CSR - A WIN - WIN BUSINESS MODEL

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CSR - A WIN - WIN BUSINESS MODEL
Col. Prakash Tewari (Retd) CSR and R R Tata
Power Company
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Prelude

• Impacts of Business
• Integrating Business and Society
• Emergence of CSR
• Mapping Social Impacts
• Responsive CSR vs Strategic CSR
• Moral Purpose of Business

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Human Beings are animals, We are sometimes
monsters, sometimes magnificent, But always
animals.   We may prefer to think of ourselves
as fallen angels, But in reality, we are
risen apes. - Desmond Morris
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Business and Society
Business can impact society in three ways

• Economic
• Environmental
• Social

Business
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Impact of Business on Society

• Impact on business on society can be positive
  as well as negative.

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Business Impact on Human Development

• Business impacts poverty, literacy, education and
  life expectancy.
• Economic growth is only a means, though an
  important one, for human development.
• Human development is both an outcome and a
  process of enlarging peoples choices to lead
  lives they value.

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Business and Environment

• In todays world, environment is an increasingly
  sensitive issue.
• This means that any failure to follow
  environmental norms could promptly result in a
  public litigation being slapped on the corporate.

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Economy Vs EcologyEconomy and Ecology
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Impact of Business on Communities

• Change in livelihood patterns on account of
  natural resources being impacted
• Change in land use / leading to
  socio-political-economic impact (loss of
  identity, culture change)
• Land owners become landless, or marginalised
  farmers
• Socio-psychological impact thru contrast in
  living standards
• Stress on local environment quality (air
  emissions, effluent, etc)

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Impact of Business on Communities

• Stress on local ecology (flora and fauna)
• Stress on local resources water, land, rural
  energy sources
• Increased dependence on the industry by the
  community
• Influx of migrant labour
• Opportunities for Business to secure goods and
  services
• Opportunities for community to improve their
  quality of life

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Scope of Collaboration
Environmental Reducing carbon emissions and hence
decreasing the chance of environmental
irregularities.
Social If people do not have the resources to
deal with todays stresses, then they are
unlikely to be able to deal with the additional
stresses associated with climate change
Adaptability Gap
Economic Protect , enhance and diversify asset
base through economic activities
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Integrating Business Society

• CSR understand interrelationship between business
  society
• Corporate need healthy society
• Society needs successful corporate
• Focus on intersection than friction
• Mutual dependence implying principle of shared
  value

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Emergence of CSR

• Issues that
• shook corporate
• Corporate response

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Justification

• Moral Obligation
• Sustainability
• License to Operate
• Reputation

Good citizens Do the right things
Meeting needs of present without compromising
future generation
Permission from Govt, communities stakeholders
Justify CSR initiatives Brand, image, morale
values of stock
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School of Thought

• Focus on tension than interdependence
• Non strategically aligned
• Fail to identify/prioritize/make impact
• Uncoordinated philanthropic
• Not linked to internal/external activities
• Lost opportunity
• Social benefits dissipated

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Identifying Points of Intersection

• Interdependence takes 2 forms
• Company impinges through its operations
• External social conditions influence corporations

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Mapping the Social Impact of Value Chain

• Air pollution
• Warm water discharge
• Ash disposal
• Impact on livelihoods
• Energy water usage
• Worker safety labour relations

• Displacement
• Loss of livelihoods
• Loss of infrastructure
• Irreversible loss to natural resources

• Conservation
• DSM
• Efficiency

LAND ACQUISITION technically feasible location
identification, purchase of land
LOGISTICS incoming material, storage, data
collection, service
OPERATIONS Generation (emission measurement),
transmission (decentralised), distribution (smart
grid)
TRADING advocacy, open axis regulation, short
term transactions, REC, website
CUSTOMER MANAGEMENT customer support, complaint
resolution, repair

• Transportation Impacts (e.g., emission,
  congestion, logging roads, safety)
• Pollution
• Dust (SPM)
• Health
• HIV/AIDS

• Pricing practices (e.g., price discrimination
  among customers, anticompetitive pricing
  practices, pricing policy to the poor)
• Consumer protection
• Global partnership for development

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Support Activities


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External Social Conditions

• Fair and open local competition
• Intellectual property rights
• Transparency

Context for Firm Strategy The rules and
incentives that govern competition

• Availability of human resources
• Availability of scientific and technological
  infrastructure
• Sustainable natural resources

Local Demand Conditions The nature and complexity
of local customer needs
Input Conditions Presence of high quality,
specialized inputs available to firms

• Peculiarity of local demand (e.g., cultural and
  society specific needs)
• Demanding regulatory standards

Related and Supporting Industries The local
availability of supporting industries

• Availability of local suppliers
• Access to firms in related field

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Choosing Social Issues
STRATEGIC CSR
RESPONSIVE CSR
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The Moral Purpose of Business

• Contribution to economic prosperity
• Corporate social integration towards building
  shared value
• Leading to self sustaining solutions

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