Responsibility
(CLSR)
The incorporation of a holistic CSR perspective within a firm’s strategic
planning and core operations so that the firm is managed in the interests of a
broad set of stakeholders to achieve maximum economic and social value over
the medium to long term.
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LP-7
19 – 26 Nov 18
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MAJOR CONCEPTS OF CSR
• Economic and Legal ---- Firms have responsibilities to
societies including economic, legal, ethical and
discretionary (or philanthropic). (Carrol, 1979)
• Social Contract --- There is a tacit social contract between
the firm and society; the contract bestows certain rights in
exchange for certain responsibilities.
(Donaldson, 1982; Donaldson and Dunfee, 1999)
• Stakeholder Theory --- A stakeholder is “any group or
individual who can affect or is affected by the achievement
of an organization's purpose.” Argues that it is in the
company’s strategic interest to respect the interests of all
its stakeholders. (Freeman, 1984)
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KEY ISSUES IN CSR
• Labour Rights:
– Desist from Child labor – under the age of 14 years
– No Forced labor – Jails etc
– Women rights to be protected
– Right to organize be recognized and implemented
– Ensuring safety and health (QwL)
• Environmental Conditions
– Treatment of sewage water & control of toxic air
emissions
– Not to negatively impact environment (Forests)
– Make due efforts to ensure climate change / climate
control / warming of Oceans
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KEY ISSUES IN CSR– Contd
• Human Rights
– Cooperation with paramilitary forces to maintain law
and order
– No complicity in extra-judicial killings
– No uprooting of people to facilitate industrial growth
– Not to affect sustenance of local people
• Poverty Alleviation
– Ensure Job creation
– Enhance Public revenues – pay taxes and levies
– Enhance Skills and introduce modern technology
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CSR IN GLOBAL CONTEXT
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EMBEDDED FIRM
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KEY DRIVERS OF CSR
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KEY DRIVERS: NGO ACTIVISM
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KEY DRIVERS---LITIGATION
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PRINCIPLES FOR RESPONSIBLE INVESTMENT
www.unpri.org
The United Nations-supported Principles for Responsible Investment
is an international network of investors working together to put the
Six Principles for Responsible Investment into practice.
Signatories will
1 …incorporate ESG (Environmental, Social, and Corporate Governance)
issues into investment analysis and decision-making processes.
2 …be active owners and incorporate ESG issues into their
ownership policies and practices.
3 …seek appropriate disclosures on ESG issues by the entities in
which they invest.
4 …promote acceptance and implementation of the Principles within
the investment industry.
5 …work together to enhance their effectiveness in implementing the
Principles.
6 …each report on their activities and progress towards implementing
the Principles.
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United Nations Initiatives
• The United Nations Global Compact --- a voluntary
initiative based on CEO commitments to implement
universal sustainability principles and to undertake
partnerships in support of UN goals.
• UN Principles for Responsible Investment
• UNEP ---- Equator Principles
• ILO --- Labor organization –a Tri-Partite Declaration of
Principles concerning Multinational Enterprises and Social
Policy (MNE Declaration)
• UNHCR --- High Commissioner for Human Rights
• UNODC -- Drugs and Anti-corruption
• UNCTAD – Conference on trade and development --- a
Corporate Responsibility reporting World Investment Report
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IMPLICATIONS FOR ENTERPRISES
• Development of Codes of
Conduct and CSR reporting Transnational Corporations
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IMPLICATIONS FOR ENTERPRISES:
TRANSNATIONAL COMPANY
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CSR MANAGEMENT-- SYSTEMS APPROACH
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CSR Management:
Management structure
Example: Chiquita
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CSR MANAGEMENT
Do
Plan
• Establish management
• Consult stakeholders
systems and personnel
• Establish code of conduct
• Promote code compliance
• Set targets
•Provide Finances
Act Check
• Corrective action • Measure progress
• Reform Systems, • Audit
Processes and Procedures
• Report
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CODE OF CONDUCT
Issue emphasis varies by industry
Heavy
Industry
Light Environment
Industry
Fair Employment &
Labour Rights
Services
Rule of Law
Multi-Sector
0 20 40 60 80 100
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SPHERE OF INFLUENCE
Who – is to be influenced?
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SPHERE OF INFLUENCE
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SPHERE OF INFLUENCE
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SPHERE OF INFLUENCE
Example: Mattel
Who: Suppliers, JVs and branch plants
What: OSH (Occupational Safety & Health)
How: Focus on manufacturing processes, HR, factory design
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CSR MANAGEMENT:
GOVERNING THE VALUE CHAIN
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COMPLIANCE MANAGEMENT:
MANAGEMENT BY CERTIFICATION
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PRINCIPLES OF SR
1. Ethical behaviour
2. Respect for rule of law,
3. Respect for international norms of behaviour
4. Respect for and considering of stakeholder
interests
5. Accountability
6. Transparency
7. Precautionary approach
8. Respect for human rights
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ISO 26000 Roadmap
Principles of SR
1. Ethical behaviour 2. Respect for rule of law, 3. Respect for international
norms of behaviour, 4. Respect for and considering of stakeholder interests,
5. Accountability 6. Transparency, 7. Precautionary approach 8. Respect
for human rights
Defining Integrating
scope into organization
Fair operating practises
Community & society
Implementing
Consumer issues
Labour Practises
Human Rights
development
Environment
in daily practise
Evaluating
performance
Enhancing
credibility
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Communicating
CSR Management:
Emerging standards in CSR Reporting
International Standards of
Accounting and Reporting (ISAR)
A project of UNCTAD
www.unctad.org/isar
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IMPLICATIONS FOR DEVELOPMENT
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IS CSR GOOD FOR GROWTH?
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William C. Fredrick contributed to an early definition of
corporate social responsibility.
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The World Business Council for Sustainable Development
CSR is a continuing commitment by business3
• To behave ethically
• To contribute in economic development to
improving the quality of life of the:
– Workforce and their families
– The local community and
– Society at a large
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Format of CSR in Pakistan
• Corporate philanthropy
• Energy conservation
• Environmental protection measures
• Community investment and welfare schemes
• Consumer protection measures
• Welfare spending for under-privileged Classes
• Industrial Relations (IR)
• Employment of special persons
• Occupational safety and health (OSH)
• Business ethics and anti-corruption measures
• National-cause donations
• Contribution to national exchequer (Taxes)
• Rural development programs. (NRSP and BISP etc)
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Org working for CSR in Pakistan
• Ministry of Commerce
• State Bank of Pakistan (SBP)
• Securities and Exchange Commission of Pakistan (SECP) Š
• Chambers of Commerce and Industry, Pakistan (CCIP)
• Ministry of Information Technology Š
• Oxfam (NOVIB) Š
• Global initiative reporting (GRI) Š
• Pakistan Compliance Initiative (PCI) Š
• Pakistan Centre for Philanthropy (PCP)
• International Labor Organizations (ILO)
• Responsible Business Initiative (RBI) Š
• United Nations Development Programme (UNDP) Š
• United Nations Industrial Development Organization (UNIDO)
• Institute of Chartered Accountants of Pakistan (ICAP)
• Institute of Cost and Management Accountants of Pakistan (ICMAP)
• National Commission for Human Development (NCHD)
• Global compact Foundation Pakistan (GCFP)
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Thank you.
Next week we would do case
study on Coca Cola
already sent via email and also
hold a quiz of LP-7
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