve the welfare of people (physical, social and
economic environment)
• Long-term
• tries to "sell" healthy behaviors that are used to sell
jeans
• E.g.
Differences:
1.
Reference List
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[Accessed: 13- Aug- 2019].
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