Corporate Social Responsibility and

Sustainability
Various terms are used….

Business Ethics
Corporate Governance
Corporate Social Responsibility
Green Business
Sustainable Development
Business Sustainability
What do they mean?

• Business ethics – doing the right thing

• Corporate governance – accountable business

• Sustainability – a system wide concern.

Sustainable Development

 Sustainable development is development that meets the needs of the

present without compromising the ability of future generations to
meet their own needs. (World Commission on Environment and
Development 1987)

 Sustainability refers to the long-term maintenance of systems

according to environmental, economic and social considerations
(Crane and Matten, 2004: 24)
Green Business

• Any business or business practice that is environmentally friendly

• From changing a light bulb and using recyclable products to installing

energy efficient equipment and systems

• Involve high end technology and innovation

Green Business

• Energy efficient operations

• Environmentally sound business practices

• Waste management system

• Green Marketing

• Green certification and eco labeling

Sustainable Business

• To achieve a sustainable development of the organisation and the

core business

• To create with its business a positive contribution of the company to a

sustainable development of the economy and society at large.

• Integration of business and sustainability together into the core focus

With the CSR approach, social and environmental management are a
business accompanying activity,

whereas

corporate sustainability requires business shaping and business

development to become a driver of sustainable development.
Debate

• Business of Business is only business

• Business of Business is beyond Business

Did you know:

• Buffett's lifetime giving tops $51.5 billion–placing him at the top of

Forbes' 2023 list of America's most generous philanthropists.
The CSR Debate

• Milton Friedman said the main objective of any business is to earn

more and more profit or profit maximization for the shareholders

• According to Freeman, any business is successful if it creates value for

customers, supplier, employees, community and financial banks and
other people for money.
Defining CSR

• The term was coined first in 1953.

• American economist Howard Bowen coined the term and he is often

referred as the father of CSR.
CSR defined?
• First, companies increasingly articulate / justify CSR in terms of it
being good for business.
• Some analysts suggest that CSR investments feed into the bottom
line i.e adding to business performance in the market.
• Certainly companies may benefit in terms of reputation, investor
attractiveness, employee attractiveness / satisfaction, innovation.
Defining CSR
• Section 135 of Companies Act 2013: "CSR is the process by which an organization thinks about
and evolves its relationships with stakeholders for the common good, and demonstrates its
commitment in this regard by adoption of appropriate business processes and strategies.

• As per the United Nations Industrial Development Organization (UNIDO), the Corporate Social
Responsibility (CSR) is generally understood as being the way through which a company achieves
a balance of economic, environmental and social imperatives ("Triple-Bottom-Line- Approach")
CSR in India
• India is the first country in the world to make corporate social responsibility (CSR)
mandatory, following an amendment to the Companies Act, 2013 in April 2014.

• Requires companies with a net worth of INR 5 billion (US$70 million) or more, or an annual
turnover of INR 10 billion (US$140 million) or more, or net profit of INR 50 million
(US$699,125) or more, to spend 2 percent of their average net profits of three years on CSR.

• The Companies Act prescribes the kind of social activities, which come under the purview of
CSR. This list is included in the 7th schedule of the rule.

• To measure and evaluate the effectiveness and outcomes of the CSR initiatives, the Ministry
the tool of Impact Assessment to be used
• Protection of national heritage, art and culture, including buildings and sites and artworks of historical importance.
• Promotion and development of traditional arts and handicrafts.
• Establishment of public libraries.
• Establishment of orphanages and hostels, construction of buildings for them, their maintenance and operation.
• Establishment of old age home, construction of buildings for them, their maintenance and operation.
• Establishment of day care centres, construction of buildings for them, their maintenance and operation.
• Setting up of houses and hostels for women.
• Training to promote rural sports, nationally recognized sports, Olympic Games and Paralympic Games.
• Promoting education, including special education and employment enhancing vocational skills especially among children, women, elderly and Persons with
Disabilities (PwDs) and livelihood enhancement projects.
• Funding for technology incubators located in educational institutions recognized by the Central Government.
• Activities to provide safe drinking water.
• Activities to maintain soil, air and water quality.
• Conservation of natural resources.
• Ensuring ecological balance.
• Conservation of flora, fauna, animal welfare, agricultural forestry.
• Rural Development Projects.
• Livelihood related projects.
• Promoting health and hygiene.
• Working for socially and economically backward groups.
• Interventions for the benefit of the widows of war martyrs, and their dependents.
CSR Trends in India

• Listed companies in India spent INR 100 billion (US$1.4 billion) in various
programs ranging from educational programs, skill development, social welfare,
healthcare, and environment conservation

• Small companies with very limited earnings are not obliged to spend on CSR.

• The education sector received the maximum funding (38 percent of the total)
followed by hunger, poverty, and healthcare (25 percent), environmental
sustainability (12 percent), rural development (11 percent).
 CSR by famous groups

• Tata Group

• Mahindra and Mahindra

• ITC group

• Cement Industry

• Bharat Petroleum / Indian Oil

WHY???????

• Legislative compliance
• Financial bottom-line
• License to operate
• Consumers
• Culture specific
Strategic CSR

• Connecting charitable contributions to company’s business.

• Requires context focused approach.

• By integrating CSR into core business processes and stakeholder management,

organizations can achieve the ultimate goal of creating both social value and
corporate value.
Strategic philanthropy

• Cause Related Marketing- company concentrates its giving on a single cause or

admired organization.

• More impactful than unfocused giving.

Cases of Strategic CSR

1. CISCO Systems Networking Academy.

Benefits-
• enlarged market & strengthened cluster.
• Increased sophistication of customers.
• Pride & enthusiasm among company employees.
• Goodwill among partners,
• Reputation for leadership in philanthropy.
Cases of Strategic CSR

2. Pfizer treatment of Trachoma

• Within 1 year, incidence of the disease declined.
• Social benefit + Pfizer expanded business prospects by building infrastructure to expand markets.
Cases of Strategic CSR
4. BP
- Achieved operational efficiency by reducing green house gas emissions.

5. Dupont
- Saved 2 bn by reducing energy consumption.

6. Mcdonalds
- Reduced solid waste by 30% by changing wrapping material of its food products.
Organizations/ initiatives promoting responsible business
Millennium Development Goals

• End Poverty and Hunger

• Universal Education
• Gender Equality
• Child Health
• Maternal Health
• Combat HIV/AIDS
• Environmental Sustainability
• Global Partnership
UNGC – United Nations Global Compact

• Largest voluntary corporate responsibility initiative in the world.

• Global Compact is a practical framework for the development,

implementation, and disclosure of sustainability policies and practices
UNGC – United Nations Global Compact

Ten Principles of UNGC:

1. Businesses should support and respect the protection of
internationally proclaimed human rights;
2. make sure that they are not complicit in human rights
abuses.
3. Businesses should uphold the freedom of association and
the effective recognition of the right to collective bargaining
4. the elimination of all forms of forced and compulsory labour;
5. the effective abolition of child labour
6. the elimination of discrimination in respect of employment
and occupation.
UNGC – United Nations Global Compact

7. Businesses should support a precautionary approach to environmental

challenges
8. undertake initiatives to promote greater environmental responsibility
9. encourage the development and diffusion of environmentally friendly
technologies
10. Businesses should work against corruption in all its forms, including
extortion and bribery.
GRI – Global Reporting Initiative
• Voluntary initiative to promote sustainability reporting

• Started in 1998

• Latest guideline G3.1 and G4 expected in 2014

• Guidelines on Content, quality and boundary of the report

• Based on economic, social, environmental and governance

Initiatives in Financial Sector

• Responsible Investments (
http://www.unpri.org/introducing-responsible-investment/)

• Sustainable Stock Exchanges (Sustainability Index- S&P ESG India

Index)