4th Wheel Newsletter July,2011 Issue 2

8/6/2019 4th Wheel Newsletter July,2011 Issue 2

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July 2011

THE FREQUENTLY ASKED QUESTION OF CORPORATE SOCIAL

RESPONSIBILITY ...... ARE THERE ANY TANGIBLE BENEFITS TO CSR ?

Yes. Here is how companies have changed their strategies from

charity based CSR to sustainability and responsible practices thereby

generating profits and doing good. (This argument is not only focussed

on CK Prahlads case studies)

The market contradictory to the state is all about profits. Every

committed business man looks at profits and Return on Investments.

This is justifiable from the fundamentalist view of Milton Friedman who

stressed that the only motive of a business establishment should be its

shareholders. We are in a stakeholder world of the 21st century and not

a shareholder world anymore. That being said, the focus of a business

house on their investment returns and the legitimate question on why

engage in social development to such an extent that it impinges on the

basic crux of the profit motive, should not be frowned upon, calling it

selfish and a way to fulfill vested interests.

The 2001 survey of 536 companies across India, conducted by

Partners in Change reveals that philanthropy is the most significant

driver (64%)of CSR, followed by image building(42%), employee morale

(30%) and ethics(30%), respectively. The CSR survey conducted in

2002 by British Council, United Nations Development Program,

Confederation of Indian Industries and Price Waterhouse Coopers

proved that the philanthropy model of CSR is most rampant and

highlighted the growing recognition of companies that philanthropy isno longer sufficient in the realm of CSR.

Hotel Orchid, Sony, Toyota and ITC have adopted environmental

sustainable methods in the areas of solid waste management, energy

efficiency, water conservation and preservation and others. These have

reduced their operational costs to a larger extent and have also

provided unique positioning in the minds of the consumers. This is not

a charity based approach but stresses on responsible business

practices and merges the facilitation of common good for society with a

businesss core competencies.

ITC and Unilever in their initiative to uplift the rural sector have entered

the rural consumer market by providing products at subsidized costs. In

a similar way, companies like Tata Consultancy Services and Wipro

distribute their special softwares to help teachers impart computer

education to rural students

CREATIVEPHILANTHROPHY

A portal to ignite energy and enthusiasm towards CSR

In this issue

Pg 2 -Examples of Profitable CSRPg 3 - The benefits to CSR

Pg 4 & 5- Views generated at a CSR

seminar organized by 4th Wheel

Pg 6 - 4th Wheel suggests...


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A few examples .................

"PUMA's Clever Little Bag sets the bar for

responsible corporate citizenship! Using 65%

less paper to manufacture, reducing water,

energy and diesel by 60% per year and

representing a 10,000 ton per year reduction in

carbon emissions, PUMA's packaging is much

more than a "clever little bag". It's a rally cry for

the true power and ROI of great design in the

21st century!".

An approach which may capitalize on a new

opportunity and address the needs of certain

key stakeholders like a food retailer creates

strategy on combating obesity and an

automobile industry works on traffic safety by

introducing training in safe driving methods

would be a good way to engage in advertising

and cause related marketing.

Starbucks has found a solution in their program

Coffee and Farmer Equity (CAF) practices. To

become a Starbucks caf practices strategic

supplier farmers, processors and suppliersmust meet minimum requirements and

demonstrate best practices that are subject to

independent verification under its guidelines.

High scoring suppliers receive preferential

buying status, high prices and better contract

terms.

Nestles Infant formula product distribution,

included nurses on commission to promote their

baby milk product

Kansai Nerolac paints Limited has developed

technology to reduce the usage of hazardousmaterials in their paints.

Law suits filled on companies due to lapse in

fulfilling their social responsibility at their marketplace leads to expensive repair. In the case of

MacDonald Corporation, it had to pay $ 10million to vegetarians and religious groups in a

proposed settlement in March 2002.

Toxic link a delhi based NGO states that India

annually generates $1.5 billion of e-waste andcompanies like Wipro Ltd. have developed

policies to buy back computers to recycle

electronic waste.

Under the Hindustan Unilever Limited, Shaktientrepreneur project, rural women are trained

to be independent direct to consumer salesdistributors for HUL soaps and shampoos. They

earn double their previous income and this hashelped HUL have access to a new supply chain

at low cost and high community support.

The French dairy company Danone and the

Grameen Group signed a joint venture in 2006whereby a social business was created with an

initial capital of $1 million. The business wouldmanufacture and distribute fortified dairy

products in Bangladesh without incurring lossesand maximizing the benefits of the clients

served.What are these benefits?According toDanone's Chairman and Chief Executive Officer

Franck Riboud the benefit is "To bring healththrough food to the largest number of people in

Bangladesh"

Cisco supports the LifeLines India program in

India, a multi-stakeholder partnership whichprovides small-scale rural farmers with access

to useful farming advise via a voicemail systembased on the Cisco Unified Messaging platform.

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EDITORS NOTEStudies have confirmed the low

levels of CSR activity and the

even lower demand for executing

social development activities

by business houses in the

country. One of the reasons for

this lack of interest is astraight forward answer to our

cover page question.

We as a young social enterprise

have as our vision a future

where business houses partake

in creating a sustainable and

equitable world and work in

collaboration with other

development entities like NGOs

and the government.

We research current CSR

endeavors of companies,

approach and convince companies

who do not engage in CSR andassist companies to execute CSR

activities.

In this entire spectrum of

work, at every step, one strong

and difficult question

confronted us. What are the

tangible benefits of CSR? Is it

merely intangible benefits of

gaining visibility and a

legitimacy to operate in

society as a hot favorite

company?

We knew the answer but toconvince our clients or our

potential clients we decided

our issue would highlight and

explain the ample benefits

accrued with a CSR initiative.

Most CSR endeavors require

investments whether it is

charity based or is

incorporated into core business

operations. Our solution to

this question is to move from

the tradition of philanthropic

CSR to something more creative,

innovative, self sustainingempowering models which

fulfills the market need for

profits in addition to social

and human development.

A charity approach towards CSR

cannot be demeaned but the only

argument against that is the

dependence it creates and the

fact that nor are profits

ploughed back to the company

and nor is any real lasting

tangible benefit created for

the stakeholders of the

company.

We look forward to your inputs

and views readers !


3/6[3]

CSR strategy aims at managing the economic, social and environmental

impacts of business operations to maximize benefits and minimize the

downsides.A companys performance as a responsible business

is key to financial and stock market standing, helping

to protect it from instability and share price

volatility. CSR initiatives and cause related

marketing helps build reputations and goodwill

among suppliers and customers. CSR as a form of

strategic branding, serves as a tool in

differentiating from competitors as global consumers

today are more selective and sensitive to consider a

companys image and CSR efforts. A small firm that is

certified to have environmental and social standards like

ISO 14000, ISO 9000, SAI 8000, UN Global Impact

principles among others, has more potential to be a

supplier to international retailers like Marks and Spencers,

Levis, Mitsubishi, etc. The growth emphasis on SRI

(Socially Responsible Investments) clearly indicates that

companies with a good CSR standing is more likely to

secure equity and debt capital.

Recent surveys indicate that corporate social

responsibility is increasingly an important factor in

attracting and retaining a talented and diverse workforce

(Globescan Inc 2005). Companies that account

for the interests of their employees by

offering good working conditions will

achieve better performance in terms of

quality and delivery, and,

therefore, experience higher levels of

productivity.Learning and innovation are

critical to the long-term survival of any

business.Corporate

social responsibility can be a vehicle for business to

respond to environmental and

societal risks and turn these into business

opportunities.Companies that fail to manage their

responsibilities to society as a whole risk losing

their license to operate a concept whereby a

companys stakeholders grant the company an unwritten

authority to do business. This may be evidenced by

favoring competitors, boycotts or calls for de registration of

companies. Thus the requirements of the global market

place and the advantages of engaging in participatory CSR

has innumerable pros and fewer cons.

India represents the most

rapidly growing economy

and is one of the

developing nations where

social and environmental

crises are most acutly felt.(iMF,2006; WRI, 2005;

UNDP,2006)

CSR- A FORM OF

STRATEGIC BRANDING


4/6[4]

4TH JUNE, 2011A seminar on Sustainable

Business models as an effective

form of CSR investments

PARTICIPANTS

Mr. Asit Vora,Mayor,Ahmedabad City

Mrs. Sushama Oza,CEO,Adani Foundation

Mr. Ajay Dixit , Centre for Social

Entrepreneurship & CSR,Entrepreneurship DevelopmentInstitute (EDI)

5th June, 2011.


5/6[5]

Actionable IdeasAn exercise conducted to generate dialogue on

the issues and solutions for more effective CSR

between five different stakeholders in society.

The state Corporates Ngos/ Civil Society Students Sustainable social

enterprises

Public private

partnerships should be

established for water

and solid waste

management among

other social cause

initiatives

There is a trend of one

off charity and

achieving the license to

operate in an area at

the basis of CSR

initiatives

Support- Managerial,

technical and financial

is required by NGOs

which should be

provided through CSR

The young population

needs to be made

aware and educated

about social

responsibility

There is a lack of a

regulatory framework

for investing in social

businesses

Incentive creation for

participation in

development by

corporates

The lack of a holistic

approach and

understanding leads to

a disconnect between

CSR and employees of

a company

Serve as a monitoring

agency in society- as a

watchdog over ill

practices of entities and

hence need better

understanding between

the entities

Develop future

leadership by

incorporating the study

of CSR in management

schools curriculum

It is difficult to get

corporates to invest

without a tax break.

A combination of thepublic sector, private

sector and civil society

to work in collaboration

for inclusive and

sustainable

development

CSR should be madepart of ones business

strategy but it is difficult

to execute since CSR

initiatives lack

quantifiable and

measurable impact

assessments

Requirement of sectorspecific expertise

(Housing, Livelihoods,

Water) from corporates

Search a cause andpurpose to work

towards

There should bemetrics to track

progress of a CSR

initiative

There should be an

increase in the

awareness of citizens,

towards cultural

integration, educationand skills development

CSR should be owned

by all departments and

there should be a cross

functional team,

investing time andknowledge to engage in

a learning and

participative process

The NGO model which

has worked for time

memorial for efficient

social service delivery

should not be forgottenwhen one engages in

CSR

A growing increase in

professional career

choices towards CSR

and social development

Key issues identified:

-Investment

mechanisms

-Partnership

frameworks-Innovation

Views generated from the seminar towards CSR and social responsibility


6/6[6]

RECOMMENDATIONSOrganizations, blogs, books, movies,

documentaries, movements, events

THE 4TH WHEEL

A Corporate Social Responsibility consultancy, advocacy and research firm.

The name signifies the business sector in addition to the other three integral

wheels- the state, NGOs and international development organizations, required

and capable of driving human development.

Services

FOR CORPORATES

Strategising and planning CSR projects/ Needs Assessment

Project implementation for corporate firms

Channel corporate decision making in socially desirable activit ies

Monitoring and Evaluation of existing CSR/social and human development

projects

Stakeholder identification/mapping/ engagement

Stakeholder Cause promotions

Compilation of CSR reports

Collaborations with NGOs

Creating partnerships between Corporates, the State and Civil society

FOR NGOsProject development

Events planning

Content writing

IT support

ADVOCACY, RESEARCH AND EDUCATION

Promoting CSR practices

Heighten public awareness and create platforms for discussion and

suggestions regarding CSR and its potential through seminars and workshops

Developing case studies and best case practices

Editor Sharon WeirContent Payal Mulchandani

Design Tania Lakadawala

Art & Logos Sameer Singh &Pravin Mishra

Marketing & Circulation

Salomi Gupte

WRITE TO USInviting views, suggestions and

feedback from corporates, NGOs,

Government employees, professionals,

media, entrepreneurs, businessmen,

academicians, social institutions,

students and anyone interested in the

well being of society

4th Wheel

16 Pahelgaon bungalows, near

judges bungalow road,

Ahmedabad, 380015

www.the4thwheel.com

http://the4thwheel.wordpress.com/

[email protected]

+919825885044, 079-40092492

E VENTS

A Bike Expedition to Build Back Better

24th July 15th August 2011

Mumbai, Ahmedabad, Jaipur, Delhi

The Leh Disaster Response Project will help in rebuilding

24 homes which were completely destroyed in the flood and

mudslides in Leh, Ladakh last year. With support, the project

will provide these families safe, environmentally friendly,

culturally relevant and disaster resistant shelters. These new

houses will enable the families to survive the extreme cold

weather they are faced with each winter.

The 5 riders who are physically handicapped will ride fromMumbai to Leh to dispel stereotypes of being dependent and

motivate other differently abled to explore their own strengths.

Each rider has pledged to raise Rs.300000/- to help build backbetter for a family.Will you help them?

Ahmedabad - 1st August, 2011 !!!!!!!!!!!!!
http://the4thwheel.wordpress.com/http://www.the4thwheel.com/mailto:[email protected]:[email protected]://the4thwheel.wordpress.com/http://the4thwheel.wordpress.com/http://www.the4thwheel.com/http://www.the4thwheel.com/

4th Wheel Newsletter July,2011 Issue 2

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