Corporate Social Responsibility

CORPORATE SOCIAL RESPONSIBILITY

By  CS Shilpi Thapar

“Our biggest challenge this century is to take an idea that seems abstract-sustainable development- and turn it into a reality for all the world’s people”

 (Kofi Annan, Former UN Secretary General)

What does being a good corporate mean? It means that work hard to deliver attractive returns and exceptional value to shareholders and at the same time, to strive to make the world a better place. Well known companies have already proven that they can differentiate their brands and reputations as well as their products and services, if they take responsibility for the well being of the societies and environments in which they operate. Strategically speaking, business can only flourish when the community and eco-systems in which they operate are healthy.

“Responsible business is good business.”

 Definition of Corporate Social Responsibility (CSR):

Corporate Social Responsibility is also known by number of other names. These include corporate responsibility, corporate accountability, corporate ethics, corporate citizenship, responsible entrepreneurship.

The world business council for sustainable development has described Corporate Social Responsibility as the business contribution to sustainable development. It typically includes “beyond law” commitment and activities pertaining to:

1. Corporate Governance and Ethics
2. Health and Safety
3. Enviornmental Stewardship
4. Human Rights
5. Sustainable Development
6. Conditions of work including safety, health, hours of work, wages
7. Industrial Relations
8. Community Involvement, Development and Investment
9. Involvement of and respect for diverse culture and disadvantaged people.
10. Corporate Philanthropy
11. Customer Satisfaction and adherence to principles of fair competition
12. Anti bribery and anti corruption measures
13. Accountability, transparency and performance reporting.
14. Supplier relations for both domestic and international supply chains.

    There are two drivers of CSR. One is Public Policy and other is business Policy.

Factors and Influences:

Many factors and influences have led to increasing attention being devoted to the role of companies and CSR. These include:

1. Sustainable Development i.e it is need of hour to protect natural resources for future generations.
2. Globalisation i.e to protect environment, health and safety, human resources,etc
3. Governance
4. Corporate sector impact
5. Communications
6. Finance
7. Ethics
8. Consistency and community
9. Leadership
10. Business tool.

Benefits for companies implementing CSR:

1. Better anticipation and management of an ever expanding spectrum of risk.
2. Improved regulation management
3. Enhanced ability to recruit, develop and retain staff.
4. Improved innovation, competitiveness and market positioning.
5. Improved operational efficiencies and cost savings
6. Improved ability to attract an build effective and efficient supply chain relationship
7. Enhanced ability to address change.
8. More robust “social science” to operate in community
9. Improved relations with regulators
10. Access to capital

For instance, TATA Group is engaged in a wide variety of activities directed at helping community development.

Strategies of Implementation of CSR in companies:

Here is a list of practical CSR activities the companies can do:-

1. Improving the environment:

·         Reduce consumption of energy, water and other natural resources and emission of hazardous substances.

·         Use of produce recycled and recyclable materials.

·         Train and encourage staff to look for additional ways to reduce the firm’s environment foot print.

·         Use “Green i.e renewable energy, power electricity suppliers and energy efficient lighting.

·         Join or start local “Green Business” Club.

·         Consider using video conferencing to meet a potential supplier or customer rather than always physically traveling to meetings.

·         Establish a environment management system with objectives and procedures for evaluating progress, minimizing negative practices.

2. Improving human resources management policies:

• Establish policy to ensure safety, health of all employees.
• Involve employees in decision that can improve work environment
• Provide more and more training opportunities
• Encourage healthy work place

3. Promoting Diversity and Human Rights:

• Implement policy to pay comparable wages for comparable work
• Support organizations that promote fair trade and human rights compliance
• Implement policies that are not discriminative in hiring, salary, promotion, training and termination on the basis of gender, race ,age, disability,etc.

4. Helping the community:

• Make some of business products or services available free or at cost to charities groups.
• Encourage and help employees voluntarily in the community and help in cash or kind.
• Use some of the marketing budget to associate the business or brand with social cause.
• Use business experience to help a local school, charity, community group.

Since businesses play an pivotal role in both in job and wealth creation in society and in the efficient use of natural capital, CSR is a central management concern. Now a days, investors are also searching for enhanced financial performance that integrates social and environmental considerations both in terms of risk and opportunities.

To conclude with statement by Niall Fitzgerald, Former CEO and Chairman, Unilever:

“We believe that the leading global companies 2020 will be those that provide goods and services and reach new customers, in ways that address the world’s major challenges-including poverty, climate changes, resource depletion, globalization and demographic shifts.”

(References: Various Publications issued by the International Institute for sustainable development, other educational publications, etc.)