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Corporate Social Responsibility (CSR) and Sustainability

CSR: Action of a firm to benefit society beyond the requirements of the law and direct interests of the firm Sustainability: Development that meets humanitys needs without harming future generations

Are Corporate display a sense of social responsibility, or is this merely a matter of good business? Defend your answer.

Operational Opportunities to Advance SD


Life-Cycle Stages of Products
Eco-Efficiency Elements
Reduce material intensity of goods & services Reduce energy intensity of goods & services Reduce toxic dispersion Enhance material recyclability Maximize sustainable use of renewable resources Extend product durablility Increase Service intensity of goods & services Resource Resource Extraction Processing Product Transportation/ Product Recycling/ Manufacturing Distribution Use Reuse

Sustainability:
Economics + Environment + Expectations of society = Sustainability

Levels of CSR: Example in Labour Markets

Social Obligation

Social Responsibility

Social Responsive

Comply with wage and working time laws, minimum benefits

Provide added labour benefits

Improve quality of work life

Globalization and CSR

China Ethical issues


Workers not well paid (often work 12 hours a day, 7 days a week)
Piracy of intellectual property, counterfeiting, and industrial spying

Human rights violations


Use of prisoner and child labor

United States

Political campaign contributions & lobbyists Fraud in mortgage sector


Attitude of caveat emptor

Rising wage inequality


middle class wages stagnant for a decade

Lack of health benefits for workers


Loss of promised retirement benefits

Principles of the Global Compact

Millennium Development Goals

Corruption Index: Least and Most Corrupt Countries

Corporate Social responsibilities in developing countries

Ethical Responsibilities

Adopt voluntary codes of governance and ethics

Legal Responsibilities

Ensure good relations with government officials

Philanthropic Responsibilities

Set asides funds for corporate social community projects Provide invest. create jobs, and pay taxes

Economic Responsibilities

Implementation phase of CSR


When? Conceptual Phase) What (Task delineation) How? (Checkpoints on the Journey)

Plan

1. Conduct a CSR Assessment

Assemble a CSR leadership team

Develop a working definition of CSR


Identify legal requirements Review corporate documents, processes and activities, and internal capacity

Identify and engage key stakeholders


2 Develop a CSR Strategy Build support with CEO, Senior management and employees Research what others are doing, and assess the value of recognized CSR instruments Prepare a matrix of proposed CSR actions Develop ideas for proceedings and the business case for them Decide on direction ,approach, boundaries and focus areas

Do 3. Develop CSR commitments

Do a scan of CSR commitments Hold discussions with major stakeholders Create a working group to develop the commitments Prepare a preliminary draft Consult with affected stakeholders

4.Implement CSR commitments

Develop an integrated CSR decision-making structure Prepare and implement a CSR business plan

Set measurable targets and identify performance measures


Engage employees and others to whom CSR commitments apply Design and conduct CSR training Establish mechanisms for addressing problematic behavior Create internal and external communications plans Make commitments public

Check

5. Assure and report on progress

Measure and assure performance Engage stakeholders Report on performance, internally and externally

Improve

6.Evaluate and improve

Evaluate Performance

Identify opportunities for improvement Engage stakeholders

Rise of Civil Society and NGOs

Emergence of organized civil society and NGOs altered


Business environment globally Role of MNC within global business environment

NGOs in the U.S. and globally


Save the Children Oxfam CARE World Wildlife Fund Conservation International

Rise of Civil Society and NGOs


Corporations receiving heavy criticism Nike Levis Chiquita Major criticisms Exploitation of low-wage workers Environmental abuses Intolerable workplace standards Response to social obligations Agreements and codes of conduct Maintenance of standards in domestic and global operations Cooperation with NGOs regarding certain social issues

Trust in Leaders
NGO leaders Leaders at the U.N. Spiritual/religious leaders 52

42
41 36 36 35 33 27

Leaders of Western Europe


Managers of the global economy Managers of the national economy Executives of MNCs Leaders of the U.S.A.

10

20

30

40

50

60

Average Across All 15 Countries Surveyed


Adapted from Figure 3-1: Trust in Leaders: Percentage Saying A Lot and Some Trust

Ethical Decision Making

Ethical Decision Models


Utilitarian Rule Decision that produces the greatest good for the greatest number
How do you measure the benefits and harms that will be done to each stakeholder group? How do you evaluate the rights and importance of each group?

4-19

Ethical Decision Models


Moral Rights rule
Decision that best maintains and protects the fundamental or inalienable rights and privileges of the people affected by it

Justice rule
Decision that distributes benefits and harms among people and groups in a fair, equitable, or impartial way

4-20

Effects of Ethical/Unethical Behavior

Environmental Ethics
Within 30 years we will have lost 15-20% of all forms of life. More than 50% of our pharmaceuticals come from various species Business, just like other human groupings, depends on the continued existence on natural world. Humankind wants to use it to meet its various needs-material and also psychological needs Most of the environmental problems are the inevitable result of the sweeping technological changes that transformed western economic system after world II

Eg. Cars, railroads


By 1970 it was clear that these technological changes were root cause of environmental pollution

Land Ethics
Includes soils, waters, plants and animals or collectively Wild flowers and songs birds have no economic value

5% of plants and animals can be sold, fed eaten or otherwise put to economic use
Yet these creatures are members of the biotic community and if its stability depends on its integrity. At the end of the century songbirds were supposed to be disappearing Eg.Crow No land ethics A system of conversation based solely on economic self interest. Eliminated many things in the name of commercial value

Water is precious, we think beyond our life, but not life as such
Natural resources should be carefully managed Ethical consideration of ecological (ecosystem) wholes rather than individuals

CSR Challenges to SD

Lack of understanding of the concept Volatile business climate Lack of socially responsible investors

Low level of awareness of consumer rights and lack of consumer activism


Weakness in corporate governance Lack of dominant model of corporate governance/funding

CSR needs
Stakeholders
Consumers, employees, national and international regulators Need for a policy for sustainable development CSR can be best implemented towards its goals-sustained environmental, social and Economic growth

CSR Practices in India


TATA Group TATA Chemicals Bajaj Autos Dabur Infosys Foundation Godaraj ITC Indian Oil Corporation

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