perspectives on csr presented at corporate governance week by icsi
TRANSCRIPT
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Corporate Social Responsibility (CSR)
A Perspective
byUday Bhaskarwar
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CSR?
2
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CSR?
3
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A few leading questions…
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Should companies voluntarily engage
in CSR?
Is the 2% mandate proposed by government
sensible/justified?
Does your company engage
in CSR?
Is CSR another word for charity?
Who should be responsible for
social welfare in general?
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Definition• Wikipedia.com
– CSR (also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business) is a form of corporate self-regulation integrated into a business model. Business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere, regardless of legality. CSR is the deliberate inclusion of public interest into corporate decision-making, that is the core business of the company or firm, and the honouring of a triple bottom line: people, planet, profit.
– Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses.
– CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. ISO 26000 is the recognized international standard for CSR (currently a Draft International Standard). Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation.
• European commission– A concept whereby companies integrate social and environmental
concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.
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Giving, Responsibility, Society and Environment, Voluntary, Outside core business
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Examples of CSR?
6
A company gives it’s old PCs to the local
school
A company employs local people rather
than machines
A company gives Rs. 100cr for earthquake
relief
A company educates local college teachers
about latest in IT
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A LOUD Suggestion…
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Different Entities, different Roles…
8
Government
NGOs
Businesses
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Different Entities, different Roles…
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Government
NGOs
Businesses
Govern / Rule
Law and order
Justice
National security
Healthcare & Education
Social equality
Disaster management
Environment
Public Welfare
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Different Entities, different Roles…
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Government
NGOs
Businesses
Govern / Rule
Law and order
Justice
National security
Healthcare & Education
Social equality
Disaster management
Environment
Public WelfareManufacturing / Services
Revenue and Profit
Growth
Shareholder value
Employee welfare
Create economic value
Pay Taxes!
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Role of Government vs Businesses
Govern / Rule
Law and order
Justice
National security
Healthcare & Education
Social equality
Disaster management
Environment
Public Welfare
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Manufacturing / Services
Revenue and Profit
Growth
Shareholder value
Employee welfare
Pay Taxes!
Create economic value!
Government
Businesses
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Why it still makes sense for businesses to engage in CSR?
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Why it makes sense for businesses to engage in CSR?
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• It’s in Businesses’ own best interest• Government’s priorities may not be aligned with businesses’
requirements• CSR doesn’t have to be pure “charity”• While CSR is all about “giving back” to the society, it can make
economic sense– “Giving back” -> “Coming back”– Multiplier effect
Investment in ecosystem
Better ecosystem Longer term gains
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How companies can differentiate between Charity & CSR?
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Aspect Charity CSR
Investment Trail Ends Begins!
Expected Benefit Humanitarian Humanitarian + Business
Effectiveness Rarely measured Rigorousmeasurement
Value add to business
No direct value add Yes but longer term
Sustenance Not necessarily there
A must
The “Loop” Incomplete Complete
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CSR Scores of the examples
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A company gives it’s old PCs to the local
school (3/10)
A company employs local people rather
than machines (6/10)
A company gives Rs. 100cr for earthquake
relief (1/10)
A company educates college teachers about latest in IT
(8/10)
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Slide 167/11/2010
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Examples of companies doing well on CSR…
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Level 4 (of 5) on
KarmayogCSR Rating
2010
Tata Steel
Infosys
HDFC
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What are they spending on…
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Tata Steel
•Education
•Tribals culture
• Income generation for tribals
•Healthcare
•Environment
Infosys
•Healthcare
•Social rehabilitation and rural upliftment
•Learning and education
•Art and culture
HDFC
•Shelter Assistance Reserve
•Anandwan - A way of life
•Kinship for children
•Ramakrishna Mission Students' Home
•Childline @ Ten Nine Eight
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What role can a Company Secretary play?
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ICSI does list out CSR as one of the CS services
CS can be an evangelist - there is no need to wait for a regulation
The CS can help formulate and implement the CSR policy
Pick up what’s relevant for the company and has direct business benefits
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Why the 2% rule does not make sense?
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Businesses that want to give are already giving
Businesses that do not want to give will never
give!
2% levy would lead to further
business malpractices…
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Meanwhile, Capitalism needs to evolve…
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Share value
Growth Profitability
Share value
Profits & growth
Planet
People
“3Ps” - Triple bottom-line
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In a nutshell…
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We live in a society that has various entities which play various roles
CSR is all about Giving but…
Be “selfish” while giving – “Give” with expected benefits
Value add to the business must be kept in mind
Look at it from a long term perspective. Make it sustainable.
Effectiveness must be measured – the loop must be complete
The CS can play a pivotal role in CSR activities
Triple Bottom-line should become the mantra for businesses!
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Q & A