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Corporate Social Responsibility (CSR)

Defining CSR

CSR as defined by IndianNGOs.com
Corporate Social Responsibility is a Business Process wherein the Institution and the Individuals within, are sensitive and Careful, about the direct and indirect effect of their work on Internal and External Communities, Nature and the Outside World.

A Close look at this definition of CSR will indicate that this definition does not limit CSR to just Corporates. It is applicable, in equal measure, to the Governments, the Media, the Research Laboratories and the weapons machineries, the Non Governmental Organisations, the Education Institutions...and just to any and every Institution.

More specific to the Corportes; Business Ethics, Products & Process Management, Consistency in generating Profits and its distribution, Sustainability, Governance, Internal Social Policies, and Financial and Non Financial Investment in Communities are essential ingradients of a true Socially Responsible Corporate.

What is fundamentally different in this definition is its direction, which is

• more inwards than outwards
• more related to the Character & Culture of the Corporate rather than its size or profitability
• more related to making and distributing profits and sustainability
• more business process oriented than philanthropic
• focused on day to day activities by every employee of the organization rather than limited to the topical presence of key individuals in the company along with the various Social Partners of the Corporate

What is CSR ? Some International Definitions
Although the concept of CSR has been developing since the early 1970s, there is no Single, commonly accepted definition of CSR.


Here are some ways CSR has been defined by various organizations.

CSR as defined by BSR
"CSR is defined as operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. CSR is seen by leadership companies as more than a collection of discrete practices or occasional gestures, or initiatives motivated by marketing, public relations or other business benefits. Rather, it is viewed as a comprehensive set of policies, practices and programmes that are integrated throughout business operations, and decision-making processes that are supported and rewarded by top management."
(Source: BSR)

CSR as defined by FIRST WBCSD CSR DIALOGUE IN THE NETHERLANDS IN 1998
"CSR 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.

(The above definition was developed in 1998 for the first WBCSD CSR dialogue in The Netherlands.)"

CSR as defined by CSR WIRE
"CSR is a public movement, which has gained more momentum as citizens demand corporations to be accountable for their impacts. Consumers, investors and employees alike are recognizing the power held by corporations and efforts are being made on several levels to create global change with the hope that earth will become a better place."
(Source: CSR Wire)

CSR as defined by EUROPEAN UNION
"CSR is the concept that an enterprise is accountable for its impact on all relevant stakeholders. It is the continuing commitment by business to behave fairly and responsibly and contribute to economic development while improving the quality of life of the work force and their families as well as of the local community and society at large. (Source: European Union.)

CSR as defined by ETHICS IN ACTION
"CSR is a term describing a company's obligation to be accountable to all of its stakeholders in all its operations and activities. 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.
(Source: Ethics in Action)

CSR as defined by MICHAEL HOPKINS
CSR is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner. Stakeholders exist both within a firm and outside. Consequently, behaving socially responsibly will increase the human development of stakeholders both within and outside the corporation.
(Source: Michael Hopkins: A Planetary Bargain: CSR Comes of Age, Macmillan, UK, 1998)

CSR generally refers to:

1. A collection of policies and practices linked to relationship with key stakeholders, values, compliance with legal requirements, and respect for people, communities and the environment; and
2. The commitment of business to contribute to sustainable development, commonly understood as sustainable development is the ability of the current generation to meet its needs without compromising the ability of future generations to meet theirs.

Corporate Citizenship which is based on the concept of the corporation as a citizen, is also frequently used while referring to CSR, and is sometimes interchangeably used.

The interpretation of CSR one makes influences the dialogue between governments, private sector and civil society. This results in different implications among various parties regarding the legitimacy, obligations and impact of corporate social responsibility standards. For example, one has to be careful in understanding and defining the term CSR because it is sometimes mistakenly equated with either corporate philanthropy or simply compliance with law. Since mid-90' the business sector has gradually engaged into many actions, which have been traditionally assigned to the sphere of responsibility of the government, yet due to its incapacity, business has taken the lead. Participation in such projects has revealed business as a strategic partner in the process of development, in close cooperation with the government and international institutions.

"Corporate Social Responsibility is a term describing a company's obligation to be accountable to all of its stakeholders in all its operations and activities. 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."

This holistic approach to business views companies as full partners in their communities, rather than measuring them solely on the basis of products and profits.
(SOURCE: http://www.worldbank.org)

IndianNGOs.com on appreciation of the concept by Corporates visited CSR, Philanthropy, Giving Back to Society ....right from Small Business in unknown places to Board Rooms of some of the Biggest Corporate in the world, this term is defined, understood or misunderstood in many ways. More often, the orientation of CSR was from the Point of view of Corporates and their Responsibility towards the Society. It was inclined towards outward action.

The bottom-line of most of these definitions was some kind of investment from Corporates towards Communities.

IndianNGOs.com started working on the issue of CSR on this very premise.

After one on one dialogue with almost 200 Indian Corporates, Secondary Research on additional 400 Indian Corporates and almost 500 International Corporates, and, a lot of internalisation of the issue, IndianNGOs.com is redefining CSR.
There are a few resons why IndianNGOs.com is redefining CSR

• To create a favorable "buy in" of the concept not just by the Top Managements, which are generally Socially Conscious, but from the "buy in", interest and appreciation of the concept by the Senior and Middle Level Management.
• To give CSR a long term perspective. One which does not depend on the Economic ups and downs.
• To give each and every Corporate and, Small and Medium Sized Businesses reasons to practise CSR, irrespective of its age, size and profitability.
• To give opportunities to each and every individual within the Company to participate in its CSR

Who are a company's stakeholders?

A company's stakeholders are all those influenced by its decisions and actions, either locally or internationally.

A listing of the stakeholders will include

• Employees
• Stockholders
• Suppliers & Contractors
• Consultants and Business Associates
• Neighbourhood Community
• Customers and
• The environment

Why should a company be interested in CSR?

Corporate Social Responsibility as defined by IndianNGOs.com starts with each and every operation of the Company.

• CSR looks at positive action right from selection of place of work, employee selection and nurturing, purchase of materials & machinery, manufacturing, marketing and after sales service.
• No Company in the world will find it unnecessary, or would not be interested in this outlook. CSR covers issues related to HR, IR, PR, Governance and issues of transparency with related communities.
• In fact each company across the world, has to understand and appreciate, the value the new orientation of CSR adds to it at all levels.
• Unlike the traditional CSR outlook, which is directed more externally, CSR defined by IndianNGOs.com is more internal for external actions. The resultant benefits thus, are more internal and thus permanent.
• The new orientation of CSR as defined by IndianNGOs.com gives opportunities for each and every constituent of the Company to participate in CSR unlike the traditional orientation, where it was limited to the involvement of the top management, CSR departments and a few volunteers. The scale of operations of giving thus is that much multiplied.
• Add to the culture that each participant takes back home, to the family and you will see a meaningful, wonderful and permanent change emerging in the Society.
• CSR is good for the Community and good for Business. Companies investing, cultivating and nurturing mutually beneficial relationships with stakeholders create Sustainable Communities in which to do business over the long term.
• They contribute to environments and other natural forces where their customers, employees and other stakeholders are happy to live and stay. Healthy communities enhanced by Socially Responsible Companies create Stable Economies, a better Environment for both business and stakeholders.

How is CSR different from Cause Related Marketing (CRM)?

CSR is permanent. It is not related to the product you make or the service you offer. It does not dependent on the scale of operations of the Company or its market orientation. It adds value not just to the sales of the company but makes the company valuable to various internal and external communities. It represents a much deeper internal and external commitment.

Cause Related Marketing makes sense with bigger scale of operations. In most of the cases across the world, it is a time bound short term excercise. Cause Related Marketing is just a part of CSR and it is not the whole of CSR.

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