ENVIRONMENT AND SUSTAINABILITY

UNIT 5: Corporate Social Responsibility (CSR)

COURSE CODE: CV242AT

 CSR- Corporate Social Responsibility

• CSR can be defined as a Company’s sense of responsibility towards the community and
environment (both ecological and social) in which it operates.

• CSR is a way of conducting business, by which corporate entities visibly contribute to the
social good. Socially responsible companies do not limit themselves to using resources to
engage in activities that increase only their profits.
 CSR- Corporate Social Responsibility

• Definition: Corporate Social Responsibility (CSR) is a business model in which

companies integrate social and environmental concerns into their operations and
interactions with stakeholders.

• WBCSD (World Business Council for Sustainable Development) “The continuing

commitment by business to behave ethically and contribute to sustainable economic
development while improving the quality of life of the workforce and their families
as well as of the local community and society.”
PURPOSE OF CSR
The purpose of CSR is to make corporate business activities sustainable in its three
Dimensions
1. Economic
2. Social
3. Environmental
• CSR’s purpose is to ensure that companies ethically conduct their business this
means taking account of their social, economic, and environmental impact and
consideration of human rights.
• It can involve a range of activities such as working in partnership with local
communities.
• Now, CSR has become one of the standard business practices of our time.
 Contribute towards a sustainable
economic development

Basic Make desirable social changes

Constituents
of CSR Towards Business & Society

Global Environmental Protection

History & evolution of CSR
Howard Bowen, an American economist and Grinnell College president, is often cited as the
“father of CSR.”
At first, CSR focused primarily on philanthropic activities and charitable giving.

They understood that their success was intertwined with the well-being of the society around
them.
Things got more interesting in the 1960s when scholars started looking at CSR as a response to
society's issues, prompting businesses to integrate responsible practices.
In 1970s and 80s, CSR became more integrated into business operations, driven in part by
reduced government regulation.
In the 1990s, International events and agreements, such as Agenda 21 and the Kyoto Protocol,
compelled multinational corporations to broaden their CSR focus beyond local concerns.
Charity
Charity typically refers to the voluntary giving of help to those in need,
typically in the form of money. It is usually motivated by compassion
and a desire to help others without expecting anything in return.

Examples: Donations to food banks, disaster relief funds, and medical

research foundations.
Corporate philanthropy
• Corporate Philanthropy involves businesses donating resources, such as money,
products, or employee time, to charitable causes.
• It is often part of a company’s broader CSR strategy but is more focused on direct
charitable contributions.
• Focus: Financial and in-kind donations to support non-profit organizations and
community programs.
• Examples: Sponsoring educational scholarships, funding community health initiatives,
and supporting arts and culture programs.
Types of Corporate Philanthropy
• Matching Gifts: Matching gift programs are a popular form of corporate philanthropy
where companies match the charitable contributions of employees to eligible non-profit
organizations.
• Volunteer Grants: Volunteer grant programs, also known as ‘Dollars for Doers’ or ‘Volunteer
Time Off’ (VTO) grants, are the amount paid by companies to Nonprofits Organizations based
on hours spent by its employees volunteering for a specified nonprofit.
• Community Grants: The community grants can be contributed in both in-kind assistance as
well as financial support depending upon the company’s budget and guidelines.
• Employee Grants Stipends: Such kind of grants are temporarily provided to the employees by
the company in case of any medical emergencies, natural disasters, personal crises, unexpected
expenses, or more.
• Volunteer Support Initiatives: This is a corporate philanthropy that encourages employees’
morale by rewarding them for active participation in volunteering activities in
company-specified non-profit organizations.
• Donations

1. Financial donations

2. In-Kind Donations

• Corporate Scholarships: Corporate scholarships are a type of corporate philanthropy in

which companies provides educational grants in the form of financial rewards to
academic pursuits in the academic realm which includes students.
• Cause-related Corporate Philanthropy: When companies contribute a part of their
earnings to non-profit, charitable, and social organizations associated with them and
which aligns with companies’ objectives and goals to increase visibility in the market as
well as contribute to society’s well-being, it is called cause-related marketing.
 •Government Support
•Tax Benefits National
•Recognition Builds
Benefits of •Community Assistance
Corporate
• Increased Sales
Philanthropy
•Employee Engagement
•Enhances Productivity
•Stronger Customer Relation
 Corporate citizenship
• Corporate citizenship refers to a company’s responsibilities toward society.

• Corporate citizenship is growing increasingly important as both individual and

institutional investors begin to seek out companies that have socially responsible
orientations such as their environmental, social, and governance (ESG) practices.

• Companies go through increasing stages during the process of developing

corporate citizenship.
 Corporate citizenship
• The five stages of corporate citizenship are defined as:
1. Elementary
2. Engaged
3. Innovative
4. Integrated
5. Transforming
CSR-an overlapping
 Sustainability & Stakeholder Management
Sustainability
• Sustainability and corporate social responsibility (CSR) are two terms that often get
talked about as the same thing.
• Both CSR and sustainability focus on how an organisation impacts the environment
and society around it.
• CSR is more concerned with looking back and reporting on what an organization has
done, whereas sustainability looks forward and is more focused on the company’s
ability to survive long into the future.
• Both CSR and sustainability cover three main areas: environment, society and
economy.
• Where CSR is focused on reporting on these areas, sustainability is focused on acting
on these areas.
 Sustainability & Stakeholder Management
Stakeholders
• One of the first steps in launching a CSR
initiative is to identify all the company’s
stakeholders.
• Stakeholders play a crucial role in shaping a
company’s corporate social responsibility journey.
• Identifying stakeholders can take some time as
there are so many of them! In the past, we tended to
talk first and foremost about ‘shareholders’.
• Stakeholders are all the physical or legal entities
that interact with a company and its business.
Relation between CSR and Corporate Governance
• Corporate governance refers to the system of rules, practices, and processes by which a company is
directed and controlled.

• Corporate social responsibility entails a company’s commitment to behaving ethically and

contributing to the economic development while improving the quality of life of its employees, their
families, the local community, and society at large.

The relationship between corporate governance and CSR is symbiotic, with each reinforcing and
supporting the other. Here are key areas where they intersect:
Alignment of Interests: Effective corporate governance ensures that the interests of various
stakeholders, including shareholders, employees, customers, and the community, are aligned with the
long-term objectives of the company.
Relation between CSR and Corporate Governance
Transparent Decision-Making: Corporate governance promotes transparency
and accountability in decision-making processes.
Accountability and Ethical Behavior: Corporate governance holds directors,
executives, and employees accountable for their actions.
Long-Term Value Creation: Both corporate governance and CSR emphasize
long-term value creation over short-term gains.
Reputation and Stakeholder Trust: A robust corporate governance framework
combined with meaningful CSR initiatives enhances a company’s reputation and
fosters stakeholder trust.
 The Environmental aspect of CSR
• Energy Consumption and Greenhouse Gas Emissions: Companies should strive to
reduce their energy consumption by implementing energy-efficient practices and investing
in renewable energy sources.

• Waste Management and Pollution: Companies should adopt sustainable waste

management practices, such as recycling materials, reducing packaging waste, and
implementing proper disposal methods for hazardous materials.

• Conservation of Natural Resources: Companies have a responsibility to conserve natural

resources, which are finite and essential for the well-being of our planet. To address this
aspect of CSR, companies should implement resource-efficient strategies.
 Environmental aspect of CSR
• Climate Change Mitigation and Adaptation: Climate change is a pressing global challenge,
and companies play a significant role in addressing it. Additionally companies should also focus
on adapting to the impacts of climate change by developing resilience plans, such as
implementing flood protection measures and creating disaster response protocols.

• Environmental Education and Awareness: Promoting environmental education and awareness

is an essential aspect of CSR. Companies can engage in initiatives that aim to educate their
employees, customers, and the community about environmental issues and the importance
of sustainable practices.
 Chronological evolution of CSR in India
• The evolution of CSR in India highlights changes in corporate engagement to create a
positive impact on communities, cultures, societies, and environments, beyond mere
profit-making.

• CSR in India emphasizes that corporations, along with public policy, should address social
issues and challenges typically managed by the state.

• India has a rich tradition of CSR, with early practices focused on charity and philanthropy
by influential merchants and firms like TATA and Birla.

• The second phase during India's independence saw industrialists encouraged to manage their
wealth for societal benefit, inspired by Mahatma Gandhi's notion of "trusteeship."
 Chronological evolution of CSR in India
• Post-independence, CSR saw a shift towards public sector control, aiming for equal
distribution of resources and social development in a mixed economy.

• The current phase of CSR began in the 1980s with globalization and economic
liberalization, boosting the Indian economy and aligning corporate practices with
international standards.

• Despite progress, CSR in India still needs widespread recognition, requiring companies to
integrate CSR into their core business strategies, set clear objectives, and publicly report
performance.

• Recent efforts have focused on making Indian entrepreneurs aware of the importance of
CSR as a key segment of their business activities.
Sustainability Reporting
• Sustainability reporting has no set format, but broadly involves
disclosure of a company’s environmental, social, and governance (ESG)
goals and communicating the company’s progress and efforts to reach
those goals.
Sustainability Reporting
• Global Reporting Initiative (GRI): Global Reporting Initiative (GRI) is one of the most
widely used frameworks for sustainability reporting. It provides comprehensive
guidelines for companies to disclose their environmental, social, and economic impacts.

• Dow Jones Sustainability Index (DJSI): Dow Jones Sustainability Index (DJSI) is a
family of indices that evaluates the sustainability performance of companies based on
environmental, social, and economic criteria. It includes global, regional, and
country-specific indices.
 Comprehensive Environmental Performance Index (CEPI)

• The CEPI (Comprehensive Environmental Performance Index) of CSR (Corporate Social

Responsibility) is a metric used to evaluate a company's environmental performance as part of its
CSR activities. The CEPI measures how effectively a company manages its environmental
impact and integrates sustainable practices into its operations.
Investor Interest in Sustainability

∙ Investors are increasingly recognizing the importance of sustainability in driving long-term value and
managing risks.

∙ Investor interest in the sustainability of corporate social responsibility (CSR) has grown significantly in
recent years.

∙ Investors are increasingly aware that companies addressing environmental, social, and governance (ESG)
issues are better positioned to meet evolving consumer demands for ethical and sustainable products.

∙ The use of ESG performance metrics allows investors to identify resilient companies well-prepared for
future challenges.

∙ Ultimately, the growing investor interest in CSR sustainability reflects a broader commitment to responsible
investing, where financial success is intertwined with positive societal and environmental outcomes.
THANK YOU