Corporate Social Responsibility
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CORPORATE SOCIAL RESPONSIBILITY NMIMS COURSE DESIGN COMMITTEE Dean TOC Reviewer Dr. Vidya Naik Dr. Alka Mitra Dean, NMIMS Global Access - Specialization: Communication, Human School for Continuing Education. Resources Associate Dean Content Reviewer Mr. Abhishek Asthana Dr. Alka Mitra Associate Dean, NMIMS Global Access - Specialization: Communication, Human School for Continuing Education. Resources Stream Leader Mr. Deepak Gupta Assistant Professor, NMIMS Global Access - School for Continuing Education. Specialization: Marketing Author : S S Gulshan Reviewed By : Dr. Alka Mitra NMIMS Copyright: 2014 Publisher ISBN: 978-81-8323-118-3 Address: A-45, Naraina, Phase-I, New Delhi – 110 028 Only for NMIMS Global Access - School for Continuing Education School Address V. L. Mehta Road, Vile Parle (W), Mumbai – 400 056, India. NMIMS Global Access – School for Continuing Education iii CONTENTS CHAPTER NO. CHAPTER NAME PAGE NO. 1 Corporate Social Responsibility: The Global Context 01 2 Business and Its Stakeholders 25 3 From Philanthropy to CSR: Historical and 53 Theoretical Perspective 4 The Business Case for CSR 81 5 Developing a CSR Strategy 101 6 Implementing CSR Strategy 121 7 CSR Monitoring and Measurement 155 8 NMIMSReporting for CSR 175 9 Role of Government and Voluntary Codes in CSR 197 10 Corporate Ethics and Governance 223 11 Case Studies 273 NMIMS Global Access – School for Continuing Education iv CORPORATE SOCIAL RESPONSIBILITY CURRICULUM Globalization and its Impact: Economic, Social, Sustainable Development, Role of Business in Sustainable Development, Millennium Development Goals, India and the MDGS Business and Society, Business Organizations as Systems. Corporate Stakeholders: From Shareholder Theory to Stakeholder Theory, Stakeholder Concept, Typology of Stakeholders and their Influence, Stakeholder Engagement, Stakeholders versus Shareholders, Dynamic Environment of Business. History of CSR in India: Pre-Independence Period, Post-Independence India, Liberalization and CSR, Emerging CSR Trends, Contemporary Scenario: Achievements, Theories of CSR: Friedman’s Theory/Fundamentalist Theory, Social Contract Theory, Social Justice Theory, Rights Theory, Deontological Theory, Stakeholder Theory, Gandhi’s Trusteeship Theory. Corporate Social Responsibility: The Pyramid of Corporate Social Responsibility, Generations of CSR, Changing Trends: Philanthropy, Strategic Philanthropy, CSR Arguments against CSR, The Business Case for CSR, Importance of CSR for India: Current Business Scenario in India- Contemporary Drivers for CSR. Developing A CSR Strategy: Steps in Designing CSR Strategy, Develop a Working Definition of CSR, Review Corporate Documents, Processes and Activities, Developing a CSR Strategy: Build Support with Senior Management and Employees, Research what others are doing, Prepare a Matrix of Proposed CSR NMIMSActions, Develop Options for Proceeding and Develop the Business Case for CSR Action, Decide on Direction, Approach and Focus Areas Implement CSR Commitments: Develop an Integrated CSR Decision-making Structure, Prepare and Implement CSR Business Plan, Set Measurable Targets and Identify Performance Measures, Engage Employees and Others to Whom CSR Commitments Apply, Design and Conduct CSR Training, Establish Mechanisms for Addressing Problematic Behaviour, Create Internal and External Communication Plan. Implementing CSR Strategy: Areas of CSR Implementation, CSR at Market Place: Benefits of Marketplace CSR, Designing Market Place CSR Activities, CSR at Workplace: Benefits of CSR at Workplace, Designing Work Place CSR Activities, Environmental CSR: Benefits of Environmental CSR, Designing Environmental CSR, CSR with Communities, Types of Interventions: Benefits of Community Interventions, Steps to Design CSR Intervention, Strategic Partnerships: Reasons for Corporate NGO Partnership, Criteria for Selecting NGO Partner, NGO Strategies to Influence CSR. NMIMS Global Access – School for Continuing Education v CSR Monitoring and Measurement: Focus of Measurement , Measure Fewer Things Better, Measure What Matters, Communicate Fewer Metrics in Multiple Ways, What is Monitoring?, Internal Compliance Monitoring, External Monitoring and Measurement Importance. CSR Reporting: Benefits of Reporting: Whom to Report, How to Report, Contents of CSR Report, Formats of CSR Communication and Reporting, The Reporting Team, Additional References for CSR Reporting. Role of Government And Voluntary Codes In CSR: Role of Government, Government Support at International Level, Voluntary Codes in CSR: OECD Guidelines for Multi-national Corporations, ILO Conventions, ISO 9000 & ISO 14000, SA8000, UN Draft Principles for Behaviour of Trans-national Corporations, LEED, GRI, DOW Jones Sustainability Index, FTSE4GOOD, Smart Growth Network, Equator Principles, UN Global Compact, Coalition of Environmentally Responsible Economies (CERES). Corporate Ethics and Governance: What is Corporate Governance, Constituents of Corporate Governance, The Corporate Governance Debate, Theories and Responsibilities of Corporate Governance, Global Growth of Corporate Governance, History of Corporate Governance in India, The Current State of Corporate Governance in India, Board Composition in India, Corporate Governance: Need to Strengthen: How to Improve Corporate Governance, Benefits of Corporate Governance, Efforts to Improve Corporate Governance, Corporate Governance and CSR. NMIMS NMIMS Global Access – School for Continuing Education NMIMS 1 CHAPTER CORPORATE SOCIAL RESPONSIBILITY: THE GLOBAL CONTEXT CONTENTS 1.1 Introduction 1.2 Globalisation and its Impacts 1.2.1 Economic Impacts 1.2.2 Social Impacts 1.2.3 Environmental Impacts 1.3 Sustainable Development 1.4 Role of Business in Sustainable Development 1.5 Millennium Development Goals and UN Post 2015 Development Agenda 1.5.1 Millennium Development Goals 1.5.2 India and MDGs 1.5.3 Indian Companies Act, 2013 and CSR 1.5.4 UN PostNMIMS 2015 Development Agenda 1.6 World Bank Group Goals by 2030 1.6.1 India and World Bank Group Country Partnership Strategy 1.7 Summary 1.8 Descriptive Questions 1.9 Answers and Hints 1.10 Suggested Readings for Reference NMIMS Global Access – School for Continuing Education 2 CORPORATE SOCIAL RESPONSIBILITY INTRODUCTORY CASELET NOTES CORPORATE SOCIAL RESPONSIBILITY MAKES SOUND BUSINESS SENSE “We have been in business for 150 years and we will be in business for more. So we made clear we will always do the right thing for the long term. I believe that’s part of the reason why the company has been more successful than most of our competitors.” – Paul Polman, CEO, Unilever Unilever has been a true epitome of sustainability giving out the good-for-society-is-good-for-business gospel in letter and spirit. The company 2012 sales crossed euro 50 billion. Unilever has been successful in combining what is good for business with what is good for society. Even under tumultuous times, Paul Polman, the CEO of the company has hinged his growth agenda around ‘Unilever Sustainable Living Plan’, a blueprint that is leading to the company doubling in size while halving its carbon footprint. It was a growth agenda and the world needed that because the 2008 crisis showed many shortcomings in the global economic system. 2008 was a crisis of short-termism and greed. Guidance and quarterly reporting were done away with. The compensation system was reviewed for a longer term and clear signals were given to tell people that while there might be a crisis they were investing for a long term. When others were cutting costs, shutting down factories, Unilever was investing. Now they are 4-5 years further, their business is up by 30 per cent and their share price has more than doubled. The Unilever Living Sustainable Plan is now seen as a very good example of responsible business. And in most countries that they operate in they are now the preferred employer because the purpose is strong enough to attract a lot of young people. There are challenges, the world is moving very fast, but they are prepared to be playingNMIMS a good role for a long time to come. Paul Polman recently opined in an interview to Economic Times that: “…75 per cent of American CFOs would not take the right decisions if it would result in missing the quarterly guidance. That’s why you see that average lifespan of a listed company is only 18 years. We have been in business for 150 years and we will be in business for more. So we made clear we will always do the right thing for the long term. I believe that’s part of the reason why the company has been more successful than most of our competitors. We try to be a more gender diverse organisation, a truly global organisation. It starts with respect and dignity of everybody, everywhere, at any level, and then focusing out there on improving the common good and not just worrying about yourself.” In economically tumultuous times, there has been an outcry from CSR pundits on doing well by doing good to society. While there are many versions of and definitions of CSR, in the global context it refers to building a model of business that is sustainable even Contd... NMIMS Global Access – School for Continuing Education CORPORATE SOCIAL RESPONSIBILITY: THE GLOBAL CONTEXT 3 NOTES in times of crises, so that stakeholders of the company continue to invest their trust in it. Unilever on this account has embraced sustainability and CSR in the same breath by avoiding the lust for quick fix solutions and building a business model that shall enable them to navigate through challenges. Source:http://m.economictimes.com/features/corporate-dossier/resist-the-short-term-