What is Corporate Social Responsibility (CSR)?

Corporate social responsibility, also known as corporate

responsibility, corporate citizenship, responsible business, sustainable
responsible business (SRB), or corporate social performance, is a form
of corporate self-regulation integrated into a business model. Ideally, CSR
policy would function as a built-in, self-regulating mechanism whereby
business would monitor and ensure their adherence to law, ethical
standards, and international norms. Business would embrace responsibility
for the impact of their activities on the environment, consumers, employees,
communities, stakeholders and all other members of the public sphere.
Furthermore, business would proactively promote the public interest by
encouraging community growth and development, and voluntarily
eliminating practices that harm the public sphere, regardless of legality.
Essentially, CSR is the deliberate inclusion of public interest into
corporate decision-making, and the honoring of a triple bottom line: People,
Planet, and Profit.
The practice of CSR is subject to much debate and criticism. Proponents
argue that there is a strong business case for CSR, in that corporations
benefit in multiple ways by operating with a perspective broader and longer
than their own immediate, short-term profits. Critics argue that CSR distracts
from the fundamental economic role of businesses; others argue that it is
nothing more than superficial window-dressing; others argue that it is an
attempt to pre-empt the role of governments as a watchdog over
powerful multinational corporations.

What is Human Resources Management?

Human Resource Management (HRM) is the function within an organization
that focuses on recruitment of, management of, and providing direction for
the people who work in the organization. Human Resource Management can
also be performed by line managers.
Human Resource Management is the organizational function that deals with
issues related to people such as compensation, hiring, performance
management, organization development, safety, wellness, benefits,
employee motivation, communication, administration, and training. The
Human Resources Management (HRM) function includes a variety of
activities, and key among them is deciding what staffing needs you have and
whether to use independent contractors or hire employees to fill these
needs, recruiting and training the best employees, ensuring they are high
performers, dealing with performance issues, and ensuring your personnel
and management practices conform to various regulations. Activities also
include managing your approach to employee benefits and compensation,

employee records and personnel policies. Usually small businesses (for-profit

or nonprofit) have to carry out these activities themselves because they
can't yet afford part- or full-time help. However, they should always ensure
that employees have and are aware of personnel policies which conform to
current regulations. These policies are often in the form of employee
manuals, which all employees have.
Note that some people distinguish a difference between HRM (a major
management activity) and HRD (Human Resource Development, a
profession). Those people might include HRM in HRD, explaining that HRD
includes the broader range of activities to develop personnel inside of
organizations, including, eg, career development, training, organization
development, etc.
There is a long-standing argument about where HR-related functions should
be organized into large organizations, e.g., "should HR be in the Organization
Development department or the other way around?"
The HRM function and HRD profession have undergone tremendous change
over the past 20-30 years. Many years ago, large organizations looked to the
"Personnel Department," mostly to manage the paperwork around hiring and
paying people. More recently, organizations consider the "HR Department"
as playing a major role in staffing, training and helping to manage people so
that people and the organization are performing at maximum capability in a
highly fulfilling manner.

What is the role of HR in CSR?

Companies increasingly need to co-ordinate their CSR activities and
demonstrate their commitment to CSR. Effective CSR depends on being seen
as important throughout an organisation. Delivery, not rhetoric, is the key to
stakeholders developing trust in an organisation.
HR has a key role in making CSR work. CSR without HR runs the risk of being
dismissed as PR or shallow window-dressing. And CSR is an opportunity for
HR to demonstrate a strategic focus and act as a business partner.
CSR needs to be embedded in an organisations culture to make a change to
actions and attitudes and the support of the top team is critical to success.
HR already works at communicating and implementing ideas, policies,
cultural and behavioural change across organizations. Its role in influencing
attitudes and links with line managers and the top team mean it is ideally

placed to do the same with CSR.

HR is also responsible for the key systems and processes underpinning
effective delivery. Through HR, CSR can be given credibility and aligned with
how business run. CSR could be integrated into processes such as the
employer brand, recruitment, appraisal, retention, motivation, reward,
internal communications, diversity, coaching and training.
The way a company treats its employees contributes directly to it being seen
as willing to accept its wider responsibilities. Building credibility and trusting
their employer are being increasingly seen as important by employees when
they choose who they want to work for.
In many cases the board may have developed corporate policies that cover a
range of issues, including CSR, but no one ensures they are adhered to,
checks the staff awareness, or assesses their impact. It may be that the
boards present mission, objectives and values do not reflect the values of
staff or expectations of customers. Arguably, HR is best placed to engage
staff in these issues.
HR can play an important role in developing the process where the business
objectives are assessed and values re-aligned to match them with staff
expectations. There are many ways this can be done:

Workshops to engage with staff and promote the exchange of real life
experiences.
Develop interactive intranet sites that show case examples of good
practice, or build in opportunities for promotion of good practice at
staff meetings.

Review company policy and procedures to ensure values are consistent

procurement, recruitment, training, appraisals and exit interviews.

Consult and involve staff more in the running of a business.

Provide feedback questionnaires for employees, customers and

suppliers to show the organisation is living its values.

HR should also play the gatekeeper role in the development and monitoring
of staff policies and practice. It needs to be asking questions such as: Does
the business have a social responsibility policy or an environmental policy?
and How does the business ensure that these policies and the companys
values drive the way the company does business? These values need to be
reflected in staffing issues recruitment, training, appraisals, and in other
processes such as procurement. HR has an important role to play in ensuring
this happens.

The world is a smaller place thanks to the Internet, global trading and new
communication and technology advances. More U.S. companies are
expanding overseas, and now manage a global workforce that has unique
benefits, rules/laws, and different languages and currencies. With this global
expansion comes a responsibility.
When companies are global, an important challenge in garnering success is
to respect other cultures and workforce environments and start forming a
global profile or social consciousness. Recognize these differences with a
sound Corporate Social Responsibility (CSR) plan that can simultaneously
increase shareholder value, boost employee engagement and increase
employer brand recognition.
Human Resource Departments play a critical role in ensuring that the
company adopts Corporate Social Responsibility programs. Furthermore, HR
can manage the CSR plan implementation and monitor its adoption
proactively, while documenting (and celebrating) its success throughout the
company. Human Resources technology can help with a Corporate Social
Responsibility program, including reducing the companys carbon footprint to
benefit the planet. Start with these areas:

Implement and encourage green practices.

Foster a culture of social responsibility.
Celebrate successes.
Share and communicate the value of corporate social responsibility to
employees and the community.
Implement and Encourage Green Practices for Corporate Social
Responsibility
Implement green practices to assist in environmental waste reduction, while
promoting and encouraging stewardship growth, better corporate ethics and
long-lasting practices that promote both personal and corporate
accountability. The value inherent in embracing green aspects of corporate
responsibility is clearly understood, given the direct impact that rising energy
and utility costs has on employees pocketbooks. Conservation has become
an accepted means of making our planet healthier. Reducing each
employees carbon footprint is a great way of getting energy conservation
and recycling waste initiatives off the ground. Here are suggestions to start:
Recycle paper, cans and bottles in the office; recognize departmental
efforts.

Collect food and donations for victims of floods, hurricanes and other
natural disasters around the globe.
Encourage reduced energy consumption; subsidize transit passes, make
it easy for employees to car pool, encourage staggered staffing to allow
after rush hour transit, and permit telecommuting to the degree
possible.
Encourage shutting off lights; computers and printers after work hours
and on weekends for further energy reductions.
Work with IT to switch to laptops over desktop computers. (Laptops
consume up to 90% less power.)
Increase the use of teleconferencing, rather than on-site meetings and
trips.
Promote brown-bagging in the office to help employees reduce fat and
calories to live healthier lives and reduce packaging waste, too.

Foster a Culture of Corporate Social Responsibility

Creating a culture of change and responsibility starts with HR. Getting the
younger employees, who are already environmentally conscious; excited
about fresh Corporate Social Responsibility initiatives is a great way to begin.
A committed set of employees who infuse enthusiasm for such programs
would enable friendly competition and recognition programs.
Over the past few years, major news organization ions have reported on
large, trusted companies that have failed employees, shareholders and the
public (i.e. Enron, Lehman, WaMu). These failures created a culture of
mistrust in the corporate world. All too often, employees and employers at all
levels, who competed for advancement and recognition in harsh workplaces,
were forced to accept corporate misconduct and waste as business as
usual.
Employer brands are being eroded and the once sacred trust that employees
had with stable pensions, defined benefits and lifelong jobs, are being
replaced with pay for performance and adjustment to new learning goals. In
this environment, Corporate Social Responsibility can go a long way in

rehabilitating the employer brand with potential new hires and society at
large. It can help defeat the image that corporate objectives are rooted in
single minded profit at the expense of society and the environment.
Social and community connections that are encouraged by employers give
employees permission to involve their companies in meaningful ways with
the community. Employers can connect with their employees and the
community through:

Company matches to employee charitable contributions;

Community programs and volunteer days;
Corporate sponsorship of community events; and
Encouraging employees to participate in walkathons, food banks, and
so forth.

Celebrate Corporate Social Responsibility Successes

Celebrating success is important to sustain the momentum of any CSR
program. Involving company leaders and praising the success of these
initiatives, gives the program real meaning. In the rapidly expanding global
workplace, the celebration of these successes not only drives the
implementation of Corporate Social Responsibility initiatives, but also allows
sound corporate HR practices to enable them.
Additionally the publicity about these successes creates a mutual
understanding of the cultures within each region that the company serves.
The local population knows that, in addition to providing jobs, the company
takes an active interest in, and participates in, local issues.

HR's Leadership Role

With company reputation, viability and sometimes survival at stake, one of
the critical roles of HR leadership today is to spearhead the development and
strategic implementation of CSR throughout the organization and promote
sound corporate citizenship. Attracting and retaining competent people is
one of the primary business reasons for CSR. While strategically including
CSR in the organization can begin from different points (e.g., product safety,
the board of directors, business development), it makes good business sense
for HR to head the process and partner with strategic leaders in the firm
because human capital is arguably the number one intangible value driver.
Many HR leaders are already looking ahead to the future. According to the
SHRM[R] 2004-2005 Workplace Forecasts, key HR trends are
1) Demonstrating HR's return on investment;

2) HR's role in promoting corporate ethics; and

3) Building people management and human capital components into key
business transactions. As this report documents, some HR leaders are taking
action now
* 63% are increasing spending on learning and training initiatives.
* 40% are changing company policy as a response to environmental issues.
* 36% are changing company policy as a response to grassroots pressure to
change specific business practices.
* 32% are increasing involvement in social programs.
Within business, Corporate Social Responsibility (CSR) is managed in a
variety of different places. Large FTSE 100 companies have dedicated teams
overseeing CSR and their names vary reflecting the different emphasis
companies place on it. For example, the bank HSBC Holdings has a
community unit that is within corporate affairs.
Last year, a survey of UK businesses active in CSR found that less than a fifth
had teams dedicated to the function. Over 80% placed CSR in public
relations and HR accounted for a quarter. However, the topic of CSR is
becoming a must for HR because of the growing recognition that staffing is
an area of risk to business. This link of risk and CSR is fundamental relating it
to the business and as this article discusses a key driver for HR involvement
High staff turnover, loss of key employees at critical times, the high cost of
recruitment and the training of new staff can all damage a business. CSR
strategies and programmes can help manage this risk by creating an
environment where staff can enjoy their work and where they can feedback
concerns about the companys behaviour so action can be taken - for
example, the identification of illegal workers in the supply chain.
The recognition of the value of staff to an organisation is one of benefits from
CSR as it is not just about engaging with external audiences. Moreover, it is
about how you interact with your staff. Increasingly businesses are realising
the importance of employer brand. Just like other stakeholders, employees
expect certain things not just a salary from their employer.
Staff members want to feel they can identify with the company. Employer
branding is about making sure that employees feel good about the place
they work. They can then be ambassadors for the company and that feel
good factor can permeate out to others, notably customers and clients. For
these benefits to be accrued the organisation needs to be CSR compliant

Three Key Areas of Corporate Social Responsibility

Focusing on three key areas for Corporate Social Responsibility can help
create a cohesive map for the present and future:

Community Relations,
Training and Development, and
A Cohesive Global Corporate Social Responsibility Platform
Encouraging Community Relations through your HR team includes
implementing reward programs, charitable contributions and encouraging
community involvement and practices. Examples of these programs include
sending emails and company newsletters to staff members that highlight
employees and managers involved in community relations or creating
monthly reward programs to recognize efforts by individuals within the
company.
Training and Development programs that explain the connection between the
companys core products or services and the society at large, their value to
the local community and ways in which employees can get involved in
appropriate CSR projects would sustain and direct these initiatives.
Global Corporate Social Responsibility policy, centrally managed, is
important to acknowledge successes and measurements according to
accepted standards. Central to measuring and communicating these results
is the use of a Web-based Human Resources Information System (HRIS) that
is available globally to employees and managers with any Web browser. In
order to encourage and maintain a clear and cohesive global workplace, it is
critical for the entire global workforce of a company to be on a single, multifunctioning HR platform, which allows for distributing a sound corporate
responsibility plan.
Having a global HR solution that offers companies flexibility, ease of use and
the right mix of tools is essential to the success of both employees and
employers alike, as they manage and maintain work-life balance and thrive
in a changing environment that includes taking on social responsibility. The
success of your Corporate Social Responsibility plan is possible with an HRIS
that provides the capability to effectively plan, control and manage your
goals, achieve efficiency and quality, and improve employee and manager
communications.
The flexibility of your HRIS system is critical to tracking and pursuing a sound
Corporate Social Responsibility plan and a Web-based system provides an
unparalleled level of both scalability and accessibility to implement your

Corporate Social Responsibility plan at a global level. This is an increasingly

important endeavor, as companies, societies and people coexist productively
and in harmony, across the planet we all inhabit.

What are the risks in HRs involvement with CSR?

The trust built through successful CSR is hard to regain if lost. HR needs to
ensure that their organisations CSR can stand up to the inevitable scrutiny
by stakeholders, and that training and communication mean its embedded
throughout the culture of an organisation.
HR needs to be an active business partner working with other functions, for
example finance, PR/marketing etc. It will need to look beyond the
boundaries of usual practice and arguably work on its own PR. CSR is a
strategic opportunity which is market-led and is restrained by bureaucracy. It
needs dynamism, creativity, imagination and even opportunism.

What to consider when starting a CSR strategy?

Clarify your core values and principles.

Make sure you know who your key internal and external stakeholders
are and which issues affect your relationship with them.

Get the top team on board, and know how to sell the benefits of CSR to
different stakeholders.

Understand how the CSR strategy is aligned to your business strategy

and HR practices.

Get endorsement for the CSR strategy from inside and outside your
organisation.

Communicate, consistently.

Training is vital, as CSR will only have an impact if employees are

engaged: attitudes or behaviour wont change otherwise.

Effectively measure and evaluate CSR, otherwise the time, effort and
money invested are based on assumptions, not results.

Direct results (such as saving fuel resulting in lower carbon emissions)

and indirect results (increased employee satisfaction) of CSR strategies
can be shown to contribute to business performance. One way
outcomes can be measured is through a balanced scorecard approach,
which allows for the different types of factors that contribute to a
businesss bottom line including internal people, processes and
customers.

Global role of CSR

One thing that is for sure - the pressure on business to play a role in social
issues will continue to grow. Over the last ten years, those institutions which
have grown in power and influence have been those which can operate
effectively within a global sphere of operations. These are effectively the
corporates and the NGOs. Those institutions which are predominantly tied to
the nation state have been finding themselves increasingly frustrated at
their lack of ability to shape and manage events. These include national
governments, police, judiciary and others.
There is a growing interest, therefore, in businesses taking a lead in
addressing those issues in which they have an interest where national
government have failed to come up with a solution. The focus Unilever has
on supporting a sustainable fisheries approach is one example. Using the
power of their supply chain, such companies are placed to have a real
influence. National governments negotiating with each other have come up
with no solutions at all, and ever-depleting fish stocks. That is not to say
businesses will necessarily provide the answers - but awareness is growing
that they are occasionally better placed to do so than any other actors taking
an interest.
In a global economy, increasingly organizations have a responsibility to
facilitate, demonstrate and promote corporate social responsibility (CSR).
Long-term sustainability demands that organizations rethink their business
goals and objectives from solely focusing on making a profit to corporate
citizenship. Today, the impact of CSR is beginning to be seen in communities
throughout the world--from human rights and labor practices to health care
and the environment. At home and abroad, HR plays a critical role--that of
leading and educating their firms regarding the importance of CSR while at
the same time strategically implementing sound HR management practices
that support the company's business and CSR goals.
HR has the opportunity, through well-managed programs, policies and
practices, to engage the organization and its stakeholders (e.g., owners,

employees, management, customers, creditors, the government and other

public organizations) in the value of CSR by focusing on communications,
employee relations, health, safety and community relations to provide their
organizations with a competitive advantage.

Future trends in CSR for HR departments

CSR is here to stay, how and where it is displayed with business will depend
on the board and other external factors. However, for CSR not to be merely
an add on but to be actually embedded as part of the business - reflecting
the way it does business, its culture and values - then HR will need to play its
part.
HR departments may have a natural ally in their financial directors who are
beginning to recognise staff as an area of intangible risk. FDs should be
prepared to invest to manage this risk and create an employer of choice
which delivers benefits to the bottom line in a number of ways from
improved staff retention to improved work performance through more
motivated staff.

Corporate Social Responsibility in India

ITCs Agri Business Division, one of Indias largest exporters of agricultural
commodities, has conceived e-Choupal as a more efficient supply chain
aimed at delivering value to its customers around the world on a sustainable
basis.
The e-Choupal model has been specifically designed to tackle the challenges
posed by the unique features of Indian agriculture, characterised by
fragmented farms, weak infrastructure and the involvement of numerous
intermediaries, among others.

The Value Chain - Farm to Factory Gate:

e-Choupal also unshackles the potential of Indian farmer who has been
trapped in a vicious cycle of low risk taking ability > low investment > low
productivity > weak market orientation > low value addition > low margin >
low risk taking ability. This made him and Indian agribusiness sector globally
uncompetitive, despite rich & abundant natural resources.
Such a market-led business model can enhance the competitiveness of
Indian agriculture and trigger a virtuous cycle of higher productivity, higher
incomes, and enlarged capacity for farmer risk management, larger
investments and higher quality and productivity.
Further, a growth in rural incomes will also unleash the latent demand for
industrial goods so necessary for the continued growth of the Indian
economy. This will create another virtuous cycle propelling the economy into
a higher growth trajectory.

The Model in Action:

Appreciating the imperative of intermediaries in the Indian context, eChoupal leverages Information Technology to virtually cluster all the value
chain participants, delivering the same benefits as vertical integration does
in mature agricultural economies like the USA.
e-Choupal makes use of the physical transmission capabilities of current
intermediaries aggregation, logistics, counter-party risk and bridge
financing while disintermediating them from the chain of information flow
and market signals.
With a judicious blend of click & mortar capabilities, village internet kiosks
managed by farmers called sanchalaks themselves, enable the
agricultural community access ready information in their local language on
the weather & market prices, disseminate knowledge on scientific farm
practices & risk management, facilitate the sale of farm inputs (now with
embedded knowledge) and purchase farm produce from the farmers
doorsteps (decision making is now information-based).
Real-time information and customised knowledge provided by e-Choupal
enhance the ability of farmers to take decisions and align their farm output
with market demand and secure quality & productivity. The aggregation of

the demand for farm inputs from individual farmers gives them access to
high quality inputs from established and reputed manufacturers at fair
prices. As a direct marketing channel, virtually linked to the mandi system
for price discovery, e-Choupal eliminates wasteful intermediation and
multiple handling. Thereby it significantly reduces transaction costs.
e-Choupal ensures world-class quality in delivering all these goods &
services through several product / service specific partnerships with the
leaders in the respective fields, in addition to ITCs own expertise.
While the farmers benefit through enhanced farm productivity and higher
farm gate prices, ITC benefits from the lower net cost of procurement
(despite offering better prices to the farmer) having eliminated costs in the
supply chain that do not add value.

The Status of Execution:

Launched in June 2000, 'e-Choupal', has already become the largest initiative
among all Internet-based interventions in rural India. 'e-Choupal' services
today reach out to over 4 million farmers growing a range of crops soyabean, coffee, wheat, rice, pulses, and shrimp - in over 40,000 villages
through 6500 kiosks across ten states (Madhya Pradesh, Haryana,
Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan,
Maharashtra, Kerela and Tamil Nadu).
The problems encountered while setting up and managing these e-Choupals
are primarily of infrastructural inadequacies, including power supply, telecom
connectivity and bandwidth, apart from the challenge of imparting skills to
the first time internet users in remote and inaccessible areas of rural India.
Several alternative and innovative solutions some of them expensive are
being deployed to overcome these challenges e.g. Power back-up through
batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits,
installation of VSAT equipment, Mobile Choupals, local caching of static
content on website to stream in the dynamic content more efficiently, 24x7
helpdesk etc.

Going forward, the roadmap includes plans to integrate bulk storage,

handling & transportation facilities to improve logistics efficiencies.
As Indias kissan Company, ITC has taken care to involve farmers in the
designing and management of the entire e-Choupal initiative. The active

participation of farmers in this rural initiative has created a sense of

ownership in the project among the farmers. They see the e-Choupal as the
new age cooperative for all practical purposes.
This enthusiastic response from farmers has encouraged ITC to plan for the
extension of the e-Choupal initiative to altogether 15 states across India
over the next few years. On the anvil are plans to channelise other services
related to micro-credit, health and education through the same 'e-Choupal'
infrastructure.
Another path-breaking initiative the Choupal Pradarshan Khet, brings
the benefits of agricultural best practices to small and marginal farmers.
Backed by intensive research and knowledge, this initiative provides Agriextension services which are qualitatively superior and involves pro-active
handholding of farmers to ensure productivity gains. The service are
customised to meet local conditions, ensure timely availability of farm inputs
including insurance and credit, and provides a cluster of farmer schools for
capturing indigenous knowledge. This initiative, which has covered over
70,000 hectares, has a multiplier impact and reaches out to over 1.6 million
farmers.