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A report on

CORPORATE SOCIAL RESPONSIBILITY- A TOOL TO ATTAIN SUSTAINABLE

DEVELOPMENT

BY

Ramya konduru



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A REPORT ON

CORPORATE SOCIAL RESPONSIBILITY- A TOOL TO ATTAIN SUSTAINABLE

DEVELOPMENT

By

RAMYA KONDURU

Course of Independent Study

A report submitted in partial fulfillment of

the requirements of

PGDM

(BATCH-XVIII)



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ACKNOWLEDGEMENT

I would like to express my gratitude to everyone who helped me out directly and

indirectly in completing this project work successfully.

I express my gratitude to the Director Dr. Kamal Ghosh Ray for giving me the

opportunity to work on such an interesting project.

I am indebted to my project guide Mr Syeed for the valuable suggestions and

encouragement right from the conception of the idea to the completion of the project.

Ramya Konduru



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Executive Summary:

It is an established fact that the increasingly serious and complex environmental and social issues

in today¶s world require the strict attention and concern of businesses and investment

communities CSR presents significant risks and opportunities for organizations. Stakeholders

expect boards and management to accept responsibility and implement strategies and controls to

manage their impact on society and the environment, to engage stakeholders in their endeavors,

and to inform the public about their results. The proliferation of regulation and voluntary

standards has made CSR management a complex endeavor. Internal auditors should understand

the risks and controls related to CSR objectives. Internal auditors should maintain the skills and

knowledge necessary to understand and evaluate the governance, risks, and controls of CSR

strategies and to understand how the companies are able to sustainable growth by undertaking

the CSR activities by which the companies tend to develop trust among the customers which

tends to be positive impact for the brands or companies to survive in the current scenario and

also acts as competitive advantage. In this paper the CSR activities undertaken by companies and

their impact on the customers which in turn lead to growth of the company have been analyzed

and interpreted.



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Table of contents

Contents

INTRODUCTION: .................................................................................................................................................... 7

OBJECTIVES: .......................................................................................................................................................... 7

LIMITATIONS: ........................................................................................................................................................ 7

SCOPE: ................................................................................................................................................................... 8

RESEARCH METHODOLOGY: .................................................................................................................................. 8

SAMPLE DESIGN: ................................................................................................................................................ 8

DATA COLLECTION:............................................................................................................................................ 8

CORPORATE SOCIAL RESPONSIBILITY .................................................................................................................... 9

MEANING AND DEFINITIONS: .............................................................................................................................. 9 NEED FOR CORPORATE SOCIAL R ESPONSIBILITY:............................................................................................... 11

IMPORTANCE OF CSR: ...................................................................................................................................... 11

CSR IN TODAY¶S WORLD: ................................................................................................................................ 12

IMPLEMENTING CSR:........................................................................................................................................ 13

ARGUMENTS ABOUT CSR: ................................................................................................................................ 15

CORPORATE SOCIAL RESPONSIBILITY IN I NDIA:.................................................................................................. 18

MEASURE FOR APPLYING CORPORATE SOCIAL R ESPONSIBILITY: ........................................................................ 19

ATTAINING SUSTAINABLE GROWTH THROUGH CORPORATE SOCIAL RESPONSIBILITY: A CASE STUDY ON THE

SURVEY CONDUCTED BY THE IBM........................................................................................................................ 22

THE CSR SURVEY.............................................................................................................................................23

HOW DO YOU DEVELOP A CSR STRATEGY? ........................................................................................................ 24

CASE STUDY: MARKS & SPENCER : DIFFERENTIATION BASED ON TRUST .......................................................... 34

CSR ACTIVITIES UNDERTAKEN BY DELOITTE TO ATTAIN SUSTAINABLE GROWTH: ................................................ 36

SONY -CSR ........................................................................................................................................................... 41

ANALYSIS: ............................................................................................................................................................ 43

FINDINGS: ............................................................................................................................................................ 44

SUGGESTIONS:..................................................................................................................................................... 45

CONCLUSION: ...................................................................................................................................................... 46

BIBLIOGRAPHY: ................................................................................................................................................... 47

GLOSSARY: .......................................................................................................................................................... 47



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TABLE OF FIGURES

Figure 1: CSR value curve. ......................................................................................................................25

Figure 2: CSR gains momentum..............................................................................................................26

Figure 3: Representing visibility to transparency. ...................................................................................27

Figure 4: Graph representing the knowledge gap among customers. ..................................................... 28

Figure 5: Graph representing the percentage of the environmental standards undertaken by business. 29

Figure 6: Graph representing the companies that are mainly collaborate with stakeholders on CSR

initivaties. ..............................................................................................................................................31

Figure 7:Graph representing the company engagement in CSR objectives and initiavites. ......................33



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Introduction:

Although the subject ³Corporate Social Responsibility´ in its present form and content has

gained popular attention only in recent years, its origin can be traced back to the evolution of the

concept of a welfare state. The changing image of business in the recent years has lent further support to the idea of social responsibility. Some public opinion polls in the 1960¶s and 1970¶s in

United States have left businessman disenchanted. These polls have revealed that the

businessman is viewed as an individual who does not cares for others, who ignored social

problems, who prey upon the population, who exploits labor, and who is a selfish money

grabber. Organizations worldwide are adopting mission statements and governance activities

related to corporate social responsibility (CSR) and sustainable development. Customers,

employees, and public stakeholders have increasing expectations for organizations to act in

responsible and sustainable ways, and public scrutiny of these activities is rising. This growing

attention extends beyond the organization to its partners and suppliers. Increasing regulations

relating to the environment and the workplace are leading to new practices and management

systems. In response, organizations are developing performance targets, measurement systems,

and reporting systems related to CSR and sustainable development strategies.

Objectives:

y To understand the corporate social responsibility and the things related to it.

y To evaluate the importance of CSR in emerging economies specifically India.

y To understand why the companies are undertaking these CSR activities.

y To understand how the companies are attaining sustainable growth by using CSR as

their major activities.

Limitations:

The study is limited to few companies which are undertaking the CSR activities to attain

sustainable development due to time constraint.



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Scope:

The study is mainly done on few companies to understand the corporate social responsibility,

how the companies are performing these activities to attain sustainable growth in the current

scenario and also making CSR as there asset and using it as a tool to convert into revenue.

Research Methodology:

Sample Design:

The study is done on two companies to understand how these CSR activities acting as a tool to

the companies to attain sustainability. Also a survey on the CSR activities undertook by different

companies has been analyzed.

Data Collection:

Primary data: This method includes the data collected (of the various companies) from the

personal interaction with the employees working in various companies.

Secondary Data: The data is collected from various books, journals and information published

in the newspapers, from the company websites¶ and also various articles.



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Corporate social responsibility

Corporate social responsibility (CSR) is a form of business self-

regulation to incorporate social and environmental concerns. It represents a business model that

adheres to laws, ethical standards, and international norms.

As part of the business model, businesses have to take into account the impact of their activities

on the environment, employees, communities, stakeholders, and other members of the public. In

short, CSR represents the deliberate inclusion of the public¶s interest in a business¶ decision

making to ensure a triple bottom line that considers the planet, people, and profits.

In general, CSR involves some kind of standardized reporting that allows the business to collect

information on how it is making progress on various fronts. Businesses that engage in CSR

typically focus on some or all of the following:

y Environment: This requires a look at the environmental impacts of products and services,

as well as what the business does outside the company to improve the environment.

y Employees: It¶s important to ensure that all employees are cared for adequately.

Businesses usually focus on workplace conditions, benefits, living wages, and training.

y Communities: Engaging the surrounding communities is an important part of not just

creating good human capital that can serve the business, but also securing a reputation

that can further establish the business.

y Regulations: Respecting regulations to the fullest and often exceeding them is part of

being socially responsible.

Meaning and Definitions:

CSR is about how companies manage the business processes to

produce an overall positive impact on society.



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Take the following illustration:

Companies need to answer to two aspects of their operations.

1. The quality of their management - both in terms of people and processes (the inner circle).

2. The nature and quantity of their impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the company. Most look

to the outer circle - what the company has actually done, good or bad, in terms of its products

and services, in terms of its impact on the environment and on local communities, or in how it

treats and develops its workforce. Out of the various stakeholders, it is financial analysts who are

predominantly focused - as well as past financial performance - on quality of management as an

indicator of likely future performance.

Other definitions

Definitions as different as "CSR is about capacity building for sustainable livelihoods. It

respects cultural differences and finds the business opportunities in building the skills of

employees, the community and the government"



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"Corporate Social Responsibility is the continuing commitment by business to behave

ethically and contribute to economic development while improving the quality of life of the

workforce and their families as well as of the local community and society at large"

Need for Corporate Social Responsibility:There are many situations where social responsibility of a business becomes

necessary. Few of these situations which show the need for Corporate Social Responsibility are

discussed below.

1. A societal approach to business is the contemporary business philosophy, which demands

business organizations to be responsive to the social problems.

2. As a result of globalization of business, global companies and MNCs operate in a big

way in their host countries. In order to establish a good corporate image, they include

social responsibility as a corporate objective. Indigenous companies are forced to follow

suit for maintaining their corporate identity.

3. In the terms and conditions of collaborations agreements, very often, social welfare terms

are included which necessitates the collaborating company to take up social responsibility

of business.

4. On the basis of legal provisions, companies have to concentrate on social problems. For

example an industrial organization in India must obtain a certification from Pollution

Control Board.

5. Corporate donations of social welfare projects of approved NGO¶s are exempted from

income tax in India.

6. An organizations commitment to social responsibility creates a good corporate image,

and there by a better business environment.

7. Social responsibility of business enables the organization to improve its product

positioning and thereby improve its market share.

Importance of CSR:

CSR is an important business strategy because, wherever possible,

consumers want to buy products from companies they trust; suppliers want to form business

partnerships with companies they can rely on; employees want to work for companies they

respect; and NGOs, increasingly, want to work together with companies seeking feasible



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solutions and innovations in areas of common concern. Satisfying each of these stakeholder

groups allows companies to maximize their commitment to another important stakeholder

group²their investors, who benefit most when the needs of these other stakeholder groups are

being met.

The businesses most likely to succeed in the globalizing world will be those best able to combine

the often conflicting interests of its multiple stakeholders, and incorporate a wider spectrum of

opinions and values within the decision-making process and objectives of the organization.

Lifestyle brand firms, in particular, need to live the ideals they convey to their consumers:

CSR is increasingly crucial to maintaining success in business²by providing a corporate

strategy around which the company can rally, but also by giving meaning and direction to day to

day operations.

CSR in Today¶s World:

CSR as a strategy is becoming increasingly important for businesses today

because of three identifiable trends:

Changing social expectations

Consumers and society in general expect more from the companies whose products they buy.

This sense has increased in the light of recent corporate scandals, which reduced public trust of

corporations, and reduced public confidence in the ability of regulatory bodies and organizations

to control corporate excess.

Increasing affluence

This is true within developed nations, but also in comparison to developing nations. Affluent

consumers can afford to pick and choose the products they buy. A society in need of work and

inward investment is less likely to enforce strict regulations and penalize organizations that

might take their business and money elsewhere.

Globalization



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The growing influence of the media sees any µmistakes¶ by companies brought immediately to

the attention of the public. In addition, the Internet fuels communication among like-minded

groups and consumers²empowering them to spread their message, while giving them the means

to co-ordinate collective action (i.e. a product boycott).

These three trends combine with the growing importance of brands and brand value to corporate

success (particularly lifestyle brands) to produce a shift in the relationship between corporation

and consumer, in particular, and between corporation and all stakeholder groups, in general.

The result of this mix is that consumers today are better informed and feel more empowered to

put their beliefs into action. From the corporate point of view, the market parameters within

which companies must operate are increasingly being shaped by bottom-up, grassroots

campaigns. NGOs and consumer activists are feeding, and often driving, this changing

relationship between consumer and company.

CSR is particularly important within a globalizing world because of the way brands are built²on

perceptions, ideals and concepts that usually appeal to higher values. CSR is a means of

matching corporate operations with stakeholder values and demands, at a time when these values

and demands are constantly evolving.

CSR can therefore best be described as a total approach to business. CSR creeps into all aspects

of operations. Like quality, it is something that you know when you see it. It is something that

businesses today should be genuinely and wholeheartedly committed to. The dangers of ignoring

CSR are too dangerous when it is remembered how important brands are to overall company

value; how difficult it is to build brand strength; yet how easy it can be to lose brand dominance.

CSR is, therefore, also something that a company should try and get right in implementation.

Implementing CSR:

CSR is about common sense policies that represent a means of integrating

a complete µsocial perspective¶ into all aspects of operations. The goal is to maximize true value

and benefit for an organization, while protecting the huge investments corporations make today

in their brands.



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CSR asks companies to ensure their business operations are clean and equitable, and contribute

positively to the society in which they are based. Otherwise, they leave themselves open to too

much danger from a potential consumer backlash.

CSR is good business sense, and a total approach to doing business, in a globalizing world where

companies are increasingly relying on brand strength (particularly global lifestyle brands) to add

value and product differentiation, and where NGO-driven consumer activism is increasing.

Many believe the issue of how corporations integrate CSR into everyday operations and long-

term strategic planning will define the business marketplace in the near future. It will become a

key point of brand differentiation, both in terms of corporate entities and the products that carry

their brands.

Key steps on the road to integrating CSR within all aspects of operations include:

Ensure the commitment of top management, and particularly the CEO, is communicated

throughout the organization

Appoint a CSR position at the strategic decision-making level to manage the development of

policy and its implementation

Develop relationships with all stakeholder groups and interests (particular relevant NGOs)

Incorporate a Social or CSR Audit within the company¶s annual report

Ensure the compensation system within the organization reinforces the CSR policies that have

been created, rather than merely the bottom-line

Any anonymous feedback/whistle-blower process, ideally overseen by an external

ombudsperson, will allow the CSR Officer to operate more effectively

Corporations today are best positioned when they reflect the values of the constantly shifting and

sensitive market environment in which they operate. It is vital that they are capable of meeting

the needs of an increasingly demanding and socially-aware consumer market, especially as

brands move front and center of a firm¶s total value. Global firms with global lifestyle brands

have the most to lose if the public perception of the brand fails to live up to the image portrayed.



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Integrating a complete µsocial perspective¶ into all aspects of operations will maximize true value

and benefit for an organization, while protecting the huge investments companies make in

corporate brands.

Arguments about CSR:Arguments offered in favor of CSR can be broadly split into two camps²

moral and economic.

1. A moral argument for CSR

While recognizing that profits are necessary for any business entity to exist, all groups in society

should strive to add value and make life better. Businesses rely on the society within which they

operate and could not exist or prosper in isolation. They need the infrastructure that society

provides, its source of employees, not to mention its consumer base. CSR is recognition of that

inter-dependence and a means of delivering on that obligation, to the mutual benefit of

businesses and the societies within which they are based:

CSR broadly represents the relationship between a company and the wider community within

which the company operates. It is recognition on the part of the business that µfor profit¶ entities

do not exist in a vacuum, and that a large part of any success they enjoy is as much due to the

context in which they operate as factors internal to the company alone.

Charles Handy makes a convincing and logical argument for the purpose of a business laying

beyond the goals of maximizing profit and satisfying shareholders above all other stakeholders in

an organization:

The purpose of a business is not to make a profit, full stop. It is to make a profit so that the

business can do something more or better. That ³something´ becomes the real justification for

the business«.It is a moral issue. To mistake the means for the end is to be turned in on oneself,

which Saint Augustine called one of the greatest sins«.It is salutary to ask about any

organization, ³If it did not exist, would we invent it?´ Only if it could do something better or

more useful than anyone else´ would have to be the answer, and profit would be the means to

that larger end.



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Advocates of CSR believe that, in general, the goal of any economic system should be to further

the general social welfare. In advanced economies, the purpose of business should extend

beyond the maximization of efficiency and profit. Increasingly, society expects businesses to

have an obligation to the society in which they are located, to the people they employ, and their

customers, beyond their traditional bottom-line and narrow shareholder concerns.

At a minimum, businesses operating in a community benefit from the infrastructure of that

community (tangible, practical elements such as the roads, other transport infrastructure, the

police, firefighters, etc) as well as more intangible benefits, such as a safe or clean environment.

But, in most cases, businesses also draw their most important resource, its employees, largely

from the local community. Any business will be more successful if it employs a well-educated

workforce that can attend good hospitals if they become sick, and who have grown up in a

positive environment. This is not to mention consumers, also often members of the local

community, without whom no business could survive.

CSR advocates point out that no organization exists in isolation. They believe that businesses,

without exception, have an obligation to contribute as well as draw from the community, on

which they rely so heavily.

2. An economic argument for CSR

An economic argument in favor of CSR can also be made. It is an argument of economic self-

interest that there are very real economic benefits to businesses pursuing a CSR strategy²and is

designed to persuade those business managers who are not persuaded by the moral case.

Proponents of this argument believe that CSR represents an holistic approach to business.

Therefore, an effective CSR policy will infuse all aspects of operations. They believe the actions

corporations take today to incorporate CSR throughout the organization represent a real point of

differentiation and competitive market advantage on which future success can hinge:

CSR is an argument of economic self-interest for a business. In today¶s brand-driven markets,

CSR is a means of matching corporate operations with stakeholder values and demands, at a time

when these parameters can change rapidly. One example is a company¶s customers: CSR adds



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value because it allows companies to better reflect the values of this important constituent base

that the company aims to serve.

CSR covers all aspects of a business¶ day-to-day operations. Everything an organization does in

some way interacts with one or more of its stakeholder groups, and companies today need to

build a watertight brand with respect to all stakeholders. Whether as an employer, producer,

buyer, supplier, or investment, the attractiveness and success of a company today is directly

linked to the strength of its brand.

CSR affects all aspects of all operations within a corporation because of the need to consider the

needs of all constituent groups. Each area builds on all the others to create a composite of the

corporation (its brand) in the eyes of all stakeholder groups.

3. Arguments against corporate social responsibility

If the arguments for a socially responsible approach were widely accepted, nobody would even

using the label "CSR" because everyone would be doing it. Those of us who spend our time

marshalling the case for would do well to spend a little time hearing the case against, and

considering what should be the response.

Of course, one of the challenges in considering cases "for" and "against" CSR is the wide variety

of definitions of CSR that people use. We assume here we are talking about responsibility in how

the company carries out its core function - not simply about companies giving money away to

charity.

Below are some of the key arguments most often used against CSR and some responses.

y Businesses are owned by their shareholders - money spent on CSR by managers is theft

of the rightful property of the owners

y The leading companies who report on their social responsibility are basket cases - the

most effective business leaders don't waste time with this stuff

y Our company is too busy surviving hard times to do this. We can't afford to take our eye

off the ball - we have to focus on core business



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y It's the responsibility of the politicians to deal with all this stuff. It's not our role to get

involved

y I have no time for this. I've got to get out and sell more to make our profit line.

y Corporations don't really care - they're just out to screw the poor and the environment to

make their obscene profits

Corporate Social responsibility in India:

Most companies are not doing any CSR

Many companies are only making token gestures towards CSR in tangential ways such as

donations to charitable trusts or NGOs, sponsorship of events, etc.

Most companies believe that charity and philanthropy equals to CSR; very few

companies are using their core competence to benefit the community.

Most companies use CSR as a marketing tool to further spread the word about their

business. For instance, donation of a token amount to some cause on purchase of a particular

product. The fact that companies are hiring advertising agencies for their CSR further highlights

this.

Only Few Indian companies (from this study) publish a Corporate Sustainability Report

to measure and assess the impact of their business on the environment .

Very few companies openly state the processes followed by them, the damage caused by

these processes, and the steps taken to minimize this damage.

Very few companies state how much they spend on CSR. There is no mention of the

amount spent in any of their balance sheets or annual reports. Most companies just list anddescribe their CSR activities and seem to be spending minimal amounts on CSR.

Very few companies are engaged in CSR activities in the local communities where they

are based.



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Very few companies have a clearly defined CSR philosophy. Most implement their CSR

in an ad-hoc manner, unconnected with their business process.

Most companies spread their CSR funds thinly across many activities, thus somewhere

losing the purpose of undertaking that activity.

Most companies appear reluctant to themselves fulfill their CSR unless it is mandatory by

law.

Generally speaking, most companies seem either unaware or don¶t care about CSR.

However, all companies can be considered to be an upward learning curve with respect to CSR

and it is expected that the situation will improve.

Measure for applying Corporate Social Responsibility:

Sustainability reporting: It is recommended that every company should publish a separate

Corporate Sustainability Report (as per the Global Reporting Initiative (GRI) framework) along

with their Annual Report. At the very least, every company must include a Corporate

Sustainability section in its Annual Report (similar to the mandatory section on Conservation of

Energy, Technology Absorption and Foreign Exchange Earnings and Outgo).

CSR philosophy to be defined and articulated: Every company must clearly define its own

CSR philosophy and objectives, stating which issues it intends working on or contributing to. It

is recommended that a company first takes up areas that directly concern its business processes,

and thereafter any other related or unrelated issues. These can also yield strategic benefits to the

company.

Minimum annual CSR expenditure: Every company must spend a minimum of 0.2% of its

annual income on CSR activities. The CSR spending of a company should not be linked to the

profit made by the company because this would vary from year to year and the CSR activities

would thus not be consistently maintained.

The scale of operations of a company and its impact is connected with its sales, and not with its

profits. The larger the company, the greater is the damage it is doing to the environment.

Conversely, the greater is the company's ability to do good.



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Protection and restoration of the environment: Every company must be engaged in CSR

activities that minimise its harm to the environment, and which help restore damage done to the

environment because of the company. For example, all companies should use energy-efficient

technologies for their factories and offices, and adopt rainwater harvesting irrespective of the

production process they are engaged in.

Employment for marginalized groups : Every company should provide inclusive employment

opportunities and include the physically-challenged and marginalized groups in their workforce.

The number of employment opportunities offered to such groups should be stated in the Annual

Reports as is done by Public Sector Undertakings.

Local community development: It is recommended that a company first undertakes projects in

the places where it functions, and helps those local communities and environments that are

affected by its work.

Use of core competence: Every company should use its core competence to benefit its

stakeholders and society. For instance, banks can use their expertise to identify and counsel

debtors who are likely to run into financial trouble

Extending profile and area of businesses: A company should attempt to stretch its business

beyond its existing profile and into areas where it does not normally work so as to reach out to

under-served groups and populations. While this may sometimes mean smaller profit margins or

marginal losses for the company, it will invariably result in valuable business learning's as well

as effective CSR for the company.

Developing internal CSR implementation systems: A company may choose to develop an in-

house CSR team or division that undertakes the CSR activities for the company. This is desirable

as it leads to greater sensitization and awareness within the company about it's processes,

responsibilities, role, etc. and leads to the internalization of the company's CSR philosophy.

Instead of contributing to the trust of the CEO or the promoter family, a company should set up

its own trust/foundation as a matter of proper business ethics.



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It is recommended that a company set up a committee that includes an external Director, an

NGO and local stakeholders for selecting, monitoring and evaluating its CSR activities.

Focused CSR activities for greater impact: It is recommended that a company identifies a few

issues for it's CSR activities and works on these areas for a sustained period of time so that

measurable results and improvements can be achieved, rather than undertaking or supporting

several small initiatives across several areas thereby reducing effective impact.

Many of the corporates attain sustainable growth by corporate social responsibility which is

acting as a tool in order to improve their brand, transparency among the customers and many

more. This can be clearly understood by the survey which was conducted by IBM to understand

how companies are making use of CSR in order to improve their brand image and to position

their product in the market compared to its competitors.



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Attaining sustainable growth through corporate social responsibility: A case

study on the survey conducted by the IBM

A growing body of evidence asserts that corporations can do well by

doing good. Well-known companies have already proven that they can differentiate their brands

and reputations, as well as their products and services, if they take responsibility for the well-

being of the societies and environments in which they operate. These companies are practicing

Corporate Social Responsibility (CSR) in a manner that generates significant returns to their

businesses.

Introduction

Just as the Internet has triggered lasting change in the structures of

industry and the ways in which industries can create value, the ubiquitous connectivity in place

today has already caused an enduring shift in the relationship between an enterprise and its

customers, employees, and partners. That¶s because massive amounts of information ± and

opinions ± about companies, their products and practices, are available in every part of the globe,

every minute of every day. And because the Internet is now a place where people congregate to

discuss and organize social actions, the balance of power between business and society has

shifted toward society and away from business. So, with this increased visibility of corporateactions, customers¶ perceptions of companies and their consequent purchasing behaviors are

fundamentally changing. And because that means significant financial impact for businesses,

CSR is no longer viewed as just a regulatory or discretionary cost, but an investment that brings

financial returns.

IBM has conducted a survey on 250 business leaders worldwide found that businesses are

wasting no time in interpreting these implications and acting on them: When companies talk

about CSR publicly, they tend to describe it in terms of philanthropy. The survey, however,

found that businesses have actually assimilated a much more strategic view; 68 percent are now

utilizing CSR as an opportunity and a platform for growth.

Based on conversations with business leaders it appears incontrovertibly true that business

leaders are starting to see CSR as a sustainable growth strategy.



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It¶s equally true that the more advanced view of CSR demands significant long-term

commitment, and definition of corporate values. It can also require wholesale changes to the

ways companies operate.

Finally, it will require a finely honed appreciation of customers¶ concerns. A potentially

alarming finding from the survey is that 76 percent of the business leaders surveyed admitted

they don¶t understand their customers¶ CSR expectations well.

The CSR survey

IBM¶s global survey was conducted to gauge just how deeply the CSR

issue has penetrated the core of the corporation and its strategies and operations. Company

surveyed more than 250 business executives worldwide. These were business leaders and

strategists, not the executives responsible for charitable foundations or special corporate CSR

initiatives.

Analysis led to three dynamics that companies should understand and act upon in dealing with

CSR. These dynamics are:

Impact on business ± From cost to growth

Information ± From visibility to transparency

Relationships ± From containment to engagement.

This study will examine each of these dynamics individually and make recommendations that

will help companies in their journey to achieve sustainable growth through CSR.

Impact for business: From cost to growth

Governments have historically arbitrated much of the relationship between society and business,

and in its most rudimentary form, CSR can be viewed as compliance with the laws and

regulations set by the public sector. Although regulation can have significant social value,

companies look at compliance as a cost of doing business ± and as a source of potentially costly

hits in terms of litigation and reputation.

As companies have gone global ± either by entering new markets to sell their products and

services or by working with new overseas suppliers ± the costs of compliance have risen rapidly.

Failure to abide by local and global regulations can destroy business reputations and brands, but



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compliance alone won¶t build brands. Nor will compliance offer the growth opportunities that

strong brands and reputations bring with them.

Many companies have clung to this narrow compliance-based view of CSR for decades. Quite

recently, however, companies have started shifting their thinking about what it means to be

socially and environmentally responsible.

Today, a surprising number of companies already regard corporate social responsibility as a

platform for growth and differentiation.

y Over two-thirds (68 percent) of the business leaders surveyed by IBM are focusing on

CSR activities to create new revenue streams.

y Over half (54 percent) believe that their companies¶ CSR activities are already giving

them a competitive advantage over their top competitors.

When aligned with business objectives, companies are beginning to see that CSR can bring

competitive differentiation, permission to enter new markets, and favorable positioning in the

talent wars.

How do you develop a CSR strategy?

IBM¶s approach is to view a company¶s current activities and

objectives against the CSR Value Curve, which captures the shift in thinking from CSR as a cost

or risk mitigation effort to CSR as a strategic goal that brings in new revenues. When businesses

do start to move beyond compliance they start their journey along a continuum described in the

CSR Value Curve. The survey results showed that surprisingly few companies engaged in what

appears to be a very fundamental area for reputation building ± strategic philanthropy. Strategic

philanthropy aligns charitable giving with business strategy, company skills and market needs.

These efforts reinforce a company¶s social commitment with ongoing returns, often in the form

of goodwill and typically indirectly from a financial perspective.

For example, IBM works with public and not for- profit organizations to make the WorldCommunity Grid available to a volunteer force of more than 210,000 people who donate the idle

processing power of their computers to create a ³virtual supercomputer´ devoted solely to

humanitarian research. The program is strategic to IBM because it demonstrates how leading-

edge technologies the company is developing can meet major global challenges, and it gives the

company feedback on the performance of those technologies in real-world applications. Because



25

the positive financial impact of strategic philanthropy is often indirect, these efforts aren¶t always

sustained. But in order to have a lasting impact on society and on the business, they must be

maintained and leveraged. So the closer they align philanthropy to the core strategy of the

business, the easier it is to consistently support the efforts. Companies are finding that many

CSR initiatives, including those that reduce energy consumption or benefit the environment, help

reduce overall cost structures or increase productivity.

For example, Catalyst Paper Corporation, a Canadian pulp and paper company, uses its own by-

products (biomass) to power its operations. It also regains heat from effluence to warm process

water and thereby further reduce its carbon emissions.

Figure 1: CSR value curve.



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Figure 2: CSR gains momentum.

Together with efficiency gains and a switch to natural gas, the company has lowered its GHG

emissions by 70 percent and its energy use by 21 percent since 1990. In 2005 and 2006 alone, the

company saved US$4.4 million through a 2 percent reduction in fuel consumption.

The maximum benefit from the CSR opportunity takes place when all activities on the CSR

Value Curve become integrated into a single company strategy, with leadership from the top

managers and full engagement by employees, business partners and customers. Business leaders

in IBM¶s survey are already focusing their CSR activities to develop capabilities in many areas

across the CSR Value Curve. Interestingly, more than half their activities have only broadened

quite recently, an indication of gathering momentum and continued opportunity.

Information: From visibility to transparency

Compared to their predecessors a generation ago, consumers today are information omnivores,

devouring information at a dizzying rate. Some keep abreast of the nutrition and health issues of

the products they consume by scouring web sites as frequently as they read ingredient labels.

Others research the sustainability of the materials used to create the products they consider. This

hunger for information is intensifying. In the UK, 57 percent and in the US, 59 percent of

consumers say their knowledge about the contents of the food they buy has increased over the

last two years. Because the actions of companies are more visible than ever before, and

customers as well as other stakeholders have grown accustomed to such visibility, they are

leading a demand for more transparency. In essence, they are asking companies to act in a more



27

open manner. Moreover, the traditional adage, ³buyer beware,´ has now become ³seller beware.´

Since 1990 the web has spurred the growth of more than 100,000 new citizen groups devoted to

social and political issues. And the torrid pace of information traveling the Internet is

transforming consumer expectations as customers gain continuous access to special interest

action plans, third party scorecards, and more. In fact, companies can easily lose control of their

own brand and reputation in today¶s marketplace.

Increased visibility is best countered by greater transparency. And the way to build trust with

consumers and other constituents is to make sure that there is a continuous exchange of

information.

IBM¶s survey results chart a marked increase in information related to CSR:

Figure 3: Representing visibility to transparency.

Three-quarters (75 percent) said the number of advocacy groups collecting information on their

business has increased in the past 3 years.

Three-quarters (75 percent) have also increased the amount of information they provide about

the sourcing and social and environmental impact of their products and services and operations

in the past 3 years.



28

A full 63 percent believe they have sufficient information about the sources and composition of

their products and services to satisfy customer concerns.

Yet 33 percent of those same leaders admit they don¶t understand their customers¶ concerns

well; making it likely that most companies are either simply confident of their ability to meet

regulatory requirements or, at best, guessing at what customers expect.

Figure 4: Graph representing the knowledge gap among customers.

Product information is only the start

While businesses typically provide the product information that is required of them by law,

customers are digging deeper. They are scrutinizing procurement and sourcing policies. They¶re

checking trading practices, product composition and lifecycle management policies. They¶re

looking at the global impact of their choices across the entire supply chain ± labor conditions in

contract factories, and the lending policies of the financial institutions they deal with. Like

consumers, companies are digging deeper into their business partners¶ operations, asking about

their carbon dioxide emissions, and the impact of hazardous components in the supply chain.

Customers are joining with activist NGOs and advocacy groups, who no longer depend on door-

to-door canvassing and street demonstrations to bring environmental and fair trade issues to

worldwide attention. They use blogs, podcasts, text messaging, MySpace and YouTube to

proliferate their messages. What seems like an insatiable thirst for information is in reality a



29

drive for relevant information that can reduce complexity and increase comfort level with

purchase decisions.

Figure 5: Graph representing the percentage of the environmental standards undertaken by business.

For example, expiration dates on food cartons were designed to provide easy to-understand

guidelines. But when you encounter one bad egg you wonder whether you need to discard the

rest of the carton as well. Egg Fusion is a company that provides freshness and traceability

coding to give you egg-specific answers ± each egg receives its unique number before being put

in a carton. The consumer enters that number on a web site to find out when and where the egg

was packed, as well as an expiration date for the particular egg.4 Imagine how this approach

might be used in the future: What vitamins did the hen receive in its feed? Is it hormone free? At

what temperature was it stored and for how long? Companies that figure out how to make

information relevant will win customers¶ trust ± and build a powerful platform for growth.



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T he information dilemma

As businesses grow more global and complex, and more interlocked with the operations of the

partners in their value chain, there¶s a very real concern that the growing demands for

information transparency could outpace the ability to supply it. Even the most open and

proactive firms face a dilemma: Too often they just don¶t know what they know. And when they

do, they don¶t know what to share.

U.S. footwear company Timberland created an unusually open product label. Based on the

graphic design of nutritional label, it indicates the name and location of the factory, the amount

of energy used in production, and percentage of renewable energy used. It even shows the

percentage of factories assessed against code-of conduct standards, and the number of hours

employees have volunteered in the community. Too much information« or just right?

Information strategies need to be relevant to customers¶ concerns, expectations, and preferences.

Customers will define the amount and type of information they need, and the enterprise will find

the best ways to deliver it.

A key dependency for all companies will be a single view of the truth across their extended

supply chains. And that will require innovative methods for maintaining compliance and

cooperation on common objectives and standards. A single view of the truth provides the

foundation for delivering that information, but ongoing interactive relationships are necessary for

companies find out what¶s important and relevant at any given time to customers and other

stakeholders.

A company¶s most valuable asset is its ability to convert brand power into customer buying

decisions. The company that has trusted information it can share with stakeholders at any time

can be a trustworthy ³partner in sustainability´ for customers who are ready to buy.

Relationships: From containment to engagement

When CSR strategies are effective, transparency, as discussed in the previous section, goes hand

in hand with stakeholder engagement. First, you company cant call it transparency if company

simply spew information out into the marketplace, or unleash what is effectively a data dump on

the customers. It could even backfire. To truly communicate requires not just context, but

interaction among the parties. Second, engagement without full transparency is disingenuous at

best. Most companies have limited the ways in which they directly interact with customers and

other constituents on CSR issues. Typically, engagement begins and ends with sales, marketing,



31

customer care, or public relations functions. Driving transparency, however, requires

significantly more interaction with customers ± from senior managers to shop assistants. And at

all these touch points, businesses will need to both practice openness and ensure that its full

employee base is prepared to enter into a dialogue with customers. Businesses have a long way

to go. Only 16 percent of the survey respondents said they really engage and collaborate with

customers regarding CSR activities. And the numbers aren¶t much better for business partners

and communities ± 23 percent and 19 percent respectively. The only way to get a better handle

on stakeholder expectations is to foster a relationship based on continuous engagement.

Figure 6: Graph representing the companies that are mainly collaborate with stakeholders on CSR initivaties.

Let¶s revisit the manufacturing company that shared its upstream suppliers¶ human capital

policies and shipment information with NGOs. Imagine the information gathering ability and the

cost savings that could come from asking the foot soldiers of a global NGO to monitor working

conditions or chemical spills. Partnerships with stakeholders allow companies to achieve some of

their objectives at lower cost ± as the NGO¶s resources can be brought to bear to support

common objectives. In this case the company can go beyond simply providing more

transparency into its operations. It can leverage its stakeholders to accomplish some of the tasks



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it would otherwise have to shoulder by itself. In fact, this is one bright spot in our survey; 48

percent of businesses report they are already partnering with NGOs or local governments for

business purposes. This suggests a good foundation for collaboration has already been

established.

T he new customer conversation

The only way to decide what¶s really relevant is to engage customers. Capture their questions.

Listen to their ideas. Make it easy for them to find the answers to their questions online, on

labels, and from sales and service employees. Analyze underlying themes so can make

companies actions and information increasingly relevant. Increasingly, companies are making

information interactive, encouraging consumers to call an information desk, or check a product

code on the Internet to find the information they need. Interactions like these can be tracked and

analyzed to better understand customers¶ interests and expectations.

Engagement starts from within

What happens when a customer walks into a store, a bank, a showroom, or even a factory floor

and asks if the products they see are fair-trade or sourced sustainably? Do employees have the

information at hand? Can they answer questions about the company¶s labor practices and energy

consumption as well as product disposal? Not usually. Are they prepared to have a real dialogue,

one in which they learn about the customers¶ needs? Not frequently enough according to the

respondents of the survey. All too often in corporate life, the CEO announces a vision and the

average employee is mystified or indifferent. With CSR, it can be different. Research at Marks &

Spencer, for example, shows that employees rate higher on every measure of CSR commitment

than customers. Developing and implementing a CSR strategy is a unique opportunity to rally

the company. However, as the survey results show, only 31 percent of businesses engage their

employees on the companies CSR objectives and initiatives. This is a significant opportunity

lost. Some companies engage employees by posing grand challenges, in which groups

collaborate around a common goal to develop a product or service with societal or environmental

benefits. Other companies provide incentives for individual actions that make a significant

difference. 3M¶s Pollution Prevention Pays (3P) rewards employees who have breakthrough



33

ideas for eliminating pollution at its source. Since its inception, nearly 6,000 3P projects have

prevented the creation of more than 2.2 billion pounds of pollutants and generated savings of

nearly $1billion, counting only first year savings from the projects. Every business will find its

own way to engage employees, customers, partners and NGOs. The success of all these

programs, however, will hinge on the depth and vitality of the interactions they support. Those

that consistently combine clear transparency with deep interaction will best be able to advance

sustainability in businesses and society. Employee engagement on CSR initiatives can have

another positive affect; it can be a powerful recruitment and retainment tool in an environment

where the war for talent is shaking up whole industries. A recent study found that 44 percent of

young professionals say they would discount an employer with a bad reputation. Moreover, there

are plenty of studies and surveys that suggest the more socially- and environmentally-aware

generation leaving school now doesn¶t just want to join a company with a good CSR reputation;

they want to be an part of a movement to create a better world ± and to do that from inside

business. That means getting involved in identifying CSR-based growth platforms, getting

creative in applying innovative solutions, and getting closer to customers.

Figure 7:Graph representing the company engagement in CSR objectives and initiavites.



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CASE STUDY: Marks & Spencer: Differentiation based on trust

³Fifteen years ago British consumers were perhaps the most

trusting in the world,´ says Mike Barry, who heads corporate social responsibility for British

retailer Marks & Spencer. However, a series of debilitating food scandals in the early 1990s left

them so shaken that by 2000 consumer skepticism had exploded to other products too ± from the

wood used in furniture to the chemicals in clothing. ³it¶s safe to say that from 2000-2002

retailers like Marks & Spencer were in crisis management mode.´ Against this backdrop, and in

response to public concern over sustainability and traceability, M&S was anxious to get in front

of the issue and better understand what was driving customer concerns and behaviors. Their

analysis revealed four consumer groups:

25 percent weren¶t interested in green or social issues at all; most of these customers had low

incomes and more pressing concerns.

3 8 percent were somewhat interested in green or social issues but didn¶t know if they could

make a difference themselves. These customers wanted to be sure if, for example, their

individual recycling would make a difference.

25 percent were fully engaged in the issues but did not want to compromise on price and

quality.

12 percent were crusaders ± very passionate and looking to Marks & Spencer to be an advocate

as well. Essentially, two-thirds of British consumers were asking for M&S to make things easy

for them. ³The only decision they really want to have to make is whether or not they should walk

through the doors of the store,´ says Barry. ³They don¶t have to think about it. It¶s easy.´

Based on these insights, M&S launched the ³Behind the Label´ campaign, which educated its 16

million customers about all the things the company was doing around environmental and social

issues. The program was deemed a success, but competitors were also doing some good things to

gain consumer trust. To establish a clearer point of differentiation, last year M&S launched Plan

A, a highly visible £200M ³eco-plan,´ impacting every part of the company¶s operations. With

350 million items of clothing and 2.3 billion items of food produced under its label, M&S

recognized it needed to work with stakeholders in new ways. That required an open and

innovative approach to information exchange.



35

C ollaborating with suppliers and customers

On the supplier side, the focus was collaboration as well as traceability. ³If you don¶t know who

you are buying from, you can¶t manage the issues,´ says Barry. At M&S, meat used in

sandwiches and recipes can be sourced back to the individual cow. Traceability for clothing

reaches back deep into the value chain --as far as dye houses and spinning mills. While the

complexity of the supply chain, especially textiles, still poses major challenges, it has also

brought opportunities for innovation. ³It¶s like the wild west out there in terms of ideas. You¶ve

got to put yourself on the map so organizations with different ideas know you and can approach

you,´ says Barry. As part of Plan A, M&S created a supplier exchange in order to share best

practices. Barry explains, ³It¶s about closing the loop ± taking different parts from the business

model ± bits that used to be isolated from each other, and linking them up.´ Farmers, for

example, who learned how to use anaerobic digestion to create biogases from farm waste are

now selling green electricity to M&S, along with their beef. A manufacturer in Taiwan that can

turn bottles into polyester is talking to a polyester plant buyer who in turn is talking to M&S

buyers. Another key objective for the company has been to engage customers. Barry actually

want consumers to buy into driving change rather than just being recipients of it To do that, the

company looked for opportunities to collaborate with NGOs. Oxfam fit the bill. Together, the

retailer and the NGO have created an alternative to dumping old clothing into landfill. Customers

who take their used M&S clothing to an Oxfam charity shop get a discount when they purchase

new clothing at M&S. Programs like this give shoppers an opportunity to learn about sustainable

consumption by taking action that achieves a social benefit as well. Barry is quick to caution that

the collaborative approach ± with customers, suppliers, NGOs ± requires patience: ³This battle

will be won and lost in three, four, five years¶ time, not in the next six months. And anybody

who thinks this is about short-term positioning is in for a rude awakening. This is about long-

term positioning of the brand.´



36

Companies as a case:

CSR activities undertaken by DELOITTE to attain sustainable growth:

Globally Deloitte Member Firms strive to make corporate

responsibility part of their business strategy to foster long-term success. The ³Shared Values´

connect the people of the network of Member Firms together across cultures, customs, and a

language, of which one is ³responsibility to society´, which define the way business is conducted

in Member Firms.

At Deloitte UK, it fully appreciate that everyday business activities affect not only the own

organisation but society more widely, both through companies actions and through the actions of

those company do business with. Also recognizes that preserving the trust and confidence withclients and the public is critical to the sustained success. That is why we have created a culture

that is underpinned by the commitment in doing the right thing. This commitment is key to the

business operations and has driven the firm¶s development of an approach to Corporate

Responsibility (CR) that is fully integrated with the business strategy.

Deloitte has always had at the core of its business a social responsibility to its people and to the

communities in which it operates. Today, company¶s ambition is to be a leader in society: to play

a positive and active role tackling the needs and opportunities in the wider community within

which company work.

Deloitte¶s Corporate Responsibility framework focuses on four key areas and that will

demonstrate this through:

y Talent - investments in our people

y Community - commitment to our local communities and the wider society

y Environmental - environmentally sustainable operations

y Marketplace - the advice and services we provide to clients



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Talent agenda

Company¶s aspiration is to be the employer of choice for top talent, underpinned by employment

policies that promote equality of opportunity and diversity. And it strive to ensure that all the

people enjoy the best possible career opportunities, reward and recognition.

Engaging the people is vital to communicate with them through a number of mechanisms that

include annual People Survey, road shows and formal feedback processes. Well-established

'Connections' programme brings together over 200 partners in structured conversations about the

firm's strategy with managers and senior managers from outside of their own area of business.

Each year company conduct a survey of commitment levels and seek feedback from the

employees about what is important to them. For the second year running commitment levels

have increased across all parts of the business and at all grades of staff.

y 80% of them participated in the annual People Survey, up from 77% last year and 57% two

years ago.

y 89% of them strongly believe Deloitte is a client-focused firm (88% in 2005).

y For the second year running, 93% of the people would recommend Deloitte to clients.

y 82% of the people are proud to tell others they are a part of Deloitte, up from 77% in 2005.

And recently launched Deloitte Networks, reflecting the commitment to creating the best

environment for the people to flourish. Even recognise that company need to draw on the widest

possible pool of talent and, through ensuring that all perspectives are voiced and appreciated,

build an environment where all the employees are able to do their best work.

Green agenda

Deloitte¶s environmental commitment

In support of the commitment to corporate responsibility and the 'Green Agenda', which seeks to

minimise the impact of the business on the environment, it even have been operating an

environmental management system (EMS) for several years. This currently applies to the

processes and operations centred on the London Campus, and in October 2009, this was

accredited to all the regional operations.



38

Link to Environmental Policy

As part of the environmental management system, company maintain an environmental risk and

impacts register. Company have identified the five principal environmental impacts of their

operations to be:

1. Energy consumption

2. Transport

3. Waste disposal

4. Office paper usage

5. Water consumption

Company¶s Green Agenda

Launched in 2007, the Green agenda addresses what Deloitte needs to do to develop a

sustainable, profitable and environmentally-friendly business. Deloitte recognise the importance

of minimising the impact of company¶s operations and services on the environment and each of

the company¶s employee plays an important part in helping to achieve this. As key stakeholders

in this Green agenda company actively seek input from the employees on areas where it can

improve and collect and act on their suggestions where appropriate.

Environment

company recognises its responsibility to minimise the impact of their operations and services on

the environment, and they are making real progress as they work to develop a fully integrated

approach to environmental management. This year company focused on improving recycling,

waste management, energy procurement and consumption, and greening their supply chain.

To support this focus company has undertaken Environmental Risk Assessments at each site,

which includes audits of the company¶s buildings and introduced new waste and energy

management processes.



39

Procurement

Over the year company¶s environment manager has worked with the primary procurement teams

for staff services, vehicles, IT and electrical equipment, and paper to engage them with

environmental issues as they apply to the products and services that they purchase.

Even company has ethical and environmental guidelines for procurement activities and it is their

priority to work in partnership with their suppliers to enhance and sustain environmental

standards, providing greatest benefit to the firm, and their suppliers and the environment.

Energy procurement and conservation

To address energy consumption and conservation, company has reached agreement with the

government¶s Carbon Trust to implement its Carbon Management programme. The programme,

aims to reduce the firm¶s carbon related impacts, focusing on office energy, business travel,

inherent energy consumption and on conservation in their new London building at New Street

Square.

The programme will involve energy surveys of their three main London buildings and two

regional buildings. company will review and implement the recommendations in the context of

the business needs of the firm. They even plan to engage their people in energy conservation programmes. All buildings will be energy rated and compared with government standards.

Company will also consider carbon off-setting of any residual carbon impacts with the aim to

make the firm carbon neutral.

Waste and recycling

Company has been working with their waste contractors to remove their office waste, ensuring

as much as possible is re-used or recycled. A new office waste recycling programme and a staff

awareness campaign have been trialled and are planned to be launched in all London offices and

regional locations. The new processes will help them to monitor waste data for each building

more accurately, set quantitative targets, target high impact areas and give clearer ownership to



40

their people. In 2009 they achieved Zero waste to landfill for their London Campus and an

overall recycling figure of 81%.

Community & social agenda

As a socially responsible business, they recognise their obligation to contribute to the wider

community. Through company¶s Community Investment Programme, which has won several

awards, they provide professional and financial support to a wide variety of charities and

community organisations, placing a special emphasis on supporting the young and

disadvantaged. they encourage all their people to become involved in charity and community

projects with the full support of the firm. Activities that their people engage in include:

y Secondary school mentoring

y Prince¶s Trust business mentoring

y Volunteering in the firm¶s time

y Regional office fundraising

y Company¶s annual µComputers for Charity' competition

y A highly successful Give As You Earn scheme

Deloitte is a member of the One Per Cent Club. The Deloitte Charitable Trust operated

independently of the firm¶s management to allocate designated funds to charitable organisations.

Recently, Deloitte announced its involvement in two additional major projects: employability

skills and disability sport.

Deloitte is making a £2.5 million investment over the next five years to develop a new

generation of employability skills trainers in FE Colleges across the country. Over the course of

the programme, the Deloitte initiative will train up to 800 new trainers. These trainers will teach

employability skills classes to students on vocational courses, helping them to develop the skills,

attitudes and behaviours that they need to secure and sustain employment.

Deloitte has launched a £3.4m programme to develop disability sport in the UK, between now

and 2012. their initiative is 50% funded by Government, and reflects their twin traditions of



41

supporting community endeavour and nurturing top talent. There will be opportunities for all

Deloitte staff to contribute through fundraising, team activity, and by supporting local athletes.

Sony -CSR

Environmental Conservation Activities Established Partnership with NGO to Address the

Issue of Climate Change:

In July 2006, Sony signed an agreement with the World Wide Fund for Nature (WWF) global

environmental NGO, to join its "Climate Savers Programme". Under the program, Sony has

agreed to partner with the WWF to reduce greenhouse gas emissions at Sony's sites around the

world, reduce CO2 emissions from product use by lowering the annual energy consumption of

major Sony products and cooperate with the WWF to raise consumer awareness of global

warming prevention.

Promoting Product Energy Saving

In February 2007, Sony received a Sustainable Energy Europe Award from the European

Commission, the first consumer electronics and entertainment company to earn this prestigious

prize. The award recognized Sony for its voluntary commitment and efforts to improve the

energy efficiency of its products, as well as its disclosure of information to consumers. As of

February 2007, all Sony televisions sold in Europe had a standby power consumption below 1watt, with 30 models achieving a standby power consumption of only 0.3 watts, below the

market average. In Japan, Sony's KDL-40J3000 model BRAVIA LCD television has achieved an

energy-conservation level of 180% relative to Japan's energy-saving laws, representing the

industry's highest energy-saving performance2 .

Environmental Conservation at Sites

Sony is engaged in a variety of environmental conservation activities at its sites as it works

towards its "Green Management 2010" mid-term group environmental targets, to be achieved by

2010. In fiscal 2006, Sony's emissions of greenhouse gases (calculated in terms of CO2) totaled

approximately 2.03 million tons, down 9% from fiscal 2000 levels. Furthermore, waste from

Sony sites was approximately 193,000 tons, down 30% from the fiscal 2000 level, while the



42

amount of water used dropped approximately 16% from fiscal 2000 to 24.18 million cubic

meters.

SONY ESTABLISHES FIRST NATIONWIDE ELECTRONICS RECYCLING

PROGRAM WITH WASTE MANAGEMENT¶S RECYCLE AMERICA

Program Open to All Consumer Electronics Devices NEW YORK, Aug. 16, 2007 ± To

encourage consumers to recycle and dispose of electronic devices in an environmentally sound

manner, Sony has established a national recycling program for consumer electronics. The Sony

Take Back Recycling Program allows consumers to recycle all Sony-branded products for no fee

at 75 Waste Management (WM) Recycle America eCycling drop-off centers throughout the U.S.

The program, which begins on Sept. 15, was developed in collaboration with WM Recycle

America, LLC, a wholly owned subsidiary of Waste Management, Inc. The program also allows

consumers to recycle other manufacturers¶ consumer electronics products at market prices, and

may include a recycling fee for some types of materials.

This is the first national recycling initiative in the U.S. to involve both a major electronics

manufacturer and a national waste management company. As the Sony Take Back Recycling

program expands, the number of eCycling drop-off centers will increase to at least 150 sites

within a year, with at least one location in every state through a combination of WM Recycle

America locales and WM external service partners. Sony and WM Recycle America are also

working towards the goal of having enough drop-off locations in all 50 states so there is a

recycling center within 20 miles of 95 percent of the U.S. population. Consumers will also have

the option of shipping their used Sony electronics products to select WM Recycle America

locations. The Sony Take Back Recycling Program is part of Sony¶s broader global commitment

to environmental stewardship, which spans product design, recycling, facilities management and

energy conservation across all categories. "Providing the highest level of service and support

doesn¶t stop once a purchase is made. We believe it is Sony¶s responsibility to provide customers

with end-of-life solutions for all the products we manufacture,´ said Stan Glasgow, president and

chief operating officer of Sony Electronics. ³Through the Take Back Recycling Program, our

customers will know that their Sony products will be recycled in an environmentally responsible

manner.´ Glasgow said that by making the recycling of Sony products easy and convenient, the



43

company expects to reach its goal of recycling one pound of old consumer electronics equipment

for every pound of new products sold. ³People are seeking services to help them recycle

electronic waste responsibly and economically,´ said Patrick DeRueda, president of WM

Recycle America. ³This program serves consumers¶ needs by offering a convenient and cost-

effective waste management solution, while demonstrating our shared commitment to providing

outstanding customer service and environmental stewardship.´ As the technology industry sees

continued growth, the amount of electronic waste is also increasing. A study by the U.S.

Environmental Protection Agency showed that in 2005 used or unwanted electronics amounted

to about 1.9 to 2.2 million tons. Of that, some 1.5 to 1.9 million tons was primarily discarded in

landfills, and only 345,000 to 379,000 tons were recycled. By recycling old electronics products,

useful materials -- such as glass, plastic and metals ± can be collected and re-used in the

manufacture of other products. Recycling not only minimizes the amount of waste disposed, it

also minimizes the extraction of new raw materials from the earth and resources required for

processing, saving energy and reducing greenhouse gases in the process.

Analysis:

By analyzing the survey and different corporate social responsibilities followed by

the companies it has been found out thatImpact of customer intimacy

Companies that understand their customers¶ CSR concerns well

Report more success than their peers in increasing revenue and reducing costs as a result of

their CSR strategy

Companies are more likely to focus on and believe they are effective at differentiating their

products and services.

They believe they are more effective at improving labor practices, adopting ethical and green

procurement, manufacturing and logistics processes, aligning philanthropy with business

priorities, and adopting a formal company value system than their peers.

Also companies are more likely to engage their employees in the company¶s CSR objectives.

CEOs have long been accountable to a varied group of stakeholders ± employees and

communities, as well as investors. The nature of these relationships is now changing in ways that



44

significantly affect corporate performance. In part due to the emergence of the Internet and

continuing globalization, companies are becoming accountable for labor issues and working

conditions in their partners¶ operations as well as their own.

In climbing the CSR Value Curve from compliance to growth, companies must:

1. Align and incorporate CSR with business strategy and integrate it across all operational

functions. Thus, making it easy to invest (not spend) the funds necessary to achieve its

objectives.

2. Implement an open information strategy for more transparent information-sharing with

multiple stakeholders.

3. Leverage transparency to increase the level of engagement of key constituents and customers.

When these activities are done in combination,

CSR can become a dimension of a company¶s successful competitive

strategy. Done right, it offers a company improved relationships with all of its key constituents,

more loyal customers, lower costs, higher revenues and an overall improvement of the business¶

standing in society. This helps in attaining sustainability to the company.

Findings:

y By the IBM¶s survey it has been noticed that the costs which have been incurred for

focusing on CSR activities has turned into increase in the revenue which is clearly

appeared through the survey curve.

y There has been drastic change in the appearances of the product in the in the customers

mind as they are not just buying they tend to dig the facts behind the production i.e., are

there any negative impact on the environment due to the production of the product.

Hence companies are undertaking certain activities to decrease the pollution etc which

even increases the brand value of the company.

y By performing the CSR activities which are helping the companies to increase their

customer loyality and may even increasing the word of mouth.



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y Companies are even giving the appraisals for the employees for those participating in the

activities by this maximum of the employees tend to participate as the appraisal system is

acting them as motivator.

Suggestions:

y Promoting CSR activities through competitions which would unleash the local talent

towards betterment of the society like ISB¶s IDIYA which acts as a medium between

social ventures and social ideators giving them a platform

y Having innovative and regular campaign in the office premises would encourage

employees towards CSR activities.

y Having company¶s own foundation would give more credibility for the CSR initiatives

and helps them works towards the cause on a continuous basis

y Generating plans to take local NGO¶s to next level by Collaborating with them and

giving them a common platform.

y Encouraging employees to share their views & ideas over blogs & online forums would

act as a promotional strategy in enriching CSR-ness in them & also helps others to

participate & contribute.

y Distributing awards by recognizing the best CSR person would act as a motivator. . For

example national Bravery awards.

y Sponsoring or providing a platform for the employees in the events which are inclined

towards company¶s CSR activities.



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Conclusion:

There were many question rose of which whether CSR and sustainability

made a positive contribution to business success, and came to the qualified conclusion that they

do. This was an important conclusion in view that the contrary expressed by some influential

commentators. The delegates believed that the mistake made by these commentators and the

shareholder value movement was to regard the cost of CSR and sustainability programmes as an

expense rather than, potentially, an investment in a strategic asset or distinctive capability. The

theory and practical experience of business in enhancing their competitive advantage through

such policies seems to be increasingly well established. There is considerable scope for

developing tools to help manage these assets through a balanced scorecard approach and to help

investors value CSR spending on these assets. Many of these tools are either already available or

being developed for other purposes in the field of business intangibles and intellectual capital.

From this result, it is possible to infer that constructing capacities to implement CSR activities

has a concrete and positive result.



Appendices:

Bibliography:

y Sheila, M., Lenny T. Mendonca and Jeremy M. Oppenheim, ´When Social Issues

Become Strategic,´ The McKinsey Quarterly,

y Vorster, Gareth. ³Corporate social responsibility is more important than salary when

choosing a job,´ P ersonnel Today

y Catalyst Paper Corporation. ³Environment Manufacturing Principles.´ Richmont,

Canada. December 2007.

y Practice Guide: Formulating and Expressing Internal Audit Opinions.

Glossary:

CSR is the continuing commitment by business to behave ethically and contribute to economic

development while improving the quality of life of the workforce and their families as well as of

the local community and society at large.

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