Corporate Social

Responsibility
EDITED BY
DR. KAMLESH KUMAR MAURYA
Why CSR
• Overcrowding of Cities and Industrial
Towns:
• The promise of better wages attracted
migrants to cities and industrial towns
that were ill-prepared to handle them.
People living in such close proximity,
fatigued by poor working conditions,
and drinking unsafe water presented
ideal conditions for outbreaks
of typhus, cholera, smallpox, tuberculosi
s, and other infectious diseases.
• Pollution and Other Environmental Ills
• With relatively few exceptions, the world’s modern environmental
problems began or were greatly exacerbated by the Industrial
Revolution.
• To fuel the factories and to sustain the output of each and every
type of manufactured good, natural resources (water, trees, soil,
rocks and minerals, wild and domesticated animals, etc.) were
transformed, which reduced the planet’s stock of valuable natural
capital.
• The global challenges of widespread water and air pollution,
reductions in biodiversity, destruction of wildlife habitat, and
even global warming can be traced back to this moment in human
history.
• Poor Working Conditions
• When factories sprung up in the cities and industrial
towns, their owners prized production and profit over
all else. Worker safety and wages were less important.
• Factory workers earned greater wages compared with
agricultural workers, but this often came at the
expense of time and less than ideal working
conditions.
• Factory workers often labored 14–16 hours per day
six days per week. Men’s meager wages were often
more than twice those of women.
• The wages earned by children who worked to
supplement family income were even lower.
• The various machines in the factory were often dirty,
expelling smoke and soot, and unsafe, both of which
contributed to accidents that resulted in worker
injuries and deaths.
 The Rise in
Unhealthy Habits
• Corporate Social Responsibility (CSR) is a concept that encompasses
various definitions and interpretations, but it generally refers to a
company's commitment to conducting its business in an ethical and
responsible manner, while also contributing positively to society and
the environment.
• Carroll's CSR Pyramid: Archie Carroll proposed a widely accepted CSR
framework that includes four dimensions:
• Economic Responsibility: The basic obligation of a company is to be
profitable and create value for its shareholders.
• Legal Responsibility: Firms must operate within the bounds of the law and
adhere to regulations.
• Ethical Responsibility: Companies should do what is right, just, and fair,
even when not explicitly required by law.
• Philanthropic Responsibility: Beyond legal and ethical duties, companies
can engage in voluntary activities to support society and make a positive
impact.
• ISO 26000: ISO 26000 is an international standard that provides guidance on
social responsibility.
• It defines CSR as "the responsibility of an organization for the impacts of its
decisions and activities on society and the environment, through transparent and
ethical behavior that:
Contributes to sustainable development, including health and the welfare of
society.
Takes into account the expectations of stakeholders.
Is in compliance with applicable law and consistent with international
norms of behavior.
Coined by John Elkington, the TBL model
emphasizes three key dimensions of CSR: • The Triple Bottom Line (TBL):
Suggests that businesses should be
evaluated and held accountable for
their performance in three
dimensions:
• Profit (Economic): Traditional financial
performance.
• People (Social): The company's impact on
people, including employees, communities,
and society at large.
• Planet (Environmental): The
environmental impact and sustainability
practices of the company.
This model, developed by R. Edward Freeman,
emphasizes the importance of identifying and
considering the interests and concerns of various
stakeholders. It suggests that businesses should
make decisions that balance the needs of these
stakeholders.

• Stakeholder Perspective:
• Some definitions emphasize the
importance of stakeholders, such as
customers, employees, suppliers,
communities, and shareholders, in
shaping a company's CSR efforts.
• CSR is seen as a way to balance the
interests of these stakeholders and
create long-term value.
The Shared Value Framework:

• Created by Michael Porter and

Mark Kramer, this model
encourages businesses to create
economic value while
simultaneously addressing societal
issues.

• It involves identifying
opportunities for business
innovations that benefit both the
company and society.
The Sustainable Development Goals (SDGs):
 Developed by the United Nations, the SDGs provide a global framework for addressing
pressing social and environmental issues.
 Businesses are encouraged to align their CSR efforts with these 17 goals, which include
poverty reduction, gender equality, climate action, and more.

• Sustainable Development:
• CSR is often linked to the concept
of sustainable development, which
seeks to meet the needs of the
present without compromising
the ability of future generations
to meet their own needs.
• In this context, CSR involves
integrating economic, social, and
environmental considerations into
business operations.
Ethical Business Practices: CSR can also be
defined as a commitment to ethical business
practices, which include honesty, transparency,
integrity, and respect for human rights.
Voluntary Commitment: CSR is often
characterized by voluntary actions taken by
companies beyond legal requirements. It reflects
a company's willingness to go above and beyond
its basic responsibilities to make a positive
impact.
Corporate Social Responsibility
(CSR) is a business approach Implementing CSR can benefit
that encourages companies to businesses in various ways,
be socially accountable and from enhancing their
contribute positively to society reputation to improving long-
while pursuing their economic term sustainability
goals.
• Enhanced Reputation and Brand
Image:
• Example: Starbucks is known for
its commitment to ethical sourcing
and sustainability.
• They invest in farmer support
centers and have sustainable
farming practices.
• This has boosted their reputation
and created a positive brand image
among socially conscious
consumers.
• Improved Customer
Loyalty and Attraction:
• Example: Patagonia, an
outdoor clothing company, is
committed to producing
high-quality outdoor gear
and environmental
protection.
• Their customers are loyal
because they align with
Patagonia's values and
commitment to
sustainability.
• Attracting Top Talent:
• Example: Google is well-known for its CSR efforts, including its
commitment to renewable energy. This attracts top talent who are
passionate about sustainability, making it easier for Google to hire and
retain skilled employees.
• A few of the measures that have substantially reduced their energy
consumption have been listed below-
• Google has actively agreed to invest more than 1.5 billion USD in
projects that involve renewable energy such as the adoption of large-
scale wind and solar panels.
• About 4 million sq. ft. of the property that Google buildings occupy
have been attributed with green certification status.
• Google centres that process data have achieved the milestone of
consumption of 50% lesser energy as compared to other data centres.
• Cost Savings and Efficiency:
• Walmart's sustainability
initiatives not only reduce their
environmental impact but also
lead to cost savings.
• For instance, they have made
substantial investments in
energy-efficient technologies,
resulting in reduced energy
consumption and lower
operational costs.
Time Period Important Elements CSR Practices

- Philanthropy: Giving back to communities. - Donations to charitable causes.

Pre-20th century - Ethical Business Practices. - Fair wages and ethical labor practices.
- Religious and Moral Motivations. - Supporting local communities.

- Social Responsibility Concept. - Adherence to legal regulations.

1950s - 1960s - Stakeholder Theory. - Voluntary community initiatives.
- Environmental Awareness. - Limited focus on sustainability.

- Pollution control and compliance.

- Environmental Regulations. - Community engagement programs.
1970s - 1980s - Corporate Accountability. - Reporting on social and environmental
- Triple Bottom Line (People, Planet, Profit). impacts.

- Globalization and Supply Chain Ethics. - Supply chain audits and fair trade practices.
1990s - 2000s - Corporate Codes of Conduct. - Integration of CSR into business strategy.
- Sustainability Reporting Standards. - Environmental sustainability efforts.

- Sustainable Development Goals (SDGs). - CSR as a key part of corporate identity.

2010s - Present - Socially Responsible Investing (SRI). - Emphasis on diversity and inclusion.
- Stakeholder Engagement and Transparency. - Carbon neutrality and renewable energy use.
 CSR
Process
• Improved brand reputation and customer loyalty: Consumers are increasingly
supporting companies that are seen as being socially responsible. A study by Nielsen found
that 66% of global consumers are willing to pay more for products and services from
companies that commit to social and environmental responsibility.
• Reduced risk of boycotts and negative media coverage: Companies that are perceived as
being socially irresponsible are more likely to be boycotted or suffer from negative media
coverage. This can damage the company's brand reputation and lead to financial losses.
• Attracting and retaining top talent: Millennials and Gen Z workers are increasingly
looking to work for companies that are committed to social responsibility. A study by
Deloitte found that 83% of millennials say that a company's social and environmental
performance is important to them when deciding where to work.
• Access to new markets and government contracts: Many governments and businesses
are now giving priority to working with suppliers that are socially responsible. For
example, the US government has a Supplier Code of Conduct that requires all suppliers to
meet certain labor and environmental standards.
• Climate change is a major global
problem that is having a
significant impact on businesses
and communities around the
world.
• Climate change presents new
revenue growth and cost
reduction opportunities.
• New Revenue Opportunities
• The low-carbon transition is creating demand for
new sustainable goods and services worth
trillions of dollars across all sectors.

• The transportation sector has seen rapid growth

in zero-emission vehicles and the explosion of
new mobility services.
• Evidence to support this statement:
• Over the last number of years consumer awareness of the
environmental impact of the goods and services they are
purchasing has continued to grow.
• This presents significant new opportunities for businesses to
grow new and existing revenue lines that have proven
sustainability credentials.
• In terms of recognizing the scale of these opportunities
globally, 225 of the world’s 500 largest companies surveyed
by Carbon Disclosure Project (“CDP”) reported that climate-
related opportunities represented potential financial impacts
totalling over US$2.1 trillion dollars.

• The majority of this impact is driven by the potential increase

in revenue due to demand for low emission products and
services.
• Growing consumer demand for sustainable goods
and services Sustainably sourced and produced
products and services is one of the major shifts in
consumer buying patterns at present, and this
trend is expected to continue to grow.
• A recent global online survey noted a remarkable
81% of global respondents feel strongly that
companies should help improve the environment.
• This desire for corporate responsibility is shared
across gender lines and generations. Millennials,
Gen Z and Gen X are the most supportive, but
their older counterparts aren’t far behind.
 Businesses are facing several challenges related to climate change: however,
this can be an opportunity for them
suggest how?
Applying Stakeholders Theory
• Responsibility towards owners
• •Responsibility towards employees
• •Responsibility towards consumers
• •Responsibility towards the governments
• •Responsibility towards the community and society
• The term social
responsibilities may be
defined as the obligation of
management towards, society
and others concerned with the
activities of the organization.
Responsibility towards owners
• The primary responsibility of
management is to assure a fair and
reasonable rate of return on capital
and fair dividend to the
shareholders as investors and risk
bearers.
• With the growth of business, the
shareholders can also expect
appreciation in the value of their
capital.
Responsibility towards employees

• Management responsibility towards

employees relate to the fair wages and
salaries, a satisfactory work
environment, labour management
relations , and employee welfare the
provision of welfare amenities like safety
and security of working conditions,
medical facilities, housing, canteen,
leave and retirement benefits.
Responsibility towards consumers

• Consumers are often victims of

unfair trade practices and
unethical conduct of business
• Management should satisfy
consumer needs and protect
consumer interests.
• Goods must be of appropriate
standard and quality and be
available in adequate, quantities at
reasonable prices.
Responsibility toward the governments

• As a part of their social responsibility.

management must conduct business
affairs in a lawful manner, honestly pay
all the taxes and dues, and should not
corrupt public officials for selfish ends.

• Business activities must also conform to

the economic and social policies of the
government