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Corporate SocialCorporate SocialResponsibilityResponsibility

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ConceptConcept

Business decision making linked with:Business decision making linked with: Ethical valuesEthical values Compliance with the lawCompliance with the law Respect for people, communities and Respect for people, communities and

the environment.the environment.

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Another definitionAnother definition

Lord Holme and Richard Watts define CSR as:Lord Holme and Richard Watts define CSR as: CSR is the continuing commitmentCSR is the continuing commitment By a business firm (company)By a business firm (company) To behave ethically, andTo behave ethically, and Contribute to country’s economic Contribute to country’s economic

developmentdevelopment While improving the quality of life of:While improving the quality of life of:

the workforcethe workforce as well as the community and society at large.as well as the community and society at large.

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The American & The American & European ConceptsEuropean Concepts

American businesses mostly think American businesses mostly think CSR is only about giving money for CSR is only about giving money for worthy causes.worthy causes.

Europeans think CSR is a tool for Europeans think CSR is a tool for promoting business. Treat the promoting business. Treat the society well so that society can buy society well so that society can buy your products. Do more CSR when your products. Do more CSR when times are bad.times are bad.

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Trusteeship TheoryTrusteeship Theory

Companies really do not belong to any Companies really do not belong to any one.one.

Shareholders own share of “what Shareholders own share of “what remains” but not specific assets of the remains” but not specific assets of the company.company.

Directors hold the assets of the Directors hold the assets of the company in trust on behalf of not just company in trust on behalf of not just shareholders but the society at large.shareholders but the society at large.

A company is a social asset.A company is a social asset.

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Historical PerspectiveHistorical Perspective

In fact, CSR came much after In fact, CSR came much after Business Ethics.Business Ethics.

Business have learned that chasing Business have learned that chasing only profit does not give enough only profit does not give enough profit.profit.

CSR can actually improve their CSR can actually improve their profitability and sustainability of profitability and sustainability of their ventures.their ventures.

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Scope of CSRScope of CSR

PhilanthropyPhilanthropy Doing Business ResponsiblyDoing Business Responsibly Being a good citizenBeing a good citizen

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PhilanthropyPhilanthropy

Financial donations to worthy causes:Financial donations to worthy causes: Do not just throw away money – be carefulDo not just throw away money – be careful Do not wait for disasters to show your Do not wait for disasters to show your

kindnesskindness Setting, running or supporting socially Setting, running or supporting socially

desirable bodies:desirable bodies: Monitoring and evaluating them in the Monitoring and evaluating them in the

processprocess Supplementing the governmental efforts Supplementing the governmental efforts

towards social welfaretowards social welfare

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Doing business Doing business responsiblyresponsibly

Essentially being ethicalEssentially being ethical Integrity in all that you doIntegrity in all that you do FairnessFairness

To every one: employees, clients, To every one: employees, clients, suppliers, allsuppliers, all

Protection of all stakeholders’ interestProtection of all stakeholders’ interest Serving the common interest of all Serving the common interest of all

stakeholdersstakeholders

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Being a good citizenBeing a good citizen

Compliance with law.Compliance with law. Paying your duesPaying your dues

No tax evasion, directly or indirectlyNo tax evasion, directly or indirectly Investment in community:Investment in community:

Capital nature rather than just Capital nature rather than just recurrent recurrent

Concern for environmentConcern for environment

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Concern for EnvironmentConcern for Environment

Eco-balanceEco-balance DeforestationDeforestation Soil degradationSoil degradation Atmospheric changesAtmospheric changes

PollutionPollution Waste/Discharges managementWaste/Discharges management

Depletion of resourcesDepletion of resources Emphasis on creating re-usable Emphasis on creating re-usable

resourcesresources

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Environmental Risk Environmental Risk ManagementManagement

Identify and define risks being posed Identify and define risks being posed (or faced) by the company.(or faced) by the company.

Establish the extent and probability of Establish the extent and probability of risks.risks.

Assess cost of: Assess cost of: The consequences of the risk after it The consequences of the risk after it

takes placetakes place preventing it from happeningpreventing it from happening

Assign specific responsibilityAssign specific responsibility

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ERM -2ERM -2

Define means of handling it.Define means of handling it. Preventing it through:Preventing it through:

Better technologyBetter technology Better materialsBetter materials Better maintenanceBetter maintenance

Insurance:Insurance: Actual lossActual loss Claims against the companyClaims against the company

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Strategies forStrategies forPrevention of Industrial Prevention of Industrial

PollutionPollution Environmental processes’ auditEnvironmental processes’ audit

Waste management auditWaste management audit Material usage reviewMaterial usage review Non-solid effluents auditNon-solid effluents audit

Financial considerationsFinancial considerations Cost benefit analysis of being eco-Cost benefit analysis of being eco-

balancedbalanced Use of new cleaner technologyUse of new cleaner technology Life cycle assessmentsLife cycle assessments

Spreading awareness among usersSpreading awareness among users

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Resource ManagementResource Management

Energy resources (fossil fuels vs. others)Energy resources (fossil fuels vs. others) Re-cycling of materialsRe-cycling of materials

Using re-cycled materialUsing re-cycled material Using bio-degradable materialUsing bio-degradable material

Conservation of life supporting systemsConservation of life supporting systems Forests, trees, water sources, mountainsForests, trees, water sources, mountains Wild lifeWild life Responsible use of landResponsible use of land

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EP LawEP Law

The law is there.The law is there. EPA has been set up.EPA has been set up. But law does not make any one But law does not make any one

responsible.responsible. Companies have to want to be Companies have to want to be

environmentally responsible.environmentally responsible.

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Some Big Some Big Environmental DisastersEnvironmental Disasters

Chernobyl Nuclear Disaster (1986)Chernobyl Nuclear Disaster (1986) Nuclear reactors went berserkNuclear reactors went berserk

Exxon Valdez (1989) in AlaskaExxon Valdez (1989) in Alaska 11.5 million barrels of crude spilled11.5 million barrels of crude spilled

Tokiamora Accident (1999)Tokiamora Accident (1999) Nuclear radiation leakedNuclear radiation leaked

Bhopal Tragedy (1984)Bhopal Tragedy (1984) Leakage of poisonous gas, killing 300 and Leakage of poisonous gas, killing 300 and

affecting 400,000 personsaffecting 400,000 persons Gulf of Mexico (2010)Gulf of Mexico (2010)

Leakage of crude oil, polluting virtually the Leakage of crude oil, polluting virtually the entire gulfentire gulf

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Shades of CSRShades of CSR

Official posture and realityOfficial posture and reality Spending more money on publicizing Spending more money on publicizing

CSR than actual CSR work.CSR than actual CSR work. Lip service: strings attached helpLip service: strings attached help IPPR says most CSR is lip serviceIPPR says most CSR is lip service

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CSR – Who is watching what?

Institutional investors PIRC provide web based data on

how companies are acting on CSR, ethics, environment, etc.

Regulators / Kings Report in SA Disclosure Requirements

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Formulating CSR Policy

Set a Code of Ethics outlining CSR Values to be upheld

Establish current position on CSR values

Discuss with relevant stakeholders Employees Pressure groups Clients

Draw up a formal CSR Policy

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CSR Policy

Formally promulgate the CSR policy Prescribe systems Establish responsibility for each

party Set realistic strategies and targets Keep all concerned informed Monitor achievements Revise policy or targets as necessary

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Bench Marking in CSR

You do as much as others are doing. Can any one set “minimums”? Who ensures compliance? How to monitor compliance?

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CSR in PakistanCSR in Pakistan

Mostly companies consider Mostly companies consider philanthropy to be the only means of philanthropy to be the only means of CSR.CSR.

However change is coming.However change is coming. Telenor’s Karo MumkinTelenor’s Karo Mumkin PTC’s tree plantingPTC’s tree planting Mobilink’s medical helplineMobilink’s medical helpline

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CSR SurveyCSR Survey

People in Pakistan want companies to:People in Pakistan want companies to: Promote educationPromote education Create employmentCreate employment Provide health care to publicProvide health care to public Reduce pollutionReduce pollution Provide better work placeProvide better work place

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Thank youThank you