From CSR to responsible business

Giving back” continues to be the flavour of the day, particularly among returning NRIs and domestic billionaires. The latter have been egged on by the likes of Bill Gates (through his personal example) to committing substantial parts of their wealth to charity. While yet limited, any such philanthropic action by individuals is welcome, all the more so in a country where—as a recent report by Oxfam International highlights—1% of the population owns 58% of the wealth.

“Giving”, though, is too often limited to cheque-book philanthropy. Contributing to development is, therefore, mainly through donating funds. This approach is now echoed in the Companies Act 2013, which seeks to mandate corporate social responsibility (CSR) for larger companies.

 It specifies a fairly wide range of activities that can be undertaken within the ambit of the mandatory (comply or explain) 2% spend on CSR, but has an option of just giving the amount to the Prime Minister’s Relief Fund. This is conceptually similar to the far more widespread religious donations, made in the belief that giving money in the name of gods will buy blessings or success.

Surely corporates do not consider their social responsibility as being fulfilled by writing a cheque of 2% of their profits? Even for highly profitable companies, this amount would be of the order of 0.5% of their revenue; for others, it would be much smaller. 

Taking turnover as a reasonable surrogate for activity, what is their social responsibility for the remaining 99.5% of their operations? Clearly, it is necessary to consider the totality of their operations and not merely a fraction of 1% of it. This holistic perspective is the essence of “business responsibility”, a concept of which CSR is only a small part.

So what is it that a company should do to be a responsible business? Some things are obvious, and amount to basic hygiene for a company. These include complying with the law; taking care of stakeholders, including employees, customers, suppliers, investors; being aware of any health and environmental impact that result from its activities; and operating with complete honesty and integrity. 

In addition, the responsibility of business must include ensuring and contributing to the well-being of the local community and others affected by the operations of the company. It must also contribute as best as it can on the environmental impact it creates, through measures to conserve and recharge water, power, and by recycling, waste handling and minimization of pollution.

The crux of business responsibility is not only a totality-of-business approach, but also the need to go beyond the legally mandated. To their credit, industry associations have tried to do this and defined guidelines for business responsibility. However, the voluntary adoption of these has been low and disappointing.

Companies, particularly bigger ones with their strong financial muscle, could well ensure better business responsibility on the part of their suppliers. This could include governance and financial standards. 

They might also consider giving preference to businesses that—through their employment policies, location or ownership—contribute to greater inclusiveness. Needless to say, this has to be rooted in the company’s own governance, employment and other policies, which must include diversity and inclusiveness as key elements.

In many cases, large investors have a substantial influence on companies. They, too, could use such financial muscle to promote responsible business. Civil society organizations have an important role, given their growing ability to influence opinion. Having devised measures to assess performance on the dimension of business responsibility, and disseminating reports on this, they could work proactively with companies to help them promote responsible business.

Through government action, India has been a leader in legally-mandated CSR. Can corporates now take the lead in going beyond this and make India a global leader in business responsibility?

-Live Mint

Making Every Bit Count

The trend towards adopting CSR (corporate social responsibility) structures within companies started early as the 70s and 80s. Today that trend has become a critical pillar in decision making across companies’ supply chains.

There is a vast array of financial benefits that can be gained and significant cost savings by embarking on environmentally sustainable operational initiatives. Today, it has become a trend amongst industry players to track companies which excel at ESG (environmental, social and governance factors) and interestingly enough, they are making the link between better financial performance and better ESG. Companies listed on international stock exchanges with strong CSR (corporate social responsibility) reputations generally experience fewer declines in share price compared to others who are not.

According to a study done by MIT’s Sloan School of Management, companies believe that adopting a strong CSR (corporate social responsibility) culture will be critical to their business success in the near future.

Significant cost reductions can result from improving operational efficiency through better management of natural resources like water and energy, as well as minimising waste. Over the years, studies have shown that companies average a 27 to 80 per cent return on investment on their low carbon projects.

Sandvik’s commitment to the environment

More and more companies that manufacture cutting tools are exploring the prospect of tool recycling. Sandvik leads the industry in terms of its Carbide Recycling Program with the aim of recycling major minerals, especially tungsten, a finite resource, for the production of new high-grade tools. It utilises the environmentally friendly zinc process for carbide recycling, consuming 75 per cent less energy as compared to using virgin materials. Impressively, this process also means that carbon dioxide emissions are reduced by 40 per cent against other recycling methods.

Cemented tungsten carbide technologies are currently used in various industries to produce a variety of hard metals, such as cutting tools for machining processes in heavy industries. In the production of cemented carbide tools, the use of alternative minerals for production is not an option, aside from tungsten, hence the procurement of carbide tools can become an expensive exercise.

Sandvik Mining and Rock Technology’s Carbide Recycling Program in Australia is one such program that provides manufacturers the option to recycle their tools and be reimbursed for a fair price. Known as the ‘no-cost’ arrangement to customers, refunds on recycled and collected materials may reimbursed by Sandvik in the form of cash, charitable donation, or an alternative arrangement, as specified by the customer. Reimbursement costs are determined by the price of carbide at the time, which has not fluctuated greatly in recent years.

The future for sustainability looks bright as Sandvik continues to partner with customers who are equally dedicated to achieving their CSR goals through environmental best practice and innovation.

 -Australian Mining

4 Reasons Why Your Small Business Should Give Back

Regardless the size of your business, it’s always good to give back. Corporate social responsibility is the basic notion of being mindful of every stakeholder when conducting business. This means your business provides both social and environmental benefits on top of earning profits. Besides being a socially responsible business, here are four more reasons why giving back can benefit your overall business.

Attract Dedicated Employees and Customers

 The more socially responsible your business, the more active you will be in your community. When looking for employment, people are attracted to reputable companies. Especially millennials.

In a 2015 Cone Communications Millennial CSR Study they found that, “Millennials say they are prepared to make personal sacrifices to make an impact on issues they care about, whether that’s paying more for a product (70 percent vs. 66 percent US average), sharing products rather than buying (66 percent vs. 56 percent) or taking a pay cut to work for a responsible company (62 percent vs. 56 percent)”

As the millennial workforce grows they’re beginning to show their true strength. Not only are they more likely to spend money on socially responsible brands, but they are even willing to take a pay-cut for a job. If your business takes the time to give back, these numbers clearly show you most definitely can increase your bottom line and do good at the same time.

Healthier Conscience 

Studies have shown that we’re in fact hard-wired for giving. That means there are both psychological and physiological benefits for being charitable. If you are aimed to be a happier healthier entrepreneur than look no further than philanthropy! Here are two ways in which business owners find the most pleasure from giving:

·         Donating in doses: It’s always hard to see your money go, but it’s less painful when it’s for a good cause. There’s no reason why you need or should write a big check to your local hospital. Make smaller payments over time so you don’t break the bank but instead you’re constantly pitching in to make a difference.

·         Donating skills and expertise: The best feeling is making a difference without needing to break out the check book. Look to donate your time or skills towards a cause that you know will benefit. For example, if you’re a great marketer help organize a fundraiser or charity drive.

Networking

Philanthropic events are a great place for networking. Influential people tend to be very involved with charities. If you catch wind of any charitable events like fundraisers, galas, or auctions it’s definitely a good idea to participate. These events typically draw the attention of wealthy and influential individuals. You may meet a potential investor, partner, or at the very least get some free advice.

Supercharge Your Marketing

 As mentioned above, socially responsible businesses have a strong presence in their communities. For example, charities will post photos of their sponsors and companies that have offered support. This will increase both brand recognition and customer loyalty.

In addition to traditional marketing, social media marketing and philanthropy were a match made in heaven. According to the same Cone Communications study, “More than nine-in-10 Millennials would switch brands to one associated with a cause (91% vs. 85% U.S. average), and two-thirds use social media to engage around CSR (66% vs. 53% U.S. average).”

Millennials already represent $1 trillion in buying power in the U.S. alone. The more socially responsible content your business can produce, the more you’ll be able to engage with this demographic. The numbers don’t lie, it’s definitely worth your while

In the end of the day, it’s our responsibility as humans to give back to one another. Whether you’re a freelancer or multinational corporation we must all work together to not only put cash in our pockets, but ultimately make the world a better place.

-Black Enterprise

BDL to sponsor 15 she-toilets

Funds continue to pour in for the construction of she-toilets in the city. On Wednesday, the Bharat Dynamics Limited (BDL) came forward to sponsor 15 toilets as part of their CSR (Corporate Social Responsibility) initiative.

It was conveyed to the GHMC (Greater Hyderabad Municipal Corporation) officials by the BDL authorities that apart from the 15 she-toilets, they will try to construct some more after their general body meeting.

The engineering officials of the GHMC were instructed to identify suitable places in the city to set up the units.

-The Hindu