Corporate Social

Responsibility
Dr Safdar A Butt

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 Concept
Business decision making linked with:
 Ethical values

 Compliance with the law

 Respect for people, communities and the

environment.

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 Another definition
Lord Holme and Richard Watts define CSR as:
 CSR is the continuing commitment

 By a business firm (company)

 To behave ethically, and

 Contribute to economic development

 While improving the quality of life of:

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

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 The American &
European Concepts
 American businesses mostly think CSR is only
about giving money for worthy causes.
 Europeans think CSR is a tool for promoting
business. Treat the society well so that society
can buy your products. Do more CSR when
times are bad.

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 Trusteeship Theory
 Companies really does not belong to any one.
 Shareholders own share of “what remains” but
not specific assets of the company.
 Directors hold the assets of the company in
trust on behalf of not just shareholders but the
society at large.
 A company is a social asset.

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 Historical Perspective
 CSR came in fact much after Business Ethics.
 Business have learned that chasing only profit
does not give enough profit;
 CSR can actually improve their profitability and
sustainability of their ventures.

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 Scope of CSR
 Philanthropy
 Doing Business Responsibly
 Being a good citizen

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 Philanthropy
 Financial donations to worthy causes
 Do not just throw away money – be careful
 Do not wait for disasters to show your kindness

 Setting, running or supporting socially desirable

bodies.
 Monitoring and evaluating them in the process
 Supplementing the governmental efforts
towards social welfare

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 Doing business responsibly
 Essentially ethics.
 Integrity in all that you do
 Fairness
 To every one: employees, clients, suppliers, all
 Protection of all stakeholders’ interest
 Serving the common interest of all stakeholders

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 Being a good citizen
 Compliance with law.
 Paying your dues
 No tax evasion, directly or indirectly
 Investment in community:
 Capital nature rather than recurrent
 Concern for environment

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 Concern for Environment
 Eco-balance
 Deforestation
 Soil degradation

 Atmospheric changes

 Pollution
 Waste/Discharges management
 Depletion of resources
 Emphasis on creating re-usable resources

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Environmental Risk Management
 Identify and define risks being posed (or faced)
by the company.
 Establish the extent and probability of risks.
 Asset cost of:
 When the risk takes place
 Preventing it from happening

 Assign specific responsibility

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 ERM -2
 Define means of handling it.
 Preventing it through:
 Better technology
 Better materials

 Better maintenance

 Insurance
 Actual loss
 Claims against the company

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 Strategies for
Prevention of Industrial Pollution
 Environmental processes’ audit
 Waste management audit
 Material usage review
 Non-solid effluents audit

 Financial considerations
 Cost benefit analysis of being eco-balanced
 Use of new cleaner technology
 Life cycle assessments

 Spreading awareness among users

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 Resource Management
 Energy resources (fossil fuels vs. others)
 Re-cycling of materials
 Using re-cycled material
 Using bio-degradable material

 Conservation of life supporting systems

 Forests, tree, water sources
 Wild life

 Responsible use of land

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 EP Law
 The law is there.
 EPA has been set up.
 But law does not make any one responsible.
 Companies have to want to be environmentally
responsible.

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 Some Big
Environmental Disasters
 Chernobyl Nuclear Disaster (1986)
 Nuclear reactors went berserk
 Exxon Valdez (1989) in Alaska
 11.5 million barrels of crude spilled
 Tokiamora Accident (1999)
 Nuclear radiation leaked
 Bhopal Tragedy (1984)
 Leakage of poisonous gas, killing 300 and affecting 400,000
persons
 Gulf of Mexico (2010)
 Leakage of crude oil, polluting virtually the entire gulf

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 Shades of CSR
 Official posture and reality
 Spending more money on publicizing CSR than
actual CSR work.
 Lip service: strings attached help
 IPPR 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 Pakistan
 Mostly companies consider philanthropy to be
the only means of CSR.
 However change is coming.
 Telenor’s Karo Mumkin
 PTC’s tree planting
 Mobilink’s medical helpline

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 CSR Survey
People in Pakistan want companies to:
 Promote education

 Create employment

 Provide health care to public

 Reduce pollution

 Provide better work place

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Thank you
Dr S A Butt

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