Corporate Social Responsibility

1. Corporate Social Responsibility LECTURE 24: Corporate Social Responsibility MGT 610

2. Corporate Social Responsibility Chapter 6 Framework For Rating Corporate Social Responsibility

3. Corporate Social Responsibility LEARNING OBJECTIVES Understand the importance of CSR reporting Create awareness about the various reporting criteria followed to report CSR Understand how conscientious organizations are committed to the concept of CSR Learn from CSR reporting frameworks of various agencies and organization

4. Corporate Social Responsibility • Available accepted rating frameworks • Specialized Securities Indexes • Replicate stock sector reporting in social and environmental sector • Dow Jones US water Index • Global Water ResourcesAbout 70% of the earth's surface is covered in water, but 97% of it is salt water, which is unfit for human use. Salt water cannot be used for drinking, crop irrigation or most industrial uses. Of the remaining 3% of the world's water resources, only about 1% is readily available for human consumption.

5. Corporate Social Responsibility Global ShortageRapid industrialization and increasing agricultural use have contributed to worldwide water shortages. Areas that have experienced water shortages include China, Egypt, India, Israel, Pakistan, Mexico, parts of Africa and the United States (Colorado, California, Las Vegas and the East Coast), to name but a few.Pollution also highlights the need for clean water. In the U.S., the dead zone off the Gulf Coast highlights the impact of fertilizer runoff, and methyl tertiary butyl ether (MTBE), an additive in unleaded gasoline, can be found in well water from California to Maryland. Overseas, highly publicized incidents in Russia, China and elsewhere demonstrate that pollution isn't limited to the West. Of course, fouled water supplies further limit the amount of fresh water available for human use.

6. IndexesLike any other scarcity, the water shortage creates investment opportunities, and interest in water is at an all-time high. Here are some of the more popular indexes designed to track various water-related investment opportunities:- Palisades Water Index - This index was designed to track the performance of companies involved in the global water industry,   including pump and filter manufacturers, water utilities and irrigation equipment manufacturers. The ticker symbol for the Palisades - Water Index is ZWI. The index was set at 1000 as of December 31, 2003. It closed at 1351.08 on December 30, 2005. Corporate Social Responsibility

7. Corporate Social Responsibility  - Dow Jones U.S. Water Index - Composed of approximately 23 stocks, this barometer climbed from 500 to 800 over the 12 months ending December 31, 2005. The ticker for the Dow Jones Water Index is DJUSWU.- ISE-B&S Water Index - Launched in January 2006, this new index represents water distribution, water filtration, flow technology and        other companies that specialize in water-related solutions. It contains 20 stocks. The ticker for the ISE-B&S Water Index is HHO.

8. Corporate Social Responsibility • Available accepted rating frameworks • Specialized Securities Indexes • FTSE4GOOD Index Series • The FTSE4Good Index Series has been designed to objectively measure the performance of companies that meet globally recognised corporate responsibility standards. Transparent management and criteria make FTSE4Good a valuable tool for consultants, asset owners, fund managers, investment banks, stock exchanges and brokers when assessing or creating responsible investment products

9. FTSE4Good can be used in four main ways: • Investment • As a basis for creating index-tracking investments, financial instruments or fund products focusing on responsible investment • Research • To identify environmentally and socially responsible companies • Reference • As reference by which companies with a transparent and evolving global corporate responsibility standard can assess their progress and achievement • Benchmarking • As a benchmark index to track the performance of responsible investment portfolios Corporate Social Responsibility

10. Corporate Social Responsibility • Available accepted rating frameworks • Regulatory bodies and stock exchanges • SEBI in India • SEC in US • CRE in UK • Companies do in house CSR reporting and publish it for public consumption • Agencies that help in rating socially relevant activities and companies often solicit their intervention in rating sustainable activities • Business in the community (BITC)

11. Corporate Social Responsibility At the start: Why and how we began In 1982, in the wake of riots in Toxteth and Brixton, the UK was suffering from high levels of unemployment and inner-city unrest. Business in the Community was created following a government conference where a group of US business leaders involved in the urban regeneration of Baltimore and Detroit in the 1970s shared their experiences with their British counterparts. Supporting economic regeneration Our organisation was formed by a small number of companies from both private and the public sector. Early supporters included Barclays Bank, BP, British Steel (Industry), IBM, ICI, Marks and Spencer, Midland Bank and WHSmith. Regeneration was our initial focus; we acted as a broker for companies supporting local enterprise agencies with cash, premises, equipment, expertise and employee volunteering.

12. Corporate Social Responsibility 1980s: Local enterprise agency champion Business in the Community encouraged companies to support local enterprise agencies as a way of business helping to regenerate local economies affected by corporate closures to create new employment opportunities. We recognised the social costs of ignoring the human consequences of massive corporate restructuring. Major activities included supporting small business development and re-skilling. Following the enterprise agency model In the early to mid 1980s many companies were restructuring, partly as a result of government reforms, and Business in the Community was actively promoting the Enterprise Agencies. This received a boost when the government announced a cash incentive – on a declining scale over three years – to match rising business contributions. We then travelled around the UK to persuade local businesses to get involved in regeneration initiatives based on this model. Charitable status and a royal president In 1985, we had 108 member companies and HRH The Prince of Wales became the organisation’s president. We were also the ‘umbrella’ for more than 300 local enterprise agencies.

13. Corporate Social Responsibility 1990s: A maturing agenda Business was driven by a need to address the UK’s decline in the international competitiveness league tables, improve basic skills in literacy and numeracy, and find new talent through a diversified workforce. Engaging business leaders and rising stars In 1990, HRH The Prince of Wales established his Seeing is Believing programme; a simple yet effective tool to inspire business leaders to take action in their local communities. It began as a single project and we asked executive search firms to share the business leaders they were tracking in order to produce an invitation list for the first SiB visits. Each visit was led by a business leader committed to Business in the Community and the relevant topic. Senior business figures and rising stars were taken to look at a social problem in a specific part of the UK and then report back to The Prince.

14. Corporate Social Responsibility 2000s: From CSR to responsible business By 2001, we had 700 member companies. Competitive advantage for individual companies and the pressures of sustainability as a business challenge were the new business drivers. We turned our attention to how business carries out its core activities and the effects it has in the workplace, the marketplace, the community and on the environment. A more accurate language Our language switched to ‘corporate social responsibility’ (CSR), but this was often used to describe community involvement only. We then began to refer to ‘corporate responsibility’ (CR), which was understood to include environmental impacts too.However, US business often linked CR with ‘corporate governance’, so we moved to ‘responsible business’. This signifies how business aims to operate overall, as well as particular activities and programmes.

15. Corporate Social Responsibility The context of our organisation today Since 1982, we have mobilised business and worked with leaders to take action in some of the UK’s most deprived communities. Our greatest success has been getting influential business figures involved, and keeping them involved.We’re now the UK’s largest business membership organisation committed to corporate responsibility. Our staff numbers have grown from 5 secondees in 1982 to over 350 employees today.We have over 830 members, with 1 in 5 of the UK private sector workforce employed by a member company. In addition, a further 3,000 companies are engaged through our programmes and campaigns. Global reach and local action Leading politicians from all the major parties and thousands of voluntary and community organisations have been involved. We have a local and global reach through our regional network and worldwide partners. With the G20 protests in London and the global recession as a back drop, we are working with business to rebuild public trust. We are also continuing with campaigns related to climate change and investment in staff.

16. Corporate Social Responsibility • CR Index • Developed in consultation with businesses, the CR Index challenges and supports large organisations to integrate responsible business practices. • Our approach • It takes the form of an online survey and companies follow a self-assessment process intended to help them identify both the strengths in their management and performance and gaps, where future progress can be made. Business in the Community believes that self-assessment is the starting point for action and improvement, but it independently validates submissions to ensure reliability and consistency •  The CR Index supports companies to: • Identify gaps for improvement and reinforces good practice • Track progress over time and drive continuous improvement • Benchmark performance against peers and leading practice • Engage board members and raise awareness of CR issues internally

17. Corporate Social Responsibility Participation Companies can choose to use the tool on either a public or private basis. Public participants are included in the annual CR Index ranking and demonstrate a commitment to transparently improving their social and environmental performance Private participation is designed for companies not ready to disclose their performance and focuses on providing guidance and feedback help organisations better integrate and improve their CR performance.