Corporate_Social_Responsibility_and_Human_Rights

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[Corporate Social Responsibility and Human Rights]

ByGroup - 6

[WMP6068 Amarpal SinghWMP6069Ambar AshrafWMP6070Ankush Gupta

WMP6077Chetan Kumar BhattWMP6082Gaurav Sehgal

WMP6094Parul Kumar BhatiaWMP6116 Vijender Singh]

A report submitted in fulfillment of the assignments for

[LAM]

WMP 2013

Indian Institute of Management, LucknowNoida Campus

2010

Date: [19-12-2010]
http://www.google.co.in/imgres?imgurl=http://www.mbatown.com/community/images/iim-lucknow-logo.gif&imgrefurl=http://mbatown.com/community/admission/IIM-Lucknow-International-Program-2010-in-Finance-for-Executives&usg=__XczhiOIuNts8nluabNu1_AeqF1I=&h=99&w=87&sz=5&hl=en&start=1&tbnid=Im92aMQsllsHcM:&tbnh=82&tbnw=72&prev=/images%3Fq%3Diim%2Blucknow%2Blogo%26um%3D1%26hl%3Den%26sa%3DN%26tbs%3Disch:1&um=1&itbs=1


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Table of Contents

Corporate Social Responsibility and Human Rights

I. Introduction

Corporate Businesses in contemporary age of globalisation and consumerism

has developed new strategies to survive and prosper. One of them is

leveraging Social Issues associated with Human Rights. The earlier charity

followed by philanthropic attitude towards social causes has now given way to

concerted efforts to develop goodwill and human values in business activities.

This concept is termed as corporate social responsibility (CSR) and may be

defined as the additional commitment by Corporate Businesses to improve

the social and economic status of various stakeholders involved while

complying with all legal and economic requirements. Warhust (2001)1 points

out the three major elements of CSR as

i) product use which focuses on contribution of industrial

products which help in well being and quality of life of the

society,

ii) business practice which focuses on good corporate

governance and gives high impetus for the environmental

well being and

iii) equity which tries for distribution of profits equitably across

different societies especially the host community.

The increase in competition among the multinational companies to gain first

mover advantage in various developing countries by establishing goodrelationships with both the state and the civil society is a clear manifestation of

this transformation. Also, in most of the emerging markets, the state still holds

the key to business success because of the existence of trade and business

regulations, restricting the freedom of multinational companies to employ their

previously successful business doctrines which have been tried and tested in

the developed nations. The state responsible for protecting the interests of the

1Warhurst, A., 2001. Corporate citizenship and corporate social investment: drivers of tri-

sector partnerships. Journal of Corporate Citizenship, Spring, 57-73.


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general public prefer the companies willing to take care of the interests of all

the stakeholders. The emerging markets are the source of immense talent

with the rising levels of education and expertise. For example, the expertise of

India in churning out software professionals and China in manufacturing is

now internationally acclaimed. In order to draw from this vast talent pool

coming up in developing countries, companies need to gain a foothold in

these markets by establishing sound business practices addressing social

and cultural concerns of the people. It has been observed that consumers

consider switching to another company's products and services, speak out

against the company to family/friends, refuse to invest in that company's

stock, refuse to work at the company and boycott the company's products and

services in case of negative corporate citizenship behaviours (Edenkamp,

2002)2.

There are many reasons why it pays for companies, both big business and

SMEs (small and medium enterprises) to be socially responsible and be

conscious about the interest of the key stakeholders.

1. Getting license to operate from key stakeholders not just shareholders

2. Sustainable Competitiveness (Enhancing Reputations and Brands,

More Efficient Operations, Improved Financial Performance, Increased

Sales and Customer Loyalty, Increased Ability to Attract and Retain

Quality Employees)

3. Creating New Business Opportunities

4. Attracting and Retaining Quality Investors and Business partners

5. Cooperation with Local Communities

6. Avoiding Crisis Due to CSR Misconduct

7. Government Support

8. Building Political Capital etc.

The Corporate Businesses all over the world are beginning to grasp the

importance of intangible assets like brand name and employee morale. Only

firms who are able to garner the goodwill of general public and are ideal

2Edenkamp, P (2002). Insights into how consumers are thinking, how they are acting and

why, Brandweek, Vol. 43, Issue 36, pp 16 -20.


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corporate citizens can develop these intangible assets into strategic

advantages.

II. Status of CSR

In todays world, CSR has been embraced as an integral part of corporate

policy by business houses existing internationally or nationally.

Triple bottom line

Business focus their attention on maximizing value added across the three

dimensions of sustainability:

Economic bottom line:

Although main emphasis is on financial performance, this often refers

not only to profit but to the philosophies behind a company's strategy or

behavior, the sustainability of its businesses and its 'human capital.

Environmental bottom line

The impact of its products or operations on the environment, plus the

nature of its emissions and waste and how it is dealing with them.

Social bottom line

How it approaches issues such as ethnic and gender diversity, working

hours and wages, staff security and its contribution to community services or

facilities.

With help from the consulting industry who provide triple bottom line advisory

services to businesses, more and more companies are reporting on their triple

bottom line performance.

Socially Responsible Investing (SRI):

Considering investor's financial needs and an investments impact on society,

the money for CSR can be put to work to build a better tomorrow while

earning competitive returns today. Social investors include individuals and

institutions such as corporations, universities, hospitals, foundations,

insurance companies, pension funds, nonprofit organizations, churches and

synagogues.

International Status:


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The MNCs are taking following CSR issues :-

Code of ethics These are written guidelines issued by an

organisation to its workers and management to help them conduct their

actions in accordance with its primary values and ethical standards.

Compliance with local laws

Developing the employees

Human rights sensitivity

Health and safety

HIV/AIDS

Partnership with community or community engagement

Stakeholder consultation

Climate change, Energy efficiency and renewable

We will take the example ofNOKIA.3

Nokia having a billion users all over the world, contribute to the global

community by taking sustainability into account in all operations, products andservices. Their corporate responsibility agenda is framed around the values of

being very human, engaging everyone, innovation and achieving together.

Through their products they provide opportunities for improving people's

livelihoods and encouraging them to embrace a more sustainable lifestyle.

Access to mobile and digital technology is an important driver of social and

economic development, both in the developed and the developing world.

Mobile phones offer far more than the ability to make calls. Billions of people

in the developing world live in remote and rural communities without access to

healthcare or education, transport and up to date news - let alone banking or

financial services. Mobile phone networks have the potential to transform the

delivery of these services and make them available to many more people.

3 http://www.nokia.com/corporate-responsibility
mailto:http://www.nokia.com/corporate-responsibilityhttp://www.nokia.com/mailto:http://www.nokia.com/corporate-responsibility


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Their strategy focuses on two major areas: using mobile communications to

stimulate social and economic development, and working to achieve

education for all, particularly young people.

They are involved in many programmes that specifically target young people

be it through formal education or improving their life skills more generally.

Supporting such programmes also has a wider social impact, as they directly

benefit teachers, parents, and other members of the community.

They have incorporated greater usability in design and services for customers

with disabilities.

Mobile communications has the potential to lift some of the most vulnerable

populations out of poverty and enable them to engage fully with the global

digital community. Affordable mobile communications are now a reality in

many countries. Serving lower-income consumers has not only proved to

change lives and create wide socio-economic benefits, it has also led to

profitable business. Studies indicate that an increase of 10 mobile phones per

100 people boosts economic growth by 1.2 percent. Typically, people are

willing to spend between 5 percent and 10 percent of their disposable income

on mobility. With 2.7 billion people earning less than two US dollars per day, a

monthly cost of five US dollars or less is needed to enable the majority of the

worlds lower-income consumers to join the mobile community. Nokia

research shows that emerging market average total cost of ownership (TCO)

is 10.88 US dollars, down from 13.16 US dollars in 2007. Although much

remains to be done to lower TCO still further, this is a huge advance in

increasing the potential to reach more and more consumers every day.

Partnership with community or community engagement

Nokias main focus is on education for all, and the various youth projects we

are involved in also further this goal.

Generally implemented in cooperation with local non-governmental

organisations, the projects provide a means of achieving important youth

development outcomes, such as improved performance in school, increasedliteracy, finding and maintaining employment, and active citizenship.


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Cooperation with youth organisations like

International Youth Foundation

Nokias youth life skills initiative with the International Youth Foundation

continues to deliver benefits to youth and communities in numerous countries.

The IYF believes in the extraordinary potential of young people, investing in

effective programs around the world that prepare todays youth to be healthy,

productive, engaged citizens. The partnership programs with Nokia are

tailored to harness the power of technology to improve education, promote the

spirit of youth volunteerism, and equip unemployed youth with valuable skills

and access to jobs.

YouthActionNet leadership program

Nokia is the founding sponsor of the YouthActionNet leadership program

aimed at reaching young people who are leading societal change.

PLAN

Nokia continues to partner with the international child-centered development

organization, Plan, to empower young people to communicate about issues

that are important to them and to raise awareness of their rights and

opportunities.

Employability

Nokia supports the Entra21 initiative to help youth in Latin America and the

Caribbean get employment training and job placement services, so they can

increase their employability and improve their access to jobs. The project

focuses on training, job counselling and helping young people articulate and

present their skills so that they could gain access to better quality jobs.

Nokia employees have the opportunity to volunteer as mentors and lecturers

depending on their professional experience.

Creative arts


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The Dreams Workshop program, run by the Educational Volunteers

Foundation of Turkey, provides disadvantaged Turkish children with quality

non-formal education, while training older youth to serve as volunteer mentors

and teachers. The children have also learnt about the importance of

environmental protection and recycling, by making artwork out of waste

products.

Nokia also supports various efforts to enable young people to create music

and learn about technology.

The Going Further project in Senegal utilises music, radio and ICT in its aim

to promote youth rights. Artists and child rights professionals teach youngpeople how to produce songs and concerts professionally while raising

awareness of children's rights. It also aims to set up multimedia spaces in

science and technology schools to increase the use of ICT in education, and

provides ICT learning resources to thousands of students.

In California, the Bay Unity Music Project (BUMP) lends the help of

professional instructors to youth so they can learn to compose music and

lyrics, DJ, produce and record music, using industry-standard technology.

BUMP producers also get hands-on entrepreneurship training and experience

in producing, branding and promoting albums. Participants can use music

production software and a professional-quality rehearsal and recording space

free of charge.

Civic engagement

Even after Romanias transition to democracy, the population remains

somewhat distrustful of the civic and political involvement of youth. Soon after

setting up a production site in Cluj-Napoca, Nokia decided to support civic

engagement of local youth through a partnership with Romanian organization

The New Horizons Foundation. The program inspires young people aged 12-

18 to develop their life, leadership and citizenship skills through service

learning.

Developing the employees


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Volunteering is an important part of global corporate responsibility approach.

Thousands of employees contribute their time and effort to worthy causes in

their communities. The employees can take one to two working days per year

as a Nokia Helping Hands day. Through this, employees can go out into the

community and contribute to a good cause.

Stakeholder consultation

Nokia encourage their supplier companies to take a similar ethical business

approach and to demonstrate progress and achievements in these areas as

well as in educating and overseeing the practices of their own suppliers.

The principles that underline their approach are:

Integrating sustainable practices into business - The aim is to

ensure that environmental, ethical, health and safety issues, as well as

labour practices, are not separate add-on features. They are

embedded within all sourcing processes, including supplier selection

and relationship development.

Close co-operation They work in close co-operation with customers

and suppliers. It allows end-to-end efficiency and speed key success

factors for the entire supply chain. They also engage with other

stakeholders such as non-governmental organisations, governmental

organisations and industry associations to look at supply chain issues

from an industry perspective.

Climate change, Energy efficiency and renewable

In 2009, Nokia continued to reduce the environmental impact of its mobile

devices and operations. Nokia reduced the CO2 emissions of its own facilities

by 12 percent, compared with levels in 2006. During 2009, the company also

reached its 2012 energy savings target ahead of schedule.

National Status :

We cite the example of flagship petroleum refiner IndianOil Corporation Ltd 4,

a Central Public Sector enterprise of Mahanavratna Status.

4 http://www.iocl.com/Aboutus/corporatesocialresponsibility.aspx
http://www.nokia.com/A4254333http://www.nokia.com/A4254333


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At IndianOil, corporate social responsibility (CSR) has been the

cornerstone of success right from inception in the year 1964. The

Corporations objectives in this key performance area are enshrined in its

Mission statement: "to help enrich the quality of life of the community and

preserve ecological balance and heritage through a strong environment

conscience."

IndianOil has set core values as Care, Innovation, Passion and Trust to

guide in all their activities. They take pride in being able to claim that all

countrymen are their customers. Public corporations like IndianOil are

essentially organs of society deploying significant public resources. They

strive to work as wholesome entities created for the good of the society and

for improving the quality of life of the communities we serve.

As a constructive partner in the communities in which it operates, IndianOil

has been taking concrete action to realise its social responsibility objectives,

thereby building value for its shareholders and customers. The Corporation

respects human rights, values its employees, and invests in innovativetechnologies and solutions for sustainable energy flow and economic growth.

In the past five decades, IndianOil has supported innumerable social and

community initiatives in India. Touching the lives of millions of people

positively by supporting environmental and health-care projects and social,

cultural and educational programmes.

Besides focusing primarily on the welfare of economically and sociallydeprived sections of society, IndianOil also aims at developing techno-

economically viable and environment-friendly products & services for the

benefit of millions of its consumers, while at the same time ensuring the

highest standards of safety and environment protection in its operations.

Sharing Profits

Every year, IndianOil sets aside a fixed portion of its profits for spreading

smiles in millions of lives across the country through a comprehensive


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community welfare and development programme. About one-fourth of the

community development funds are spent on the welfare of Scheduled Caste

and Scheduled Tribe beneficiaries.

IndianOil has a concerted social responsibility programme to partner

communities in health, family welfare, education, environment protection,

providing potable water, sanitation, and empowerment of women and other

marginalised groups. IndianOil has always been in the forefront in times of

national emergencies. IndianOil People have time and again rallied to help

victims of natural calamities, maintaining uninterrupted supply of petroleum

products and contributing to relief and rehabilitation measures in cash and

kind.

IndianOils community-focused initiatives include allotment of petrol/diesel

station dealerships and LPG distributorships to beneficiaries from among

Scheduled Castes, Scheduled Tribes, physically handicapped, ex-

servicemen, war widows, etc. The Corporation has also unveiled kisan seva

kendras as small-format retail outlets to reach quality products and services to

people in the rural areas. IndianOil has also set up the IndianOil Foundation

(IOF) as a non-profit trust to protect, preserve and promote national heritage

monuments. The Corporation also supports a variety of endeavours in arts,

culture, music and dance, apart from organising programmes on its own

under the banners of IndianOil Art Exhibition, IndianOil Sangeet Sabha and

IndianOil Kavi Sammelan.

As part of its environment-protection initiatives, IndianOil has invested close to

Rs. 7,000 crore in state-of-the-art technologies at its refineries for production

of green fuels meeting global standards. To further reduce dependence on

precious petroleum products and secure the nations energy security, the

Corporation is now in the process of commercialising various options in

alternative fuels such as ethanol-blended petrol, biodiesel, and Hydrogen and

Hydrogen-CNG mixture.

With safety, health and environment protection high on its corporate agenda,


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IndianOil is committed to conducting business with a strong environment

conscience, so as to ensure sustainable development, safe work places and

enrichment of the quality of life of its employees, customers and the

community. IndianOil is also committed to the Global Compact Programme of

the United Nations and endeavours to abide by the 10 principles of the

programme, some of which are already part of the Corporations Vision and

Mission statements. It is the firm resolve of IndianOil People to move beyond

business, touch every heart and fuel a billion dreams.

III. Existing laws/ measures and their adequacy and effectiveness

Although there are number of initiatives addressing the need for global

conduct standards, (Global Reporting Initiative (1999), ISO 26000(2001) etc.)

an international standard is yet to emerge.

However, there are many international principles and guidelines for CSR.

Some of them are mentioned below :-

_ AIs Human Rights Principles (AI)

_ UN Global Compact (UNGC)

_ OECD Guidelines for MNCs

_ Global Sullivan Principles (GSP)

_ Fair Labour Association (FLA)

_ Ethical Trading Initiative (ETI)

_ Worldwide Responsible Apparel Production (WRAP)

_ Global Reporting Initiative (GRI)

_ Social Accountability International (SA8000)

Amnesty International (AI)5

AI is pursuing the social responsibility strategy by trying to convince MNCs

to voluntarily adopt human rights principles and policies in their own codes. AI

does not call for economic sanctions against countries nor boycotts against

companies. AI takes no position on the legitimacy of economic relations

between companies and governments guilty of human rights violations.

5International Business Leaders Forum. Human Rights: Is It Any of Your Business? (2000).

AI & IBLF. Business & Human Rights: A Geography of Corporate Risk. (2002).


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AI may in some cases oppose specific transfers of equipment, training or

other support used to commit human rights violations.

AIs Human rights principles6

Company human rights policy based on Universal Declaration of Human

Rights (UDHR).

_ Security arrangements must not permit Human Rights Violations (HRVs).

_ Community engagement.

_ Freedom from discrimination.

_ Freedom from forced labour.

_ Health and safety.

_ Right to association and collective bargaining.

_ Fair working conditions (adequate standard of living).

_ Elimination of child labour (as lawfully required).

_ Independent monitoring and transparency.

UN Global Compact- 10 principles7

The UN Global Compact launched by UN Secretary General Kofi Annan at

the 1999 Davos World Economic Forum is a purely voluntary standard. It has

weak compliance mechanism and is not a code of conduct.

The Global Compact asks companies to embrace, support and enact, within

their sphere of influence, a set of core values:

Human Rights

Principle 1: Businesses should support and respect the protection of

internationally proclaimed human rights;

Principle 2:make sure that they are not complicit in human rights abuses.

Labour Standards

Principle 3: Businesses should uphold the freedom of association and the

effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

6www.amnesty.org.uk/business; www.iblf.org/humanrights; www.business-humanrights.org.7 http://www.unglobalcompact.org/aboutthegc/thetenprinciples/index.html
http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/humanRights.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle1.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/Principle2.htmlhttp://www.unglobalcompact.org/opencms/AboutTheGC/TheTenPrinciples/labourStandards.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle3.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/Principle4.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle5.htmlhttp://www.amnesty.org.uk/businesshttp://www.amnesty.org.uk/businesshttp://www.iblf.org/humanrightshttp://www.amnesty.org.uk/businesshttp://www.iblf.org/humanrightshttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/humanRights.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/humanRights.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle1.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/Principle2.htmlhttp://www.unglobalcompact.org/opencms/AboutTheGC/TheTenPrinciples/labourStandards.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle3.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/Principle4.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle5.html


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Principle 6: the elimination of discrimination in respect of employment and

occupation.

Environment

Principle 7: Businesses should support a precautionary approach to

environmental challenges;

Principle 8: undertake initiatives to promote greater environmental

responsibility; and

Principle 9: encourage the development and diffusion of environmentally

friendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms,

including extortion and bribery.

Global Reporting Initiative (GRI)8

It is a voluntary, long-term, multi-stakeholder international guideline for

sustainability reporting. GRI addresses Economic, Environmental, and Social

dimensions of Business.

Economic: wages and benefits, labour productivity, job creation,

expenditures on R&D, investment in training.

Environmental: impacts of processes, products and services on air, land,

water, biodiversity, and human health.

Social: workplace health and safety, employee retention, labour rights,

human rights, working conditions.

_GRI Features

_ Comprehensive reporting guideline applicable to almost all businesses.

_ Improves transparency with stakeholders.

_ Provides a management tool to help evaluate and continuously improve

business operations.

_ Common format allows comparisons and illuminates relationships among

core elements.

_ Supports independent verification, but does not provide it.

_ Supports consultation with key stakeholders.

_ Allows for incremental implementation.8

www.globalreporting.org
http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle6.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/environment.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle7.htmlhttp://www.unglobalcompact.org/opencms/Issues/Environment/Principle_8.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle9.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/anti-corruption.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle10.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle6.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/environment.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle7.htmlhttp://www.unglobalcompact.org/opencms/Issues/Environment/Principle_8.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle9.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/anti-corruption.htmlhttp://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/principle10.html


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Social Auditing -- SA8000

It is a comprehensive, technically strong, and effectively auditable, multi-

sector code for CSR. It uses accredited professional auditing bodies (SGS,

ITS, DNV, BVQI and UL). SA8000 is tested internationally with 300+ audits

and under this code. certificates are issued in 24 countries on four continents.

Its members include Avon Products, Eileen Fisher, Otto Versand, Toy R Us,

Coop-Italia, the UN Office of Project Services and others. It has International

Advisory Board representing multinational corporations, trade unions, and

NGOs.

SA8000 Elements are

_ No child labour

_ No forced labour

_ Freedom of association

_ Freedom from discrimination

_ Disciplinary practices restricted

_ Reasonable working hours

_ Compensation to meet basic needs

_ Management system

_ Appeals and complaints system

Thailand Factory Example

_ Apparel Avenue Co., headquartered in Nakorn Pathom was the first

company in Thailand to be SA8000 certified.

_ Mr. Kartchai Jamkajornkeiat, president of the company, had already

obtained ISO 9002 and ISO 14001certificates and saw SA8000 as a

management tool and as a means to maintain his export market in the long

run.

_ Major SA8000 corrective action request was to reduce overtime hours to no

more than 60 hours per week.

_ Achieved this by redesigning work stations and production sequencing to

achieve greater productivity.


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At national level, Government of India has issued Guidelines on CSR for

Central Public Sector Enterprises (CPSEs), and even national and state level

corporate businesses have taken CSR in their own way.

Guidelines on Corporate Social Responsibility for Central Public Sector

Enterprises.9

1. CONCEPT

1.1. Public Corporations have legal responsibilities to maximize shareholder

profits; but a shift in corporate mindset led by social expectations and

pressure is causing business leaders to rethink their responsibilities with

respect to corporate performance measured in terms of economic impact,

social impact and environmental impact commonly called the Triple Bottom

Line.

1.2. Economic growth is possible only through consumption of inputs available

in the environment and society. The harnessing of natural resources has a

direct impact on the economy, the environment and society at large.

Corporate Social Responsibility (CSR) is a concept whereby organizations

serve the interests of society by taking responsibility for the impact of their

activities on customers, employees, shareholders, communities and the

environment in all aspects of their operations.

1.3. Corporate Social Responsibility is a Company's commitment to operate in

an economically, socially and environmentally sustainable manner, while

recognizing the interests of its stakeholders. This commitment is beyond

statutory requirements. Corporate Social Responsibility is, therefore, closely

linked with the practice of Sustainable Development. Corporate Social

Responsibility extends beyond philanthropic activities and reaches out to the

integration of social and business goals. These activities need to be seen as

those which would, in the long term, help secure a sustainable competitive

advantage.

2. PLANNING

2.1. The planning for Corporate Social Responsibility should start with the

identification of the activities/projects to be undertaken. CSR projects/activities

may be undertaken in the periphery where a company carries out its

commercial activities as far as possible. Where this is not possible or9Dpemou.nic.in


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applicable, a Company may choose to locate CSR projects anywhere in the

country. Company specific Corporate Social Responsibility strategies should

be developed that mandate the design ofCorporate Social Responsibility

Action Plan (Long-term, medium-term and short-term), with a shift from the

casual approach to the project based accountability approach. The business

plan under CSR should be integrated with the social and environment

concerns related to the business of the company.

2.2. Selection of activities under CSR may be made to ensure that the

benefits reach the smallest unit i.e. village, panchayat, block or district

depending upon the operations and resource capability of the company.

The approach to CSR planning needs to be shifted from an ad-hoc charity to

a long-term sustainable approach. The Project Management and Monitoring

skills available with the companies could be shared as far as possible, with

the local administration by training and setting up required structures and

systems.

2.3. The long-term Corporate Social Responsibility Plan should match with the

long term Business Plan. This should be broken down into medium term and

short term plans. Each of these plans should clearly specify:

i) Requirements relating to baseline survey;

ii) Activities to be undertaken;

iii) Budgets allocated;

iv) Time-lines prescribed;

v) Responsibilities and authorities defined;

vi) Major results expected.

2.4 Such plans should also clearly specify the implementation guidelines and

the involvement of the implementing agency. The procedures and

methodologies prescribed for monitoring should be highlighted as well as the

modalities of the concurrent and final evaluation. Finally, there should be a

clear specification regarding mandatory documentation of the experience.

3. IMPLEMENTATION

a. CSR initiatives of Central Public Sector Enterprises (CPSEs) should

consider the following parameters for identification/selection of

schemes/projects:


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(i) Thrust should be given wherever possible to areas related to the business

of the CPSEs as a natural corollary to the business.

(ii) Investment in CSR should be project-based. Mere donations to

philanthropic/ charity or other organizations would not come under the

category of CSR.

(iii) CSR activities should generate community goodwill, create social impact

and visibility.

(iv) For every project, the time-frame and periodic milestones should be

finalized at the outset.

(v) CSR activities should also involve the suppliers in order to ensure that the

supply-chain also follows the CSR principles.

(vi) CSR activities should help in building a positive image of the company in

the public perception.

(vii) CSR activities may be related to United. Nations Global Compact

Programme on Environment.

(viii) CSR projects may be closely linked with the principles of Sustainable

Development, based on the immediate and longterm social and environmental

consequences of their activities.

(ix) Every CPSE should shoulder responsibility for restoring / compensating

for any ecological damage that is taking place as a result of its operations.

(x) Care may be taken to ensure that CPSEs work towards fulfillment of the

National Plan goals and objectives, as well as the Millennium Development

Goals adopted by our country, ensure gender sensitivity, skill enhancement,

entrepreneurship development and employment generation by co-creating

value with local institutions/people.

(xi) Central Public Sector Enterprises should redefine their business continuity

plan to factor in hazards, risks and vulnerabilities. They should also create

value in innovative social investments in the community and may focus on the

areas of "Preparedness and Capacity Building" in Disaster Management

(OM).

(xii) Public-Private Partnership between the Government and the Central

Public Sector could also be encouraged to leverage the strengths of the latter

in Disaster Management. CPSEs need to network with the Ministries inGovernment of India /NOMA at the National level and State Governments /


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SOMAs at the State level to strengthen and formalize their role in the OM

process for ensuring preparedness of the communities towards disaster

resilience.

3.2 Project activities identified under CSR are to be implemented by

Specialized Agencies and generally NOT by staff of the CPSE concerned.

Specialized Agencies could be made to work singly or in tandem with other

agencies.

3.3 Such specialized agencies would include:-

i) Community based organizations whether formal or informal;

ii) Elected local bodies such as Panchayats;

iii) Voluntary Agencies (NGOs);

iv) Institutes Academic Organizations;

v) Trusts, Missions, etc.;

vi) Self-help Groups;

vii) Government, Semi-Government and autonomous Organizations;

viii) Standing Conference of Public Enterprises (SCOPE);

ix) Mahila Mandals! Samitis and the like;

x) Contracted agencies for civil works;

xi) Professional Consultancy Organizations, etc.

3.4 CPSEs should generate awareness among all levels of their staff about

CSR activities and the integration of social processes with business

processes. Those involved with the undertaking of CSR activities should be

provided with adequate training and re-orientation.

3.5 Initiatives of State Governments, District Administration, Local

Administration as well as Central Government Departments! Agencies, Self-

Help Groups, etc., would be dovetailed! synergized with the initiatives taken

by the CPSEs.

3.6 Every care should be taken to ensure that there is no duplication of CSR

activities undertaken by the CPSEs with that of programmes run by Central,

State and Local Governments.

3.7 While assigning CSR projects to specialized agencies, every possible

effort must be made to verify the reliability and clean track record of such

agencies. CPSEs may make efforts to prepare suitable panels of such


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agencies or they may select from panels maintained by Government, Semi-

Government, Autonomous Organization or the National CSR Hub, etc.

3.8. Activities related to Sustainable Development will form a significant

element of the total initiatives of CSR.

3.9. Such activities should come under the 3 UN Global Compact Principles

pertaining to the Environment. Businesses are asked to:

i) Support a precautionary approach to environmental challenges;

ii) Undertake initiatives to promote greater environmental responsibility; and

iii) Encourage the development and diffusion of environmentally friendly

technologies.

3.10. Companies may also keep in mind the Environmental Management

System as per ISO 14001.

4. RESEARCH, DOCUMENTATION, ADVOCACY, PROMOTION &

DEVELOPMENT

4.1. The Department Of Public Enterprises, in conjunction with SCOPE and

the CPSEs will create a National CSR Hub which will undertake/facilitate the

following activities:

i) Nation-wide compilation, documentation, and creation of database;

ii) Advocacy;

iii) Research;

iv) Preparation of Panels of Implementing organisations/ monitoring and

valuation Agencies;

v) Promotional activities, including production of short films, printing of

brochures, pamphlets etc.;

vi) Conferences, Seminars, Workshops - both national and international;

vii) Act as a Think Tank;

viii) Any other matter as entrusted to it from time to time by the Department of

Public Enterprises (OPE)

4.2 The National CSR Hub will begin operations with funding provided by

Department of Public Enterprises. It will, however, be free to receive funds

from:

i) SCOPE and both Central as well as State PSEs;

ii) UN Agencies, reputed international agencies such as World Bank, EU andother multilateral bodies and organisations;


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iii) Reputed National and State Bodies;

iv) Government Departments, Autonomous Organisations, Planning

Commission, Attached and Subordinate Offices, Corporations etc.

v) Philanthropic Missions, Trusts, etc. of national and international repute.

4.3. Decisions relating to the location and functioning of the HUB will be taken

by DPE. SCOPE will be kept informed of such decisions and will be free to

offer suggestions, inputs etc.

5. FUNDING

5.1 The CSR budget. willbe mandatorily created through a Board Resolution

as a percentage ofnet profitin the following manner:-

Type of CPSEs Expenditure range for CSR in a Financial Year Net Profit

(Previous Year) (% of profit)

(i) Less than Rs. 100 crore 3%-5%

(ii) 100 crore to Rs. 500 crore 2%-3%

(Subject to a Minimum of 3 crores)

(iii) 500 crore and above 0.5%-2%

5.2 Loss-making companies are not mandated to earmark specific funding for

CSR activities.

5.3. They should achieve CSR objectives by integrating business processes

with social processes wherever possible and taking up such initiatives which

do not involve cash outgo, e.g., by synergising their CSR activities with those

of other profit-making companies.

5.4. The CSR Budget should be fixed for each financial year. This funding will

not lapse. It will be transferred to a CSRFund, which will accumulate - as in

the case ofnon-Iapsable pool-for the North East.

5.5. In case CPSEs have different Profit Centers like Factories I Plant

locations, they may be allocated separate CSR budgets to be spent by them

under the Annual CSR Budget allocations.

6. CLARIFICATIONS

6.1. These Guidelines will supersede/override any other

Guidelines/Circulars/lnstructions etc. that may have been issued by any

Ministry/ Department on any prior date. Guidelines on CSR for CPSEs will

henceforth issue only from the Department of Public Enterprises.


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6.2. These Guidelines are fully in consonance with the draft Guidelines for

Corporates issued by the Ministry of Corporate Affairs as per their website.

6.3. Such companies who are operating in sectors such as financial services,

and have no specific geographical area or limited area, would adopt and

define the areas of their choice for undertaking CSR activities.

6.4. Activities and expenditure related to staff benefits will not count as CSR.

6.5. Also grants to organizations/ institutions that are not specifically

implementing CSR projects specified by the CPSE would not count as CSR.

6.6. These Guidelines may be amended by the Department of Public

Enterprises from time to time with the approval of the competent authority.

7. BASELINE SURVEY & DOCUMENTATION

7.1. The impact made by CSR activities should be quantified to the best

possible extent with reference to base line data, which need to be created by

the CPSEs before the start of any project. Hence Base-line Surveys are

mandatory.

7.2. Meticulous documentation relating to CSR approaches, policies,

programmes, expenditures, procurement, etc., should be prepared and put in

the public domain, (particularly through the internet) and made available to

the National CSR Hub.

8. MONITORING

8.1. Monitoring of the CSR projects is very crucial and needs to be a periodic

activity of the Enterprise.

8.2. The Boards of CPSEs should discuss the implementation of CSR

activities in their Board meetings.

8.3. Each CPSE should include a separate paragraph/chapter in the Annual

Report on the implementation of CSR activities/projects including the facts

relating to physical and financial progress.

8.4. The implementation of CSR guidelines will form a part of the

Memorandum of Understanding that is signed each year between CPSEs and

Government.

8.5. The performance of each CPSE with reference to its CSR activities

should be monitored by the Ministry/Department concerned on a regular

basis.


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8.6. In MoU Guidelines from 2010-11 onwards, 5 marks have been earmarked

out of the non-financial parameters for CSR activities and 5 marks for

Sustainable Development initiatives.

8.7. For proper and periodic monitoring of CSR activities, companies may

appoint a CSR committee or a Social Audit Committee or a suitable, credible

external agency.

8.8 CSR projects should also be evaluated by an independent external

agency. This evaluation should be both concurrent and final.

9. ANNEXE

POSSIBLE AREAS OF ACTIVITIES UNDER CSR (THE LIST IS

INDICATIVE AND NOT EXHAUSTIVE)

i) Drinking Water Facility

ii) Education

iii) Electricity Facility

iv) Solar Lighting System

v) Health and Family Welfare

vi) Irrigation Facilities

vii) Sanitation and Public Health

viii) Pollution Control

ix) Animal Care

x) Promotion of Sports and Games

xi) Promotion of Art and Culture

xii) Environment friendly technologies

xiii) Promotion of livelihood for economically weaker sections through forward

and backward linkages

xiv) Relief to victims of Natural Calamities like eartl}-quake,. cyclone, drought

& flood situation in any part of the country

xv) Supplementing Development Programmes of the Government.

xvi) Non-conventional Energy Sources

xvii) Construction of Community Centres/Night Shelters/Old Age Homes

xviii) Imparting Vocational Training

xviii) Setting up of skill development centres.

xix) Adoption of vi"ages


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xx) Taking action on points suggested by Ministry of Forest and Environment

pertaining to Charter on Corporate Responsibility for Environment Protection

for 17 categories of Industries.

xxi) Scholarships to meritorious students belonging to SC, ST, OBC and

disabled categories.

xxii) Adoption/Construction of Hostels (especially those for SC/ST and girls),

xxiii) Skill training, entrepreneurship development and placement assistance

programmes for youth.

xxiv) Building of Roads, Pathways and Bridges.

xxv) Entrepreneurship Development Programme (EDP)

xxvi) Disaster Management Activities including those related to amelioration/

mitigation.

xxvii) Activities related to the preservation of the Environment/Ecology and to

Sustainable Development

IV. Compliance and Enforcement mechanism and their effectiveness

CSR as stated above in Guidelines of Ministry of Corporate Affairs, are not

enforceable through legal rules and regulations. CSR is an expected duty

from corporate businesses. Often it takes a crisis to precipitate attention to

CSR. One of the most active stands against environmental management is

the CERES Principles that resulted after the Exxon Valdez incident in Alaska

in 1989 (Grace and Cohen 2006). Other examples include the lead poisoning

paint used by toy giant Mattel, which required a recall of millions of toys

globally and caused the company to initiate new risk management and quality

control processes. In another example, Magellan Metals in the West

Australian town of Esperance was responsible for lead contamination killing

thousands of birds in the area. The company had to cease business

immediately and work with independent regulatory bodies to execute a

cleanup. Odwalla also experienced a crisis with sales dropping 90%, and the

company's stock price dropping 34% due to several cases ofE. Coli spread

through Odwalla apple juice. The company ordered a recall of all apple or

carrot juice products and introduced a new process called "flash

pasteurization" as well as maintaining lines of communication constantly openwith customers.
http://en.wikipedia.org/wiki/Coalition_for_Environmentally_Responsible_Economieshttp://en.wikipedia.org/wiki/Exxon_Valdezhttp://en.wikipedia.org/wiki/Lead_poisoninghttp://en.wikipedia.org/wiki/Mattelhttp://en.wikipedia.org/wiki/Magellan_Metalshttp://en.wikipedia.org/wiki/E._Colihttp://en.wikipedia.org/wiki/Applehttp://en.wikipedia.org/wiki/Carrothttp://en.wikipedia.org/wiki/Coalition_for_Environmentally_Responsible_Economieshttp://en.wikipedia.org/wiki/Exxon_Valdezhttp://en.wikipedia.org/wiki/Lead_poisoninghttp://en.wikipedia.org/wiki/Mattelhttp://en.wikipedia.org/wiki/Magellan_Metalshttp://en.wikipedia.org/wiki/E._Colihttp://en.wikipedia.org/wiki/Applehttp://en.wikipedia.org/wiki/Carrot


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V. Role of Judiciary- Contribution of Supreme Court / High

Courts

CSR issues cannot be put before Judiciary as it is not mandated through any

legislation. However, it is the role of the judiciary to interpret the law in the

socio-economic and political context in which it is meant to be interpreted.

Further, the judiciary recognised the civil and political rights by broadening

locus standi, making the judiciary more accessible. The responsible role

played by the judiciary in terms of judicial activism, by recognising CSR, as

long back as in 198310. However, the legislature has still not given effect to it

in terms of any statutory standing, even though the judiciary, by recognising

CSR, has actually supplemented the burden of the government, with that of

the corporates, which could have ended up in division of responsibilities of the

government.

Also, through Public Interest Litigations (PILs) any citizen in India can raise an

issue concerning Human Rights which in his / her view is not upheld by any

business entity. Some examples are Uphaar Cinema Fire Incidence, Bhopal

Gas Leakage Case and excessive use of groundwater by Coca Cola in

Kerala. All these cases when put up for judgment, have a CSR angle as the

culprit company is considered to not uphold their responsibilities.

Till now, redressal is available only against the actions of the government. If

CSR is mandated, there would be a more effective redressal forum in the form

of the judiciary, in case of failure on the part of corporates, apart from the

current accountability forum, i.e. the media. Further, even the UN Norms seek

to impose responsibilities on businesses within their respective spheres of

activity and influence.

10 AIR 1983 SC 759, where it was held by the Apex Court that the traditional view that a company is the property ofthe shareholders is an exploded myth. According to the new socio-economic thinking, a company is a socialinstitution having duties and responsibilities towards the community in which it functions. Also, it is agreed that if acompany has caused some loss to its surrounding areas, it is its obligation to make up for that loss, whether technicalor environmental, as a part of its CSR. Also, refer to para 4 in MANU/SC0025/1982, where Justice P.N. Bhagwatirefers to this as the new Corporate Philosophy, and also attracts the Directive Principles of State Policy, and theirfurtherance with the help of such corporates.


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VI. Role of NGOs/Civil Society Groups and Business /

Industry Associations and other stake holders

Non Government Organisations (NGOs) are private voluntary organizations

(PVOs) that represent social movements. They function as moral

entrepreneurs that are selling ethical ideals and standards for no-profit and

no-loss. They vary greatly in size, mission, strategies and degree of

democratic legitimacy.

NGO Strategies and Tactics for Promoting CSR are

_ Research and Reporting media exposure

_ Social Responsibility dialogue with Trans National Corporations (TNCs)

_ Social Accountability standards and audits

_ Shareholder Activism shareholder resolutions

_ Economic Pressure boycotts

_ Sanctions/Divestment selective purchasing

_ Government Regulation supporting legislation

_ Litigation bringing law suits.

_ Norm Creation development of international law

NGOs can play the role of mediator between Corporate Businesses and civil

society by:

_ Understanding need to address demands from civil society as a responsible

dialogue partners who can represent civil society interests.

_ NGOs have relevant expertise to assist TNCs in country risk assessments

and social auditing programs.

_ Provide guidance about social standards and social auditing.

_ protecting TNCs reputation and public criticism.

NGOs are also interested to co-ordinate with Transnational Corporations due

to

_ shift of power in the Post Cold-War world towards TNCs and economic

issues.

_ Perceived lack of social and environmental accountability of TNCs under

existing laws.


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_ Internal critique of the human rights movement for being too Northern and

too focused on traditional civil and political rights.

_ Desire to find new allies in the on-going struggle for human rights and

dignity for all people.

Civil Society Groups

Ethical banks excel in community involvement, as do other financial

institutions such as credit unions. Community involvement is not limited to

ethical banks as conventional banks also partake in such actions. The

following are a few examples of community involvement done by ethical

banks, credit unions, and conventional banks:

Affordable housing projects

Many banks/credit unions try to increase financial literacy in the

community

Give local scholarships & sponsorships.

Financially support community events

Securities & Exchange Board of India (SEBI) also emphasizes CSR of

businesses.

VII. Conclusion & Suggestions

Globalization and continuing rapid technological advances offer

unprecedented opportunities for social and economic development. At the

same time, they continue to present serious challenges, including widespread

financial crises, insecurity, poverty, exclusion and inequality within and among

societies. Considerable obstacles to further integration and full participation in

the global economy remain for developing countries. Unless the benefits of

social and economic development are extended to all countries, a growing

number of people in all countries and even entire regions will remain

marginalized from the global economy11.

After the colonial era, which tapped many transition economies natural

resources, its now the turn of these erstwhile colonies, somewhat better off

economically, to draw the descendants of the erstwhile colonial powers to the

11UN Globalization and Its Impact on the Full Enjoyment of Human Rights (August 2000)


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vast markets that await the benefits that are on offer from the developed

world. Therefore transition economies have attracted the attention of large

MNCs on account of the vast potential market growth. These markets are

relatively untapped and offer new domains for marketing operations.

However, many MNCs also take the markets for granted and exploit the laxity

in the norms of operations to their advantage. The lack of concern for the local

community, the consumers and the environment by these corporations has

created large scale public debate and action. It is important in this context to

understand that the sustainable business growth is associated with care for

the community and the markets these corporations operate in. Negative

publicity caused by the actions of MNCs has lead to suspicion about their

motives while operating, in the minds of the general public in these markets.

Irresponsible corporate behaviour by MNCs can have severe repercussions

throughout their global markets.

Despite of all the developments, the world is still suffering due to poverty and

illiteracy. The data below gives an estimation :-

- 800 million people suffer from malnutrition12

_ 900 million people are illiterate

_ 20% of the worlds population lacks access to safe drinking water.

_ 1 billion people live on less than $1 a day.

_ 250 million children work.

_ 120 million children receive no schooling.

_ 25% of humans live in poverty.

Revaluation of Values

_ The key solution to the alleviation of poverty is the provision of sustainable

livelihoods to more and more people. Economic development, as it is currently

understood, functions primarily as a means of creating economic value

(wealth), but often does so at the expense of social justice (social equity), and

environmental quality (ecological integrity). Present forms of corporate-led

globalization tend to benefit the haves while further marginalizing the have-

nots.

Tri-Valuable Solutions

12 http://www.gtz.de/de/dokumente/en-promotion-of-CSR.pdf


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_ The way forward is through sustainable development programs that

increase wealth, promote social equity, and preserve ecological integrity.

Wealth (gold value) must be seen as linked with social justice (blue value) and

the preservation and renewal of the natural environment (green value).

Business enterprises and government development programs and initiatives

that promote gold, blue, and green values simultaneously are sustainable and

should be preferred to those that produce gold at the expense of green and

blue value for society.

Global Governance

_ Emerging global system is redefining roles of state, business, and civil

society in the protection of human rights and the promotion of sustainable

development.

_ Multi-stakeholder dialogue involving all three sectors is seen as key to make

globalization work for all.

_ No single actor or sector can be expected to provide for the fulfilment of all

human rights, or the solution to all social problems, but if business,

government and civil society organizations work together to address these

problems, progress is possible.

Conclusion

Corporate social responsibility is most frequently used to describe a

company's relations with its wider community. CSR is on the boundary of HR

and PR. There are dangers for companies and for the HR function if it is

allowed to slide too far towards PR. More than excessive use of relationship

management techniques they should make use of strategic relationship

management approaches. This strategic relationship management

approaches includes the relationship development, maintenance and

separation factors. After the goal attainment the HR managers should be able

to separate themselves from the community and Non Governmental

Organisations and lead them to new interventions and action programmes

where the organisations development and Social Development can be better

integrated. If HR managers are not orienting and experimenting them with

innovative areas the Human Resource Management don't have better role in

the industrial sector. HR has a role in demonstrating the benefits of workplace


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practices that both reflect CSR and at the same time, contribute to

organizational efficiency and success.

The Business Case for CSR

_ Enhances compliance with local and international laws.

_ Benefits from promotion of rule of law.

_ Better internal control and control over supply chain.

_ Protection of reputation and brand image.

_ Enhances risk management.

_ Increases worker productivity, morale, and loyalty.

_ Provides management tools.

_ Addresses shareholder concerns.

_ Builds community goodwill.

_ Applies corporate values.

_ Reduces operating costs.

_ Enhances financial performance.

_ Increases stock value.

_ Enhanced ability to attract quality workforce.

_ Improves business relationships.

Push Factors

_ Globalization of production.

_ Privatization of state-owned industries in some cases.

_ Communications and IT.

_ Calls for greater corporate transparency.

_ Threats of trade sanctions, boycotts and divestment campaigns.

_ Threats of negative publicity and damage to reputation.

_ Desire to address concerns of consumers and active shareholders.

_ Desire to address concerns of NGOs, Trade Unions, and Faith-Based

organizations.

_ Desire to address concerns of local communities.

_ Desire to respond to CSR initiatives by governments.

_ Desire to keep up with industry leaders in CSR.

Next Steps for Companies_ Companies should adopt strong CSR policies.


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_ Companies should commit to creating internal management systems to

monitor compliance.

_ Companies should seek to achieve external certification through auditing

systems such as SA8000.

_ Companies can cooperate with local NGOs and community groups in

identifying issues, assisting internal and external auditors, and solving

problems.

_ Companies need to be more transparent about what they are actually doing

in the field of CSR.

The Way Forward

_ More companies must get past Why should we? to How can we? Dont

wait to be shamed for bad practices.

_ More NGOs need to loose their anti-business biases and begin to

distinguish among different companies.

_ Companies need to begin to think about CSR compliance as a normal part

of the cost of doing business, and as providing a competitive advantage.

_ NGOs need to begin thinking of companies as potential allies and partners

rather than as adversaries.

_ Ultimately, governments will need to create and enforce CSR standards

internationally.

In India, traditionally business is seen as legitimate, integral part of society

with inherent Vedic philosophy Sarva Loka Hitam the well being of all

stakeholders along with business excellence. Today most of our big business

houses like TATA, BIRLA, RELIANCE, etc and CPSEs, SPSEs all have taken

CSR as part of their mission. However, this has to be further inculcated up to

bottom level of their day to day working. This can be achieved through regular

training and incentives to all involved. As ex-prime minister Late Shri Rajiv

Gandhi in one of his rallies stated that if Rs 100/- is sent, only Rs 15/- reaches

up to the needy. The main stress shall be on accountability of distribution of

Public Goods whether food items through Public Distribution System or

money through various YOJNAs like NREGA, Gramin Sadak Vikas etc. Rapid

implementation of UID scheme may help in rooting out this problem. The

education and health system shall also be revamped as they are becomingvery costly day by day, making them out of reach of our majority of population.


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Schools like KVS, NVS, etc shall be leveraged in standard of education and

facilities to make them at par with private schools. Government Hospitals

services are to be made at par with Private Hospitals. Also, these entities

should be discouraged for making them money churning house at the cost of

exorbitant fees.

Infrastructure like, roads, railways, irrigation, housings all need a CSR

perspective while planning and implementation. All things said and done can

only bear their desired fruits, if the population is kept under control. At 120

crores today, and further increasing at a rate higher than world rate, it has to

be given foremost weightage.

In light of the above arguments in favour of CSR, and its benefits, attempts

should be made to mandate CSR, or else, the people would be deprived of a

whole new forum of ensuring poverty reduction and social development, apart

from the government. In this way, the government and the corporates can

work hand in hand, both assuming their duties and responsibilities while

realising rights of the people. Thus CSR exhorts firms to diverge from their

sole aim of maximising profits and to lay more importance on improving the

economic and social standards of the community in their countries of

operation.

VII. Views regarding relevance of project for a business

manager and entrepreneur

This project may help a business manager / entrepreneur to understand

importance of his/ her CSR.

1) Role of Human Resource Managers

If Non Governmental Organizations can play better role in the corporate social

responsibility, then Human Resource Management Department of the industry

can play better role in linking industry with community. The HR managers

shall take lead in the effort to link between community and the industry. To

develop better rapport with the people, HR managers have to make use of

their Strategic Relationship Management Skills. They should interact with the

community by establishing better linkage with the Non Governmental

Organisations Working there in the locality. The HR managers can initiallyconduct Focus Group Discussion (FGD) with the community and community


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leaders with the help of Non Governmental Organisations and need

evaluation and need prioritization should be conducted. Here HR managers

can act as facilitators in the Corporate Social Responsibility initiatives. The

community may have unlimited social needs. It is the responsibility of the HR

managers to intervene into those needs and give a realistic perception to the

community members related to their unlimited and unrealistic needs. The

needs of the community are to be segregated into important and important

needs. Both short-term goals and long-term goals are to be segregated. The

discussion to be entertained and the need categorization and finalization

should come from the community itself. The HR managers who act as the

implied leaders should lead the community towards realistic goal perception

that integrate the goals and objectives of Corporate Social Responsibility

programme initiated by the organization. This indicates that as leaders of the

Corporate Social Responsibility programme, HR managers should integrate

the needs of the community and that of the organisation. The list of social

development needs and the environmental protection needs to be discussed

soon after the Focus Group Discussions, with the top management in order to

ascertain whether all those needs can be met with the budget allotment for

the developmental programs. A multi level discussion, with members of the

NGO's, HR managers and representative of the Top Management, is to be

initiated for the finalization of the social intervention programme. Corporate

Social Responsibility offers the HR community opportunities to demonstrate

its strategic focus. The relationship with the community and Non

Governmental Organisations indicates the level of HR manager's success role

in the Corporate Social Responsibility effort.

2) The potential for banks to create environmentally and socially

conscious business practices

Generally all banks play an intermediary role in the economy; because of this

the possibility for banks to contribute to sustainable development is potentially

profound. Banks have extensive and efficient credit approval systems, which

gives them a comparative advantage in knowledge (regarding sector-specific

information, legislation and market developments). Banks are well seasonedand well equipped to weigh risks and attach a price to these risks; because of


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this banks can fulfill an important role in reducing the information asymmetry

between market parties, for example between the business and consumers.

This is important not just to consumers but also to depositors. When

depositors allow a bank to invest for them they are able to assume that the

bank will know which investments will maximize their returns. Conventional

banks are legally bound to maximize return for their clients. If clients are

concerned with more than simple return (i.e. the costs of the return on other

areas such as society and the environment) then they may need to turn to an

ethical bank to find ways in which they can garner return while keeping to their

own moral concerns.

3)Ethical initiatives

Numerous ethical banks (as well as some conventional banks) create initiates

that allow the banker to contribute to organizations that have positive

societal/environmental impacts either in the local community or in developing

countries. For example the Cooperative Bank (UK) offers customers "a free

Home Energy Rating on all house purchases, enabling them to better

understand how energy efficient a property is and how to make

improvements. Additionally, all of the bank's mortgages include carbon-offset

features. Every year that a customer holds a mortgage the bank offsets a fifth

of the carbon dioxide emissions arising from a typical household's energy

consumption. Following customer consultation, 2003 offset monies were used

for reforestation in Uganda, a Bangladesh project which trains local people to

build energy efficient stoves and a Bulgaria project supporting micro-hydro

electricity.

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Documents

Corporate_Social_Responsibility_and_Human_Rights