Discretionary Responsibilities

Be a good corporate citizen.

Ethical Responsibilities
Be ethical.
Legal Responsibilities
Obey the law.
Economic Responsibilities
Be profitable.
Pyramid of CSR
 Corporate Social Responsibility (CSR)

CSR in Equation Form Is the Sum of:

Economic Responsibilities (Make a profit)
Legal Responsibilities (Obey the law)
Ethical Responsibilities (Be ethical)
Discretionary Responsibilities (Good corporate citizen)
CSR
 Corporate Social Responsibility (CSR)
Business Responsibilities in the 21 st
Century
• Demonstrate a commitment to society’s values and
contribute to society’s social, environmental, and
economic goals through action.
• Insulate society from the negative impacts of
company operations, products and services.
• Share benefits of company activities with key
stakeholders as well as with shareholders.
• Demonstrate that the company can make more
money by doing the right thing.
Key Issues in CSR
• Labour rights:
– child labour
– forced labour
– right to organise
– safety and health

• Environmental conditions
– water & air emissions
– climate change

• Human rights
– cooperation with paramilitary forces
– complicity in extra-judicial killings

• Poverty Alleviation
– job creation
– public revenues
– skills and technology
 Key drivers of CSR

Around the world Developing Countries

• NGO Activism • Foreign customers
• Responsible investment • Domestic consumers
• Litigation • FDI
• Gov & IGO initiatives • Government & IGO
Business of business is to do
business
 CSR

350 possible definitions!!

 Some Definitions…
Corporate governance should be recognized as set of standards, which
aims to improve a company’s image, efficiency, effectiveness and
social responsibility- Nigel Kendall

“….operating in a manner that meets or exceeds the ethical, legal,

commercial and public expectations that society has of
business….”Business for social responsibility.

CSR is a new terminology, but its hardly a new concept. As in third

century BC, Kautilya’s has dealt with the management of people and
power commerce and taxations, standardization of weights and
measures, and more peace.
 Concepts & Methodology
There are 3 levels of CSR :

Level 1 : Compliance
Level 2 : Philanthropy/Green wash
Level 3 : - Innovations
- Key business strategy
- Leapfrog
Based on :
John Elkington & Stuart Hart, et al.
 CSR
Level 1:
Key Question :

The least industry can do beyond compliance

Polluter pays principle

 CSR Level 1
Improve law/ regulations standards
Department of environmental
management
Reclamation (turning ash in to soil)
Local Government participation

Whether the regulation poor

or good/new or old : that is
not the issue.
 CSR Levels 2
Key Questions :

Is industry voluntarily giving back something to the

society?

Are these actions inspired by a sense of guilt to the

society, earning good name in market,
philanthropy, etc.?
 CSR Level 2
• Infrastructure for physically challenged employees
• Foundations (i.e. : financial aid beyond immediate
community/tax planning with positive impact)
• Income generation for community
• Forestation / “Greening”
• Community development office
• Cultivation in public land
• Paternity leave
 CSR Level 3
Key Questions:

Is it part of core business strategy?

Is it adopted by the board?

 CSR Level 3
• Ash management: ash brick factory
• Quality Circle: empowering community
• R&R: land for land
• Distributed Generation: Regional dev.
• Center for power efficiency and Env.
Protection (CenPEEP)
Spectrum of CSR
Poor CSR
•No employment
•No concern for indirect effect
(land, water, air)
•Destruction of agricultural land
•Not willing to listen to other
stakeholders
•Appropriate of land not being
compensated
•Non compliance of rule of land
Good CSR
•Taking care of workers
•Low dependence on non
renewable resources
•High awareness about
CSR initiatives
•Land compensation
•Increased monitoring
system
•Environment responsibility
Company Project:Balco
Level 1
Company Project:Balco Hospital
Level 2
Company Project:NTPC’s Silver
Park/DG Level 3