Sustainability and CSR ?

Do we need to rethink the way Corporations look at CSR and Sustainability?

Corporate Social Responsibility is defined as businesses positively influencing public policy and impact society by taking responsibility beyond compliance by relating profit, production, protection of environment and human rights issues into their business strategy. The concept was first used in Europe in response to a range of emergent issues in the 70's like pollution generated by businesses which started affecting people living around it . It developed gradually with more notable contributions from Unilever backed United Nations Environment Program (UNEP) report, the International Business Leaders Forum (IBLF), British prime minister's commission on sustainable development related issues like climate change. However corporations have indeed been practicing some form of CSR long before these studies or frameworks for that matter were framed; primarily though philanthropic charitable acts mostly as engagement marketing efforts whose benefits may not necessarily be realized for a period longer than two years due to several dissimilarities between charitable work and purpose-driven ways of working followed by companies pursuing clear mission statements, vision and mandate – aspects considered key but often neglected vital ingredients driving non-profit organizations because they intentionally wipe out before breaking new ground or create fear amongst financial backers worried nothing would get done without substantial cash infusions required to start projects with tangible output evident within first four months. CSR thus evolved from economic terms whereas many charities are very familiar with being "good citizens". Companies involved certainly believed Corporate Social Responsibility supplemented sales better than any other marketing effort undertaken while keeping their ethical outlook intact or bringing them closer to ideal described at most recent awards ceremonies.

The word “sustainability” is often used in the context of CSR. The term has been defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development 1987). This definition, however, does not provide a clear indication for how sustainability should be achieved. Viewed from an economic perspective, sustainability means that firms should operate at full capacity and with high levels of profitability over time. However, this is not always possible; there are situations where certain costs cannot be avoided – such as environmental pollution or employee injuries – because they are necessary to produce a product or service that consumers want (Baumol et al. 1982). In such cases, firms may have to accept lower profits in order to achieve sustainable operations. From a social point of view, businesses can also contribute positively by creating jobs and paying taxes which will enable governments to fund public services such as health care and education (Daly 1996). In addition, if business improves its performance through innovation it can create new markets that benefit society as well as itself (Kirzner 1973; Schumpeter 1934). Finally, from an ecological perspective companies can avoid damaging natural resources by reducing material consumption through recycling products or using renewable energy sources instead of fossil fuels (Lovins 1977; Stern 2007) . These examples show that sustainability is more than just avoiding negative impacts on society and nature: positive contributions towards sustainable development are also important for business success. In practice many companies do focus on all these aspects when aiming at sustainability: they try to find ways for better resource utilization while keeping their customers satisfied; they invest into R&D projects with long-term payoffs in order to maintain high profitability over time; they develop new technologies which reduce material use while increasing customer benefits . At the same time most firms want their actions towards sustainability not only seen but also recognized by external stakeholders like NGOs who criticize them for being too slow or even hypocritical when it comes down to action rather than rhetoric . Such criticism is particularly intense when it comes down to climate change issues since many multinational corporations have been blamed for contributing significantly towards global warming through carbon dioxide emissions produced during production processes . It was against this background that Shell decided in September 2004 after much internal debate about whether it would be better just stay out completely from any role within climate change discussions , finally deciding upon setting up its own Climate Change Advisory Board whose task was supposed “to review Shell's activities related directly or indirectly with greenhouse gas emissions" . The main purpose behind this decision was clearly stated: “increasingly stringent legislation around carbon dioxide emissions could impact our core business” thus making Shell's management feel obliged “to influence policy makers' views about climate change so we can help shape effective policies before regulations become binding” CSR and Sustainability is thus very subjective.

You can do it badly. You can do it for the wrong reasons. You can do it for some political purpose. You can do it for some sort of business purpose. The only way to do it well is to make sure that you are doing something that makes a real difference and not just trying to be clever or gimmicky about it.

Has sustainability become a joke in recent times? The answer may be “yes”, in the eyes of many. The ongoing saga of the proposed new stadium for Tottenham Hotspur FC has become a case study for everything that can go wrong with sustainability. It has been a disaster from start to finish, and it shows how little progress we have made in getting sustainability embedded into mainstream thinking. In short, Spurs want to build a new 60,000-seat stadium on the site of their current ground at White Hart Lane. They are planning to demolish most of the existing structure and rebuild it as an eco-friendly building with zero carbon emissions and low energy use – but only if they get permission from Haringey Council to do so. The council seems unconvinced by Spurs’s proposals – both because they don’t like some aspects of them (notably public transport links) and because they are worried about what might happen if Spurs move away (the club may be forced out due to redevelopment plans for nearby land). Spurs have now submitted revised plans which its chairman Daniel Levy says will “offer the best possible outcome for all parties involved”. But that hasn't stopped him criticising Haringey Council's stance: "We remain committed to delivering one final scheme which ensures our future success while respecting local residents." He also said he was "disappointed" by what he called "misinformation" about his plans being spread by opponents who were trying to block them even before knowing what was planned". Last week he threatened legal action against critics who had been spreading rumours about his club's intentions - including claims that there would be no affordable housing on site or that fans would not be able to watch games live in pubs around White Hart Lane as part of their matchday experience; both allegations turned out not to be true when exposed by journalists working on this story!

No wonder people think sustainability has gone off track…

If you are really interested in sustainability, and think that it is a legitimate effort by corporations-let’s consider another example; I think it makes sense to choose a company that has a good reputation. There are many companies which claim they care about the environment and their customers. However, when you look at their actions, they do not seem to be so honest. For example, Starbucks is one of the biggest coffee chains in Japan. They have been criticized by some customers for using disposable cups instead of reusable ones or recycling plastic cups into other products like bags and umbrellas. It seems that they just want to make more money by selling disposable items instead of being sustainable! In addition to this problem with Starbucks, there is another issue with them: The price difference between paper cups and plastic ones is big enough for people who want to buy paper cups but cannot afford them because of the cost difference between the two types (Starbucks charges 500 yen for a paper cup while it costs 300 yen for a plastic cup). This means that if someone wants both reusable items as well as saving money on coffee drinks then he or she will need to pay 500 yen twice every day! In my opinion this is ridiculous! How can Starbucks claim its commitment towards sustainability? It seems that all these efforts have nothing but marketing purposes behind them…

Do companies talk about sustainability just to get more sales?

I think the answer is yes. But I also think that it's not just about sales, but about a change in mindset.

The main reason why companies talk about sustainability is because they want to be seen as good corporate citizens. The second reason is that they want to use their brands as an instrument for social change and make sure that people know what they are doing.

Many businesses are now talking about sustainability because of the new generation of consumers who care more and more about these issues, and these companies have realised that this group of consumers will become bigger in the future so if you do not adapt yourself now then you will lose out on them later on when it comes to buying your products or services.

It's really important for companies to understand how important it is to integrate sustainable development into their business strategy if they want long term survival in the marketplace today and tomorrow. It's crucial for them to realise how much value there is in becoming a leader rather than a follower when it comes to embracing sustainability within their organisations, which means having a different kind of mindset from traditional businesses where everything was driven by short-term profits alone with no concern whatsoever towards environmental impacts or social concerns such as human rights violations or child labour etcetera... This type of business model doesn't work anymore today since we live in an interconnected world where we all share responsibility for each others' actions whether we like it or not! Therefore thinking only short-term profit oriented strategies does not work anymore since many stakeholders including governments around the world are asking corporations (and especially multinational corporations) questions like: "What kind of impact did your company have on our society?"; "How much damage did your company cause our environment?"; "How many people were killed due to working conditions at one of your suppliers? How many workers had been injured? What happened with those cases?". And so forth... So I would say that most companies today realise this reality and therefore embrace sustainable development within their organisation through Corporate Social Responsibility programs which usually include initiatives like employee engagement programs, training workshops regarding environmental awareness etcetera... They also see CSR initiatives as being very cost effective because employees who feel valued tend to stay longer with their employer while delivering better performance during work hours! And finally CSR can help attract new customers from different age groups who care deeply about these issues so overall CSR helps strengthen brand loyalty among current customers while attracting new ones at same time!

Or should I say: Sustainability leads towards increased profitability!!

So what then is true CSR and Sustainability?

CSR is about authenticity, authenticity rooted in a socially committed corporation. This corporate commitment needs to be genuine; it must include the company's definition of sustainability and its vision for sustainable development—and it must be expressed and acted on over time. Commitment becomes relevant where we can demonstrate that business decisions take account of all affected parties who will benefit or endure some kind of cost from them (Jansen, Koehler & Pistorius 2006). So companies with CSR initiatives in relation to people actually "commit" (being beyond a mere communication strategy) resources into this area by hiring staff specialists responsible for sustainability issues within their formal organizational structure. Companies also commit funds when they spend money on follow-up activities such as research or mediation processes for improving working conditions at third-party providers (Klantschnig 1999). CSR requires not only an internal commitment expressed through external communications but also extended responsibilities for supporting general practices deemed necessary by elevated social standards or regulation affecting its most proximal partners involved in current action. For instance, Shell was one of two participants along with Enron that helped develop the estimate credit default swaps market, even though it had promised investors would never have anything more to do with derivatives trading other than exchange normal commodities after divestment of noncore asset.

Sustainability is based on the long-term and responsible operation of corporate activities. It refers to the financial viability of their own operations as well as those directly or indirectly connected, including appropriate expenditure or investment capacity. Corporate sustainability should be a primary target for management decisions in order to ensure that companies can both survive and profitably run their businesses, while also creating lasting value for shareholders, customers and society in general. Corporate sustainability needs a coherent strategy. So what does it mean now in 2021? Our younger colleagues will confront it when they enter employment tomorrow; our older will be challenged by it over time, maybe even at this very moment!

To ensure that a firm’s activities are actually doing benefit, the project map of any CSR activity should look like this:

1. Community Need Assessment

2. Locus of Control

3. Loop of Incompletion

4. Fulfilling the UIUI (Unnecessary-Intimate- Incomplete- Ugly-) matrix

5. Scalability, Sustainability and Selflessness Review

6. Impact Measurement

The community need assessment should involve an in-depth detailed analysis of “What we want to do, is that even something that the community/world need?”

Most CSR activities fail in concept; as they do not answer this question.

The locus of control: Meaning, WHo is it, that has control over the day-to-day activities and ongoings of the planned CSR activity. This control should ideally in the initial stages of the activity lie within the firm but then should be transferred to parties outside the firm so that the firm can move out of one project but ensure it’s sustenance.

The Loop of Incompletion simply defines the fact that the activity can move on for a long time, and doesn’t have to end with the firm ceasing the activity. Once the Process and model have shown successful implementation and capability or sustainability, the model holds potential to be extrapolated to various housing societies, corporate parks, eventually wards and districts.

The project/ activity taken up by the firm has to be Unnecessary, meaning the activity is not something that is demanded off the firm due to the nature or scope of it’s function - only then is it truly a selfless act; Intimate- to ensure a commitment to the activity by internal stakeholders even when things turn ugly, Incomplete- the activity must remain incomplete so as to ensure that it keeps going on, benefiting the society/group till the group exists; and does not see a definitive end and Ugly - the matter should really have the firm dirty it’s hands in the muck by getting down to grassroots of the problem, and not just a high level interaction and a donation of money.

A Scalability, Sustainability and Selflessness Review committee should exist outside the firm to monitor and hold people accountable if they aren’t doing work according to plan, and also to monitor flays in the firm conforming to the UIUI matrix.

To explain better let’s take 3 Pharmaceutical firms and evaluate their CSR activities.

COMPANY 1 : The Sanofi Espoir foundation

The Sanofi Espoir foundation, the major CSR sector of Sanofi was created in October 2010 to leverage commitment to international solidarity. The foundation provides a dedicated operating framework, a governance and additional resources to gain better leverage from initiatives already underway. The response/donation of the foundation to various situations depends on the crisis and the health needs identified according to the situation. Product donations of the foundation depends on the guidelines set forth by the WHO. They are focused on reducing healthcare inequalities in 3 target areas like fighting childhood cancer, improving maternal and infant health, improving access of care in France. The foundation carries out it’s initiatives in partnership with other associations while undertaking CSR. The corporate culture firmly believes in “Solidarity”. Therefore active involvement of the Sanofi employees is always present.

• Having a laser focused target of what good to do in the world helps the company to use their resources in an effective way.

• Having the CEO of the company be the Head of the foundation which carries out the CSR activity helps create great synergy between the company and it’s CSR activities.

• The company has create great amount of goodwill across the world through their healthcare benefit schemes through which they help provide drugs at places which are usually deprived of quality healthcare.

• The company does a great job of listening to it’s stakeholders and not only the beneficiaries in terms of taking up new CSR projects.

• Has helped them gain Goodwill with global bodies like WHO, UNICEF, WTO and all.

• Have created a large set of skilled people who can then be employed within the company.

• The company, in addition to working towards better child and maternal care, is also working for the deprived people who live in their home country of France.

• They have looked to actively align with United Nations for their global CSR activities.

• Unlike other companies’ CSR activities, they like to re-enforce their CSR activity to ensure long term activity benefits.

Q.2) Key Challenges and Opportunities in making the CSR Program sustainable and scalable.

CHALLENGES:

1. Meeting manpower needs.

2. Distributing equal budget among all the CSR initiatives.

3. Making sure all the CSR initiatives are given equal importance.

4. Aligning the Social projects with the needs of the community.

5. Integration of different business areas into one core strategic area

6. Management of a diverse portfolio of activities across the globe

OPPORTUNITIES:

1. Involvement of Sanofi employees in CSR initiatives deeply rooted in the Corporate culture (Promoting Solidarity)

2. Collaborations with organizations like UNICEF and WHO.

3. Collaborations and partnerships aiding in improving relations with Organizations.

4. To ensure a huge customer base that works dedicatedly for the company itself, giving their best with full trust, loyalty and support.

5. Gaining knowledge about the various regulatory requirements of different countries, how to function, how to properly conduct activities keeping in mind business alignment with community.

Q3. Addressing said challenges.

1. A proper need assessment needs to be done for every project and accordingly a fixed budget needs to be allocated that should even include a corpus that covers for future maintenance requirements, if any.

2. A reporting structure to be brought into practice to record and document and follow up anything and everything related to the CSR activities.

3. The foundation should focus on other healthcare inequalities and therapy areas and not only cater to cancer.

4. Proper budget allocation can be done by mapping out a blueprint of the whole activity and discussing it with the panel, or board of directors, consultants from various fields. This can also be eased out by creation of cross functional team looking only after the CSR part of the company.

5. Needs of every business and community can be identified, a community needs assessment program, along with the disease burden of different countries can be carried out to better understand the dynamics and demographics of that particular region.

6. Special assistance is required to carry out some projects at a community level, which can be mapped and aligned with the budget by setting up sessions with consultants in the industry.

Company 2: AUROBINDO PHARMA

Q.1) Learnings/Understandings from the Presentation

1. Focussing on a small geographical area can be often more beneficial and difference making than spreading the efforts across a wide geographical region.

This will result in a higher probability of seeing a palpable difference through their social endeavours.

2. Having a department and a committee dedicated to the CSR Activities can be beneficial to the company in terms of record maintenance and general record keeping.

3. Having the higher ups such as the Board of Directors involved in the decision making and approval process of CSR activities helps by giving added importance to these activities.

4.Focussing over a smaller gamut of activities is helpful in giving adequate time and resources to each of the activities rather than focussing on an abominably high number of fields and not having any palpable results.

5. Focusing on India business rather than working on a global spread helps the company to align their strategies more effectively.

6. Working towards the general healthcare is a great opportunity to engage masses and create large scale awareness.

7. Having a member from the board of directors, who directly supervises, creates great value in terms of delivery.

Q.2) Key Challenges and Opportunities in making the CSR Program sustainable and scalable.

Challenges:

• Manpower Allotment

• Maintaining a balance between the budget allocation to the various projects

• Integration of the activities under a larger umbrella

• Creating meaningful value propositions

Opportunities:

• Aligning the business proposition and offering to the community needs

• Create an ecosystem of enhanced trust between the company and the community

Q3. Addressing said challenges.

Creating a fine balance between fulfilling the needs of the society and the resources available with the organization to do so.

Understanding the needs of the society and only then proceeding to adopt an activity all the while keeping in mind the resources available with the company.

Creating an optimum process flowchart in order to ensure maximum value delivery.

To ensure that the set objectives are met and maximum value of output is delivered.

Managing the diverse spread of activities undertaken, to make sure that all the activities taken up are met and fulfilled responsibly and whole heartedly.

Company 3 : Dr. Reddy’s Laboratories

Q.1) Learnings/Understandings from the Presentation

1. They are one of the few companies who have a pan-India coverage.

2. They are trying to create highly skilled healthcare professionals through dissemination of high quality healthcare knowledge.

3. They are also focussing on educating young girls and align with the Government schemes for educating girl child.

4. They are looking to create jobs for people with orthopaedic disabilities.

5. They are also looking at helping people kick-start their second inning in their careers by giving the people who were betrayed by the poor education system by giving them essential skill training.

6. They look to alleviate social problems through skill creation and creating skill sets amongst eligible people.

7. They have great focus on youth with focus on skill training amongst the youth.

Q.2) Key Challenges and Opportunities in making the CSR Program sustainable and scalable.

Challenges:

• Creating palpable differences through their efforts.

• Co-ordination of their pan-India skill creation efforts.

• Having proper oversight.

• In spite of creating the foundation, reducing a huge chunk of paperwork, which is usually a hugebarrier to process optimization and skimming.

Opportunities:

• They can have a favourable sight from the Government of India due to their contribution to the Government’s efforts and due to their help in alleviating the socio-economic problems currently faced by the society.

• Using the Skill creation efforts, they can have a large number of skilled people who will be loyal to the company.

• It will help decrease the unemployment numbers of India by helping successfully re-train people who have been betrayed by the educational system.

Q3. Addressing said challenges.

• Having proper oversight can be managed via proper functioning of the oversight committee with the Board of Directors monitoring the functioning of the oversight committee and seeing whether the Committee is working in accordance with their vision.

• Co-ordination of their pan-India skill creation efforts can be done by creating a strong oversight committee which can take whatever actions that may be required to maintain the efficacy of the CSR activities. This can be aided by having high level executives on the committee which will lend further weight to the committee.

• Creating palpable differences through their efforts can be done through proper use of resources allocated to the CSR Department and use them judiciously to create palpable differences and benefits.

• In spite of creating the foundation, reducing a huge chunk of paperwork, which is usually a huge barrier to process optimization and skimming: paperwork, sometimes can be a mess and hindrance towards a skimmed functioning department. This can be reduced by adequate supervision, processes that can be digitalized, can be automated, and be reduced. This would help the manpower allocation to the required areas, rather than creating bottlenecks within the organisation.

This, thus brings to an end my comments on CSR and Sustainability.