CORPORATE SOCIAL RESPONSIBILITY

A STUDY OF 100 MANAGEMENT EMPOLYEES OF

HINDALCO INDUSTRIES LIMITED,

(UNIT: BIRLA COPPER- DAHEJ)

(ADIYTA BIRLA GROUP)

RESEARCH GUIDE: SUBMITTED BY:DR. ANKUR SAXENA NAVEEN MALIK

30th March, 2007Vallabh Vidya Nagar - 388120

CORPORATE SOCIAL RESPONSIBILITY

A STUDY OF 100 MANAGEMENT EMPOLYEES OF

HINDALCO INDUSTRIES LIMITED,

(UNIT: BIRLA COPPER- DAHEJ)

(ADIYTA BIRLA GROUP)

A DISSERTATION REPORT

SUBMITTED TO

THE DEPARTMENT OF SOCIAL WORK (MSW),

SARDAR PATEL UNIVERSITY,

VALLAB VIDYA NAGAR.

FOR PARTIAL FULFILLMENT FOR

THE REQUIREMENT OF

POST GRADUTION DREGEE

In

SOCIAL WORK

(Master in Social Work)

2

RESEARCHER:NAVEEN MALIK

EXAM NO: - 3930th March, 2007

Vallabh Vidya Nagar - 388120

PREFACEIn the more recent times there is a distinct movement away from

Corporate Social Responsibility (CSR) as a compliance tool and philanthropy to a

strategy of social relevance. Corporations have as obligation to society as they

impact environments, institutions and a variety of stakeholders. They generate

and distribute wealth; however, the manner in which they do so has created

controversies. Both in the generation and distribution of wealth they may adopt

methods which do not conform to the norms of social behaviour and rules

governing trade and commerce. There are implications of accountability in the

social, economic and legal spheres. For instance, corporations account for the

cost of internal activities but they don’t account for third party costs, many actions

of corporations create externalities which have harmful effects on society. In

order that they become more accountable to various stakeholders it is necessary

that they comply with the social norms and technical / legal rules.

Corporate leadership can demonstrate a high degree of commitment to

the core values of the business and empower their managers to incorporate the

same. It is the responsibility of the top management of the company to articulate

the principles of CSR and ensure companywide programmes for creating

strategic groups within the organization. There is a need to spend out a message

that corporate social action is not incompatible with profit, provided that the

norms of transparency are introduced by the corporation and best practices are

taken into account. Strategic social relevance is possible only when the third

party costs are taken into account. Moreover, long term sustainability of modern

corporations gets strong foundation when the guiding principles of CSR are

practiced. Empirical studies have proved that companies with durable

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commitment to CSR acquire greater creditability and promote corporate

citizenship.

There are newer demands for a movement from using CSR as a brand

building exercise to socially oriented actions which are influenced by

The shrinking role of government,

Demands for greater disclosure,

Increased customer interest,

Growing investor pressures,

Competitive labour market and

Supplier’s relations

Corporate brand should reflect the underlying values of business and

companies should develop brand equity programme around these values. When

we link CSR with corporate governance we need to emphasize that the company

will need to manage better enforcement of various contracts and they can do so

by relating operating aspects of business to brand building exercises.

Expected outcomes of social responsibility are

Improved financial performance,

Increases customer loyalty,

Higher ability to attract and retain employees,

Reduced regulatory oversight and workforce diversity,

Product safety and decreased liability,

Employee volunteer programmes and

Greater use of renewable resources

Business managers have a key role in translating the vision a proactive

social and environmental strategy as a means of creating a competitive

advantage and strengthening the foundation for sustainable business. But in

today’s business world, managers must be able to complement technical and

analytical capabilities with a board understanding of the social context in which

business decisions are made. A systematic strategy is therefore, called for to

sensitize business managers to their responsibilities for the world around them,

and to build their capacity for action.

4

The purpose of researcher to carry out the study on employees in regards

to Corporate Social Responsibility helps to understand knowledge, attitude and

practices of employees towards it and the awareness and suggestion for the

betterment of CSR programmes carried out by the organization.

NAVEEN MALIK

ACKNOWLEDGEMENT

I am sincerely thankful to Dr. Ankur Saxena, Department of Social Work, Vallabh Vidhya Nagar for inspiring me to take the training in the second

largest business house, “ADITYA BIRLA GROUP” (UNIT: BIRLA COPPER). This was indeed a golden opportunity for me to work with such esteemed

organization and learn all the important aspects.

I find it obligatory on my part to express my heartfelt gratitude and

thankfulness to Mrs. Rakshita Joshi, Manager (HRD), was instrumental in

framing my training schedule and was always there to help me in case of any

difficulty and encouragement throughout the project. I am also thankful for

providing me the opportunity to bring up my talent through training and data

collection in Birla Copper and without the help of whom this project would have

never seen the light of the day

I would also like to thank HODs of all the departments of the plants and

the support functions in the Birla Copper unit for the genuine interest they

showed in my training. Without their response the learning would not have been

possible.

Special thanks to Mr. Ramesh Kasondra and Mr. Jainish who was very

open and enthusiastic while sharing the information with me while doing the

project on social front.

I am extremely grateful to Mr. David & Miss Arti Gupta for the knowledge

he shared with me. Talking to him on various projects related and other issues

was a great learning experience.

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Lastly I would like to appreciate and praise the kind support which I

received from my friends who made my working very easy. Hence, I take this

opportunity to thank all those who have helped in preparing this report.

Naveen Malik

CONTENTS

TOPICS PAGE NO.

Preface 3

Acknowledgement 5

List of Graphs & Tables 7

Chapter 1- Introduction 10

Chapter 2- Review of Literature 42

Chapter 3- Research Methodology 115

Chapter 4- Research Setting 120

Chapter 5- Data Analysis &

Interpretation

132

Chapter 6 – Findings, Conclusion,

Suggestion

164

References & Annexure 181

6

List of Tables & Graphs

S.No. Particulars Page no.

1. Table showing Age (in Years) 133

2. Table showing Sex 133

3. Table showing Level of Management 134

4. Table showing social responsibility is desirable for the

business

134

5. Table showing, the reason if answer of Q – 3 is 1 or 2 135

6. Table showing the objective of CSR 135

7. Table showing CSR is the need of the hour and very vital 136

8. Table showing it is just window that companies do to keep

critics happy

136

9. Table showing there are many business benefits of CSR 137

10. Table showing ranking of business, organization and society 137

11. Table showing the profit maximization 138

12. Table showing the money and wealth 139

13. Table showing the labour and dignity 140

14. Table showing the accountability 141

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15. Table showing the technology and decision making 142

16. Table showing the employees and problems 143

17. Table showing the values and organization efficiency 144

18. Table showing son of soil policy 145

19. Table showing the government and business 146

20. Table showing the ideas of employees 147

21. Table showing the natural environment 148

22. Table showing the business and aesthetic values 149

23. Table showing the important publics with respect to social

responsibility of business

150

24. Table showing any specific policy formed by your organization

with regard to Social Responsibility

151

25. Table showing programme for Urban renewal 151

26. Table showing programme for Rural Development 152

27. Table showing programme for Educational Aids 152

28. Table showing programme for better transport, Communication

and Distribution system

153

29. Table showing programme for Health 153

30. Table showing programme for Healthy atmosphere for

industrial peace

154

31. Table showing programme for Dynamic infrastructural facilities 154

32. Table showing programme for efficient use of energy and

natural resources

155

33. Table showing programme for Instituting programmes for

hiring the unemployed.

155

34. Table showing programme for HIV / AIDS 156

35. Table showing that looks after social responsibility affairs in

your organization

156

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36. Table showing the reaction of government towards your social

responsibility activities

157

37. Table showing company is doing business in an ethical

manner

157

38. Table showing the role of HR department in any programme

directed towards the issues of CSR

158

39. Table showing welfare programme running to address the

issues of CSR

159

40. Table showing HR department role in the addressing of the

issues of CSR

159

41. Table showing relation between CSR productivity and Quality

of work life of a worker

160

42. Table showing threat caused by CSR to the organization is

very grave

160

43. Table showing suggestions for developing a sustainable CSR

programme

161

44. Table showing Z Test between Economic & Technological

Dimension and Social & Political Dimension

162

45. Table showing Z Test between Environmental & Aesthetic

Dimension and Social & Political Dimension

162

46. Table showing Z Test between Economic & Technological

Dimension and Environmental & Aesthetic Dimension

163

List of Graphs

48. Graph 1 showing Age (in Years) 133

49. Graph 2 showing social responsibility is desirable for the

business

134

50. Graph 3 showing objectives 135

51. Graph 4 showing the important publics with respect to social

responsibility of business

150

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INTRODUCTION

UN Secretary General, Kofi Annan first called upon the

corporate leadership in the world economy to join in a Global Compact in the year 2000 in order to Marshall the creative

forces of private entrepreneurship to address the needs of the

disadvantages and requirements of future generations. The

Goble Compact enumerates ten principles of good business, and good

citizenship.

These are:

Human Rights1. Business should support and respect the protection of internationally

proclaimed human rights; and

2. Make sure that they are not complicit in human rights abuses.

Labour Standards3. Business should uphold the freedom of association and the effective

recognition of the right to collective bargaining;

4. The elimination of all forms of forced and compulsory labour;

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5. The effective abolition of child labour; and

6. The elimination of discrimination in respect of employment and

occupation.

Environment7. Business should support a precautionary approach to environmental

challenges;

8. Undertake initiatives to promote greater environmental responsibility; and

9. Encourage the development and diffusion of environmentally friendly

technologies.

Anti-Corruption10.Business should work against all forms of corruption, including extortion

and bribery.

Since the launch of the Global Compact, corporate boards across the

world have intensified their commitment to such principles, and translated that

commitment into concrete actions for corporate social responsibility.

The Government sees CSR as the business contribution to our

sustainable development goals. Essentially it is about how business takes

account of its economic, social and environmental impacts in the way it operates

– maximizing the benefits and minimizing the downsides.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) is the alignment of business

operations with social values. It takes into account the interests of stakeholders

in the company's business policies and actions.

CSR focuses on the social, environmental, and financial success of a

company - the so-called triple bottom line - with the aim to achieve social

development while achieving business success.

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Companies now perform in non-financial arenas such as human rights,

business ethics, environmental policies, corporate contributions, community

development, corporate governance, and workplace issues.

Social and environmental performances are considered side by side

with financial performance. From local economic development concerns to

international human rights policies, companies are being held accountable for

their actions and their impact.

Companies are also more transparent in disclosing and communicating

their policies and practices as these impact employees, communities, and the

environment.

In the new global economy, companies that are responsive to the

demands of all of their stakeholders are arguably better positioned to achieve

long-term financial success. It is no longer optional for a company to

communicate its environmental and social impacts; such information is pertinent

in an information-driven economy, and improved communication has become

critical for sustainable business growth.

The new slogan

CSR has become the password to not only overcome competition but to

ensure sustainable growth. It has been supported not only by the shareholders

but stakeholders by and large encompassing the whole community. Corporate Virtue Is In is the slogan and why not? As it offers so many advantages including

a hike in profits

CSR is the point of convergence of various initiatives aimed at ensuring

socio-economic development of the community which would be livelihood

oriented as a whole in a credible & sustainable manner.

Benefits of CSR1. Improved financial performance

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2. Reduced costs

3. Enhanced brand image and reputation

4. Increased sales and customer loyalty

5. Customer satisfaction

6. Increased productivity and quality

7. Increased ability to attract and retain employees

8. Reduced regulatory oversight

9. Brand Visibility, recognition and awareness

10. Increased market share

11.Favorable positioning

12.Competitive mileage

13.More engaged investors

14.Environmental sustainability

15.Forging of partnerships

The modern industrial era is characterized by several thousands of big

corporations. Such behemoths in both private and public sector bestride the

earth producing a large proportion of all the goods and services that we

consume. Thus, externally they present a commanding appearance; control vast

resources employ millions of workers besides influencing our social, economic,

political and even personal lives. Their computers with unmatched ability to plan

and to execute projects on a grand scale in make them unshakably powerful and

permanent. At a time when most of us feel powerless, they appear to dominate

our destinies.

In the wake of such fast changing business ecology, various factors like

the pressure of competition, resource crunch and excessive legislation have

forced the businessmen to adopt a paradigm of unethical practices to keep the

show going. This has in turn created a host of crisis quite unlike the earlier i.e.

inflation, unemployment and the exploitation of labour etc. these have added to

the crisis of ecology, poverty, energy crisis , societal welfare and the like.

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Environment and Social Responsibility

An organization is a creation of Society. It gets its resources from Society.

Its outputs are accepted and consumed by Society. Without the specific sanction

of Society, no organization can prosper. Organizations are citizens (members) of

society and as citizens; they owe certain responsibilities to the society. The

primary responsibility is to ensure that it does not cause it any damage and the

second responsibility is to contribute to its progress.

Business organizations of today are much bigger than in the past and the

impact of their operations on society much wider. They have much greater

potential to do much greater damage than ever before, through thoughtless

actions, if they do not focus on the long term consequences. Considerations of

patronage, may blind them to excesses. There is need to consciously transcend

the limited interests of a corporation and ennoble its cause’s in terms of the

greater goods.

The responsibility to society is different from the responsibility it has

towards selected segments of society like shareholders, customers, employees,

dealers, suppliers, Government, etc., all of whom are stakeholders in one form or

the other. These stakeholders are benefited because they directly contribute

towards the activities and success of the organization. The activities however,

have impact on persons other than the stakeholders. For example, if a factory

allows toxic affluent to pollute the atmosphere or waters, the adverse

consequences may or may affect the stakeholders, but will affect many others.

The life styles of people living out of the waters, through fishing or ferrying, will be

affected on a long term basis. The effect will be on the health of the people, their

productive capacities and the economy of the society, lasting perhaps, for

generations.

Organizations are sub-systems of society. They cannot function and

remain healthy except when the bigger system remains healthy, just as organs of

15

a body cannot function effectively when the body as a whole, is not healthy. The

health of the society is therefore a necessary concern of organizations. The

concern cannot be one of a passive observer. It has to contribute actively to the

enhancement of the overall health of the society. By no means should it cause

any deterioration in society. There are organizations which deliberately violate

basic principles and the laws on child labour, human rights, discrimination, fair

wages, etc. There are also organizations which show little concern for consumer

interests. They compromise on safety and quality standards producing goods

that are dangerous. They are using resources, taken from the society, for their

own benefit at the cost of the society. This constitutes misuse and breach of

trust. When society gives its resources to an organization, there is an implicit

understanding as to how they are to be used. They are not intended to be used

for some one’s personal benefits, after harming the larger interests of the society.

One of the important responsibilities of an organization is not to waste the

resources that society has placed at its disposal. There is waste when there is

loss; because that means that the total output is less than inputs. Generating a

surplus in its operations is therefore the primary responsibility of all

organizations. This profit or surplus is required to be generated not because the

shareholders have to be paid dividends. That is a secondary reason. The

generation of profits is the proof that the resources have been utilized in a

manner that created more wealth instead of depleting the existing wealth. In the

case of organizations, which do not have commercial objectives, the same

principle will hold good, but the wealth created, in the nature of better health or

education would need different measurements.

The daily press is full of stories pointing out irregularities and improprieties

in the behaviour of individuals in authority, in the form of neglect of duties, abuse

of power, harassment instead of the expected help, misappropriation, cheating,

and collusion with criminals and so on. All these stories offend our sense of

propriety, because there is breach of trust. Someone is using society’s resources

for personal advantage and harming society in the process. Effectively, the

16

organization, through the activities of the persons concerned, has violated the

sanction of the society.

Social Impact and Social Responsiveness

Organizations are subsystems of society. They are powerful subsystems.

They are in command of a lot of technical, financial and human resources.

Whichever way these resources are used, there will be an impact on the society.

These impacts will be of obvious economic consequences or sometimes very

subtle and not very observable. For example, the establishment of the steel

factory gave rise to the huge city that Jamshedpur now is. A petrol station on the

highway will, in due course of time, give rise to various related auto repair

services, auto related spare parts dealers, rest rooms and eating facilities, small

shops (selling, cigarettes, biscuits, soaps and toothbrushes) and more people,

which in turn will bring in more entrepreneurial activities, gradually building up to

a village and then a small town. Whether these changes may mean improvement

or impoverishment of the area and the people therein, could be a matter of some

dispute. But the parameters relevant to the changes, like incomes, employment,

living standards, etc., are visible and measurable.

On a bigger scale, the developments since 1992 in India, in terms of

liberalization of economic policies, have had great social impact. Much of the

opposition to the economic reforms is founded on this factor. Wages in the

corporate sector have skyrocketed. Management graduates are expecting and

getting about Rs.15000 per month. A gross monthly salary of Rs. 5 lakhs is not

uncommon for senior managers. This is to be compared with the context of

Rs.10000 to Rs.15000 being the maximum about 10 years back. Many Indian

companies cannot afford wages at this rate and the unorganized sector can

never match these levels. The public sector and Government cannot agree to

such levels. The disparities have increased and so also has the discontent.

Expectations have changed and the new expectations are not being fulfilled in

most of the cases. In the pursuit of the new expectations, executives are looking

17

for better prospects all the time and therefore there are no loyalties to existing

employers. There is disturbance to the social equilibrium.

A company’s internal practices also have social impact. There are certain

organizations which recruit only persons from particular castes or communities.

Employees in such organizations develop attitudes very different from those in

another organization that does not make any such distinction and is more secular

in its policies. These different attitudes will be reflected in their behaviour outside

the organization and will either strengthen or weaken the social fabric. An

organization, in which authority is highly centralized and does not allow its people

enough discretion, will develop among its people tendencies for dependency and

inability to take responsibility. These tendencies are handicaps in their roles as

parents or citizens. The extent of concern shown for the effect of working

conditions on employees’ health has an impact on the society, not merely in

terms of general health and costs on medical care, but also in terms of the kind

of activities that the members of the society participate in. When an organization

is sensitive to its impact on society, and responds to the society’s concerns, it is

said to be socially responsive. On the contrary, if it is concerned only with its own

purposes and ignores the impact that it has on society, it is said to be socially not

responsive. The Times of India of 21st October 1999 has the following report

"Several chemical firms in the state save cost of treating their effluent by

simply dumping it in Mumbai. The modus operandi is to show the effluents as

chemicals being sold to these factories, which, in turn, drain the untreated toxic

waste into their sewers. In the process, carcinogenic chemicals enter the water

stream, and through it, into the human food chain."

This is not a case of social responsiveness or non-responsiveness. This is

a case of crime. Companies like these create justifications for regulations and

regulatory authorities, which in turn create opportunities for corruption, with more

regulation and more corruption. The cycle goes on. Better social responsiveness

reverses the entire cycle.

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The question often debated is whether the social impact of an

organization’s activities should be the concern of the organization. Managing

these impacts does not add direct value to the customer’s satisfaction in the

short run. According to some observers, the responsibility for managing these

impacts should not be thrust upon or accepted by business organizations. The

grounds for such a stand are:-

1. Organizations have one and only one social responsibility and that is to

use its resources and engage in activities designed to achieve its basic

purpose, mostly in terms of economic performance.

2. Business managers specialized in the narrow discipline of technology and

business cannot be expected to have experience with social questions.

3. A business organization is an agent for economic performance and should

not be burdened with non-economic issues of social relevance.

4. Social issues should be the concern of elected representatives of society,

answerable to society for their actions.

5. Responsibility of business managers for economic performance precludes

their using non-economic criteria, in making strategic and policy decisions.

6. A management that incurs cost (on account of social responsibility) not

justified by considerations of economic performance or compliance with

law, is effectively levying a tax on the shareholders, an action without

authority.

7. The business manager, responding to economic compulsions of the

market place, cannot have the knowledge of issue on morality, required to

address social issues.

On the other hand, those who believe that organizations must be socially

responsive argue:

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1. Corporate power, vast in potential strength, must be brought to bear on

certain social problems, if they have to solve at all.

2. Business managers, with the integrity, intelligence and humanity,

adequate to run organizations, with economic budgets and thousands of

workers, cannot be confined to their economic activity, impervious to the

consequences of these activities on society.

3. The power and capability of organizations are allowed by the society not

merely for economic activity, as if social consequences of such activities

do not matter.

4. A business organization is created by the society as an instrument to

serve it. It cannot pursue its immediate purpose at the cost of other

impacts. The society has the option to prevent the organization from

functioning at all. The right to regulate includes the right to prohibit, even

in a free society.

5. The compulsions of a competitive market place and economic

performance must be disciplined by reflection on the larger long term

interests of society

6. Social issues are not the concern of only a few elected persons, but are of

all responsible citizens. Organizations are citizens.

The debates referred to above have by and large been resolved in favour

of corporate bodies having to be socially responsible. This responsibility

increases according to the size and power of the corporate body. Ignoring the

impacts would be, according to Peter Drucker, irresponsible. Some of the

principles to follow are as stated below:-

1. Impacts which are not essential and which are not part of one’s specific

purposes, should be kept to the minimum. Even if they appear to be

beneficial, if they are outside the boundaries of one’s function, they will

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sooner or later be resisted and considered an imposition. For example, for

a textile company, the priority would be to eliminate effluents rather than

supporting a sports development activity. If the latter (sports), at some

time becomes a matter of some controversy, the textile company would be

accused of wrongfully exercising its clout in the matter. If it wants to

support sports, it can do so by giving funds or providing other facilities,

without directly getting involved in the conduct of the activity itself.

2. The acceptance of this responsibility requires concern, compassion, and

the conviction of all its executives. This has to become a value throughout

the organization. This is particularly so, in organizations that are large and

decentralized like banks. In such large organizations, the policy decisions

are not clearly understood throughout. Unless specifically taken care of,

the Chief Executive, committed to social responsibility, might be surprised

by the neglect that may occur at distant places. If not carefully applied,

one might easily get embroiled in ugly controversies of a political nature.

3. The effects of activities concerning social responsibility are not easily

quantifiable. They do not become numbers that constitute economic

performance and results. This is the problem with many public sector

undertakings, whose contributions on social responsibilities do not reflect

on performance data. Too much emphasis on social factors diverts

attention from economic performance. There are difficulties in developing

systems that reflect both social issues as well as organizational outputs.

4. There is need to incorporate into operating plans of regional organizations

or profit centers, specific objectives in areas of social concerns,

strategically related to the economic activity and community environment

of the organization unit. The executive at the corporate head office cannot

know or specify the appropriate social strategy in some other parts of the

country.

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5. Financial, production and sales requirements may be transmitted down

rather than drawn upwards, in an efficient planning process but not social

policy. If a community centered social strategy is initiated from the top, it

can only be in terms so general as to be ineffective. It will also stifle

creativity and commitment.

Dimensions of Social Responsibility

Society expects that organizations should perform as responsible citizens,

trustworthy and reliable, causing no harm. Some of the ways in which these

expectations are expressed are mentioned below.

1. First of all, the organization is expected to satisfy customers, for whom it will

produce more, better and of greater value.

2. Also, the organization will conserve and utilize resources entrusted to its

care without wastage, thus, improving productivity and reducing costs,

passing on the gains to the consumer, workers and society.

3. Society does not approve of ‘exploitation’ by organizations. Exploitation

includes unfairness in treatment of workers, in pricing to customers,

pressurizing suppliers, manipulating dealers, etc. It demands justice in

distribution of products, not creating periods of artificial scarcity, fidelity to

contracts including verbal understandings, not making public promises

which are not intended to be kept, and so on. The extent to which an

organization conceals real data about itself, and attempts to mislead is also

a manner of exploitation

4. Society is a bigger entity than the aggregate of suppliers, workers, dealers,

customers, and shareholders etc., who deal directly with the organization.

Public is aware of the bad effects that may be caused to the environment,

as well as to the normal life of the people, in an area where a factory is set

up. The bad effects may be toxicity in the air and the water, disturbances of

eco-equilibrium causing harm to the plant and animal life around,

22

concentration of economic power, diversion of resources, denying dues,

rigging prices, false advertising, supporting anti-social practices or

disturbing local values and life styles. Pressures are built through voluntary

organizations as well as Government agencies to control and avoid these

bad effects. Such pressures do succeed in bringing about correction, but not

always.

5. There is increasing awareness that an organization has to be responsible

for the welfare and development of the community around itself. Some

organizations even carry this responsibility to distant places, villages and

towns, which are ‘adopted’. This shows itself in building hospitals, schools

and parks which contribute to better quality of life, but are extended even to

supporting local industry or artisans with technical, financial, or marketing

expertise.

6. Policies governing employment and management of employees are

expected to conform to the aspirations of society. Particularly relevant are

extra considerations for the weaker sections, like minorities, women, and

the infirm or handicapped and so on and also adequate safety

arrangements.

There are organizations, for which social responsiveness is more a matter

of verbiage and publicity than substance, highlighting minor or short-term

activities that appear significant. For example, the contributions to the relief funds

during the Kargil war or times of disasters like floods and earthquakes are given

lots of publicity. Companies are required to state in their annual reports, what

they have done with regard to energy conservation and import substitution.

These are important issues of social and national relevance. Many companies

however, treat these as routine and their reports give little information beyond

stating that adequate measures have been taken. In fact, nothing may have been

done.

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Transparency is considered to be an important obligation of all

organizations. Financial institutions do not fully disclose their financial condition,

particularly their doubtful debts. Some justification is given for this, that the public

unfamiliar with the technicalities of financial dealings may miss-interpret and be

mislead by raw data about doubtful debts. This does not however prevent

speculation based perhaps, on incorrect information. It also raises the question

as to why the same justification cannot be used by other non-financial, public

organizations, whose technicalities are not less complex than financial dealings.

Some companies behave in socially responsive ways, because the costs

otherwise, are too heavy. For example, safety features are incorporated more out

of fear of penalties and bad publicity than the need to be protective of workers

and the environment. Some do it for fear of being compelled by society later.

Some do it pro-actively, recognizing the good that it will do to themselves and the

environment.

Some limit their social responsibility to what the law compels. Some do not

do even this much, hoping that they will buy their way out of possible penalties,

by bribing the authorities concerned. Some others see the legal provisions as just

prescribing the minima of organizational obligations. They want to do more. Such

companies often lay down the standards for others to follow, because in their

action, there is social approval and also commercial advantage. For example a

cement company that fostered a rose garden in its plant as evidence of the

control it had on pollution, became the bench mark, not only for social

recognition, but also because it proved that it was technically feasible to control

the volume of value-added material going waste into the atmosphere. Social

demands and pressures are not always codified in the statute books. Legislation

usually codifies, what is already expressed by social pressures.

The Concept of Trusteeship

Trusteeship is a Gandhian concept. It implies that:

24

All assets be held and used in trust for the benefit of the community.

Distribution is to be equitable, not equal.

Owner, manager, worker, etc. titles be removed.

There is no use for compulsion, force or exploitation.

There is continuous participation.

Gandhiji’s concept of trusteeship was founded on non-violence. He

thought that the very idea of ownership was at the root of violence, giving birth to

unwarranted attachments eventually breeding possessiveness, greed,

exploitation and revenge. People really come together only when they rise above

conflicts of interests, envy and competition. Trusteeship was seen as a means of

bringing people together. He had said, “If one has come by a fair amount of

wealth, either by way of legacy or by means of trade and industry, he must know

that all that wealth does not belong to him." It has to be considered as wealth of

the society, given to his care to be held in trust.

Trusteeship followed the Vedic dictum to renounce (rights and pleasures

of self) and enjoy (in the pleasure of others). This is also the basis of the

commandment in all religions to share one’s strengths and assets with others. In

the Mahabharata, Vidor, who is the embodiment of all that is right and proper,

advises Dhritharastra that his son does not automatically inherit the kingdom,

because sons inherit only what belongs to the father, and a king does not own

the kingdom. A king only has the duty and responsibility to look after the welfare

of his kingdom and his subjects. That is trusteeship.

Mr.J.R.D.Tata, addressing the national conference on Trusteeship in

Bombay in October 1977 had explained that trusteeship did not focus on matters

of immediate concern, such as distributive justice, socialization, land reforms and

ownership of shares, nor on labour relations and handing over wealth to the

nation for the common good. Trusteeship is a way of life, making you do

25

whatever you do, for the good of the others or even of all. A sense of trusteeship

is similar to a belief in religion or philosophy, manifesting in areas like lowering

prices through efficiency and technology, even at levels below the permissible in

terms of law or competition, ensuring avoidance of adulteration after the product

leaves the factory, devoting share of profits to provide employment in the rural

area. In another context, Mr. Tata had said, "No success or advancement in

material terms is worthwhile unless it serves the needs or interests of the country

and its people and is achieved by fair and honest means."

Mr. Kim Woo Chong, Chairman of the Daewoo Industries of South Korea,

had said, "Fighting for your own greed, means the end of peaceful existence. On

the personal level it results in social confusion and at the national level it ends in

war."

Socrates had said, "If a rich man is proud of his wealth, he should not be

praised until it is known how he employs it."

Andrew Carnegie, the steel magnate, who had established the well known

Institute of Technology, 2500 libraries and foundations for charitable purposes,

had said that the duty of a man of wealth was "modest, unostentatious living, …

to consider all surplus revenues which come to him as trust funds, which he is

called upon to administer, becoming thus a trustee and agent for his brethren."

Mr. Omkar Goswami, addressing the CII conference on 18.11.98, had

said, "Promoter should consider them to be trustees of public funds."

Thus, the concept of trusteeship has been recognized across the world,

across the ages. It is practical and relevant in modern times.

Trusteeship essentially centres on the accountability of individuals to

others in the society. It is the simplest logic to make individuals aware of his

dependence on others for his satisfactions, his wealth, and his physical and

mental capacities and to acknowledge his debt to others. The acknowledgment

26

of this debt results in sharing the resources in the family and the community. In

families, elders are generous and sacrificing for the young. In small communities,

sharing is done through voluntary acceptance of mutual rights and obligations. In

larger groups, such as a city or a state or a nation, the relationships become

more complex and anonymous and the individual’s sense of obligation to return

the debt gets watered down. Generally, people do not see the relationship

between social costs of the benefits received from public utilities for instance,

and their accountability for the benefits so received. Parents sending their

children to aided schools are hardly aware that they pay less than 10% of the

real cost of education. The rest is borne by society.

What applies to an individual, should apply also to a corporate body,

which is a person, more powerful and endowed of more variegated assets than

an individual. The concept is that the manager of an enterprise is like a trustee of

property, whose main concern has to be that the property be so husbanded as to

provide maximum advantages to the beneficiaries of the trust and not to the

trustee. In a business enterprise, the beneficiaries are the community and the

society.

Trusteeship is an attitude. It requires awareness. It is practice. It is not a

matter of changing structures. It requires the spread of trusteeship behaviour

among the members of the organization. Restructuring or the distribution of

capital ownership does not ensure that the principles of trusteeship will be

practiced. Cooperatives in the areas of housing, sugar manufacture, milk

production, banking and credit etc., are founded on, but do function on, principles

akin to trusteeship. They provide plenty of instances of attempts at self-

aggrandizement and exploitation. At the political level, those entrusted with

responsibility through processes of democracy, are expected to, but do not

necessarily, act as trustees of the larger community.

There have been various attempts at codifying principles of corporate

governance, by the CII or individual organizations preparing what are called

27

Citizens charters. These have focused on structural matters, like the composition

of the Board of Directors, quantum of sitting fees, time frame for various

customer related activities and so on. None of these focus on social

responsibilities. The emphasis on enhancement of shareholder value, in fact

misdirects. Shareholder is only one of the many constituents of society entitled to

receive enhanced value from the operations of an enterprise. The focus will get

lost in organizations which do not have shareholders. The success of a company

depends much less on the capital provided by the shareholder, than on the

contributions of other financiers, employees, customers, suppliers, dealers and

so on. The shareholder’s perception of the value of his capital is a good, not

perfect, indicator of corporate success. But that cannot be the end objective of

corporate management. Social responsibility transcends and encompasses all.

Today, there are many references to corporate social responsibility (CSR),

sometimes referred to as corporate citizenship, in our workplaces, in the media,

in the government, in our communities. While there is no agreed-upon definition,

the World Business Council for Sustainable Development defines CSR as the

business commitment and contribution to the quality of life of employees, their

families and the local community and society overall to support sustainable

economic development Simply put, the business case for CSR—establishing a

positive company reputation and brand in the public eye through good work that

yields a competitive edge while at the same time contributing to others—

demands that organizations shift from solely focusing on making a profit to

including financial, environmental and social responsibility in their core business

strategies. Despite what the phrase corporate social responsibility suggests, the

concept is not restricted to corporations but rather is intended for most types of

organizations, such as associations, labor unions, organizations that serve the

community for scientific, educational, artistic, public health or charitable

purposes, and governmental agencies.

In the late 1990s, CSR began to gain momentum as pressure from

consumers, the media, activists and various public organizations demanded that

28

companies contribute to society. In large part, the increasing focus on CSR has

been fueled by a number of events in recent years, such as the highly publicized

financial scandals of Enron and WorldCom, alleged sweatshop labor by retail

clothing and sports shoe manufacturers and the alleged “under-the-table” deals

that companies such as Halliburton have received. Now, reputation, brand,

integrity and trust are increasingly considered important measures of corporate

social responsibility.

CSR in the Business Community Worldwide, companies and their HR leadership are coming to grips with

what exactly CSR means in their organizations and how to strategically include

CSR within business goals and objectives. There is growing evidence pointing to

the validity of and the demand for CSR. For example, 82% of companies noted

that good corporate citizenship helps the bottom line and 74% said the public has

the right to expect good corporate citizenship However, as Niall FitzGerald,

chairman of Unilever, explained in his presentation at the London Business

School, “the reality of corporate social responsibility is there are no precedents to

fall back on, and decisions must be based on judgment rather than tried and

tested formulae.”

As the concept of CSR becomes more widely accepted and integrated in

business, it is helpful in this discussion to understand that the development of

CSR in organizations is in transition (see Figure 1). There are basically three

“generations” of CSR in varying stages of sophistication. The first generation has

demonstrated that companies can contribute to society without risking

commercial success. Today, the second generation is developing more fully as

CSR gradually becomes an integral part of companies’ long-term business

strategies. Finally, the third generation addresses significant societal issues,

such as poverty and cleanup of the environment. Evidence of the transition of

CSR will be discussed throughout this article, with suggestions of how HR

professionals can take on leadership roles that can contribute to CSR initiatives

29

in their organizations. The article will also highlight some examples of the impact

of CSR and how it may link to the bottom line.

Making the Business Case for CSR In recent years, intangible assets—company values, human and

intellectual capital, reputation and brand equity—have become increasingly

important to organizations. Companies that exhibit good corporate citizenship are

likely to gain a competitive edge. Below are just a few examples of today’s CSR

success factors that are fast becoming the primary measures of an organization’s

credibility.

Figure – 1 Old and New Ethics*

Old Ethics New Ethics

Do the minimum required by law Do the right thing

Keep a low profile Show you are doing the right thing

Down play public concerns Seek to identify and address public

concerns

Reply to shareholders inquires when

necessary

Be responsible to stakeholders

Communicate on a need to know basis Communicate openly

Male decision on the bottom line and

laws alone

Integrate all of the above into decision

making

*Source: Adopted from Durphic D., Griffths A., & Blanns (2003), Organizational change for

corporate sustainability, p-116, New York

Reputation and Brand Enhancement

30

Company reputation and brand are greatly influenced by public

perception. For example, in the largest global survey of the public’s expectations,

the Millennium Poll on Corporate Social Responsibility documented that over

25,000 individuals across 23 countries on six continents revealed they form their

impressions of companies by focusing on corporate citizenship and two out of

three people want companies to go beyond making money and contribute to

broader society goals. Increasingly, there are success stories that show

companies are listening to the public. A recent example is that of Ecolab of St.

Paul, Minnesota, that quickly developed new products to address unexpected

hazards with an antimicrobial disinfectant product in response to foot and mouth

disease in livestock and another new product to combat SARS at the Toronto

airport.

Another critical aspect of reputation and brand, as a CSR success factor,

is the impact on a company’s sustainability—that is, the conditions or

characteristics that support an organization to continue its business, including

environmental, social and economic aspects of the company. Ultimately, the

environmental, social and economic health of a company transfers into dollars

that either directly or indirectly affect reputation and brand, and thus the bottom

line. For example, a company whose product contributes to the safety of the

environment will likely be favorably viewed by the public. Both examples may

yield additional applications for employment or employee referrals, thus

potentially lowering the time and cost per hire. The final CSR report card is

directly linked to the company’s sustainability and consequently influences critical

success factors such as reputation and brand.

Accountability and TransparencyOpen, reliable and regular reporting of a company’s performance—known

as accountability and transparency in CSR terminology—is quickly becoming a

public issue and one that HR leaders will need to keep in the forefront (see

Figure 2). As a sign of the times, large companies are beginning to publish

company information, once deemed as too sensitive to release, with expectations

for their suppliers and their internal human resources practices. However, few

31

companies give robust performance measures, with fewer yet being

independently verified. The clothing industry, for example, has been criticized for

how workers are treated in factories in their supply chain. Setting an example,

Gap, Inc. released its first Social Responsibility Report, emphasizing the

organization’s commitment to working with key players to create industry-wide

change. It also took a proactive stance on employee treatment by prohibiting

child labor, forced labor and discrimination and protecting freedom of association

for workers.

Figure – 2 Five Keys of CSR Strategy*

A coherent CSR strategy, based on integrity, sound values and a long term

approach, offers clear business benefits to companies and a positive contribution

to the well being of society.

A CSR strategy provides the opportunity to demonstrate the human face of

business.

A strong CSR strategy requires engagement in open dialogue and constructive

partnerships with government at various levels, such as with IGOs

(intergovernmental Organizations), NGOs (Nongovernmental Organizations) and

Local communities.

In implementing their CSR strategies, companies should recognize and respect

local and cultural differences while maintaining high and consistent standards

and polices.

Companies should be responsive to local differences by taking specific initiatives.

*Source: Adapted from Corporate Social Responsibility; Making Good Business Concern for

Sustainable Development, January 2000, www.wbcsd.org

Risk Management

32

Managing investor confidence is another factor supporting the business

case for CSR. Today, the financial community is examining organizations’ CSR

report cards and their risk profile. The rapid rise of socially responsible

investment illustrates that corporate citizenship is becoming a key measure that

investors consider when aligning ethical concerns with publicly held corporations.

For example, the Dow Jones Sustainability Indexes (www.sustainability-

index.com) track the financial performance of the leading sustainability-driven

companies worldwide, and the Domini Social Investments (www.domini.com)

screen companies for corporate citizenship, diversity, employee relations, non-

U.S. impact, environmental responsibility and safe and useful products. In view of

the increasing importance placed on socially responsible investment, this is an

opportunity for HR leaders to consider programs, such as community events, that

may generate investor confidence linking CSR initiatives to the bottom line.

The Talent WarWith the anticipated labor shortage in the next 10 to 25 years, attracting,

developing, motivating and retaining talent is, and will continue to be, very

important. Correspondingly, CSR influences a company’s competitive advantage

today through two key value drivers: 1) company reputation and brand; and 2)

human capital. HR leaders have begun to assume leadership roles to address

both areas. For example, a positive CSR initiative was documented by an

employee survey that illustrated the pride of employees regarding their

company’s contribution to a local AIDS organization.

In addition, the talent war is evidenced by an influx of “best places to work”

awards (e.g., Fortune magazine’s “100 Best Companies to Work For,”

www.fortune.com/fortune/fortune500). There are many such programs, located in

communities and business organizations, which highlight the company and/or the

HR professional. By applying for and winning these awards, HR leaders can gain

invaluable exposure for their organizations and use the award as a key feature in

recruiting campaigns. Thus, a strong argument for CSR is talent management in

both the short and the long term.

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Challenges to the Business Case for CSR

The business case for CSR is not necessarily a simple one. Among the

challenges is that social and/or environmental impact differs across industries,

complicated by the fact that the term CSR has different meanings to different

industry sectors in different parts of the globe. Also, some may question if the

message CEOs communicate about CSR is an add-on or part of company core

business activities—or is it merely an insincere effort to boost public relations? In

some organizations, CSR is still considered to mean compliance and

philanthropy, although some large companies are now placing CSR in a more

strategic framework.

Further, there is the question of how to measure CSR. For example, a

survey of 539 CEOs in 40 countries examined the strategic importance of

communication regarding corporate citizenship to investors. One of the largest

obstacles noted was the lack of a rigorous, credible business case backed up by

performance indicators and metrics that can be quantified and benchmarked.

Further, investment in CSR is not yet being taken seriously by some

organizations. Only 30% of executives said their company increased overall

business investments in corporate citizenship in the last year. The same report

indicates resources and resistance as barriers to practicing corporate citizenship

and CSR.

Not all organizations may have the resources (e.g., funds, time, staff) to

funnel into CSR initiatives. However, CSR programs may not be expensive or

require a significant time commitment. Organizations that are interested in CSR

may choose to start with small projects that showcase their commitment to their

workforce and the community. HR leaders can help address this challenge by

considering different options and developing creative approaches to CSR to

present to their company. Below are recommendations to consider:

Network with other HR professionals to learn about their organizations’

CSR initiatives (ideas and information about programs; what worked and

lessons learned).

34

Explore partnering with other organizations (e.g., co-sponsor a community

event).

Contact local business organizations, such as the Chamber of Commerce,

to learn what events they sponsor and how the company may contribute.

Solicit employee suggestions regarding CSR initiatives.

Thus, it is at this point that HR leadership, as the eyes and ears of the

organization, is the key to the CSR equation. As discussed in the next section,

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.

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.14 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® 2004-2005 Workplace Forecast, 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.

35

36% are changing company policy as a response to grassroots pressure

to change specific business practices.

32% are increasing involvement in social programs.

The Status of CSR in the OrganizationHR leaders can influence three primary standards of CSR—ethics,

employment practices and community involvement—that relate either directly or

indirectly to employees, customers and the local community, as outlined below.

By considering these three CSR standards, HR leaders can then identify the

CSR stage of their organization before making decisions to develop and

implement CSR initiatives (see Figure 3).

Ethics —Ethical standards and practices are developed and implemented

in dealings with all company stakeholders. Commitment to ethical

behavior is widely communicated in an explicit statement and is rigorously

upheld.

Employment Practices —Human resource management practices

promote personal and professional employee development, diversity at all

levels and empowerment. Employees are valued partners, with the right to

fair labor practices, competitive wages and benefits and a safe,

harassment-free, family-friendly work environment.

Community Involvement —The company fosters an open relationship

that is sensitive to community culture and needs and plays a proactive,

cooperative and collaborative role to make the community a better place

to live and conduct business.

Figure 3 Stages of CSR in the Organization*Stage 1 Introduction Introducing and understanding CSR concepts and how

they may interact with company values and business

objectives/ goals.

Stage 2 Exploration Understanding CSR’s implication in the business.

Stage 3 Development Planning and creating a CSR strategy.

Stage 4 Implementation Putting CSR into practice.

36

Stage 5 Evaluation Measuring and monitoring performance, looking for

continues improvement.

*Source: Adapted from Corporate Social Responsibility; Making Good Business Concern for

Sustainable Development, January 2000, www.wbcsd.org

Next, prior to launching and/or evaluating CSR initiatives in the

organization, consideration of principles, implementation and employer brand will

assist HR leaders in determining how and/or why to include CSR initiatives in

their company (see Figure 4). First, questions of principle provide the broad view

of CSR—moving from philanthropy and donations to contributing solutions to

help solve the large issues such as poverty. Second, questions of

implementation address practical issues such as incorporating CSR into the

performance appraisal process and the softer issues of creating an

organizational culture that supports CSR initiatives. And third, questions

regarding employer brand provide an opportunity for HR leaders to look closely

at how their current policies and programs can more positively affect recruitment,

retention and talent management.

Figure 4 Evaluating CSR Initiatives*

Principle Implementation Employer Brand

How is CSR

distinguished from

corporate philanthropy

and donations?

How can CSR best be

embedded in corporate

management objectives

and incentives?

Why are talented people

attracted to work for this

company?

How far down the supply

chain does responsibility

extend?

How can HR get all

employees involved in

and committed to CSR?

How can HR create a

culture and work

environment for superior

performance?

What is the distinctive

corporate contribution to

How can HR measure

and report on softer, less

How can HR ensure

managers nurture this

37

the poverty/ sustainable

livelihood question?

defined areas? culture?

*Source: Adapted from Corporate Social Responsibility; Making Good Business Concern for

Sustainable Development, January 2000, www.wbcsd.org

HR’s CSR Checklist

Taking the long-range view, HR leaders can use a checklist to track the

HR scorecard on CSR as initiatives are developed and implemented over time

(see below). As appropriate, changes in direction can be made to correspond

with the organization’s overall strategy.

Create a strong organizational culture around core company values.

Scan the environment to identify potential threats (e.g., competition for

talent within the organization’s industry sector).

Build personal and professional capability of the workforce (e.g., expand

intellectual capital within the organization and in collaboration with other

organizations).

Include ethical concerns in staff performance measures.

Support participative decision-making.

Ensure highest standards in workplace health and safety.

Encourage active engagement in community activities.

Moving Forward with CSR—HR as a Change Agent

Focusing on company values, HR leaders set the tone for an

organizational culture that is open to and understands CSR. HR’s role as a

change agent—grounded in mutual respect and open and honest communication

—is essential to educate management and employees about including CSR

when setting business goals and objectives. Three practical steps to promote

change regarding CSR are to 1) establish a workable stakeholder consultation

process; 2) use the process to understand the local culture (e.g., internal—the

38

workforce—or external—the community) at all stages of implementing CSR; and

3) create a sense of ownership between staff who set up a project and those who

implement it.

Beyond including CSR in the HR management system, HR’s role as a

change agent continues through keeping the CEO and other members of the

senior management team informed of human capital initiatives, the status of

community relations, measurements of employment activities and development

of partnerships for CSR programs, both inside and outside the organization.

HR and Community Relations

One of the most visible CSR initiatives is community relations. Strong

community relations can have a positive impact on company reputation and

brand. Through community programs that highlight the company doing good

work, HR can link critical issues—decreasing turnover, savings on cost per hire

and attracting talented individuals—to CSR and the bottom line. There are many

other possibilities that HR leaders could explore to match both company and

community needs (e.g., cultural facilities for the community, recreational facilities

for employees and their families, an educational project to help prepare

tomorrow’s workforce). For example, employees from high-tech companies could

work with students on science projects that require technical skills. Further,

programs that affect both short- and long-term goals are also strategically

advantageous as CSR initiatives. An illustration of such a program is the literacy

initiative developed by Time Warner when the company saw that the reading

public could have an impact on their short- and long-term goals of product sales.

CSR in the Global Arena

Internationally, CSR has a strong human rights dimension. This is

evidenced, for example, by the United Nations’ Global Compact that addresses

10 principles in the areas of human rights, labor and the environment with the

goal to have the private sector help realize United Nations’ vision of a more

39

sustainable and inclusive global economy. Global companies are increasingly

placing a stronger emphasis on corporate citizenship activities. The top four

citizenship priorities are 1) employee health and safety; 2) sustainability; 3) equal

opportunities/global diversity; and 4) globalization of contributions. Further,

companies worldwide are beginning to emphasize the importance of citizenship

activities beyond philanthropy. For example, a recent study documents that about

60% of global managers polled indicated these activities result in an enhanced

reputation with customers and goodwill that opens doors in local communities.

The global CSR agenda is associated with multilateral processes and

guidelines. In recent years, there has been a significant growth of “codes of

conduct” worldwide, sometimes referred to as a global regime of “soft law” (see

Figure 5). These voluntary business conduct principles cover a wide range of

corporate citizenship topics, from corporate social and environmental

responsibility to transparency and fair business practices. Following these

international codes of conduct has been shown to yield similar outcomes as

domestic CSR initiatives, such as enhancement of company reputation,

increased stakeholder confidence and higher standards of business

accountability. For example, companies are increasingly publicly strengthening

their global partnerships by joining organizations such as Social Accountability

International’s Corporate Involvement Program

(www.cepaa.org/SA8000/CIP.htm), the Ethical Trading Initiative

(www.ethicaltrade.org) and the United Nations’ Global Compact

(www.unglobalcompact.org). Therefore, as organizations continue to expand

globally, HR leaders must be cognizant of, promote and demonstrate public

support of these codes.

Globally, CSR has a significant impact on HR management. For example,

HR must be aware that effective CSR means respect for cultural and

developmental differences and sensitivity to imposing values, ideas and beliefs

when establishing global HR policies and programs. Externally, global

organizations are publishing mission statements, such as the one below by Shell,

40

to publicly announce their intentions of corporate citizenship, using terms such as

“respect” and “cultural differences,” and focusing on CSR priorities of diversity,

health, safety and equal opportunity.

“We aim to treat everyone with respect. We strive to protect people from

harm from our products and operations. We aim to respect and value personal

and cultural differences and try to help people realize their potential.”

Figure 5 Code of Conduct

Asian pacific economic Cooperation Forum Business Code of Conduct

( www.cauxroundtable.org )

Caux Round Table Principe for Business ( www.cauxroundtable.org )

European Corporate Code of Conduct ( European Union Parliament,

www.europa.ed.int )

United Nations Universal Declaration of Human Rights ( www.un.org )

*Source: Adapted from Corporate Social Responsibility; Making Good Business Concern for

Sustainable Development, January 2000, www.wbcsd.org

Internally, HR leaders are beginning to take steps regarding CSR by

developing and implementing incentives and appraisal systems that reflect

citizenship vision and purpose as well as hiring personnel that reflect these traits.

For example, research by The Conference Board reveals that 50% of global

managers report their companies do, or plan to, include citizenship as a

performance evaluation category. Additionally, 68% of respondents cite the link

between citizenship and performance appraisal as “increasingly important.”

What Does the Future Hold?

41

The impact of CSR is under close scrutiny. There are four primary areas

of concern: 1) product responsibility; 2) strategies for sustainability; 3) the quality

of CSR management; and 4) the future of CSR overall. Importantly, indications

are that organizations will increasingly be held accountable for their actions.

According to PricewaterhouseCoopers, within the next 10 years evaluation

methods used by Wall Street analysts will include new metrics—social

performance and intellectual capital—to more accurately assess the net worth of

a company, and within the next five years, 70% of North American and European

companies will assign board responsibility for reputation and social responsibility.

Over the next five to 10 years, one of the primary tests of how society will

judge companies will be based on where corporations place their facilities, how

they source goods and services and what economic impact they have on poor

and disadvantaged communities. Companies will increasingly adopt a

comprehensive view of corporate citizenship that includes the environment and

community engagement. A proactive and perhaps controversial recommendation

regarding human capital and emerging markets is that global corporations

consider putting the world’s five billion or so poorest people at the heart of their

profit-making strategies.

Not surprisingly, evidence suggests that companies have a long way to go

to clearly demonstrate substantive CSR performance. For example, a global

ranking report notes that the world’s 100 largest companies have a poor record

of accounting for their impact on society and the environment. A range of

measures that include strategy, governance and stakeholder involvement show

these companies scoring an average of 24 out of 100 points with only five

companies scoring more than 50% and only one U.S. Company, Hewlett-

Packard, placing among the 10 highest scorers. Further, the level of effort that

the worldwide community is putting into the achievement of the United Nations

Millennium Declaration goals is less than half the effort necessary to meet any of

the goals. Consequently, since the CSR initiatives of most organizations tend to

be peripheral and isolated from their core businesses and the initial momentum

42

gained in the past few years appears too disjointed to make a significant impact

in the world, the CSR movement must significantly shift gears in order to reach

its full potential.

In conclusion, with the growing importance of human capital as a success

factor for today’s organizations, the role of HR leadership will become evermore

critical in leading and educating organizations on the value of CSR and how best

to strategically implement CSR policies and programs domestically and abroad.

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Review of Literature

Corporate Social Responsibility (CSR) has its feet grounded finally after

years of debate and confusion. The corporate fraternity has moved on from

paying mere lip service to CSR to real-time implementation programmes aimed

at enhancing overall operational efficiency.

44

CSR today is a critical strategic adventure. Organizations endeavor to

project themselves as socially responsive in a bid to improve investor relations

and build corporate responsibility. An effective strategy aligns responsibility,

shareholder concerns and overall corporate strategy on one axis. A misalignment

of even one of these components can lead to make the entire exercise futile.

Hence, corporates have to be extremely cautious while framing their CSR

policies and reporting systems.

To better understand the corporate stance and ensure effective CSR

implementation, let us delve into the corporate strategies of a few big wings. A

sneak preview

Bristol-Myers Squibb (Arthur Andersen Report 1999)

Bristol Myers began its CSR drive almost half a decade ago with its

“Secure the future” campaign for AIDS awareness in the African countries. It was

a tough drive for the global pharmaceutical giant since the incidence of AIDS was

highest in the continent. The financially intensive programme came with a

committed investment of USD 120 million. The pharma giant stumbled initially

since it really didn’t feel in control. It saw success only after Bristol Myers decided

to involve the community in its crusade.

Community mobilization was the key to its AIDS awareness programme.

According to John McGoldRick, the general counsel of the pharma giant, it’s

important to translate a corporate concern into a community cause to get full

community support. This is specifically true in the case of largely backward

communities. The company partnered with the village medical “healers” who

strongly believed in their treatment. Therefore, associating with the local quacks

gave Bristol Myers an opportunity to show their commitment towards the cause.

In the past six years, Bristol Myers’ effort to secure the future has been hugely

successful. In a recent development, Bristol Myers started construction of the first

pediatric HIV/AIDS clinic in the African village of Swaziland. This apart, John

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McGoldRick states that another challenge in the path to effective CSR

implementation is to develop standardized, inexpensive models that can be used

in different settings. Standardize technical processes like auditing, preparing a

grant application and setting up financial measures could prove beneficial to the

organization as a whole.

Fortune Magazine: The 100 Worst Corporate Citizens, May-2006

For the past 52 years, Fortune magazine has been publishing a list of the

largest U.S. corporations, an annual chance for chief executives to brag that "my

revenue is bigger than yours." For the past seven years, Business Ethics

magazine has issued another kind of ranking -- a list of what it calls the "100 Best

Corporate Citizens"

That promotes virtue over size in the perennial game of corporate

comparisons. THE DEBATE over the role of business dates back at least a

century, to the time when President Theodore Roosevelt broke the power of

those "malefactors of great wealth." But today's debate is more heated than

usual. Even though there is always a good argument for the notion that the

business of business is business, corporations are under mounting pressure to

define their goals more broadly. The crucial role of business in saving the planet

for decades, the science of sustainability has been obvious to anyone that cared

to take an interest. The bit that requires courage and leadership - the politics and

the economics of sustainability – has been a lot further behind. We know what

we have to do, the question is how and what role business has to play. That

science is pretty simple on one level. We should not use renewable resources

faster than they can be renewed. We should not deplete non-renewable

resources faster than alternatives can be found. We should not create wastes

faster than they can be properly absorbed into the environment. None of these

elements are fixed. We can boost the output of renewable resources and we can

reduce consumption. We can extend the lifetime on nonrenewable resources

through more efficient technologies, and we can innovate with alternatives. We

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can reduce the creation of waste, and we can do things that may make them

more easily absorbed and assimilated into the environment. At the moment, we

remain severely out of balance. A recent statement by the US Government said

that it expected worldwide greenhouse gas emissions to increase by 75 percent

by 2040. Even if that is wildly pessimistic, there is no light at the end of the tunnel

on this one. The question is how do we get there? Environmentalists have been

saying for decades that we need to change our lifestyles to consume less. This

has not proven to be a saleable message, and it's time we came to terms with

why, and what we can do about it. Let's be clear about this. No government of

any democracy in any country of the world, nor international institution of

authority, has gone to its constituency to argue for reduced consumption and

reduced choice. Not once. We never even point to one brave government that

took the stand and got voted out for its troubles. To reflect upon this fact decade

after the Brundtland Commission first coined the phrase 'sustainable

development' and to draw no call to action from it would be complacency in the

extreme. The most active proponents of sustainability tend to disdain business.

Businesses are 'psychopaths' that are the cause of the problem and the problem

will be solved by regulating them out of existence. Ironically, businesses are

probably the best solution that we have to the challenges that face us as a

society, because they are the ones that can innovate, can produce solutions, can

be a part of the engine of development that will eventually bring developing

countries out of poverty that may, just may, have a whisker of a chance of

achieving sustainability. Let's put it this way:

1. Government's taking courage and selling the message of less

consumption to its citizens = no sign

2. The forces of benevolent dictatorship lining up to take power = never

heard of them.

3. Businesses innovating to produce more socially beneficial goods.

And services, made in more environmentally efficient ways = some first

signs. But in order for that hope to be realized, more businesses need to follow

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the leadership currently being shown by the few. More leadership needs to be

shown by governments as the price for getting to avoid going to the electorate on

a platform of 'making do with less'. It remains our choice - for now.

Global 100: Most Sustainable Corporations in the World, January 27, 2007

On January 24, 2007, this year's Global 100 Most Sustainable Corporations in the World (Global 100) was released at the World Economic Forum in Davos, Switzerland. Launched in 2005, the Global 100 is a project

initiated by Corporate Knights Inc., a Canadian magazine that covers

responsible business, with Innovest Strategic Value Advisors Inc. A research

firm which specializing in analyzing “non traditional” risk and value drivers.

According to the Global 100’s website, “The concept of sustainability is a

contentious one, to say the least. Debates have been raging in various circles

(e.g. academia, business, government, the UN, etc.) for a number of years over

exactly how to define sustainability, and more importantly over what it should

look like in practice. We do not have the pretence to know how to resolve this

dispute, let alone be able to produce an authoritative blue-print for ‘sustainable

behavior’. What we do know is that social, environmental and governance factors

are increasingly relevant to financial performance, and that companies which

show superior management of these issues are fast gaining an edge over their

competitors – an edge which we believe will translate into out performance in the

long haul. The Global 100 companies are therefore sustainable in the sense that

they have displayed a better ability than most of their industry peers to identify

and effectively manage material environmental, social and governance factors

impacting the opportunity and risk sides of their business.”

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Edelman Trust Barometer, 2007

Business More Trusted Than Media and Government across the Globe.

Edelman, a leading global public relations firm headquartered in New

York, released its new   Edelman Trust Barometer on January 22, 2007. This

involved a survey of 3,100 opinion leaders in 18 countries.  Edelman concluded

that business is more credible than government or media in 13 of the 18

countries surveyed; more respondents in 16 of 18 countries felt that companies

have more of a positive impact on society than a negative impact. In the U.S.,

53% of respondents report trusting business, which marks an all-time high for the

survey (from a low of 44% in 2002).

In the three largest economies of Western Europe, France, Germany, and

the United Kingdom, trusts in business stands at 34%, which is higher than trust

in media and government at 25% and 22% respectively. In Latin America,

represented in the survey by Brazil and Mexico, trust in business is at 68% while

trust in media stands at 62% and government at 37%. Asian trust in business is

60%, while government and media are both at 55%. China, Japan, India, and

South Korea represent the Asian nations in this year’s survey.

The 2007 Edelman Trust Barometer’s other key findings include:

Five years after Wall Street’s stock research scandals, trust in “stock or

industry analyst reports” in the United States is 47%, up from 26% in

2003. In 12 countries, stock or industry research is either the most

credible or second most credible source of information about a company.

In 11 of 18 countries, business magazines are the most or second most

trusted source of information about a company.

In many countries, “conversations with friends and peers” is as trusted a

source of information about a company as “articles in newspapers” or

“television news coverage.” For example, within the nine European Union

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countries surveyed, 44% trust conversations with friends and peers while

33% trust articles in newspapers.

In every region (EU, Asia, North America, Latin America), respondents

most often named “shares a common interest with you” as one of the top

three characteristics that would increase their trust in a person sharing

information about a company. In no region did religion, race, or nationality

list among the top three attributes of a peer.

Non-governmental organizations (NGOs) have grown in stature

dramatically in Asia. Trust in NGOs in China has increased from 31% in

2004 to 56% today; from 42% in 2005 to 55% in Japan; and from 39% to

46% in South Korea in the last 12 months.

At least 70% of respondents in North America (71%) and Asia (72%) state

that global business plays a role that no other institution can in addressing

major social and environmental challenges. Fifty-seven percent in the

European Union and 63% in Latin America also believe this to be true.

Trailing only “providing quality products or services,” undertaking “socially

responsible activities” is universally seen as the most important action an

organization can to do to build trust. “Socially responsible activities”

surpassed providing “a fair price for products or services,” “attentiveness

to customers” and “good labor relations” in most markets.

For the third straight year, American brands operating in Europe continue

to receive a trust discount. For example, McDonald’s is trusted by 60% of

respondents in the United States and by only 26% across the United

Kingdom, France, and Germany. However, American brands are trusted in

the developing world, with McDonald’s trusted by 75% of Chinese

respondents and 66% of Brazilian respondents.

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The survey found that multinational brands receive significantly more trust

in their home country. The United States gives top scores to UPS (83%).

In France, the second-highest trust score is Danone (69%). In Japan, the

highest score goes to Nissan (79%), and in India it is Tata (89%).

Technology is the most trusted sector in each region. The industry is

trusted by 79% of Asians, 80% of Latin Americans, 72% of Europeans,

and 75% of North Americans. The biotechnology and healthcare sectors

also receive high trust marks globally.

Companies headquartered in Sweden and Canada is the most trusted

globally; Brazilian, Mexican and Russian companies are the least trusted.

Traditional media sources such as newspapers, TV, and radio remain

more credible than new media sources such as a company’s own Web

site and blogs.

In all four regions surveyed (the European Union, North America, Asia,

and Latin America), respondents reported higher trust in their own CEO

than in CEOs generally. For example, within North America, 31% of

respondents said they trusted their own CEO, compared to 22% who

report trusting CEOs generally.

The Trust Barometer Survey : Edelman Trust Barometer, November 2006

About the Trust Barometer Survey: The 2007 is the firm’s eighth trust and

credibility survey. The survey was produced by research firm Strategy One. The

survey was conducted by a 30-minute telephone survey conducted in October -

November 2006. The survey population included respondents who are between

the ages of 35 and 64; college educated; in the top 25% of household income

nationally; report a significant interest and engagement in the media, economic,

and policy affairs. The nations represented include United States (400

respondents), China (300), United Kingdom (150), Germany (150), France (150),

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Italy (150), Spain (150), the Netherlands (150), Sweden (150), Poland (150),

Russia (150), Ireland (150), Mexico (150), Brazil (150), Canada (150), Japan

(150), South Korea (150), and India (150). (About Edelman: Edelman is the

world’s largest independent public relations firm, with 2,500 employees in 46

offices worldwide.)

Business and Society Highlights, 2006

As the field of Corporate Social Responsibility continues to grow and

evolve in both theory and practice, keeping up with its development is a daunting

task. Every year, Michael Kane, a senior advisor in the U.S. Environmental

Protection Agency’s Office of Policy, Economics and Innovation and founder and

managing editor of Resources for Promoting Global Business Principles and

Best Practices, published by CSRwire, does just that. His Business and Society

Highlights 2006 outlines some of the most important developments in the field of

CSR over the past year, many of which Ethics World has reported on – from new

organizations and initiatives to the latest research and publications.

The Highlights, which can be accessed below, are presented in list format

and divided into the following sections:

New National and Regional Business Policy Organizations

International Business Policy Organizations

National Business Organizations

Human Rights and Labor Organizations

Environmental Organizations

National Government Programs and Initiatives

International & Investment Organizations

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New Partnerships

Accountability and Monitoring

Public Policy Organizations

Academia Trends and Surveys

New Publications, Broadcast Media and Film

Books, Leaders’ Remarks

Recruiting Leaders

Innovative Policy Reports and Research

Tax policy

Special CSR-Related Publications

Books-in-Progress

From 1973 to 1981 Michael Kane served in various staff capacities at the

White House Council on Environmental Quality. Since 1982 he has served as a

senior advisor in the U.S. Environmental Protection Agency’s Office of Policy,

Economics and Innovation. In 1992 Mr. Kane served as the Department of

State’s senior advisor for the United Nations Conference on Environment and

Development, and also served as senior advisor for the U.S. Delegation to the

Rio Summit in June 1992.          

Mr. Kane is the author of Promoting Political Rights to Protect the

Environment; Yale Journal of International Law; 1993.  He is the founder and

managing editor of Resources for Promoting Global Business Principles and

Best Practices, published online since 2003 by CSRwire at csrwire.com/directory.

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South Africa: Women, Access to Finance & Role of the Private Sector, 2006

Women entrepreneurs face diverse forms of discrimination in South Africa

when seeking finance for their ventures, according to a new report by the

International Finance Corporation (IFC). The report highlights the forms of

discrimination and provides a set of key policy recommendations.

The issues discussed in this report raise questions that reach beyond the

specifics of the South African situation. Governments elected in many post-

conflict societies pledge to create laws to fairly and peacefully re-distribute wealth

and opportunity to previously oppressed segments of the population. In the case

of South Africa, some of this legislation came in the form of the “Black Economic

Empowerment Program,” (BEE), which included measures such as employment

equity, skills development, and access to finance. But, the BEE on its own is

insufficient in its present form to secure the results that it promotes – its own

code needs some review; and most significantly, there has to be the active

commitment of the private sector to address economic injustices. In this report,

the IFC, the private sector affiliate of the World Bank, primarily addresses what

the private sector in South Africa needs to do.

The IFC study, “Access to Finance for Women Entrepreneurs in South

Africa: Challenges and Opportunities,” (excerpts from which are reproduced

below) was commissioned by the South Africa Department of Trade and Industry

and undertaken by IFC’s Gender Entrepreneurship Market program.

Access to Finance for Women Entrepreneurs in South Africa: Challenges and Opportunities

Access to finance in South Africa is not equal across all groups. Race and

gender remain important variables in the lack of access, and black African

women are at the bottom of the pile. This fact sheet evaluates the challenges and

opportunities to government and financial institutions in addressing this key

issue.

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South Africa’s constitutional and legislative framework is progressive and

highlights the importance of gender equality. The Broad-Based Black Economic

Empowerment Act promotes “increasing the extent to which black women own

and manage existing and new enterprises, and increasing their access to

economic activities, infrastructure and skills training”. The Act further notes that

“to comply with the equality provision of the constitution, a code of good practice

and targets therein specified may distinguish between black men and black

women”.

Despite this, the Financial Sector Charter only specifies gender targets for

staffing – and these are controversially low – and is silent on gender equality in

terms of financial services outreach, enterprise development and in procurement

finance. Most financial institutions work on an assumption that BEE strategy will

automatically benefit women. This isn’t happening and black women in particular

could remain marginalized if adequate measures are not taken to redress this.

An abundance of resources in both the private and public sectors is not

matched by an understanding of women's enterprises, and attempts to

accommodate this growing and potentially rewarding market are insufficient.

Women in business face a number of barriers and prejudice remains an issue, as

illustrated by the fact that women have better credit repayment records than

men, yet still find it harder to raise finance than their male counterparts.

Obstacles to access

Financial literacy: Poor understanding of financial terminology and lack

of awareness of bank and microfinance services is an obstacle. A lack of

understanding of credit processes and the role of credit bureaus also

places women at a disadvantage.

Attitudes of banks: Only one out of South Africa’s four major banks is

contemplating a specific programme to increase its share of women-

owned enterprises.

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BEE code targets: codes and industry charters do not have sufficient

targets for women’s financial services outreach or business activity.

Lack of awareness of development finance: despite the resources

available from private and public development finance institutions, few

women in business know about the different institutions, their products or

how to access them.

Lack of financial confidence: overall women have less financial

confidence than men.

Lack of appropriate products: bank services and products, including

savings products are often unaffordable, and the emphasis on

collateralized and asset based lending disqualifies most women from

accessing business loans. Financial landscape – black women remain on

the edge Black women are a huge potential market for financial

institutions. Only 38% of black women are formally banked against 44% of

black men and 94% and 91% respectively of white men and women.

While 88% of banked white women are able to reach their bank within 10

minutes, the corresponding percentage for banked black women is only

22%. 42% of black women are financially excluded – they have no

financial products at all (see graphs 5 & graph 6 overleaf). This compares

to only 5% of white women who have no financial products at all. The

remaining 20% of black women use informal products such as stokvels,

savings clubs, burial societies and informal sources of credit or have

other formal products such as insurance and retail credit.

Financial institutions – are they reaching women?Out of 170 women surveyed in four provinces, only 7 were familiar with

the offerings for SME finance from development finance institutions in their

provinces. This reflects inadequate marketing to this target market, and limited

use of networks such as business women’s organizations and trade

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organizations for outreach. Some of the development finance institutions report

reaching their targets on financing women’s business. Their strategies are,

however, mainly based on an assumption of gender neutrality, and even more

could be achieved by a concerted effort to analyze and exploit the strengths of

this particular market.

Microfinance is often cited as a resource for women’s economic

empowerment. However, despite the growing number of self-employed women in

South Africa, only two sustainable micro enterprise lenders exist, Marang

Financial Services and the Small Enterprise Foundation, which together serve

about 56,000 micro entrepreneurs. Rural areas remain under serviced, further

disadvantaging those already neglected by the first-tier banks. Urgent investment

and expansion in this sector is required, and financing should be accompanied

by impact assessments, particularly about the type of skills development that

could encourage sustainable growth beyond micro-enterprise.

RECOMMENDATIONSPOLICY FRAMEWORKS

The Financial Sector Charter, other industry charters and BEE codes

should be reviewed to include gender-specific financing outreach and

procurement targets as well as definitions of women-owned business. This will

help to ensure and monitor equal access for women to business opportunities.

FINANCIAL INSTITUTIONS

A national directory of business financiers should be regularly updated,

published and widely disseminated in order to better inform entrepreneurs

of services available in the market.

Financing institutions should disaggregate their portfolios and targets and

put in place strategies that help them to better understand and serve the

women’s market.

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Financial institutions need to pay more attention to understanding the

opportunities in the emerging markets and to having loan staff who

understand the challenges of women in business.

A comprehensive capacity-building strategy and service for the

microfinance sector is needed to meets the needs of the many self-

employed women in South Africa, and to enable them to grow their skills

and businesses beyond micro enterprise.

BUSINESS DEVELOPMENT SERVICES

The 70/30 male/female ratio of BDS providers interviewed indicates that

women need more access to business development services; such

services should include more women mentors and advisors.

Non-financial support should be structured so that it facilitates access to

finance for entrepreneurs and enables business growth at the same time.

BDS should be designed to meet the different requirements of micro and

SME businesses at various levels of growth.

CREDIT REFERENCING

Women’s better repayment records should translate into improved access

to credit.

Co-ordinated credit vetting should be promoted between different levels of

financial institutions, including microfinance institutions. Alternate

mechanisms of determining creditworthiness should also be explored to

reduce dependence on traditional forums of assessment.

The impact of Community of Property marriage on women’s own credit

records should be studied. Credit bureaus should begin to better

disaggregate credit information in order to differentiate between personal,

business and contractual causes.

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Credit referencing should be demystified to make the public more aware of

how to positively manage their records.

BEE FINANCINGWomen need to recognize as an asset in themselves and not as a token

or afterthought in BEE deals. The benefits of women BEE companies as

shareholders and managers of companies should be better documented and

highlighted.

Industry and financial institutions should put in place gender-specific

procurement and enterprise development targets, with aligned and realistic

financing mechanisms. Implementation of these should be properly monitored.

Tomorrow’s Value: Sustainability’s Survey of Corporate Sustainability Reporting 2006

On November 9, 2006, Sustainability, an international CSR and

sustainable development consultancy and think tank, released “Tomorrow’s Value,” its fourth international benchmark of corporate sustainability reporting,

developed in partnership with the United Nations Environment Programme

(UNEP) and Standard & Poor's. The 50 leaders and executive summary of the

survey are reproduced below.

THE 50 LEADERSThe 2006 results show BT head-and shoulders in front of the main pack of

leading reporters. They come in seven percentage points ahead of the second

group — Co-operative Financial Services, BP, Rabobank and Anglo Platinum —

all of which achieve impressive scores of over 70%. A small but growing group of

non-OECD companies make an excellent showing, with two companies ranking

in the top 10, compared with zero in 2004.

EXECUTIVE SUMMARY

Tomorrow’s Value, SustainAbility’s fourth international benchmark of

corporate sustainability reporting, has once again been developed in partnership

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with the United Nations Environment Programme (UNEP) and Standard & Poor's.

This year we introduce a revised methodology, developed in close consultation

with experts and leading corporate reporters, and — in line with our sense that

the focus also needs to shift beyond disclosure and reporting to communication

— we have adopted a portfolio approach. Tomorrow’s Value is the flagship

document in a suite of publications exploring wider aspects of reporting, including

communication with financial analysts and the wider innovation agenda. The field

is currently extremely dynamic, with new entrants making up half of the 50

Leaders (Figure 1). Strikingly, half of the Leading 50 companies are complete

newcomers, including four entrants from non-OECD countries. The pressures

driving improved sustainability reporting continue to grow, with the Global

Reporting Initiative’s recently launched G3 guidelines providing renewed impetus

in terms of international standardization. In parallel, the slow, grudging

awakening of financial markets is being accelerated by growing concerns around

climate change.

The field is currently extremely dynamic, with new entrants making up half

of the 50 Leaders (Figure 1). Strikingly, half of the Leading 50 companies are

complete newcomers, including four entrants from non-OECD countries. The

pressures driving improved sustainability reporting continue to grow, with the

Global Reporting Initiative’s recently launched G3 guidelines providing renewed

impetus in terms of international standardization. In parallel, the slow, grudging

awakening of financial markets is being accelerated by growing concerns around

climate change.

Tomorrow’s Value asks the question: How far has the value light bulb

switched on in corporate brains and boardrooms? On current evidence, the

answer is that the links between the evolving sustainability agenda and wider

market opportunities are now better understood — with a small number of

companies reporting the relationship with value in increasingly interesting ways.

Partly as a result, some parts of the financial community are gearing up their use

of non-financial, extra-financial and/or sustainability disclosures to better

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understand emerging environmental, social and governance risks. Nonetheless,

our expert panel (page 9) concluded that most companies are still missing an

important opportunity to communicate with financial analysts and institutions.

ConclusionsKey findings of the 2006 benchmark survey include:

Yesterday’s risks are mutating into tomorrow’s opportunities for value

creation. Leadership companies — including BP, BT, GE and Philips — are

shifting the focus of their sustainability strategy towards a more progressive and

entrepreneurial approach that seeks to identify opportunities for strategic

innovation and market building. The pioneers are still a minority, representing a

quarter (28%) of our Leading 50, compared to 60% who demonstrate a more

conservative, risk focused approach, but their numbers will likely grow.

Financial markets welcome — and challenge — sustainability disclosures.

Cutting-edge sustainability reports are framed as a key component of — and

platform for — a portfolio of information available to both socially responsible

investment (SRI) funds and, increasingly, to mainstream investors. Our panel of

financial experts agreed that their sector’s appraisal of stock volatility and long-

term value is now benefiting significantly from heightened corporate

transparency. Although around two-thirds (70%) of companies report some

interaction with investors on sustainability matters, many reports still lack the

hard targets and forward-looking information that makes required reading for

analysts.

Sustainability drills into core business processes. Most so-called

sustainability reports only constitute steps in that direction, but there has been a

leap in the proportion of companies reporting the integration of sustainability-

related factors into core decision-making. A central concept has been

‘materiality’, helping companies sort the critical risks and opportunities from the

background noise. This year at least 80% of companies were rated as integrated

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on at least one aspect of their reporting, though this result leaves many gaps to

be bridged.

Disclosures on public policy initiatives remain precariously weak. Despite

growing pressures, under half of corporate reporters fail to sufficiently discuss

and link their sustainability initiatives and commitments to the lobbying activities

they undertake — and to the wider influence they exercise, either directly or

through lobbying and trade organizations. Only around a quarter (28%) of the

Leading 50 reporters covered this area meaningfully. That said this result is a

major advance on previous years.

International frameworks provide context and synchromesh. True

sustainability reporting will require company-level reporting to be linked with

value chain, sector and economy-level targets and reporting. Tomorrow’s Value

spotlights — and encourages — an emerging effort by some leading businesses

to link their individual targets and activities with broader macro-frameworks, to

provide a sense of scale and to help measure the relative impact of individual

contributions. The Millennium Development Goals (MDGs) are used in this way

by over 20% of the Leading 50 reporters, a trend we see as likely to grow as we

move towards the MDGs’ 2015 deadline.

The Future of Sustainability Reporting while the GRI’s G3 guidelines

indicate a growing degree of standardization, there are also signs of a degree of

splintering in the sustainability reporting field. Some companies are looking to

broader frameworks, like the Millennium Development   Goals, to frame their

reporting, while others are already straining at the leash and pondering what a

G4 set of guidelines might look like — hoping for a further upgrading of the

materiality components.

As for the future of reporting we sketch a number of trajectories. These

include: a progressive hardening of sustainability information requirements; a

greater emphasis on value chain performance; a steady but irresistible shift in the

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centre of gravity of the field towards non-OECD country issues and perspectives;

and a growing focus on value creation, business models and scalable,

entrepreneurial solutions to sustainability challenges.

Key Recommendations

Tomorrow’s Value concludes with recommendations for practitioners,

CEOs and boards, and investors. Key recommendations include:

Corporate Responsibility Practitioners: Simplify

Develop and apply robust materiality processes to produce tighter, more focused

disclosures on responsibility, accountability and sustainability targets and

performance.

CEOs and boards: Rethink

Review the ways in which the sustainability agenda is likely to change the

competitive landscape, as through the growing involvement of companies like

Wal-Mart. As the spotlight shifts to scalable solutions, how is the company’s

strategy and portfolio of initiatives aligned?

Investors: Recalculate.

Scrape aside the language issues and identify the key value drivers. Challenge

companies to articulate the long and short term value creation potential of their

sustainability activities. Watch out for our first briefing for analysts, due out early

in 2007.

The Human Rights Policies of the Fortune 500 Results of a survey conducted by John G. Ruggie Harvard University and UN Secretary- General’s Special Representative for Business & Human Rights

Published: September 1, 2006, Posted: 9/29/06

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On July 28, 2005, UN Secretary General, Kofi Annan commissioned

Professor John Ruggie of Harvard University to research the current human

rights practices, policies, and regulations of transnational corporations and other

business enterprises, as well as to compile a compendium of best corporate

practices in this area. As a part of his research, Professor Ruggie conducted a

survey of the Fortune 500 in order to: a) gauge how companies currently define

and implement their human rights responsibilities and b) determine any

weaknesses or industry/regional differences. The report was prepared with the

help of Business for Social Responsibility (BSR), a non-profit business

association that works with corporations to create a more just and sustainable

global economy; the International Organization of Employers (IOE), which

represents the interests of business in the labor and social policy fields; the

International Chamber of Commerce (ICC), a global business advocacy and

education organization; and the International Business Leaders Forum, a non-

profit advocacy organization (IBLF).

102 companies responded to the survey. While a higher percentage of

North American and European Fortune 500 firms responded than did their

counterparts in Latin America and Asia, Prof. Ruggie’s results nonetheless

suggest several trends in how large, transnational companies approach human

rights. 

Reproduced with permission is part I of Professor Ruggie’s report, which

includes the survey’s overall results (part II, III, and IV of the report display

results by region, sector, and the response rate by country, respectively)

preceded by his analysis of its key findings:

Summary of Responses

This section summarizes the survey’s overall results, and indicates where

and how these patterns varied depending on companies’ home regions or

industry sectors.

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Policy Uptake: Almost all respondents – nine out of ten – report having an

explicit set of human rights principles or management practices in place

(Question 2). At the same time, fewer than half overall say they have

experienced “a significant human rights issue” themselves (Question 1). This

substantial differential suggests that the majority of companies adopted their

human rights policy or practices for reasons other than immediate necessity – in

response to some embarrassing revelation, say – and that policy innovation and

diffusion clearly also drive their uptake of human rights concerns.

There are some regional and sectoral differences. North-American firms

are slightly less likely than Europeans to have adopted human rights policies or

practices, even though proportionately they were somewhat more likely to have

experienced a significant human rights issue. And firms in the extractive

industries report having experienced a human rights incident at a higher rate than

the others – while every respondent in this sector also says it has human rights

policies and practices in place, perhaps reflecting recent efforts by the

International Council on Metals and Mining to promote these steps among their

member companies in the mining industry.

Almost all companies that report having human rights policies include

them in their overall corporate code of conduct; only four out of ten respondents

indicate having a freestanding human rights protocol (Question 3). There is no

significant regional or sectoral variation on this dimension.

Roughly two-thirds of the respondents in the retail and consumer products

sectors as well as in the extractive industries report that they also take human

rights factors into account in project risk assessments – the former presumably

concerning sourcing issues, and the latter in relation to the communities affected

by their proposed operations.

Which Rights: What areas of human rights do firms recognize in their policies

and/or management practices (Question 6)? All respondents, irrespective of

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region or sector, include non-discrimination, by which at minimum they mean

recruitment and promotion based on merit, not on race, gender, religion or other

such factors. Workplace health and safety standards are cited almost as

frequently and widely.

Freedom of association and collective bargaining is included by 87

percent of respondents overall. They are cited by every respondent in the

extractive industries and by U.S. firms more frequently than European.

Forced, bonded or compulsory labor together with child labor is the next

most-frequently referenced area – by eight out of ten overall, somewhat more

often by European than American firms. But European firms are more than twice

as likely as their American counterparts to recognize the right to life, liberty and

security of the person – despite the growing number of Alien Torts Statute cases

that have been brought against U.S. firms for alleged violations of these rights.

Three out of four respondents indicate that they recognize a right to

privacy; there is little regional variation but some differences across sectors

(highest in financial services, lowest among retailers and manufacturers of

consumer products).

European companies are more likely to recognize a right to health than

their U.S. counterparts, and the same is true for rights to an adequate standard

of living. In neither case, however, is the overall ranking as high as for the other

rights already mentioned.

Rights for Whom: We also asked companies which stakeholders their human

rights policies and practices encompass (Question 7). Respondents could

choose as many of the options as they thought relevant, and to add others not

mentioned in the questionnaire. This made it possible to establish a relative

ranking of whose rights companies believe they should be concerned with in

formulating their policies and practices.

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The overall responses are clear and robust. In descending order,

company policies and practices encompass employees (referenced by 99

percent); suppliers and others in their value chain (92.5 percent); the

communities in which they operate (71 percent); the countries in which they

operate (63 percent); and others (23.7 percent), a category that includes

customers, shareholders, and investors.

There are slight regional differences in this rank ordering. U.S. companies

rank employees and value chains equally high, but place human rights issues of

communities and countries of operation far lower than European firms do. They

also rank communities lower than Japanese firms. Of the three regional clusters,

Japanese companies are least likely to include the countries of operation within

the spectrum of their perceived human rights concerns.

The same overall pattern also holds up across sectors – except that

companies in the extractive industries rank their obligations to surrounding

communities higher than to their value chains, which is not altogether surprising

given that community-related issues have been their major source of liability.

International Instruments: Companies were asked what if any international

human right instruments their policies and practices draw upon (Question 5).

Again they were given the opportunity to cite more than one and to add any not

mentioned in the questionnaire.

Approximately one-fourth of the respondents skipped this question,

presumably indicating that they reference no international instrument. Among the

other 75 percent, ILO declarations and conventions top the list, referenced by

seven out of ten. The Universal Declaration on Human Rights (UDHR) is the next

highest. The only variations on this theme are in the extractive sector, where

every single respondent cites the UDHR, and the fact that half of the Japanese

respondents skipped this question compared to 25 percent of all respondents.

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The Global Compact is referenced by just over half of the companies that

reference any international instrument, the OECD Guidelines by fewer than half.

As a source, they matter more to European than North American respondents.

In their optional responses, individual companies added a number of other

instruments, such as the Voluntary Principles on Security and Human Rights and

Social Accountability 8000, but none was widely referenced.

It should be noted that companies generally do not “adopt” any of these

instruments verbatim. Several indicated in their optional responses that while

they were “influenced by” or “support” these instruments, their policies do “not

explicitly adhere” to or “explicitly reference” them. The follow-up study mentioned

earlier examines actual company policies and management practices, and

therefore should provide more detailed information about how close they get to

the original sources that inspired them.

Stakeholder Engagement: Most respondents – more than eighty percent –

indicate that they work with external stakeholders in developing and

implementing their human rights policies and practices (Question 11). U.S. firms

are somewhat less likely to do so than European or Australian firms, and

Japanese companies significantly less likely than any of the others. No

pronounced sectoral differences exist.

NGOs are the most frequently mentioned external partner except by

Japanese companies (Question 12). Industry associations also feature

prominently. International organizations are ranked a distant third except by U.S.

firms, which place them fifth, behind labor unions and governments.

Only a few variations are found across sectors and they appear to be

largely situational – for example, the pharmaceutical and financial services

industries, typically more heavily regulated than the others, indicate working

more closely with governments in developing their policies, and the

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pharmaceuticals also with international organizations – presumably the World

Health Organization, UNAIDS, and the like.

Accountability: A final set of questions asked the companies if their human

rights policies are subject to internal reporting and compliance systems; if they

engage in external reporting; and if they conduct human rights impact

assessments – corresponding to three features of voluntary accountability

mechanisms in other areas of corporate activity.

Nearly nine out of ten respondents say that they have internal reporting

and compliance systems in place (Question 8). Nearly three-fourths indicate that

they also engage in some form of external reporting (Question 9). These

responses hold across regions and sectors, although the financial services firms

and companies in the infrastructure and utilities sectors fall below the others on

both dimensions.

Most companies that do external reporting use a periodic publication or

the company’s website as their preferred vehicle (Question 10). Fewer than half

utilize a third party medium such as the Global Reporting Initiative or the Global

Compact’s Communication on Progress. European companies are more likely to

engage in external reporting than U.S. firms; Japanese companies are a distant

last. Company-based platforms for reporting are preferred irrespective of industry

sector, but three out of four extractives companies state that they also use a third

party instruments.

Social impact assessments of planned or existing corporate activities are

becoming a more common practice, and they are beginning to incorporate a

human rights dimension into them. The International Finance Corporations new

performance standards and the Equator Principles governing commercial banks’

project financing exemplify these developments. But strictly speaking, very few

dedicated human rights impact assessments have ever been conducted by any

company, and standard tools for them are only gradually being developed.

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One-third of all respondents say they do conduct human rights impact

assessments as a routine matter, and just under half that they do occasionally –

for the reasons mentioned, presumably as part of broader social and

environmental impact assessments. A combined total of one-fourth of the

respondents either never conduct such assessments or they skipped the

question. U.S. firms are more likely to conduct human rights impact assessments

routinely than European companies, but only one of the Japanese respondents

does so.

According to the survey, assessing the human rights impact of business operations is most widespread in the extractives sector, which can have a

dramatic impact on host communities; in financial services, where due diligence

is a standard business practice; and in retail and consumer products firms,

which often have significant labor issues in their supply chains.

Concluding Observations

Some clear patterns emerge from this survey. Virtually all companies

responding say they have human rights principles or management practices in

place. The majority adopted them for reasons unrelated to any specific human

rights incident. Work-place rights constitute their primary area of concern.

Companies recognize significant obligations toward other stakeholders, but they

decrease as they move outward from employees into value chains, communities,

countries of operation, and beyond. The companies’ human rights policies draw

on international instruments, and they are developed in cooperation with external

stakeholders. An overwhelming number of respondents indicate that they have

internal reporting and compliance system in place, and most that they also

engage in some form of external reporting. Finally, including human rights issues

in impact assessments is becoming a more common practice.

For obvious reasons, a survey of this kind cannot assess the effectiveness

of companies’ policies and management practices. But it is safe to conclude that

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no survey conducted a mere five years ago would have yielded comparable

results, indicating that policy innovation and diffusion has occurred in this

domain. How far these patterns reach beyond the leading firms in the GF500 will

become clearer with the completion of a follow-up study that examines the

human rights policies of nearly 300 companies, including a larger number

headquartered in emerging market countries.

We also found evidence of sectoral and regional variations around the

overall patterns. Some sectoral differences are to be expected, reflecting the

unique attributes of industries and their operating contexts. But significant

variations based on the political culture of companies’ home countries are

inherently more problematic. Human rights are considered to be universal,

interdependent and indivisible. Yet in several instances we saw that European-

based companies are more likely to embrace that conception of rights than the

others, with U.S.-based firms tending to recognize a narrower spectrum of rights

and rights holders. Differences of this kind are bound to be even more

pronounced for companies domiciled in emerging market countries, underscoring

the need for clearer and commonly accepted human rights standards for firms.

Another issue of concern involves the elasticity of human rights standards

in corporate policies. We saw that most of the companies with such policies

include human rights in an overall corporate code or set of business principles;

only a minority has a separate human rights instrument; and few of those adopt

what the human rights community considers a “rights-based approach.” Within

such a “rights-based” approach companies would be expected to take the

universe of human rights (as contained in the UDHR and related covenants and

conventions) and work back from them to define corresponding policies and

practices.

In contrast, beyond the realm of legal requirements, companies that

currently have human rights policies typically approach the recognition of rights

as they would other social expectations, risks and opportunities, determining

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which are most relevant to their business operations and devising their policies

accordingly. The latter model comes more naturally to business, but it also leads

to variability in how rights are defined. Some of this variation may matter little.

But ultimately there must be generally recognized boundaries around “what

counts” as recognition of any particular right, again reinforcing the desirability of

clear and commonly accepted standards.

A final issue involves accountability mechanisms. We saw that companies

report on their human rights policies using their own websites or periodic reports

far more frequently than third-party mechanisms. This may reflect limited third-

party options available at this time, although the latest generation of the Global

Reporting Initiative includes more detailed criteria for human rights performance

and management systems. But it may also reflect reluctance by companies to

move toward fuller transparency. For reporting to satisfy external stakeholders

and maximize its utility to a company’s own strategic and management

objectives, two core conditions must be met: the information must be broadly

comparable across companies, and there needs to be some external assurance

as to its trustworthiness and materiality. The survey did not probe this issue

directly, but the overall findings and optional responses provide no reason to

dispute assessments in professional circles that while comparability is slowly

increasing, external assurance remains more limited.

The participants in this survey have made a significant contribution to

several core elements of the SRSG’s mandate, for which he extends them his

deepest gratitude. He hopes that they, too, will benefit from the publication of

these results and observations – and, indeed, that all stakeholders do.

The Dow Jones Sustainability Indexes: Assessment Results 2006

On September 6, 2006, SAM Group, a Zurich-based financial services

group that focuses on the integration of economic, environmental and social

criteria into investing, announced the release of its review of the 2006 Dow

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Jones Sustainability Indexes (DJSI), which were created with Dow Jones Indexes

in 1999 to track the economic, environmental and social performance of

sustainability leaders around the world.

The Indexes are reviewed annually in light of issues such as corporate

governance, risk management, branding, climate change, supply chain

standards, and labor practices. The DJSI are used by asset managers in 14

countries who have licensed the DJSI family as benchmarks and underlying for a

variety of sustainability-driven portfolios, including mutual funds, segregated

accounts, structured products, as well as two exchange traded funds. Currently,

these entities manage an estimated total of over 5 billion USD in assets, a 30%

increase since the 2005 review.

2006 Additions To and Deletions from the Regional Indexes significant

changes have been made to the Indexes resulting from the review:

Dow Jones Sustainability World Index: 46 new companies added as

sustainability leaders, 36 deleted.

Dow Jones STOXX Sustainability Index (pan-European sustainability

benchmark): 26 companies added, 16 deleted

Dow Jones Sustainability North America Index: 17 companies added, 13

deleted

What the 2006 Assessment Shows: According to press release, the

assessment results also provide detailed information about recent sustainability

developments in the corporate world such as:

The trend towards industry-specific sustainability management continues.

Companies are getting increasingly educated about the specific

sustainability risks and opportunities in their sector and continuously move

beyond general aspects. Examples for this include waste-to-energy

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production of utility companies, digital inclusion in the communication

technology industry, and closed-cycle bleaching in the paper industry.

Competition increases for sustainability leadership. As sustainability gains

recognition, an increasing number of companies are competing for sector

sustainability leadership and differences between leading companies in

most sectors are getting smaller.

Huge discrepancies exist between companies concerning their operational

risk management. Only few companies report that they have established

systems to quantify and visualize operational risks with tools such as risk

maps, stress testing, sensitivity analysis, etc.

Leaders quantify the value of their brands. Companies care about their

brands and invest heavily into brand management, but few report that they

are actually able to quantify the values of their brands and the returns on

their brand investments.

Climate change continues to attract increased attention. More companies

recognize that climate change will have a major impact on their future

operations and product offering. Leading energy firms include a climate

change impact assessment in their M&A due diligence. The top financial

institutions leverage their climate change know-how gained for internal

assessments to market new products and services that go beyond mere

carbon emission trading (e.g. risk management systems, environmental

impact assessments of potential investments, etc.)

More global firms Taylor their product offerings to the specific needs of

developing countries. Mobile communication technology providers offer

low budget mobile phones or install phone booths in under-developed

regions. Consumer goods manufacturers adjust their global offering in

terms of product packaging, product sizing, pricing and contents (e.g.

adding iodine to salt).

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Overall, sustainability performance continues to advance across all

sectors. At the same time, substantial room for progress in sustainability

remains on the corporate agenda.

The European Social Investment Forum's European SRI Study 2006

On September 12, 2006 the European Social Investment Forum, an

umbrella association that covers socially responsible investment issues at the

European level, published its, “European SRI Study 2006,” which analyses the

scale and progress of European socially responsible investment (SRI) across

nine countries (Austria, Belgium, France, Germany, Italy, the Netherlands, Spain,

Switzerland and the United Kingdom). The report provides an overview of the EU

SRI Market, key features of SRI in each European country, an analysis of the

SRI market’s evolution since 2003 (when the report was last published) and

market predictions for the future.

According to the study, which divides its findings by country, Europe’s SRI

market is now estimated at approximately 1 trillion Euros, representing as much

as 10-15% of the total European funds under management and a 36% growth

since December 31, 2002, with Spain and Austria have showing the greatest

increases.

The study also reports growing diversification in the types of SRI

institutional investors, which constitute the bulk of Europe’s SRI community, are

making, as well as trends towards innovation in SRI strategies. The study also

shows a growing demand by European pension funds that their assets are

managed with social, environmental, and governance considerations in mind.

According to the report, three key factors are driving the growth in SRI in Europe.

These are:

1. The increased credibility of the business case in the financial community;

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2. Business and financial services regulation that requires more

transparency and incorporation of social/environmental/ethical (SEE)

issues and;

3. A growing use by the fund management community of strategies such as

Engagement (which relies on the influence of investors and the rights of

ownership, mainly taking the form of dialogue between investors and

companies on issues of concern, sometimes extend to voting practices)

and Integration (the explicit inclusion by asset managers of Corporate

Governance/SEE-risk into traditional financial analysis) which may be

used across all assets, regardless of whether they are specifically

subjected to SRI mandates.

CSR Reporting: Study Shows Increase in Large U.S. Companies

For the full analysis, including results from individual companies, visit SIRAN’s website http://www.siran.org/csr.php .

An analysis by the Social Investment Research Analyst Network (SIRAN), an analyst network that supports more than 150 North American social

investment research analysts from 30 investment firms, research providers, and

affiliated investor groups, shows that more large U.S. Companies are reporting

on social and environmental (S&E) issues with over 40 percent of S&P 100 index

companies issuing annual reports on corporate social responsibility and growing

numbers using “Global Reporting Initiative” standard.

Methodology

SIRAN first issued its analysis environmental and social reporting

practices of companies in the S&P 100 Index in June 2005 and updated its

analysis a year later in June 2006.  For the 2006 analysis, independent

investment research firm KLD Research & Analytics, Inc. utilized SOCRATES,

its proprietary research database, and conducted an independent review of the

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public websites of all S&P 100 companies to assess their disclosure of

environmental, social and governance policies and performance to answer the

following seven questions:

1. Company has separate CSR/Sustainability section of web-site?

2. Company has annual CSR/Sustainability Report?

3. Company references GRI in report?

4. Company has GRI content index?

5. Company report has goals and benchmarks?

6. Company is GRI Organizational Stakeholder?

7. Company report is GRI "In Accordance"?

Key Findings from the 2006 Analysis: Website Coverage of S&E Issues

More than three-quarters of the S&P 100 Index (79 companies) now have special

sections of their websites dedicated to sharing information about their social and

environmental policies and performance. This represents a 34% increase from

last year, when 59 companies in the S&P 100 included this information on their

websites.

CSR Reports: Overall, in the last year a dozen new companies issued corporate

social responsibility reports for the first time, including Cisco Systems, General

Electric, Time Warner, and Wells Fargo. Other members of the S&P 100, such as

American International Group and Black & Decker, have pledged to issue their

first reports later this year.

Forty-three companies in the S&P Index now issue annual corporate

social responsibility (CSR) reports (up from the 39 companies in the S&P 100

that issued such reports for the 2005 study). This net figure reflects both the

addition of 12 companies that joined the ranks of CSR reporters in 2005, and the

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deletion of eight companies that have moved to web-based CSR reporting rather

than issuing stand-along reports, issued CSR reports in 2004 but not in 2005, or

dropped out of the S&P 100.

GRI Reporting: Over a third of the S&P 100 Index (34 companies) say they base

their CSR reports on a widely recognized external standard for reporting called

the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines. This

was up sharply from 2005, when 25 companies in the S&P based their reports on

the GRI guidelines. The up tick reflects a concerted outreach effort by SIRAN

members to promote reporting based on the GRI to the S&P 100. In 2006, 27

S&P 100 companies included an index to GRI indicators in their reports, up from

23 in 2005. This year, six of the companies met the highest standard of reporting

fully “in accordance” with the GRI guidelines.

Shareholder Proposals: According to SIRAN’s press release, institutional

investors filed 19 shareholder proposals over the last year calling on companies

to issue sustainability reports that detail their social and environmental

performance, which received record levels of support, including 48% in favor for

a proposal filed at construction equipment manufacturer Terex.

According to Steve Lippman, Vice President of Social Research at

Boston-based Trillium Asset Management Corporation these proposal reflect that

“a growing number of investors recognize that how companies manage

environmental and social challenges can affect their business and their stock

price.”

BP and Infosys Co-Chair Tomorrow's Global Company Inquiry

BP and Infosys (for more on Infosys see Ethical Leadership) are co-

chairing a year long inquiry entitled, "Tomorrow's Global Company" launched

by the non-profit research and agenda-setting, Tomorrow's Company, whose

stated goal is to shape a business future that makes equal sense to staff,

shareholders and society. Founded in 1998, Tomorrow's Company releases key

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reports and organizes events aimed at fostering dialogue about the most

pressing issues facing the business world.

After consultation Tomorrow's Company has identified three issues that

will be fundamental to the future success of business. Its programme of

research, events and activities are designed to explore and build upon these

themes:

1. 21st Century Investment - Towards a Better Investment System. Does

our current system serve the needs of savers and wealth creators? What

changes are needed and how can we achieve a business-led rather than

a government imposed improvement to the system?

2. An Inclusive Company - Leadership and Governance. For solutions to

today's corporate problems Tomorrow's Company draws on the richness

of the inclusive approach. For example:

a. Making the board more effective by focusing their attention on the

real drivers of success.

b. Developing an effective and productive culture based upon shared

purpose and values

c. Helping companies improve measurement and reporting based on

a clear success model.

3. Business and Society - Closing the Gap. What is the role of business in

society at the local and global level? What obligations does it have to its

many stakeholders?

The "Tomorrow's Global Company" inquiry, which is open to public comment and

is geared toward theme 3, seeks to answer four questions:

1. What should be the role of a company in society, globally and locally, in

the context of the changing global environment?

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2. How should the future collaboration between the wealth-creating

enterprises, the financial institutions, government and civil society be

developed and managed? How can this be done in a way that does not

undermine the strengths and remits of each party, while strengthening

society and governance as a whole?

3. How can companies lead, manage and benefit from a diverse workforce

whilst maintaining a strong core purpose and set of values?

4. How can companies address their critics and form productive relationships

which yield positive outcomes?

Business Ethics Magazine Releases Its 2006 “100 Best Corporate Citizens” Survey

The U.S. based Business Ethics Magazine has released its annual

survey of the “100 Best Corporate Citizens” in its quarterly Spring 2006 Issue. Of

the top 10 firms on the list, 7 of these are technology firms, which Majorie Kelly,

Editor of Business Ethics attributes to the industry's proclivity towards sound

environmental policies, high community involvement, and good employee

relations. According to Kelly, these tendencies may be a function of their ability

and interest in attracting and retaining highly talented individuals.

The list puts a numerical rating on performance in eight stockholder’s

categories: shareholders, community, governance, diversity, employees,

environment, human rights, and product. According to Business Ethics

Magazines press release: “Environmental, social and governance ratings are

drawn from Socrates (TM), the online research database created by KLD

Research and Analytics, Inc. in Boston, an independent research firm serving

investment management professionals….

The universe of companies considered for the list encompasses U.S. firms

in the Russell 1000, the S&P 500 and KLD’s Domini Social Index. Social scores

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use KLD’s assessment of “strengths” and “concerns” demonstrated in each

category. The shareholder score is based on three-year average total return

(stock appreciation plus dividends) through year-end 2005.”

The Top 10 Corporate Citizens:

1. Green Mountain Coffee Roasters Inc.

2. Hewlett-Packard Company

3. Advanced Micro Devices, Inc.

4. Motorola, Inc.

5. Agilent Technologies, Inc.

6. Timberland Company (The)

7. Salesforce.com, Inc.

8. Cisco Systems, Inc.

9. Dell Inc.

10.Texas Instruments Incorporated

Corporate Governance and Climate Change: Making the Connection 2006

A new report from CERES

“leading companies in many key industries are now tackling the issue [of

climate change] at the highest level, with boards conducting strategic

assessments and management setting performance goals for reducing

greenhouse gas emissions and developing new climate-friendly products.”

However, many companies continue to ignore the issue as “low climate

governance scores also were prevalent among entire sectors, including: coal

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companies, which are especially vulnerable to greenhouse gas regulations; food

and forest product companies, which are vulnerable to natural resource impacts

from climate change; and airlines, one of the fastest growing sources of CO2

emissions.”

These are just some of the finding of a first-ever report by Ceres, a US-

based coalition of environmental groups and investment funds, entitled, “2006 Corporate Governance and Climate Change: Making the Connection.” The

study, which assessed how 100 leading companies (76 U.S. and 24 non-U.S. in

10 business sectors) are tackling the growing financial risks and opportunities

arising from climate change (which range from expanding greenhouse gas

regulations to direct physical impacts to surging demand for climate-friendly

technologies), shows significant improvements from a similar 2003 Ceres survey.

"More U.S. companies realize that climate change is an enormous

business issue that they need to manage immediately," said Mindy S. Lubber,

president of Ceres, “Investor pressure, expanding greenhouse gas limits and

surging global demand for clean-energy products are compelling U.S.

businesses to act, although many others still fail to recognize the enormity of

this issue. Ultimately, management and board members at all 100 of these

companies need to make climate a top governance priority."

The nine-month study drew from securities filings data, company reports,

company websites, third-party questionnaires and direct company

communications. It used a "Climate Governance Checklist," which covers five

broad areas of corporate action: board oversight, management performance,

public disclosure, greenhouse gas emissions, accounting and strategic planning,

to assess company performance.

Using a 100-point scoring system, the report ranked the largest

companies in the oil/gas, electric power, auto, chemical, industrial equipment,

mining/metals, coal, food products, forest products and air transportation sectors,

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with operations in the United States. Those companies with a sustained

commitment to controlling greenhouse gas emissions, disclosing data and

strategies, supporting regulatory actions, and taking practical, near-term steps to

find lasting solutions to climate change received the highest scores.

Foreign companies led in five of the nine sectors (which excluded electric

power) which included both U.S. and non-U.S. companies, while American

companies led in the other four.

Among the industry sector leaders and laggards:

Sector Leaders Laggards

Oil/Gas BP (90 points*) ExxonMobil (35)

Chemical DuPont (85**) PPG (21)

Metals/Mining Alcan (77) & Alcoa (74) Newmont (24)

Electric Power AEP & Cinergy (both 73) Sempra Energy (24)

Auto Toyota (65) Nissan (33)

* Top score among the 100 companies. **Top score among 76 U.S. companies

CSR’s Rising Importance

The McKinsey Global Survey of Business Executives : Business and Society, January 2006

“Executives Say They Face a Host of Worries about Society's Expectations of Their Companies, Which Can—and Must—Do Better”

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Executives around the world overwhelmingly embrace the idea that the

role of corporations in society goes far beyond simply meeting obligations to

shareholders, according to the latest McKinsey Quarterly global survey.

But executives also say that, for most companies, sociopolitical issues—

such as environmental concerns and the effects of off shoring—present real

risks. Indeed, finding ways to control them is so important, the executives say,

that the effective management of sociopolitical concerns must start with the

CEO.  Executives are far less certain, however, that corporations adequately

anticipate which sociopolitical concerns will affect them. These executives also

believe that the tactics—lobbying and public relations, for example—companies

now use to meet such concerns are not the most effective ones. In addition, they

think that the public will expect corporations to take on a significant role in

handling the new pressures.

Some Findings from This Report:

Business executives across the world overwhelmingly believe that

corporations should balance their obligation to shareholders with explicit

contributions "to the broader public good." Yet most executives view their

engagement with the corporate social contract as a risk, not an opportunity, and

frankly admit that they are ineffective at managing this wider social and political

issue. Our findings highlight some of the key issues that businesspeople expect

stakeholders, social and consumer activists, and the media to raise during the

next five years. The responses provide striking evidence of the way

environmental concerns, doubts about data privacy, the controversy around off

shoring, and other sociopolitical matters have firmly inserted themselves into the

day-to-day agenda of the executive suite.

More than four out of five respondents agree that generating high returns

for investors should be accompanied by broader contributions to the public good

—for example, providing good jobs, making philanthropic donations, and going

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beyond legal requirements to minimize pollution and other negative effects of

business. Only one in six agrees with the thesis, famously advanced by Nobel

laureate Milton Friedman, that high returns should be a corporation's sole focus.

Reputation Risks: Many respondents stress the risks to the reputation of

companies, as well as the potential for damaging their shareholder value, when

they are expected to address social and political concerns. Across most sectors

—notably consumer-facing ones—nearly three in ten respondents say that the

media or interest groups have criticized corporations in their industries for "failing

to meet social responsibilities generally expected of them but not required by

law."  Executives believe that the solution lies in their own hands. Asked how

adequately the respondents' companies anticipate social pressure—including

criticism of their activities—46 percent say that they have "substantial room for

improvement," and a further 24 percent admit to seeing "some room." Only 3

percent report that their companies are doing a "good job."

Is this just PR? The choice of tactics is also an issue in assigning

leadership. Asked who actually takes the lead in trying to manage the

sociopolitical agenda of their companies, more than half of our respondents point

to the chair or chief executive. A further 14 percent reported that the public- or

corporate-affairs department typically holds the reins. When asked who should

take the lead, however, almost three-quarters opt for the chair-CEO and a mere

4 percent for the public- or corporate-affairs department. Judging by our survey,

executives are hard-nosed about why companies are engaging in this new

agenda. Only 8 percent think that large corporations champion social or

environmental causes out of "genuine concern." Almost nine in ten agree that

they are motivated by public relations or profitability or by both concern and

business benefits in equal measure.

Upcoming Key Issues: Looking ahead, executives expect that a wide

range of concerns will dominate public and political debates. Asked which three

issues will have the most impact, for better or worse, on the shareholder value of

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companies in their industries during the next five years, 41 percent choose job

loss and off shoring. Also at the top of many minds are corporate political

influence and involvement; environmental issues, including climate change;

pension and retirement benefits; and privacy and data security. Surprisingly,

perhaps, human-rights standards—a cause long championed by

nongovernmental organizations—barely register as a concern. Among notable

regional and industry differences, 47 % of the respondents in North America

mention health care and other employee benefits, while 39 percent of banking

and finance executives point to privacy and data security.

Pharmaceuticals Looks Good: With executives generally positive about

the wider social role business plays, which specific industries make the greatest

overall contribution to the public good? Health care, mentioned by 49 percent of

the respondents, tops all other sectors by a notable margin.  Despite the high-

profile attacks of some interest groups, the pharmaceutical sector (buoyed

particularly by North American support) also does well. More than a quarter of

the respondents cite either agriculture, especially valued in China and India,

though less so in Europe, or telecommunications, notably popular in developing

countries, including China.

Such optimism is encouraging, since there is no sign that the new

pressures on business will go away. According to the survey, 20 percent of the

respondents believe that the public will expect companies to take on most of the

added responsibility for handling social and political issues, while an additional

59 percent think the burden will fall equally on governments and companies.

Corporate Responsibility & Emerging Economies

A new Report from AccountAbility (UK) , which includes a National Corporate Responsibility Index (Nordic countries outperform the rest of the world, Pakistan comes last in 80 countries ranked)

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“Responsible Competitiveness is the precondition for an acceptable,

viable globalization that aligns the extension of business opportunities and roles

in development with reductions in poverty and inequality, and environmental

security.”

Exploring Responsible Competitiveness: AccountAbility noted that it has

joined with the United Nations Global Compact and a network of research

institutes, business schools and civil society organizations to explore how

responsible business practices can most effectively become an embedded

feature of global market. It said its findings in the new report are grounded in

concepts, cases and statistics, including the latest Responsible Competitiveness

Index (RCI) covering over 80 countries. The Report concludes

with proposals for advancing the practice of Responsible Competitiveness.

Profiling Responsible Competitiveness: The Challenge

All nations, states the Report, regions and communities share the three-part

development goal of satisfying the needs of their citizens; playing their part in

securing broader global public goods including civil and environmental security

and basic human rights; and generating economic development. Realizing this

goal requires markets and regulation that create a ‘race to the top’ of escalating

productivity, human development and environmental responsibility. The potential

exists for such a positive relationship, but a competition-driven ‘race to the

bottom’ remains a very real possibility. The facts of pervasive poverty and

inequality suggest that the ‘trickle down’ of undirected economic growth will not

deliver sustainable development on its own. What is required is a more

responsible form of competitiveness.

Corporate Responsibility Constrained Business leaders increasingly

recognize the need to act responsibly says AccountAbility. This is exemplified by

the growth in adoption of the UN Global Compact’s 10 Principles, and the

business community’s engagement in addressing the UN Millennium

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Development Goals. But individual businesses cannot go against the grain of

the market. Being responsible sometimes does and sometimes does not pay. As

with anything in business, success depends on a combination of good ideas,

skills luck and circumstance. While the growing significance of intangible assets

has created opportunities for leveraging responsible business practices, the

intensification of competition and the short-termism of investors constrain such

practices.

Some Key Findings of the report include:

1. Access for developing nations to the markets of developed countries is

increasingly linked to compliance with labor and environmental standards.

Industries and nations around the world are improving their social and

environmental performance with the specific intention of competing in

developed markets and/or establishing a competitive edge.

2. Korea (28), Malaysia (30), Thailand (32), The Philippines (42) and India

(43) are among the most corporately responsible emerging economies,

according to the National Corporate Responsibility Index (NCRI).

3. Responsible business practices may well be a driver of national

competitiveness, according to the Responsible Competitiveness Index,

also included in this report. The index measures the impact of corporate

responsibility on national competitiveness by adding the results of the

National Corporate Responsibility Index as a new variable to the World

Economic Forum’s Growth Competitiveness Index. Again the Nordic

countries dominate the top of the list, suggesting that they are maintaining

sustainable economic growth based on responsible business practices.

More generally, Europe goes up the competitiveness ladder once

corporate responsibility is taken into account, whilst several countries,

including China and Japan see significant "falls" in their relative

competitiveness levels.

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The Fortune Global 100 Accountability List, September 22, 2005

The Fortune Global 100 Accountability List shows US companies lagging

behind their European and Asian competitors in managing and reporting their

environmental and social impact. Simon Zadek, chief executive of a UK-based

group called AccountAbility, commented that one reason US companies may lag

behind their European counterparts is that American companies tend to only

disclose and audit according to the law and do not report anything if it is not

required. Zadek sees companies like Ford and Chevron as leaders who are

"stepping up to the mark on some of these issues" but points out that more

progress in necessary considering that the overall average score for companies

was an abysmal 32 out of 100. One notable improvement was HSBC whose

commitment to using the World Bank's Equator Principles to guide lending to

dam and forestry projects as well as its use of AccountAbility's AA1000 standard

to asses its governance structure helped the company jump from 45th place to

4th place. See the Fortune Magazine for the full list and the Financial Times for

comments on the list. See also the AccountAbility website where more

information on its AA1000 standard can be found.

Ethical Investment research Services (EIRIS) in the U.K. warns of

bribery concerns in two key sectors: oil & gas, and aerospace & defense. In a

September 28, 2005 report. EIRIS stated in a new report that these two sectors

are judged to be most exposed to risk from bribery and corruption. According to a

survey of company practices at 2,400 companies, EIRIS found that just fewer

than 24% appear to have declared policies on whistle-blowing, bribery, political

donations and compliance monitoring.

The Top 5 Most Accountable Companies

2005 rank*

Company Global 100 rank

Accountabilityscore

Sector Region

1 BP 1 78 Oil, Chemicals Europe

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2 Royal Dutch Shell 4 72 Oil, Chemicals Europe

3 Vodafone 53 71 Utilities, telecoms, other

services

Europe

4 HSBC Holdings 36 63 Financial services Europe

5 Carrefour 22 60 Trading and merchandise Europe

*Global Corporate Survey Raises Key Ethics Issues

Of the 23 countries analyzed, Hong Kong and Singapore were found to

have the fewest companies with high standards of corporate codes of ethics.

Dutch companies scored highest on the quality of their over-all corporate codes

of ethics - over 86% of companies have meaningful ethical codes, and almost

73% of companies based in the Netherlands have polices judged by EIRIS as

‘advanced’.

Oil and Defense Companies Lack Systems to Counter Bribery and Corruption

“More and more companies are operating in environments where political

and economic systems are weak and the potential for corruption is great,” said

report author and EIRIS research analyst Danielle Mallen. “Investors are

increasingly interested in how companies respond to the challenges raised by

operating in such places. EIRIS is pleased to provide a further dimension to the

evaluation of corporate governance on behalf of investors.”

Other key findings in the paper include the following:

After Singapore and Hong Kong, companies in Spain are least likely to

have ethical codes, and Singapore, Hong Kong, Greece, Spain, Ireland

and Portugal lag behind when it comes to governance ethics management

systems.

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Over half (54%) of the companies assessed have a meaningful

governance ethics code or equivalent policy.

A higher percentage (67%) has a governance ethics management system,

but overall management systems appear to be less developed than the

policies.

Over 78% of UK larger cap companies have meaningful ethical codes,

although this figure drops to around 31% once the sample is expanded to

cover all medium and smaller cap companies (the FTSE All-Share index).

The Netherlands and the UK are also ahead of other major economies in

relation to the quality of their governance ethics management systems.

Others with relatively high percentages of their leading companies having

ethical codes include the USA, Australia, New Zealand and the Nordic

countries.

Business for Social Responsibility (BSR) Reports on Ethics and Canadian Mining Companies

BSR notes a report by Canadian socially responsible investment firm The

Ethical Funds Co. that finds that only four Canadian extractives firms ( Alcan Inc.,

Enbridge Inc., Nexen Inc. and Talisman Energy Inc.) are adequately addressing

legal, financial and reputation risks of operating in countries where human rights

abuses occur. According to Social Funds, Ethical Funds assessed 152 countries

on their level of human rights risk. Nine countries, including Burma and

Colombia, were deemed "extreme risk" and 25 countries, including China,

Indonesia and Nigeria, were deemed "high risk." Ethical Funds then surveyed

extractive firms on the S&P/TSX Composite Index and found that 24 Canadian

firms operate in six extreme risk countries and 11 operate in high risk countries.

The report recommends that firms doing so establish a human rights policy along

with management mechanisms to implement the policy. Other recommendations

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include adopting the Voluntary Principles on Security and Human Rights and the

Extractive Industry Transparency Initiative, which requires firms to disclose

royalty and tax payments to host governments. The full report -- entitled

"Canadian Energy and Mining Companies: Navigating International Humanitarian

Law in the 21st Century" -- is available at http://www.bsr.org /CSR Resources /

News/news. cfm? Document ID=51211

NGO Initiatives

“Turning Conflict Into Cooperation"

Peter Asmus, Hank Cauley & Katherine Maroney. Stanford Social Innovation Review , Fall 2006

Turning Conflict into Cooperation: A Case Study in Successful Corporate-NGO Engagement

Posted on: 10/18/06

Too often the interactions between social and environmental advocacy

NGOs and the corporations they are campaigning fall into predictable patterns of

hostility which often only solidify disagreements and accomplish few lasting

changes. Ten years ago, however, the Rainforest Action Network launched an

intensive consumer boycott of several Mitsubishi companies leading to significant

changes in the way the Japanese giant and many of its partners do business.

That engagement provides critical lessons for both activist NGOs and

corporations. In the following article, reproduced with permission from the Fall

2006 issue of the Stanford Social Innovation Review authors Peter Asmus,

Hank Cauley & Katherine Maroney describe these lessons:

Ten years ago, top executives at three Mitsubishi companies were

suddenly faced with a consumer boycott by Rainforest Action Network (RAN), an

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activist NGO that was willing to wage a protracted war against the corporation’s

brand in order to get it to change its business practices. Instead of fighting RAN,

the companies did exactly the opposite of what most of its lawyers, public

relations experts, and crisis professionals advised them at the time: They sat

down and engaged in a dialogue with the group’s leaders.

After many fits and starts, the dialogue between RAN and Mitsubishi

resulted in several significant achievements. It created a precedent-setting

agreement that helped drive sustainable forestry practices at some 400

companies, a new system for measuring corporate environmental and social

impacts, and some close personal friendships between former foes, which

continue to this day. No laws were enacted in the process, no regulations

promulgated, and no lawsuits filed. Yet the impacts of that early engagement

continue to multiply even today.

The tactics that RAN employed – dubbed “stakeholder engagement” and

“market campaigns” – have become standard operating practice at many NGOs.

Instead of trying to get governments to enact laws, these NGOs target

companies that they believe have negative social and environmental impacts

with public campaigns that place the company’s brand at risk.

Often, these tactics have made significant contributions to changing

company behavior. Home Depot’s commitment to avoid sourcing products from

endangered forests is one example. Other successes have occurred outside

forestry, like Nike’s creation of a code of business conduct for its suppliers, and

Citibank’s adoption of the Equator Principles to guide its lending practices.

The changes that individual companies have embarked on have, on

occasion, spread beyond the trendsetters to include large numbers of firms. The

forestry industry has undergone the most change of any sector, but even here

much remains to be done. Later in the article, we take a close look at how these

types of campaigns have impacted six different sectors – forestry, finance,

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mining, apparel, chemicals, and oil and natural gas (1) – as well as some of the

lessons that can be learned from these experiences. But first, we return to RAN’s

campaign against Mitsubishi.

RAN Targets Mitsubishi

January 1993

RAN’s global campaign against Japanese giant Mitsubishi started

innocuously enough. In January 1993, Tachi Kiuchi, then chairman and CEO of

Mitsubishi Electric America, began receiving a steady stream of letters from

elementary school students, asking him why his company was destroying the

world’s rain forests. The letters puzzled him. Mitsubishi Electric didn’t own any

forests, and it used very little paper. How could it be impacting the rain forest?

From his headquarters in Torrance, Calif., Kiuchi called Richard Recchia,

then COO of Mitsubishi Motors’ U.S. sales arm, whose headquarters was just

down the street. His company, it turned out, was also the target of a rain forest

campaign. Protesters were locking themselves inside Mitsubishi automobiles at

car shows around the country, drawing publicity for their cause.

The force behind the actions was the San Francisco group Rainforest

Action Network. According to RAN founder and current board president Randall

Hayes, RAN’s real target was a third company, Mitsubishi Corp., a Japanese

trading company responsible for perhaps 3 percent of the world’s trade in tropical

timber.

Moving to Direct Engagement

Implementing the first part of the plan – putting together an inventory of

Mitsubishi’s environmental assets – was relatively easy. Implementing the

second part of the plan – engaging directly with environmental stakeholders –

proved to be more difficult. The three companies still saw no point in direct

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engagements with RAN, whose founder had said that he wanted to “take down a

multinational.”

Instead, the companies started with indirect engagements. Kiuchi hit the

speaking circuit, giving a keynote address at Ecotech, a major environmental

conference with a positive, pro-technologym theme. Meanwhile, Shireman met

informally with Marx and others at RAN to find opportunities for productive

dialogue. These contacts eventually broke down perceptions that RAN was

incapable of reasoned dialogue, and later led to direct meetings between RAN

and Mitsubishi.

To implement the third part of the plan – being proactive on forest

protection – a third party was brought in who was respected by both Mitsubishi

and RAN: Amory Lovins, the energy efficiency guru who heads the Rocky

Mountain Institute. After lengthy planning sessions between Shireman, Lovins,

and the three Mitsubishi executives, two new organizations were formed: the

Systems Group on Forestry and Future 500.

The Systems Group on Forestry would develop potential solutions to

forest destruction, as well as systematic steps companies could take to leverage

their market positions to protect forests. Future 500 would convene corporate

and environmental stakeholders to consider other systemic and market-based

actions for sustainability, and to develop tools and processes for more effective

engagements between them. The three Mitsubishi companies were the first

members of both organizations.

The Systems Group held three meetings but never produced a promised

final report. It did, however, have several positive effects. The meetings educated

corporate leaders about forestry issues, and it developed relationships among

the many stakeholders. Hayes and Brumm became close friends, a relationship

that would later lead to other initiatives.

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Other relationships blossomed as well. Recchia and Marx discovered a

common passion for fly-fishing. Their most productive meeting occurred during a

one-on-one fly-fishing expedition. Global Futures facilitated direct discussions

between all three companies and RAN. The first meeting was exceedingly

positive, with all sides finding more areas of agreement than they expected. The

second meeting was mostly negative, as all sides retrenched. By the third

meeting, realism finally began to prevail, as the companies and activists realized

what might be achieved if they set their minds to it.

Striking an Accord

Freed from Mitsubishi Corp.’s more conservative approach, Kiuchi and

Recchia asked Shireman to work toward a formal agreement with RAN. The

agreement was based on the belief that even though Mitsubishi Electric and

Mitsubishi Motors did not buy large quantities of timber and paper products, their

sheer size and links into global supply chains might generate an impact far

beyond the companies themselves. Signed in February 1998, the agreement

stipulated that Mitsubishi Electric and Mitsubishi Motors would, among other

things:

Phase out purchase of paper or timber from old-growth sources by 1998.

Achieve a 75 percent reduction in paper use by 1999.

Phase out of all wood products by 2002.

Commit Mitsubishi Motors to offer “carbon offsets” tied to sales of its

Montero LS, proceeds from which would fund forest reserves.

Commit Mitsubishi Motors to lobby President Clinton’s administration to

reduce carbon emissions. Mitsubishi Motors would be the first major car

company to do so.

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Fund forest reserves to protect natural resources and indigenous

communities.

Establish a comprehensive system of eco-accounting to measure the net

value created by a company, after accounting for social and environmental

externalities.

The agreement was risky for all sides. The companies had to trust that

RAN would not besiege them with additional demands after they signed. RAN

had to demonstrate to its activist base that the agreement was worthwhile even

though it did not directly require the company to change its logging practices.

Both sides had to overcome internal factions determined never to strike an

agreement with the enemy.

What Was Accomplished

One of the most powerful portions of the agreement turned out to be the

phase-out of old-growth paper and timber purchases. Because neither company

purchased many old-growth products, this step was relatively easy and

inexpensive for the Mitsubishi companies to adhere to – though one timber

company reportedly cancelled a contract with Mitsubishi Electric over it.

But the ripple effect was tremendous. Once the two Mitsubishi companies

made their commitment, hundreds of other companies followed suit. The

combined buying power of all these companies created a healthy and growing

market for sustainable timber, and set the stage for several later agreements.

“It was really the first agreement between corporate entities and an NGO

that took a systems approach,” says Hayes. “This was one of the first times

issues of supply chain management were addressed.”

The other clause that spread beyond the two Mitsubishi companies was

the eco-accounting commitment. To implement it, Future 500 developed a tool

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for Mitsubishi Electric and Mitsubishi Motors that consolidated several existing

systems for measuring corporate social and environmental performance. The tool

evolved into a process now known as Global Citizenship 360, which has been

adopted by Coca-Cola, General Motors, and a dozen other large corporations.

The most controversial clause committed Mitsubishi Motors to be the first

auto company to buy carbon credits for a line of its automobiles and to fund

forest reserves operated by indigenous communities. The company has never

implemented the clause, nor has RAN ever pressed it to do so. Some RAN

leaders object to Mitsubishi funding the program because they feel it undermines

the credibility of the organization, even if the funds do not actually go to RAN.

Others hope the clause will eventually be followed, once the now-struggling auto

company regains its financial footing.

But what about Mitsubishi Corp., which was not party to any formal

agreements with RAN? “The truth is, we ended up getting what we wanted from

Mitsubishi Corp., even though we never engaged in a formal agreement with the

company,” says Hayes.

Under the leadership of Brumm, Mitsubishi Corp. ultimately went through

an internal process to change its approach to buying timber. And because of the

forestry issue, Brumm started investigating other environmental concerns. “It

opened my eyes and challenged my attitude. What exactly are we doing at

Mitsubishi Corp. about the environment? We really should accept some

responsibility – at least in principle – on how and where we cut trees,” Brumm

says.

Mitsubishi Corp. ended up committing to a certification program developed

by the Forest Stewardship Council (FSC), the gold standard of certification

programs for sustainable wood products. There is not yet an adequate supply of

FSC-certified timber and paper products for the firm to fill all of its orders, but that

is its first product choice for customers. Mitsubishi Corp. is certified to ISO 14000,

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the environmental management standard, and performed its first sustainability

report in 1999.

According to Hayes, one of the most enduring lessons from the

experience with working with each of the Mitsubishi companies is “seeing the

influence of individual people – leaders – in these sorts of circumstances.” The

commitment of the chief executive to the success of the process is vital. On the

other hand, support for sustainability can’t stop at the executive suite. One

weakness of the Mitsubishi- RAN agreements was that support for it waned after

the departure of Kiuchi and Recchia from their companies. “The older leaders

and managers who might have understood why the agreements were made in

the first place are now often gone,” laments Hayes. “These are the folks who

could explain to a new generation of employees why these agreements should

be implemented with integrity.”

Perhaps the biggest impact of the protracted engagement between RAN

and Mitsubishi was to advance two important trends in corporate-stakeholder

relations. The first is market campaigns – initiatives like RAN’s initial boycott of

Mitsubishi. The second is stakeholder engagements – the approach Mitsubishi

employed to resolve its conflict with RAN. Hayes believes these two trends have

helped revitalize the social change movement, even with the lack of leadership

from government. “We learned that you do not have to deal with corrupt

government agencies or Congress, who are bought off by the big corporate

money. We activists can go directly to the corporations to get the behavior

changes that we want.”

Types of NGOs

NGOs come in all shapes and sizes. One way to divide them is between

market campaigners and implementation groups. Market campaigners help get

issues on the corporate agenda and create urgency around an issue, often by

attacking the company’s brand. Implementation groups often work as

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intermediaries between market campaigners and companies, either by working

inside companies to help direct and coach change, or by helping define solutions

such as standards of performance. The two types of NGOs, although

occasionally in competition, quite often complement one another in driving

change.

Another way to segment NGOs is by organizations’ interpretations of the

concept of sustainability. This axis stretches from a strict protectionist

interpretation of sustainability (the wilderness standard) to a fully integrated

approach involving social, economic, and environmental considerations. Within

the realm of forestry, for example, many grassroots organizations advocate

strictly protecting a landscape from any type of use. Other organizations, such as

Ducks Unlimited, approach landscape use as part of a system of human and

environmental concerns.

A third way to segment the NGO community is by an organization’s

willingness to use public pressure to accomplish its goals. Along this axis, groups

either use public pressure routinely or avoid its use in the hopes of working out

solutions outside of the public’s eye. RAN is an example of an NGO that has

mused public pressure very effectively in campaigning for the protection of

forests around the world.

The best way to understand these differentiations is to map them on a

matrix. The chart above depicts where NGOs in the forestry sector fall on the

dimensions of public pressure use and notions of sustainability.

The interplay between different types of NGOs is an important driving

force in whether change took place. However, the position of an NGO within this

segmentation is not static. It can shift according to the specific issue being

addressed. The World Wildlife Fund (WWF, or the World Wide Fund for Nature

as it is called outside the U.S.), for example, is a member of the implementation

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group on many forestry issues, but takes a market campaigner stance on toxic

chemical issues in Europe.

Future Challenges

Both NGOs and companies have learned from targeting and being

targeted for questionable practices. For market campaigns to continue to be

effective, the following outstanding issues need to be addressed:

Change in industry takes a long time and therefore support for market

campaigns over the long term is essential. For example, approximately

$500,000 has been spent in the mining sector over the last 10 years

toward the development of operations principles. This is a relatively small

amount of funding over a long period of time, and progress is only slowly

becoming apparent.

There is presently little financial reward for companies that choose to do

the right thing. To continue the momentum that has been achieved, it is

important to demonstrate that companies that have adopted socially

responsible practices also win in the marketplace.

It is uncertain to what extent a market campaigner NGO can transition into

an implementation group NGO. Numerous companies have said that the

issue of trust makes it difficult for an NGO to play a dual role. If this is true,

it means that coordination between different types of NGOs and long-term

funding of both is critical.

People are translating market campaigns into widespread sector changes,

but a broader set of stakeholders will be necessary to take campaigns to

the mature stage, where changes are permanent and irreversible. A model

for this is the agreement around the Great Bear Rainforest involving all

types of NGOs, First Nations, and them provincial government of British

Columbia.

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Market campaigns have become more sophisticated and effective,

emerging as a critical method for driving companies to change their behavior. As

effective as these campaigns have become, they have not yet achieved their final

goal of changing entire industries. To achieve real and sustained progress,

strategies that incorporate a diverse group of sector stakeholders and that offer

both punishment and reward will prove to be the most successful.

Ten Lessons for NGOs Waging Corporate Pressure Campaigns

1. Focus the campaign on a company with a valuable brand. Find ways to

harness the influence the company has over its business partners to

create change throughout the company’s supply chain.

2. Expect both sides to express pent-up frustrations during the first meetings.

Listen and learn from the process, and don’t let it deter you from holding

future meetings.

3. Use a combination of carrots and sticks when pressuring a company. A

sticks-only approach may close the door to dialogue and block

opportunities for progress.

4. Partnerships between NGOs in the same niche frequently fail. The

chances of success increase when NGOs bring unique strengths and

have clearly defined roles.

5. Be prepared for the fact that engagements often veer between extremes

of optimism and pessimism in the early stages, before taking a realistic

course.

6. Consider targeting the largest buyers of the product you are protesting,

instead of just the largest sellers.

7. Find actions that a company can easily take, but which effect systemic

change throughout the marketplace.

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8. Look for, and be aware of, how sustainability initiatives can save company

money, drive needed change, and create a competitive advantage.

9. Once a company’s top executives and internal change agents commit to

sustainability, their commitment will continue to drive improvements, even

beyond the company.

10.Be wary of waging campaigns that demonize a company. These can leave

a long legacy of negative feelings, making it difficult to rally your

supporters around an agreement and to earn the trust of company.

PETER ASMUS is president of Pathfinder Communications. His articles

on corporate social responsibility have appeared in Business Ethics,

green@work, The Christian Science Monitor, and other publications. HANK

CAULEY is a senior officer in the environment program at the Pew Charitable

Trusts. Before joining Pew in July of this year, Cauley was a partner at the

sustainability management consulting firm Ecos Corp. KATHARINE MARONEY

is a partner at Ecos Corp. Before joining Ecos, Maroney was chief of staff to

Congressman John Edward Porter (R-IL).

Cauley, H. & Maroney, K. “The Growing Influence of Market Campaigns in

Driving Social and Environmental Change,” Ecos Corporation (April 20,

2006).

Each of the sectors identified has some regional differences in regard to

their state of evolution. Arguably, the mining sector is one where actions by

leading companies in Australia have put the evolution of that sector at the

top of the growth stage. We’ve chosen to concentrate on the North

American mining sector given the likely audience for this article and to

highlight the potential for moving a sector from one stage to the next.

Human Rights Watch Calls for Binding International Agreements and Actions on Corporate Social Responsibility

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Human Rights Watch World Report 2006

The Human Rights Watch World Report 2006 contains information on

human rights developments in more than 60 countries in 2005. The new report

includes an outstanding essay by Lisa Misol, researcher with the Business and

Human Rights Program at Human Rights Watch.

Private Companies and the Public Interest

Why Corporations should Welcome Human Rights Rules. By Lisa Misol

In this essay the author starts by stressing that, "For most corporations,

having clear, consistent rules would be preferable to being subjected to unfair

competition and a confusing mix of standards that provides little guidance to

companies and little comfort for victims of human rights abuse. This essay

argues that enforceable global standards are desirable, inevitable, and, contrary

to received wisdom, well for business."

The author provides an extensive and compelling analysis and, in so

doing, highlights the roles that rogue companies play and why it is especially

important that approaches be put in place that serve the overwhelming majority

of corporations that strive to take a constructive approach to human rights. The

following is the concluding key section of the essay:

The Way Forward

“Social responsibility is not the first issue for which corporations have begun to

recognize the advantage of enforceable standards with broad reach. A similar

dynamic emerged after the U.S. government’s adoption in 1977 of the Foreign

Corrupt Practices Act, which made it illegal for companies operating in the United

States to bribe foreign officials. The U.S. law was adopted in the wake of a

domestic corporate scandal but, once in place, put U.S. companies at a

competitive disadvantage because their foreign competitors remained free to

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continue securing business through bribery. In response, U.S. firms pressed for

—and got—a multilateral treaty to even out the competitive environment.

“After years of complaints, the Organization for Economic Cooperation

and Development (OECD) in 1997 adopted a treaty requiring all its member

states to criminalize such bribery. The OECD’s thirty members account for some

two-thirds of the world’s goods and services and 90 percent of global private

capital flows. China remains outside the treaty, but as its companies increasingly

operate overseas its exclusion will become legally less tenable.

“The OECD already has set out corporate social responsibility standards.

Its Guidelines for Multinational Enterprises have been endorsed by a total of

thirty-nine countries, including nine non-OECD members. The adhering countries

are home to ninety-seven of the world’s top one hundred multinational

companies. The OECD Guidelines are voluntary but do have an implementation

process run by governments, and are widely used to judge corporate conduct.

For example, a U.N. expert panel publicly chastised a number of Western

companies operating in Congo for failing to comply with the OECD Guidelines. In

addition, NGOs have lodged formal complaints against some of these companies

under OECD procedures.

"OECD member countries, following on the anti-bribery effort, should

move to make their CSR standards binding. They should adopt a treaty under

which they agree to enact laws similar to the OECD Guidelines that would be

enforceable under national criminal or civil codes, carrying penalties such as

fines or, in extreme cases, imprisonment. Like anti-bribery laws, this national

legislation would bind any company operating in that nation’s jurisdiction.

"In addition, the United Nations, which has already drafted non-binding

norms on corporate conduct, might provide a forum to negotiate a universally

applicable treaty. U.N. discussions on business and human rights have tended

to be highly polarized, but a new approach may emerge. In 2005 the United

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Nations’ human rights body launched a two-year process to examine these

issues. The Commission on Human Rights created a mandate for a high-level

expert, appointed in July 2005 by the U.N. Secretary-General; to raise

awareness of the human rights responsibilities of companies, look at the tough

issues that have blocked progress to date, and map a way forward. An

advantage of this U.N.-led process is that it is explicitly focused on human rights

and brings together governments, companies, and concerned civil society groups

from around the world.

"The U.N. mandate—if focused appropriately—has the potential to move

beyond a purely voluntary approach toward effective human rights protection that

combines elements of voluntarism with enforcement potential on core rights

issues. It carries risks as well. Unless human rights are taken as the point of

departure, the process could degenerate into a consensus around weak

“standards” that are lower than those derived from human rights law and

principles.

"Though any such agreements or treaties will take time, it is crucial to

begin to move down that road. The next few years offer a valuable opportunity to

break the current impasse on the corporate accountability debate. Already, many

corporations are engaged with other stakeholders in various processes to debate

and refine CSR standards. These companies are working on several fronts to

develop CSR standards and widen their application within and across different

industries.

"Given the momentum behind the CSR movement, the continuing

proliferation of different standards, and the problem of an unequal playing field, it

is clear that business has a vital interest in helping to define human rights

norms. By doing so, it can help for ensure that the resulting requirements are

clear, practicable, and fair. Industry also has a direct stake in seeing that these

requirements are applied to all companies, regardless of where they are based,

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and that they are effectively implemented and enforced. Ultimately, that means

making the rules universal and mandatory.

Sometimes it pays to take the initiative. For hard-headed businesspeople,

the smart move is to face up to global human rights standards early and make

them work by making them stick."

Links to Some of the Most Active NGOs Engaged in CSR

Business and Human Rights Resource Centre

Updated daily website highlighting news and developments of important

issues relating to business and human rights; Website includes reports of

corporate misconduct, as well as positive examples of "best practice" by

companies.

Business for Social Responsibility

BSR is a global organization that works with its member companies

on a broad array of key organizational ethics and governance issues.

The Caux Round Table CRT is an international network of business leaders working to

promote a "moral capitalism". The CRT advocates implementation of

the CRT Principles for Business.

The Corporate Library The Corporate Library is an independent investment research firm

providing corporate governance data, analysis & risk assessment

tools.

Corporate Responsibility Index The Corporate Responsibility Index is a strategic management tool

to enhance the capacity of businesses to develop measure and

communicate best practice in the field of corporate social

responsibility. It does this through benchmarking corporate social

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responsibility strategy and implementation process across the four

key impact areas of community, workplace, marketplace and

environment.

Corporate Social Responsibility Initiative The Corporate Social Responsibility Initiative at the Harvard

University Kennedy School of Government is a multi-disciplinary and

multi-stakeholder program that seeks to enhance the public role of

private enterprises.

EthicScan EthicScan Canada Ltd is a synthesis of three different services – an

ethics consultancy, Canada's first corporate social responsibility

research house, and a clearinghouse or resource centre for

consumer and corporate ethics.

European Business Ethics Network - UK EBEN-UK was established in 1994 as the UK association of the

European Business Ethics Network. Its purpose is to provide a forum

for academics and practitioners to discuss and debate issues to do

with business ethics / corporate social responsibility.

The Global Institute for Tomorrow (GIFT) GIFT is a Hong Kong-based policy think tank that works on CSR and

business ethics issues in Asia.

The Global Reporting Initiative A multi-stakeholder process and independent institution whose

mission it is to develop and disseminate globally applicable

Sustainability Reporting Guidelines.

International Business Leadership Forum is a is an international non-

profit organization set up in 1990 by HRH The Prince of Wales and a group

of chief executives of international companies, in respect growth and

change in the global economy.

Sustainable Business

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Website that focuses on environmental issues in business; Provides

information for the “Progressive Investor” (a socially responsible and

“green” investor).

Shell & Exxon Mobil: Who Tells The Best Social Responsibility Story?

Corporate social responsibility reporting is increasing, but can companies do this

in a credibly manner?  Ethics world compares the new “Shell Sustainability

Report 2005” and the ExxonMobil “2005 Corporate Citizenship Report.”

Oil companies are facing particularly difficult publicly credibility challenges

at this time of record high earnings and record high gas pump prices to

consumers. Both Shell and ExxonMobil are responding in part by seeking to

demonstrate that they are operating as excellent corporate citizens. While both

companies post a good deal of information on their websites, the leading edge of

their efforts are their annual CSR reports.

CEO Letters: Both reports are detailed. They cover a comprehensive range of

issues. In their cover letters ExxonMobil Chairman and CEO Rex Tillerson and

Shell Chief Executive Jeroen van der Veer highlight achievements, underscore

the seriousness with which they take key social responsibility issues and

conclude that their companies are performing well. They do not highlight external

criticisms in this section, but both imply that they recognize that still better

performance can be achieved and that this is an important challenge for the

period ahead.

External Review Committee of the CSR Reports: The credibility of these

reports, especially among non-governmental organizations and the media, may

well relate to the efforts that the companies make to demonstrate substantive

external verification of their claims.  The Exxon Mobil report does not contain

comment from NGOs, nor is it subject to review by them, although it contains an

"Assurance Statement" from Lloyd's Register Quality Assurance, Inc. that

explains how data in the report was externally reviewed, but does not make

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critical comments. ExxonMobil also points out that in its efforts to improve

reporting its 2005 report reflects comments that it received on its 2004 report

from Business for Social Responsibility.

By contrast, the Shell report highlights the role played by a special NGO

external review committee that analyzed the presentation and the material

provided by the company and engaged in discussions with the top management

of Shell. The review group publishes a letter in the new Shell report that generally

praises Shell’s efforts and notes a number of areas for improved future reporting.

The committee’s existence, especially given its participants, is clearly a serious

effort by Shell to secure external credibility and it is quite effective, although

greater detail on the verification methodologies used by the experts would have

been helpful. The committee consisted of Jermyn Brooks, as the chair. He is a

member of the board of directors of Transparency International and plays the

lead role for TI in promoting anti-bribery approaches to business. His colleagues

on the committee were Margaret Jungk of the Danish Institute for Human Rights,

Dr. Li Hailai of the Institute for Environment and Development, Roger Hammond

of Living Earth, and Jonathan Lash of the World Resources Institute.

Employee Safety: The 2005 reports of both companies note this critical area.

The Shell report does not devote as much space nor detail to this issue as the

Exxon Mobil report. However, it is significant that its Chief Executive felt bound in

his introductory letter to highlight a serious problem and note, “I deeply regret

that three employees and 33 contractors lost their lives at work in 2005. Ten of

these fatalities occurred in road accidents, despite our major programmes in this

area.”

A similar statement of regret is not to be found in the Exxon Mobil CEO’s

cover letter, but the reporting on this topic in the body of the company’s report is

impressive. ExxonMobil underscores its Nobody Gets Hurt policy and reports that

“Tragically, we had eight workforce fatalities in 2005 – three employees and five

contractors.” It then goes on to provide detailed information on occupational

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injuries and illnesses and resulting lost work time. Moreover, it provides several

country examples (France, Malaysia and Hong Kong) to highlight the pro-active

approaches that it is taking in this area.

Corruption: ExxonMobil provides clear statements in support of transparency

and against corruption. It notes its support for the Extractive Industries

Transparency Initiative and its agreements with a growing list of governments to

publicly provide greater disclosure on its royalty and other payments. In addition,

its highlights the approaches it has in place to detect bribery and counter it. The

Shell report, however, goes far further when it comes to detailed disclosure. It

notes that in 2005 there were 107 reported violations of the company’s anti-

bribery principles and as a result Shell ended relationships with 175 staff and

contractors. The report says that the company runs an extensive confidential

survey of its entire staff on the issue of corruption every two years and it has also

introduced a global whistle blowing helpline and supporting website to encourage

staff to report bribery when they see it.

Climate Change: Here again the companies take strikingly different approaches.

Shell devotes a larger number of pages to its climate change section than to any

other section in its report, it openly acknowledges the severity of the problem and

it provides a substantial amount of data within the text on its performance in

lowering GHG emissions. It clearly states and explains where it has failed to

meet targets and where challenges need to be overcome (for instance the high

frequency of flaring in its Nigerian operations). Shell reports that it is well on their

way to meeting its target in the European Union’s Emissions Trading Scheme,

which was launched after the Kyoto Protocol came into force.

The Exxon Mobil report, which is also substantive on this issue, involves a rather

polemical approach. It contains an essay that raises questions about direct links

between GHG emissions and climate change (indeed, in this essay it refrains

from using the term “climate change,” but instead opts for “climate science”). It

notes that it has supported substantial scientific research and it then argues that,

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“climate science is complex…As a result, the extent to which recent temperature

changes can be attributed to greenhouse gas increases remain uncertain.” In a

box in its report it then states its opposition to the Kyoto Protocol, which it

asserts, “is [not] the right approach to reducing greenhouse gases. We are

concerned it will impose significant economic costs in the developed world while

doing little to achieve its goal of climate change.”

Moreover, while Shell states that it follows the Global Reporting Initiative’s

(GRI) reporting guidelines, Exxon Mobil notes, “while we recognize the value of

the initiative we focused on an approach we believe is more relevant to the

issues and indicators particular to our industry.” To be sure, Exxon Mobil then

details its actual environmental approaches and, perhaps reluctantly, admits that,

“Recognizing the risk of climate change, we are taking actions to improve

efficiency and reduce greenhouse gas emissions in our operations.”

Political Involvement and Contributions: Shell notes that one of its revised

2005 General Business Principles is that, “We will make no payments to political

parties or campaigns.” Exxon Mobil devotes an entire sub-section to this topic,

evidently sensitive to the recent plethora of scandals involving Washington

politicians, lobbyists and corporate donations.  The company reports the

existence of its Exxon Mobil Political Action Committee. It says that this group, as

well as the company’s lobbying efforts, is fully within the law. It reports that it

disbursed $281,900 in contributions to federal candidates in the first half of the

2005-2006 election cycles.

Conclusion: These are serious reports by companies that recognize that they

can no longer just say “trust us,” but need to account comprehensively for their

actions and their approaches. The Shell report appears to be far more directed to

social responsibility activist, while the Exxon Mobil report never drifts too far from

indicating that it is sensitive to the views of U.S. politicians (such as the Bush

Administration’s opposition to the Kyoto Protocol) and its shareholders. For

example, Shell decides not to address the issue of its record profits in this report,

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leaving it instead to its other communications tools. But, the Exxon Mobil report

includes a detailed section entitled, “Investments, Prices, and Profits.” The

release of its record fourth quarter earnings sparked a high-profile debate among

lawmakers responding to public criticism that big oil companies were hugely

enriching themselves as the American public suffered the burden of extremely

high gas prices. Exxon Mobil says bluntly: “We believe that a fundamental aspect

of corporate citizenship is using the company’s earnings to responsibly meet the

world’s growing energy needs while delivering value to our shareholders and

competitive prices to our customers.”

Corporate Social Responsibility

Jeanette Slepian, (President, Better Management) August 5, 2005

Over the past decade, Corporate Social Responsibility has become an

ever more pervasive term in business parlance and the business of Corporate

Social Responsibility has grown exponentially. While it seemingly has been

adopted by major organizations throughout the world, the fact is, we have little

clarity as to what is meant by the term. There is no consensus on the definition of

Corporate Social Responsibility. There are no national or global standards for

Corporate Social Responsibility, there are different expectations as to what

Corporate Social Responsibility is designed to do, and therefore the term has a

muddled meaning, causing activists to allege that corporations are guilty of  

"window dressing and tokenism", and others to say that corporations are merely

bending to political correctness.

Most annual reports now include not only financial information but also

information on an organizations environmental and "community" or social

commitment,  The so-called, Triple Bottom Line accounting. Those companies

that don't report face the wrath of interest groups, many of whom make their

living off of advising companies on their Corporate Social Responsibility. 

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In the United States, since the shattering accounting scandals of Enron,

WorldCom, Tyco and others, there has been a seeming convergence of

corporate governance and Corporate Social Responsibility agendas, although in

fact, they may mean very different things. We see increasing attention on a

company's commitment to ethical and socially responsible behavior, but what

does this mean in real terms for an organization? Attempts to rate, rank and

reward companies for being good corporate citizens have led to some

embarrassing missteps.  The #1 position holder, for two years in a row, in

Business Ethics' Magazine list of top 100 Best Corporate Citizens, Fannie Mae,

had to be pulled "for financial and social misdeeds". 

There have also seen a battle of the surveys, among competing groups

seeking to prove or disprove whether Corporate Social Responsibility actually

improves an organization's bottom line.  Does a company do well by doing well?

Some surveys show "no significant positive correlation between Corporate Social

Responsibility and business profitability", while others declare the debate

"closed" and argue that there is incontrovertible proof that social and

environmental responsibility go hand in hand with superior financial performance.

KPMG released a report just last month which showed that 68% of the

global 250 now report social and environmental, as well as economic measures.  

But it is clearly pointed out, that environmental and financial measures are far

more in depth and precise than are social measures, and only 25% of these

companies discuss the economic impact of their business from a sustainability

perspective.

To complicate the issue, in a recent article in the Financial Times it was

reported that not only do people in different countries have a different perception

of what constitutes good corporate responsibility, but that their perception is

dynamic and changes according to agendas. 

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In the research referenced by the Financial Times it was found that clarity

could be added to the discussion by identifying two kinds of Corporate Social

Responsibility. Operational Responsibility, which includes some areas already

governed by a myriad of state and federal laws and in some cases, international

treaties:   areas such as - product safety, environmental protection, fair treatment

of employees and a more ethical supply chain.  Insuring responsibility in these

areas is driven by the need to manage the operational risk of an organization and

consumers hold companies fully responsible for these areas. Operational

Responsibility is simply good strategy.

 "Citizenship Responsibilities", things like solving social problems and

taking on human rights abuses fall outside the realm of those areas for which a

corporation is held responsible and while embracing these areas may enhance a

company's reputation among some, there was a warning that those who embark

on the path of pursuing reputation enhancement at the expense of risk

management are wasting their time. Managers should not reward their own virtue

at investor's expense. Poor operational responsibility cannot be compensated for

by socially oriented citizenship activities. The researchers also concluded that the

public is more likely to punish companies seen as performing poorly on the

operational side than reward companies that exceed their expectation on the

citizenship side.

So, simply put, if the bottom line results are not there, a company will not

survive for any of its stakeholders:  investors, employees or consumers. Positive

results are being realized by organizations that demand an ethical supply chain,

enforce fair labor practices, protect the environment and produce safe products. 

There can be no substitute for wise policies, business ethics and sound

leadership.

THE PIC-IMRB SURVEY: - THE STATE OF CSR

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Prosenjit Datta and Gina S. Krishnan May and October 2003

Between May and October 2003, the Social and Rural Research Institute,

a specialist unit of IMRB, polled 536 companies across India on behalf of

Partners in Change. These companies, with turnover upwards of Rs 25 crore,

were randomly selected from a CMIE database of 5,928 companies. PIC

conducts this survey once every two years

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117

118

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RESEARCH METHODOLOGY

Title of Study

A study on employees’ knowledge, attitude and practices related to

corporate social responsibility performed by Birla Copper.

Significance of Study

Corporate social responsibility is the business of the new millennium,

using a new link between business operation and social values. Most businesses

have moved into an era where companies face increasing pressure from

investor, consumers and employees to consider the social and environmental

issues in the way they operate. CSR focus on the social, environmental and

financial success of a company, with the goal to have a positive impact on

society while at the same time achieving business success.

Further, it is certain that with the passage of time the socio economic

problems of the country will become more complex, intricate and the government

will experience a great difficulty in coping with ever increasing social problems. In

the way it can be conclude that corporations of tomorrow will have to assume

greater social responsibility than what they are doing today.

The Government sees CSR as good for society and good for business.

Better understanding of the potential benefits of CSR for the competitiveness of

individual companies and for national economies can help encourage the spread

of CSR practice.

It was therefore, thought desirable to study the knowledge, attitude and

practices of organization towards social responsibility.

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Objective of Study

The main objectives of the research are as under:

1. To identify the adopted corporate social responsibility practices followed

by Birla Copper.2. To understand the concept of corporate social responsibility (CSR) as

understand by the employees.

3. To assess the corporate social responsibility (CSR) with economic &

technical dimension as perceived by employees.

4. To assess the corporate social responsibility (CSR) with social & political

dimension as perceived by employees.

5. To assess the corporate social responsibility (CSR) with environmental &

aesthetic dimension as perceived by employees.

Hypothesis

1. There is a significant association between Economic & Technological

Dimension and Social & Political Dimension of Corporate Social

Responsibility.

2. There is a significant association between Environmental & Aesthetic

Dimension and Social & Political Dimension of Corporate Social

Responsibility.

3. There is a significant association between Economic & Technological

Dimension and Environmental & Aesthetic Dimension of Corporate Social

Responsibility.

Study Design

The study makes an effort to understand and examine knowledge, attitude

and practices of employees towards corporate social responsibility of Birla

Copper.

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Tool for Data Collection

The required data would be collected by questionnaire having close ended

question which are answered on two scales and five scale rating as well as open

ended questions.

Universe

The total population for study includes all the management employees

(Management Group) of Birla Copper.

Sample

The sample includes 100 management employees (Management Group)

of Birla Copper.

Sampling Technique

Random sampling method would be used for data collection.

Limitation of the study

Extraneous factors (unseen factors)

Time factors (limited)

Experience and skill of the researcher (Indirect supervision).

Limited sample size (feasibility factor)

Test material (modification and adaptability of test)

Chapterization

1. Introduction

2. Review of literature

3. Methodology

4. Research setting

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5. Analyses and interpretation

6. Finding, conclusion, suggestion, and action plan.

Operational Definition

Corporate Social Responsibility

Corporate Social Responsibility is a “firm’s obligation to constituent group

in society other than stockholders and beyond that prescribed by law or union

contract”.

Quality of Life

Quality of Life is the better standard of living for the society and greater

welfare of the community.

Trusteeship

Trusteeship provides a means of transforming the present capitalist order

of society into an egalitarian one. It gives no quarter to capitalism, but gives the

present owning – class chances of reforming itself. It is based on the faith that

human nature is never beyond redemption.

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Hindalco Industries Limited

(Unit: Birla Copper)

WCM Excellence Model for Competitive Advantage

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View of plant

Plant Location:Plant Location:

1. LOCATION Village: Lakhigam, near Dahej

2. SOIL CONDITION Black cotton soil

3. THE PORT Dahej, 4 kms north from the site

4. RAILWAYS Dahej, narrow gauge

5. Main station Bharuch, about 51 kms to the east

6. ROADWAYS National highway (no. 8) passes through

Bharuch

7. RIVER Narmada, which is located at south of the

Arabian Sea

8. POWER Intake power –220 KV.

9. WATER Water is pumped from an intake near Jhanor, 4

kms from the site

10. THE TOWN Nearest major town is Bharuch, 51 kms from the

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site

INTRODUCTION

Aditya Birla Group has been committed to the future of science and

technology of India. Its world quality produces and commodities have been

already reached out to remotest of location in the world.

Aditya Birla has operated in different fields like chemical, fertilizers textile,

cellulose, cement and telecommunication. It has set up many plants, inside and

outside of India. Its all units have been facilitated ISO-9002, ISO-140001.

India’s one of the largest business houses, the Aditya Birla Group enjoys a

dominant position in all sectors in which it operates. The Aditya Birla Group,

single largest producer of viscous staple fiber and single largest location refiner

of palm oil. It is World’s third largest producer of insulators and sixth largest

producer of carbon black. It also produces Rayon grade pulp, yarn and white

cement. Mrs. Kumarmangalam Birla and being supported by an experienced

expert’s international mgt. team lead the Aditya Birla Group.

Hindalco Industries Ltd

Hindalco Industries Ltd., through Birla Copper, has set up a mega

Greenfield copper smelting and refining complex at Dahej in Bharuch, district of

Gujarat, India. The plant involving an investment of about $500 million is the

largest of its kind in India. The plant produces world-class copper cathodes,

continuous cast copper rods and precious metals. Apart from copper products,

sulphuric acid, phosphate, other phosphatic fertilizers and phosphor-gypsum are

also produced at this plant. The plant has its own power plant, jetty and water

system to meet its infrastructure requirement.

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Hindalco industries Ltd., a flagship company of the Aditya Birla Group,

with a turnover of about Rs. 2,508 billion, ranks among the India’s top 10

companies (in terms of market capitalization).

Aluminium has been and continues to be one of the core businesses for

the group with enormous growth potential. India’s strengths in alumina and

downstream products would ideally dovetail with Hindalco’s strong presence in

metal. It is also among the world’s lowest cost aluminium producers.

Hindalco’s world’s sized premier copper smelter with a capacity of

1,00,000 tones p.a. commenced commercial production in March 1999. In less

than a year of operations, it has emerged as a market leader in the Indian copper

industry with over 40% market share. In the year 2001, the capacity was further

increased to 1,50,000 TPA of refined copper through de-bottlenecking. The

capacity is also aggressively developing values enhancing strategies for its

existing products.

Product of Birla Copper

The following are the products, which are at present sold by Birla Copper –

1. Copper cathode

2. Continuous cast copper rods.

3. Sulphuric acid

4. Phosphoric acid

5. Copper slag

6. DAP/NPX

7. Gold

8. Silver

Vision

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“Our Goal is to be one of the largest manufacturers and suppliers of the

World Class Quality Copper and also achieve and maintain World Class

Standards in relation to Safe Work place, environment and Friend of the

Community,”

Mission

“We continue to be System Driven Organization and achieve standards of

excellence in all area of Business Operation.

We continue to provide all requisite recourses, supports, guidance and

environment to our employees and business associates to excel in their standard

of performance focusing on internal and external customer delightfulness.

We continue to lead and support rural development initiatives in relation to

education, health and community development.”

Values   We believe in

Integrity - Honesty in every action

Commitment - Deliver on the promise

Passion - Energized action

Seamlessness - Boundary less in letter and spirit

Speed - One step ahead always

Achievements

Birla Copper's quality standards are recognized internationally. It has been

accorded the LME (London Metal Exchange) registration: its copper

cathodes marketed as "Birla Copper", have been approved as a 'Grade A' Copper brand by the LME.

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Birla Copper has been accredited ISO-9001:2000 (Quality Management System) and ISO-14001:1996 (Environmental Management System) certification.

Dahej Harbor and Infrastructure Ltd. has been awarded the ISO 9001:2000 (Port Management for Handling Dry and Liquid Cargo) certificate by KPMG.

Birla Copper is awarded commendation certificate - Ramakrishna Bajaj

National Quality Award 2002 of Indian Merchant Chambers for Business

Excellence and Quality Achievements in manufacturing companies’

category for the year 2002.

WCM Policy:-

Birla Copper shall strive to establish itself as the first choice of the

stakeholders- including Customers, Suppliers, and Employees and surrounding

community, through sustained efforts in Implementing, Maintaining and

continuously Improving World Class Manufacturing Program that aims to

deliver

Zero Defects

Zero losses

Zero breakdowns

Zero pollution

Zero accident

Zero customer complaints

We continue to lead and support rural development initiatives in relation to

Education, Health and Community Development.

Quality Policy:-

We at Birla Copper are committed to evolving and sustaining Excellence

in every area of activity.

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Birla Copper will be driven by a sharp focus on maximizing Customer

Satisfaction. Towards that end an accent and Quality will make every aspect of

our operations.

We will also work continuously to improve on existing processes and

introduce Innovative Technologies.

Environmental Policy:-

Implementing and Maintaining sound Environmental Practices.

Consistently meeting all prevalent Regulatory and Statutory norms related to

Environment and exceed wherever practicable.

Enhancing Environment Awareness among employees and general public

in and around the Plant

Conservation of key input resources like Energy and Water

Providing necessary resources for promotion of clean environment and

continuously strive for improvement in our Environmental Performance.

Occupational Health and Safety Policy:-

It shall be the policy of Birla Copper to prevent injuries to employees,

damage to property and environment by conducting all operations safely and by

complying with all the relevant statutory requirements for health, safety and

environment protection.

Health, Safety and Environment control at Birla Copper start with planning

and continue through Design, Purchase, Storage, Fabrication, Construction,

Installation, Operation and Maintenance, They are integral parts of each and

every job/operation carried out by any one directly or indirectly attached to Birla

Copper.

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All practicable steps shall be taken to assess risk and safety status

periodically for creating awareness amongst all employees and public at large, by

using expertise knowledge of educated and trained personnel.

Safety, Health and Environment control are the direct responsibilities of all

levels of management and employees and they are considered collectively as

one of the measures for their advancement. These responsibilities must be

accepted by each one who conducts the affairs of Birla Copper no matter in what

capacity he may function.

A resume on Health and Safety performance shall also find way to remain

on record in the annual report of the company for information of all concerned.

HR Policy:-

HR Policy is derived from the ideology/ thoughts propounded by our late

Chairman Aditya V. Birla and present Chairman Kumar Mangalam Birla in

respect to Human Resource Management.

“I think the most important lesson in Human Resource Management is that

major investments should be made in the selection, training and building up of

people to repose full trust and confidence in people. Your men will be as loyal to

you as you are to them. Even ordinary people can give extraordinary results

given an opportunity. You have to train people by delegating authority to them.

When you delegate, people will make mistakes, but it is through the making of

these mistakes that you build up people. You must have the forbearance,

fortitude, patience and a large heart to bear the losses in training the people.

Opportunity must be given to people to perform.”

Late Aditya V. Birla

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“To remain at the cutting edge and to strive to beat the best, our focus has

not only to be on operational and business strategies, but more importantly also

on our People Power.”

Kumar Mangalam Birla

Policies:-

Creating highly motivated and competent teams in every profit Centre.

Creating an entry level cadre of bright, young, enthusiastic people with

good academic credentials and caliber.

Spotting and tracing high potential through a common performance

appraisal system.

A reward system that encourages people to focus on results consistent

with the larger business goals.

Continuously building, developing and enhancing people competencies

through meaningful training programmes.

Creating an event of helping caring approach and providing strong social

security coverage.

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ORGANIZATIONAL STRUCTURE

EPJEP

Sr. VP/ VP AVP/ Sr. GM/ GM

DGMSR. MANAGER

MANAGERDY. MANAGER

SR. OFFICER / SR. ENGROFFICER / ENGR

NON PROF. OFFICERASST. OFFICER/ CHIEF TECH

SR. ASST / SR. TECHASST / TECH

JR. ASST / JR. TECHSECURITY GUARDS/ DRIVERS

ATTENDANTSCHIEF TECHNICIAN

SR. OPRATOR

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OG CADRE

MG CADRE

Executives (Level – 5)

Functional Head (Level - 4)

Sectional Heads

(Level - 3)

Front Line Managers(Level -2)

Operative Group

(Level- 1)

OPRATORJR. OPRATOR

JR. OPRATOR (NON ITI)

ORGANIZATIONAL STRUCTURE OF PAH DEPARTMENT

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VP (PAH)

DGM (P & IR)

Sr. Officer(S)

GM (Admn.)

Sr. Manager (HRD)

Dy. Manager (P)

Officer (P)

Sr. Assistant (Time Office)

Assistant Officer (W)

Assistant (Programme)

Sr. Assistant (Contracts)

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Table 1 showing Age (in Years)

Sr. Description Frequency %No.1 20-25 years 15 15.00%2 26-35 years 35 35.00%3 36-45 years 38 38.00%4 46 and above 12 12.00%

Total 100 100%

12

38

35

15

0 10 20 30 40

20-25 years

26-35 years

36-45 years

46 and above

Graph-1

From the above table & graph, it can be interpreted that out of total 100

respondents, 15 respondents (15%) belongs to the age group of 20-25 years, 35

respondents (35%) belongs to the age group of 26-35 years, 38 respondents

(38%) belongs to the age group of 36-45 years and 12 respondents (12%)

belongs to the age group of 46 years and above in the management level of the

organization.

Table 2 showing Sex

Sr.No. Description Frequency %

1 Male 91 91.00%

2 Female 9 9.00%

138

Total 100 100%

Above table it can be interpreted that out of total 100 respondents, 91

male (91%) respondents and 9 (9%) female respondents are selected for the

study.

Table 3 showing Level of Management

Sr. Description Frequency %No.1 Top 8 8.00%2 Middle 39 39.00%3 Lower 53 53.00%

Total 100 100%

Table 3 it can be interpreted that out of total 100 respondents 8

respondents (8%) are from top management, 39 respondents (39%) are from

middle management and 53 respondents (53%) are from lower management.

Table 4 showing social responsibility is desirable for the business

Sr. Description Frequency %No.1 Desirable 43 43.00%2 very much desirable 57 57.00%3 indifferent 0 0.00%4 not at all desirable 0 0.00%

Total 100 100%

139

0

0

57

43

0 10 20 30 40 50 60

Desirable

very much desirable

indifferent

not at all desirable

Graph 2 clearly shows that 43 respondents (43%) feel that social

responsibility is desirable for the business while 57 respondents (57%) feel that

social responsibility is very much desirable for the business.

Table 5 showing, the reason if answer of Q – 3 is 1 or 2

Sr. Description Frequency %No.    

1 it is in the interest of business 8 8.00%2 it is in the interest of country 39 39.00%3 it is in the interest of mankind 53 53.00%

  Total 100 100%

According to table 4, 8 respondents (8%) feels that CSR is in the interest

of business while 39 respondents (39%) feels that it is in the interest of country

and 53 respondents (53%) feel that it is in the interest of mankind.

Table 6 showing the objective of CSR

Sr. Description Frequency %No.    1 Encourage responsible business practice 5 8.00%2 To promote the concept of good corporate citizenship 63 39.00%3 Highlight the social responsibility of the organization 32 53.00%

  Total 100 100%

140

Encourageresponsible business

practice

To promote theconcept of good

corporate citizenship

Highlight the socialresponsibility of the

organization

S1

5

63

32

010203040506070

Graph-3

As per table 5 & Graph 3, 5 respondents (5%) says that encouraging

responsible business practice, 63 respondents (63%) says that promotion of

good corporate citizenship while 32 respondents (32%) says that highlighting the

social responsibilities of the organization is the objective of CSR.

Table 7 showing CSR is the need of the hour and very vital.

Sr. Description Frequency %No.1 Strongly agree 17 17.00%

2 agree 46 46.00%

3 agree somewhat 31 31.00%

4 disagree 6 6.00%

5 can't say 0 0.00%

Total 100 100%

The above table shows that 17 respondents (17%) are strongly agree, 46

respondents (46%) are agree and 31 respondents (31%) are agree somewhat

with the statement while 6 respondents (6%) disagree with the statement that

CSR is the need of the hour and very vital.

Table 8 showing it is just window that companies do to keep critics happy.

141

Sr. Description Frequency %No.    

1 Strongly agree 2 2.00%

2 agree 8 8.00%

3 agree somewhat 15 15.00%

4 disagree 68 68.00%

5 can't say 7 7.00%

Total 100 100%

Table-7 shows that 2 respondents (2%) are strongly agree, 8 respondents

(8%) are agree and 15 respondents (15%) are agree somewhat with the

statement while 68 respondents (68%) disagree with the statement and 7

respondents has not given their views on the statement that CSR is just window

that companies do to keep critics happy.

Table 9 showing there are many business benefits of CSR.

Sr. Description Frequency %No.    

1 Strongly agree 6 6.00%2 agree 39 39.00%3 agree somewhat 49 49.00%4 disagree 1 1.00%5 can't say 5 5.00%

  Total 100 100%

Table-8 shows that 2 respondents (2%) are strongly agree, 8 respondents

(8%) are agree and 15 respondents (15%) are agree somewhat with the

statement while 68 respondents (68%) disagree with the statement and 7

respondents has not given their views on the statement that there are many

business benefits of CSR.

Economic & Technological DimensionsPlease rank 1, 2 & 3 in the order of preference in the box provided from 19-32.

Table 10 showing ranking of business, organization and society

142

Sr. Statement Rank - 1 Rank -2 Rank - 3

No. Frequency % Frequency % Frequency %

1

In business what is

good for us is good for

country.

2 2.00% 12 12.00% 86 86.00%

2

What is good for our

organization is good for

our country.

28 28.00% 58 58.00% 14 14.00%

3

What is good for

society is essential

good for our company.

70 70.00% 30 30.00% 0 0.00%

Total 100 100% 100 100% 100 100%

The table shows that 2 % (n=2) give ranks 1, 12% (n=12) give rank 2

while 86% (n=86) give rank 3 to the statement i.e. in business what is good for us is

good for country.

Also 28 % (n=28) give ranks 1, 58% (n=58) give rank 2 while 14% (n=14)

give rank 3 to the statement i.e. what is good for our organization is good for our

country.

Also the table shows that 70 % (n=70) give ranks 1, while 30% (n=30) give

rank 2 to the statement i.e. what is good for society is essential good for our company.

Table 11 showing the profit maximization

Sr. Statement Rank - 1 Rank -2 Rank - 3

No. Frequency % Frequency % Frequency %

1

Organizational activity

must center on profit

maximization.

1 1.00% 12 12.00% 87 87.00%

2 Profit maximization should

not result in exploitation. It

leads to hostility towards

46 46.00% 46 46.00% 8 8.00%

143

organization and

jeopardizes organizational

productivity

3

Profit is necessary but

only after meeting certain

to her obligation.

53 53.00% 42 42.00% 5 5.00%

Total 100 100% 100 100% 100 100%

The table shows that 1 % (n=1) give ranks 1, 12% (n=12) give rank 2

while 87% (n=87) give rank 3 to the statement i.e. organizational activity must

center on profit maximization.

Also 46 % (n=46) give ranks 1, 46% (n=46) give rank 2 while 8% (n=8)

give rank 3 to the statement i.e. profit maximization should not result in

exploitation. It leads to hostility towards organization and jeopardizes

organizational productivity.

Also above table shows that 53 % (n=53) give ranks 1, while 42% (n=42)

give rank 2 while 5% (n=5%) give rank 3 to the statement i.e. profit is necessary

but only after meeting certain to her obligation.

Table 12 showing the money and wealth

Sr. Statement Rank - 1 Rank -2 Rank - 3

No. Frequency % Frequency % Frequency %

1

Money and wealth are

most important for our

organization

15 15.00% 34 34.00% 51 51.00%

2

Money is important but so

the people as they help in

organizational productivity.

24 24.00% 38 38.00% 38 38.00%

144

3

People are more important

than money. Thus

organizational goals must

center on people.

61 61.00% 28 28.00% 11 11.00%

Total 100 100% 100 100% 100 100%

The table shows that 15 % (n=15) give ranks 1, 34% (n=34) give rank 2

while 51% (n=51) give rank 3 to the statement i.e. Money and wealth are most

important for our organization.

Also 24 % (n=24) give ranks 1, 38% (n=38) give rank 2 while 38% (n=38)

give rank 3 to the statement i.e. Money is important but so the people as they

help in organizational productivity.

Also above table shows that 61 % (n=61) give ranks 1, while 28% (n=28)

give rank 2 while 11% (n=11%) give rank 3 to the statement i.e. People are more

important than money. Thus organizational goals must center on people.

Table 13 showing the labour and dignity

Sr.No.

StatementRank - 1 Rank -2 Rank - 3

Frequency % Frequency % Frequency %

1Labour is a commodity to

be bought and sold2 2.00% 12 12.00% 86 86.00%

2

Labour has certain rights

which must be recognized,

otherwise union pressures

are inevitable

27 27.00% 60 60.00% 13 13.00%

3Employee dignity must be

satisfied71 71.00% 28 28.00% 1 1.00%

Total 100 100% 100 100% 100 100%

145

The table shows that 2 % (n=2) give ranks 1, 12% (n=12) give rank 2

while 86% (n=86) give rank 3 to the statement i.e. Labour is a commodity to be

bought and sold.

Also from the above table, it is stated as 27 % (n=27) give ranks 1, 60%

(n=60) give rank 2 while 13% (n=13) give rank 3 to the statement i.e. Labour has

certain rights which must be recognized, otherwise union pressures are

inevitable.

Also above table shows that 71 % (n=71) give ranks 1, while 28% (n=28)

give rank 2 while 1% (n=1%) give rank 3 to the statement i.e. Employee dignity

must be satisfied.

Table 14 showing the accountability

Sr.No.

Statement

Rank - 1 Rank -2 Rank - 3

Frequency % Frequency % Frequency %

1

Accountability of

management is to the

owners only3 3.00% 7 7.00% 90 90.00%

2

Accountability of

management is to owners,

costumers, employees,

suppliers and the other

contributors only

38 38.00% 54 54.00% 8 8.00%

3

Accountability of

managers is equality to

the owners , contributors

and the society

59 59.00% 39 39.00% 2 2.00%

Total 100 100% 100 100% 100 100%

146

The table shows that 3 % (n=3) give ranks 1, 7% (n=7) give rank 2 while

90% (n=90) give rank 3 to the statement i.e. Accountability of management is to

the owners only.

Also from the above table, it is stated as 38 % (n=38) give ranks 1, 54%

(n=54) give rank 2 while 8% (n=8) give rank 3 to the statement i.e. Accountability

of management is to owners, costumers, employees, suppliers and the other

contributors only.

Also above table shows that 59 % (n=59) give ranks 1, while 39% (n=39)

give rank 2 while 2% (n=2%) give rank 3 to the statement i.e. Accountability of

managers is equality to the owners, contributors and the society.

Table 15 showing the technology and decision making

Sr.No.

StatementRank - 1 Rank -2 Rank - 3

Frequency % Frequency % Frequency %

1

Technology is very

important and must

occupy the foremost place

in decision making

1 1.00% 12 12.00% 87 87.00%

2

Technology is important

but so are people ,

because people help in

technological efficiency

10 10.00% 80 80.00% 10 10.00%

3

People are more important

than technology and

hence technology should

be modified and changed

to met the requirement of

the people

89 89.00% 8 8.00% 3 3.00%

Total 100 100% 100 100% 100 100%

147

The table shows that 1 % (n=1) give ranks 1, 12% (n=12) give rank 2

while 87% (n=87) give rank 3 to the statement i.e. Technology is very important

and must occupy the foremost place in decision making.

Also from the above table, it is stated as 10 % (n = 10) give ranks 1, 80 %

(n = 80) give rank 2 while 10% (n = 10) give rank 3 to the statement i.e.

Technology is important but so are people, because people help in technological

efficiency.

Also above table shows that 89 % (n=89) give ranks 1, while 8% (n=8)

give rank 2 while 3% (n=3 %) give rank 3 to the statement i.e. People are more

important than technology and hence technology should be modified and change

to met the requirement of the people.

Social & Political DimensionTable 16 showing the employees and problems

Sr.No.

StatementRank - 1 Rank -2 Rank - 3

Frequency % Frequency % Frequency %

1

Employee must leave

personal problems at

home. Organization is

meant to solve only

corporate problems

1 1.00% 12 12.00% 87 87.00%

2

We recognize that

employees have motives

beyond their economic

needs. For organizational

efficiency there needs

must be recognized

10 10.00% 80 80.00% 10 10.00%

3

We hire the whole man ,

hence we must concern

ourselves with his social

needs

89 89.00% 8 8.00% 3 3.00%

148

Total 100 100% 100 100% 100 100%

The table shows that 1 % (n=1) give ranks 1, 12% (n=12) give rank 2

while 87% (n=87) give rank 3 to the statement i.e. Employee must leave personal

problems at home. Organization is meant to solve only corporate problems.

Also from the above table, it is stated as 10 % (n=10) give ranks 1, 80 %

(n=80) give rank 2 while 10% (n=10) give rank 3 to the statement i.e. we

recognize that employees have motives beyond their economic needs. For

organizational efficiency there needs must be recognized.

Also above table shows that 89 % (n=89) give ranks 1, while 8% (n=8)

give rank 2 while 3% (n=3%) give rank 3 to the statement i.e. we hire the whole

man, hence we must concern ourselves with his social needs.

Table 17 showing the values and organization efficiency

Sr.No.

StatementRank - 1 Rank -2 Rank - 3

Frequency % Frequency % Frequency %

1

We hire the whole

man ,hence we must

concern ourselves with his

social needs

89 89.00% 8 8.00% 3 3.00%

2

We recognize the value of

group participation

because it help in

organization efficiency

1 1.00% 12 12.00% 87 87.00%

3

Group participation is

fundamental for meeting

social and psychological

needs of employees.

Besides it contributes to

organizational successes.

10 10.00% 80 80.00% 10 10.00%

Total 100 100% 100 100% 100 100%

149

The table shows that 89 % (n=89) give ranks 1, 8% (n=8) give rank 2

while 3% (n=3) give rank 3 to the statement i.e. we hire the whole man; hence we

must concern ourselves with his social needs.

Also from the above table, it is stated as 1 % (n=1) give ranks 1, 12 %

(n=12) give rank 2 while 87% (n=87) give rank 3 to the statement i.e. we

recognize the value of group participation because it help in organization

efficiency.

Also above table shows that 10 % (n=10) give ranks 1, while 80% (n=80)

give rank 2 while 10% (n=10%) give rank 3 to the statement i.e. Group

participation is fundamental for meeting social and psychological needs of

employees. Besides it contributes to organizational successes.

Table 18 showing son of soil policy

Sr.No.

StatementRank - 1 Rank -2 Rank - 3

Frequency % Frequency % Frequency %

1

Sons of soil policy in

employment should not

get any preference. Let

Govt. be concerned

about it

2 2.00% 42 42.00% 56 56.00%

2

Sons of soil policy in

employment in should

get some preferences to

avoid trouble

48 48.00% 37 37.00% 15 15.00%

3

Sons of soil policy in

employment must get

preference.

50 50.00% 21 21.00% 29 29.00%

Total 100 100% 100 100% 100 100%

150

The table shows that 2 % (n = 2) give ranks 1, 42% (n = 42) give rank 2

while 56% (n = 56) give rank 3 to the statement i.e. Sons of soil policy in

employment should not get any preference. Let Govt. be concerned about it.

Also from the above table, it is stated as 48 % (n = 48) give ranks 1, 37 %

(n = 37) give rank 2 while 15% (n = 15) give rank 3 to the statement i.e. Sons of

soil policy in employment in should get some preferences to avoid trouble.

Also above table shows that 50 % (n = 50) give ranks 1, while 21% (n =

21) give rank 2 while 29% (n = 29%) give rank 3 to the statement i.e. Sons of soil

policy in employment must get preference.

Table 19 showing the government and business

Sr. Statement Rank - 1 Rank -2 Rank - 3

No.

Frequency % Frequency % Frequency %

1

That Gov. is best

which governs the

least

0 0.00% 46 46.00% 54 54.00%

2Govt. is a necessary

evil30 30.00% 45 45.00% 25 25.00%

3

Business and Govt.

must cooperate to

solve the society

problem

70 70.00% 9 9.00% 21 21.00%

Total 100 100% 100 100% 100 100%

151

The table shows that 0 % (n=0) give ranks 1, 46% (n=46) give rank 2

while 54% (n=54) give rank 3 to the statement i.e. That Gov. is best which

governs the least.

Also from the above table, it is stated as 30 % (n=30) give ranks 1, 45 %

(n=45) give rank 2 while 25% (n=25) give rank 3 to the statement i.e. Govt. is a

necessary evil.

Also above table shows that 70 % (n=70) give ranks 1, while 9% (n=9)

give rank 2 while 21% (n=21%) give rank 3 to the statement i.e. Business and

Govt. must cooperate to solve the society problem.

Table 20 showing the ideas of employees

Sr.No.

StatementRank - 1 Rank - 2 Rank - 3

Frequency % Frequency % Frequency %

1

Subordinates are

incapable of contributing

to new ideas towards

profits maximization.

Involving them is nothing

but simply wasting the

value able time of the

organization

0 0.00% 3 3.00% 97 97.00%

2

Subordinates opinion

should be considered

because it may lead to

some profitable ideas

49 49.00% 50 50.00% 1 1.00%

3 Good ideas normally flow

from subordinates .They

51 51.00% 47 47.00% 2 2.00%

152

must be involve in

decision making

Total 100 100% 100 100% 100 100%

The table shows that 0 % (n=0) give ranks 1, 3% (n=3) give rank 2 while

97% (n=97) give rank 3 to the statement i.e. Subordinates are incapable of

contributing to new ideas towards profits maximization .Involving them is nothing

but simply wasting the value able time of the organization.

Also from the above table, it is stated as 49 % (n=49) give ranks 1, 50 %

(n=50) give rank 2 while 1% (n=1) give rank 3 to the statement i.e. Subordinates

opinion should be considered because it may lead to some profitable ideas.

Also above table shows that 51 % (n=51) give ranks 1, while 47% (n=47)

give rank 2 while 2% (n=2%) give rank 3 to the statement i.e. Good ideas

normally flow from subordinates .They must be involve in decision making.

Environment & Aesthetic Dimension

Table 21 showing the natural environment

Sr.No.

StatementRank - 1 Rank -2 Rank - 3

Frequency % Frequency % Frequency %

1

The natural

environment takes care

of the ecological

problem. Hence we

need not bother about it

2 2.00% 23 23.00% 75 75.00%

2

We should control and

manipulates the

environment to suit the

corporate objectives.

8 8.00% 68 68.00% 24 24.00%

3 We must preserve the

environment in order to

90 90.00% 9 9.00% 1 1.00%

153

lead better quality of

life.

Total 100 100% 100 100% 100 100%

The table shows that 2 % (n=2) give ranks 1, 23% (n=23) give rank 2

while 75% (n=75) give rank 3 to the statement i.e. the natural environment takes

care of the ecological problem. Hence we need not bother about it.

Also from the above table, it is stated as 8 % (n=8) give ranks 1, 68 %

(n=68) give rank 2 while 24% (n=24) give rank 3 to the statement i.e. we should

control and manipulates the environment to suit the corporate objectives.

Also above table shows that 90 % (n=90) give ranks 1, while 9% (n=9)

give rank 2 while 1% (n=1%) give rank 3 to the statement i.e. we must preserve

the environment in order to lead better quality of life.

Table 22 showing the business and aesthetic values

Sr. Statement Rank - 1 Rank -2 Rank - 3

No. Frequency % Frequency % Frequency %

1

Business is not meant

for the preservation of

aesthetic values

2 2.00% 33 33.00% 65 65.00%

2

Aesthetic values are

O.K but not for

business they do not

contribute to business

directly

28 28.00% 37 37.00% 35 35.00%

3

We must preserve our

aesthetic values and

must play a positive

role in preserving

aesthetic values

70 70.00% 30 30.00% 0 0.00%

154

Total 100 100% 100 100% 100 100%

The table shows that 0 % (n=0) give ranks 1, 3% (n=3) give rank 2 while

97% (n=97) give rank 3 to the statement i.e. Business is not meant for the

preservation of aesthetic values.

Also from the above table, it is stated as 49 % (n=49) give ranks 1, 50 %

(n=50) give rank 2 while 1% (n=1) give rank 3 to the statement i.e. Aesthetic

values are O.K but not for business they do not contribute to business directly.

Also above table shows that 51 % (n=51) give ranks 1, while 47% (n=47)

give rank 2 while 2% (n=2%) give rank 3 to the statement i.e. we must preserve

our aesthetic values and must play a positive role in preserving aesthetic values.

Table 23 showing the important publics with respect to social responsibility of business

Sr. Description Frequency %No.    

1 Customer 12 12.00%2 Community 62 62.00%3 Government 0 0.00%4 Employee 17 17.00%5 Shareholders 8 8.00%6 Competitor 0 0.00%7 All 1 1.00%

Total 100 100%

155

Customer

Community

Employee

Shareholders

All

-20

-10

0

10

20

30

40

50

60

70

80

-2 0 2 4 6 8 10 12 14 16 18

Graph - 4

The above table shows that 12 % (n=12) respondents views customer, 62

% (n=62) respondents views community, 17 % (n=17) respondents views

employees while 8 % (n=8) respondents views shareholders and only 1 % (n=1)

respondent view all are the important publics with respect to social responsibility

of business.

Table 24 showing any specific policy formed by your organization with regard to Social Responsibility

Sr.No. Description Frequency %

1 yes 97 97.00%

2 No 0 0.00%

3 Don't Know 3 3.00%

4 No Response 0 0.00%

Total 100 100%

156

According to the above table it has shown that 97 % (n=97) respondents

are aware while 3 % (n=3) respondents don’t know that there is any specific

policy formed by their organization with regards to social responsibility.

Table 25 showing programme for Environmental protection

Sr.No.

Description Frequency%

1 Regularly 39 39.00%

2 frequently 51 51.00%

3 sometime 10 10.00%

4 never 0 0.00%

  Total 100 100%

Above table shows that according to 39 respondents (39%) says regularly,

51 respondents (51%) says frequently while 10 respondents (10%) says

sometimes environmental protection programme is carried out by the

organization for the betterment of community.

Table 26 showing programme for Urban renewal

Sr.No. Description Frequency %

1 Regularly 17 17.00%

2 Frequently 41 41.00%

3 Sometime 42 42.00%

4 Never 0 0.00%

Total 100 100%

157

Above table shows that according to 17 respondents (17%) says regularly,

41 respondents (41%) says frequently while 42 respondents (42%) says

sometimes urban renewal programme is carried out by the organization for the

betterment of community.

Table 27 showing programme for Rural Development

Sr.No. Description Frequency %

1 Regularly 59 59.00%

2 Frequently 39 39.00%

3 Sometime 2 2.00%

4 Never 0 0.00%

Total 100 100%

Above table shows that according to 59 respondents (59%) says regularly,

39 respondents (39%) says frequently while 2 respondents (2%) says sometimes

rural development programme is carried out by the organization for the

betterment of community.

Table 28 showing programme for better transport, Communication and Distribution system

Sr.No. Description Frequency %

1 Regularly 10 10.00%

2 Frequently 12 12.00%

3 Sometime 62 62.00%

4 Never 16 16.00%

Total 100 100%

158

Above table shows that according to 10 respondents (10%) says regularly,

12 respondents (12%) says frequently while 62 respondents (62%) says

sometimes and 16 respondents (16%) says never that better transport,

communication and distribution system programme are carried out by the

organization for the betterment of community.

Table 29 showing programme for Educational Aids

Sr.No. Description Frequency %

1 Regularly 23 23.00%

2 Frequently 46 46.00%

3 Sometime 31 31.00%

4 Never 0 0.00%

Total 100 100%

Above table shows that according to 29 respondents (29%) says regularly,

46 respondents (46%) says frequently while 31 respondents (31%) says

sometimes educational aid has been provided by the organization for the

betterment of community.

Table 30 showing programme for Health

Sr.No. Description Frequency %

1 Regularly 39 39.00%

2 Frequently 59 59.00%

3 Sometime 2 2.00%

4 Never 0 0.00%

Total 100 100%

159

Above table shows that according to 39 respondents (39%) says regularly,

59 respondents (59%) says frequently while 2 respondents (2%) says sometimes

health programme is carried out by the organization for the betterment of

community.

Table 31 showing programme for Healthy atmosphere for industrial peace

Sr.No. Description Frequency %

1 Regularly 32 32.00%

2 Frequently 66 66.00%

3 Sometime 2 2.00%

4 Never 0 0.00%

Total 100 100%

Above table shows that according to 32 respondents (32%) says regularly,

66 respondents (66%) says frequently while 2 respondents (2%) says sometimes

programme for healthy atmosphere for industrial peace has carried out by the

organization for the betterment of community.

Table 32 showing programme for Dynamic infrastructural facilities

Sr.No. Description Frequency %

1 Regularly 54 54.00%2 Frequently 43 43.00%3 Sometime 3 3.00%4 Never 0 0.00%

Total 100 100%

Above table shows that according to 54 respondents (54%) says regularly,

43 respondents (43%) says frequently while 3 respondents (3%) says sometimes

160

programme for dynamic infrastructural facilities carried out by the organization for

the betterment of community.

Table 33 showing programme for efficient use of energy and natural resources

Sr. Description Frequency %No.     Frequency       

1 Regularly 0 0.00%       2 Frequently 2 2.00%       3 Sometime 16 16.00%       4 Never 82 82.00%       

  Total 100 100%       

Above table shows that according to 2 respondents (2%) says frequently

while 16 respondents (16%) says sometimes and 82 respondents says never any

programme for efficient use of energy and natural resources are carried out by

the organization for the betterment of community.

Table 34 showing programme for Instituting programmes for hiring the unemployed.

Sr. No. Description Frequency %

1 Regularly 71 71.00%

2 Frequently 27 27.00%

3 Sometime 2 2.00%

4 Never 0 0.00%

Total 100 100%

161

Above table shows that according to 71 respondents (71%) says regularly,

27 respondents (27%) says frequently while 2 respondents (2%) says sometimes

Instituting programmes for hiring the unemployed is carried out by the

organization for the betterment of community.

Table 35 showing programme for HIV / AIDS

Sr. No. Description Frequency %

1 Regularly 5 5.00%

2 Frequently 17 17.00%

3 Sometime 47 47.00%

4 Never 31 31.00%

Total 100 100%

Above table shows that according to 5 respondents (5%) says regularly,

17 respondents (17%) says frequently while 47 respondents (47%) says

sometimes and 31 respondents says never HIV / AIDS programme is carried out

by the organization for the betterment of community.

Table 36 showing that looks after social responsibility affairs in your organization

Sr. No. Description Frequency %

1 General Manager 0 0.00%2 Corporate Planning Manager 0 0.00%3 Public Relation Officer 0 0.00%4 Administration Officer 10 10.00%5 Personnel Manager 16 16.00%6 Separate social Responsibility Division 74 74.00%

Total 100 100%

162

Above table shows that according to 10 respondents (10%) says

administrative officer, 16 respondents (16%) says Personnel Manager while 74

respondents (74%) says separate social responsibility division looks after social

responsibility affairs in the organization.

Table 37 showing the reaction of government towards your social responsibility activities

Sr. No. Description Frequency %

1 Positive 45 45.00%2 Just Appreciative 36 36.00%3 Indifferent 0 0.00%4 Negative 0 0.00%5 No Response 19 19.00%

Total 100 100%

The above table shows that 45 respondents (45%) says government

response is positive 36 respondents (36%) says it is just appreciative while 19

respondents (19%) has no response towards the government reaction towards

social responsibility of their organization.

Table 38 showing company is doing business in an ethical manner

Sr. No. Description Frequency %

1 Always 95 95.00%2 Frequently 4 4.00%3 Sometime 1 1.00%

4 Never 0 0.00%

Total 100 100%

163

As per the table it is clear that 95 respondents (95%) always while 4

respondents (4%) says frequently and 1 respondent (1%) say sometimes

company do business in an ethical manner.

The Role of HR Department

Table 39 showing the role of HR department in any programme directed towards the issues of CSR

Sr. No. Description Frequency %

1 Ethical Investment training of personnel 12 12.00%

2 Ethics and Corporate governance 22 22.00%

3 Linking with NGOs for Mutual Programme 19 19.00%

4 All 47 47.00%

Total 100 100%

Table 38 shows that according to 12 respondents (12%) says the role of

HR department is the ethical investment training of personnel, 22 respondents

(22%) says it is Ethics and Corporate governance, 19 respondents (19%) says it

is linking with NGOs for mutual programme while 47 respondents (47%) says all

should be taken care by the HR department while launching any programme

directed towards the issues of CSR by the company.

Table 40 showing welfare programme running to address the issues of CSR

Sr. No. Description Frequency %

1 Yes 96 96.00%

2 No 4 4.00%

Total 100 100%

164

Table 39 shows that 96 respondents (96%) says yes while 4 respondents

(4%) says no that their company have any welfare programme running to

address the issues of CSR.

Table 41 showing HR department role in the addressing of the issues of CSR

Sr. No. Description Frequency %

1 Strongly Agree 56 56.00%

2 Agree 27 27.00%

3 Agree somewhat 10 10.00%

4 Disagree 1 1.00%

5 Can't say 6 6.00%

Total 100 100%

Table shows that 56 respondents (56%) are strongly agree, 27

respondents (27%) are agree and 10 respondents (10%) are agree somewhat

with the statement while 1 respondents (1%) disagree with the statement and 6

respondents (6%) has not given their views on the statement that the Hr

department has a significant role to play in the addressing of the issues of CSR.

Table 42 showing relation between CSR productivity and Quality of work life of a worker

Sr. No. Description Frequency %

1 Strongly Agree 35 35.00%

2 Agree 47 47.00%

3 Agree somewhat 16 16.00%

4 Disagree 0 0.00%

165

5 Can't say 2 2.00%

Total 100 100%

Table shows that 35 respondents (35%) are strongly agree, 47

respondents (47%) are agree and 16 respondents (16%) are agree somewhat

with the statement while 2 respondents (2%) has not given their views on the

statement that there is a relation between CSR productivity and Quality of work

life of a worker.

Table 43 showing threat caused by CSR to the organization is very grave

Sr. No. Description Frequency %

1 Strongly Agree 0 0.00%

2 Agree 0 0.00%

3 Agree somewhat 2 2.00%

4 Disagree 89 89.00%

5 Can't say 9 9.00%

Total 100 100%

Table shows that 2 respondents (2%) are agree somewhat with the

statement while 89 respondents (89%) disagree with the statement and 9

respondents (9%) has not given their views on the statement that the threat

caused by CSR to the organization is very grave.

Table 44 showing suggestions for developing a sustainable CSR programme

Sr. No. Description Frequency %

1 Building awareness on CSR 12 12.00%

2 facilitation of adoption of programmes 16 16.00%

3 organize seminars, meeting, visits etc 11 11.00%

4 project development and building of databases 3 3.00%

166

5 Any other (linking with NGOs) 1 1.00%

6 Any Other (all) 57 57.00%

Total 100 100%

The above table shows that 12 respondents (12%) says building

awareness on CSR, 16 respondents (16%) says facilitation of adoption of

programmes, 11 respondents (11%) says organize seminars, meeting, visits etc,

3 respondents (3%) says project development and building databases are

required for a sustainable CSR programme while 1 respondent (1%) says linking

with NGOs and 57 respondents (57%) says that all above required for a

sustainable CSR programme.

Tables showing Z Test

Table 45 showing Z Test between Economic & Technological Dimension and Social & Political Dimension

Mean Standard Deviation (Sd) ZCal.0.13

ZTab.

(5%) = 1.96Eco. & Tech.

So. & Po. Eco & Tech So. & Po.

167

(1%) = 2.578.11 7.91 14.19 6.32

From the table it can be seen that Z Cal < Z Tab, hence null hypotheses is

accepted. Further it can be inference that Dimension of CSR i.e. Economic &

Technological dimension and Social & Political Dimension have no significant

relationship.

Table 46 showing Z Test between Environmental & Aesthetic Dimension and Social & Political Dimension

Mean Standard Deviation (Sd)

ZCal.2.60

ZTab.

(5%) = 1.96(1%) = 2.57

Env. & Aes. So. & Po. Env. & Aes. So. & Po.

12.2 7.91 15.19 6.32

From the table it can be seen that Z Cal > Z Tab, hence null hypotheses is

rejected. Further it can be inference that Dimension of CSR i.e. Environmental &

Aesthetic Dimension and Social & Political Dimension have significant

relationship.

Table 47 showing Z Test between Economic & Technological Dimension and Environmental & Aesthetic Dimension

Mean Standard Deviation (Sd) Z

Cal.

1.97

Z

Tab.

(5%) = 1.96

Eco. & Tech.

Env. & Aes.Eco. & Tech.

Env. & Aes.

8.11 12.2 14.19 15.19

168

(1%) = 2.57

From the table it can be seen that Z Cal > Z Tab, hence null hypotheses is

rejected. Further it can be inference that Dimension of CSR i.e. Economic &

Technological Dimension and Environmental & Aesthetic Dimension have

significant relationship.

169

Findings

From the above tables & graphs following are the findings of the study.

Personal Data

170

1. Table 1 & Graph 1 shows that there are 15 respondents (15%) belongs to

the age group of 20-25 years, 35 respondents (35%) belongs to the age

group of 26-35 years, 38 respondents (38%) belongs to the age group of

36-45 years and 12 respondents (12%) belongs to the age group of 46

years and above in the management level of the organization.

2. Table 2 shows that there are 91 male (91%) respondents and 9 (9%)

female respondents are selected for the study.

3. Table 3 shows that 8 respondents (8%) are from top management, 39

respondents (39%) are from middle management and 53 respondents

(53%) are from lower management.

Introduction about Corporate Social Responsibility

4. Table 4 & Graph 2 clearly shows that 43 respondents (43%) feel that

social responsibility is desirable for the business while 57 respondents

(57%) feel that social responsibility is very much desirable for the

business.

5. According to table 4, 8 respondents (8%) feels that CSR is in the interest

of business while 39 respondents (39%) feels that it is in the interest of

country and 53 respondents (53%) feel that it is in the interest of mankind.

6. As per table 5 & Graph 3, 5 respondents (5%) says that encouraging

responsible business practice, 63 respondents (63%) says that promotion

of good corporate citizenship while 32 respondents (32%) says that

highlighting the social responsibilities of the organization is the objective of

CSR.

7. Table 6 shows that 17 respondents (17%) are strongly agree, 46

respondents (46%) are agree and 31 respondents (31%) are agree

somewhat with the statement while 6 respondents (6%) disagree with the

statement that CSR is the need of the hour and very vital.

8. Table-7 shows that 2 respondents (2%) are strongly agree, 8 respondents

(8%) are agree and 15 respondents (15%) are agree somewhat with the

statement while 68 respondents (68%) disagree with the statement and 7

171

respondents has not given their views on the statement that CSR is just

window that companies do to keep critics happy.

9. Table-8 shows that 2 respondents (2%) are strongly agree, 8 respondents

(8%) are agree and 15 respondents (15%) are agree somewhat with the

statement while 68 respondents (68%) disagree with the statement and 7

respondents has not given their views on the statement that there are

many business benefits of CSR.

Economic & Technological Dimension

10.The table 9 shows that 2 % (n=2) give ranks 1, 12% (n=12) give rank 2

while 86% (n=86) give rank 3 to the statement i.e. in business what is good

for us is good for country. Also 28 % (n=28) give ranks 1, 58% (n=58) give

rank 2 while 14% (n=14) give rank 3 to the statement i.e. what is good for

our organization is good for our country. Also the table shows that 70 %

(n=70) give ranks 1, while 30% (n=30) give rank 2 to the statement i.e. what is good for society is essential good for our company.

11.The table 10 shows that 1 % (n=1) give ranks 1, 12% (n=12) give rank 2

while 87% (n=87) give rank 3 to the statement i.e. organizational activity

must center on profit maximization. Also 46 % (n=46) give ranks 1, 46%

(n=46) give rank 2 while 8% (n=8) give rank 3 to the statement i.e. profit

maximization should not result in exploitation. It leads to hostility towards

organization and jeopardizes organizational productivity. Also table shows

that 53 % (n=53) give ranks 1, while 42% (n=42) give rank 2 while 5%

(n=5%) give rank 3 to the statement i.e. profit is necessary but only after

meeting certain to her obligation.

12.The table 11 shows that 15 % (n=15) give ranks 1, 34% (n=34) give rank 2

while 51% (n=51) give rank 3 to the statement i.e. Money and wealth are

most important for our organization. Also 24 % (n=24) give ranks 1, 38%

(n=38) give rank 2 while 38% (n=38) give rank 3 to the statement i.e.

Money is important but so the people as they help in organizational

productivity. Also table shows that 61 % (n=61) give ranks 1, while 28%

172

(n=28) give rank 2 while 11% (n=11%) give rank 3 to the statement i.e.

People are more important than money. Thus organizational goals must

center on people.

13.The table 12 shows that 2 % (n=2) give ranks 1, 12% (n=12) give rank 2

while 86% (n=86) give rank 3 to the statement i.e. Labour is a commodity

to be bought and sold. Also from the above table, it is stated as 27 %

(n=27) give ranks 1, 60% (n=60) give rank 2 while 13% (n=13) give rank 3

to the statement i.e. Labour has certain rights which must be recognized,

otherwise union pressures are inevitable. Also table shows that 71 %

(n=71) give ranks 1, while 28% (n=28) give rank 2 while 1% (n=1%) give

rank 3 to the statement i.e. Employee dignity must be satisfied.

14.The table 13 shows that 3 % (n=3) give ranks 1, 7% (n=7) give rank 2

while 90% (n=90) give rank 3 to the statement i.e. Accountability of

management is to the owners only. Also from the above table, it is stated

as 38 % (n=38) give ranks 1, 54% (n=54) give rank 2 while 8% (n=8) give

rank 3 to the statement i.e. Accountability of management is to owners,

costumers, employees, suppliers and the other contributors only. Also

table shows that 59 % (n=59) give ranks 1, while 39% (n=39) give rank 2

while 2% (n=2%) give rank 3 to the statement i.e. Accountability of

managers is equality to the owners, contributors and the society.

15.The table 14 shows that 1 % (n=1) give ranks 1, 12% (n=12) give rank 2

while 87% (n=87) give rank 3 to the statement i.e. Technology is very

important and must occupy the foremost place in decision making. Also

from the above table, it is stated as 10 % (n=10) give ranks 1, 80 % (n=80)

give rank 2 while 10% (n=10) give rank 3 to the statement i.e. Technology

is important but so are people, because people help in technological

efficiency. Also table shows that 89 % (n=89) give ranks 1, while 8% (n=8)

give rank 2 while 3% (n=3%) give rank 3 to the statement i.e. People are

more important than technology and hence technology should be modified

and changed to met the requirement of the people.

173

Social & Political Dimension

16.The table 15 shows that 1 % (n=1) give ranks 1, 12% (n=12) give rank 2

while 87% (n=87) give rank 3 to the statement i.e. Employee must leave

personal problems at home. Organization is meant to solve only corporate

problems. Also from the above table, it is stated as 10 % (n=10) give ranks

1, 80 % (n=80) give rank 2 while 10% (n=10) give rank 3 to the statement

i.e. we recognize that employees have motives beyond their economic

needs. For organizational efficiency there needs must be recognized. Also

table shows that 89 % (n=89) give ranks 1, while 8% (n=8) give rank 2

while 3% (n=3%) give rank 3 to the statement i.e. we hire the whole man;

hence we must concern ourselves with his social needs.

17.The table 16 shows that 89 % (n=89) give ranks 1, 8% (n=8) give rank 2

while 3% (n=3) give rank 3 to the statement i.e. we hire the whole man;

hence we must concern ourselves with his social needs. Also from the

above table, it is stated as 1 % (n=1) give ranks 1, 12 % (n=12) give rank

2 while 87% (n=87) give rank 3 to the statement i.e. we recognize the

value of group participation because it help in organization efficiency. Also

table shows that 10 % (n=10) give ranks 1, while 80% (n=80) give rank 2

while 10% (n=10%) give rank 3 to the statement i.e. Group participation is

fundamental for meeting social and psychological needs of employees.

Besides it contributes to organizational successes.

18.The table 17 shows that 2 % (n=2) give ranks 1, 42% (n=42) give rank 2

while 56% (n=56) give rank 3 to the statement i.e. Sons of soil policy in

employment should not get any preference. Let Govt. be concerned about

it. Also from the above table, it is stated as 48 % (n=48) give ranks 1, 37

% (n=37) give rank 2 while 15% (n=15) give rank 3 to the statement i.e.

Sons of soil policy in employment in should get some preferences to avoid

trouble. Also table shows that 50 % (n=50) give ranks 1, while 21% (n=21)

give rank 2 while 29% (n=29%) give rank 3 to the statement i.e. Sons of

soil policy in employment must get preference.

174

19.The table 18 shows that 0 % (n=0) give ranks 1, 46% (n=46) give rank 2

while 54% (n=54) give rank 3 to the statement i.e. That Gov. is best which

governs the least. Also from the above table, it is stated as 30 % (n=30)

give ranks 1, 45 % (n=45) give rank 2 while 25% (n=25) give rank 3 to the

statement i.e. Govt. is a necessary evil. Also table shows that 70 % (n=70)

give ranks 1, while 9% (n=9) give rank 2 while 21% (n=21%) give rank 3 to

the statement i.e. Business and Govt. must cooperate to solve the society

problem.

20.The table 19 shows that 0 % (n=0) give ranks 1, 3% (n=3) give rank 2

while 97% (n=97) give rank 3 to the statement i.e. Subordinates are

incapable of contributing to new ideas towards profits

maximization .Involving them is nothing but simply wasting the value able

time of the organization. Also from the above table, it is stated as 49 %

(n=49) give ranks 1, 50 % (n=50) give rank 2 while 1% (n=1) give rank 3 to

the statement i.e. Subordinates opinion should be considered because it

may lead to some profitable ideas. Also table shows that 51 % (n=51) give

ranks 1, while 47% (n=47) give rank 2 while 2% (n=2%) give rank 3 to the

statement i.e. Good ideas normally flow from subordinates .They must be

involve in decision making.

Environmental & Aesthetic Dimension

21.The table 20 shows that 2 % (n=2) give ranks 1, 23% (n=23) give rank 2

while 75% (n=75) give rank 3 to the statement i.e. the natural environment

takes care of the ecological problem. Hence we need not bother about it.

Also from the above table, it is stated as 8 % (n=8) give ranks 1, 68 %

(n=68) give rank 2 while 24% (n=24) give rank 3 to the statement i.e. we

should control and manipulates the environment to suit the corporate

objectives. Also above table shows that 90 % (n=90) give ranks 1, while

9% (n=9) give rank 2 while 1% (n=1%) give rank 3 to the statement i.e. we

must preserve the environment in order to lead better quality of life.

175

22.The table 21 shows that 0 % (n=0) give ranks 1, 3% (n=3) give rank 2

while 97% (n=97) give rank 3 to the statement i.e. Business is not meant

for the preservation of aesthetic values. Also from the above table, it is

stated as 49 % (n=49) give ranks 1, 50 % (n=50) give rank 2 while 1%

(n=1) give rank 3 to the statement i.e. Aesthetic values are O.K but not for

business they do not contribute to business directly. Also table shows that

51 % (n=51) give ranks 1, while 47% (n=47) give rank 2 while 2% (n=2%)

give rank 3 to the statement i.e. we must preserve our aesthetic values

and must play a positive role in preserving aesthetic values.

23.The table 22 shows that 12 % (n=12) respondents views customer, 62 %

(n=62) respondents views community, 17 % (n=17) respondents views

employees while 8 % (n=8) respondents views shareholders and only 1 %

(n=1) respondent view all are the important publics with respect to social

responsibility of business.

24.According to the table 23 it has shown that 97 % (n=97) respondents are

aware while 3 % (n=3) respondents don’t know that there is any specific

policy formed by their organization with regards to social responsibility.

25.Table 24 shows that according to 39 respondents (39%) says regularly, 51

respondents (51%) says frequently while 10 respondents (10%) says

sometimes environmental protection programme is carried out by the

organization for the betterment of community.

26.Table 25 shows that according to 17 respondents (17%) says regularly, 41

respondents (41%) says frequently while 42 respondents (42%) says

sometimes urban renewal programme is carried out by the organization

for the betterment of community.

27.Table 26 shows that according to 59 respondents (59%) says regularly, 39

respondents (39%) says frequently while 2 respondents (2%) says

sometimes rural development programme is carried out by the

organization for the betterment of community.

28.Table 27 shows that according to 10 respondents (10%) says regularly, 12

respondents (12%) says frequently while 62 respondents (62%) says

176

sometimes and 16 respondents (16%) says never that better transport,

communication and distribution system programme are carried out by the

organization for the betterment of community.

29.Table 28 shows that according to 29 respondents (29%) says regularly, 46

respondents (46%) says frequently while 31 respondents (31%) says

sometimes educational aid has been provided by the organization for the

betterment of community.

30.Table 29 shows that according to 39 respondents (39%) says regularly, 59

respondents (59%) says frequently while 2 respondents (2%) says

sometimes health programme is carried out by the organization for the

betterment of community.

31.Table 30 shows that according to 32 respondents (32%) says regularly, 66

respondents (66%) says frequently while 2 respondents (2%) says

sometimes programme for healthy atmosphere for industrial peace has

carried out by the organization for the betterment of community.

32.Table 31 shows that according to 54 respondents (54%) says regularly, 43

respondents (43%) says frequently while 3 respondents (3%) says

sometimes programme for dynamic infrastructural facilities carried out by

the organization for the betterment of community.

33.Table 32 shows that according to 2 respondents (2%) says frequently

while 16 respondents (16%) says sometimes and 82 respondents says

never any programme for efficient use of energy and natural resources

are carried out by the organization for the betterment of community.

34.Table 33 shows that according to 71 respondents (71%) says regularly, 27

respondents (27%) says frequently while 2 respondents (2%) says

sometimes Instituting programmes for hiring the unemployed is carried out

by the organization for the betterment of community.

35.Table 34 shows that according to 5 respondents (5%) says regularly, 17

respondents (17%) says frequently while 47 respondents (47%) says

sometimes and 31 respondents says never HIV / AIDS programme is

carried out by the organization for the betterment of community.

177

36.Table 35 shows that according to 10 respondents (10%) says

administrative officer, 16 respondents (16%) says Personnel Manager

while 74 respondents (74%) says separate social responsibility division

looks after social responsibility affairs in the organization.

37.The table 36 and graph shows that 45 respondents (45%) says

government response is positive 36 respondents (36%) says it is just

appreciative while 19 respondents (19%) has no response towards the

government reaction towards social responsibility of their organization.

38.As per the table 37 it is clear that 95 respondents (95%) always while 4

respondents (4%) says frequently and 1 respondent (1%) say sometimes

company do business in an ethical manner.

The Role of HR Department

39.Table 38 shows that according to 12 respondents (12%) says the role of

HR department is the ethical investment training of personnel, 22

respondents (22%) says it is Ethics and Corporate governance, 19

respondents (19%) says it is linking with NGOs for mutual programme

while 47 respondents (47%) says all should be taken care by the HR

department while launching any programme directed towards the issues of

CSR by the company.

40.Table 39 shows that 96 respondents (96%) says yes while 4 respondents

(4%) says no that their company have any welfare programme running to

address the issues of CSR.

41.Table 40 shows that 56 respondents (56%) are strongly agree, 27

respondents (27%) are agree and 10 respondents (10%) are agree

somewhat with the statement while 1 respondents (1%) disagree with the

statement and 6 respondents (6%) has not given their views on the

statement that the Hr department has a significant role to play in the

addressing of the issues of CSR.

42.Table 41 shows that 35 respondents (35%) are strongly agree, 47

respondents (47%) are agree and 16 respondents (16%) are agree

178

somewhat with the statement while 2 respondents (2%) has not given their

views on the statement that there is a relation between CSR productivity

and Quality of work life of a worker.

43.Table 42 shows that 2 respondents (2%) are agree somewhat with the

statement while 89 respondents (89%) disagree with the statement and 9

respondents (9%) has not given their views on the statement that the

threat caused by CSR to the organization is very grave.

44.The table 43 shows that 12 respondents (12%) says building awareness

on CSR, 16 respondents (16%) says facilitation of adoption of

programmes, 11 respondents (11%) says organize seminars, meeting,

visits etc, 3 respondents (3%) says project development and building

databases are required for a sustainable CSR programme while 1

respondent (1%) says linking with NGOs and 57 respondents (57%) says

that all above required for a sustainable CSR programme.

Finding from Tables showing Z Test

45.Table 44 shows there is no significant relationship between Dimension of

CSR i.e. Economic & Technological dimension and Social & Political

Dimension.

46.Table 45 shows there here is significant relationship between Dimension

of CSR i.e. Environmental & Aesthetic Dimension and Social & Political

Dimension.

47.Table 46 shows there here is significant relationship between Dimension

of CSR i.e. Economic & Technological Dimension and Environmental &

Aesthetic Dimension.

179

CONCLUSIONS

180

The findings of the study provide us with the strong base to draw

conclusion.

Personal Data

It can be concluded that most of the employees belongs to the age group

of 26-35 years and 36-45 years while others belongs to the age group of

20-25 years and 46 years and above in the management level of the

organization. So management comprises of mix group of experienced and inexperienced but well qualified employees.

Also there are majority of males while few females’ are in the

management.

Introduction about Corporate Social Responsibility

All employees feel that social responsibility is desirable for the business.

So employees have a positive attitude towards CSR.

It is reflected that majority of employees feel that CSR is in the interest of

mankind while for others it is in the interest of country and for few CSR is

in the interest of business.

According to majority of employees the objective of CSR is the promotion

of good corporate citizenship while for other it is highlighting the social

responsibilities of the organization and few things that encouraging

responsible business practice is the objective of CSR.

Majority of employees feels that CSR is the need of the hour and very vital

while very few says that it is not needed.

Majority of employees disagree with the statement that CSR is just

window that companies do to keep critics happy while few agree with the

statement.

Majority of employees disagree with the statement that there are many

business benefits of CSR while few agree with the statement that there

are many business benefits of CSR.

181

So it can be concluded that employees have some knowledge about CSR and have a positive attitude with towards it.

Economic & Technological Dimension

It can be concluded that majority of employees says society is equally

essential as the company.

It can be concluded that majority of employees says profit is necessary but

only after meeting certain obligation and must not be result of exploitation.

It can be concluded that majority of employees says people are more

important than money as they help in organizational productivity. Thus

organizational goals must center on people.

It can be concluded that majority of employees says Labour is a

commodity to be bought and sold and also Employee dignity must be

satisfied.

It can be concluded that majority of employees says accountability of

managers is equality to the owners, contributors and the society.

It can be concluded that majority of employees says Technology as well

as people are important, because people help in technological efficiency.

Hence technology should be modified and changed to met the

requirement of the people.

Social & Political Dimension

It can be concluded that majority of employees says employees have

motives beyond their economic needs. Hence social need must be

concerned for organizational efficiency.

It can be concluded that majority of employees says group participation is

fundamental for meeting social and psychological needs of employees.

Besides it contributes to organizational successes.

It can be concluded that majority of employees says Sons of soil policy in

employment get preference but it should not be on the cost of quality.

182

It can be concluded that majority of employees says business and Govt.

must cooperate to solve the society problem.

It can be concluded that majority of employees says Subordinates are

capable of contributing to new ideas towards profits maximization. Hence

they must be involved in decision making process.

Environmental & Aesthetic Dimension

It can be concluded that majority of employees says we must preserve the

environment in order to lead better quality of life of present as well as of

future generation.

It can be concluded that majority of employees says we must preserve our

aesthetic values and must play a positive role in preserving aesthetic

values.

It can be concluded that majority of employees views community at large

must be taken care with respect to social responsibility of business.

It can be concluded that majority of employees know that there is a

specific policy formed by their organization with regards to social

responsibility.

It can be concluded that majority of employees says more emphasis has

given on environmental protection programme, rural development

programme, educational aid, health programme (inside and outside the

organization), programme for dynamic infrastructural facilities, instituting

programmes for hiring the unemployed is carried out by the organization

for the betterment of community.

It can be concluded that majority of employees says separate social

responsibility division looks after social responsibility affairs in the

organization.

It can be concluded that most of employees says government response is

positive towards social responsibility of their organization.

It can be concluded that majority of employees says company always do

business in an ethical manner.

183

The Role of HR Department

It can be concluded that majority of employees says the role of HR

department is the ethical investment training of personnel, Ethics and

Corporate governance and linking with NGOs for mutual programme while

launching any programme directed towards the issues of CSR by the

company.

It can be concluded that majority of employees says their company have

welfare programme to address the issues of CSR.

It can be concluded that majority of employees says HR department has a

significant role to play in the addressing of the issues of CSR.

It can be concluded that most of employees says there is a relation

between CSR productivity and Quality of work life of a worker.

It can be concluded that most of employees says there is no threat caused

by CSR to the organization.

184

Suggestion

From the findings and conclusion following are the suggestions given

To accurately identify and rank local stakeholders and their expectations a

Stakeholder Relationship Management (SRM) methodology can be

adopted. This can be clearer through the figure

185

Safety, one of severalSelection criteria

Properly informing and raising the

awareness of the contractor employee

On - site coordination and

supervision

Risk analysis and prevention plan in collaboration with

contractors

More community

based approach should be taken while framing programme.

Awareness about various activities carried out by the organization must be

reached to all level within organization as well as in community.

A contractor Safety Policy can be adopted.

186

Site BaselineSelf assessment of community impacts;

stakeholder relationship and community action

plans. Definition of improvement objectives

Site BaselineSelf assessment of community impacts;

stakeholder relationship and community action

plans. Definition of improvement objectives

Action PlanDefinition of actions in line with stakeholder

priorityDevelopment of best practices for dialogue

ContinuousImprovement

Suggestion given the employees for making effective CSR programme

o Building awareness on CSR,

o Facilitation of adoption of programmes,

o Organize seminars, meeting, visits etc,

o Project development and

o Building databases and

o Linking with NGOs is required for a sustainable CSR programme.

187

Assessment and feedback

Corporate Strategic Unit

CrisisManagement Unit

On – Site Unit(Local Operation Unit)

Site, country or subsidiary Local

Authorities and elected representatives

Strategic Watch

Material & Logistic Support,

Assistance & coordination

Crisis Management

operation, Field Operation etc

Business, National elected Authorities &

elected representatives

Formation of Crisis Management Organization

Crisis Management Organization

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BOOKS:-

C.V. Baxi, Ajit Prasad (2005). Corporate Social Responsibility: Concepts

and Cases, the Indian Experience.

Francis Cherunilum (1992), Business Environment. Himalaya Publishing

House.

Dr. Jayraj Jadeja (March, 1992). Approaches to Social Responsibility in

Industrial Houses of Gujarat.

Resources Websites:

Business for Social Responsibility: www.bsr.org

CSR Europe: www.csreurope.org

Global Environmental Management Initiative (GEMI): www.gemi.org

Prince of Wales International Business Leaders Forum (IBLF):

www.iblf.org

Standards of Corporate Responsibility: www.svn.org

The Center for Corporate Citizenship at Boston College:

www.bc.edu/centers/ccc/index.html

U.S. Chamber of Commerce Center for Corporate Citizenship:

www.uschamber.com/ccc/default

World Business Council for Sustainable Development: www.wbcsd.org

World Economic Forum: www.weforum.org

HR Library: www.hrlibrary.com

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HR world: www.hrworld.com

A STUDY ON EMPLOYEES KNOWLEDGE, ATTIDUDE & PRACTICE OF CORPORATE SOCIAL RESPONSIBILITY

PERSONAL DATA

1. Name (optional)

2. Name of organization

3. Age

a. 20-25 years

b. 26-35 years

c. 36-45 years

d. 46 and above

4. Sex

5. Educational qualification

6. Number of dependents

7. Type of family

a. joint

b. nuclear

8. Level of management

a. top

b. upper middle

c. middle

9. Area of working

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a. finance

b. marketing

c. technical

d. personnel

e. public relation

f. purchase

10. Income group

11.Experience in present job

INTRODUCTION ABOUT CORPORATE SOCIAL RESPONSIBILITY

12.Do you feel that social responsibility is desirable for the business?

a. Desirable

b. Very much desirable

c. Indifferent

d. Not at all desirable

13. If answer to Q.12 is a, b then state the reasons

a. It is in the interest of Business

b. It is in the interest of country

c. It is in the interest of mankind

14. If answer to Q.12 is c, d state the reasons

a. It is unproductive expenditure

b. Industry can not afford it

c. Environment doesn’t demand it

15.According to you the objective of CSR are

a. Encourage responsible business practice

b. To promote the concept the good corporate citizenship

c. Highlight the social responsibility of the organization

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S.No.

Statement Strongly agree

agree Agree somewhat

disagree Can’t say

16. CSR is the need of the hour and very vital

17. It is just window that companies do to keep critics happy

18. There are many business benefits of CSR

ECONOMIC AND TECNOLOGICAL DIMENSIONS

Please rank 1, 2, and 3 in the order of preference in the box provided from 19-32:

19.

A In business what is good for us is good for our country

B What is good for our organization is good for our country

C What is good for society is essentially good for our company

20.

A Organizational activity must center around profit maximization

B Profit maximization should not result in exploitation. Exploitation

leads to hostility towards organization and jeopardizes

organizational productivity

C Profit is necessary but only after meeting certain other

obligations

21.

A Money and wealth are most important for our organization

BMoney is important but so are people as they help in

organizational productivity

CPeople are mare important than money Thus organizational

goals must center around people

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22.

A Labour is a commodity to be bought and sold

BLabour has certain rights which must be recognized, otherwise

union pressures are inevitable

C Employee dignity must be satisfied

23.

A Accountability of management is to the owners only.

B Accountability of management is to owners, costumers,

employees, suppliers and the other contributors only

C Accountability of managers is equality to the owners , contributors

and the society

24.

A Technology is very important and must occupy the foremost place

in decision making

B Technology is important but so are people , because people help

in technological efficiency

C People are more important than technology and hence technology

should be modified and changed to met the requirement of the

people

SOCIAL AND POLITICAL DIMENSIONS25.

A Employee must leave personal problems at home. Organization is

meant to solve only corporate problems

B We recognize that employees have motives beyond their

economic needs. For organizational efficiency there needs must

be recognized

C We hire the whole man ,hence we must concern ourselves with

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his social needs

26.

A We hire the whole man; hence we must concern ourselves with

his social needs.

B We recognize the value of group participation because it help in

organization efficiency

C Group participation is fundamental for meeting social and psychological

needs of employees. Besides it contributes to organizational successes.

27

A Sons of soil policy in employment should not get any preference.

Let Govt. be concerned about it.

B Sons of soil policy in employment in should get some preferences

to avoid trouble.

C Sons of soil policy in employment must get preference.

28

A That Gov. is best which governs the least

B Govt. is a necessary evil

C Business and Govt. must cooperate to solve the society problem.

29

A Subordinates are incapable of contributing to new ideas towards profits

maximization .Involving them is nothing but simply wasting the value

able time of the organization.

B Subordinates opinion should be considered because it may lead to

some profitable ideas

C Good ideas normally flow from subordinates .They must be involve in

decision making.

ENVIROENMENTAL AND AESTHETIC DIMENSIONS30

A The natural environment takes care of the ecological problem.

Hence we need not bother about it

B We should control and manipulates the environment to suit the

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corporate objectives.

C We must preserve the environment in order to lead better quality of life.

31

A Business is not meant for the preservation of aesthetic values

B Aesthetic values are O.K but not for business they do not contribute to

business directly

C We must preserve our aesthetic values and must play a positive

role in preserving aesthetic values

32 In your view which are the important publics with respect to social

responsibility of business?

a. Customers

b. Community

c. Government

d. Employees

e. Shareholders

f. Competitors

g. All

33 Is there any specific policy formed by your organization with regard to

social responsibility?

a. Yes

b. No

c. Don’t know

d. No response

34 Which programmmes do you carry out for the betterment of community?

Regularly Frequently Sometime Never

a Environmental protection

b Urban renewal

c Rural development

d Better transport, communication&

distribution system

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e Educational aids

f Health

g Healthy atmosphere for industrial Peace

h Dynamic infrastructural facilities

i Efficient use of energy & natural resources

j Instituting programmes for hiring the

unemployed

k HIV \ AIDS

35 Who looks after social responsibility affairs in your organization?

a. General Manager

b. Corporate Planning Manager

c. Public Relation Manager

d. Administration Manager

e. Personnel Manager

f. Separate Social responsibility division

36 What is the reaction of government to your Social responsibility activities?

a. Positive

b. Just appreciative

c. Indifferent

d. Negative

e. No response

37 Do you feel that company is doing business in an ethical manner?

a. Always

b. Frequently

c. Sometime

d. Never

THE ROLE OF HR DEPARTMENT

38 If any programme is launched by the company, directed towards the issue

of CSR, what would be the role of HR department?

a. Ethical investment training of personal

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b. Ethics and corporate governance

c. Linking with NGOs for mutual programme

d. Any other (specify)

39 Does your company have any welfare programme running to address the

issues of CSR?

a. Yes

b. No

S.No. Statement Strongly

agree

agree Agree

somewhat

disagree Can’t

say

40 The HR department has a

significant role to play in the

addressing of the issues of CSR

41 There is a relation between CSR

productivity and quality of life of a

worker

42 The threat caused by CSR to the

organization is very grave

43 What are your suggestions for developing a sustainable CSR programme?

a. Building awareness on CSR

b. Facilitation of adoption of programmes

c. Organize seminars, meeting, visits etc

d. Project development and building of databases

e. Any other (specify)

44 What is your opinion about CSR programme of your organization (in

brief)?

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