CSR - A WIN - WIN BUSINESS MODEL
Col. Prakash Tewari (Retd) CSR and R & R
Tata Power Company
1
Prelude
• Impacts of Business
• Integrating Business and Society
• Emergence of CSR
• Mapping Social Impacts
• Responsive CSR vs Strategic CSR
• Moral Purpose of Business
“Human Beings are animals, We are sometimes monsters, sometimes magnificent, But always animals. We may prefer to think of ourselves as fallen angels, But in reality, we are risen apes.”
- Desmond Morris
3
Business and Society
• Economic
• Environmental
• Social
Business can impact society in three ways
Business
Impact of Business on Society
Impact on business on society can be positive as well as negative.
Business Impact on Human Development
• Business impacts poverty, literacy, education and life expectancy.
• Economic growth is only a means, though an important one, for human development.
• Human development is both an outcome and a process of enlarging people’s choices to lead lives they value.
Business and Environment
In today’s world, environment is an increasingly sensitive issue.
This means that any failure to follow environmental norms could promptly
result in a public litigation being slapped on the corporate.
Economy Vs Ecology
Economy and Ecology
Impact of Business on Communities
• Change in livelihood patterns on account of natural resources being impacted
• Change in land use / leading to socio-political-economic impact (loss of identity, culture change)
• Land owners become landless, or marginalised farmers
• Socio-psychological impact thru contrast in living standards
• Stress on local environment quality (air emissions, effluent, etc)
Impact of Business on Communities
• Stress on local ecology (flora and fauna)• Stress on local resources – water, land, rural
energy sources• Increased dependence on the industry by the
community• Influx of migrant labour• Opportunities for Business to secure goods and
services• Opportunities for community to improve their
quality of life
Scope of Collaboration
3
Adaptability Gap
EnvironmentalReducing carbon emissions and hence decreasing the chance of environmental irregularities.
EconomicProtect , enhance and diversify asset base through economic activities
SocialIf people do not have the
resources to deal with today’s stresses, then they are unlikely
to be able to deal with the additional stresses associated
with climate change
Integrating Business & Society
• CSR understand interrelationship between business & society
• Corporate need healthy society• Society needs successful corporate• Focus on intersection than friction• Mutual dependence implying principle of shared
value
• Issues that
shook corporate
• Corporate response
Emergence of CSR
• Moral Obligation
• Sustainability
• License to Operate
• Reputation
Good citizens – ‘Do the right things’
‘Meeting needs of present without compromising future generation’
Permission from Govt, communities & stakeholders
Justify CSR initiatives – Brand, image, morale & values of stock
Justification
School of Thought
• Focus on tension than interdependence• Non strategically aligned• Fail to identify/prioritize/make impact• Uncoordinated & philanthropic• Not linked to internal/external activities• Lost opportunity• Social benefits dissipated
Identifying Points of Intersection
• Interdependence takes 2 forms Company impinges through its operations External social conditions influence
corporations
LAND ACQUISITIONtechnically feasible location identification, purchase of land
LOGISTICSincoming material,
storage, data collection,
service
OPERATIONSGeneration (emission
measurement), transmission
(decentralised), distribution (smart grid)
TRADINGadvocacy, open axis regulation, short term transactions, REC, website
CUSTOMER MANAGEMENTcustomer support, complaint resolution, repair
•Displacement•Loss of livelihoods•Loss of infrastructure•Irreversible loss to natural resources
•Air pollution•Warm water discharge•Ash disposal•Impact on livelihoods•Energy & water usage•Worker safety & labour relations
•Conservation•DSM•Efficiency
•Transportation Impacts (e.g., emission, congestion, logging roads, safety)•Pollution•Dust (SPM)•Health•HIV/AIDS
•Pricing practices (e.g., price discrimination among customers, anticompetitive pricing practices, pricing policy to the poor)•Consumer protection•Global partnership for development
Mapping the Social Impact of Value Chain
•Procurement & •Supply Chain practices
•Education & Job Training•Labour Standards•*Gender equality
•Financial Reporting practices•Corporate Governance Practices•Transparency
HUMAN RESOURCE MANAGEMENT
recruiting, training, supervision system
CORPORATE INFRASTRUCTUREfinancing, planning, investor relations
PROCUREMENTcomponents, machinery,
advertising and services
TECHNOLOGY DEVELOPMENTproduct design, testing, process design, material design, market
research
Support Activities
Local Demand Conditions
The nature and complexity of
local customer needs
Input ConditionsPresence of high quality, specialized
inputs available to firms
Context for Firm StrategyThe rules and incentives that
govern competition
Related and Supporting IndustriesThe local
availability of supporting industries
•Peculiarity of local demand (e.g., cultural and society specific needs)•Demanding regulatory standards
•Fair and open local competition •Intellectual property rights•Transparency
•Availability of human resources•Availability of scientific and technological infrastructure•Sustainable natural resources
•Availability of local suppliers•Access to firms in related field
External Social Conditions
• Social issues that are not significantly affected by a company’s operations nor materially affect its long-term competitiveness
Generic Social Impacts
• Social issues that are significantly affected by a company’s activities in the normal course of business
Value Chain Social Impacts
• Social issues in the external environment that significantly affect the underlying drivers of a company’s competitiveness in the location where it operates
Social Dimensions of Competitive Context
Good Citizenship Mitigate harm from value chain activities
Transform value-chain activities to benefit society while reinforcing strategy
Strategic philanthropy that leverages capabilities to improve salient areas of competitive context
RESPONSIVE CSR
STRATEGIC CSR
Choosing Social Issues
The Moral Purpose of Business
• Contribution to economic prosperity• Corporate social integration towards building
shared value• Leading to self sustaining solutions