Responsible business note

Compiled by

Paul V Mathew

[Cochin University of

Science and Technology)

Responsible Business; Principles, Practices and Prospects

Responsible Business| Cochin University of Science and Technology (CUSAT)

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In the era of globalization the role of business and corporations is getting robustness while considering the

growth of economy. Irrespective of developed and developing countries business plays a crucial role in the

generation employment and the enhancement of livelihood of common people. It is apparent that the

prime objective of the business is profit. At the same time all the business enterprises have a responsibility

towards planet and people. In other way organizations are expected to contribute for the overall

development of society and environment. In contrary to this, while booming business in one side

environment as well as people remain as victims. It may be heartening to realize that millions of people

sink in to poverty and hunger whereas a minority business groups deepen their pockets with the cost of

the majority. In this context, the concept ‘responsibility’ emerges as a very vital component. It spreads in

individual, organization, community and governments thereby creating a win win situations.

Amidst competition and crisis Corporate Sector around the world is striving to strike a balance between

business and society. The issues like environmental degradation, climate change, corruption etc. tempts

business to think beyond profit. Along with profit business tries to meet the needs of the present

generation without compromising the ability of the next generation. Businesses now want to handle

planet and people with great care to minimize its negative impact on society and the natural environment.

While encapsulating, business must focus its attention on achieving the 'triple bottom line'- people, planet

and profit. This reflection forces the organizations and business enterprises to trying to ensure that

economic growth is socially and environmentally sustainable. A business which is responsible towards

society, environment and economy can sustain for a long time.

In the wake of this realization, different stake holders comprises of governments, business leaders and

social activists have began to call on the business community to play a significant role in moving global

economy towards ‘sustainability’. The concept emerged from the Brundtland Report of UN World

Commission on Environment and Development that defines sustainable development as “meeting the

needs of the present without jeopardizing the ability of future generation to meet their needs. It

incorporates social, environmental and economic goals of entities in the notion of development. The

terminologies with similar meanings responsible business, sustainable business, social and environmental

performance, social action program, corporate citizenship and Corporate Social Responsibility (CSR)

provides us a parallel notion about sustainable development.

Responsible Business Responsible Business refers to the commitment of an enterprise to operating in an economically, socially

and environmentally sustainable manner while balancing the interests of diverse stakeholders (Indian

Institute of Corporate Affairs). A parallel or equally relevant concept Corporate Social Responsibility (CSR)

is about how companies manage the business processes to produce an overall positive impact on society.

Even though the concept CSR is conspicuous, the term ‘Responsible Business’ now emerges as a more

meaningful substitute to avoid ambiguities of CSR – what it really signifies and provide a holistic approach

for business responsibility. The concept CSR created a notion which limited business responsibility inside

certain boundaries that made it as some financial contribution for society. But responsible Business

envisions a holistic approach that expects responsibility in each and every minute activities of business.


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The Extended Producer Responsibility (EPR) in waste management, cradle to grave approach of product

development, CSR and social cost benefit analysis are some of responsible business practices.

A Responsible Business practice is that businesses should not only be responsible but they should also be

seen as socially, economically and environmentally responsible. This concept comprises of various

environments like socio – politic, cultural, economy, legal, technology and ecology. It is a concept whereby

companies decide voluntarily to contribute to a better society and a cleaner environment. It can be also

explained as the organization concern towards economic issues, social issues, environmental issues or a

combination of these three pillars is to promote better corporate governance practices and raise the

standard of corporate governance towards achieving stability and growth. The 21st century will be the

century of the social sector organization. If a large economy, Huge money supply, and a high volume of

information becomes available globally then the size of the community becomes higher and higher. CSR

evolved beyond code of conduct and reporting, it started taking initiative in NGO’s, multi- stakeholder,

ethical trading etc. The Green paper defined CSR as “a concept whereby companies integrate social and

environmental concerns in their business operations and in their interaction with their stakeholders on a

voluntary basis” as they are increasingly aware that responsible behavior leads to sustainable business

success.

Responsible Business Practice – Walmart

Align value with values Walmart is the largest business in the world. As such, it is one of the heaviest users of packaging and other materials. In 2005, after much criticism, Walmart set goals to be supplied with 100% renewable energy, to create zero waste, and to sell products that sustain resources and the environment. Paul Tepfenhart, senior director of private brands strategy at Walmart, talks about the benefits of the company’s zero packaging initiative. “Walmart is the place,” he says, “to save money, to live better…. By being smarter through the life cycle of a product, we save money in our cost structure and that’s reflected on the shelf. This builds the brand.” The epiphany that came to Tepfenhart and others at Walmart is that sustainability saves customers

money. “It is good business, wise business, and the way to build a lasting relationship with our

customers,” he explains.

(Source: Beyond CSR, Doug Solomon)

The Caux Round Table (CRT) Principles The Caux Round Table (CRT) is an international network of business leaders working to promote a morally

and sustainable way of doing business. The Responsible Business Principles developed in the Caux Round

Table are widely recognized as the most comprehensive statement of responsible business practice. This

approach to responsible business consists of seven core principles. It recognizes that while laws and

market forces are necessary, they are insufficient guides for responsible business conduct. The principles

are rooted in three ethical foundations for responsible business and for a fair and functioning society more

generally, namely: responsible stewardship; living and working for mutual advantage; and the respect and

protection of human dignity. The principles also have a risk management foundation - because good ethics

is good risk management. And they balance the interests of business with the aspirations of society to


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ensure sustainable and mutual prosperity for all. Following are the seven principles of Responsible

Business.

Principle 1 - Respect Stakeholders beyond Shareholders

Principle 2 – Contribute to Economic, Social and Environmental Development

Principle 3 – Build Trust by Going beyond the Letter of the Law

Principle 4 –Respect Rules and Conventions

Principle 5 – Support Responsible Globalization

Principle 6 – Respect the Environment

Principle 7 – Avoid Illicit Activities

Stakeholder Management Guidelines

The CRT Principles for Responsible Business are supported by more detailed Stakeholder Management

Guidelines covering each key dimension of business success: customers, employees, shareholders,

suppliers, competitors, and communities.

1. Customers

A responsible business treats its customers with respect and dignity. Business therefore has a

responsibility to:

a. Provide customers with the highest quality products and services consistent with their

requirements.

b. Treat customers fairly in all aspects of business transactions, including providing a high level of

service and remedies for product or service problems or dissatisfaction.

c. Ensure that the health and safety of customers is protected.

d. Protect customers from harmful environmental impacts of products and services.

e. Respect the human rights, dignity and the culture of customers in the way products and services

are offered, marketed, and advertised.

2. Employees

A responsible business treats every employee with dignity and respects their interests. Business therefore

has a responsibility to:

a. Provide jobs and compensation that contribute to improved living standards.

b. Provide working conditions that protect each employee's health and safety.

c. Provide working conditions that enhance each employee’s well-being as citizens, family members,

and capable and caring individuals.

d. Be open and honest with employees in sharing information, limited only by legal and competitive

constraints.

e. Listen to employees and act in good faith on employee complaints and issues.


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f. Avoid discriminatory practices and provide equal treatment, opportunity and pay in areas such as

gender, age, race, and religion.

g. Support the employment of differently-abled people in places of work where they can be

productive.

h. Encourage and assist all employees in developing relevant skills and knowledge.

i. Be sensitive to the impacts of unemployment and work with governments, employee groups and

other agencies in addressing any employee dislocations.

j. Ensure that all executive compensation and incentives further the achievement of long term

wealth creation, reward prudent risk management, and discourage excessive risk taking.

k. Avoid illicit or abusive child labor practices.

3. Shareholders

A responsible business acts with care and loyalty towards its shareholders and in good faith for the best

interests of the corporation. Business therefore has a responsibility to:

a. Apply professional and diligent management in order to secure fair, sustainable and competitive

returns on shareholder investments.

b. Disclose relevant information to shareholders, subject only to legal requirements and competitive

constraints.

c. Conserve, protect, and increase shareholder wealth.

d. Respect shareholder views, complaints, and formal resolutions.

4. Suppliers

a. A responsible business treats its suppliers and subcontractors with fairness, truthfulness and

mutual respect. Business therefore has a responsibility to:

b. Pursue fairness and truthfulness in supplier and subcontractor relationships, including pricing,

licensing, and payment in accordance with agreed terms of trade.

c. Ensure that business supplier and subcontractor activities are free from coercion and threats.

d. Foster long-term stability in the supplier relationships in return for value, quality, competitiveness

and reliability.

e. Share information with suppliers and integrate them into business planning.

f. Seek, encourage and prefer suppliers and subcontractors whose employment practices respect

human rights and dignity.

5. Competitors

A responsible business engages in fair competition which is a basic requirement for increasing the wealth

of nations and ultimately for making possible the just distribution of goods and services. Business

therefore has a responsibility to:

a. Foster open markets for trade and investment.

b. Promote competitive behavior that is socially and environmentally responsible and demonstrates

mutual respect among competitors.


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c. Not participate in anti-competitive or collusive arrangements or tolerate questionable payments or

favors to secure competitive advantage.

d. Respect both tangible and intellectual property rights.

e. Refuse to acquire commercial information through dishonest or unethical means, such as industrial

espionage.

6. Communities

As a global corporate citizen, a responsible business actively contributes to good public policy and to

human rights in the communities in which it operates. Business therefore has a responsibility to:

a. Respect human rights and democratic institutions, and promote them wherever practicable.

b. Recognize government’s legitimate obligation to society at large and support public policies and

practices that promote social capital.

c. Promote harmonious relations between business and other segments of society.

d. Collaborate with community initiatives seeking to raise standards of health, education, workplace

safety and economic well-being.

e. Promote sustainable development in order to preserve and enhance the physical environment

while conserving the earth's resources.

f. Support peace, security and the rule of law.

g. Respect social diversity including local cultures and minority communities.

h. Be a good corporate citizen through ongoing community investment and support for employee

participation in community and civic affairs.

Caux Round Table Conference gives us a comprehensive view on Responsible Business. The seven

principles and stake holder management guidelines acts as a key instrument for responsible business

practitioners.

(Source: Caux Round Table 2009)

Responsible Business code of CSL Limited

1 A commitment to conducting CSL’s business with the utmost integrity by complying with all applicable local laws and regulations in all countries in which we operate, and by fulfilling all of our responsibilities to shareholders and the financial community;

2 Rules guiding employees and directors towards ethical decisions in situations of potential conflict of interest, political involvement, bribery and financial inducements;

3 Fundamental workplace relations principles including mutual respect, non-discrimination and freedom of association;

4 A commitment to the quality and safety of our patients, donors and employees by adherence to health and safety standards, through compliance with manufacturing and other best practice standards, and through provision of safe employee work environments;

5 Investing in Research and Development in new products and improved products that improve patients’ lives;

6 Responsible environmental practices that minimise our environmental impacts;


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7 Guidance for creating and maintaining beneficial relationships with all the communities in which we operate;

8 Collaboration throughout the organisation; 9 Contributing to the development of public policy in our areas of expertise. Code and supplementary policies 1 Our customers and the broader community can be confident that CSL is committed to

operating with the highest integrity at all times; 2 Our contractors, suppliers and distributors know what to expect from a business

relationship with CSL and the expectations we have of them; 3 Our employees understand both their obligations to CSL and CSL’s obligations to them.

Every employee in any of our businesses has a responsibility to ensure that the role they perform in carrying out CSL’s business is a constant reflection of these principles and the

values of the organization.

(Source: Our Code of Responsible Business Practice, December 2008, CSL Ltd.)

Responsible Business Guidelines – An Indian Approach Responsible business envisions a concept that goes beyond the traditional walls of a business organization

and all the way across the value chain. The guidelines prepared by the Ministry of Corporate Affairs urges

businesses to embrace the “triple bottom-line” approach whereby its financial performance can be

harmonized with the expectations of society, the environment and the many stakeholders it interfaces

with in a sustainable manner. These Guidelines aim at the enhancement competitive strengths, improving

reputations, attract and retain talent and manage relations with investors and society at large. The

Guidelines have been articulated in the form of nine (9) Principles with the Core Elements to actualize

each of the principles. The Principle and Core Elements are applicable to large and small businesses.

Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability

Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability

throughout their life cycle

Principle 3: Businesses should promote the wellbeing of all employees

Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders,

especially those who are disadvantaged, vulnerable and marginalised.

Principle 5: Businesses should respect and promote human rights

Principle 6: Business should respect, protect, and make efforts to restore the environment

Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so in a

responsible manner

Principle 8: Businesses should support inclusive growth and equitable development

Principle 9: Businesses should engage with and provide value to their customers and consumers in a

responsible manner


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Cradle to Grave - A Case Study – Principle 2

The company has played a pioneering role in the growth of cellular technology in India. During

product creation the company (guided by Life Cycle Assessment) focused on energy efficiency,

sustainable use of materials and smart packaging. The device even has a feature which reminds the

user to unplug their phone charger from the electric socket when the battery has been charged. The

company's sourcing managers are in constant dialogue with suppliers to confirm full material

information and compliance of every single component and module, and to ensure that the

Company Supplier Requirements and related environmental and ethical standards are met. There is

a dedicated Design for Environment (DfE) specialist for every product and site, to support product

development and monitor that the quality, safety and environmental requirements are met

through a series of milestone reviews. Packaging specialists work to minimize the materials and

logistics burden: every product ships in a smaller box compared to its earlier equivalents. By

providing Eco applications and services, it increases awareness of environmental choices and

promote sustainable actions, like offsetting CO2 emissions. Effective end-of-life practices close the

lifecycle loop, putting energy and valuable materials back into circulation. The company has

recently offered take-back schemes in all its operating sites. By offering to take back old devices at

all its operating sites, the company is striving to practice recycling and reusing of materials.

Solutions that touch lives – A Case Study – Principle 5

Of the some 70 million persons with disabilities in India (5-6 percent of India's population), only a

handful have succeeded in obtaining employment. A Business Process Outsourcing (BPO) company

recognized the need and proactively tapped different talent pools including hiring people with

physical disability, having necessary skill sets to work in a BPO environment.

The unique objective of this initiative was to provide gainful employment to persons with

disabilities without compromising on the quality. The company encourages people with disabilities

to apply for positions with them and have suitably advertised: 'Persons with disability are

encouraged to apply”. They also organize special recruitment drives solely targeted a increasing

the representation of persons with disability among the workforce. They have developed specific

standard recruitment/induction process to ensure that persons with disability are inducted well

into the company and provide the required assistance to them. This includes sensitization of team

members of hearing impaired employees, and other special training, as required. They provide

requisite facilities like ramps, accessible washrooms, special low floor cabs, sign language

interpreter, and emergency preparedness plan etc to meet the needs of persons with disabilities.

The company experienced a lowest attrition rate of 34.79% compared to the industry attrition rate

of 70%

Towards Responsible Business

Sustainability and International Finance Corporation has developed a six step strategy for Responsible

Business. Along with Responsible Business principles and guidelines this strategy model paves a way

towards responsible Business. This six steps consist of Business Analysis, SWOT Analysis, strategy

Development, Planning and implementation of strategy, monitoring and evaluation and communication.


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The diagrammatic representation of the six steps for building a strategy for Responsible Business is shown

below.

Six Steps for Building a Strategy for Responsible Business (RB), Steps towards Responsible Business (Source: Ministry of Corporate Affairs Adapted from Developing Value published by Sustainability and International Finance Corporation)

Global reporting initiative, Global Compact, Sustainability index etc. are some of the wide known

sustainability reporting initiatives. In order to practice responsible business and to ensure transparency,

accountability and responsibility, these models act as effective guidelines.

Responsible Business develops the consciousness that you can only ‘‘do well’’ in the long run by ‘‘doing

good’’ to the environment and the society you operate in and that the source of your competitive

advantage can either be enhanced or destroyed by strategic and operational decisions you take today

(Daniela Ortiz Avram and Sven Ku¨hne, 2008). It is evident that many of the business have negative impact

on environment and society. Advocates of Responsible Business believe that the most alarming social and

environmental issues can be solved through mutual conscience and effort. To tackle different socio-

economic and environmental threats created by men and business, corporations should behave in more

responsible and ethical manner.


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Business Responsibility Business is a part of the society and the existence of both is interrelated. Business provides services for

society and at the same time it fetches resources from environment and people. In the wake of increased

community demands and stake holder pressure which arose from the looming environmental crisis,

business entities are forced to adapt myriad responsible practices not only to solace society but also to

maintain sustainability. In another way sustainability is a matter of concern for almost all business.

Organizations are striving to develop a variety of strategies for dealing with societal needs, environmental

protection and different other sustainable development practices. “At one end of the continuum are

organizations that do not acknowledge any responsibility to society and the environment. And on the

other end of the continuum are those organizations that view their operations as having a significant

impact as well as reliance on society at the economic, social, and ecological levels, thus resulting in a sense

of responsibility beyond the traditional boundaries of the organization. Most organizations can be placed

somewhere in between (Alasia et.al, 2009, Corporate Social Responsibility and Sustainable Business).

Sustainable development, a concept which considers society, environment and economy with equal

preference emerged as the ideal development strategy of business. This TBL (Triple Bottom Line) ideology

takes account planet, people and profit shall be the agenda of business development.

Social Responsibilities of Business The notion of ‘give something back to the society’ is may be the logic behind social responsibility. The term

CSR is also in line with these concept. Along with profit business should concern people and society and

never let people in lurch for profit. “In negative terms, social responsibility of business means its obligation

to prevent economic performance overrun its social performance. In practice it could mean promoting

employment opportunities, maintaining healthy competition with the result ensuring quality products and

fair prices, developing human resources, promoting human values within the organization etc. The

presumption here is that a business is responsible not just for doing what it thinks useful, but it is

responsible to the whole community, whether local or global. This idea is expressed by Ethics in Action, a

Vancouver, BC organization as follows. “Socially responsible companies consider the full scope of their

impact on communities and the environment when making decisions, balancing the needs of stakeholders

with their need to make a profit”. Accordingly, the success rate of a company is to be measured according

to its whole impact on all who are affected by or involved in its operations, not just by virtue of its size,

revenues, profits, returns to financial investors, or social responsible campaign budgets”. (Mathew

Illathuparampil, Indian Ethos and Management Values).

As aforesaid there are various social responsibilities are expected from organizations. This social

performance means overall activities which includes external activities as well as internal responsibilities.

The social responsibility equally considers employees and nearby community as equally importance

partners. Considering the internal responsibilities of business, most of it related with employees and HR

practices. From the very beginning of industrial era, clash between employees and management were

apparent. Earlier employees were just a cog in a machine. But time moves systems changed and

employees became an integral and core part of business. While proclaiming this flamboyant ideology,

unemployment and skill shortage keep employees in the back seats in certain places. In some occasions

management exploits staffs and in some places employees blindly attack management with the vigor and


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spirit of trade unions. The HR issues of Maruti workers, Air India pilots, Rail way loco pilots etc. are

frequently occurred in news these days. Along with these the issues of nursing staffs and private school

teachers were also came in to our attention. These incidents proved that business should consider the

genuine issues of employees with great care.

Social responsible business can do a diverse range of activities for the overall enhancement different social

indices. Business can adopt social programs, cultural development initiatives, micro enterprises

development, employment generation activities, awareness campaign etc. for the overall growth of

immediate community. The social interest business varies, that may depend on the people demand,

strategic area, management decision and certain other factors. The Time Foundation Survey (2008)

reveals that the selection of issues under social responsibility by organizations depends on host of factors

including organizational mandate, current relevance of issues and demand from the community. The

priority areas that the respondents felt ought to be covered under social responsibility initiatives include

education, environment, health, women empowerment, livelihood promotion, sanitation, microfinance,

HIV/ AIDS, child care, slum improvement, disaster management and agricultural development. The study

of KPMG reveals that action in social responsibility in India largely spans a diverse set of thematic areas –

health, education, livelihood, poverty alleviation, environment, water, housing, energy and microfinance.

However some other areas like women empowerment, child development and infrastructure also

appeared in the case studies. Based on the comparative study of the 24 companies, it was found that

while some companies chose to narrow their focus on a few thematic areas, others took a broader view

and undertook a larger scope of areas to focus on. Out of 24 case studies that were analysed, it was found

that there were as many as 16 corporates focusing on 3-5 thematic areas, whereas only 4 corporate

catered to 1-2 thematic areas of work and remaining four stuck to six or more thematic areas. In terms of

the area focus, environment garnered the maximum attention from corporate while women

empowerment and poverty alleviation were neglected areas with minimal corporate focusing on the

same.

The Miracle Card – Centurion Bank of Punjab Limited (CPOB)

The Miracle Card program of Centurion Bank of Punjab Limited aimed at the education of every

underprivileged child in the country. The fund generated through the Miracle card - a kind credit

card ensures money every time when a member spends for shopping. For every member, Bank

debits a nominal amount of INR 50 on the card which is matched by a similar contribution from

CBOP thus totaling to INR 100 per card. This amount is sent to the ‘Gift a Smile’ initiative run by AOL

which focuses on creating ‘first time literates’.

How can INR 100 make a difference?

Imagine when all the proposed 500,000 people subscribe to the card. The amount changes from a

mere INR 100 to a monumental 5 crores! This money is in turn put into Ved Vignan Maha

Vidyapeeth, a school in Bangalore committed to providing free education to underprivileged

children from rural backgrounds thus helping them break the shackles of poverty and face the world

with more confidence. It costs INR 10, 000 to sponsor a kid’s education for one year (including food,

travel, uniform, books). Hence with an estimated corpus of INR 5 crores, the miracle can potentially

add 3500 more kids to school (INR 1.5 crores going towards funding the infrastructure).


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In order to achieve sustainability and brand image organizations are liable perform certain social

functions. This is why business incorporates responsible practices in their strategic plans. Some of the

social responsible practices of corporate are shown below.

Sl. No. Social Responsible Initiatives

1 Development of local infrastructure

2 Improving basic amenities of local people

3 Giving aid for community development activities like education, women

empowerment, child development, environmental protection, employment

generation activities, charity works, health and hygiene etc.

4 Cooperation with government and local bodies

5 Consultation with LSG’s and NGO’s

6 Improving Management in Government

7 Ensuring equal job opportunities

8 Providing sufficient training and development activities

9 Compensation and welfare in comply with industrial standards

10 Procuring manpower and raw materials from the local community whenever possible

11 Responsive to the complainants of customers and stakeholders

12 Organization runs under national and international legislations

13 Code of conduct for staffs and Management

14 Policy against commercial exploitations like sexual abuse and discrimination against

physically challenged persons

ASOCIO Policy paper 2004 explains 4 key drivers of social Responsibility.

Enlightened self-interest - creating a synergy of ethics, a cohesive society and a sustainable global

economy where markets, labour and communities are able to function well together.

Social investment - contributing to physical infrastructure and social capital is increasingly seen as

a necessary part of doing business.

Transparency and trust - business has low ratings of trust in public perception. There is increasing

expectation that companies will be more open, more accountable and be prepared to report

publicly on their performance in social and environmental arenas

Increased public expectations of business - globally companies are expected to do more than

merely provide jobs and contribute to the economy through taxes and employment.”

In this globalized era people are more concerned and aware about socially responsible business. So

companies are expected to contribute more than mere jobs and products/services. Consumers and

stakeholders looks for transparency, accountability and responsibility of business. Rather than meager

statements, community looks for values and ethics deliver by corporate. Reporting responsibility practices

through sustainability reports, Global Reporting Initiative, Global Compact etc. are therefore increasingly


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becoming common practice and now mandatory to various organizations. Increased engagement of

government, initiatives of stake holders and meaningful dialogues of business leaders make business more

socially responsible.

Environmental responsibility The term Business Environmental Performance gives more meaning to the concept of Environmental

responsibility. Similar to other responsibility areas the idea behind environmental responsibility is

‘something in return’ to environment. Business utilizes or exploits natural resources as raw materials or

products most of these are not capable of replenish. In the wake of this negative environmental impact

business have the responsibility for the preservation, conservation and reproduction of environmental

resources.

In contrary to this contemporary business is often charged with the responsibility of creating

environmental hazards. The practice of jeopardizing environment for profit caused series of natural as well

as environmental calamities. The tragedies like Minamata, Bhopal Nuclear Plant, Fukushima, Chernobyl,

Exon Valdez etc. are easily explained disasters created by business. While coming to our premises the

scams like Coalgate and 2G Spectrum unveils that natural resources were plundered by giant business

groups with meager prices. Ground water exploitation of Coco Cola in Plachimada, terminator seeds and

GM crops of Monsanto and endosulfan also are evident to these issues.

Even though everyone has equitable right for resources in the nature, an ecological as well as social

imbalance occurs when a minority exploits natural resources in a big way. This unethical behavior drags

vulnerable communities in to health hazards, poverty and drought. The practice of some developed

countries to export their industrial waste, debris, radioactive materials, dirties and outdated technologies

and electronic wastes to some poor and underdeveloped countries where no environmental regulations

exist or through some coercion or corrupted ways make common people in peril. These incidents raise

some ethical questions against the environmental integrity of business and entities.

Here I remember two quotes of Mahatma Gandhi which reiterates the relevance of environment and

jettisons the negation of business.

“Air, water, land and resources are not an inheritance from our fore fathers but on loan on our

children. So we are expected to handover to them as at least it was transferred to us.”

“Resources are only to satisfy the needs not to their greed of human.”

From small to big now business have the responsibility to address issues such as global warming, climate

change, ozone depletion, bio diversity conservation and pollution control which is to ensure sustainable

economic growth and the well being of society. A comprehensive and systematic approach is essential to

understand these issues and to be accountable for direct and indirect environmental impacts of business.

To make the operation environmental friendly, every business needs to imbibe certain ethical standards as

well as moral principles. Ministry of Corporate Affairs, Government of India gives some guidelines in this

regard.


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Business should respect, protect, and make efforts to restore the environment

1. Businesses should utilize natural and manmade resources in an optimal and responsible manner

and ensure the sustainability of resources by reducing, reusing, recycling and managing waste.

2. Businesses should take measures to check and prevent pollution. They should assess the

environmental damage and bear the cost of pollution abatement with due regard to public

interest.

3. Businesses should ensure that benefits arising out of access and commercialization of biological

and other natural resources and associated traditional knowledge are shared equitably.

4. Businesses should continuously seek to improve their environmental performance by adopting

cleaner production methods, promoting use of energy efficient and environment friendly

technologies and use of renewable energy

5. Businesses should develop Environment Management Systems (EMS) and contingency plans and

processes that help them in preventing, mitigating and controlling environmental damages and

disasters, which may be caused due to their operations or that of a member of its value chain

6. Businesses should report their environmental performance, including the assessment of potential

environmental risks associated with their operations, to the stakeholders in a fair and transparent

manner.

7. Businesses should proactively persuade and support its value chain to adopt this principle

Businesses should provide goods and services that are safe and contribute to sustainability throughout

their life cycle

The principle emphasizes that in order to function effectively and profitably, businesses should work to

improve the quality of life of people. The principle recognizes that all stages of the product life cycle, right

from design to final disposal of the goods and services after use, have an impact on society and the

environment. Responsible businesses, therefore, should engineer value in their goods and services by

keeping in mind these impacts. The principle, while appreciating that businesses are increasingly aware of

the need to be internally efficient and responsible, exhorts them to extend their processes to cover the

entire value chain – from sourcing of raw materials or process inputs to distribution and disposal.

1. Businesses should assure safety and optimal resource use over the life-cycle of the product – from

design to disposal – and ensure that everyone connected with it- designers, producers, value chain

members, customers and recyclers are aware of their responsibilities.

2. Businesses should raise the consumer's awareness of their rights through education, product

labeling, appropriate and helpful marketing communication, full details of contents and

composition and promotion of safe usage and disposal of their products and services.

3. In designing the product, businesses should ensure that the manufacturing processes and

technologies required to produce it are resource efficient and sustainable.

4. Businesses should regularly review and improve upon the process of new technology

development, deployment and commercialization, incorporating social, ethical, and environmental

considerations.


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5. Businesses should recognize and respect the rights of people who may be owners of traditional

knowledge, and other forms of intellectual property.

6. Businesses should recognize that over-consumption results in unsustainable exploitation of our

planet's resources, and should therefore promote sustainable consumption, including recycling of

resources.

Linking natural resource management with sustainable development: Creating value for society

A cement manufacturing company in the country initiated the salinity mitigation programme in

coastal regions of Gujarat to improve the condition of the natural resources available. Under this

project, the community members were mobilized for innovative water conservation projects by the

company. This jointly conceptualized and implemented project also received funding assistance

from the state government and other funding NGOs. The company dealt with the problem from

many angles. In areas where a seasonal river flowed, check dams were built to allow water to

percolate down. The bottoms of fresh water wells were sealed so that saline water does not mix

with fresh water. Modifications in agriculture, like growing of less water intensive crops, use of drip

irrigation, promotion of horticulture were encouraged. For provision of drinking water, roof rain

water harvesting structures were built.

The highlight of the project was in using simple, relatively inexpensive technology along with direct

people's participation to solve a serious socioeconomic and environmental problem. The project has

benefited a total of 2181 households across 15 villages by raising the ground water levels in project

villages by nearly 30 feet, interlinking water bodies/ ponds, greater ground water recharge,

increased agricultural productivity as well.

Initiative towards Eco friendly process: Cleaner is Cheaper

A globally recognized integrated pharmaceutical (pharma) company based in Maharashtra with core

competencies in the development and manufacture of APIs (active pharmaceutical ingredients) and

finished dosage forms, as well as in drug discovery has been working towards making its process

more energy efficient and reducing their environmental impacts. As a part of its commitment

towards sustainable development and conservation of the environment, the company has

undertaken remarkable initiatives for effective utilization of energy resources and minimization &

control of waste. The company, through strategic process innovation in the manufacturing process

of Cephalosporin, has achieved

A 40% reduction in the generation of hazardous waste; a 25% reduction in the effluent

generated;

Reduced furnace oil consumption leading to reduction in sulphur emission;

Reduced electricity consumption by 95%;

Complete elimination of unrecoverable metals.

The total savings per annum have been calculated to the tune of INR 2.1 million, improving

productivity by 55%.

(Source: National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of

Business, Ministry of Corporate Affairs, Govt. of India)


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In the contemporary scenario government as well as different world organizations consider the issue of

environmental responsibility very seriously. Earth summits, protocols and multitude of certifications and

standards are evident for this movement which will be discussed later. It is understood that

environmental activism and scientific finding have played a commendable role in the mass awareness of

community. Any activity hinders the healthy relation of earth and live being produce negative impacts. As

a contributor of pollution, business is involved in current environmental crisis. To tackle this looming crisis,

business should intentionally control their activities and adapt eco friendly practices like promotion of

renewable sources, pollution control mechanisms, creation of social forests, promoting green ventures

and strictly follow rules and legislations. It is important to realize the existence of business and human and

there is no existence of both without the existence of earth. This realization may lead us to behave more

ethically and eco friendly.

Economic Responsibility “The economic value of avoiding GHG emissions by conserving forests: US$ 3.7 trillion (NPV) and the

economic value of species diversity specifically the contribution of insect pollinators to agricultural output is estimated to be ~ US$ 190 billion/year”. (TEEB Report 2010)

Primary objective of every business is profit. Business depicts its responsibility towards economy through

creating profit, employment and infrastructure. Responsible business can contribute to the growth of

economy through promoting research and development, product development, business innovation and

novel business ventures. Along with these functions, business has the responsibility to pay taxes and to

comply with economic objectives of the nation.

@@@@@@@@@@@@@@@@@@2

The three categories of Responsible Finance considered by a study (Responsible Finance – A Catalyst for

Responsible Business, International and Indian Trends and Challenges in Responsible Finance) coined three

terms : Sustainable/Responsible Lending, Sustainable/Responsible Investment, and Impact Investing.

Sustainable/Responsible Lending: Refers to the practices of retail lenders and corporate financiers’

(investment banks) to apply environmental, and/or social criteria in their lending decision making, the

latter specifically in their project financing decisions.

Sustainable/Responsible Investment: Refers to the incorporation of environmental, social and

governance (ESG criteria) into investment decision making by investors.

Impact investment: Refers to an investment approach by a new breed of venture capitalists and angel

investors at the start up or early stage of a business’s development. In providing early stage financing

impact investors aim to maximize social and environmental impacts alongside financial returns with their

investments.


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International Responsible Finance Trends

Recognition of the Business Case for Responsible Finance

International Commitment by the Financial Institutions to Responsible Finance

Governmental and regulatory drivers of ESG management and disclosure

Increasing Stock Exchange Listing Requirements

Translating a Commitment into ESG Policies

Implementing Practices to manage operational and portfolio impacts

Disclosing Policies, Practices and Performance

Measuring, Rating and Rewarding Performance

Increased interest in impact investing

A new asset class

Geographic Focus on emerging markets

Thematic focus on a number of key sectors such as health and education

Impact measurement and engaged investing

Responsible Finance Challenges and Barriers

Lack of disclosure and data availability Data quality and comparability, standardization of metrics and impact Assurance of data Lack of research on business case and business case recognition by banks and investors Thematic blind spots of risks and opportunities Lack of measurement tools India specific challenges include:

Lack of awareness, understanding, commitment and capacity Lack of engagement by the media and other stakeholders A focus on operational impacts by banks rather than portfolio impacts Non-compliance Shareholding patterns and lack of engagement by domestic insurance and pension funds

Responsible Business Practice of CSL (Economic and Finance)

Internal controls and reporting procedures

Accurate and complete business records are essential for the effective management of our business and to

maintaining investor confidence. At CSL, we are committed to ensuring the integrity and quality of our

business record keeping and that all of our business records are created and managed to give a fair, true

and accurate account of our business. We have internal control systems to ensure financial statements

comply with the applicable local laws of the countries in which we operate. The management of our

information technology ensures that our information assets are protected and held secure.

Continuous disclosure

As a publicly listed company on the Australian Securities Exchange (“ASX”), CSL has obligations under

Australian law and the ASX Listing Rules. Subject to limited exceptions, we must continuously disclose

information about CSL that a reasonable person would expect to have a material effect on the price or

value of CSL securities.CSL has a policy that sets clear guidelines and describes the actions that the

directors and all employees should take when they become aware of information that may require


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disclosure.

Trading in CSL shares

We encourage all of our directors and employees to be long term holders of CSL shares. However, we must

take care over the timing of the sale or purchase of any such shares. Insider trading laws prohibit directors

or employees from buying or selling CSL shares, where they are in possession of price sensitive information

that is not generally available to the market. We have a policy that helps directors and employees to fully

understand their obligations in relation to trading in CSL securities. Insider trading is a criminal offence

under Australian law.

Trade practices

Compliance with trade practices and competition law is fundamental to our integrity and good reputation.

CSL supports the principle of free competition and forbids practices that would in any way:

o Mislead consumers;

o Result in pricing that would be in contravention of applicable trade practices or competition

laws; or

o Constitute other unfair practices.

We have compliance training programs in place to ensure that relevant employees understand their own

and CSL’s obligations in relation to applicable trade practices and competition laws. These programs are

delivered at the local business unit level and cover the systems we have established for identifying,

communicating, reporting, investigating, and resolving any non-compliance with such laws.

Conflicts of interest

A conflict of interest can occur where a private interest is inconsistent with an employee’s obligation to

serve the interests of CSL. In carrying out their responsible duties at CSL, all directors and employees are

expected to put the interests of CSL ahead of their private interests. This includes where:

o A private interest (financial or otherwise) could conceivably influence an employee’s judgment in

handling company business;

o An employee’s allegiance to immediate family or any third party, group or organization is regarded

as competing with the interests and concerns of CSL;

o An employee has an interest in a transaction in which it is known that CSL has or may have an

interest; or

o An employee receives fees, commissions or other compensation from a supplier, a competitor or

customer of CSL.

To avoid any potential or perceived conflict of interest, an employee must seek the permission from their

manager in order to commence or continue any outside employment. We have management systems and

approaches in place for dealing with and resolving any conflicts or potential conflicts that may arise. We

encourage employees to declare any potential conflict of interest to their manager as early as possible to

help us plan ahead and avoid the conflict.

Bribery & inducements

No CSL businesses or employees will directly or indirectly offer, pay, solicit or accept bribes or give or

receive personal financial rewards or inducements in exchange for making business decisions. Our

employees and directors must not accept gifts or entertainment where to do so might influence, or might

be perceived to influence, objective business judgment.


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Corporate Social Responsibility (CSR)

The term Corporate Social Responsibility (CSR) is an evolving concept getting wide attention and gaining

different dimensions day by day. Even though the term is new, the concept has a long history even from

pre Christian period. At the same time, sustainable business, responsible business, social and

environmental performance, social action program, corporate citizenship etc are emerged as a proxy for

CSR. Albeit the term ‘Corporate Social Responsibility’ was coined by R. Edward Freeman in his book titled

‘Strategic Management: A Stakeholder Approach’, this term not have a globally accepted definition. But

the common concise that CSR is essential to business and majority believe that business should serve as a

steward in society, and that it has a duty to investors, employees, consumers, communities and the

environment (CCC 2005c., Corporate Responsibility, a critical introduction, Michel Blowfield and Alan

Murray). This can be corroborated by the fact that while in 1977 less than half of the Fortune 500 firms

even mentioned CSR in their annual reports, by the end of 1990, approximately 90 percent Fortune 500

firms embraced CSR as an essential element in their organisational goals, and actively promoted their CSR

activities in annual reports (Boli and Hartsuiker, 2001). (Corporate Social Responsibility –Towards a

Sustainable Future, A White Paper, KPMG IN INDIA).

The meaning of CSR has two dimensions. On one hand, it is ethical behavior of an organization exhibits

towards its and on the other hand, it denotes the responsibility of an organization towards the

environment and society in which it operates. According to World Business Council for Sustainable

Development “Corporate social

Responsibility is the continuing

commitment by business to behave

ethically and contribute to economic

development while improving the

quality of life of the workforce and

their families as well as of the local

community and society at large”.

While debating on definition, there

is no dual opinion in the fact that

CSR relates with sustainable

development. The common

principles constitute to form a

concept triple bottom line (TBL)

approach gives a holistic view on

CSR. This may be encapsulated as

the organization/individual effort

towards social, environmental and

economical enhancement of the

society. This was evolved in line with the three pillar concept (People, Planet and Profit). In short CSR can

be expressed as the of the organizations responsibility towards overall positive impact of the society.

(Diagram: Source: http://www.bombaychamber.com/image002.jpg)


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Evolution of CSR

The concept of CSR in India is not new, the term may be. The process though acclaimed recently, has been

followed since ancient times albeit informally. Philosophers like Kautilya from India and pre-Christian era

philosophers in the West preached and promoted ethical principles while doing business. The concept of

helping the poor and disadvantaged was cited in much of the ancient literature. The idea was also

supported by several religions where it has been intertwined with religious laws. “Zakaat”, followed by

Muslims, is donation from one’s earnings which is specifically given to the poor and disadvantaged.

Similarly Hindus follow the principle of “Dhramada” and Sikhs the “Daashaant”

The term corporate social performance was first coined by Sethi (1975), expanded by Carroll (1979), and

then refined by Wartick and Cochran (1985).In Sethi’s 1975 three-level model, the concept of corporate

social performance was discussed, and distinctions made between various corporate behaviors. Sethi’s

three tiers were ‘social obligation (a response to legal and market constraints); social responsibility

(congruent with societal norms); and social responsiveness (adaptive, anticipatory and preventive)

(Cochran, 2007). An ideal CSR has both ethical and philosophical dimensions, particularly in India where

there exists a wide gap between sections of people in terms of income and standards as well as socio-

economic status (Bajpai, 2001). According to Infosys founder, Narayan Murthy, ‘social responsibility is to

create maximum shareholders value working under the circumstances, where it is fair to all its

stakeholders, workers, consumers, the community, government and the environment’. Commission of the

European Communities 2001 stated that being socially responsible means not only fulfilling legal

expectations, but also going beyond compliance and investing ‘more’ into human capital, the environment

and the relation with stakeholders(Bajpai, 2001). Over the time four different models have emerged all of

which can be found in India regarding corporate responsibility (Kumar et al.2001).

In the global context, the recent history goes back to the seventeenth century when in 1790s, England

witnessed the first large scale consumer boycott over the issue of slave harvested sugar which finally

forced importer to have free-labor sourcing. In India, in the pre independence era, the businesses which

pioneered industrialisation along with fighting for independence also followed the idea. They put the idea

into action by setting up charitable foundations, educational and healthcare institutions, and trusts for

community development. The donations either monetary or otherwise were sporadic activities of charity

or philanthropy that were taken out of personal savings which neither belonged to the shareholders nor

did it constitute an integral part of business. The term CSR itself came in to common use in the early 1970s

although it was seldom abbreviated. By late 1990s, the concept was fully recognised; people and

institutions across all sections of society started supporting it. This can be corroborated by the fact that

while in 1977 less than half of the Fortune 500 firms even mentioned CSR in their annual reports, by the

end of 1990, approximately 90 percent Fortune 500 firms embraced CSR as an essential element in their

organisational goals, and actively promoted their CSR activities in annual reports (Boli and Hartsuiker,

2001).

(Source: Corporate Social Responsibility – Towards a Sustainable Future, A White Paper - KPMG IN INDIA)


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CSR Theories

Instrumental theories

In this group of theories CSR is seen only as a strategic tool to achieve economic objectives and, ultimately,

wealth creation. Representative of this approach is the well-known Friedman view that ‘‘the only one

responsibility of business towards society is the maximization of profits to the shareholders within the

legal framework and the ethical custom of the country’’ (1970). Instrumental theories have a long tradition

and have enjoyed a wide acceptance in business so far. As Windsor (2001) has pointed out recently, ‘‘a

leitmotiv of wealth creation progressively dominates the managerial conception of responsibility’’

(Windsor, 2001, p. 226). Concern for profits does not exclude taking into account the interests of all who

have a stake in the firm (stakeholders). It has been argued that in certain conditions the satisfaction of

these interests can contribute to maximizing the shareholder value (Mitchell et al., 1997; Odgen and

Watson, 1999). An adequate level of investment in philanthropy and social activities is also acceptable for

the sake of profits (McWilliams and Siegel, 2001).

Three main groups of instrumental theories can be identified, depending on the economic objective

proposed. In the first group the objective is the maximization of shareholder value, measured by the share

price. Frequently, this leads to a short-term profits orientation. The second group of theories focuses on

the strategic goal of achieving competitive advantages, which would produce long-term profits. In both

cases, CSR is only a question of enlightened self-interest (Keim, 1978) since CSRs are a mere instrument for

profits. The third is related to cause-related marketing and is very close to the second. Let us examine

briefly the philosophy and some variants of these groups.

Currently, this approach usually takes the shareholder value maximization as the supreme reference for

corporate decision-making. The Agency Theory (Jensen and Meckling, 1976; Ross, 1973) is the most

popular way to articulate this reference. However, today it is quite readily accepted that shareholder value

maximization is not incompatible with satisfying certain interests of people with a stake in the firm

(stakeholders). In this respect, Jensen (2000) has proposed what he calls ‘enlightened value maximization’.

This concept specifies long-term value maximization or value-seeking as the firm’s objective. At the same

time, this objective is employed as the criterion for making the requisite tradeoffs among its stakeholders.

Strategies for achieving competitive advantages

A second group of theories are focused on how to allocate resources in order to achieve long-term social

objectives and create a competitive advantage (Husted and Allen, 2000). In this group three approaches

can be included: (a) social investments in competitive context, (b) natural resource-based view of the firm

and its dynamic capabilities and (c) strategies for the bottom of the economic pyramid.

The resource-based view of the firm (Barney, 1991; Wernerfelt, 1984) maintains that the ability of a firm

to perform better than its competitors depends on the unique interplay of human, organizational, and

physical resources over time. The ‘‘dynamic capabilities’’ approach is focused on the drivers behind the

creation, evolution and recombination of the resources into new sources of competitive advantage (Teece


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et al., 1997). So dynamic capabilities are organizational and strategic routines, by which managers acquire

resources, modify them, integrate them, and recombine them to generate new value-creating strategies.)

c) Strategies for the bottom of the economic pyramid. Traditionally most business strategies are focused

on targeting products at upper and middle-class people, but most of the world’s population is poor or

lower- middle class. At the bottom of the economic pyramid there may be some 4000 million people. On

reflection, certain strategies can serve the poor and simultaneously make profits. Prahalad (2002),

analyzing the India experience, has suggested some mind-set changes for converting the poor into active

consumers. The first of these is seeing the poor as an opportunity to innovate rather than as a problem.

A specific means for attending to the bottom of the economic pyramid is disruptive innovation. Disruptive

innovations (Christensen and Overdorf, 2000; Christensen et al., 2001) are products or services that do not

have the same capabilities and conditions as those being used by customers in the mainstream markets; as

a result they can be introduced only for new or less demanding applications among non-traditional

customers, with a low-cost production and adapted to the necessities of the population. For example a

telecommunications company inventing a small cellular telephone system with lower costs but also with

less service adapted to the base of the economic pyramid.

Disruptive innovations can improve the social and economic conditions at the ‘‘base of the pyramid’’ and

at the same time they create a competitive advantage for the firms in telecommunications, consumer

electronics and energy production and many other industries, especially in developing countries (Hart and

Christensen, 2002; Prahalad and Hammond, 2002).

Cause-related marketing

Cause-related marketing has been defined as ‘‘the process of formulating and implementing marketing

activities that are characterized by an offer from the firm to contribute a specified amount to a designated

cause when customers engage in a revenue-providing exchanges that satisfy organizational and individual

objectives’’ (Varadarajan and Menon, 1988, p. 60). Its goal then is to enhance company revenues and sales

or customer relationship by building the brand through the acquisition of, and association with the ethical

dimension or social responsibility dimension (Murray and Montanari, 1986; Varadarajan and Menon,

1988). In a way, it seeks product differentiation by creating socially responsible attributes that affect

company reputation (Smith and Higgins, 2000).

Political theories A group of CSR theories and approaches focus on interactions and connections between business and society and on the power and position of business and its inherent responsibility. They include both political considerations and political analysis in the CSR debate. Although there are a variety of approaches, two major theories can be distinguished: Corporate Constitutionalism and Corporate Citizenship. Corporate constitutionalism Davis (1960) was one of the first to explore the role of power that business has in society and the social impact of this power. In doing so, he introduces business power as a new element in the debate of CSR. He


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held that business is a social institution and it must use power responsibly. Additionally, Davis noted that the causes that generate the social power of the firm are not solely internal of the firm but also external. Their locus is unstable and constantly shifting, from the economic to the social forum and from there to the political forum and vice versa. Davis attacked the assumption of the classical economic theory of perfect competition that precludes the involvement of the firm in society besides the creation of wealth. Davis formulated two principles that express how social power has to be managed: ‘‘the social power equation’’ and ‘‘the iron law of responsibility’’. The social power equation principle states that ‘‘social responsibilities of businessmen arise from the amount of social power that they have’’ (Davis, 1967, p. 48). The iron law of responsibility refers to the negative consequences of the absence of use of power. In his own words: ‘‘whoever does not use his social power responsibly will lose it. In the long run those who do not use power in a manner which society considers responsible will tend to lose it because other groups eventually will step in to assume those responsibilities’’ (1960, p. 63). So if a firm does not use its social power, it will lose its position in society because other groups will occupy it, especially when society demands responsibility from business (Davis, 1960). According to Davis, the equation of social power responsibility has to be understood through the functional role of business and managers. In this respect, Davis rejects the idea of total responsibility of business as he rejected the radical free-market ideology of no responsibility of business. The limits of functional power come from the pressures of different constituency groups. This ‘‘restricts organizational power in the same way that a governmental constitution does.’’ The constituency groups do not destroy power. Rather they define conditions for its responsible use. They channel organizational power in a supportive way and to protect other interests against unreasonable organizational power (Davis, 1967, p. 68). As a consequence, his theory is called ‘‘Corporate Constitutionalism’’. Integrative social contract theory Donaldson (1982) considered the business and society relationship from the social contract tradition, mainly from the philosophical thought of Locke. He assumed that a sort of implicit social contract between business and society exists. This social contract implies some indirect obligations of business towards society. This approach would overcome some limitations of deontological and teleological theories applied to business. Afterwards, Donaldson and Dunfee (1994, 1999) extended this approach and proposed an ‘‘Integrative Social Contract Theory’’ (ISCT) in order to take into account the socio-cultural context and also to integrate empirical and normative aspects of management. Social responsibilities come from consent. These scholars assumed two levels of consent. Firstly a theoretical macrosocial contract appealing to all rational contractors, and secondly, a real microsocial contract by members of numerous localized communities. According to these authors, this theory offers a process in which the contracts among industries, departments and economic systems can be legitimate. In this process the participants will agree upon the ground rules defining the foundation of economics that will be acceptable to them. The macrosocial contract provides rules for any social contracting. These rules are called the ‘‘hyper-norms’’; they ought to take precedence over other contracts. These hyper-norms are so fundamental and basic that they ‘‘are discernible in a convergence of religious, political and philosophical thought’’ (Donaldson and Dunfee, 2000, p. 441). The microsocial contracts show explicit or implicit agreements that are binding within an identified community, whatever this may be: industry, companies or economic systems. These microsocial contracts, which generate ‘authentic norms’, are based on the attitudes and


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behaviors of the members of the norm-generating community and, in order to be legitimate, have to accord with the hyper-norms. Corporate citizenship In the 80s the term ‘‘corporate citizenship’’ was introduced into the business and society relationship mainly through practitioners (Altman and Vidaver- Cohen, 2000). Since the late 1990s and early 21st century this term has become more and more popular in business and increasing academic work has been carried out (Andriof and McIntosh, 2001; Matten and Crane, in press). Although the academic reflection on the concept of ‘‘corporate citizenship’’, and on a similar one called ‘the business citizen’, is quite recent (Matten et al., 2003; Wood and Logsdon, 2002; among others), this notion has always connoted a sense of belonging to a community. Perhaps for this reason it has been so popular among managers and business people, because it is increasingly clear that business needs to take into account the community where it is operating. The term ‘‘corporate citizenship’’ cannot have the same meaning for everybody. Matten et al. (2003) have distinguished three views of ‘‘corporate citizenship’’: (1) a limited view, (2) a view equivalent to CSR and (3) an extended view of corporate citizenship, which is held by them. In the limited view ‘‘corporate citizenship’’ is used in a sense quite close to corporate philanthropy, social investment or certain responsibilities assumed towards the local community. The equivalent to CSR view is quite common. Carroll (1999) believes that ‘‘Corporate citizenship’’ seems a new conceptualization of the role of business in society and depending on which way it is defined, this notion largely overlaps with other theories on the responsibility of business in society. Finally, in the extended view of corporate citizenship (Matten et al., 2003, Matten and Crane, in press), corporations enter the arena of citizenship at the point of government failure in the protection of citizenship. This view arises from the fact that some corporations have gradually come to replace the most powerful institution in the traditional concept of citizenship, namely government.

Integrative theories This group of theories looks at how business integrates social demands, arguing that business depends on

society for its existence, continuity and growth. Social demands are generally considered to be the way in

which society interacts with business and gives it a certain legitimacy and prestige. As a consequence,

corporate management should take into account social demands, and integrate them in such a way that

the business operates in accordance with social values. So, the content of business responsibility is limited

to the space and time of each situation depending on the values of society at that moment, and comes

through the company’s functional roles (Preston and Post, 1975). In other words, there is no specific

action that management is responsible for performing throughout time and in each industry. Basically, the

theories of this group are focused on the detection and scanning of, and response to, the social demands

that achieve social legitimacy, greater social acceptance and prestige.

Issues management

Social responsiveness, or responsiveness in the face of social issues, and processes to manage them within

the organization (Sethi, 1975) was an approach which arose in the 70s. In this approach it is crucial to

consider the gap between what the organization’s relevant publics expect its performance to be and the

organization’s actual performance. These gaps are usually located in the zone that Ackerman (1973, p. 92)

calls the ‘‘zone of discretion’’ (neither regulated nor illegal nor sanctioned) where the company receives

some unclear signals from the environment. The firm should perceive the gap and choose a response in

order to close it (Ackerman and Bauer, 1976). Ackerman (1973), among other scholars, analyzed the


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relevant factors regarding the internal structures of organizations and integration mechanisms to manage

social issues within the organization. The way a social objective is spread and integrated across the

organization, he termed ‘‘process of institutionalization’’. According to Jones (1980, p. 65), ‘‘corporate

behavior should not in most cases be judged by the decisions actually reached but by the process by which

they are reached’’.

The concept of ‘‘social responsiveness’’ was soon widened with the concept ‘‘Issues Management’’. The

latter includes the former but emphasizes the process for making a corporate response to social issues.

Issues management has been defined by Wartick and Rude (1986, p. 124) as ‘‘the processes by which the

corporation can identify, evaluate and respond to those social and political issues which may impact

significantly upon it’’. They add that issues management attempts to minimize ‘‘surprises’’ which

accompany social and political change by serving as an early warning system for potential environmental

threats and opportunities. Further, it prompts more systematic and effective responses to particular issues

by serving as a coordinating and integrating force within the corporation. Issues management research has

been influenced by the strategy field, since it has been seen as a special group of strategic issues (Greening

and Gray, 1994), or a part of international studies (Brewer, 1992). That led to the study of topics related

with issues (identification, evaluation and categorization), formalization of stages of social issues and

management issue response. Other factors, which have been considered, include the corporate responses

to media exposure, interest group pressures and business crises, as well as organization size, top

management commitment and other organizational factors.

The principle of public responsibility

Preston and Post (1975, 1981) criticized a responsiveness approach and the purely process approach

(Jones, 1980) as insufficient. Instead, they proposed ‘‘the principle of public responsibility’’. They choose

the term ‘‘public’’ rather than ‘‘social’’, to stress the importance of the public process, rather than

personal-morality views or narrow interest groups defining the scope of responsibilities. They added that

‘‘public policy includes not only the literal text of law and regulation but also the broad pattern of social

direction reflected in public opinion, emerging issues, formal legal requirements and enforcement or

implementation practices’’ 58 Elisabet Garriga and Dome`nec Mele´ (Preston and Post, 1981, p. 57). This is

the essence of the principle of public responsibility. Preston and Post analyzed the scope of managerial

responsibility in terms of the ‘‘primary’’ and ‘‘secondary’’ involvement of the firm in its social

environment. Primary involvement includes the essential economic task of the firm, such as locating and

establishing its facilities, procuring suppliers, engaging employees, carrying out its production functions

and marketing products. It also includes legal requirements. Secondary involvements come as

consequence of the primary. They are, e.g., career and earning opportunities for some individuals, which

come from the primary activity of selection and advancement of employees.

Stakeholder management

Instead of focusing on generic responsiveness, specific issues or on the public responsibility principle, the

approach called ‘‘stakeholder management’’ is oriented towards ‘‘stakeholders’’ or people who affect or

are affected by corporate policies and practices. Although the practice of stakeholder management is long-

established, its academic development started only at the end of 70s (see, e.g., Sturdivant, 1979). In a


85

seminal paper, Emshoff and Freeman (1978) presented two basic principles, which underpin stakeholder

management. The first is that the central goal is to achieve maximum overall cooperation between the

entire system of stakeholder groups and the objectives of the corporation. The second states that the

most efficient strategies for managing stakeholder relations involve efforts, which simultaneously deal

with issues affecting multiple stakeholders. Stakeholder management tries to integrate groups with a

stake in the firm into managerial decision making.

In recent times, corporations have been pressured by non-governmental organizations (NGOs), activists,

communities, governments, media and other institutional forces. These groups demand what they

consider to be responsible corporate practices. Now some corporations are seeking corporate responses

to social demands by establishing dialogue with a wide spectrum of stakeholders. Stakeholder dialogue

helps to address the question of responsiveness to the generally unclear signals received from the

environment. In addition, this dialogue ‘‘not only enhances a company’s sensitivity to its environment but

also increases the environments understanding of the dilemmas facing the organization’’ (Kaptein and Van

Tulder, 2003 p. 208).

Corporate social performance

A set of theories attempts to integrate some of the previous theories. The corporate social performance

Corporate Social Responsibility (CSP) includes a search for social legitimacy, with processes for giving

appropriate responses. Carroll (1979), generally considered to have introduced this model, suggested a

model of ‘‘corporate performance’’ with three elements: a basic definition of social responsibility, a listing

of issues in which social responsibility exists and a specification of the philosophy of response to social

issues. Carroll considered that a definition of social responsibility, which fully addresses the entire range of

obligations business has to society, must embody the economic, legal, ethical, and discretionary categories

of business performance. He later incorporated his four-part categorization into a ‘‘Pyramid of Corporate

Social Responsibilities’’ (Carroll, 1991). Recently, Schwartz and Carroll (2003) have proposed an alternative

approach based on three core domains (economic, legal and ethical responsibilities) and a Venn model

framework. The Venn framework yields seven CSR categories resulting from the overlap of the three core

domains.

Ethical theories

There is a fourth group of theories or approaches focus on the ethical requirements that cement the

relationship between business and society. They are based on principles that express the right thing to do

or the necessity to achieve a good society. As main approaches we can distinguish the following.

Normative stakeholder theory

Stakeholder management has been included within the integrative theories group because some authors

consider that this form of management is a way to integrate social demands. However, stakeholder

management has become an ethically based theory mainly since 1984 when Freeman wrote Strategic

Management: a Stakeholder Approach. In this book, he took as starting point that ‘‘managers bear a

fiduciary relationship to stakeholders’’ (Freeman, 1984, p. xx), instead of having exclusively fiduciary duties


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towards stockholders, as was held by the conventional view of the firm. He understood as stakeholders

those groups who have a stake in or claim on the firm (suppliers, customers, employees, stockholders, and

the local community). In a more precise way, Donaldson and Preston (1995, p. 67) held that the

stakeholder theory has a normative core based on two major ideas (1) stakeholders are persons or groups

with legitimate interests in procedural and/or substantive aspects of corporate activity (stakeholders are

identified by their interests in the corporation, whether or not the corporation has any corresponding

functional interest in them) and (2) the interests of all stakeholders are of intrinsic value (that is, each

group of stakeholders merits consideration for its own sake and not merely because of its ability to further

the interests of some other group, such as the shareowners).

Universal rights

Human rights have been taken as a basis for CSR, especially in the global market place (Cassel, 2001). In

recent years, some human-rights-based approaches for corporate responsibility have been proposed. One

of them is the UN Global Compact, which includes nine principles in the areas of human rights, labor and

the environment. It was first presented by the United Nations Secretary- General Kofi Annan in an address

to The World Economic Forum in 1999. In 2000 the Global Compact’s operational phase was launched at

UN Headquarters in New York. Many companies have since adopted it. Another, previously presented and

updated in 1999, is The Global Sullivan Principles, which has the objective of supporting economic, social

and political justice by companies where they do business. The certification SA8000 (www.cepaa.org) for

accreditation of social responsibility is also based on human and labor rights. Despite using different

approaches, all are based on the Universal Declaration of Human Rights adopted by the United Nations

general assembly in 1948 and on other international declarations of human rights, labor rights and

environmental protection. Although for many people universal rights are a question of mere consensus,

they have a theoretical grounding, and some moral philosophy theories give them support (Donnelly,

1985). It is worth mentioning the Natural Law tradition (Simon, 1992), which defends the existence of

natural human rights (Maritain, 1971).

Sustainable development

Another values-based concept, which has become popular, is ‘‘sustainable development’’. Although this

approach was developed at macro level rather than corporate level, it demands a relevant corporate

contribution. The term came into widespread use in 1987, when the World Commission on Environment

and Development (United Nations) published a report known as ‘‘Brutland Report’’. This report stated that

‘‘sustainable development’’ seeks to meet the needs of the present without compromising the ability to

meet the future generation to meet their own needs’’ (World Commission on Environment and

Development, 1987, p. 8). Although this report originally only included the environmental factor, the

concept of ‘‘sustainable development’’ has since expanded to include the consideration of the social

dimension as being inseparable from development. In the words of the World Business Council for

Sustainable Development (2000, p. 2), sustainable development ‘‘requires the integration of social,

environmental, and economic considerations to make balanced judgments for the long term’’. Numerous

definitions have been proposed for sustainable development (see a review in Gladwin and Kennelly 1995,

p. 877). In spite of which, a Corporate Social Responsibility content analysis of the main definitions


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suggests that sustainable development is ‘‘a process of achieving human development in an inclusive,

connected, equiparable, prudent and secure manner.’’ (Gladwin and Kennelly 1995, p. 876).

The common good approach

This third group of approaches, less consolidated than the stakeholder approach but with potential, holds

the common good of society as the referential value for CSR (Mahon and McGowan, 1991; Velasquez,

1992). The common good is a classical concept rooted in Aristotelian tradition (Smith, 1999), in Medieval

Scholastics (Kempshall, 1999), developed philosophically (Maritain, 1966) and assumed into Catholic social

thought (Carey, 2001) as a key reference for business ethics (Alford and Naughton, 2002; Mele´, 2002;

Pope John Paul II, 1991, #43). This approach maintains that business, as with any other social group or

individual in society, has to contribute to the common good, because it is a part of society. In this respect,

it has been argued that business is a mediating institution (Fort, 1996, 1999). Business should be neither

harmful to nor a parasite on society, but purely a positive contributor to the wellbeing of the society.

Business contributes to the common good in different ways, such as creating wealth, providing goods and

services in an efficient and fair way, at the same time respecting the dignity and the inalienable and

fundamental rights of the individual. Furthermore, it contributes to social well-being and a harmonic way

of living together in just, peaceful and friendly conditions, both in the present and in the future (Mele´,

2002).

Approaches of CSR

Business has a long term liability towards society and environment; this may be in the wake of its strong

link with various components of environment and society. While business explores resources and fetches

profit from the people, it has the liability to ‘give something in return’. Even though this may be the core

notion behind CSR, times taught business entities to think beyond CSR and to behave more responsibly.

Researchers have identified the reasons why firms develop CSR strategies, such as reputation

improvement, government regulations, competitive advantage, stake holder pressure, critical events and

top management pressure (Hall and Vredenburg, 2004; Kassins and Vafeas, 2006; Chih Hung Chen and

Winai Wonsgurawat, 2011.). The selection of issues under CSR by organisations depends on host of factors

including organisational mandate, current relevance of issues and demand from the community. The

priority areas are covered under CSR initiatives include education (82 percent),environment (81 per cent),

health (81 per cent), women empowerment (63 per cent), livelihood promotion (62 per cent), sanitation

(61 per cent), microfinance (60 per cent), HIV/ AIDS (54 per cent), child care (55 per cent), slum

improvement (50 per cent), disaster management (44 per cent) and agricultural development (29 per

cent). (Survey; Times Foundation and TNS, 2010). Other than CSR initiatives, business enterprises are

striving to depict its commitment, transparency, accountability and governance practices to enhance its

brand image and competitiveness through Global Reporting Initiative and Sustainability Reports.

CSR and Inclusive Approach

In order to ensure equality and justice in the society, more attention is vital to cater the needs of

neglected and underprivileged sections of the community. The recently published 12th plan period

approach paper was titled ‘faster, sustainable and inclusive’ growth. Inclusive development, inclusive


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growth and inclusive banking are some of the key strategies of the Government to make certain that all

are benefitting. Contradict to this, 650 million people (53.7% of population) living in poverty - 340 million

(28.6%) in severe poverty and 198 million people (16.4% of the population) are vulnerable to poverty

(Poverty and Human Development Initiative, Oxford). India is the country with largest number of stunted

(31%), wasted and underweight (42%) children in the world (HuNGama Report, 2011). One in three

malnourished children worldwide is found in India (UNICEF). India recorded the highest number of deaths

due to premature births (Born Too Soon: The Global Action Report on Pre-Term Birth, 2012). India

accounted for 47 per cent of Measles deaths in 2010 (WHO, The Lancet, 23 April, 2012). Lack of health

service and adequate nutrition emerges as serious cause of concerns. It is true that government is very

keen to consider various social evils and implemented myriad schemes to surpass these issues. Whereas

many of them are fruitful, rampant corruption and policy paralysis are drowning people to severe peril. As

per the Transparency International Report, India ranked 83 out of 172 countries in the corruption index. At

the same time, as a result of neo liberal policies of government corporate are now in the race to fetch

public resources with fewer prices. In this back ground business need to be more transparent and should

play a vital role in social development. In order to extend the services of the Government and to fill the

existing lacuna, corporate and business enterprises can contribute a lot for inclusive development of the

country.

CSR and Triple Bottom Line (TBL) approach

The conspicuous concept Triple Bottom Line (TBL) model contributes a large towards sustainable

development initiatives. TBL is the totality of the corporation’s financial, social, and environmental

performance in conducting its business. It envisions a holistic approach that reiterates the responsibility of

business towards society, economy and environment. Attaining sustainability requires stabilizing or

reducing the environmental burden, keeping business people friendly by maximizing social benefit and

making the business economically feasible. This was the Sustainable development conceptualized by the

Brundtland Commision Report in 1987 – ‘meeting the needs of the present generation without

compromising the ability of future generations to meet their own needs’ and it is now commonly

paraphrased. United Utilities defines sustainability as ‘development that conserves natural resources,

protects and enhances the environment, support the communities we serve, and maintains economic

growth, for AMEAC, ‘a commitment to acting responsibly in all that we do, whilst talking into account the

concerns of our stake holders’. The Global Compact Programme, 2000, announced by Mr Kofi Annan, is

now considered as the model of social responsibility of corporate all over the world and its sustainability

approach is globally acclaimed. The United Nations' Millennium Development Goals (MDGs) and the

Water, Energy, Health, Agriculture, and Biodiversity (WEHAB) agenda of the UN Secretary General are also

deemed as essentials for bringing about a solution to the basic problems facing our society and

environment. Therefore, responsible actions of business can tackle multiple problems in the society by

incorporating different dimensions of economy and environment. There are several bodies now emerging

on the Indian scene that focus on issues of CSR. For instance, the Corporate Roundtable on Development

of Strategies for the Environment and Sustainable Development - Business Council for Sustainable

Development (CoRE-BCSD) of India is a grouping of Indian corporate trying collectively and individually to

build in sustainable development concepts into their operations (EMC, 2005). The efforts of Ministry of


85

Corporate Affairs, Confederation of Indian Industries (CII), Times Foundation, EU – India CSR Network etc

are laudable.

CSR and Participatory Approach

Participation is considered as one of the success factors of

effectiveness and mission accomplishment. People

democracy, works committee, community involvement,

industrial democracy and employee participation are

evolved from this ideology. The same has been enshrined in

our constitution especially through 73rd and 74th

amendments which provided constitutional guarantee to the

formation of Panchayath at village and other levels (Grama

Sabha). Similarly, there is no expectation in the case of CSR

implementation. CSR defined by the World Business Council

for Sustainable Development (1999) gives a stakeholder

dimension – ‘the commitment of business to contribute to

sustainable economic development, working with

employees, their families, local community and society at

large to improve their quality of life’. Another definition

states as ‘Corporate social responsibility is the overall relationship of the corporation with all of its

stakeholders. These include customers, employees, communities, owners/investors, government,

suppliers and competitors. Elements of social responsibility include investment in community outreach,

employee relations, creation and maintenance of employment, environmental stewardship and financial

performance’ (Khoury et al., 1999). The stakeholder theory of CSR put forwarded by Freeman (1984)

describes the role of primary and secondary stake holders. The business community can make tremendous

contributions in the well being of our nation in partnership with local people, NGO’s, Governemnt and

different philanthropists. In order to understand the ground realities and people needs, a strong

participatory approach is essential. This will help to create a win - win situation by maintaining a strong

and long lasting partnership with different stake holders. The diagram shown above (IBM Institute) depicts

the participation of different stake holders in CSR initiatives. It is apparent that a healthy collaboration

among business, Government and community is very essential in CSR projects.

During this period, expectations of people have increased enormously along with their demands focusing

on unemployment, health, social infrastructure, education and poverty alleviation. Pressure groups like

NGO’s and Community organizations are successfully persuading corporate to fund various CSR schemes.

However, the efforts of Governments may not be adequate to provide basic services to its citizens. It is

being increasingly recognized that progress and welfare of a society is not only the responsibility of the

Government alone, but many more stakeholders need to be involved to attain the development goal (Save

the Children Sweden, 2007). The corporate sector has a pivotal role to play in ensuring private investment

flows to those rural areas that have been left out of the development process so far and also to work for

sustainable development of rural areas in general. (Corporate Social Responsibility in Rural Development


85

Sector: Evidences from India, Sanjay Pradhan, Akhilesh Ranjan) . At the same time, it is essential to

understand the actual needs of society rather than creating a doom effect through CSR.

Triple Bottom Line Approach

The triple bottom line (TBL or 3BL) also known as people, planet, profit or the three pillars captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological, and social. With the ratification of the United Nations and ICLEI TBL standard for urban and community accounting in early 2007, this became the dominant approach to public sector full cost accounting. Similar UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL, e.g. the EcoBudget standard for reporting ecological footprint.

In the private sector, a commitment to corporate social responsibility (CSR) implies a commitment to some form of TBL reporting. This is distinct from the more limited changes required to deal only with ecological issues. Triple bottom line (TBL) accounting expands the traditional reporting framework to take into account social and environmental performance in addition to financial performance. In 1981 Freer Spreckley first articulated the triple bottom line in a publication called 'Social Audit - A Management Tool for Co-operative Working. In this work, he argued that enterprises should measure and report on social, environmental and financial performance. The phrase was coined by John Elkington in his 1997 book Cannibals with Forks: the Triple Bottom Line of 21st Century Business. Sustainability, itself, was first defined by the Brundtland Commission of the United Nations in 1987. 1988 also marked the foundation of the Triple Bottom Line Investing group by Robert J. Rubinstein, a group advocating and publicizing these principles.

The concept of TBL demands that a company's responsibility lies with stakeholders rather than shareholders. In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit.

(Source: Wikipedia accessed 20/09/2012)

Environmental and Social Issues

Deforestation

It is estimated that total industrial roundwood consumption in India could exceed 70 million m3 per year

by the end of the decade (350,000 large shipping containers), while domestic supply would fall short of

this figure by an estimated 14 million m3.

Pollution

Increasing competition for water among various sectors, including agriculture, industry, domestic,

drinking, energy generation and others, is causing this precious natural resource to dry up. Increasing

pollution is also leading to the destruction of the habitat of wildlife that lives in waterways.

• Loss of Biodiversity and Extinctions

• Climate Change Affects Biodiversity

• Climate Change and Global Warming


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• Global Dimming

• Carbon Sinks, Forests and Climate Change

• The Ozone Layer and Climate Change

• Energy Security

• Human Population

• Gender and Population Issues

• Natural Disasters

• Media and Natural Disasters

• Asian Earthquake and Tsunami Disaster

• Third World Debt and Disaster Recovery

• Genetically Engineered Food

• Consumption and Consumerism

• Poverty

• Corruption

• Discrimination

Labor and related issues

Rather than machines employees need to be considered as human beings. The 1948 Universal Declaration

of Human Rights is the most widely used codification of human rights and includes the right to life,

recognition before the law, freedom of thought, conscience and religion, and freedom from torture,

slavery, and imprisonment for debt or through retroactively applied legislation. United Nations (UN) 2002

draft Norms on the responsibilities of Transnational Companies and Other Business Enterprises with

regard to Human Rights, Global Sullivan Principles targeted at business operating in apartheid South

Africa, MacBride Principles aimed at ending discrimination in North Ireland, OECD Guidelines for Multi

National Enterprises SA8000, ETI Base code and UN International covenant on Economical, Social and

Cultural Rights focused on fair wages, the rights to work and education, to freedom of association and

collective bargaining and to work place health and safety are some of the well known legal measures to

protect labor and human rights.

International Labor Organization and International trade Union Movement are the major players in this

regard. To maintain a harmonious relation with employees and management is an important component

of business. In order to achieve these welfare measures of labor should be necessarily meted. Labour

welfare referred to as betterment work for employees, relates to taking care of the well being of workers

by employers, trade unions, and governmental and non-governmental agencies. Moorthy’s list of welfare

measures

Issues Inside work place

Conditions of the work environment

a) Neighborhood safety and cleanliness

b) Housekeeping; up keeping of premises – compound wall, lawns, gardens, passages and doors,

white – washing of walls and floor maintenance


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c) Workshop sanitation and cleanliness, temperature , humidity , ventilation, lighting, elimination of

dust , smoke fumes, gases

d) Control of effluents

e) Convenience and comfort during work, that is operatives’ posture, seating arrangements

f) Distribution of work hours and provision for rest hours, meal times and breaks.

g) workmen’s safety measures

h) Supply of necessary beverages, and pills and tablets.

i) Notice boards, posters, pictures , slogans, information or communication

Convenience

a. Urinals, lavatories, wash basins, provision for spittoons, waste disposal.

b. Provision for drinking water, water coolers

c. Canteen services

d. Rest rooms, reading room and library

Workers health service

Factory health centre, dispensary, ambulance, emergency aid , medical examination for workers;

health education, health research; family planning services

Women and child welfare

Antenatal and postnatal care, maternity aid , crèche and child care, women’s general education;

separate services for women workers, that is lunch rooms, urinals, rest rooms, women's

recreation, family planning services

Workers recreation

Indoor games , strenuous games to be avoided during the intervals of work

Employee follow-up

Progress of the operative in his/her work; his/her adjustment problems with regard to machines

and workload , supervisors and colleagues, industrial counseling

Economic Services

Co – operatives, loans, financial grants; thrift and saving schemes; budget knowledge,

unemployment insurance, health insurance, employment bureau, profit sharing and bonus

schemes, transport services, provident fund, gratuity and pension, rewards and incentives etch

Labor Management Participation

a) Formation and working of various committees.

b) Workmen’s arbitration council

c) Research bureau

Workers Education

Reading room, library, circulating library, visual education, literary classes, adult education , social

education

Outside Work place

a. Housing bachelor’s quarters, family residences according to types and rooms

b. Water , sanitation, waste disposal

c. Roads, lighting, parks, recreation, playgrounds


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d. Schools, Bank , Markets

e. Transport

f. Communication-telegraph and telephone

g. Health and medical services etc

h. Welfare facilities may also be categorized as :

i. Intra mural facilities

j. Intra- mural facilities consist of facilities provided within the factories and include medical facilities,

compensation for accidents, provision of crèches and canteens, supply of drinking water, washing

and bathing facilities, provision of safety measures, activities relating to improving conditions of

employment and the like,

Extra Mural Facilities

Extra – mural facilities cover the services and facilities provided outside the factory such as housing

accommodation, indoor and outdoor recreational facilities, amusement and sports, educational

facilities for adults and children

Statutory and non statutory

a) Welfare activities may also be classified into i) statutory and ii) non statutory

Statutory provisions

a) Factory act

b) Labor welfare officer

c) Welfare provisions

d) Welfare funds

Non – statutory benefits, also called voluntary benefits, include loans for house building , education of

children, leave travel concession, fair price shops, loans for purchasing personal conveyance and a host of

other facilities

Industrial Relations

Introduction to IR

IR – Concept and Approaches (Unitary Approach, Systems Approach, Participative Approach,

Pluralistic Approach, Inductive Approach, Marxist Approach, Neo-Classical Approach, Gandhian

Trusteeship Approach )

Role of Government, Employers & Trade Unions in IR

Employer – Employee Relation

Union – Management Relations

Industrial Disputes – Causes & Effects

IR Machinery

Collective Bargaining & Conciliation

Arbitration & Adjudication

Emerging Trends in IR


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Protective and employment legislation

Factories Act 1948

Plantation Labour Act 1951

Mines Act

Shops and Commercial Establishments Act 1960

Indian Merchants Shipping Act

Payment of wages Act 1936

Minimum Wages Act 1948

Equal Remuneration Act 1976

Payment of Bonus Act 1965

Apprentices Act

Employment Exchange (Compulsory Notification of Vacancies ) Act

Social Security Legislation

Employees State Insurance Act 1948

Employees Provident Funds Act 1952

Payment of Gratuity Act 1972

Workmen Compensation Act 1923

Maternity Benefit Acts

Kerala Payment of Subsistence Allowance Act 1972

Causes of Poor Industry Relations

Mental inertia of Management

Intolerant attitude of Management

Inadequate wage structure

Unhealthy working conditions

General indiscipline

Lack of HR skill of Management

Demand for higher bonus and DA

Inappropriate introduction of automation

Unreasonable heavy workload,

Inadequate welfare facilities

Dispute on sharing gains of productivity

Unfair labour practice-victimization

Retrenchment-dismissal-lockout-strike

Inter union rivalries

General economic and political situation

The following are the statutory machineries provided in the Industrial dispute act for the

settlement and prevention of disputes

Works committee - sec-3

Conciliation officers- - sec-4


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Boards of conciliation - sec-5

Courts of Enquiry - sec-6

Labor courts - sec-7

Tribunals - sec-7A

National Tribunals - sec-7B

Human Rights – UN Charter 1945

In the wake of catastrophic events happened in second world war United Nations (International Court of Justice) has decided to save succeeding generations from the scourge of war and to reaffirm faith in fundamental human rights of the human being. In order to reach this objective, UN published a declaration on Human Rights which aimed at

• The dignity and worth of the human person • The equal rights of men and women and of nations large and small • To establish conditions under which justice and respect • To promote social progress and better standards of life in larger freedom, • To practice tolerance and live together in peace with one another as good neighbors • To unite our strength to maintain international peace and security


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II. BUSINESS AND SOCIETY

Sustainable Development • The Concept of Sustainable Development was brought into focus by Brundtland Report (OUR

COMMON FUTURE) in 1987.

• It states that Economic growth has to be environmentally sustainable.

• Sustainable development is the process for improving the quality of human life while living within

the carrying capacity of supporting ecosystems

Improve and maintain resource base to:

• protect the current stock of natural resources

• ensure the wellbeing of future generations

It requires:

• Shifting from reliance on one resource to another (and equal access to resources)

• Appropriate technology development

• Change in attitude, lifestyle

Causative Factors

• Population explosion

• Energy production and use

• Land use alteration / Land degradation

• Exploitation of natural resources

• Industrialization

• Urbanization

• Poverty

• Ill-planned/Unplanned development

Factors need consideration

• Control of population growth

• Conservation of resources including biodiversity


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• Energy conservation

• Technological upgradation/alternatives

• Scientific planning

• Ecological budgeting

• Community involvement

• Alternative energy sources/technologies

Bottom of the Pyramid Approach In economics, the bottom of the pyramid is the largest, but poorest socio-economic group. In global terms, this

is the 2.5 billion people who live on less than US$2.50 per day. The phrase “bottom of the pyramid” is used in

particular by people developing new models of doing business that deliberately target that demographic, often

using new technology. This field is also often referred to as the "Base of the Pyramid" or just the "BoP". The

phrase “bottom of the pyramid” was used by U.S. president Franklin D. Roosevelt in his April 7, 1932 radio

address, The Forgotten Man, in which he said “These unhappy times call for the building of plans that rest upon

the forgotten, the unorganized but the indispensable units of economic power...that build from the bottom up

and not from the top down, that put their faith once more in the forgotten man at the bottom of the

economic pyramid.”

The more current usage refers to the billions of people living on less than $2 per day, as first defined in

1998 by Professors C.K. Prahalad and Stuart L. Hart. It was subsequently expanded upon by both in their

books: The Fortune at the Bottom of the Pyramid by Prahalad in 2004and Capitalism at the Crossroads by

Hart in 2005. Prahalad proposes that businesses, governments, and donor agencies stop thinking of the

poor as victims and instead start seeing them as resilient and creative entrepreneurs as well as value-

demanding consumers. He proposes that there are tremendous benefits to multi-national companies who

choose to serve these markets in ways responsive to their needs. After all the poor of today are the

middle-class of tomorrow. There are also poverty reducing benefits if multi-nationals work with civil

society organizations and local governments to create new local business models..

Meanwhile, Hart and his colleague Erik Simanis at Cornell University's Center for Sustainable Global

Enterprise advance another approach, one that focuses on the poor as business partners and innovators,

rather than just as potential producers or consumers. Hart and Simanis have led the development of the

Base of the Pyramid Protocol, an entrepreneurial process that guides companies in developing business

partnerships with income-poor communities in order to "co-create businesses and markets that mutually

benefit the companies and the communities". This process has been adopted by the SC Johnson Company

and the Solae Company (a subsidiary of DuPont).

Another recent focus of interest lies on the impact of successful BoP-approaches on sustainable

development. Some of the most significant obstacles encountered when integrating sustainable

development at the BoP are the limits to growth that restrict the extended development of the poor,

especially when applying a resource-intensive Western way of living. Nevertheless, from a normative

ethical perspective poverty alleviation is an integral part of sustainable development according to the


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notion of intergenerational justice (i.e. within the living generation) in the Brundtland Commission's

definition. Ongoing research addresses these aspects and widens the BoP approach also by integrating it

into corporate social responsibility thinking.

(Source: Wikepedia accessed on 25/09/2012)

Participatory Approach In its simplest terms, a participatory approach is one in which everyone who has a stake in the

intervention has a voice, either in person or by representation. Staff of the organization that will run it,

members of the target population, community officials, interested citizens, and people from involved

agencies, schools, and other institutions all should be invited to the table. Everyone's participation should

be welcomed and respected, and the process shouldn't be dominated by any individual or group, or by a

single point of view. The use of that term participatory implies that each participant becomes an

important contributor to the planning process. A true participatory approach is one in which everyone's

perspective is considered. That doesn't mean that people can't challenge others' assumptions, or argue

about what the best strategy might be. It does mean, however, that everyone's thoughts are respected,

and it isn't necessarily assumed that the professionals or the well -educated automatically know what's

best. Everyone actually gets to participate in the planning process, and has some role in decision-making.

This is an extremely important point. Many low-income or minority individuals and groups feel that they

have no voice in the society, that they are not listened to even when they are asked for their opinions.

True participation means that everyone has a voice which must be acknowledged.

Acknowledgment also implies having enough respect for another's opinion to argue with it. All too often,

low-income or minority members of a planning team or governing board are treated with reverse

condescension, as if anything they say must be true and profound. A truly participatory process would

include not only everyone being heard, but also everyone thrashing out ideas and goals, and wrestling

with new concepts. In order for this to happen, those with less education and "status" often need extra

support, both to learn the process and to believe that their opinions and ideas are important and worth

stating. All of this takes time, but the rewards are great.

Advantages of a participatory planning approach

1. Participation carries with it feelings of ownership, and builds a strong base for the intervention in

the community.

2. It ensures that the intervention will have more credibility in all segments of the community

3. Bringing a broader range of people to the planning process provides access to a broader range of

perspectives and ideas.

4. A participatory planning approach avoids pitfalls caused by ignorance of the realities of the

community or the target population.

5. It involves important players from the outset.

6. It can provide an opportunity for often-disenfranchised groups to be heard,

7. It teaches skills which last far beyond the planning process


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8. It can bring together and establish ties among community members who might normally have no

contact.

9. A participatory planning process builds trust

10. A participatory planning process generally reflects the mission and goals of grass roots and

community-based organizations.

11. It implies respect for everyone in the community

12. Logically, a participatory planning approach should be effective.

13. Finally, it does things the way they should be done

Millennium Development Goals The Millennium Development Goals (MDGs) are eight international development goals that all 193 United

Nations member states and at least 23 international organizations have agreed to achieve by the year

2015. The goals are:

1. Eradicating extreme poverty and hunger,

2. Achieving universal primary education,

3. Promoting gender equality and empowering women

4. Reducing child mortality rates,

5. Improving maternal health,

6. Combating HIV/AIDS, malaria, and other diseases,

7. Ensuring environmental sustainability, and

8. Developing a global partnership for development

The aim of the MDGs is to encourage development by improving social and economic conditions in the

world's poorest countries. They derive from earlier international development targets, and were officially

established following the Millennium Summit in 2000, where all world leaders present adopted the United

Nations Millennium Declaration. It came about from not just the UN but also the Organization for

Economic Cooperation and Development (OECD), the World Bank and the International Monetary Fund.

The MDGs were developed out of the eight chapters of the Millennium Declaration, signed in September

2000. There are eight goals with 21 targets, and a series of measurable indicators for each target.

Goal 1: Eradicate extreme poverty and hunger

Target 1A: Halve the proportion of people living on less than $1 a day

o Proportion of population below $1 per day (PPP values)

o Poverty gap ratio [incidence x depth of poverty]

o Share of poorest quintile in national consumption

Target 1B: Achieve Decent Employment for Women, Men, and Young People

o GDP Growth per Employed Person

o Employment Rate

o Proportion of employed population below $1 per day (PPP values)

o Proportion of family-based workers in employed population

Target 1C: Halve the proportion of people who suffer from hunger


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o Prevalence of underweight children under five years of age

o Proportion of population below minimum level of dietary energy consumption

Goal 2: Achieve universal primary education

Target 2A: By 2015, all children can complete a full course of primary schooling, girls and boys

o Enrollment in primary education

o Completion of primary education

o everyone will get into school

Goal 3: Promote gender equality and empower women

Target 3A: Eliminate gender disparity in primary and secondary education preferably by 2005,

and at all levels by 2015

o Ratios of girls to boys in primary, secondary and tertiary education

o Share of women in wage employment in the non-agricultural sector

o Proportion of seats held by women in national parliament

o For girls in some regions, education remains elusive

o Poverty is a major barrier to education, especially among older girls

o In every developing region except the CIS, men outnumber women in paid employment

o Women are largely relegated to more vulnerable forms of employment

o Women are over-represented in informal employment, with its lack of benefits and security

o Top-level jobs still go to men — to an overwhelming degree

o Women are slowly rising to political power, but mainly when boosted by quotas and other

special measures

Goal 4: Reduce child mortality rates

Target 4A: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

o Under-five mortality rate

o Infant (under 1) mortality rate

o Proportion of 1-year-old children immunized against measles

Goal 5: Improve maternal health

Target 5A: Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio

o Maternal mortality ratio

o Proportion of births attended by skilled health personnel

Target 5B: Achieve, by 2015, universal access to reproductive health

o Contraceptive prevalence rate

o Adolescent birth rate

o Antenatal care coverage

o Unmet need for family planning

Goal 6: Combat HIV/AIDS, malaria, and other diseases

Target 6A: Have halt by 2015 and begun to reverse the spread of HIV/AIDS

o HIV prevalence among population aged 15–24 years

o Condom use at last high-risk sex

o Proportion of population aged 15–24 years with comprehensive correct knowledge of

HIV/AIDS

Target 6B: Achieve, by 2010, universal access to treatment for HIV/AIDS for all those who need it


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o Proportion of population with advanced HIV infection with access to antiretroviral drugs

Target 6C: Have halted by 2015 and begun to reverse the incidence of malaria and other major

diseases

o Prevalence and death rates associated with malaria

o Proportion of children under 5 sleeping under insecticide-treated bed nets

o Proportion of children under 5 with fever who are treated with appropriate anti-malarial

drugs

o Incidence, prevalence and death rates associated with tuberculosis

o Proportion of tuberculosis cases detected and cured under DOTS (Directly Observed

Treatment Short Course)

Goal 7: Ensure environmental sustainability

Target 7A: Integrate the principles of sustainable development into country policies and

programs; reverse loss of environmental resources

Target 7B: Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss

o Proportion of land area covered by forest

o CO2 emissions, total, per capita and per $1 GDP (PPP)

o Consumption of ozone-depleting substances

o Proportion of fish stocks within safe biological limits

o Proportion of total water resources used

o Proportion of terrestrial and marine areas protected

o Proportion of species threatened with extinction

Target 7C: Halve, by 2015, the proportion of the population without sustainable access to safe

drinking water and basic sanitation (for more information see the entry on water supply)

o Proportion of population with sustainable access to an improved water source, urban and

rural

o Proportion of urban population with access to improved sanitation

Target 7D: By 2020, to have achieved a significant improvement in the lives of at least 100

million slum-dwellers

o Proportion of urban population living in slums

Goal 8: Develop a global partnership for development

Target 8A: Develop further an open, rule-based, predictable, non-discriminatory trading and

financial system

o Includes a commitment to good governance, development, and poverty reduction – both

nationally and internationally

Target 8B: Address the Special Needs of the Least Developed Countries (LDC)

o Includes: tariff and quota free access for LDC exports; enhanced programme of debt relief

for HIPC and cancellation of official bilateral debt; and more generous ODA (Official

Development Assistance) for countries committed to poverty reduction

Target 8C: Address the special needs of landlocked developing countries and small island

developing States


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o Through the Programme of Action for the Sustainable Development of Small Island

Developing States and the outcome of the twenty-second special session of the General

Assembly

Target 8D: Deal comprehensively with the debt problems of developing countries through

national and international measures in order to make debt sustainable in the long term

o Some of the indicators listed below are monitored separately for the least developed

countries (LDCs), Africa, landlocked developing countries and small island developing

States.

o Official development assistance (ODA):

Net ODA, total and to LDCs, as percentage of OECD/DAC donors’ GNI

Proportion of total sector-allocable ODA of OECD/DAC donors to basic social

services (basic education, primary health care, nutrition, safe water and sanitation)

Proportion of bilateral ODA of OECD/DAC donors that is untied

ODA received in landlocked countries as proportion of their GNIs

ODA received in small island developing States as proportion of their GNIs

o Market access:

Proportion of total developed country imports (by value and excluding arms) from

developing countries and from LDCs, admitted free of duty

Average tariffs imposed by developed countries on agricultural products and textiles

and clothing from developing countries

Agricultural support estimate for OECD countries as percentage of their GDP

Proportion of ODA provided to help build trade capacity

o Debt sustainability:

Total number of countries that have reached their HIPC decision points and number

that have reached their HIPC completion points (cumulative)

Debt relief committed under HIPC initiative, US$

Debt service as a percentage of exports of goods and services

Target 8E: In co-operation with pharmaceutical companies, provide access to affordable,

essential drugs in developing countries

o Proportion of population with access to affordable essential drugs on a sustainable basis

Target 8F: In co-operation with the private sector, make available the benefits of new

technologies, especially information and communications

o Telephone lines and cellular subscribers per 100 population

o Personal computers in use per 100 population

o Internet users per 100 Population (Source: Wikepedia accessed on 20/09/2012)

Stakeholder Engagements

There is an apparent contradiction at the heart of corporate responsibility management practice. On the

one hand, corporate responsibility management is often depicted as managing what companies voluntarily

accept as their responsibilities to society; on the other, to have credibility, there is an expectation that


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those responsibilities be well defined, consistent, and something for which the company is accountable. In

other words, while the company can act of its own free will, once it has chosen to do so, limits are

immediately placed on that freedom. (Stake holder theory refer chapter 1)

Stake holder Management Key factors in acting on stake holder Engagement

Stake holder dialogue Selection of stake holders Stakeholders dialogue Interpretation of information from dialogue Decision about company action Response to the dialogue through activities

Awareness that an issue exists Commitment to prioritize and resources an issue Capacity availability of resources to tackle an issue Consensus amongst the company and its stakeholders over the issues and relevance of stakeholders dialogue in general

(Source: CSR a critical Introduction, Michael Blowfield, Alan Murray)

HPCL and Participatory Approach

HPCL firmly believes that sustainable business and inclusive growth can be achieved through responsible

efforts in all areas of our operations. While traversing through development, HPCL balances economic

progress with social value, health, safety, security and environmental care. The organization has a strong

commitment towards social development and depicts it through myriad ways. Education, health,

environment and community support are the key thematic areas of company’s CSR operation. Even

though HPCL concentrates on its vicinity of operation for the implementation of CSR projects, its impact is

ubiquitous.

The CSR vision of HPCL states like that ‘build

a powerful partnership with society for

‘Sustainable Development’. It is evident that

the strategy adapted by the HPCL for the

implementation CSR initiatives is in

partnership with society. This participatory

approach, grass root level planning process

and the involvement of bottom to top

members make the CSR efforts of HPCL

unique. In order to identify the needs and

wants of the local people and to identify the

gaps in the society, an attempt for

participatory planning and grass root level

interventions are necessary. Local government has a crucial role in the development of region as well as

the bridging of infrastructure lacunas. Local governments provide the core utilities and infrastructure on

which the community requires. Additionally, role of NGO’s can enhance the robustness of CSR initiatives

by augmenting capacity building plans and by maintaining strong acquaintance with people and

government. Here HPCL synergizing the actions of stake holders like local self government, NGO’s and

community through a participatory planning approach. The CSR methodology of HPCL is shown in the

diagram. Through this strategy, HPCL acts as a centre point to hold all its stake holders together thereby


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provide the needs of community. While ensuring the involvement of local panchayth, HPCL manages to

utilize the expertise of NGO’s. Benefitting communities are selecting on the basis of their socio economic

circumstances and their needs are identified through discussion with local stakeholders. Local NGO’s that

are familiar and adept at working with these communities are identified to carryout work with the

communities on behalf of BPCL. The CSR activities are regularly monitored and evaluated by BPCL officials.

Along with these, employees of BPCL visit in this locations and participated with the local community by

providing training, medical benefits, workshops and construction of basic amenities. The strong network

exists between local self governments and NGO’s serves as a catalyst for CSR operations.

BPCL has a tie up with Gramin Social Welfare Society & Community Action for Rural Development in

Tamilnadu,Vivekananda Girjana Kalyan Kendra in Bhubaneswar(Orissa),Kalyan Vikas Kendra & Sevavrata &

Divyayana in Jharkhand,G.P.Tin UP & Rajasthan,Sevavrata in West Bengal, to deliver social welfare services

at grass root level. Corporate Social Responsibility initiatives (CSR) in BPCL have emerged from the belief

that it is only through collective effort that change can be brought about in society. BPCL has successfully

completed various projects in the fields of education, water conservation, health, environment

conservation and economic empowerment in collaborations with different NGO’s and local governments.

HPCL gives preference for local procurement of goods and services to support the livelihood of immediate

communities. For procurements other than crude, approximately 90% of the materials procure

indigenously. NRL is historically been isolated from rest of the India's growth story due to difficult terrain,

lack of infrastructure and few access routes. Albeit many constraints like limited availability of local

vendors and contractors, HPCL procures goods and services from the region. During the financial year

2007-08, the quantum of social benefits to local communities in and around NRL is estimated to be Rs.

84.82 million.

Project Boond is one of the novel CSR ventures of HPCL aims at alleviating the drought situation in five

villages on the leeward side of the Western Ghats. This was in support with a well known NGO, Bridge

Public Charitable Trust. HPCL provided all the material supports. Community contribution was raised in the

form of “Shram Daan”, or voluntary service. Villagers contributed a day’s work per week to the village and

were paid for the remaining days of the week. BPCL employees also participated along with villagers in

construction of some of the structures. The project Boond has been honored with Asian Corporate Social

Responsibility Award 2008. In the wake of the positive impacts of the project, BPCL now extends it to

various villages all over the country.

NGO and CSR Within the NGO world, there is a basic tactics for dealing with corporations: NGO’s have a significant role

in persuading or controlling corporations to adopt voluntary codes of conduct. There is no dual opinion

that business contributes a large for social and economical development. While initiating Corporate Social

Responsibility projects, majority of the organizations don’t have any idea about the grass root realities or

the needs and wants of the communities. At the same time NGO can have good acquaintance with

community members and people representatives. Fruitful dialogues with targeted community and local

people are the strategy to prepare ideal CSR Model. Most of the cases organization makes collaboration


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with a local NGO to implement their CSR activities. While doing this, business can behave according to the

needs of community. Local organizations can sense the pulse of the community and behave according

their desire.

At the same time NGO’s can unite community against the unethical practices of business. The same has

been proved by different NGO’s so far which vehemently reacted against the social and environmental

exploitation of corporations. NGO’s can

Make aware the corporate about social and environmental accountability under existing national and international laws;

Can effectively act against corruption and culprits in business

NGO;s have the influence over community and can make successful campaign against unethical practices in business

Regional organizations can arrange frutitious dialogues with community partners and business leaders

Environmental degradation and plundering of natural resources by business make in to notice of the corresponding authorities

Amnesty International and Human Rights Watch were founded in order to combat violations of traditional

civil and political rights, such as abuses of freedom of expression, arbitrary imprisonment, and unfair trials.

Southern human rights activists are more keenly aware of the legacies of colonialism and imperialism, and

they tend to see the most pressing human rights issues in economic and social rather than only in civil and

political terms.

Non-governmental organizations (NGOs) have played a major role in pushing for sustainable development

at the international level. Campaigning groups have been key drivers of inter-governmental negotiations,

ranging from the regulation of hazardous wastes to a global ban on land mines and the elimination of

slavery. But NGOs are not only focusing their energies on governments and inter-governmental processes.

Aided by advances in information and communications technology, NGOs have helped to focus attention

on the social and environmental externalities of business activity. Multinational brands have been acutely

susceptible to pressure from activists and from NGOs eager to challenge a company's labour,

environmental or human rights record. Even those businesses that do not specialize in highly visible

branded goods are feeling the pressure, as campaigners develop techniques to target downstream

customers and shareholders.

They hail from north and south and from all points in between - with the contrasting levels of resources

which such differences often imply. Some are highly sophisticated, media-savvy organizations like Friends

of the Earth and WWF; others are tiny, grassroots collectives, never destined to be household names.

Although it is often assumed that NGOs are charities or enjoy non-profit status, some NGOs are profit-

making organizations such as cooperatives or groups which lobby on behalf of profit-driven interests. For

example, the World Trade Organization's definition of NGOs is broad enough to include industry lobby

groups such as the Association of Swiss Bankers and the International Chamber of Commerce. Such a

broad definition has its critics. It is more common to define NGOs as those organizations which pursue

some sort of public interest or public good, rather than individual or commercial interests.


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Even then, the NGO community remains a diverse constellation. Some groups may pursue a single policy

objective - for example access to AIDS drugs in developing countries or press freedom. Others will pursue

more sweeping policy goals such as poverty eradication or human rights protection.

However, one characteristic these diverse organizations share is that their non-profit status means they

are not hindered by short-term financial objectives. Accordingly, they are able to devote themselves to

issues which occur across longer time horizons, such as climate change, malaria prevention or a global ban

on landmines. Public surveys reveal that NGOs often enjoy a high degree of public trust, which can make

them a useful - but not always sufficient - proxy for the concerns of society and stakeholders.

Not all NGOs are amenable to collaboration with the private sector. Some will prefer to remain at a

distance, by monitoring, publicizing, and criticizing in cases where companies fail to take seriously their

impacts upon the wider community. However, many are showing a willingness to devote some of their

energy and resources to working alongside business, in order to address corporate social responsibility.

To learn more about what these partnerships look like, go to 'Opposites attract' using the menu on the

left. There, NGO-business relations expert Jem Bendell explores several NGO-business relationships and

explains how the new wave of partnerships differs from old-style

Government Regulation of Business

The regulatory system is a primary means through which government tries to harmonize business

behavior and the public interest. Many types and forms of regulations have been developed. During the

1980’s a major rethinking of regulatory system in United States has occurred, and there is little doubt that

government officials, business executives, and the public will continue to evaluate its effectiveness.

Government has decisive role in maintaining business responsible, transparent and accountable. Myriad

laws and guidelines regulating business entities from exploiting natural resources, plundering wealth and

monopolizing business have played a relevant role. In order to maintain health, safety and hygiene of

employees and to ensure providing necessary welfare measures for people government making serious

interventions.

In the era of globalization, many of the business enterprises aim on natural resources to initiate lucrative

business. Along with these possibilities of violation of rules and regulation in connection with market,

human rights, completion, trade, taxation etc, are also very high. Compromising human rights and

environment for profit is very apparent in industries. It is evident that any liberal approach of government

which jeopardizes land and resource will lead to catastrophic consequences to planet and people. In this

scenario government and judicial system have to perform its role vey vigilantly curb exploitations.

Providing necessary policy guidelines to practice responsible business

Strengthen judiciary involvement and act as a watch dog to prevent human right violations

Strict monitoring of business activities and trade practices


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Ensure that business is not making any negative repercussions to environment and people

Develop and implement quality standards, Eco friendly labels and controlling measures

Controlling unethical and unfair trade practices

Take necessary measure to curb monopolizing business

Ensure business is not creating social nuisances and environmental hazards

Corporate Sustainability Assessment

Corporate Sustainability is a business approach to create long-term shareholder value by embracing

opportunities and managing risks deriving from economic, environmental and social developments.

Corporate sustainability leaders harness the market's potential for sustainability products and services

while at the same time successfully reducing and avoiding sustainability costs and risks. A growing number

of investors perceive sustainability as a catalyst for enlightened and disciplined management, and, thus, a

crucial success factor. As a result, investors are increasingly diversifying their portfolios by investing in

companies that set industry-wide best practices with regard to sustainability.

The Dow Jones Sustainability Indexes (DJSI) were established to track the performance of companies that

lead the field in terms of corporate sustainability. All indexes of the DJSI family are assessed according to

the same Corporate Sustainability Assessment TM and respective criteria. The Dow Jones Sustainability

Indexes family consists of a set of geographically focused indexes. The Dow Jones Sustainability World

Indexes (DJSI World) were first published on 8 September 1999. They consist of a broad composite index

as well as narrower, subset indexes excluding companies that generate revenue from alcohol, tobacco,

gambling, armaments (including cluster bombs and landmines) & firearms, and/or adult entertainment. A

subset that excludes US companies is also available as a benchmark for non-US portfolios. Additionally,

two blue chip indexes are published, the Dow Jones Sustainability World 80 and Dow Jones Sustainability

World ex US 80 indexes that track the performance of the largest 80 sustainability leaders in the world

respectively the world ex US. The latter were launched on 26 August 2008. (Dow Jones Sustainability

World Indexes, Guide Book, Version 11.6, 7 September 2011)

Sustainability index is an index which is proposed as a model Bombay Stock Exchange Sustainability Index

(BSE SIN) in line with the Dow Jones sustainability index (Table 3). The index incorporates companies in

BSE based on their score in different parameters based again on the company’s economic, social and

environmental performance. Each of these three parameters will have certain criteria with specific weights

attached to each criterion. (Corporate Social Responsibility Rating: India Focus, Lokaranjan Guha)


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Global Reporting Initiative

The Global Reporting Initiative (GRI) [GRI, 2002] is an international institution the duty of which is to establish guiding lines for the publishing of nonfinancial information regarding sustainable development. It was set up further to an initiative of the non-governmental organizations (NGOs) and of the big companies of Boston by CERES in partnership with UNEP. Initiated in 1997, GRI became independent in 2002. GRI benefits from the active participation of the representatives of the business, accounting, investments, human rights, environments research, labour sector, etc. all over the world and aims at ensuring the quality of reports having in view to cater for the comparability, reliability and assessment of the submitted information. The adoption of GRI is the result of a voluntary approach, in the absence of any provision binding its application [Quairel, 2004]. According to the study of KPMG 2008, more than three-quarters of the G250 and nearly 70 percent of the N100 use the GRI Guidelines for their reporting [KPMG, 2008]. GRI stands for sustainable reporting in terms of economic, environment and social performances (approach known as the triple bottom line) [GRI, 2006]. The term alludes to the last line of balance sheet and also refers to the three “p” (people, planet, profit), being assimilated to the report “population, planet, profit” published by Shell company in 2005, when it presents the actions carried out in favour of sustainable development, and the objectives established for the future period.


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At present, this report has become synonymous with the triple bottom line reporting. This approach is based on the idea that the overall performance of an entity can be measured depending on the

contribution to economic prosperity, to the quality of the environment and of the share capital. In a narrow sense, this notion refers to the framework permitting the measurement and reporting of the results of an entity according to economic, social and environment parameters. In a wider sense, the term refers to the totality of processes that an entity carries out to minimize the effects of its activity and create new economic, social and ecologic values. This implies a clear purpose of the entity and the consideration of all the users’ needs (shareholders, clients, employees, trade partners, public authority, etc.) [Pulselli all, 2006]. This triple approach of sustainability is a reliable means of dealing with complex issues. In fact,

GRI continuously analyses and improves the content of the information of reports according to an optimum means of measurement of the sustainable development reports published by entities, specifying that the boundaries of a sustainable development report may affect all the entities which have a considerable (real or potential) impact on the environment and/or over which the entity exercises a significant control or influence in matters of financial and operational policies and practices [GRI, 2006]. (Source: Indicators Of The Global Reporting Initiative Regarding Sustainable Development, Leontina Beţianu)

Global Compact

The Global Compact is a voluntary, international initiative that encourages companies of every size to

implement environmentally friendly and socially responsible policies and to report on them. At the core of

the Compact are Ten Principles that cover four areas: Human Rights, Labour Standards, Environment AND

Anti-Corruption.


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The goal of the Global Compact is to promote responsible corporate management so that business can be

part of the solution to the challenges of globalization. The Global Compact is not a regulatory instrument –

it does not “police”, enforce or measure the behavior or actions of companies. Rather, the Global Compact

relies on public accountability, transparency and the enlightened self-interest of companies, labour and

civil society to initiate and share substantive action in pursuing the principles upon which the Global

Compact is based.

The Global Compact is organized as a network. As of 2007, it includes approximately 3,000 companies

from all regions of the world, as well as some 1000 international labour and civil society organizations. A

variety of universities and cities support the initiative as well. At its core are the Global Compact Office

and six UN agencies:

1. Office of the High Commissioner for Human Rights

2. United Nations Environment Program

3. International Labour Organization

4. United Nations Development Program

5. United Nations Industrial Development Organization

6. United Nations Office on Drugs and Crime

Moreover, the Compact has created more than 80 Local or Country Networks that function as voluntary

local associations of participants that engage in collective activities.

The Global Compact asks companies to integrate Ten Principles into their core business operations and to

pursue projects and corporate activities that advance the principles and broad goals of the United Nations.

One of the overriding objectives is to embed the principles – and, hence, good corporate citizenship – into

corporate management strategy, decision making and the value chain of a company. The Ten Principles

are:

Human Rights

Principle 1: Businesses should support and respect the protection of internationally proclaimed human

rights; and

Principle 2: make sure that they are not complicit in human rights abuses.

Labour Standards

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right

to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption

Principle 10: Businesses should work against all forms of corruption, including extortion and bribery.


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ISO 26000 Social Responsibilities

ISO 26000 is intended to assist organizations in contributing to sustainable development. It is intended to

encourage them to go beyond legal compliance, recognizing that compliance with law is a fundamental

duty of any organization and an essential part of their social responsibility. It is intended to promote

common understanding in the field of social responsibility, and to complement other instruments and

initiatives for social responsibility, not to replace them. In applying ISO 26000, it is advisable that an

organization take into consideration societal, environmental, legal, cultural, political and organizational

diversity, as well as differences in economic conditions, while being consistent with international norms of

behavior.

ISO 26000 provides guidance for all types of organization, regardless of their size or location, on :

1. Concepts, terms and definitions related to social responsibility

2. Background, trends and characteristics of social responsibility

3. Principles and practices relating to social responsibility

4. Core subjects and issues of social responsibility

5. Integrating, implementing and promoting socially responsible behavior throughout the

organization and, through its policies and practices, within its sphere of influence

6. Identifying and engaging with stakeholders

7. Communicating commitments, performance and other information related to social responsibility

ISO 26000 is not a management system standard. It is not intended or appropriate for certification purposes or regulatory or contractual use. Any offer to certify, or claims to be certified, to ISO 26000 would be a misrepresentation of the intent and purpose and a misuse of this International Standard. As ISO 26000 does not contain requirements, any such certification would not be a demonstration of conformity with this International Standard. ISO 26000 addresses seven core subjects of social responsibility defined in the standard and portrayed in the following graphic. The figures refer to the corresponding clauses in the standard.


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Schematic overview of ISO 26000 The following graphic provides an overview of ISO 26000 and is intended to assist organizations in understanding relations between the various clauses of the standard.

Core subjects and issues of social responsibility addressed in ISO 26000 Core subjects and issues Core subject: Organizational governance 6.2 Core subject: Human rights 6.3 Issue 1 : Due diligence 6.3.3 Issue 2 : Human rights risk situations 6.3.4 Issue 3 : Avoidance of complicity 6.3.5 Issue 4 : Resolving grievances 6.3.6 Issue 5 : Discrimination and vulnerable groups 6.3.7 Issue 6 : Civil and political rights 6.3.8 Issue 7 : Economic, social and cultural rights 6.3.9 Issue 8 : Fundamental principles and rights at work 6.3.10 Core subject : Labour practices 6.4 Issue 1 : Employment and employment relationships 6.4.3 Issue 2 : Conditions of work and social protection 6.4.4 Issue 3 : Social dialogue 6.4.5 Issue 4 : Health and safety at work 6.4.6 Issue 5 : Human development and training in the workplace 6.4.7 Core subject : The environment 6.5 Issue 1 : Prevention of pollution 6.5.3 Issue 2 : Sustainable resource use 6.5.4


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Issue 3 : Climate change mitigation and adaptation 6.5.5 Issue 4 : Protection of the environment, biodiversity and restoration of natural habitats 6.5.6 Core subject : Fair operating practices 6.6 Issue 1 : Anti-corruption 6.6.3 Issue 2 : Responsible political involvement 6.6.4 Issue 3 : Fair competition 6.6.5 Issue 4 : Promoting social responsibility in the value chain 6.6.6 Issue 5 : Respect for property rights 6.6.7 Core subject : Consumer issues 6.7 Issue 1 : Fair marketing, factual and unbiased information and fair contractual practices 6.7.3 Issue 2 : Protecting consumers' health and safety 6.7.4 Issue 3 : Sustainable consumption 6.7.5 Issue 4 : Consumer service, support, and complaint and dispute resolution 6.7.6 Issue 5 : Consumer data protection and privacy 6.7.7 Issue 6 : Access to essential services 6.7.8 Issue 7 : Education and awareness 6.7.9 Core subject : Community involvement and development 6.8 Issue 1 : Community involvement 6.8.3 Issue 2 : Education and culture 6.8.4 Issue 3 : Employment creation and skills development 6.8.5 Issue 4 : Technology development and access 6.8.6 Issue 5 : Wealth and income creation 6.8.7 Issue 6 : Health 6.8.8 Issue 7 : Social investment

• • • • • •


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III. BUSINESS AND ENVIRONMENTAL PROTECTION Environment is considered as the mother of all natural resources provides all for business & society.

Judicial and sustainable utilization of natural resources make our life away from environmental

degradation and resource depletion. But exploitation of environment has resulted in it’s “almost

emptiness”. Irrespective or large and small countries, negative impact of industrial activities on

environment is alarming. Depletion of resources, exploitation of natural resources, destruction of forests,

pollution and emission of toxic made our earth and environment vulnerable to threats. Every business

needs raw materials or resources from earth or society. For most of the business, producing or

manufacturing goods is the most important area of operation. In other way manufacturing firms totally

depends up on environment for inputs. This causes negative impact on environment. The environment in

which an individual or an organization operates is needed to be considered more and environmental

concern should be in the agenda of corporate. Here we discuss about environmental concerns, problems

and remedies.

Pollution

Production of unwanted materials or bi products generates in production process leads to pollution.

Business as well as human activity now contaminates water air and land. The habit of NIMBY (Not In My

Backyard) throwing waste outside our compound creates unpardonable menace to common community.

It is estimated that a liter of waste water pollutes another 8 L of pure water. Solid and waste water decay

environment and infect drinking water sources. Pollution makes nuisance to the community and collapses

the ecological balance.

AIR POLLUTION

It consists of gases, liquids or solids or solids present in the atmosphere in high enough levels to harm

humans, other organisms or materials. The two main sources of human generated air pollution are motor

vehicles and industry. Primary air pollutants are harmful chemicals that enter directly in to the

atmosphere. Secondary air pollutants are harmful chemicals that form from other substances that have

been released in to the atmosphere. All major forms of human produced air pollution except carbon

dioxide can be prevented or controlled with current technologies, although control may involve

considerable expense.

Poisonous gases emitted from chemical industries causes serious health problem

E.g. : Bhopal tragedy due to methyl isocyanides leakage in 1984

Gases emitted from chemical industries like nitrate , sulphate causes acid rain

Eg: Madurai oil refineries make damage on TAJMAHAL

WATER POLLUTION

It consists of physical or chemical change in water that affects the health of humans and other

organisms.

Water pollutants come from both natural and human activities.

Pollution that enters at specific sites, such as pipes from industrial or sewage treatment plants is

called point source pollution


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Non point source pollution, also called polluted runoff, comes from the land rather than from a

single point of entry.

Three major sources of human induced water pollution are agriculture, municipalities (sewage and

urban runoff) and industries

The chemical wastes dumped to water bodies causes increasing biological oxygen demand.

Seriously affect water eco system.

Decrease the availability of drinking water.

The chemical waste which is drawn to the river cause eco system in the water.

The reproduction process of living beings is affected

All major forms of human produced water pollution can be prevented or controlled with current

technologies, although control may involve considerable expense.

LAND POLLUTION

It chiefly occurs through agricultural chemicals and human refuse. Humans produce millions of

tones of waste every year. Besides sewage, this waste is mostly dumped on the land – the dumping

sites being called as landfills. The landfills breed disease germs, release methane – a green house

gas – while the wastes decompose.

The main sources of soil pollution are, increasing rate of population, waste dumping from the

industries like cement, distilleries, fertilizers, mining, nuclear industry, petrochemical etc.

Other major soil pollutant is the increased use of fertilizers in our agriculture sector

Soil pollution can be prevented or controlled with current technologies, although control may

involve considerable expense.

Over use of Chemical fertilizers cause the loss of fertility of soil.

The pesticide like DDT, BHC causes biological magnification.

Dumping of waste cause desertification.

NOISE POLLUTION

NOISE is unwanted sound which forms an irritant and a source of stress. Sources are,

• Transport sector: air craft, trains, trucks, cars, three-wheelers, motor cycles, etc.

• Industrial and construction machinery: factory equipments, generators road rollers, pile drivers,

pneumatic drills etc.

• Special events: high volume sound from loud speakers, pop music performances, religious festivals,

public meetings, etc.

Health Effects

• Prolonged exposure to even 85 dBA can cause hearing loss; 140 dBA is painful; 180 dBA could kill a

person.

• Noise can do both physiological and psychological damage.

• Common health effects of noise pollution manifest as migraine, headache, nausea, dizziness,

gastric ulcers, constriction of blood vessels, muscle contraction.

Control Mechanism

• Producing less noise is the best machinery to reduce or control noise pollution.

• Redesign noise producing machinery


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• Provide shields and noise absorbing materials

• Control through law.

Noise regulation Rules under the Environmental Protection Act of 1986

Area/Zone Day time Night time

Industrial area 75 70

Commercial area 65 55

Residential area 55 45

Silence zone 50 40

Managing industrial Pollution

Pollution is due to discharge of waste, Industrial pollution means discharge of waste to air, water and soil

from various industries like automobile manufacturing, chemical industry, clothing industry, electronics,

engineering, energy industries (petroleum, gas and electric power), steel industry, soft engineering,

telecommunications etc. So managing industrial pollution means managing the industrial wastes.

Waste is a misplaced resource. Waste management is the collection, transport, processing,

recycling or disposal of waste materials. Waste management is done in an effort to reduce their

effect on human health.

Management for hazardous &non hazardous commercial and industrial waste is usually the

responsibility of the generator.


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Increasing waste disposal costs, increasingly stringent waste reduction regulations, and heightened public

awareness have dramatically increased the financial burden of waste management and pollution control

on industry. To respond to these pressures, environmental, production, and financial managers are

seeking to reduce waste generation, and air and water pollution at the source through Materials

substitution, Process modification, Life Cycle Analysis and on-site recycling of these claims

Material substitution

Eco- friendly or less polluting raw materials should be used. For these we can adopt industrial ecology

systems. Industrial ecology proposes not to see industrial systems (for example a factory, or national or

global economy) as being separate from the biosphere, but to consider it as a particular case of an

ecosystem- but based on infrastructural capital rather than on natural capital. It is the idea that if natural

systems do not have waste in them, we should model our systems after natural ones if we want them to

be sustainable.

Industrial ecology is the shifting of industrial process from linear (open loop) systems, in which resource

and capital investments move through the system to become waste, to a closed loop system where wastes

become inputs for new processes.

The development of process technology to replace potentially toxic chemicals such as halogens in

the pulp and paper industry and in other industrial processes using solvents in industries

The implementation of sensors and process control technologies to improve efficiency and reduce

waste generation in industry

The development of technologies to recover value-added products from industrial wastes and

used products in every possible industry


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LCA involves examining the environmental releases and impacts of a specific product by tracking

its development from a raw material, through its production, and its eventual disposal

Pollution Prevention through Life Cycle Analysis, or LCA, is a different approach from evaluating

waste management (source reduction and recycling) options which look mainly at single issues,

such as recyclability or reduced toxicity. Pollution prevention can take place at any stage in the

product life cycle, and changes at any stage can have positive or negative impacts on waste

generation at other stages.

A hazardous industrial waste needed to be placed in barrels and transported to approve treatment

plant and storage or disposal facility.

An awareness of waste stream characteristics and the potential benefits of waste segregation are

then blended with the knowledge of regulatory compliance issues and treatment system

capabilities/ performance to minimize environmental risks and costs.

The policy Polluter Should Pay shall be the agenda of individual as well as business. It is the responsibility

of the producer to dispose waste safely. Responsible business expects such responsible behavior from

individuals and business enterprises. Nature, land, waster and resources are needed to be handled very

sensitively. This environmental consciousness should be cultivated and generated among the members of

society. A combined effort to preserve and protect nature is a need of this hour.

Environmental Management System Standard (EMSS) “Environmental Management System Standards (EMSS) refers to system for managing organizations'

environmental programmes in formal, comprehensives, systematic, planned and documented manner.” It

embraces organizational structure, planning and resources for developing, implementing and maintaining

the policy for protection of environment. Formal operations of EMS in a company require enhancing

certain conditions in terms of organizational structure, besides other condition. The foremost is

commitment of top management. The top management and the senior executives are usually used to

taking in thinking, let alone adopting it. Legal compliances and market demand may lead to installing EMS

but it should not be the sole aim for environment mgt. The most common motives for adopting a formal

EMS are the following;

It is a statutory requirement and the firms want to avoid prosecution.

In developed countries, improved environmental performance is becoming a popular theme for

enhancing the image of the company.

The demand of various stakeholders especially the key client puts pressure for installing a formal

EMS.

There is a provision to have EMS certified by an external party. International standards called ISO 14001

and European Unions' EMSA and earlier British standard for environment are the recognized standard for

the purpose. Certifications for EMS through the above mentioned standard may be a part of corporate

policy or this may be in response to the demand of the clients. Planning for EMS is an important function

of an organization in the sense that it takes into consideration a proper schedule, resources, targets

successes as well as likely failure, contingencies and alternatives to mitigate the crisis it occurs.


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Environmental Accounting and Audit

"Environmental accounting" - sometimes referred to as "green accounting", "resource accounting" or

"integrated economic and environmental accounting" - refers to modification of the System of National

Accounts to incorporate the use or depletion of natural resources.

It is a type of management accounting that focuses on costs internal to the company and excludes external

costs to individuals, society, or the environment for which a company is not legally held responsible.

Environmental management accounting is the identification, collection, estimation, analysis, internal

reporting, and use of materials and energy flow information, environmental cost information and other

cost information for both conventional and environmental decision-making within an organization.

Environmental Accounting also referred as green accounting is defined as an important tool for

understanding the role played by the environment in the economy as a mutual relationship is identified

between the two. Environmental accounting prepares accounts that exhibit the cost of environmental

conservation during the normal course of business Costs can include costs to clean up or remediate

contaminated sites, environmental fines, penalties and taxes, purchase of pollution prevention

technologies and waste management costs. Environmental Accounting generates, analyses and uses

financial and non-financial information to support management. According to Bennett and James It is a

complementary management accounting approach to the financial accounting approach. Key application

fields for EA are assessment of annual environmental costs/expenditures, product pricing, budgeting,

investment appraisal, calculating costs and savings of environmental projects, or setting quantified

performance targets.

The relationship between the environment and economy is close and mutually beneficial. Businesses have

become increasingly aware of the environmental implications on their operations, products, and services.


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Even consumers and stakeholders are taking interest and ask to report on environmental behavior. Apart

from this EA provides data those results in cost and competitive advantage. Companies like good year

scrap tyre and Ricoh Group are even implementing it. As the EA benefits the company so does it benefits

environment. Implementing of EA results in increase in awareness among business, stakeholders and

society as a whole. It helps to build an environment friendly business culture. Companies incur costs in

pollution prevention and waste disposal equipments that saves environment .EA has also led in awareness

towards use of alternate raw material and recycling techniques. Company makes investment in new

technology to save their input cost at the same time they benefit the environment.

For example Good-Year tyre of America is made from scrap .Though EA can measure the profits of the

company but definitely it cannot measure the immense benefits EA has on the environment. After

assessing the mutual benefits of EA I think it should be definitely made compulsory or at least companies

should produce environmental statements within their annual reports. As unless if it is not made

mandatory people do not follow it and the greedy companies only concentrate on their profits. We often

forget if nature provides us with world’s best gifts we also have a duty towards it.

Environmental audit is a general term that can reflect various types or evaluations intended to identify

environmental compliance and management system implementation gaps, along with related corrective

actions. In this way they perform an analogous (similar) function to financial audits. There are generally

two different types of environmental audits: compliance audits and management systems audits.

Compliance audits tend to be the primary type in the US or within US-based multinationals. It is the means

by which business can assess the environmental impacts of their operations, its identification and

measurement which would be helpful to a company to determine where it should implement cleaner

production and eco efficiency improvements planning and conduct of the audit defining the purpose and

scope of the audit, resolving policy issues and establishing priorities, assigning departmental responsibility

and choosing the audit team

This is done by testing the following criteria:

Identify overall aims

Understands constraints on achieving

aims

Identifies who is responsible for

what

Sets an overall timetable for

achieving aims

Has determined resource needs

Has a progress monitoring system

(Source: Wikipedia, accessed on 17/09/2012)

Environmental laws

In the Constitution of India it is clearly stated that it is the duty of the state to ‘protect and improve the environment and to safeguard the forests and wildlife of the country’. It imposes a duty on every citizen


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‘to protect and improve the natural environment including forests, lakes, rivers, and wildlife’. Reference to the environment has also been made in the Directive Principles of State Policy as well as the Fundamental Rights. The Department of Environment was established in India in 1980 to ensure a healthy environment for the country. This later became the Ministry of Environment and Forests in 1985.

General

1986 - The Environment (Protection) Act authorizes the central government to protect and improve environmental quality, control and reduce pollution from all sources, and prohibit or restrict the setting and /or operation of any industrial facility on environmental grounds.

1986 - The Environment (Protection) Rules lay down procedures for setting standards of emission or discharge of environmental pollutants.

1989 - The objective of Hazardous Waste (Management and Handling) Rules is to control the generation, collection, treatment, import, storage, and handling of hazardous waste.

1989 - The Manufacture, Storage, and Import of Hazardous Rules define the terms used in this context, and sets up an authority to inspect, once a year, the industrial activity connected with hazardous chemicals and isolated storage facilities.

1989 - The Manufacture, Use, Import, Export, and Storage of hazardous Micro-organisms/ Genetically Engineered Organisms or Cells Rules were introduced with a view to protect the environment, nature, and health, in connection with the application of gene technology and microorganisms.

1991 - The Public Liability Insurance Act and Rules and Amendment, 1992 was drawn up to provide for public liability insurance for the purpose of providing immediate relief to the persons affected by accident while handling any hazardous substance.

1995 - The National Environmental Tribunal Act has been created to award compensation for damages to persons, property, and the environment arising from any activity involving hazardous substances.

1997 - The National Environment Appellate Authority Act has been created to hear appeals with respect to restrictions of areas in which classes of industries etc. are carried out or prescribed subject to certain safeguards under the EPA.

1998 - The Biomedical waste (Management and Handling) Rules is a legal binding on the health care institutions to streamline the process of proper handling of hospital waste such as segregation, disposal, collection, and treatment.

1999 - The Environment (Siting for Industrial Projects) Rules, 1999 lay down detailed provisions relating to areas to be avoided for siting of industries, precautionary measures to be taken for site selecting as also the aspects of environmental protection which should have been incorporated during the implementation of the industrial development projects.

2000 - The Municipal Solid Wastes (Management and Handling) Rules, 2000 apply to every municipal authority responsible for the collection, segregation, storage, transportation, processing, and disposal of municipal solid wastes.


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2000 - The Ozone Depleting Substances (Regulation and Control) Rules have been laid down for the regulation of production and consumption of ozone depleting substances. 2001 - The Batteries (Management and Handling) Rules, 2001 rules shall apply to every manufacturer, importer, re-conditioner, assembler, dealer, auctioneer, consumer, and bulk consumer involved in the manufacture, processing, sale, purchase, and use of batteries or components so as to regulate and ensure the environmentally safe disposal of used batteries.

2002 - The Noise Pollution (Regulation and Control) (Amendment) Rules lay down such terms and conditions as are necessary to reduce noise pollution, permit use of loud speakers or public address systems during night hours (between 10:00 p.m. to 12:00 midnight) on or during any cultural or religious festive occasion

2002 - The Biological Diversity Act is an act to provide for the conservation of biological diversity, sustainable use of its components, and fair and equitable sharing of the benefits arising out of the use of biological resources and knowledge associated with it

Forest and wildlife

1927 - The Indian Forest Act and Amendment, 1984, is one of the many surviving colonial statutes. It was enacted to ‘consolidate the law related to forest, the transit of forest produce, and the duty leviable on timber and other forest produce’.

1972 - The Wildlife Protection Act, Rules 1973 and Amendment 1991 provides for the protection of birds and animals and for all matters that are connected to it whether it be their habitat or the waterhole or the forests that sustain them.

1980 - The Forest (Conservation) Act and Rules, 1981, provides for the protection of and the conservation of the forests.

Water

1882 - The Easement Act allows private rights to use a resource that is, groundwater, by viewing it as an attachment to the land. It also states that all surface water belongs to the state and is a state property.

1897 - The Indian Fisheries Act establishes two sets of penal offences whereby the government can sue any person who uses dynamite or other explosive substance in any way (whether coastal or inland) with intent to catch or destroy any fish or poisonous fish in order to kill.

1956 - The River Boards Act enables the states to enroll the central government in setting up an Advisory River Board to resolve issues in inter-state cooperation.

1970 - The Merchant Shipping Act aims to deal with waste arising from ships along the coastal areas within a specified radius.

1974 - The Water (Prevention and Control of Pollution) Act establishes an institutional structure for preventing and abating water pollution. It establishes standards for water quality and effluent. Polluting


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industries must seek permission to discharge waste into effluent bodies. The CPCB (Central Pollution Control Board) was constituted under this act.

1977 - The Water (Prevention and Control of Pollution) Cess Act provides for the levy and collection of cess or fees on water consuming industries and local authorities.

1978 - The Water (Prevention and Control of Pollution) Cess Rules contains the standard definitions and indicate the kind of and location of meters that every consumer of water is required to affix.

1991 - The Coastal Regulation Zone Notification puts regulations on various activities, including construction, are regulated. It gives some protection to the backwaters and estuaries.

Air

1948 – The Factories Act and Amendment in 1987 was the first to express concern for the working environment of the workers. The amendment of 1987 has sharpened its environmental focus and expanded its application to hazardous processes.

1981 - The Air (Prevention and Control of Pollution) Act provides for the control and abatement of air pollution. It entrusts the power of enforcing this act to the CPCB .

1982 - The Air (Prevention and Control of Pollution) Rules defines the procedures of the meetings of the Boards and the powers entrusted to them.

1982 - The Atomic Energy Act deals with the radioactive waste.

1987 - The Air (Prevention and Control of Pollution) Amendment Act empowers the central and state pollution control boards to meet with grave emergencies of air pollution.

1988 - The Motor Vehicles Act states that all hazardous waste is to be properly packaged, labelled, and transported.

Green Funding

“Green funds are mutual funds that invest in socially-responsible companies that do not take part in

immoral or unethical activities. As a rule of thumb, this typically excludes tobacco and gaming companies,

as well as those with questionable labor practices or environmental policies”

"The work carried out with this funding will help to reduce the amount of energy we use in our buildings

and also cut harmful carbon emissions. We are committed to combating climate change and will continue

to look at ways we can use renewable energy and energy efficient systems."

Eg. Carbon Credit

Green Communities is a five-year, $555 million initiative to build more than 8,500 environmentally healthy

homes for low-income families. Created by the Enterprise Foundation / Enterprise Social Investment

Corporation in partnership with the Natural Resource Defense Council, Green Communities will transform


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the way American thinks about, commercial and residential building designs. The initiative provides grants,

financing, tax-credit equity, and technical assistance to developers who meet Green Communities criteria

for affordable housing that promotes health, conserve energy and natural resources, and provides easy

access to jobs, schools, and services. Designing, developing, and building green affordable housing

requires the right technology, supplies, and materials. Amergreen has assembled a list of sources and

suppliers to assist in completing green affordable projects, including:

General Green Information Green Buildings Planning and Site Location Energy Solar Energy Materials Water Efficiency Appliances

Funds may be used for:

Planning expenses related to the integrated design process including the additional costs of

architectural work, engineering, site surveys, analysis of energy use, and environmental reviews

Green construction items.

Costs of architect's certification that Green Communities Criteria have been met, as well as costs of

any other third-party assistance in certifying a development.

Third-party costs of establishing systems and tools for property management and resident

education, to maximize the benefits of the green measures once the property is operating.

In some instances, conducting surveys and collecting data to determine the benefits of

implementing green measures that were funded with a grant .

Grant funds may be used in ways that benefit the entire project, including homes and apartment

units that are not low-income.

An applicant may apply for and be awarded a grant for both planning and implementation, but the

implementing portion of the grant funds will be automatically cancelled if the project does not

meet the Green Communities Criteria at the construction stage.


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Green Marketing According to the American Marketing Association, green marketing is the marketing of products that are

presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities,

including product modification, changes to the production process, packaging changes, as well as

modifying advertising. Yet defining green marketing is not a simple task where several meanings intersect

and contradict each other; an example of this will be the existence of varying social, environmental and

retail definitions attached to this term. Other similar terms used are Environmental Marketing and

Ecological Marketing.

Green, environmental and eco-marketing are part of the new marketing approaches which do not just

refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those

approaches and provide a substantially different perspective. In more detail green, environmental and

eco-marketing belong to the group of approaches which seek to address the lack of fit between marketing

as it is currently practiced and the ecological and social realities of the wider marketing environment.

The legal implications of marketing claims call for caution. Misleading or overstated claims can lead to

regulatory or civil challenges. In the USA, the [Federal Trade Commission] provides some guidance on

environmental marketing claims. This Commission is expected to do an overall review of this guidance, and

the legal standards it contains, in 2011

The term Green Marketing came into prominence in the late 1980s and early 1990s. The American

Marketing Association (AMA) held the first workshop on "Ecological Marketing" in 1975. The proceedings

of this workshop resulted in one of the first books on green marketing entitled "Ecological Marketing".

Two tangible milestones for wave 1 of green marketing came in the form of published books, both of

which were called Green Marketing. They were by Ken Peattie (1992) in the United Kingdom and by

Jacquelyn Ottman (1993) in the United States of America. According to Jacquelyn Ottman, (author of "The

New Rules of Green Marketing: Strategies, Tools, and Inspiration for Sustainable Branding" (Greenleaf

Publishing and Berrett-Koehler Publishers, February 2011)) from an organizational standpoint,

environmental considerations should be integrated into all aspects of marketing — new product

development and communications and all points in between. The holistic nature of green also suggests

that besides suppliers and retailers new stakeholders be enlisted, including educators, members of the

community, regulators, and NGOs. Environmental issues should be balanced with primary customer needs.

The past decade has shown that harnessing consumer power to effect positive environmental change is far

easier said than done. The so-called "green consumer" movements in the U.S. and other countries have

struggled to reach critical mass and to remain in the forefront of shoppers' minds.

Despite these challenges, green marketing has continued to gain adherents, particularly in light of growing

global concern about climate change. This concern has led more companies to advertise their commitment

to reduce their climate impacts, and the effect this is having on their products and services.


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Green washing

Corporations are increasingly recognizing the benefits of green marketing, although there is often a thin

line between doing so for its own benefit and for social responsibility reasons. The term “green washing”

refers to all industries that adopt outwardly green acts with an underlying purpose to increase profits. The

primary objective of green washing is to provide consumers with the feeling that the organization is taking

the necessary steps to responsibly manage its ecological footprint. In reality, the company may be doing

very little that is environmentally beneficial. The term greenwashing was first used by environmentalist Jay

Westerveld when objecting to hotelier's practice of placing notices in hotel rooms which asked their

guests to reuse towels to “save the environment”. Westerveld noted that there was little else to suggest

that the hoteliers were interested in reducing their environmental impacts, and that their interest in

washing fewer towels seemed to be motivated by a concern to save costs rather than the environment.

Since then greenwashing has become a central feature of debates about marketing communications and

sustainability, with “awards” for greenwashing established and numerous campaigns, law and advices

developed in an attempt to reduce or curb it.

Everett Rogers, communication scholar and author of “Diffusion of Innovations”, claims that the following

five factors can help determine whether a new idea will be adopted or not, including the idealism of the

shift towards “green”:

1. Relative advantage: is the degree to which the new behavior is believed to accrue more beneficial

outcomes than current practice.

2. Observability: is how easy it is to witness the outcomes of the new behavior.

3. Trialability: is the ease with which the new behavior can be tested by an individual without making

a full commitment.

4. Compatibility: is the degree to which the new behavior is consistent with current practice.

5. Complexity: is how difficult the new behavior is to implement.

The Green Marketing Mix

A model of a green marketing-mix should, of course, contain all 4P’s:

Product: A producer should offer ecological products which not only must not contaminate the

environment but should protect it and even liquidate existing environmental damages.

Price: Prices for such products may be a little higher than conventional alternatives. But target

groups like for example LOHAS are willing to pay extra for green products.

Place: A distribution logistics is of crucial importance; main focus is on ecological packaging.

Marketing local and seasonal products e.g. vegetables from regional farms is easier to be marketed

“green” than products imported.

Promotion: A communication with the market should put stress on environmental aspects, for

example that the company possesses a CP certificate or is ISO 14000 certified. This may be

publicized to improve a firm’s image. Furthermore, the fact that a company spends expenditures

on environmental protection should be advertised. Third, sponsoring the natural environment is

also very important. And last but not least, ecological products will probably require special sales

promotions.


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Additional Social Marketing

"P's" that are used in this

process are as followed:

Publics-- Effective

Social Marketing

knows its audience,

and can appeal to

multiple groups of

people. "Public" is the

external and internal

groups involved in

the program. External

publics include the

target audience,

secondary audiences,

policymakers, and

gatekeepers, while

the internal publics

are those who are

involved in some way

with either approval

or implementation of

the program.

Partnership-- Most

social change issues,

including "green"

initiatives, are too

complex for one

person or group to

handle. Associating

with other groups

and initiatives to

team up strengthens

the chance of

efficacy.

Fig. Green marketing activities

Policy--Social marketing programs can do well in motivating individual behavior change, but that is

difficult to sustain unless the environment they're in supports that change for the long run. Often,

policy change is needed, and media advocacy programs can be an effective complement to a social

marketing program.

Purse Strings-- How much will this strategic effort cost? Who is funding the effort?


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The level of greening-strategic, quasi-strategic, or tactical dictates exactly what activities should be under-

taken by a company. Strategic greening in one area may or may not be leveraged effectively in others. A

firm could make substantial changes in production processes but opt not to leverage them by positioning

itself as an environmental leader. So although strategic greening is not necessarily strategically integrated

into all marketing activities, it is nevertheless strategic in the product area.

Green marketing cases

Phillips's "Marathon" CFL lightbulb

Philips Lighting's first shot at marketing a standalone compact fluorescent light (CFL) bulb was Earth Light,

at $15 each versus 75 cents for incandescent bulbs. The product had difficulty climbing out of its deep

green niche. The company re-launched the product as "Marathon," underscoring its new "super long life"

positioning and promise of saving $26 in energy costs over its five-year lifetime. Finally, with the U.S. EPA's

Energy Star label to add credibility as well as new sensitivity to rising utility costs and electricity shortages,

sales climbed 12 percent in an otherwise flat market.

Car sharing services

Car-sharing services address the longer-term solutions to consumer needs for better fuel savings and

fewer traffic tie-ups and parking nightmares, to complement the environmental benefit of more open

space and reduction of greenhouse gases. They may be thought of as a "time-sharing" system for cars.

Consumers who drive less than 7,500 miles a year and do not need a car for work can save thousands of

dollars annually by joining one of the many services springing up, including ZipCar (East Coast), I-GO Car

(Chicago), Flex Car (Washington State), and Hour Car (Twin Cities).

Electronics sector

The consumer electronics sector provides room for using green marketing to attract new customers. One

example of this is HP's promise to cut its global energy use 20 percent by the year 2010. To accomplish this

reduction below 2005 levels, The Hewlett-Packard Company announced plans to deliver energy-efficient

products and services and institute energy-efficient operating practices in its facilities worldwide

Eco Label

An eco-label is a graphic symbol and/or a short descriptive text applied on a product, package, or inserted

in a brochure that accompanies the product which offers information about the environmental impacts

generated by the respective product

• Eco-labelling was first introduced in Germany in 1977.

• It is a voluntary method of environmental performance certification that is now practiced all over

the world.

• Eco-labelling schemes help consumers make decisions about the products they buy: whether they

are environment-friendly.

Eg. German Green Spot, Nordic Swan, US Green Seal

The Government of India launched an Eco-mark Scheme in 1991 to increase consumer awareness in

respect of environment-friendly products


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Types of Eco Labels

• National eco-labels: developed by the National Eco-labelling Institute. Focus is purely on

environmental issues.

• Fair trade labels: mainly focus on labour and living conditions of workers or employees in

developing countries. Environmental issues play a minor role within the scope of these labels

• Labels for organic production: focus almost exclusively on agricultural products. Fruits, vegetables,

flowers and plants along with fishery products are eligible for such label.

• Product specific labels: focus on environmental aspects of one product group only. e.g. labelling of

forestry products

Overview of the different types of eco-labels used to indicate credibility to consumer.

(Source: Wikipedia accessed on 25/09/2012)

Life Cycle Assessment

During the late 1980s, new instruments such as life cycle assessment (short: LCA) were invented which

allowed ecological considerations to be introduced into marketing decisions. The life cycle assessment

model seeks to identify the main types of environmental impact throughout the life cycle of a product. LCA

was developed according to ISO 14040. The main goal of the LCA is to define the energy and

environmental profile of the finished products. The reasons to use LCA arose from the need to have a

precise process accounting and to highlight potential improvements that could be used in order to

increase the environmental, energy and economic efficiency and overall effectiveness of the processes. In


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addition, the purpose was to quantify the environmental advantages deriving from the use of recycled raw

material.

Example for LCA

LCA is used for example in the building sector. Buildings today account for the 40% of the world’s energy

use. The resulting carbon emissions are substantially higher than those of the transportation sector. New

buildings using more energy than necessary are being built every day, and millions of today's inefficient

buildings will remain standing until at least 2050. It’s therefore necessary to start reducing energy use in

new and existing buildings in order to reduce the planet's energy-related carbon footprint. Growing

interest, space, and attention in the architecture sector are directed to environmental issues according to

the principles of green building. Mineral, vegetable, or animal materials such as perlite, vermiculite, rock

wool, glass wool, cork, plant fibers (cotton, flax, hemp, coconut), wood fiber, cellulose, and sheep's wool

can be used for the production of insulation panels.

Environmental Impact Assessment (EIA) An environmental impact assessment (EIA) is an assessment of the possible positive or negative impact

that a proposed project may have on the environment, together consisting of the environmental, social

and economic aspects. The purpose of the assessment is to ensure that decision makers consider the

ensuing environmental impacts when deciding whether to proceed with a project. The International

Association for Impact Assessment (IAIA) defines an environmental impact assessment as "the process of

identifying, predicting, evaluating and mitigating the biophysical, social, and other relevant effects of

development proposals prior to major decisions being taken and commitments made." EIAs are unique in

that they do not require adherence to a predetermined environmental outcome, but rather they require

decision makers to account for environmental values in their decisions and to justify those decisions in

light of detailed environmental studies and public comments on the potential environmental impacts of

the proposal.

EIAs began to be used in the 1960s as part of a rational decision making process. It involved a technical

evaluation that would lead to objective decision making. EIA was made legislation in the US in the National

Environmental Policy Act (NEPA) 1969. It has since evolved as it has been used increasingly in many

countries around the world. As per Jay et al.(2006), EIA as it is practiced today, is being used as a decision

aiding tool rather than decision making tool. Developments cause a multitude of indirect effects through

consumption of goods and services, production of building materials and machinery, additional land use

for activities of various manufacturing and industrial services, mining of resources etc. The indirect effects

of developments are often an order of magnitude higher than the direct effects assessed by EIA. Large

proposals such as airports or ship yards cause wide ranging national as well as international environmental

effects, which should be taken into consideration during the decision- making.


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Conventional Energy Sources

Natural resource qualifies as renewable resource if it is replenished by natural processes at a rate

comparable to its rate of consumption by humans other users.

Eg: Solar radiation, tides, winds, oxygen, fresh water, timber, biomass. Soil and water are non living

renewable natural resources.

Rate of sustainable use of renewable resource is determined by the replacement rate and amount of

standing stock of that particular resource.

Hydro power is the capture of the energy of moving water for some useful purposes. It is used for

irrigation, milling of grain, textile manufacture and for many other operations. It allows the electric power

generation at low cost for long distances from the watercourse. Wind is another alternative energy source

that could be used without producing by-products that are harmful to nature. Wind highly depends upon

weather and location. We produce energy from wind by building a tall tower, with a large propeller on the

top. The wind blows the propeller round, which turns a generator to produce electricity. The major benefit

of wind energy is that it does not cause pollution.

It is pollution free.

Fewer fossils are to be burned to make electricity.

Wind power reduces global warming.

Wind power is cost effective.

Solar energy is light and heat energy from the sun. Solar cells are long lasting sources of energy which can

be used almost anywhere.

Solar cells provide cost effective solutions to energy problems in places where there are no means

of electricity.

Solar cells are also totally silent and non-polluting.

Solar cells require very little maintenance and they last for a long time.

There are three main ways that we use suns energy.

1. Solar cells are used for generating electricity.

2. Solar furnaces use a huge array of mirrors to concentrate the sun’s energy into a small space and

produce high temperature.

3. Solar water heaters are used to heat water during sunny days .

Over the past 200 years the use of primary energy sources in manufacturing or processing has evolved

from simply using locally available resources, such as water, firewood or coal. The transition from coal to a

petroleum based fuel economy took place through the twentieth century. The demand for energy has

increased dramatically on the last century. During the first half of the last century global energy

consumption grew by about 2.2% per year between 1950’s and 1970’s. There have been also major

changes in the energy mix used in this century. There is also a large change for misusing the energy. All

these points to the importance of energy management. So that managing energy of environment is now a

basic feature in the global economy and the environment.


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ISO 14000 The ISO 14000 environmental management standards exist to help organizations minimize how their

operations negatively affect the environment (cause adverse changes to air, water, or land), comply with

applicable laws and regulations). ISO 14001 is the international specification for an environmental

management system (EMS). It specifies requirements for establishing an environmental policy,

determining environmental aspects and impacts of products/activities/services, planning environmental

objectives and measurable targets, implementation and operation of programs to meet objectives and

targets, checking and corrective action, and management review.

ISO 14000 is similar to ISO 9000 quality management in that both pertain to the process (the

comprehensive outcome of how a product is produced) rather than to the product itself. The overall idea

is to establish an organized approach to systematically reduce the impact of the environmental aspects

which an organization can control. Effective tools for the analysis of environmental aspects of an

organization and for the generation of options for improvement are provided by the concept of Cleaner

Production.

As with ISO 9000, certification is performed by third-party organizations rather than being awarded by ISO

directly. The ISO 19011 audit standard applies when auditing for both 9000 and 14000 compliance at once.

Standards

The material included in this family of specifications is very broad. The major parts of ISO 14000 are:

ISO 14001 is the standard against which organizations are assessed. ISO 14001 is generic and

flexible enough to apply to any organization producing and/or manufacturing any product, or even

providing a service anywhere in the world.

ISO 14004 is a guidance document that explains the 14001 requirements in more detail. These

present a structured approach to setting environmental objectives and targets and to establishing

and monitoring operational controls.

These are further expanded upon by the following:

ISO 14020 series (14020 to 14025), Environmental Labeling, covers labels and declarations.

ISO 14030 discusses post-production environmental assessment.

ISO 14031 Evaluation of Environmental Performance.

ISO 14040 series (14040 to 14044), Life Cycle Assessment, LCA, discusses pre-production planning

and environment goal setting.

ISO 14050 terms and definitions.

ISO 14062 discusses making improvements to environmental impact goals.

ISO 14063 is an addendum to 14020, discussing further communications on environmental impact.

ISO 14064-1:2006 is Greenhouse gases – Part 1: Specification with guidance at the organization

level for the description, quantification and reporting of greenhouse gas emissions and removals.

ISO 14064-2:2006 is Greenhouse gases – Part 2: Specification with guidance at the project level for

the description, quantification, monitoring and reporting of greenhouse gas emission reductions

and removal enhancements.


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ISO 14064-3:2006 is Greenhouse gases – Part 3: Specification with guidance for the validation and

verification of greenhouse gas assertion.

ISO 19011 which specifies one audit protocol for both 14000 and 9000 series standards together.

This replaces ISO 14011 meta-evaluation—how to tell if your intended regulatory tools worked.

19011 is now the only recommended way to determine this.

(Source: Wikipedia, accessed on 20/09/2012)

AA 1000 - A standard for ethical performance

Accountability 1000 (AA1000) is the work of ISEA - the Institute for Social and Ethical Accountability. ISEA

(also known as Accountability) is an international membership organization, based in the UK. It exists to

encourage ethical behavior in business and non-profit organizations. AA1000 is promoted as a standard for

the measuring and reporting of ethical behavior in business. It provides a framework that organizations

can use to understand and improve their ethical performance, and a means for others to judge the validity

of claims to be ethical.

It aims to assist an organization in the definition of goals and targets, the measurement of progress made

against these targets, the auditing and reporting of performance and in the establishment of feedback

mechanisms. The involvement of stakeholder groups is crucial to each stage of the process. AA1000 can be

used to underpin the quality of specialized accountability standards or as a stand-alone system. The

standard is designed both for internal and external audit procedures. It may be used by organisations of

any size, whether single or multi site, and by public, private and nonprofit organisations.

OECD Guidelines for Multinational Enterprises

The OECD Guidelines for Multinational Enterprises (the Guidelines) are recommendations addressed by

governments to multinational enterprises. The Guidelines aim to ensure that the operations of these

enterprises are in harmony with government policies, to strengthen the basis of mutual confidence

between enterprises and the societies in which they operate, to help improve the foreign investment

climate and to enhance the contribution to sustainable development made by multinational enterprises.

The Guidelines are part of the OECD Declaration on International Investment and Multinational Enterprises

the other elements of which relate to national treatment, conflicting requirements on enterprises, and

international investment incentives and disincentives.

The Guidelines provide voluntary principles and standards for responsible business conduct consistent

with applicable laws and internationally recognized standards. However, the countries adhering to the

Guidelines make a binding commitment to implement them in accordance with the Decision of the OECD

Council on the OECD Guidelines for Multinational Enterprises. Furthermore, matters covered by the

Guidelines may also be the subject of national law and international commitments. International business

has experienced far-reaching structural change and the Guidelines themselves have evolved to reflect

these changes. With the rise of service and knowledge-intensive industries and the expansion of the

Internet economy, service and technology enterprises are playing an increasingly important role in the

international marketplace. Large enterprises still account for a major share of international investment,


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and there is a trend toward large-scale international mergers. At the same time, foreign investment by

small and medium-sized enterprises has also increased and these enterprises now play a significant role on

the international scene. Multinational enterprises, like their domestic counterparts, have evolved to

encompass a broader range of business arrangements and organizational forms. Strategic alliances and

closer relations with suppliers and contractors tend to blur the boundaries of the enterprise.

This is the third issue of SA8000, an auditable standard for a third-party verification system, setting out the

voluntary requirements to be met by employers in the workplace, including workers’ rights, workplace

conditions, and management systems. The normative elements of this standard are based on national law,

international human rights norms and the conventions of the ILO. The SA8000 standard can be used along

with the SA8000 Guidance Document to assess the compliance of a workplace with these standards. The

SA8000 Guidance Document helps to explain SA8000 and how to implement its requirements; provides

examples of methods for verifying compliance; and serves as a handbook for auditors and for companies

seeking certification of compliance with SA8000. The Guidance Document can be obtained from SAI upon

request for a small fee.

SA8000 is revised periodically as conditions change, and to incorporate corrections and improvements

received from interested parties. Many interested parties have contributed to this version. The intent of

SA8000 is to provide a standard based on international human rights norms and national labour laws that

will protect and empower all personnel within a company’s scope of control and influence, who produce

products or provide services for that company, including personnel employed by the company itself, as

well as by its suppliers/subcontractors, sub-suppliers, and home workers.

SA8000 is verifiable through an evidenced-based process. Its requirements apply universally, regardless of

a company’s size, geographic location, or industry sector. Complying with the requirements for social

accountability of this standard will enable a company to:

a) Develop, maintain, and enforce policies and procedures in order to manage those issues which it can

control or influence;

b) Credibly demonstrate to interested parties that existing company policies, procedures, and practices

conform to the requirements of this standard.

The company shall comply with national and all other applicable laws, prevailing industry standards, other

requirements to which the company subscribes, and this standard. When such national and other

applicable laws, prevailing industry standards, other requirements to which the company subscribes, and

this standard address the same issue, the provision most favourable to workers shall apply.


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Monopolies and Restrictive Trade Practice Commission (MRTPC)

The Monopolies and Restrictive Trade Practices Act, 1969, aims to prevent concentration of economic

power to the common detriment, provide for control of monopolies and probation of monopolistic,

restrictive and unfair trade practice, and protect consumer interest.

Monopolistic trade practice:

Monopolistic trade practice is that which represents abuse of market power in the production and

marketing of goods and services by eliminating potential competitors from market and taking advantage

of the control over the market by charging unreasonably high prices, preventing or reducing competition,

limiting technical development, deteriorating product quality or by adopting unfair or deceptive trade

practices.

Unfair Trade Practice:

Misleading advertisement and False Representation

Falsely representing that goods and services are of a particular standard, quality, grade,

composition or style.

Falsely representing any second hand renovated or old goods as new.

Representing that goods or services, seller or supplier have a sponsorship, approval or affiliation

which they do not have.

Making a false or misleading representation concerning need for, or usefulness of goods or

services.

Giving to public any warranty, guarantee of performance that is not based on an adequate test or

making to public a representation which purports to be such a guarantee or warranty.

False and misleading claims with respect to the price of goods or services.

Giving false or misleading facts disparaging the goods, services or trade of another person or

concern.

Restrictive Trade Practice:

To maximize profits and market power, traders often attempt to indulge in certain trade practices which

tend to obstruct the flow of capital into the stream of production. It may also bring manipulation of prices

or conditions of delivery or affect the flow of supplies in the market so as to impose unjustified costs.

The Foreign Exchange Regulation Act (FERA)

The Foreign Exchange Regulation Act (FERA) was legislation passed by the Indian Parliament in 1973 by

the government of Indira Gandhi and came into force with effect from January 1, 1974. FERA imposed

stringent regulations on certain kinds of payments, the dealings in foreign exchange and securities and the

transactions which had an indirect impact on the foreign exchange and the import and export of currency.

The bill was formulated with the aim of regulating payments and foreign exchange.

Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered the

company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by


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the Foreign Exchange Regulation Act (FERA). In 1993, the company (along with PepsiCo) returned after the

introduction of India's Liberalization policy.

FERA :

Regulated in India by the Foreign Exchange Regulation Act (FERA), 1973.

Consisted of 81 sections.

FERA Emphasized strict exchange control.

Control everything that was specified, relating to foreign exchange.

Law violators were treated as criminal offenders.

Aimed at minimizing dealings in foreign exchange and foreign securities.

FERA was repealed in 1999 by the government of Atal Bihari Vajpayee and replaced by the Foreign

Exchange Management Act, which liberalized foreign exchange controls and restrictions on foreign

investment.

Objectives:

To regulate certain payments.

To regulate dealings in foreign exchange and securities.

To regulate transactions, indirectly affecting foreign exchange.

To regulate the import and export of currency.

To conserve precious foreign exchange.

The proper utilization of foreign exchange so as to promote the economic development of the

country.

FERA was introduced at a time when foreign exchange (Forex) reserves of the country were low, Forex

being a scarce commodity. FERA therefore proceeded on the presumption that all foreign exchange

earned by Indian residents rightfully belonged to the Government of India and had to be collected and

surrendered to the Reserve bank of India (RBI). FERA primarily prohibited all transactions, except one’s

permitted by RBI.


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IV. Business and Good Governance

The concept good governance and smart governance is a contemporary point of discussion in the wake of

rampant corruption and policy paralysis. Albeit all these are strongly adhere to governments, the business

case of good governance needs consideration. Although interest in sound governance practices may be

traced back to the eighteenth century (Farinha, 2003), corporate governance (CG) has attracted

unprecedented attention in the context of modern corporations. The modern corporate form comprises

three different entities: Shareholders, Employees and Managers. The importance of governance lies in its

role of crafting/continuously refining the laws, regulations and contracts that govern companies’

operations, and ensuring that shareholder rights are safeguarded, stakeholder and manager interests are

reconciled and that a transparent environment is maintained, wherein each party is able to assume its

responsibilities and contribute to the corporation’s growth and value creation (Page, 2005).

In 1990’s many businesses from the developing countries expanded their operations and became

multinational. The transactions between businesses and the governments increased as a result, which

gave rise to many practical issues. Culture and its relativity was one factor more prominent than the

others. Other ethical issues in the context of international business are generally dealt with the laws of the

land; although all of them fall within the ambit of international business ethics.

In the international business arena, ethical problems also arise out mere international business

transactions. Fair trade movement, transfer pricing, bio prospecting and bio piracy are examples of

transactions that fall within the ambit of international business ethics. Similarly issues like child labor and

cultural imperialism are controversial enough to call upon the attention of international business ethics.

Yet another arena for strong requirement responsibility would be when multinationals bargain to take

advantage of international differences; For example when rich nations outsource their services to poor

and developing nations at cheaper cost. Western nations were up till recently outsourcing many of

services to third world nations where they could hire manpower for the cheapest prices. This led to a

severe competition between developing nations with each one offering cheaper labor than the other.

Dumping is yet another way by which large companies are trying to kill the domestic players. Foreign

players often sell goods and services at a cheaper price making it hard for the small players to survive the

competition. Consumer durables and FMCG are biggest examples of such practices. The bigger threat here

is the resulting monopoly which places the customer in a losing position. The international trade

commission began for its search of its anti dumping laws from the year 2009. All these are ways in which

business at the international level can lead to ethical dilemmas. In absence of good governance it may

become almost impossible to regulate business and create winning situations for people in the market

place.


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Good Governance

Recently the terms "governance" and "good governance" are being increasingly used in development

literature. Bad governance is being increasingly regarded as one of the root causes of all evil within our

societies. Major donors and international financial institutions are increasingly basing their aid and loans

on the condition that reforms that ensure "good governance" are undertaken. "Governance" and "good

governance “means: the process of decision-making and the process by which decisions are

implemented (or not implemented). Three institutions can be reformed to promote good governance: the

state, the private sector and civil society Governance can be used in several contexts such as corporate

governance, international governance, national governance and local governance. Since governance is the

process of decision-making and the process by which decisions are implemented, an analysis of

governance focuses on the formal and informal actors involved in decision-making and implementing the

decisions made and the formal and informal structures that have been set in place to arrive at and

implement the decision.

The concept of good governance has been clarified by the work of the former Commission on Human

Rights. In its resolution 2000/64, the Commission identified the 8 key attributes of good governance: It is

participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable

and inclusive and follows the rule of law. It assures that corruption is minimized, the views of minorities

are taken into account and that the voices of the most vulnerable in society are heard in decision-making.

It is also responsive to the present and future needs of society.

Participation

Participation by both men and women is a key cornerstone of good governance. Participation could be

either direct or through legitimate intermediate institutions or representatives. It is important to point out

that representative democracy does not necessarily mean that the concerns of the most vulnerable in

society would be taken into consideration in decision making. Participation needs to be informed and

organized. This means freedom of association and expression on the one hand and an organized civil

society on the other hand.

Rule of law

Good governance requires fair legal frameworks that are enforced impartially. It also requires full

protection of human rights, particularly those of minorities. Impartial enforcement of laws requires an

independent judiciary and an impartial and incorruptible police force.

Transparency

Transparency means that decisions taken and their enforcement are done in a manner that follows rules

and regulations. It also means that information is freely available and directly accessible to those who will

be affected by such decisions and their enforcement. It also means that enough information is provided

and that it is provided in easily understandable forms and media.

Responsiveness

Good governance requires that institutions and processes try to serve all stakeholders within a reasonable

timeframe.


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Characteristics of good governance

Consensus oriented

There are several actors and as many view points in a given society. Good governance requires mediation

of the different interests in society to reach a broad consensus in society on what is in the best interest of

the whole community and how this can be achieved. It also requires a broad and long-term perspective on

what is needed for sustainable human development and how to achieve the goals of such development.

This can only result from an understanding of the historical, cultural and social contexts of a given society

or community.

Equity and inclusiveness

A society’s well being depends on ensuring that all its members feel that they have a stake in it and do not

feel excluded from the mainstream of society. This requires all groups, but particularly the most

vulnerable, have opportunities to improve or maintain their well being.

Effectiveness and efficiency

Good governance means that processes and institutions produce results that meet the needs of society

while making the best use of resources at their disposal. The concept of efficiency in the context of good

governance also covers the sustainable use of natural resources and the protection of the environment.

Accountability

Accountability is a key requirement of good governance. Not only governmental institutions but also the

private sector and civil society organizations must be accountable to the public and to their institutional

stakeholders. Who is accountable to whom varies depending on whether decisions or actions taken are

internal or external to an organization or institution. In general an organization or an institution is

accountable to those who will be affected by its decisions or actions. Accountability cannot be enforced

without transparency and the rule of law.

From the above discussion it should be clear that good governance is an ideal which is difficult to achieve

in its totality. Very few countries and societies have come close to achieving good governance in its

totality. However, to ensure sustainable human development, actions must be taken to work towards this

ideal with the aim of making it a reality.

A variety of country level initiatives and international movements put emphasis on various types of

governance reform. Each movement for reform establishes criteria for what they consider good

governance based on their own needs and agendas. The following are examples of good governance

standards for prominent organizations in the international community. Eg. IMF, UN, World Bank


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Indian Constitution and Business

Constitution of India is not 'law' in the ordinary sense of the term, instead it regulates the rule of

recognition authenticating the legislation of primary rules of obedience. In this sense, Constitution

contains the legislative power of a constitutional authority. The enforcement of primary rules requires

another constitutional authority viz., the Executive whose functions and functional authority is to be

recognised within the framework of the Constitution.

The Preamble

The Constitution of India sets out in its introductory statement called the Preamble, the aims and

aspirations of the people of India. The objectives given by the people unto themselves in 1949 were to

establish a Sovereign Democratic Republic and to secure to its citizens, justice, liberty, equality and

fraternity. The Supreme Court of India in one of its landmark judgments has affirmed that the Preamble is

also a part of the Constitution in the affirmative.

Fundamental Rights

The Constitution assures every citizen, and in some cases all persons, certain basic rights that cannot

ordinarily be abrogated by the State. To make these rights effective, the Constitution provides 'Writ'

remedies whereby the superior courts (i.e., the Supreme Court and the High Courts) are vested with the

power to enforce these rights by issuing mandatory directions to the authorities. No law made by the

State Legislatures or Parliament can effect these fundamental rights.

The Constitution confers upon all citizens the right to certain fundamental freedoms. They are:

1. Freedom of speech and expression

2. Peaceful assembly without arms

3. Formations of associations and unions

4. Free movement throughout the territory of India

5. Residence and settlement in any part of the territory of India

6. Practice of any profession or carrying on of any occupation, trade or business

The rights conferred by the Constitution are confined to natural persons who are citizens and that a

corporation not being a citizen cannot claim any of these rights.

Directive Principles of State Policy

These are statements of certain ideals that the Indian Nation State must strive for. Unlike the fundamental

rights, these provisions are not enforceable by Courts. Nevertheless, these principles are fundamental for

the governance of the country. Some of the directive principles are:

1. The state shall strive for the promotion of the welfare of the people

2. Economic principles aimed at an egalitarian economic order

3. Organisation of village administration

4. Protection of environment.

5. Education.

The Constitution deals with the form of government that India must have. The government comprises

three heads, the Executive, the Legislature and the Judiciary. Being a Federal Constitution, the Indian


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model has two spheres of authority, the Union or Central Government and the State Governments.

However, no dual citizenship is permitted. Taxing power is circumscribed by the Constitution with the

condition that to levy a tax there must be a specific law made under a legislative head. The provisions also

exempt the State and Central Governments from mutual taxation besides making appropriate provisions

for allocation of revenues between the Union and the State. The Constitution proclaims that trade and

commerce shall take place unhindered throughout the length and breadth of the country.

Centre-State Relations

The Constitution of India, unlike many other Constitutions is both a political and a financial document.

Constitution deals in detail in issues like the finances of the Union and State. The Constitution also

provides an elaborate framework through which legislation is possible for laws to regulate various types of

business. The public law in India clearly contemplates and in many cases sets out in elaborate terms the

legal strategy in relation to various aspects of finance, trade, commerce and business. It is important to

study the division of powers between the Centre and State to understand the true nature of business laws.

Trade and Commerce throughout India

Freedom of Trade and Commerce

The economic unity of India is not broken up by internal barriers. In doing so, the Article imposes a limit on

the exercise of legislative power of the Union/State. If freedom of trade and commerce is restricted

directly and immediately by taxes, it would then be violation of the Constitution. The validity of the claim

of such an offence will depend on the movement of goods. If the tax which is imposed solely on the basis

that the goods are transported or carried, it would directly affect the freedom of trade, commerce and

intercourse. Trade, commerce and intercourse must pay for the facilities provided by the State by way of

constructing, maintaining and regulating roads, bridges and other means of transportation necessary for

such trade, commerce on intercourse. As long as there is correlation between the tax recovered and the

cost incurred by the State, the tax cannot be challenged as expropriatory though there may be a marginal

excess over the cost.

Parliamentary Restrictions

A law restricting freedom of trade and commerce can be made only by Parliament strictly in public

interest. However such law made by the Union should not be discriminatory between different states

unless the situation warrants. The Parliament or any of the State Legislatures does not have the right to

give preference to one state over another in respect of trade and commerce.

Freedom of State

State Legislatures have powers,

1. To impose taxes on goods from other states provided similar goods produced within the

state are also subjected to the same taxes.

2. To impose reasonable restrictions on the freedom of trade, commerce or intercourse with

another or within that state as may be required in public interest.

(http://business.webindia.com/picon.htm)


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V. Responsible Business and Organization Management

Responsible Management The attitude and awareness of business leaders and management plays a significant role in doing

Responsible Business. It is proved that development of vision and mission of an organization depicts the

responsibility of business. Many of the business enterprises now include sustainable aspects in their

strategies. Responsible programs benefit organisations in many ways; one they help lay down standards of

behavior and second it helps in clear communication of the same. This prevents the employee plead on

condition of ignorance, which is not the case with the manual containing policies and procedures that are

hardly known to any of the employees.

Organisations have now realised the importance of developing responsible management programs. Unlike

the belief held earlier that it only helps the employee, the belief is gaining more ground that such

programs are equally beneficial to the organisations. Ethical and responsible practices of organization can

generate a long term benefit to organizations as well as community. As mentioned earlier beyond green

washing or mere outside performance, organizations are expected to practice responsible behaviours in all

the aspects they deal.

Responsibility in Marketing

Aware or invite attention, creating interest, arise desire and win affection is the core concept of

promotional activities. These can be achieved in both ways; fair and unfair. But incorporating social and

environmental consideration in marketing and by which attain customer interest in products/services,

build strong customer interest/relationships, and create value for all stakeholders shall be the right

approach. In this context, Responsible Marketing seems high relevance. Responsible marketing refers to

the application of marketing ethics and moral principles in the marketing process. It is a right moral

judgment in philosophical examination. Responsible marketing generally results in a more socially

responsible and culturally sensitive business community. The establishment of marketing ethics has the

potential to benefit society as a whole, both in the short- and long-term. Responsible marketing should be

part of Responsible business that involves examination of whether or not an honest and factual

representation of a product or service has been delivered in a framework of cultural and social values.

It promotes qualitative benefits to its customers, which other similar companies, products or services fail

to recognise. The concern with ethical issues, such as child labor, working conditions, relationships with

third world countries and environmental problems, has changed the attitude of the Western World

towards a more socially responsible way of thinking. This has influenced companies and their response is

to market their products in a more socially responsible way. Many brands have tried to use ethics to make

themselves look responsible, often spinning environmental claims which has led to the term green wash.

In research consumers have shown to have even less trust of ethical claims in ads than ordinary ads.

Media attention on ethics has resulted in many top brands suffering consumer boycotts. Although many

brands have tried to use green issues, it has been noted that in research 2/3 of consumers responded

more to ethical claims that relate to people rather than to than environment.


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Marketers who are pursuing a socially responsible agenda should bear in mind that such efforts do not

automatically translate into increased revenue or even an improved public image. However, organizations

that consistently exhibit socially responsible tendencies may eventually gain a strong reputation that could

pay dividends in the form of increased customer loyalty.

Socially responsible marketing is a marketing philosophy that states a company should take into

consideration what is in the best interest of society in the present and long term. Socially responsible

companies should aspire to produce desirable products. Desirable products provide immediate

satisfaction and long term benefits. These products are sought by consumers for immediate gratification

and also benefit society and consumers in the long term. An example of socially responsible marketing is a

mail order catalogue company using recycled paper to make its catalogues. Advertising this in the

catalogue could help convince customers that the company is environmentally conscious and makes an

effort to protect the environment. By appealing to this audience companies can differentiate themselves

from competitors and potentially gain market share.

Simply put, ethics means principle or values by which marketing ought to be conducted in the market

place. Logically also when there are huge number of transactions involved, a certain code or guiding

principles are required to ensure that operations and industry competitiveness is fair and beneficial to the

end user. Whereas one school of thought says that all marketing efforts should be focused on maximizing

the shareholder value and that this is the only marketing ethics; the other believes that that marketing and

market is equally responsible to consumers, other stake holders and the shareholders. The tactic of

targeting targeted segments, creating needs that were inexistent till now, transparency about the source

of labor and environmental risks, transparency about the use of source and the ingredients, appropriate

labeling, mentioning associated health risks, advertising jurisprudence and not making false promises fall

within the ambit of marketing ethics.

Like other ethical disciplines, marketing ethics is also looked up from various perspectives. There is the

perspective of virtue, expediency and other perspectives. But like other ethics there is also the difficulty of

deciding the agency responsible for ethical practice. Since there is not one single agency responsible for

ethics this gives the independence to an individual or to any marketing agency to act on its own and be

ethical!

Specific issues in marketing ethics

Here are some examples of potential ethical issues in marketing:

Market research:

Invasion of privacy (e.g. obtaining research data without permission)

Stereotyping – drawing unfair or inappropriate conclusions

Target customers and market:

Targeting the vulnerable (e.g. children, the elderly)

Excluding potential customers from the market (e.g. discouraging demand from undesirable

market sectors or simply refusing to sell to certain customers)


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Pricing

Price fixing (see below)

Price wars

Price collusion (agreeing with other competitors to set prices in a market to the detriment of

competition and consumers)

Advertising and promotion

Issues over truth and honesty

Issues with violence, sex and profanity

Taste and controversy

Negative advertising

Picking one of the above topics (price fixing), it is possible to see how the law acts to prevent or deter

unethical marketing practices, in some cases.

Price fixing is illegal. It is considered to be anti-competitive as well as unethical. So a business cannot:

Agree prices with its competitors (e.g. it can't agree to work from a shared minimum price list)

Share markets or limit production to raise prices (e.g. if two contracts are put out to tender, one

business can't agree that it will bid for one and let a competitor bid for the other)

Impose minimum prices on different distributors such as shops

Agree with competitors what purchase price it will offer suppliers

Cut prices below cost in order to force a smaller or weaker competitor out of the market

Advertising (promotion) is another marketing activity that is regulated in order to deter unethical practice.

Advertising in the UK is regulated by the Advertising Standards Authority, which regulates advertising

across all media, including TV, internet, sales promotions and direct marketing. The ASA’s role is to ensure

ads are legal, decent, honest and truthful by applying the Advertising Codes

Ethics in production

Ethics in production is a subset of business ethic that is meant to ensure that the production function or

activities are not damaging to the consumer or the society. Like other ethics there is a certain code of

conduct or standards to be followed, however ensuring that the ethics are complied with is often difficult.

One of the most important characteristic of the business today is that there is a great degree of

interdependence between various business functions. Production cannot happen without marketing and

sales and vice versa. In order to survive in the competitive sphere organizations try to reduce the costs

involved in production processes. This cost efficiency is sometimes achieved at the cost of quality. Poor

processes and technology is used to keep the cost down, this is especially true for small players who

cannot afford economies of scale. Having said this there are also examples of industry giants that

compromised on certain production processes, cola companies make up for a good example. All the

production functions are governed by production ethics but there are certain that are severely harmful or

deleterious which need to be monitored continuously. The following are worth mentioning:

1. There are ethical problems arising out of use of new technologies that are deleterious to health,

safety and environment. Technological advancements like genetically modified food, radiations

from mobile phones, medical equipment etc are less problems are more of dilemmas.


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2. Defective services and products or products those are innately deleterious like alcohol, tobacco,

fast motor vehicles, warfare, chemical manufacturing etc.

3. Animal testing and their rights or use of economically or socially deprived people for testing or

experimentation is another area of production ethics.

Ethics of transactions between the organization and the environment that lead to pollution, global

warming, increase in water toxicity and diminishing natural resources

Dilemma of Ethics in Production

There are certain processes involved in the production of goods and a slight error in the same can degrade

the quality severely. In certain products the danger is greater i.e. a slight error can reduce the quality and

increase the danger associated with consumption or usage of the same exponentially. The dilemma

therefore lies in defining the degree of permissibility, which in turn depends on a number of factors.

Bhopal gas tragedy is one example where the poisonous gas got leaked out due to negligence on the part

of the management.

Usually many manufactures are involved in the production of same good. They may use similar or

dissimilar technologies for the same. Setting a standard in case of dissimilar technologies is often very

difficult. There are many other factors that contribute to the dilemma, for example, the involvement of

the manpower, the working conditions, the raw material used etc.

Social perceptions also create an impasse sometimes. For example the use of some fertilizer by cola

companies in India recently created a national debate. The same cold drinks which were consumed till

yesterday became noxious today because of a change in the social perception that the drinks are not fit for

consumption.

Ethics and Technology

“ Businesses today are technology and innovation driven. There is huge competition in the sphere

and therefore like other industry or business function ethics is essential here also. Every day we

have innovative products and services that announce their arrival in the market place and others

that go obsolete. It is this technology and innovation that leads to ethical issues, considering the

competition to stay ahead by innovating is immense. Issues like data mining, invasion to privacy,

data theft and workplace monitoring are common and critical”.

In technology we speak of responsibility in two contexts; one is whether the pace of technological

innovation is benefiting the humankind or not, the other is either severely empowering people while

choking others for the same. Technology, for example, has drastically replaced people at work. In the first

case we are compelled to think about the pace at which technology is progressing. There are manifold

implications here, be it things like computer security or viruses, Trojans, spam’s that invade the privacy of

people or the fact the technology is promoting consumerism.

Nowadays data storage is primarily on computer systems. With the advent of internet technology the

world has got interconnected and data can be accessed remotely by those who are otherwise

unauthorized to do the same. This is one of the pitfalls of innovation. The other one i.e. the pace of

technological change also raises the question of ethics. New products make their way and leave the


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existing ones obsolete. In fact technological change and innovation is at the heart of consumerism, which

is bad for economy and environment in general. The recent economic downturn makes up for a very good

example. Increasingly technological products are adding up to environmental degradation. Computer

screens, keyboards, the ink used in the printers are some of the ways in which technology is polluting the

environment. All these produce toxins that cannot be decomposed easily.

Technology has also made inroads into the field of medicine and life care. New cloning techniques, genetic

modifications or other life saving drugs need continuous monitoring and surveillance. Bioethics has thus

emerged as ethics in the field of medical technology. Whereas we cannot talk of controlling technology

and innovation, the better way is to adapt and change. The role of ethics in technology is of managing

rather controlling the same. Continuous monitoring is required to keep track of latest innovations and

technological changes and for ensuring fair practices.

Responsibility in Human Resource Management

Human resource management deals with manpower planning and development related activities in

an organization. Since it concerns human issues specially those of compensation, development,

industrial relations and health and safety issues, responsibility emerges as a most relevant factor.

Employee rights and duties and freedom and discrimination at the workplace are issues discussed and

covered by most texts on the topic. Some argue that there are certain things in employment

relationship that are constant others disagree with the same. For example, right to privacy, right to be

paid in accordance with the work (fair compensation) and right to privacy are some areas that cannot

be compromised upon.

There are various issues arising around the employer-employee relationship, such as the rights and duties

owed between employer and employee.

Discrimination issues include discrimination on the bases of age (ageism), gender, race, religion,

disabilities, weight and attractiveness. See also: affirmative action, sexual harassment.

Issues surrounding the representation of employees and the democratization of the workplace:

union busting, strike breaking.

Issues affecting the privacy of the employee: workplace surveillance, drug testing. See also:

privacy.

Issues affecting the privacy of the employer: whistle-blowing.

Issues relating to the fairness of the employment contract and the balance of power between

employer and employee: slavery, indentured servitude, employment law.

Occupational safety and health.


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Strategic Management

Strategic lenses are a concept of strategic management. They are the four angles from which strategy can

be viewed and implemented on a corporate level. The four viewpoints are: as design, as experience, as

ideas, as discourse.This lens views Strategy development as a process of logical determinism. Through

careful evaluation of the firm's industry, environment and available resources, the optimal strategy and

clear direction can be determined. This strategic process thus follows an analysis-selection-

implementation process. Fundamental to this view is that the responsibility of strategy development is

top-management driven and that they are capable of choosing the optimal strategy for the business.

Many proponents of the view of Strategy as Experience, such as Henry Mintzberg would argue that the

design lens is often inaccurate as top level executives are too distant from daily developments of the

organisation. According to Minzberg, strategic development should be adaptive, and divides it into

intended, realised and emergent strategies. In this model, strategic development is the continuous

adaptation of past strategies based on experience. In this view strategy is greatly influenced by taken for

granted assumptions (culture) and involves large levels of bargaining and negotiation. Strategy as

Experience carries with it a risk of the effect known as strategic drift as a result of failing to act upon

environmental changes by being too 'path dependent' on past activity.

This view interprets strategy as a process coming from within an organisation and influenced by the

environment around it. It's a 'bottom up' approach and requires an organisational culture which allows all

employees to feel able to express their ideas. Some companies such as 3M, actively encourage employees

to generate ideas with specifically allotted time. This view strategy as a discourse consists in making

choices between different possibilities and then inspiring confidence for the choice taken. This view is very

high on legitimacy and low on rationality and innovation. Strategy as discourse sees strategy development

in terms of language as a "resource" for managers by which strategy is communicated, explained and

sustained and through which managers gain influence, power and establish their legitimacy as strategists.

ITC – A Case Study

ITC's Core Values are aimed at developing a customer-focused, high-performance organisation which

creates value for all its stakeholders: it incorporates Trusteeship, Customer Focus, respect for People,

Excellence, Innovation and Nation Orientation.

We are result oriented, setting high performance standards for ourselves as individuals and teams.

We will simultaneously respect and value people and uphold humanness and human dignity.

We acknowledge that every individual brings different perspectives and capabilities to the team

and that a strong team is founded on a variety of perspectives.

We want individuals to dream, value differences, create and experiment in pursuit of opportunities

and achieve leadership through teamwork.


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Corporate Governance Policy of ITC

Preamble

Over the years, ITC has evolved from a single product company to a multi-business corporation. Its

businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging,

paper and paperboards and international commodities trading. Each of these businesses is vastly different

from the others in its type, the state of its evolution and the basic nature of its activity, all of which

influence the choice of the form of governance. The challenge of governance for ITC therefore lies in

fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity

of purpose of the Company as a whole.

Since the commencement of the liberalisation process, India's economic scenario has begun to alter

radically. Globalisation will not only significantly heighten business risks, but will also compel Indian

companies to adopt international norms of transparency and good governance. Equally, in the resultant

competitive context, freedom of executive management and its ability to respond to the dynamics of a

fast changing business environment will be the new success factors. ITC's governance policy recognises the

challenge of this new business reality in India.

Definition and Purpose

ITC defines Corporate Governance as a systemic process by which companies are directed and controlled

to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal

resources, we believe that the governance process should ensure that these companies are managed in a

manner that meets stakeholders aspirations and societal expectations.

Core Principles

ITC's Corporate Governance initiative is based on two core principles. These are:

i. Management must have the executive freedom to drive the enterprise forward without undue

restraints; and

ii. This freedom of management should be exercised within a framework of effective accountability.

ITC believes that any meaningful policy on Corporate Governance must provide empowerment to

the executive management of the Company, and simultaneously create a mechanism of checks

and balances which ensures that the decision making powers vested in the executive management

is not only not misused, but is used with care and responsibility to meet stakeholder aspirations

and societal expectations.

Cornerstones

From the above definition and core principles of Corporate Governance emerge the cornerstones of ITC's

governance philosophy, namely trusteeship, transparency, empowerment and accountability, control and

ethical corporate citizenship. ITC believes that the practice of each of these leads to the creation of the

right corporate culture in which the company is managed in a manner that fulfils the purpose of Corporate

Governance.


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Trusteeship:

ITC believes that large corporations like itself have both a social and economic purpose. They represent a

coalition of interests, namely those of the shareholders, other providers of capital, business associates and

employees. This belief therefore casts a responsibility of trusteeship on the Company's Board of Directors.

They are to act as trustees to protect and enhance shareholder value, as well as to ensure that the

Company fulfils its obligations and responsibilities to its other stakeholders. Inherent in the concept of

trusteeship is the responsibility to ensure equity, namely, that the rights of all shareholders, large or small,

are protected.

Transparency:

ITC believes that transparency means explaining Company's policies and actions to those to whom it has

responsibilities. Therefore transparency must lead to maximum appropriate disclosures without

jeopardising the Company's strategic interests. Internally, transparency means openness in Company's

relationship with its employees, as well as the conduct of its business in a manner that will bear scrutiny.

We believe transparency enhances accountability.

Empowerment and Accountability:

Empowerment is an essential concomitant of ITC's first core principle of governance that management

must have the freedom to drive the enterprise forward. ITC believes that empowerment is a process of

actualising the potential of its employees. Empowerment unleashes creativity and innovation throughout

the organisation by truly vesting decision-making powers at the most appropriate levels in the

organisational hierarchy.

ITC believes that the Board of Directors are accountable to the shareholders, and the management is

accountable to the Board of Directors. We believe that empowerment, combined with accountability,

provides an impetus to performance and improves effectiveness, thereby enhancing shareholder value.

Control:

ITC believes that control is a necessary concomitant of its second core principle of governance that the

freedom of management should be exercised within a framework of appropriate checks and balances.

Control should prevent misuse of power, facilitate timely management response to change, and ensure

that business risks are pre-emptively and effectively managed.

Ethical Corporate Citizenship:

ITC believes that corporations like itself have a responsibility to set exemplary standards of ethical

behaviour, both internally within the organisation, as well as in their external relationships. We believe

that unethical behaviour corrupts organisational culture and undermines stakeholder value.


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Global Sustainable Tourism Criteria

The Global Sustainable Tourism Criteria (GSTC) are an effort led by a coalition of more than 30 diverse

organizations and businesses to come to a common understanding of sustainable tourism, and will be the

minimum that any tourism business should aspire to reach. The Criteria were developed over a nearly

two-year period with the input of the world’s leading tourism experts, academics, and members of the

private sector, through an extensive public consultation process. The resulting set of 37 criteria is

organized around four main themes:

1. Effective sustainability planning;

2. Maximizing social and economic benefits for the local community;

3. Enhancing cultural heritage; and

4. Reducing negative impacts to the environment.

Although the criteria are initially intended for use by the accommodation and tour operation sectors, they

have applicability to the entire tourism industry, and many of the indicators are applicable to other

sectors. The criteria indicate what should be done, not how to do it or whether the goal has been

achieved. The indicators in this document are recommendations about ways of measuring compliance

with the criteria. They are not the only ways of measurement, but are designed as a basic set of

parameters that can be applied in most places in the world in most circumstances. In many cases, they

may need to be adapted to regional differences and industry sectors. Nevertheless, insofar as these

indicators can be used as a rough worldwide baseline, it will be possible to compare performance among

businesses and regions.

A. Demonstrate effective sustainable management.

A.1. The Company has implemented a long-term sustainability management system that is suitable to

its reality and scale, and that considers environmental, sociocultural, quality, health, and safety issues.

A.2. The Company is in compliance with all relevant international or local legislation and regulations

(including, among others, health, safety, labor, and environmental aspects).

A.3. All personnel receive periodic training regarding their role in the management of environmental,

sociocultural, health, and safety practices.

A.4. Customer satisfaction is measured and corrective action taken where appropriate.

A.5. Promotional materials are accurate and complete and do not promise more than can be delivered

by the business.

A.6. Design and construction of buildings and infrastructure:

A.6.1. comply with local zoning and protected or heritage area requirements;

A.6.2. respect the natural or cultural heritage surroundings in siting, design, impact assessment, and

land rights and acquisition;

A.6.3 use locally appropriate principles of sustainable construction;

A.6.4 provide access for persons with special needs.

A.7. Information about and interpretation of the natural surroundings, local culture, and cultural

heritage is provided to customers, as well as explaining appropriate behavior while visiting natural areas,

living cultures, and cultural heritage sites.


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B. Maximize social and economic benefits to the local community and minimize negative impacts.

B.1. The company actively supports initiatives for social and infrastructure community development

including, among others, education, health, and sanitation.

B.2. Local residents are employed, including in management positions. Training is offered as necessary.

B.3. Local and fair-trade services and goods are purchased by the business, where available.

B.4. The company offers the means for local small entrepreneurs to develop and sell sustainable

products that are based on the area’s nature, history, and culture (including food and drink, crafts,

performance arts, agricultural products, etc.).

B.5. A code of conduct for activities in indigenous and local communities has been developed, with the

consent of and in collaboration with the community.

B.6. The company has implemented a policy against commercial exploitation, particularly of children

and adolescents, including sexual exploitation.

B.7. The company is equitable in hiring women and local minorities, including in management

positions, while restraining child labor.

B.8. The international or national legal protection of employees is respected, and employees are paid a

living wage.

B.9. The activities of the company do not jeopardize the provision of basic services, such as water,

energy, or sanitation, to neighboring communities.

C. Maximize benefits to cultural heritage and minimize negative impacts.

C.1. The company follows established guidelines or a code of behavior for visits to culturally or

historically sensitive sites, in order to minimize visitor impact and maximize enjoyment.

C.2. Historical and archeological artifacts are not sold, traded, or displayed, except as permitted by law.

C.3. The business contributes to the protection of local historical, archeological, culturally, and

spiritually important properties and sites, and does not impede access to them by local residents.

C.4 The business uses elements of local art, architecture, or cultural heritage in its operations, design,

decoration, food, or shops; while respecting the intellectual property rights of local communities.

D. Maximize benefits to the environment and minimize negative impacts.

D.1. Conserving resources

D.1.1. Purchasing policy favors environmentally friendly products for building materials, capital

goods, food, and consumables.

D.1.2. The purchase of disposable and consumable goods is measured, and the business actively

seeks ways to reduce their use.

D.1.3. Energy consumption should be measured, sources indicated, and measures to decrease

overall consumption should be adopted, while encouraging the use of renewable energy.

D.1.4. Water consumption should be measured, sources indicated, and measures to decrease overall

consumption should be adopted.

D.2. Reducing pollution


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D.2.1. Greenhouse gas emissions from all sources controlled by the business are measured, and

procedures are implemented to reduce and offset them as a way to achieve climate neutrality.

D.2.2. Wastewater, including gray water, is treated effectively and reused where possible.

D.2.3. A solid waste management plan is implemented, with quantitative goals to minimize waste

that is not reused or recycled.

D.2.4. The use of harmful substances, including pesticides, paints, swimming pool disinfectants, and

cleaning materials, is minimized; substituted, when available, by innocuous products; and all chemical

use is properly managed.

D.2.5. The business implements practices to reduce pollution from noise, light, runoff, erosion,

ozone-depleting compounds, and air and soil contaminants.

D.3. Conserving biodiversity, ecosystems, and landscapes

D.3.1. Wildlife species are only harvested from the wild, consumed, displayed, sold, or

internationally traded, as part of a regulated activity that ensures that their utilization is sustainable.

D.3.2. No captive wildlife is held, except for properly regulated activities, and living specimens of

protected wildlife species are only kept by those authorized and suitably equipped to house and care

for them.

D.3.3. The business uses native species for landscaping and restoration, and takes measures to avoid

the introduction of invasive alien species.

D.3.4. The business contributes to the support of biodiversity conservation, including supporting

natural protected areas and areas of high biodiversity value.

D.3.5. Interactions with wildlife must not produce adverse effects on the viability of populations in the

wild; and any disturbance of natural ecosystems is minimized, rehabilitated, and there is a compensatory

contribution to conservation management

(http://www.gstcouncil.org/sustainable-tourism-gstc-criteria/criteria-for-hotels-and-tour-operators.html)

Responsible Tourism – a case Study Responsible Tourism is “about creating better places for people to live in and better places for people to

visit’. The concept, which emerged around 1996, received conceptual clarity and operational guidelines

after the Cape Town Declaration in 2002. According to the Declaration, Responsible Tourism (RT) is the

form of tourism which:

Minimizes negative economic, environmental and social impacts; generates greater economic

benefits for local people and enhances the well being of host communities.

Improves working conditions and access to the industry.

Involves local people in decisions that affect their lives and life chances.

Makes positive contributions to the conservation of natural and cultural heritage embracing

diversity.

Provides more enjoyable experience for tourists through more meaningful connections with local

people, and a greater understanding of local cultural, social and environmental issues.

Provides access for physically challenged people.

Is culturally sensitive; encourages respect between tourists and hosts and builds local pride and

confidence.


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Responsible tourism is fast becoming a global trend. Operators, destinations and industry organizations in

several countries including India are presently trying to practic it in one way or another. Recognizing the

global significance of its market, one of the world’s largest travel exhibitions, has created World

Responsible Tourism Day, to be celebrated annually during November and it has been endorsed by the

World Tourism Organization (WTO) and World Travel and Tourism Council (WTTC) .

Responsible tourism is a tourism management strategy embracing planning, management, product

development and marketing to bring about positive economic, social, cultural, and environmental impacts.

For tourism operators, it is about providing more rewarding holiday experience for their clients while for

the tourism destination it is about enabling local communities to enjoy a better quality of life and

conserving the natural environment. Responsible tourism is also a way of destination management to

minimise leakages in tourist expenditure and maximise linkages between stake holders. The three bottom

line settings of responsible tourism are economic responsibility, social responsibility and environmental

responsibility.

Economic responsibility stipulates that the tourism industry make use of local resources and encourages

spending by the tourists in the destination area so that the local economy and the people get the benefits

of tourism development in adequate measure. Employing and purchasing locally and setting up business

relationships with local people will help to create employment, stimulate entrepreneurial activity, increase

investment in infrastructure and boost the overall standard of living in the destination. Local people

actively participating in tourism operation will also seek to sustain it and contribute to a positive tourism

experience to the visitors. In other words, the distinctive aspect of responsible tourism is that it

encourages the growth of tourism with significant social and economic benefits to local community and

due respect for environment and ecology. The specific guidelines on triple bottom line areas of responsible

tourism include the following:

Responsible tourism development is uniquely distinct with multiple advantages as compared to traditional

development approaches. In effect, responsible tourism is the most singular choice for minimizing, if not

eliminating, all the adverse impacts of tourism. It is an effective instrument for eliminating the conflict

between tourism industry and local community which usually arise due to various adverse impacts of

tourism on their lives including price rise of daily use commodities, increased vehicular traffic and

crowding of tourist spots, accelerated environmental pollution and indictments on the existing socio-

cultural settings. Such conflicts can destroy the tourism image of the destination and lead to fall in tourist

arrivals and its ultimate disappearance. Responsible tourism on the other hand ensures that local

community is involved from the very beginning, participates in decision making on all aspects affecting

their lives and share the benefits of tourism in good measure to compensate the ill effects of tourism

suffered by them. Such benefits accrue to the local community in the form of employment, increased

business opportunities in tourism and supporting activities and enhanced demand for local produces

including agricultural products. The social benefits of tourism to local community include better access to

basic infrastructure, better living conditions and revival of local art forms. The community also becomes

aware of environmental issues and actively participates in its protection. Responsible tourism is thus an

effective instrument for sustainable development of tourism and the community.


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Responsible Tourism initiatives in Kerala

Kerala has emerged as one of the prime tourism destinations on the national and international map and is

considered as the tourism trendsetter in the country. The availability of plenty of natural resources, skilled

manpower, supportive entrepreneurial community, strong local self governments, civil society

organizations, multitude of micro enterprises, streams of professionals and academicians, responsible

media and responsive tourism industry provide the state an ideal setting to implement and practice

Kumarakom, Wayanad, Kovalam, and Thekkady tourism destinations were identified for responsible

tourism initiative in the first phase.

Responsible Tourism Initiative at Kumarakom

Kumarakom, a village with a population of about 6000 persons, is known for its panoramic backwater

stretches, lush green paddy fields, highlands and beaches. The

destination has fairly large tourist inflow and sufficient

accommodation facility. About 20 hotels and resorts are

operating at Kumarakom. In recognition of the significance of

Responsible Tourism, Kumarakom Grama Panchayath came

forward to experiment with it in their land. It emerged as a

model destination for responsible tourism. A receptive and

enabling environment could be created through mass

campaigns and other supportive steps undertaken by the RT

Cell. Local Self Government, Kudumbashree, Farmers and Industry partners actively involved and

contributed to make the process a great success. It

could rejuvenate and enhance agriculture and agro-

based industries including flours, processed food, local

snacks, etc. The positive impacts of RT initiative at

Kumarakom are summarized in the following

paragraphs.

Fallow Land Cultivation and Enhanced Agricultural

Production

The resource mapping carried out through household

surveys and physical reconnaissance of the project area

identified large chunks of un-cultivated land in the villages. These were left fallow either because of low

yield and low demand for agricultural produces or because of spiraling prices of non-agricultural land

induced by the development of tourism. The RT Cell was, however, able to mobilise Kudumbasree

volunteers to take up paddy cultivation in 55 acres of land and Grama Panchayat to introduce vegetable

cultivation in another 30 acres of land. In addition 612 homestead farmers were motivated to take up

vegetable cultivation to enhance vegetable supplies to local hotels. It greatly improved the level of supply

of agricultural products to hotel industry apart from securing additional income to the farmers. On the

whole, about one-third of the population in the Panchayat is presently involved in the production and sale

of agricultural products to tourism industry.


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Fish Farms and Lotus Cultivation

The resource mapping exercise identified as many as twenty six un-used ponds with reasonable water

levels in all the seasons. The RT Cell took up the cleaning of these ponds and promoted fish cultivation in

twenty ponds and lotus cultivation in six ponds by the local community. The tourism industry provided a

ready market for the produce of the fish farms and lotuses. It thus had a positive impact on improving the

living conditions of local community.

Establishing Linkages with Hotel Industry and Enhancing Demand for Local Produces.

The RT Cell identified the items of purchase of hotel industry and initiated a dialogue to encourage them

to resort to local purchases to the extent possible. The apprehensions of the industry regarding regularity

of supplies, quality of products and competitive prices were progressively removed by developing

institutional mechanisms to address those issues. With the establishment of an assured market, the

community was also encouraged to enhance production and to adopt organic farming practices. Though

initially, the local purchase of hotel industry was confined to eleven items of agricultural produces, it got

expanded progressively and by 2010 it became 45 items including some of the agro-based industrial

products. The establishment of such an economic linkage fostered a win-win partnership between the

community and the industry by removing all kinds of miss-trusts and conflicts. The immense economic

gains of the community through the process included (i) assured market and reasonable prices for the

local produce, (ii) enhanced production and the consequent employment generation (iii) minimization of

leakages from tourism receipts.

Development of Souvenir Industry

Tourists visiting any particular destination usually like to carry

with them small items typically produced in the place of visit as

mementoes of their visit. Kumarakom can now boast of its own

symbolic souvenir item and a growing souvenir industry largely

due to RT Initiative. A local crafts man who was struggling to

survive in the extreme poverty conditions was assisted in making

models of boats and houseboats which are typical tourist

attractions of tourism. These mementoes are crafted by using

screw pines which are locally available in plenty. The production

of these souvenirs by the local craftsman attracted the attention

of the hotel industry and contracted exclusive marketing rights through their outlets. It has led to

accelerated growth of souvenir industry and the consequent benefits to the craftsman which pushed him

above the poverty line during a short period.

Community Based Tourism Products

In order to provide a village experience to tourists by guiding them through real life situations in

hinterlands and thereby distributing economic benefits of tourism directly to the community, the RT Cell

developed two tour packages at Kumarakom. The first package is titled as “Village Life Experience at

Kumarakom” and the second as “A Stay in the Company of Farmers”.

Promotion of Local Art Forms and Culture

Kumarakom has a rich cultural heritage with many art forms and cultural troupes. A professional Sinkari

Melam Group of Children and Women was formed under the banner of responsible tourism and it became


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the first such cultural group in Kerala. Yet another cultural group formed is the Suvarna Cultural Group.

Performance of these groups are organised in hotels and other places to enrich the experience of tourists.

Promotion of Cultural Tourism and Ethnic Cuisine

The people of Kumarakam celebrates several fairs and festivals, some of which are of regional and local

importance. These events form part of their social life and reflect their cultural identity. The colour and

splendor with which these festivals are celebrated is a source of great amazement and attraction. The

potential tourists to Kumarakom are, however, not aware of such festivals and the exact dates of

celebrations. In order to remove this information gap the RT Cell prepared a calendar of such festivals and

made available to tourism industry partners for the promotion of such events as added tourist attractions.

Tourists interested in experiencing local culture are also usually interested in enjoying local ethnic cuisine.

However, they are often not aware of the existence of such cuisine and its availability. The RT Cell,

therefore, documented such ethnic items and made available to the tourism industry and promotion

agencies.

Social Awareness and Tourist Management

The local community has been made aware of adverse impacts of tourism including child labour,

exploitation, prostitution, etc and the importance of tourist management to avoid such ill effects. The

community has thus taken a lead role in identifying and preventing such instances so as to create an image

of clean tourism.

Protection of Environment

The environmental initiative of responsible tourism succeeded in declaring the bird sanctuary as a plastic

free zone, promoting bicycle journey around hotels and resorts, promotion of organic farming, mangrove

protection and control of back water pollution with the help of the community. A survey of plastic use by

sales outlets in the area was conducted and promoted the manufacture and use of eco-friendly carry bags

by the establishments.

The experience of implementing responsible tourism initiatives in Kerala invariably proves the capability of

the local self government to effectively use tourism for social, economic and environmental

empowerment in a destination. The Kumarakom gramapanchayat has efficiently used the Responsible

tourism initiatives to make into reality a positive and meaningful involvement of the local community in

the tourism industry of the destination, through which it has brought about local economic empowerment

especially to the women community.

Responsible Tourism – the first ever initiative in India produced significant outputs in destinations in terms

of enhanced cultivation and community participation. These contributions are especially notable in the

present scenario where leading tourism destinations are finding it difficult to balance their growth in

tourism activities and retain their tradition livelihoods, culture and heritage, most of which are

undoubtedly the hallmarks of individual destinations. This has been made possible by the long term vision

and timely intervention by the Department of Tourism, Government of Kerala, which formulated the

project in line with the latest international trend in the tourism sector. Considering the success of

Responsible Tourism in Kumarakom, and the lead position that Kerala enjoys in the global tourism market,

this initiative could be replicated in all leading tourism destinations to ensure sustainability of tourism

development efforts adopted by the state.


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