“ ROLE OF ASSOCIATION FOR IMPLEMENTATION

OF CORPORATE SOCIAL RESPONSIBILITY”

DR (MS) MANJULA JAGATRAMKA

“ACCELERATE TO EXCEL ”L”

ALL INDIA HPCL SC/ST EMPLOYEES WELFARE ASSOCIATIONIIND ALL INDIA CONFERENCE OF OFFICE BEARERS ON 21 &

22 JANUARY 2015 AT THE TAJ GATEWAY –VIZAG (AP)

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Basic concepts of

C S R

CATEGORIES OF ORGANIZATIONS

For profits: Seek gain for their owners, i.e. financial returns to keep the company running.

Governments: Exist to define rules and structures within which all organizations must operate.

Non profits: Emerge to do social good when political will or the profit motive is insufficient to address society’s needs.

Preliminary definitions of CSR

The impact of a company’s actions on society

Requires a manager to consider his acts in terms of a whole social system, and holds him responsible for the effects of his acts anywhere in that system

"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".

Corporate Social Responsibility is concerned with treating the

stakeholders of a company or institution ethically or in a

responsible manner. ‘Ethically or responsible‘, simply put, means treating key stakeholders in a

manner deemed acceptable according to international norms

Corporate social responsibility emphasizes obligation and accountability

to society

Corporate social responsiveness emphasizes action, activity

Corporate social performanceemphasizes outcomes, results

Corporate Citizenship Concepts

"People, planet and profit" succinctly describes the triple bottom lines and the goal of sustainability. The phrase,

"people, planet, profit", was coined by John Elkington in

1995

KEY ISSUES IN CSR Labour rights

child labour

forced labour

right to organize

safety and health

Environmental conditions water & air emissions

climate change

Human rights cooperation with

paramilitary forces

complicity in extra-judicial killings

Poverty Alleviation job creation

public revenues

skills and technology

SUSTAINABLE DEVELOPMENT

Development that meets the needs of the

present without compromising the ability of

future generationsto meet their own needs

CARROLL’S FOUR PART DEFINITION

Philanthropic Responsibilities :-Be a good corporate citizen.

Ethical Responsibilities : Be ethical

Legal Responsibilities : Obey the law

Economic Responsibilities :-Be profitable

CSR IN EQUATION FORM IS THE SUM OF….

Economic Responsibilities -(Make a profit)

Legal Responsibilities - (Obey the law)

Ethical Responsibilities - (Be ethical)

Philanthropic Responsibilities (Good corporate citizen)

CSR IN THE PUBLIC SECTORGUIDELINES, MARCH 2010

Corporate Social Responsibilityis a concept whereby organisations

serve the interests of society by taking responsibility for the impact

of their activities on customers, employees, shareholders,

communities, and the environment in all aspects of their operations

”CSR spending”

According to voluntary guidelines;Identification of

projects/activitiesPhysichal targets with

time frameImplementation and monitoring

CHANGE IN APPROACH

With the rapidly changing corporate environment, more functional

autonomy, operational freedom etc., CPSEs today are required to adopt

CSR as a strategic tool for sustainable growth.

CSR in the present context, means not only investment of funds for social activities but also integration of business processes with social

processes.

NEED FOR LINKAGE WITH COMMUNITY

An Enterprise needs to address the concerns of the society in which the

enterprise is operating. There should be free interaction between enterprises and

community leaders.

In order to address the social needs of the community, viable projects need to be

identified to meet its requirements.

OVERARCHING CONCEPT

CPSEs may approach Corporate Social Responsibility as a professional

management process with a long-term strategy integrating it with corporate

strategies. CSR activities may be planned in parallel

to the business plan, looking at every possible opportunity to link and integrate

business plans with the social and environmental concerns available.

PLANNING THE CSR INITIATIVEA long-term Corporate Social Responsibility

Plan needs to be prepared matching with the

long-term business plan;

This may be broken down into short-term and medium term plans, specifying activities

to be undertaken, budgets allocated, responsibilities and authorities defined, and

measurable results expected.

IMPLEMENTATIONThe Plan must clarify implementation guidelinesinvolving:

Participation of Voluntary Organizations,Specialist Organisations and CommunityBased Organizations;

Base-line Surveys Documentation of the experience; Setting Up a CSR Hub with participation

of Deptt of PE, SCOPE and CP SectorEnterprises;

Monitoring and Evaluation Lessons learnt for future use.

THRUST AREAS Areas related to the business of the PSE as a natural corollary to

the business.

Assistance to be mostly project based rather than donation, so as

to generate community goodwill, create social impact and visibility.

Finalizing of time-frames and various milestones before

commencement of a project.

Involving of suppliers in order to ensure that the supply- chain also

follows the CSR principles.

Emphasis on principles of Sustainable Development, based on the immediate and long-term social and environmental consequences of the activities undertaken;

Improvement of the existing ecological conditions;

Ensuring skill enhancement and employment generation by co-creating value with local institutions and people.

ACTIVITIES THAT WILL NOTCOUNT AS CSR

BENEFITS TO STAFF;

GRANTS TO ORGANIZATIONS

/INSTITUTIONS;

IMPLEMENTATION MODALITIES

CSR Activities to be carried out by Specialist Agencies;

Such activities generally not to be conducted by CPSE employees/staff;

Specialist Agencies to include NGOs, Institutes,Academic Organizations, Civil Society/Community-based orgns., Trusts, Missions etc., who have requisiteexpertise.

IMPLEMENTATION MODALITIES CONTD… Utmost efforts to be made to find out the

reliability, and track record of theNGOs/Orgns entrusted with CSR activities.

Initiatives of State Governments as well asCentral Government Departments /Agenciescould be dovetailed/ synergised with CSRactivities.

Avoidance of any duplication of CSRactivities by the CPSEs, the StateGovernments and local level Programmes.

FUNDING The CSR budget to be mandatorily created through a Board Resolution as a

percentage of net profit in the following manner:-

Type of CPSEs Expenditure range for CSR

Net Profit in a Financial Year

(Previous Year) (% of profit)

(i) Less than Rs. 100 crore 3% – 5%

(ii) 100 crore to Rs. 500 crore 2% – 3%

(Subject to a Min. of 3 cr)

(iii) 500 crore and above 0.5% – 2%

The CSR Budget to be fixed for eachfinancial year. This funding not to lapse– must be transferred to a CSR Fund,which will accumulate – as in the case ofnon-lapsable pool for North East.

In case CPSEs have different ProfitCenters like Factories / Plant locations,they may be allocated separate CSRbudgets to be spent by them under theAnnual CSR Budget allocations.

MONITORING Monitoring of the CSR projects is very

crucial and needs to be a periodic activity ofthe Enterprise.

The Board of CPSEs should discuss theimplementation of CSR activities in theirBoard meetings.

The CPSE should bring a separateparagraph/chapter in the Annual Report onthe implementation of CSRactivities/projects including the factsrelating to physical and financial progress.

The implementation of CSR guidelinesto form a part of the Memorandum ofUnderstanding to be signed betweenCPSE and the Government;The performance of CSR should be

monitored by the Ministry/Departmenton regular basis.In MoU Guidelines from 2010-11

onwards, 20% has been earmarked outof the non-financial parameters forperformance under CSR.

MONITORING & EVALUATION For proper monitoring of CSR activities,

companies may appoint a CSR committee ora Social Audit Committee or a suitable,credible agency to critically assessfulfillment of social obligations.

CSR projects should also be evaluated byan independent external agency. Thisevaluation should be both concurrent andfinal.

BASELINE SURVEYS AND DOCUMENTATION

Impacts made may be quantified to the bestpossible extent with reference to base line data,which need to be created by the CPSEs before thestart of any project. Hence Base-line Surveysmandatory.

The documentation relating to CSR approaches,policies, programmes, expenditures, procurement,etc. to be put in the public domain, particularlythrough the internet.

CSR HUBThe Deptt. Of Public Enterprises, in conjunction with SCOPE and the CPSEs will

create a CSR Hub which will undertake/facilitate the following activities:

Nation-wide compilation, documentation, andcreation of database;

Advocacy; Research; Preparation of Panels of Implementing Orgns.; Promotional activities, including production of

short films, printing of brochures, pamphlets etc.; Conferences, Seminars, Workshops – both

national and international; Act as a Think Tank; Any other matter as entrusted to it from time to

time by the DPE

The Hub will begin operations with funding provided by Deptt. PE;

It will, however, be free to receive funds from;

SCOPE and both Central as well as State CPSEs; UN Agencies, reputed international agencies such as

World Bank, EU and other multilateral bodies andorgns.;

Reputed National and State Bodies; Govt. Deptts., Autonomous Orgns., Planning

Commission, Attached and Subordinate Offices,Corporations etc.

Philanthropic Missions, Trusts, etc. of national andinternational repute.

Decisions relating to the location and functioning of theHUB will be taken by DPE. SCOPE will be kept informedof such decisions and will be free to offer suggestions,inputs etc.