1

A PROJECT REPORT ON

TERM CORPORATE SOCIAL RESPONSIBILITY AND STRATEGIES

FOR LINKING CSR WITH PROFIT AND SUSTAINIBILITY FOR
BUSINESS BENEFITS
SUBMITTED BY
MR/MISS REENA RAMKRISHNA MAHADIK.
ROLL NO: 6225
M.Com. SEM- I
(ADVANCE ACCOUNTANCY)
ACADEMIC YEAR: 2015-16

Under the guidance of PROJECT GUIDE

PROF. RAHUL JAGTAP.

SUBMITTED TO UNIVERSITY OF MUMBAI

MULUND COLLEGE OF COMMERCE
S N ROAD, MULUND (WEST)
MUMBAI - 400080

Declaration from the Student

I, REENA RAMKRISHNA MAHADIK.

R.No. 6225 Student of Mulund College Of

Commerce, S. N. Road, Mulund (West) 400080, studying in M.Com Part- I hereby declare
that I have completed the project on

TERM CORPORATE SOCIAL

RESPONSIBILITY AND STRATEGIES FOR LINKING CSR WITH

PROFIT AND SUSTAINIBILITY FOR BUSINESS BENEFITS under the
guidance of project guide Prof. RAHUL JAGTAP during the academic year 2015-16. The
information submitted is true to the best of my knowledge.

Date:
Place:

Signature

CERTIFICATE
I, Prof. RAHUL JAGTAP, hereby certify that Mr/Miss REENA RAMKRISHNA
MAHADIK . R.No. 6225 of Mulund College of Commerce, S. N. Road, Mulund (West),
Mumbai -400080 of M.com Part I (Advanced Accountancy) has completed her project on

TERM CORPORATE SOCIAL RESPONSIBILITY AND STRATEGIES

FOR LINKING CSR WITH PROFIT AND SUSTAINIBILITY FOR
BUSINESS BENEFITS during the academic year 2015-16. The information submitted
is true and original to the best of my knowledge.

____________________

___________________

Project Guide

External guide

_____________________

___________________

Co-coordinator

Date:

Principal

ACKNOWLEDGEMENT

I would like to express my sincere gratitude to Principal of Mulund College of

Commerce DR. (Mrs.) Parvathi Venkatesh, Course - Coordinator

Prof. Rane and our

project guide Prof. RAHUL JAGTAP, for providing me an opportunity to do my

project work on TERM CORPORATE SOCIAL RESPONSIBILITY AND

STRATEGIES

FOR

LINKING

CSR

WITH

PROFIT

AND

SUSTAINIBILITY FOR BUSINESS BENEFITS I also wish to express my

sincere gratitude to the non - teaching staff of our college. I sincerely thank to all of
them in helping me to carrying out this project work. Last but not the least, I wish to
avail myself of this opportunity, to express a sense of gratitude and love to my
friends and my beloved parents for their mutual support, strength, help and for
everything.

PLACE:
DATE:

Signature

INDEX
SR.
NO.

1
2
3
4
5
6
7
8
9
10
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PARTICULARS
Introduction
Definition And Meaning
Importance Of CSR And Sustainibility
Reasons Of CSR and sustainibility
Types OF CSR and Sustainibility
Benefits OF CSR and sustainibility
Current State Of CSR in India
Advantages and Disadvantages Of CSR and
sustainibility
Case Study OF CSR
Conclusion
Biblography

INTRODUCTION

PAGE
NO.

5
7-9
10-11
12-16
17-20
21-30
31
32-37
38
39
40

Corporate Social Responsibility is a concept whereby companies integrate

social and environmental concerns into their business operations and in their
interaction with their stakeholders (employees, customers, shareholders, investors,
local communities, government), on a voluntary basis. Corporate responsibility
programs can help businesses entice customers, attract and retain talent, assure
investors, reduce operating costs, improve employee morale and enhance a company's
reputation. However, business owners should understand the benefits and limitations
of corporate responsibility programs in order to choose an initiative that benefits the
community and the company. Corporate responsibility programs must be embraced
and supported by top management and woven into company culture and operations.
Stakeholders will soon become skeptical of one-time initiatives or programs that come
and go.
Convincing shareholders or other financial decision makers to allocate
resources to a program designed to benefit something other than the company's
bottom line can be the first obstacle a small business owner must overcome. Small
businesses owners should not assume that customers and community members know
about the company's investment in socially responsible programs. Among other
countries India has one of the richest traditions of Corporate Social Responsibility.

Main
Concepts of CSR

CSR (Carrol, 1979)

Firms have responsibilities to societies including economic, legal,
ethical and discretionary (or philanthropic).
- See also DeGeorge (1999) on the Myth of the Amoral Firm
Social Contract (Donaldson, 1982; Donaldson and Dunfee, 1999)
There is a tacit social contract between the firm and society; the
contract bestows certain rights in exchange for certain
responsibilities.
Stakeholder Theory (Freeman, 1984) A stakeholder is any
group or individual who can affect or is affected by the
achievement of an organisations purpose. Argues that it is in
the companys strategic interest to respect the interests of all its
stakeholders.

Key Issues in CSR

Labour rights:
child labour
forced labour
right to organise
safety and health
Environmental conditions
water & air emissions
climate change
Human rights
cooperation with paramilitary forces
complicity in extra-judicial killings
Poverty Alleviation
job creation
public revenues
skills and technology

Defination Of Corporate Social Responsibility

Corporate social responsibility, often abbreviated "CSR," is a corporation's initiatives

to assess and take responsibility for the company's effects on environmental and social
wellbeing. The term generally applies to efforts that go beyond what may be required
by regulators or environmental protection groups.
CSR may also be referred to as "corporate citizenship" and can involve incurring
short-term costs that do not provide an immediate financial benefit to the company,
but instead promote positive social and environmental change.

Definition Of sustainibility

Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. It contains
within it two key concepts:
The concept of 'needs', in particular the essential needs of the world's poor, to
which overriding priority should be given; and
The idea of limitations imposed by the state of technology and social
organization on the environment's ability to meet present and future needs.
As an ability or capacity of something to be maintained or to sustain itself. It's about
taking what we need to live now, without jeopardising the potential for people in the
future to meet their needs. If an activity is said to be sustainable, it should be able to
continue forever.

Meaning Of Corporate Social Responsibility

In its new Communication, the European Commission has put forward a simpler
definition of CSR as "the responsibility of enterprises for their impacts on society"
and outlines what an enterprise should do to meet that responsibility.
Although there is no "one-size-fits-all" and for most small and medium-sized
enterprises the CSR process remains informal, complying with legislation and
collective agreements negotiated between social partners is the basic requirement for
an enterprise to meet its social responsibility. shareholders at the same time as
ensuring benefits for the company's other stakeholders; to identify, prevent and
mitigate possible adverse impacts which enterprises may have on society.
Corporate social responsibility concerns actions by companies over and above their
legal obligations towards society and the environment. Certain regulatory measures
create an environment more conducive to enterprises voluntarily meeting their social
responsibility.

Meaning of Sustainibility

Ability or capacity of something to be maintained or to sustain itself. Its about taking

what we need to live now, without jeopardising the potential for people in the future to
meet their needs.
Living sustainably is about living within the means of our natural systems
(environment) and ensuring that our lifestyle doesnt harm other people (society and
culture). Its a big idea to get your head around, for all of us. Its really about thinking
about where your food, clothes, energy and other products come from and deciding
whether you should buy and consume these things.

10

Timber harvesting in native forests is carried out so that erosion is minimised,

threatened species habitat and cultural heritage sites are protected, and trees remain to
provide seed so the forest can regrow naturally after harvesting.

The importance of corporate social responsibility

Corporate social responsibility (CSR) has become one of the standard business
practices of our time. For companies committed to CSR it means kudos and an
enhanced overall reputation a powerful statement of what they stand for in an often
cynical business world.
The establishment of a CSR strategy (sometimes referred to as a sustainability
strategy) is a crucial component of a companys competiveness and something that
should be led by the firm itself. This means having policies and procedures in place
which integrate social, environmental, ethical, human rights or consumer concerns
into business operations and core strategy all in close collaboration with
stakeholders.
For companies, the overall aim is to achieve a positive impact on society as a whole
while maximising the creation of shared value for the owners of the business, its
employees, shareholders and stakeholders. Not so long ago, the European
Commission defined CSR as the responsibility of enterprises for their impacts on
society, a succinct and distinct summation for sure.
A 2015 study by the Kenexa High Performance Institute in London (a division of
Kenexa, a global provider of business solutions for human resources) found that
organisations that had a genuine commitment to CSR substantially outperformed those
that did not, with an average return on assets 19 times higher. Additionally, the study
showed that CSR-orientated companies had a higher level of employee engagement
and provided a markedly better standard of customer service.
And yet, despite the positivity and optimism that CSR brings to the corporate table,
companies do not always accept their responsibilities in this area in good heart, with a
fair number admitting to having adopted CSR mainly as a marketing gimmick. In
some cases, firms may have been coerced into adopting CSR and did so with

11

insufficient enthusiasm and vigour, leaving many of them to ponder what they could
and should have done differently.

Importance Of Sustainibility
Sustainability in its broadest sense is the capacity to endure, to maintain a process or
situation over time. In ecology, a sustainable system is a system whose biodiversity
and productivity are preserved over time. Long-lived and healthy wetlands and forests
are examples of sustainable biological systems.
Sustainability can be explored and managed in various references of time and space
and within different contexts of environmental, social and economic order. These
contexts include the carrying capacity of planet Earth, sustainability of economic
sectors, ecosystems, countries, municipalities, neighborhoods, home gardens, private
life, goods and services, occupations, lifestyles, behavior patterns and so on.
The prevailing approach nowadays is that in order to preserve global resources for
future generations an underlying concept of sustainability business companies
must assume an important role in the process. An entire system is working to provide
consumers with extensive and accurate information about the nutrients, enabling them
to make informed, healthy nutritional choices, and equipping them with options to
dispose of waste with minimal impact on the environment.
With respect to environmental quality, we are currently defining new, multiple-year
environmental goals, having achieved the goals set for 2009 earlier than expected.
Regarding the water issue, we highlighted the importance and significance of the fact
that we, a leading food company operating in Israel, should save water.
We undertook to carry out water-saving processes, recycling of water and quality
treatment of wastewater that once treated is used in agricultural irrigation.

12

Reasons Companies Should Embrace CSR.

Corporate social responsibility (CSR) is not going to solve the worlds problems. That
said, CSR is a way for companies to benefit themselves while also benefiting society.
When I define CSR to the uninitiated, I typically get three reactions. Some say, Isnt
that a bunch of greenwashing? Others use a non-so-nice word to describe male
bovine excrement instead of greenwashing. Still others say my definition sounds like
an inspiring call to action to soothe the ills of capitalism. Then there are those who say
CSR is like a begrudging call to Woodstock to sing Kumbaya something only
hippies could dream up.
So whats a CSR professional supposed to do when faced with such a varied response?
Typically,
I step on
top of my
soapbox
to declare
the six
business
reasons
why

companies should embrace corporate social responsibility. Companies that get it are
the ones that are using CSR (or sustainability as I prefer to call it) as a way to push the
following business processes into the organization:

13

Innovation

CSR, innovation is a huge benefit to a company and society. For example, I recently
watched a video of a brief talk by Geoff McDonald who is the Unilever Global VP for
HR, Marketing, Communications and Sustainability. Using the lens of sustainability
as McDonald described it, Unilever was able to innovate new products such as a hair
conditioner that uses less water. Without sustainability, the companys research and
development efforts possibly wouldnt have led to such a product.

Cost savings

One of the easiest places for a company to start engaging in sustainability is to use it
as a way to cut costs. Whether its using less packaging or less energy, these savings
add up quickly. For example, General Mills is on a path to reduce its energy savings
by 20% by 2015. According to its 2011 CSR report, after installing energy monitoring
meters on several pieces of equipment at its Covington, Ga. plant, the company saved
$600,000.

Brand differentiation

In the past, brand differentiation was one of the primary reasons companies
embraced CSR. Companies such as Timberland were able to find their voice and
incorporate the companys values into their business model. However, as CSR
has become more commonplace, using it to differentiate your brand is getting
harder to do. For example, the Cola Wars is one of the longest running
rivalries in business. Coke and Pepsi are constantly looking to grab as much
market share as they can from each other. Yet they are both adopting similar,
although slightly different, approaches to CSR. Both Pepsi and Cokeare
pursuing strategies of zero net water usage. Both companies offer water bottles
made from sustainable packaging as well. In the end, although neither company
is necessarily going to see strong differentiation benefits, I see the diminishing
returns on brand differentiation as a sign that CSR is taking hold and is not just a
fad.
Long-term thinking

The only reason were doing sustainability is to drive the growth of Unilever,
McDonald said in the video mentioned above. Indeed, CSR is an effort to look
at the companys long-term interest and ensuring that the companys future is
well sustainable. Hence, thats why I prefer the term sustainability to CSR. It
is a shift from worrying about the next fiscal quarters financial results to the

14

impact business decisions today have on financial (and social) results ten years
from now.

Customer engagement

Whats the point of doing CSR if no one knows about it? For the past few years,
Walmart has established itself as a leader on environmental efforts. Yes, you
read that correctly, Walmart is a leader in environmentalism. In 2008, Walmart
ran an ad campaign designed to raise awareness about the environment and the
product choices consumers could make. Using CSR can help you engage with
your customers in new ways. Since the message is about something good, it
can often be an easier way to talk to your customers. This is an underused tool
for business-to-business company communication.

Employee engagement

Along similar lines, if your own employees dont know whats going on within
your organization, youre missing an opportunity. Companies like Sara
Leecreated a cross-functional, global Sustainability Working Team to help create
a strategy for sustainability. At a more grass roots level, the Solo Cup
Company created the Sustainability Action Network to activate employees in
community service focused on the companys CSR priorities.

Showing a True Commitment

The most successful corporate social responsibility programs integrate these two
types of CSR together to show a true commitment to a cause. For example, a
company that uses sustainable materials in their products, donates financial
resources to environmental causes, and allows employees to take paid time off
for volunteering at environmental charities would be showing a true
commitment to the environment that goes beyond any single CSR initiative.

Social Media Visibility

One of the reasons that corporations should have visible CSR campaigns is due
to the importance and prevalence of social media. Corporations that want to

15

protect their brand understand that social media is an integral part of public
perception. When a corporation exercises social responsibility in the form of
fundraising or setting up employee giving programs, using social media to
promote these actions helps to create a positive branding environment and it is a
great way to engage with your audience on a deeper level that goes beyond your
products or services.

Public Relations Benefits

Public relations is a potent tool for shaping consumer perception and building a
companys image. Corporations that actively promote their social responsibility
activities often take steps to publicize these efforts through the media. Getting
the word out about corporate donations, employee volunteer programs, or other
CSR initiatives is a powerful branding tool that can build publicity for you in
both online and print media.

Government Relations

Corporations that place an emphasis on corporate social responsibility typically

have an easier experience when dealing with politicians and government
regulators. In contrast, businesses that present a reckless disregard for social
responsibility tend to find themselves fending off various inquiries and probes,
often brought on at the insistence of public service organizations. The more
positive the public perception is that a corporation takes social responsibility
seriously, the less likely it is that activist groups will launch public campaigns
and demand government inquiries against it.

Building a Positive Workplace Environment

16

Finally, one of the greatest benefits of promoting social responsibility in the

workplace is the positive environment you build for your employees. When
employees and management feel they are working for a company that has a true
conscience, they will likely be more enthusiastic and engaged in their jobs. This
can build a sense of community and teamwork which brings everyone together
and leads to happier, more productive employees.

Getting an effective CSR program off the ground isnt easy.

All too often, a program is received with enthusiasm at the beginning and then
gets pushed off to the side for other priorities. This doesnt have to be the case

Reasons Of Sustainibility
Cost Savings.
"Sustainability is first about improving the bottom line," says Emily Reyna, a
project manager for the Environmental Defense Funds Corporate Partnerships
Program.
Reyna works with EDF Climate Corps, a program that places MBA and MPA
students in companies, including McDonald's, Verizon and Target, to "build the
business case for energy efficiency" by identifying ways to slash electricity and
gas use.
Since 2008, fellows have uncovered energy efficiency opportunities from
changing light bulbs to replacing old computers that would save $1 billion in
net operational costs over project lifetimes.

Consumer demand.
Being green not only saves money, it also creates new revenue by attracting
customers who care about a company's environmental footprint.

Risk mitigation.

17

"With energy costs rising and uncertainty in supply, it is important that

companies start re-thinking how they obtain and use inputs," says Reyna.

Leadership.
Traditionally, companies adopted sustainability strategies in order to comply
with government regulations and avoid fines. Now leading-edge corporations
are embracing the concept of sustainability in order to be a part of the
conversation on environmental policy, says Eliot Metzger, a senior associate at
the World Resources Institute.

Tax incentives.
According to Area Development, federal, state, and local governments offer a
range of financial incentives for undertaking environmentally-responsible
activities. These include investment-, production-, or consumption-based
income tax credit, accelerated depreciation for certain capital expenses,
exemptions from state or local sales taxes, and cash grants.

Employee retention.
"Working for a bigger cause excites employees," says Metzger. "It's one of the
softer measures to wrap your head around, but if you talk to someone where
sustainability is embedded into the corporate culture, it's a selling-point to attract
and retain workers."

Brand reputation and publicity.

Fostering positive consumer relations through sustainable initiatives generates
brand value and improves a company's image.

Resource limitations.

18

Natural resources like fossil fuels and water are finite. As scarcity increases, cost
also increases. "At some point the resources with which we depend upon will be
more expensive or we wont be able to get it, says Reyna. "So companies need
to be prepared to protect those resources so they will be plentiful or find
alternate resources for their products and services. The winning companies will
do both."

Keeping up with the competition.

A 2011 survey of nearly 3,000 global executives by MIT Sloan Management
Review found that about two-thirds of respondents believed sustainability was
necessary to being competitive in todays market.

New revenue opportunities.

"Companies like DuPont, Nike and IBM are looking ahead to see how natural
resources, climate change, and energy can drive innovation and inspire new
business models, products and services, said Metzger. These are the factors
that are going to determine future winners and losers in the marketplace.

Types of CSR
The idea behind corporate social responsibility is that companies have multiple
responsibilities to maintain. These responsibilities can be arranged in a pyramid,
with basic responsibilities closer to the bottom. As a business meets lower-level
responsibilities that obligate it to shareholders and the law, it can move on to the
higher level responsibilities that benefit society.

Economic Responsibilities
A company's first responsibility is its economic responsibility -- that is to say, a
company needs to be primarily concerned with turning a profit. This is for the
simple fact that if a company does not make money, it won't last, employees will
lose jobs and the company won't even be able to think about taking care of its
social responsibilities. Before a company thinks about being a good corporate
citizen, it first needs to make sure that it can be profitable.

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Legal Responsibilities
A company's legal responsibilities are the requirements that are placed on it by
the law. Next to ensuring that company is profitable, ensuring that it obeys all
laws is the most important responsibility, according to the theory of corporate
social responsibility. Legal responsibilities can range from securities regulations
to labor law, environmental law and even criminal law.

Ethical Responsibilities
Economic and legal responsibilities are the two big obligations of a company.
After a company has met these basic requirements, a company can concern itself
with ethical responsibilities. Ethical responsibilities are responsibilities that a
company puts on itself because its owners believe it's the right thing to do -- not
because they have an obligation to do so. Ethical responsibilities could include
being environmentally friendly, paying fair wages or refusing to do business
with oppressive countries, for example.

Philanthropic Responsibilities
If a company is able to meet all of its other responsibilities, it can begin meeting
philanthropic responsibilities. Philanthropic responsibilities are responsibilities
that go above and beyond what is simply required or what the company believes
is right. They involve making an effort to benefit society -- for example, by
donating services to community organizations, engaging in projects to aid the
environment or donating m oney to charitable causes.

Types Of Sustainibility

Sustainability is the endurance of systems and processes. The term can be

defined as the ability to sustain itself in the prolonged future. If an activity is
said to be sustainable, then the general idea is that it should be able to continue

20

forever. The world has gradually understood the importance of sustainability in

light of limited resources, constant environmental degradation, and population
growth. To maintain the sustainability of earth and human life as a whole, there
are four types of sustainability that should be properly observed.

HUMAN SUSTAINABILITY
Human sustainability is the maintenance of human life. The primary need for
human sustainability is healthy reproduction and child-bearing. Child care is an
essential part of maintaining human sustainability. Reproduction alone is not the
end of responsibilities and is not enough. Those who reproduce should also
provide proper education, take care of their health and safety and equip them
with worldly knowledge to sustain their own way of life. When the child is fully
functional as an adult and is able to sustain his own life, they can be the part of
the cycle. Healthy maintenance of this cycle will help preserve human
sustainability.

ECONOMIC SUSTAINABILITY
Economic Sustainability as the term speaks for itself, is having enough capital
for a designated period of time. Consumers of those capitals should make sure
that the capital lasts until the end of that particular period. The main objective of
this is to make sure that the resources are preserved for the human beings in the
future. To maintain economic sustainability production and regeneration of
resources must be faster than the rate of consumption, or at least equal it.

SOCIAL SUSTAINABILITY

21

Social aspect of sustainability is a must for the preservation of human kind in

the future. Since, societies are where humans reside and live out their life, the
peace and sovereignty of the societies must be maintained. In order to maintain
the social sustainability, law and order must be preserved and everyone should
live by the social values created for the good of the people. Achieving social
sustainability will help maintain the sustainability of the human kind in a proper
society in the future. While failure to maintain this will lead to chaos and
extinction of societies.

ENVIRONMENTAL SUSTAINABILITY

We, as humans, depend on natural resources for everything. All our needs and
desires are fulfilled by absorbing the resources from the nature. The continuous
depletion of natural resources will have a massive impact on environment.
Nature must be allowed time to re-generate to avoid degradation and scarcity of
the natural resources. Also, constant pollution and deposition of waste materials
in a larger quantity than nature can handle degrades the environment.
Environmental sustainability is a must to prolong the life of earth and everything
in it.
All four types of sustainability are interlinked with each other. We, as
humans, exist within the economy, which exists within the society, which exists
within the environment. Humans are individuals with knowledge, skills and
actions which impact on all other realms of sustainability. The whole concept of
sustainability has emerged, solely due to our desire to survive on earth, to
maintain a sustainable living environment for the future generations to come.
Maintaining sustainability of all four aspects falls under our own responsibilities
and the benefits are also entirely for us. Acknowledging the importance of
Sustainability should be enough motivation for everyone to play their part.

22

Why is social responsibility important to a business

Social responsibility is important to a business because it demonstrates to

both consumers and the media that the company takes an interest in wider social
issues that have no direct impact on profit margins. These issues may be local,
national or global, but a concern for the health and wellness of others that does
not involve sales can be seen as commendable if done well.
For this reason, evidence of a healthy social responsibility policy can
impact buying decisions where customers seek to make an ethical purchase.
This, in turn, can lead to greater profits for a business. However, building a
highly regarded and trustworthy reputation is more valuable in this instance, and
observers appreciate that social responsibility initiatives take time to establish
and manage.
Furthermore, being part of a scheme that helps disadvantaged people or
those otherwise in need can help boost morale for employees within the
responsible company. Along with other methods of morale boosting, this can
lead to greater productivity among the workforce. Knowledge that a product and
service has a great influence on social causes can be a genuine delight to
employees, customers and business owners alike. Over time, the business

23

contribution to a charity, cause or community can be a significant amount

of charitable funds, product donations or other ventures.

Issues and Challenges Faced By Corporate Social

Responsibility

In the first phase charity and philanthropy were the main drivers of
Corporate Social Responsibility. Culture, religion, family values and tradition
and industrialization had an influential effect on Corporate Social
Responsibility. In the pre-industrialization period, which lasted till 1850,
wealthy merchants shared a part of their wealth with the wider society by way of
setting up temples for a religious cause. With the arrival of colonial rule in India
from 1850s onwards, the approach towards Corporate Social Responsibility
changed. The industrial families of the 19th century such as Tata, Godrej, Bajaj,
Birla, Singhania were strongly inclined towards economic as well as social
considerations. However it has been observed that their efforts towards social as
well as industrial development were not only driven by selfless and religious
motives but also influenced by caste groups and political objectives.

The First Phase

National Conference on Innovative Business Practices in Technological
Era 58 | Page Erode Sengunthar Engineering College, Thudupathi, Erode

The Second Phase

In the second phase, during the Independence movement, there was
increased stress on Indian Industrialists to demonstrate their dedication towards
the progress of the society. According to Gandhi, Indian companies were
supposed to be the "temples of modern India". Under his influence businesses
established trusts for schools and colleges and also helped in setting up training
and scientific institutions. The operations of the trusts were largely in line with
Gandhi's reforms which sought to abolish untouchability, encourage
empowerment of women and rural development.

24

The Third Phase

The third phase of Corporate Social Responsibility (196080) had its
relation to the element of "mixed economy", emergence of Public Sector
Undertaking and laws relating labor and environmental standards. During this
period the private sector was forced to take a backseat. The public sector was
seen as the prime mover of development. Because of the stringent legal rules
and regulations surrounding the activities of the private sector, the period was
described as an "era of command and control".

The Fourth Phase

In the fourth phase (1980 until the present) Indian companies started
abandoning their traditional engagement with CSR and integrated it into a
sustainable business strategy. In 1990s the first initiation towards Globalizations
and Economic Liberalization were undertaken. Controls and licensing system
were partly done away with which gave a boost to the economy the signs of
which are very evident today. Increased growth momentum of the economy
helped Indian companies grow rapidly and this made them more willing.
Globalization has transformed India into an important destination in terms of
production and manufacturing bases of TNCs are concerned. As Western
markets are becoming more and more concerned about and labour and
environmental standards in the developing countries.

How companies benefit from the Corporate Social

Responsibility concept

25

No matter the size of an organization or the level of its involvement with

Corporate Social Responsibility every contribution is important and provides a
number of benefits to both the community and business. Contributing to and
supporting Corporate Social Responsibility does not have to be costly or time
consuming and more and more businesses active in their local communities are
seeing significant benefits from their involvement:

Reduced costs
Increased business leads
Increased reputation
Increased staff morale and skills development

Improved relationships with the local community, partners and clients

Innovation in processes, products and services

Managing the risks a company faces

Company benefits:

Improved financial performance;

Lower operating costs;
Enhanced brand image and reputation;
Increased sales and customer loyalty;
Greater productivity and quality;
More ability to attract and retain employees.
Reduced regulatory oversight;

26

Access to capital;
Workforce diversity;
Product safety and decreased liability.

BENEFITS TO THE COMMUNITY AND THE

GENERAL PUBLIC

Charitable contributions;
Employee volunteer programmes;
Corporate involvement in community education, employment and
homelessness programmes;
Product safety and quality.

ENVIRONMENTAL BENEFITS

Greater material recyclability;

Better product durability and functionality;
Greater use of renewable resources;
Integration of environmental management tools into business plans,
including life-cycle assessment and
management standards, and eco-labelling.

costing,

environmental

Top 5 benefits of Corporate Social Responsibility

27

Benefit 1: The ability to have positive impact in the community

Keeping social responsibility front of mind encourages businesses to act
ethically and to consider the social and environmental impacts of their business.
In doing so, organisations can avoid or mitigate detrimental impacts of their
business on the community. In some cases, organisations will find ways to make
changes in their services or value chain that actually delivers benefits for the
community, where they once didnt.

Benefit 2: It supports public value outcomes

Put simply, public value is about the value that an organisation contributes to society.
A sound, robust corporate social responsibility framework and organisational mindset
can genuinely help organisations deliver public value outcomes by focussing on how
their services can make a difference in the community. This might happen indirectly,
where an organisations services enable others to contribute to the community, or
directly through the organisations own activities, such as volunteerism and
philanthropy.

Benefit 3: It supports being an employer of choice

Being an employer of choice typically translates into the companys ability to attract
and retain high calibre staff. There are ways to approach being an employer of choice,
including offering work life balance, positive working conditions and work place
flexibility. Studies have shown that a robust corporate social responsibility framework
can also help a company become more attractive to potential future employees who
are looking for workplaces with socially responsible practices, community
mindedness and sound ethics.

Benefit 4: It encourages both professional and personal

development

contribute to work and causes that they might feel passionate about, or learn
something entirely new which can Providing employees with the opportunity to

28

be involved in a companys socially responsible activities can have the benefit

of teaching new skills to staff, which can in turn be applied in the workplace. By
undertaking activities outside of their usual work responsibilities, employees
have the chance to help enrich their own perspectives. By supporting these
activities, organisations encourage growth and support for employees.

Benefit 5: It enhances relationships with clients

A strong corporate social responsibility framework is essential to building and

maintaining trust between the company and clients. It can strengthen ties, build
alliances and foster strong working relationships with both existing and new
clients. One way this can be achieved is by offering pro-bono or similar services
where a company can partner with not-for-profit organisations to support their
public value outcomes, where funds or resources may be limited. In turn, this
helps deliver public value outcomes that may not have been delivered otherwise.

Benefits Of Sustainibility
Enhanced Brand and Increase Competitive Advantage
The Natural Marketing Institute (NMI) has found in their consumer research that
knowing a company is mindful of its impact on the environment and society
makes consumers 58% more likely to buy their products or services. A
subculture called Cultural Creatives has been emerging for the past 40 years
and is now in the mainstream leading this sustainable revolution. This
demographic according to the NMI is roughly estimated at 68 million adult
Americans who make purchasing decisions based on their personal, social and
environmental values. They find consumers are willing to spend up to 20%

29

more on environmental sound products and services. According to the BBMG

Conscious Consumer Report, nearly nine in ten Americans say the words
conscious consumer describe them well and are more likely to buy from
companies that manufacture energy efficient products (90%), promote health
and safety benefits (88%), support fair labor and trade practices (87%) and
commit to environmentally-friendly practices (87%), if products are of equal
quality and price.

Improve Financial and Investment Opportunity

Financial and investment analysts have recognized companies who have developed
sustainability plans with regards to energy efficiency and reduction of environmental
impact as an important evaluator criterion. A Goldman Sachs study revealed that
companies in six industries considered leaders in environmental social and
governance policies have outperformed the general stock market by 25% with 72% of
the companies outperforming their peers since August 2005. Another study based on
CFO Research that surveyed 175 top finance executives more than half believe their
companies will increase revenue through strong sustainability initiatives.

Minimize Carbon Risk and Improve Energy Efficiency

In Ernst and Youngs 2008 report on The Top 10 Business Risks for Business
highlight two key business risks; 1.failure to respond and plan for environmental
regulations and 2.energy efficiency as important business risks to mitigate. It is
estimated that companies will be required to cut 25% of carbon emissions by 2020 and
50-80% by 2050 which will be mandated by both state and federal regulations. This
will affect the availability and costs of energy which are expected to double within the
next 10 years.

Increase Employee Retention and Recruitment

Employees want to work with companies who are doing the right thing and being

30

proactive with corporate environmental and social programs. A 2007 survey by

Adecco, an international HR company, found that 52% of employed adults feel their
companies should do more about the environment. More importantly, companies want
their employees to be loyal and ethical to the organization. According to a Global
Study of Business Ethics by the American Management Association, one of the top
five internal practices for ensuring an ethical corporate culture is developing corporate
social responsibility programs.

Increase Productivity and Reduced Costs

Through development of more sustainable business practices, efficiency in operations
will increase. With better use and conservation of resources, operations will be
streamlined and costs will decrease.

31

CURRENT STATE OF CSR IN INDIA

Companies have specialized Corporate Social Responsibility teams that formulate
policies, strategies and goals for their Corporate Social Responsibility programs and
set aside budgets to fund them. These programs are often determined by social
philosophy which have clear objectives and are well defined and are aligned with the
main stream business. The programs are put into practice by the employees who are
crucial to this process. Corporate Social Responsibility programs ranges from

32

community development to development in education, environment and healthcare

etc. For example, a more comprehensive method of development is adopted by some
corporations such as Bharath Petroleum, and Hindustan Unilever Limited.
Provision of improved medical and Sanitation facilities, building schools and houses,
and empowering the villagers and in process making them more self-reliant by
providing Vocational training and a knowledge of business operations are the facilities
that these corporations focus on. Many of the companies are helping other peoples by
providing them good standard of living. Kingfisher is Europe's largest home
improvement retailer, with 1,300 stores and 9,000 employees in 16 countries. Its
operating companies include BCC (The Netherlands), Promarkt (Germany), Vanden
Borre (Belgium), Darty (France), Comet (UK), B&Q (UK), Kotas (Turkey) and
Rno-Dpt (Canada). At the end of 2001, Kingfisher unveiled a group-wide initiative
to monitor, improve and report on corporate social responsibility issues at the level of
individual companies. The group has identified six ways in which it believes
Corporate Social Responsibility can help its business:

Being ready for the future: identifying and managing issues which have the
potential to affect the bottom line, either positively or negatively;
Respect for people: making Kingfisher companies attractive places to work,
and thereby retaining skilled staff;
Stores that communities welcome: maximizing customer loyalty and improving
morale among the workforce;
Product innovation: identifying 'green' products that consumers will want to
buy;
Saving costs: recognizing that many CSR initiatives are largely good
housekeeping, such as reducing waste and retaining staff more effectively;
Brand: using innovation and excellence within individual operating companies
to enhance the reputation of the group as a whole.

Advantages and Disadvantages to Corporate Social

Responsibility
Working in the nonprofit sector, you will encounter things that will alternately excite
and frustrate you. Some advantages, like fulfilling work and kind coworkers, can be
expected. Many disadvantages, like increased bureaucracy and burnout, often take

33

career changers by surprise. Knowing about both before you make a decision will
better prepare you for success.

Advantages
1. Satisfied employees.
Employees want to feel proud of the organization they work for. An employee with a
positive attitude towards the company, is less likely to look for a job elsewhere. It is
also likely that you will receive more job applications because people want to work
for you.
More choice means a better workforce. Because of the high positive impact of CSR on
employee wellbeing and motivation, the role of HR in managing CSR projects is
significant.

2. Satisfied customers
Research shows that a strong record of CSR improves customers attitude towards the
company. If a customer likes the company, he or she will buy more products or
services and will be less willing to change to another brand.
Relevant research:
IBM study Attaining Sustainable Growth through Corporate Social Responsibility:
The majority of business executives believes that CSR activities are giving their firms
competitive advantage, primarily due to favorable responses from consumers.
Better Business Journey, UK Small Business Consortium: 88% of consumers said
they were more likely to buy from a company that supports and engages in activities
to improve society.

3. Positive PR
CSR provides the opportunity to share positive stories online and through traditional
media. Companies no longer have to waste money on expensive advertising
campaigns. Instead they generate free publicity and benefit from worth of mouth
marketing.

34

4. Costs reductions
Yes, you read this correctly. A CSR program doesnt have to cost money. On the
contrary. If conducted properly a company can reduce costs through CSR.
Companies reduce costs by:

More efficient staff hire and retention

Implementing energy savings programs
Managing potential risks and liabilities more effectively
Less investment in traditional advertising

5. More business opportunities

A CSR program requires an open, outside oriented approach. The business must be in
a constant dialogue with customers, suppliers and other parties that affect the
organization. Because of continuous interaction with other parties, your business will
be the first to know about new business opportunities.

6. Long term future for your business

CSR is not something for the short term. Its all about achieving long term results and
business continuity. Large businesses refer to: shaping a more sustainable society

Disadvantages
Work environments can be frustrating. From antiquated technology to bureaucratic red
tape, working at a nonprofit can be downright exasperating. Employees are asked to

35

do more work with fewer resources, create miracles on a daily basis, and satisfy
competing interests. The pace of change is often slower than it is in a for-profit
environment, given that so many opinions must be considered and the bottom line is
not as clear.
The level of burnout is high. Those who enter the nonprofit workforce with a specific
mission and goal in mind do so with great purpose. This great purpose often places a
heavy weight on the shoulders of those doing the work.
The stakes are higher. A bad day in a corporate job is unlikely to resemble a bad day in
a nonprofit job. Consider the difference between losing a few percent off your stock
price and losing a mentored young person to drugs. The stakes are simply higher when
you are dealing with a cause close to your heart.
There is a constant focus on fundraising. Nonprofit executives wake up every morning
and go to bed every night worrying about the location of their next fundraised dollar.

Advantages And Disadvantages Of Sustainibility

Advantages
Enhanced Brand and Increase Competitive Advantage
The Natural Marketing Institute (NMI) has found in their consumer research that
knowing a company is mindful of its impact on the environment and society makes
consumers 58% more likely to buy their products or services. A subculture called
Cultural Creatives has been emerging for the past 40 years and is now in the
mainstream leading this sustainable revolution. This demographic according to the
NMI is roughly estimated at 68 million adult Americans who make purchasing
decisions based on their personal, social and environmental values. They find
consumers are willing to spend up to 20% more on environmental sound products and
services. According to the BBMG Conscious Consumer Report, nearly nine in ten
Americans say the words conscious consumer describe them well and are more
likely to buy from companies that manufacture energy efficient products (90%),
promote health and safety benefits (88%), support fair labor and trade practices (87%)

36

and commit to environmentally-friendly practices (87%), if products are of equal

quality and price.

Increase Productivity and Reduced Costs

Through development of more sustainable business practices, efficiency in operations
will increase. With better use and conservation of resources, operations will be
streamlined and costs will decrease.

Improve Financial and Investment Opportunity

Financial and investment analysts have recognized companies who have developed
sustainability plans with regards to energy efficiency and reduction of environmental
impact as an important evaluator criterion. A Goldman Sachs study revealed that
companies in six industries considered leaders in environmental social and governance
policies have outperformed the general stock market by 25% with 72% of the
companies outperforming their peers since August 2005. Another study based on CFO
Research that surveyed 175 top finance executives more than half believe their
companies will increase revenue through strong sustainability initiatives.

Minimize Carbon Risk and Improve Energy Efficiency

In Ernst and Youngs 2008 report on The Top 10 Business Risks for Business
highlight two key business risks; 1.failure to respond and plan for environmental
regulations and 2.energy efficiency as important business risks to mitigate. It is
estimated that companies will be required to cut 25% of carbon emissions by 2020 and
50-80% by 2050 which will be mandated by both state and federal regulations. This
will affect the availability and costs of energy which are expected to double within the
next 10 years.

Increase Employee Retention and Recruitment

Employees want to work with companies who are doing the right thing and being
proactive with corporate environmental and social programs. A 2007 survey by

37

Adecco, an international HR company, found that 52% of employed adults feel their
companies should do more about the environment. More importantly, companies want
their employees to be loyal and ethical to the organization. According to a Global
Study of Business Ethics by the American Management Association, one of the top
five internal practices for ensuring an ethical corporate culture is developing corporate
social responsibility programs.

Disadvantages Of Sustainibility

Most of the "cons" with sustainability reporting revolve around how the report is
actually created and presented. There appears to be no downside to creating a report,
unless it is not done well. Greenbiz.com highlighted 10 mistakes that any company
can make when creating its reports. Those mistakes are adapted from "The Best
Sustainability Reports are built on Trust" by Irene Herremans, and include:
Weak goals. Having weak goals for the report, for sustainability policies in
general, and for the organization as a whole is a potion for disaster. The report
must be built around strong organizational goals.
Mismanaged data. To present results accurately in the report, the data collection
and presentation must be efficient, accurate, and meaningful.
Disordered priorities. A good company will prioritize sustainability in the
reports by weighting it equally to financial, environmental and societal
performance - the Triple Bottom Line - instead of just focusing on financial
performance.
Discounting feedback. Listen to clients and stakeholders when they provide
advice, data verification, or comments on the report.
Breaking the rules. The report should follow good guidelines for sustainability
reporting, such at those set by the aforementioned Global Reporting Initiative.

38

Tenuous comparisons. State how your sustainability efforts compare to those of

your industry peers, as opposed to presenting results based on your own
internal benchmarks.
Unreachable targets. Make the reporting goals relevant and achievable, and in
line with the overall company goals.
Underreporting. Communicate sustainability performance across multiple
media, in addition to the actual report. Make the message consistent across all
platforms.
Thinking short-term. Don't turn down a sustainable opportunity simply because
it has a higher price tag or longer payback period. Results will pay off in the
end.
Inadvertent greenwashing. Results should be meaningful and truthful, with
noted areas for self-improvement. While reporting company progress is a key
component of the report, if all results are completely positive, customers and
stakeholders may become skeptical.

39

Case Study OF Canon On Corporate Social

Responsibility.
Canons profile
Canon Inc. (hereafter Canon) was founded in 1937. Its headquarters are in Japan and
the company is listed on the NYSE. Although the digital camera is the most wellknown product to consumers, Canon also produces devices for office and industry
use.Canon is planning to invest more in medical image recording equipment and
ophthalmic devices.Canons regional headquarters are established on every continent
and, together with other companies, they form the Canon Group. Canon has a global
network of more than 200 companies and employs more than 160,000 people
worldwide. Canon Inc. alone employs more than 26,000 people. It is dedicated to
advancements in technology and commits approximately 10% of its total revenue each
year to Research & Development. Canon is consistently one of the top few companies
to be granted the most number of patents over the last 18 years. In the year 2010
Canon Groups net sales were estimated at $45,764 million

Canons CSR policies and reporting

It seems that Canon invests a great deal of effort into its CSR reporting. It publishes a
separate sustainability report. Apart from that, a lot of information regarding its
compliance with different standards and its positive role in society (fund raising and
other activities) can be found on its webpage. The company introduced a CSR strategy
based on the Kyosei philosophy in 1988. At that time this philosophy was not yet
widely used, but in recent years the philosophy has come to be commonly used in
Japan, in business, politics and in daily life.It is used to imply a range of concepts and
meanings. Canon refers to kyosei defined as living and working together for the
common good.Currently, Canon has a CSR policy and a CSR mission statement. It
has Canons Global Code of Conduct. Canon follows the GRI Sustainability Reporting
Guidelines 2006 and its CSR report

Canons conflicts
Not enough and started to examine not only its own, but the European and global
Canon policies as well.

40

Employees not allowed to sit down during working hours Internet research also
presented a couple of articles related to Canon Electronics Inc., a company based in
Japan, forcing its employees to stand during their work and demanding that they walk
at a specific pace.
As it was not possible to find an NGO report on this topic or any other completely
reliable Stress-related illnesses When trying to analyze the companys behaviour it
was difficult to find reliable independent articles. Nevertheless, one article from 2007
deserves attention.In Canon Denmark a problem of stressrelated illnesses occurred.
These illnesses were the result of changes in the organization and
increasing pressure to perform. As this caused many problems for
business managers, human resources (HR) and increased the
workload for other employees, Canon Denmark started to develop a
policy to reduce stress in the workplace.

Canons CSR policies post-conflicts

This chapter of the article focuses on comparing Canons
sustainability reporting on employee matters between the years
2007 and 2010. Since its founding, Canon has promoted Health
First as one of its Guiding Principles. Even in the Canon Inc.
sustainability report of 2007 it can be read that Canon took action in
preventing lifestyle-related diseases. With the government
enactment of health-promoting policies and laws, such as Health
Japan 21 and the Health Promotion Law, lifestyle checks and tests
are performed during periodic medical examinations. Based on
these examination results, all Canon Group companies in Japan have
set common numerical targets with the aim of preventing lifestylerelated diseases. Their focus was (and still is) on cholesterol and
smoking rates.

41

Conclusion

corporate Social Responsibility and sustainability currently boost in

India. And this Both the concept are use to improve financial position
to every business.
Corporate Social Responsibility is commitment for businesses to
behave ethically and contribute to economic development, while

42

also improving the quality of life for its workforce and their families.
CSR also works towards benefiting the local community at large,
which in turn is helping improve our planet.
Once the non-value add steps have been eliminated, or at
least minimised, you can target the remaining steps. You may be
able to reduce the amount of handling or the distance and frequency
of movements throughout the process. Eliminating unnecessary
movement can result in lower transport costs and better production
rates. Make sure your organization is upfront and honest, provide
information in a way that stakeholders involved can obtain a proper
insight into the issues they deem relevant.
As a leading consultant on sustainability, we offer you
expertise and experience in consumer product supply chains
through our unique global network.
We provide a complete portfolio of solutions to incorporate
sustainability practices into your organization, your products and
your supply chain. We can help you meet or exceed regulatory
requirements, societys expectations and consumer demand.
Once the non-value add steps have been eliminated, or at least
minimised, you can target the remaining steps. You may be able to
reduce the amount of handling or the distance and frequency of
movements throughout the process. Eliminating unnecessary
movement can result in lower transport costs and better production
rates.
The most successful organisations are those that can implement and
sustain effective improvement initiatives leading to increased quality
and patient experience at lower cost. The Sustainability Model and
Guide has been developed to support health care leaders to do just
that.

BIBLOGRAPHY.

43

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44