Download - 4th Wheel April 2011 Newsletter

8/7/2019 4th Wheel April 2011 Newsletter

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April 2011

A portal to ignite energy and enthusiasm towards CSR

INTRODUCTION TO THE NEWSLETTERThe fact that Corporate Social Responsibility (CSR) has gained tremendous importance cannot be debated.

Owing to globalization and increasing economic power and

influence in society, the business sector has been assigned or gained

a new role in society. There has been an increase in the expectation

from businesses in the role they would play in the betterment of

society.

The United Nations Global Compact, a policy initiative for

corporate entities committed to aligning their businesses with

universally accepted principles in areas such as human rights, labour,

the environment and anti-corruption, and the voluntary guidelines on

Corporate Governance and CSR released by Indias ministry of

corporate affairs in 2009 are two examples of the heightened

importance of CSR nowadays.

There has been a drastic change in the way CSR is perceived. It

is no longer about charity. There has been a shift to profitable and

sustainable business models to combat underdevelopment.

One way has been the use of organizational skills to create a

social impact. For example FedEx Corp., the worlds largest logistics

services company, provides contributions as well as logistics and

transportation support for emergency and disaster relief. Microsoft

Corp. launched Unlimited Potential (UP), a global initiative focused on

imparting technological skills to disadvantaged individuals through

community-based technology and learning centres.

The other wave has been of socio-commercial investments, suchas technology multinational Apple Inc. donating computers to schools,

thereby increasing the usage and appeal of their systems.

Another popular method has been to integrate CSR with a

companys business model, such as in the case of Starbucks Corp.

working with Conservation International, a not-for-profit that seeks to

protect ecosystems and biodiversity in order to ensure human health,

to support farmers in minimizing their impact on the local

environment.

This reflects an increasing understanding among businesses that

they can play a positive role in societies where they operate and invest

and contribute to social and economic development.

Looking at current trends and the heightened sense of

responsibility of business houses, it is essential to get the ball rolling

and ignite enthusiasm and dialogue on CSR. This newsletter aims to

increase awareness of CSR among corporate entities and the masses

and invite views on pressing social ills and problems.

United Nations Global Compact

Never before in history has there been a

greater alignment between the objectives of

the international community and those of the

business world! Common goals, such as

building markets, combating corruption,

safeguarding the environment and ensuring

social inclusion, have resulted inunprecedented partnerships and openness

between business, governments, civil society,

labour and the United Nations.

CREATIVEPHILANTHROPHY

In this issue

Pg 2 -ExplainingCSRPg 3 - Our Influences

Pg 4 - Currentendeavors

Pg 5 - An introduction to

CSR in India

Pg 6 - 4th Wheel

suggests...


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CSR is the continuing commitment by business to contribute to

economic development while improving the quality of life of the

workforce and their families as well as of the community and society

at large.(World Business Council for Sustainable Development)In its broadest sense, CSR refers to the firms consideration of,

and response to, issues beyond the narrow economic, technical, and

legal requirements of the firm to accomplish social benefits along

with the traditional economic gains which the firm seeks (Davis,1973).

CSR basically focuses on what an organisation does that affects

the society in which it exists (Stone, Social issues in business, 1987)

CSR is a commitment to improve community well being through

discretionary business practices and contributions of corporate

resources. (Philip Kotler and Nancy Lee, Corporate Social

Responsibility, 2010)

EDITORS

NOTECorporations have gained

immense clout in theprevailing form of

capitalism. The role of

businesses in facilitating

development has long been

debated. We have

progressed to a society,

where businesses are no

longer based on the sole

motive of profit

maximisation. There has

been an acceptance of the

role they can play in

making the effects of

globalisation and business

operations, positive and

reducing the ill effects

by conscious efforts.

These efforts in a broad

sense are termed as

Corporate Social

Responsibility. CSR is an

evolving concept and is no

longer random charity or

philanthropy but is now

looked as key to business

operations, sustainability

and development.Thisendeavorby thecorporate sector should be

accompanied by appropriate

State assistance, guidance

and regulation. Civil

Society and International

Organisations can also

encourage and make CSR

more effective.

This introductory issue

introduces the concept to

the reader and attempts to

generate dialogue and

discussion on the subject.

The 4thWheel, a start upthink tank, in operation

since September 2010 uses

this medium to communicate

their beliefs, interests

and on going projects,

hoping the literature

transpires into ideas,

innovations and support

for CSR.

..WHAT IS CSR?


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INFLUENCES According to Bill gates, self interest is just one of twoforces in human nature. The other is caring for others.The book asserts that the genius of capitalism is that it makes self

interest serve the general interest. Philanthropy and government are

supposed to address our caring for others but there is not enough

philanthropic or government money to solve the worlds problems. It is a

dialogue and presents notable articles by professionals who discuss a

reversed system which should use profit incentives where possible. But

even where profits are not possible, there is a market based incentive:

Recognition. Positive recognition is good for a companys reputation,

good for attracting customers and good for attracting employees.

Creative capitalism is a system where incentives for both profits and

recognitions motivate both self interest and caring for others. Under

creative capitalism, governments, businesses and non profits work

together. Bill Gates gives suggestions of corporations donating money

or products and corporations spending money or using technology to

find new markets in poor countries. An apt example is Tiered pricing

wherein a drug company has a valuable patent and charges full

monopoly price in the developed world but lets poor world

manufacturers produce for less than one dollar a dose. Another example

he gives is the Bono (RED campaign) model under which products are

sold with a small percentage of the profits going to worthy causes in the

poor world.

C.K. Prahlad (2005) has stated that The idea that the

private sector can and should be involved in creating

market-based solutions for the worlds poorestconsumers is gaining credibility.

He highlights various case studies, a noteworthy one being,

Jaipur rugs, operating in India and elaborates on how a company can

benefit the poor by connecting them with global markets. Jaipur rugs

makes this connection by building and orchestrating a global supply

chain on a massive scale- one focussed on developing human

capability and skills at the grassroots level, providing steady incomes

for rural men and women in the most depressed parts of India and

connecting them with market of the rich, such as the US. He gives an

example of the cell phone revolution which has demonstrated beyond

doubt that there is a market for world class goods and services if they

can be made at accessible at affordable prices. The cell phone, we can

say, has shown that the Bottom of the pyramid is not just a market but a

source of innovation in business models and applications. It has

transformed the lives of the poor. We can do well and do good

simultaneously. He mentions organisations which help the handicapped

walk, helps subsistence farmers check commodity prices and connect

with the rest of the world. There are banks adapting to the financial

needs of the poor, power companies reaching out to meet energy

needs, and construction companies doing what they can to house the

poor in affordable ways that allow for pride. He also mentions the

chains of stores tailored to understand the needs of the poor and to

make products available to them.


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CSR in rural areas of Gujarat

Business thrives on a prosperous society. India has 638,596 villages. The rural population is

72.2% (Census of India, 2001). These basic facts make it an important task to cater to

contemporary Indias rural population and their quandary.

The private sector has gained importance and plays a critical part in the growth of rural

India. Their role can be looked at in two different ways, one is to bridge the gap left by the

government and the other to increase their markets. For example when a corporate builds a road

in rural India it not only benefits the community as whole but it is also beneficial to the corporate

which can use these roads to deliver their products to the rural market which stands very

important to them as two-thirds of the country's one billion consumers live in rural India, where

almost half of the national income is generated.

In April 2011, we shall initiate a 6 month research project to document CSR activities in

rural Gujarat and the test the impact and the effect it has on the beneficiaries residing in rural

areas. Examples if companies undertaking CSR in rural areas areAdani Foundation, which works

in the rural areas for agriculture, animal husbandry, water conservation, village institution

building, capacity building and amenities to fishermen, L&T's rural development programs which

touches the lives of people in remote villages and isolated communities through comprehensive

packages of medical services to the communities and ACCs contribution to the rebuilding effort

after the 2001 earthquake in Gujarat which was unique.

Gujarat Livelihood Promotion Co. Ltd (GLPCL) signed agreements at the Vibrant Gujarat

forum, with at least 30 firms, including Reliance Retail Ltd, Tata Motors Ltd, Future Group, ITC

Ltd, Arvind Ltd and National Spot Exchange Ltd to create livelihood options for the rural poor.

These case studies and interventions shall be showcased and understood, thereby leading

to more effective and long lasting change in how CSR is currently undertaken.

Self Sustainable Business

models.An Effective form ofCSR investments.

In India, most CSR funds are

utilized to dole out charities.

There is a dearth of awareness of

business models that lead to

sustainable and inclusive growth and

development in society. Most CSR

activities are charity and fail to build the

capabilities of the beneficiaries.

Through this seminar, we propose

to discuss methods of more effective

use of CSR funds, educate people

about CSR and the need to move from

charity to focused CSR, create a

platform to increase the scope of PPP

models and provide ideas and options

for meaningful CSR. The seminar will

take the participants through CSR

models/case studies of sustainable

projects which are currently running

successfully and the different sectors,

areas and social issues where

sustainable models could undertaken

and how corporates can execute these

ideas.

This is an endeavor to build alliances,

provide opportunities for people to

participate and engage in solving

pressing social issues and share

experiences of agencies involved in

social development, social change and

CSR operations.The speakers will be

reputed academicians, development

professionals, corporate employees,

and NGO spear headers, amongst

others who have achievedcommendable laurels in their respective

fields.

SEMINAR 04/11


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THE TRUSTEESHIP PRINCIPLE

Charity and philanthropy is not new to India. Mahatma Gandhi

spoke of the trusteeship principle. The trusteeship principle is about

equity and sustainable growth.

The principle asserts that organisations have an obligation to see

that the publics interests are served by corporate actions and the way

in which profits are spent.The Gandhi ashram was established and

supported with the charitable acts of big industrialists and philanthropic

individuals.

Indian industrialists were pressurized to demonstrate their

commitment to social progress increased during the independence

movement, which resulted in the development of the notion of

trusteeship, by Gandhi, whereby the owners of property would

voluntarily manage their wealth on behalf of the people. Gandhis

influence prompted various Indian companies to play active roles in

nation building and promoting socioeconomic development during the

20th century. This trend had continued till date and has increased in

scope and extent.

The Gandhian principle

of trusteeship (Gandhi

M.K. Harijan, 1927)

expresses the inherent

duties of the business

enterprises to its

consumers, workers,

community and themutual

responsibilities of

these to one another.

INDIA AND CSR

CSR Voluntary Guidelines

The guidelines were issued at the

conclusion of the first India Corporate

Week in late December 2009

The guidelines set out six core elements

for companies to address

Covered in the core elements are areas

related to 1. Care for all stakeholders; 2.

Ethical functioning; 3. Respect for

workers' rights and welfare; 4. Respect

for human rights; 5. Respect for the

environment; and 6. Activities for social

and inclusive development.

India is one of the latest Governments

to reference the UN Global Compact

principles in formal CSR guidelines or

strategies, as has previously been done

in Norway and Denmark.

2009/10- The government made it

mandatory for all public sector oil

companies to spend 2 per cent of their

net profits on corporate social

responsibility.

2011- The new Companies Bill will

make it mandatory for private

companies to contribute a certain

amount towards corporate social

responsibility activities. The Ministry of

Company Affairs (MCA) has said that

companies will have to spend 2% of the

average net profit on CSR. India Inc. If

approved, mandatory CSR will be made

part of the amendment to the

Companies Bill


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BLOGScraneandmatten.blogspot.com

Two business school professors from the Schulich School of

Business in Toronto, Canada, best known for their books

and research articles on business ethics and corporate

citizenship. Have been writing the Crane and Matten blog

since 2008, offering unique insight on a range of issues from

across the globe.

blog.bsr.org

The business of a better world (BSR) works with its global

network of more than 250 member companies to developsustainable business strategies and solutions through

consulting, research, and crosssector collaboration.

ORGANISATIONS

SustainAbility

A think tank and strategy consultancy working to inspire

transformative business leadership on the sustainability

agenda

Read more about them on www.sustainability.com

Business in the Community (BITC)

Works with over 800 UK companies committed to improving

their impact on society, and operates throughout the UK.

BITC seeks to positively shape business impact on the

environment, in the marketplace, in the workplace and in the

community. It is an organisation that works with businesses

to improve their Corporate Social Responsibility (CSR)

credentials, offering advice and programmes tailored to

meet their needs.

Read more about them on www.bitc.org.uk

RECOMMENDATIONSOrganisations, blogs, books, movies,

documentaries, movements, events

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

Editor Sharon WeirContent Payal Mulchandani

Design Tania Lakadawala

Art & Logos Sameer Singh &Pravin Mishra

Marketing & CirculationSalomi Gupte

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 organisations,

required and capable of driving human development.

Services

FOR CORPORATES

Strategising and planning CSR projects/ Needs Assessment

Project implementation for corporate firmsChannel corporate decision making in socially desirable activities

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 NGOs

Project developmentEvents 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
mailto:[email protected]:[email protected]:[email protected]://the4thwheel.wordpress.com/http://the4thwheel.wordpress.com/http://www.the4thwheel.com/http://the4thwheel.wordpress.com/mailto:[email protected]:[email protected]://the4thwheel.wordpress.com/http://the4thwheel.wordpress.com/http://www.the4thwheel.com/http://www.the4thwheel.com/http://www.sustainability.com/http://www.sustainability.com/http://blog.bsr.org/http://blog.bsr.org/http:///craneandmatten.blogspot.comhttp:///craneandmatten.blogspot.comhttp:///craneandmatten.blogspot.comhttp:///craneandmatten.blogspot.com