Corporate Social Responsibility, Human Values and Ethics

Unit 1 Moral Values and Ethics

Values
Ideas shared by the members of a culture about what is good and what is bad and what is
desirable or undesirable. Values have major influence on person’s behavior and attitude and
serve as broad guidelines in all situation. Some common values are:
• Fairness
• Innovation
• Community Involvement

Value provide basic foundation for understanding person’s personality, perception and attitude.

Importance of Values
• Values play an important role in the integration and fulfillment of man’s basic impulses
and desires in a stable and consistent manner appropriate for his living.
• They are generic experiences in social action made up of both individual and social
responses and attitudes.
• They build up societies, integrate social relations.
• They mold the ideal dimensions of personality and range and depth of culture.
• They influence people’s behavior and serve as criteria for evaluating the actions of others.
• They have a great role to play in the conduct of social life.
• They help in creating norms to guide day-to-day behaviour.

Characteristics of Values
• Values from culture to culture, one may be aggressive, some may be easy going, peaceful,
calm, polite, etc.
• Values of culture may change but most remains stable during one person’s lifetime.
• Values are learnt early in life from family, friends, neighbourhood and school.

Type of Values
• By Milton Rokeach
❖ Terminal Values: These are values that we think are most important or most
desirable. These refer to desirable end states of existence, the goals a person
would like to achieve during his or her lifetime. They include happiness, self-
respect, recognition, inner harmony, leading a prosperous life, and professional
excellence. For Example: A comfortable life, A sense of accomplishment, etc.
 ❖ Instrumental Values: Instrumental values deal with views on acceptable modes of
conductor means of achieving the terminal values. These include being honest,
sincere, ethical, and being ambitious. These values are more focused on
personality traits and character. There are many typologies of values. One of the
most established surveys to assess individual values is the Rokeach Value Survey.
For Example: Ambitious, Broad-minded, Courageous.

• By G.W Allport, P.E. Vernon and G. Lindzey

❖ Theoretical Value: Person is concerned with the discovery of truth.
❖ Economic Value: Person is concerned more with money.
❖ Aesthetic Value: Person pay more value to the artistic things and beauty.
❖ Social Value: Person places high value for the people in the society.
❖ Political Value: Person place more emphasis on attaining power.
❖ Religious Value: Individual place high value on unity. They understand and
experience world as a unified model.

• Classification by England
❖ Pragmatic: A pragmatic person is the one who deals the situation with sensible
and realist thinking. The things that appear important and successful irrespective
of good or bad.

❖ Moralist: A person who is guided by the ethical consideration of right or wrong,

just or unjust, honest or dishonest. A person who tries to force or teach other
people to behave in ways he or she considers to be most correct and honest.

Formation/Sources of Values
• Family Factor: Most important of all the factors/sources of values as the individual able
to get some values is from the immediate family as the values are inculcated in the
individual from the childhood & remain in his life throughout until his death.

• Social Factor: This factor includes those who the individual came into contact apart from
the family members and those are:
❖ Teachers
❖ Classmates
❖ Friends
 • Cultural Factor: Whether the person is co-operative, friendly, or holistic depends upon
culture he belongs to as every country or every region the culture varies and thus the
reaction of the person.

• Personal Factor: It is his/her own ability to understand and gain values while living in the
society and those are:
❖ Intelligence on individual
❖ Educational level

• Organizational Factor: The organization in which the individual works for the longer
period and is able to develop and shape his/her value as per the system in which he/she
works.

Values of Indian Manager

• Integrity: Honesty and integrity are the cornerstone of sustainable success. In order for
people to want to follow their leader they must have complete trust in his honesty, his
dedication, his commitment and his unshakeable ethics and high standards and values.
Managers who are open, truthful and consistent in their behaviors are more likely to
inspire trust, loyalty and commitment in their teams.

• Willingness to take Risk: Leaders are not afraid of taking risks or making mistakes. They
take calculated as opposed to reckless risks and while they weigh their options and
alternatives carefully they do not allow themselves to fall prey to the “analysis paralysis”
syndrome. The best leaders learn from their mistakes and emerge from them resilient
and ready to take on the next challenge.

• Optimism and Enthusiasm: A great manager inspires others with their infectious
enthusiasm, their disarmingly genuine keenness, passion and their zeal for what they do.
Rather than dwelling on problems they are solution-oriented and focus on how to make
things work and succeed. They are willing to see the silver lining in every cloud and have
a ‘can-do’ optimistic attitude that leaves no place for negativity.

• Commitment to Growth: Leaders recognize that learning is a life-long process and never
stop doing what it takes to grow professionally and personally and maintain a grip with
emerging trends and tools and business realities and technologies. The best leaders
realize that to remain at the vanguard of their particular function or industry requires
constant learning, enquiry, exploration and innovation as well as continuous self-scrutiny
and analysis.
• Vision: Leaders know precisely what they want and make clear detailed and achievable
plans to get there. They are not vague or ambiguous in their goals nor do they leave
anything to chance. Leaders are also able to articulate and communicate their vision
clearly and in no uncertain terms and inspire and win others to their platform with their
vision.

• Pragmatism: While leaders may have lofty visions and ideals, they do not hide their heads
in the clouds and are mindful of the hard facts and figures that surround them. They are
very realistic when it comes to assessing the landscape they operate in and practical about
the decisions they make.

• Responsibility: Leaders can be depended on to take responsibility for their actions and to
live up to their responsibilities completely. They do not stand firmly behind the
commitments they make and do not let their teams down; nor do they assign or allocate
blame to deflect from their own responsibilities. They do not have a victim mentality that
holds others responsible for their poor choices and deficiencies.

• Hard Work and Conscientiousness: Leaders work hard and accept no short cuts. The best
leaders lead by their example demonstrating a stellar work ethic by being the first in the
office, the last out and the most productive, persistent and dedicated while at work. They
have a strong sense of duty and very high standards of excellence and they apply these
rigorous standards to themselves first always seeking better, smarter, more effective
ways of doing things.

• Self-confidence: Leaders have no shortage of that essential commodity of self-assurance

that enables them to risk giant strides, be bold and tough-minded and ‘fall forward’ in the
rare instances when they do fall/fail. Leaders generally have little need for approval and
are motivated by an inner strength, maturity and drive. Leaders are very cognizant of their
inner strengths, weaknesses and the impact they have on others and knowledgeable of
what they can and cannot realistically do/achieve/influence.

• Expertise in Industry: While there are many generalists in leadership positions the best
leaders become generalists not by knowing a little about many fields but my being experts
in a multitude of fields. Good leaders are characterized by a very high level of energy,
conscientiousness and drive and spare no efforts to become experts in their field and
harness all the information and knowledge and competence they need to maintain an
edge over their competitors.
Apart from the above-mentioned values, other values that an Indian Manager have are:
• Respect for individual
• Cooperate and trust
• Self-discipline
• Purity of emotions and feelings

Business Ethics
Ethics is a subject of social science that is related with moral principles and social values.
“Business Ethics” can be termed as a study of proper business policies and practices regarding
potentially controversial issues, such as corporate governance, insider trading, bribery,
discrimination, corporate social responsibility, and fiduciary responsibilities.

According to Andrew Crane, “Business ethics is the study of business situations, activities, and
decisions where issues of right and wrong are addressed”.

Features of Business Ethics

• Code of Conduct: Business ethics is actually a form of codes of conduct. It lets us know
what to do and what not to do. Businesses must follow this code of conduct.
• Based on Moral and Social Values: Business ethics is a subject that is based on moral and
social values. It offers some moral and social principles (rules) for conducting a business.
• Protection to Social Groups: Business ethics protect various social groups including
consumers, employees, small businesspersons, government, shareholders, creditors, etc.
• Offers a Basic Framework: Business ethics is the basic framework for doing business
properly. It constructs the social, cultural, legal, economic, and other limits in which a
business must operate.
• Voluntary: Business ethics is meant to be voluntary. It should be self-practiced and must
not be enforced by law.
• Requires Education & Guidance: Businessmen should get proper education and guidance
about business ethics. Trade Associations and Chambers of Commerce should be active
enough in this matter.
• Relative Term: Business ethics is a relative term. It changes from one business to another
and from one country to another.
• New Concept: Business ethics is a relatively newer concept. Developed countries have
more exposure to business ethics, while poor and developing countries are relatively
backward in applying the principles of business ethics.
Principles/Need/Relevance of Business Ethics
• Avoid Exploitation of Consumers: Do not cheat and exploit consumer with measures such
as artificial price rise and adulteration.
• Avoid Profiteering: Unscrupulous business activities such as hoarding, black-marketing,
selling banned or harmful goods to earn exorbitant profits must be avoided.
• Encourage Healthy Competition: A healthy competitive atmosphere that offers certain
benefits to the consumers must be encouraged.
• Ensure Accuracy: Accuracy in weighing, packaging and quality of supplying goods to the
consumers has to be followed.
• Pay Taxes Regularly: Taxes and other duties to the government must be honestly and
regularly paid.
• Get the Accounts Audited: Proper business records, accounts must be managed. All
authorized persons and authorities should have access to these details.
• Fair Treatment to Employees: Fair wages or salaries, facilities and incentives must be
provided to the employees.
• Keep the Investors Informed: The shareholders and investors must know about the
financial and other important decisions of the company.
• Avoid Injustice and Discrimination: Avoid all types of injustice and partiality to
employees. Discrimination based on gender, race, religion, language, nationality, etc.
should be avoided.
• No Bribe and Corruption: Do not give expensive gifts, commissions and payoffs to people
having influence.
• Discourage Secret Agreement: Making secret agreements with other business people to
influence production, distribution, pricing etc. are unethical.
• Service before Profit: Accept the principle of “service first and profit next.”
• Practice Fair Business: Businesses should be fair, humane, efficient and dynamic to offer
certain benefits to consumers.
• Avoid Monopoly: No private monopolies and concentration of economic power should
be practiced.
• Fulfil Customers’ Expectations: Adjust your business activities as per the demands, needs
and expectations of the customers.
• Respect Consumers Rights: Honour the basic rights of the consumers.
• Accept Social Responsibilities: Honour responsibilities towards the society.
• Satisfy Consumers’ Wants: Satisfy the wants of the consumers as the main objective of
the business is to satisfy the consumer’s wants. All business operations must have this
aim.
Ethical Decision-Making
Decision making is the process of making choices by identifying a decision, gathering information,
and assessing alternative resolutions. Using a step-by-step decision-making process can help you
make more deliberate, thoughtful decisions by organizing relevant information and defining
alternatives. This approach increases the chances that you will choose the most satisfying
alternative possible.

Ethical decision-making refers to the process of evaluating and choosing among alternatives in a
manner consistent with ethical principles. In making ethical decisions, it is necessary to perceive
and eliminate unethical options and select the best ethical alternative. The process of making
ethical decisions requires:
• Commitment: The desire to do the right thing regardless of the cost.
• Consciousness: The awareness to act consistently and apply moral convictions to daily
behavior.
• Competency: The ability to collect and evaluate information, develop alternatives, and
foresee potential consequences and risks.

Ethical Decision-Making Process

Identifying the decision

Gather relevant information

Identifying the alternatives

Weigh the evidence

Choose among alternatives

Act upon alternative

Review

In every step, the ethical aspects are given due consideration. And such consideration through
PLUS Approach.
P (Political): It is that decision which consist organization policies, procedures and guidelines.
L (Legal): It is that decision which is acceptable under the applicable laws and regulations.
U (Universal): This decision confirms to universal principles & values that organization adopted.
S (Self): This decision satisfies the manager’s personal definition of right, good or fair.
Characteristics/Features of Ethical Decision Making
• Decision-making is a selective process in which only the best possible alternative is
chosen.
• Decision-making involves careful evaluation and analysis of all the possible alternatives.
• Decision-making is the responsibility of the management executives at all levels.
• It is a continuous process which goes on throughout the life of an organisation.
• It is a mental process which involves deep thinking and foreseeing things.
• It may be positive to do a certain thing or negative not to do a certain thing.
• Decisions are normally taken on the basis of past experiences and present circumstances
for a future course of action.
• It is not an end in itself but a means to reach the goal.
• If necessary experts and specialists should be consulted before making a particular
decision.

Business Ethical Values

Business ethical values vary by company and are defined largely by the behaviors and values that
govern a business environment. In general, Business Ethical Values are a set of guiding principles
that encourage individuals in an organization to make decisions based on the company’s stated
beliefs and attitudes toward business practices within its industry. The business ethical values
includes:
• Corporate Culture: Companies that define elements of a corporate culture communicate
their core values, beliefs and preferred approaches to handling common and uncommon
business situations. Employees with a firm grasp on a company’s values will make the
most appropriate choices when facing a business dilemma.

• Conveying Company Values: Managers define ethical business behavior in their

workplaces by explaining to employees how behavior and action affects the business’
overall mission. An example is demonstrating the link between respectful workplace
relationships and low turnover, or lenient return policies and increased customer
satisfaction surveys. This approach helps employees understand the link between ethical
business behavior and corporate success.

• Creating an Ethical Workplace: While there are many shades of gray in business dealings,
companies can define ethical business values by outlining clear examples of right and
wrong behavior as it applies to them. This can be achieved by role-playing scenarios such
as customer interactions, employee disputes or negotiations with vendors and
contractors.
 • Fair Treatment: A business can define ethical behavior by outlining what it considers fair
and just treatment of employees & customers. This includes goodwill among co-workers
and toward customers, a willingness to give back to the community and the self-control
to avoid situations where unethical behavior could occur. When employees understand
how a company defines business ethical values, they become more likely to comply with
corporate policies and management decisions.

• Acting with Integrity: A company that defines business ethical values as a core element
of a corporate culture encourages employees to perform their job responsibilities
accordingly. This often involves doing what’s right for the business, without regard to
personal outcomes or ulterior motives.

• Dealing with Unethical Business Values: Many poor personal and professional decisions
are based on a rationalization of the ethics involved. For example, a person who
embezzles from his company may fully understand the behavior was unethical, but he
justifies it by saying he was under-paid, so the company got what it deserved. Truly
defining business ethical values in a workplace environment involves following examples
of ethical behavior and fair treatment, starting from management and trickling down.

Principles of Business Ethic Values

• HONESTY. Ethical executives are honest and truthful in all their dealings and they do not
deliberately mislead or deceive others by misrepresentations, overstatements, partial
truths, selective omissions, or any other means.

• INTEGRITY. Ethical executives demonstrate personal integrity and the courage of their
convictions by doing what they think is right even when there is great pressure to do
otherwise; they are principled, honorable and upright; they will fight for their beliefs.

• PROMISE-KEEPING & TRUSTWORTHINESS. Ethical executives are worthy of trust. They

are candid and forthcoming in supplying relevant information and correcting
misapprehensions of fact, and they make every reasonable effort to fulfill the letter and
spirit of their promises and commitments.

• LOYALTY. Ethical executives are worthy of trust, demonstrate fidelity and loyalty to
persons and institutions by friendship in adversity, support and devotion to duty; they do
not use or disclose information learned in confidence for personal advantage. They
safeguard the ability to make independent professional judgments by scrupulously
avoiding undue influences and conflicts of interest.
• FAIRNESS. Ethical executives and fair and just in all dealings; they do not exercise power
arbitrarily, and do not use overreaching nor indecent means to gain or maintain any
advantage nor take undue advantage of another’s mistakes or difficulties. Fair persons
manifest a commitment to justice, the equal treatment of individuals, tolerance for and
acceptance of diversity and they are open-minded.

• CONCERN FOR OTHERS. Ethical executives are caring, compassionate, benevolent and
kind; they like the Golden Rule, help those in need, and seek to accomplish their business
objectives in a manner that causes the least harm and the greatest positive good.

• RESPECT FOR OTHERS. Ethical executives demonstrate respect for the human dignity,
autonomy, privacy, rights, and interests of all those who have a stake in their decisions;
they are courteous and treat all people with equal respect and dignity regardless of sex,
race or national origin.

• LAW ABIDING. Ethical executives abide by laws, rules and regulations relating to their
business activities.

• COMMITMENT TO EXCELLENCE. Ethical executives pursue excellence in performing their

duties, are well informed and prepared, and constantly endeavor to increase their
proficiency in all areas of responsibility.

• LEADERSHIP. Ethical executives are conscious of the responsibilities and opportunities of

their position of leadership and seek to be positive ethical role models by their own
conduct and by helping to create an environment in which principled reasoning and
ethical decision making are highly prized.

• REPUTATION AND MORALE. Ethical executives seek to protect and build the company’s
good reputation and the morale of its employees by engaging in no conduct that might
undermine respect and by taking whatever actions are necessary to correct or prevent
inappropriate conduct of others.

• ACCOUNTABILITY. Ethical executives acknowledge and accept personal accountability for

the ethical quality of their decisions and omissions to themselves, their colleagues, their
companies, and their communities.
Ethics as Driver of Corporate Social Responsibility (CSR)
Corporate Social Responsibility (CSR) is a management concept whereby companies integrate
social and environmental concerns in their business operations and interaction with the
stakeholders. It is a way through which company achieves a balance of economic, environmental
and social imperatives. While at the same time addressing the expectations of the shareholders
and stakeholders.

The key drivers for firms becoming more socially responsible are:
• Government legislation: In many countries across certain industries, the government has
imposed legislation that requires companies to conform and behave in a certain manner.
In this case, however, the organizations impacted by this legislation are only complying
with various requirements because of regulation. They may or may not be willing to
incorporate social responsibility initiatives into their day-to-day operations of an overall
strategy.

• Customers’ expectations of firms: Consumers are becoming more aware of social and
environmental issues and the consideration of the future is becoming slightly more
important when consumers consider purchase decisions. As a result, some consumers will
have an expectation that certain companies behave in an appropriate manner, relative to
society and the communities.

• Consumer lobby groups: In conjunction to the previous driver of corporate social

responsibility, the Internet and social media has made it much easier for consumer lobby
groups to form, to generate attention and adverse media coverage, and therefore achieve
its goals of change.

• The extent of costs involved: A shift to increase social responsibility may come at a
reasonable cost to the organization. For example, a manufacturer choosing to
manufacture its products in more developed countries or choosing to pay the production
workers are much better salary – rather than “exploiting” unskilled workers in developing
countries – will significantly impact their unit margin and overall profitability.

• The type of industry in which they operate: There are a number of more significant
industries where there is greater pressure an expectation on the firms to become
responsible corporate citizens. Following the Global Financial Crisis, there has been in
increased expectation on banks and other financial institutions to be more transparent
and ethical in their business operations.
 • Potential for a competitive advantage by image: There are some companies that are
attempting to build their core image, or at least parts of their brand association around
their socially responsible behavior. Some companies will highlight that they are ethical
manufacturers – Etiko is one such manufacturer, and bankmecu is a financial institution
that rewards customers with cheaper home loans if they have environmentally friendly
houses.

Historical Perspective of CSR

The historical evolution of the CSR can be classified into different periods (Johnson, 2010). There
is the earlier period in the CSR evolution followed by the development of unique trends in the
1970s. The 1970s trends are followed by the shifts that existed during the 1990s (Matten and
Moon, 2005). The below figure shows the historical timeline and different stages in the history
of CSR as a paradigm in management and business theory:
• The Early Classical Period: CSR was looked as a product of the industrialization process at
that time. With the development of big companies in 1870s the tasks of these companies
increasingly affected other society domains. From 1900 through 1920, extra legislation
based on business social responsibilities was passed under the banner of the collection of
advocated social reforms in the upcoming era.

• The Immediate Post War Period: The debate over the social responsibility of business
had achieved impetus succeeding World War II. By this time corporate philanthropy had
already become part of normal social fabric and business life. Two principles formed the
foundations for contemporary views on CSR. These were the principle of stewardship and
charity.

• Trends during the 1970s: During 1970s, the texture of the war based on CSR altered to
some degree. The focus in the war shifted from corporate responsibility to the corporate
responsiveness concept. This new focus on responsiveness altered the emphasis from
what organizations could do to survive to what organizations could do to better the world
through sustainability.

• Shifts during the 1990s: In the 1990s, the concept of CSR emerged as the outcome of new
forms of stakeholder engagement and social regulation, increased demands of
stakeholder and governmental regulation for reporting and CSR. Critics and Scholars
improved their analysis to include arguments based on the sustainability, business ethics,
corporate social performance, green marketing, stakeholder theory and citizenship
theory.
Emerging Theories of CSR
• Triple Bottom Line Philosophy
According to world business council for sustainable development, “CSR is the continuing
commitment by business to behave ethically & contribute to economic development by
improving quality of life of workplace and their families as well as local community and
society at large.

Triple Bottom Line Philosophy involves sustainability of:

❖ People: “People” considers employees, the labor involved in a corporation’s work,
and the wider community where a corporation does business. Another way to look
at “people” is, how much does a company benefit society? A triple bottom line
company pays fair wages and takes steps to ensure humane working conditions at
supplier factories.
❖ Planet: The “planet” piece of the triple bottom line indicates that an organization
tries to reduce its ecological footprint as much as possible. These efforts can
include reducing waste, investing in renewable energy, managing natural
resources more efficiently, and improving logistics.
❖ Profit: While every business pursues financial profitability, triple bottom line
businesses see it as one part of a business plan. Sustainable organizations also
recognize that “profit” isn’t diametrically opposed to “people” or “planet.”

The corporation must fulfil their social obligation towards the people including
employees, customers, suppliers and members of the company. The triple bottom line
generates long term gains for both business and society. And because of such several
programs are launched by the Chamber of Commerce & Industry from time to time to
inspire companies to meet social obligation.

Key benefits of using such philosophy are:

❖ Reputation: The key benefited often associated with pursuing CSR initiatives is an
improvement with the organisation’s reputation in the public eye. This can have a
range of positive effects, other favor organizations that have a positive reputation.
❖ Recruitment and Retention of Talent: Studies have shown that individuals will
choose to work for a company with a positive CSR reputation over one that does
not. Therefore, pursuing these initiatives will help to recruit the best talent.
❖ Increased Productivity: Initiatives to reduce waste and utilise sustainable
operations can also improve productivity and save costs.
❖ New Market Potential: By pursuing these initiatives, new markets can open up.
For e.g., fair trade food has recently become very popular in consumer market.
 Disadvantages of using this philosophy:
❖ Marketing Tool – Often CSR initiatives can come across a simply marketing tools,
with no real objective to improve performance. If organisations only want to
appear to be monitoring triple bottom line, then they will be wasting resources.
❖ Objectives Lost – The triple bottom line, while having the potential to improve
productivity, is not enough to have as a sole strategy. Therefore, only pursuing the
triple bottom line will allow other important objectives to be lost.
❖ Lack of Understanding – The triple bottom line is a complex tool and is not always
understood fully, in particular as there are no precise measurement tools for each
element. This means resources can be wasted pursuing the wrong things.
❖ No Precise Measurement – No precise measurement exists for each of the three
elements and this can make it hard to measure and control performance.

• Carroll’s Model of CSR

“An idea whereby companies combine social and environmental concerns in their
business operation and in their interaction with their stakeholders on a voluntary basis”.

The social responsibility of company encompasses the economic, legal, ethical and
philanthropic expectation that a society has of the organization at a given point of time.
Carroll contends that all the responsibility has always existed at some degree but ethical
and philanthropic have become significant only in recent years.

Economic Responsibility: The economic responsibilities are the foundations on which all
other rests. All the organizations are operating to generate profit or in other words try to
be profitable. The organizations are required to find the ways for generating the profit
which can be morally, ethically and legally allowed and accepted.
❖ This is the responsibility of business to be profitable
❖ Only way to survive and benefit society in long-term
 Legal Responsibility: Law is society’s codification of right and wrong. All the firms are
required to play by the rules of the game and obey what is stated in law of the host
country and follow all relevant rules and regulations set.
❖ This is the responsibility to obey laws and other regulations
❖ E.g. Employment, Competition, Health & Safety

Ethical Responsibility: Firms are obliged to do what is assumed right and just. They should
act ethically towards the concerning issue surrounding the area of operation and try to
avoid harm to the community and general public.
❖ This is the responsibility to act morally and ethically
❖ With this responsibility, businesses should go beyond narrow requirements of law
❖ E.g. Treatment of suppliers & employees

Philanthropic Responsibility: All the firms should contribute resources to the community
and improve the quality of the life of the people connecting to them and act as a good
corporate citizen. All the companies operating around the world are trying to maximize
their profits, these companies are there to generate profit but generating profits one
should be well aware that there are some responsibilities which should be fulfilled, for
companies it is important to operate in a consistent with maximizing earnings per share.
❖ This is the responsibility to give back to society
❖ The responsibility is discretionary, but still important
❖ E.g. charitable donations, staff time on projects

• Stakeholder’s Model of Social Responsibility

The stakeholder theory is a theory of organizational management and business ethics
that addresses morals and values in managing an organization, such as those related to
corporate social responsibility, market economy, and social contract theory.

Social Responsibility towards

Investors

Employees
Business Enterprise
Suppliers

Customers
 Stakeholders includes:
❖ Investors: Investors are those who provide finance by way of investment into
company through share, debentures, etc. The responsibility of business towards
its investors are:
Ensuring safety of investment.
Regular payment of interest.
Timely payment of principle amount.

❖ Employees:
Timely and regular payment of wages/salary.
Proper working conditions.
Opportunity for better career projects.
Job security as well as social security.
Timely training and development.

❖ Suppliers:
Giving regular order of purchase of goods.
Dealing on fair and term conditions.
Availing reasonable credit period.
Timely payment of dues.

❖ Customers:
Goods and service must take care of the needs of customer.
Regularity in supply on goods and services.
Prices should be reasonable and affordable.
There must be proper after sale services.
Grievances of consumer, if any must be settled quickly.

Regulatory Issues of CSR

• Local social license to operate: Debates over the environmental and social impacts of
natural gas developments in the United States, labor and community unrest in Africa and
Central Asia, and the increasing application of free, prior, and informed consent (FPIC)
principles in engagement with indigenous peoples are just some of the 2012 headlines
that highlighted the growing significance of social license to operate as a commercial
driver.
• Integration of CSR into mainstream business: While we are seeing greater awareness of
CSR among leading companies in the industry, it remains on the periphery for many
companies. In particular, the business processes and systems needed to manage the
complexities of social and environmental performance—specifically the coordination
across functions responsible for environmental impact, legal issues, procurement, HR,
government relations, and community affairs—are still lagging.

• Collaborative approaches to cumulative sustainability impacts: The cumulative

environmental and social impacts of mining and energy projects—as well as the combined
activities from other industry sectors such as agriculture and manufacturing—are leading
policymakers and many companies to think differently about their contributions to
sustainable development. From air quality and carbon emissions to demands on
biodiversity, climate adaptation, and land and water use, there are significant
opportunities for companies to partner with government and civil society in 2013.

• Changing expectations about human rights issues: The energy and mining industries’
large-scale projects have substantial physical and economic impacts on host countries—
often affecting entire national economies as well as localized individual communities.
Given this, as well as the social, economic, and political stakes associated with these
projects, it’s important for companies to consider human rights—not only to mitigate
downside risk but also to enhance social-investment programming and corresponding
delivery of local benefits that help companies secure and maintain social license.

• Local content and growing demands for benefit sharing: Countries continue to seek out
opportunities to capture a greater proportion of the benefits of resource extraction
through legislation and regulations, hard and soft fiscal assertiveness, prohibitions on
foreign takeovers, and export taxes. Company responses to these pressures will not only
influence commercial strategies and host government relations but will also influence
social license outcomes.

• Accountability and responsibility for social and environmental performance in the

supply chain: Suppliers’ CSR performance can significantly impact the operational,
reputational, and financial success of their customers. There is more pressure than ever
for companies to implement practices that promote transparency, avoid corruption,
advance environmental sustainability, protect human rights, and facilitate “local content”
objectives in the supply chain. In response, more companies are grappling with how to
set clear expectations, establish assurance mechanisms, and balance cost implications of
managing their supply chain.
• Evolving NGO agendas and relations with business: Over the last few years, we’ve seen
the number and types of NGOs flourish. NGOs, which range from collaborators to critics,
are not a homogenous group, and many operate with hybrid strategies, whereby
individual companies are both friend and foe on different issues or across distinct
geographies. In the years ahead, we expect the NGO landscape to continue its evolution
with new issues, organizational models, and modes of operating—particularly as NGOs
respond to their own stakeholder pressures for greater accountability in governance,
impact, and transparency.

• Balancing the competition for water resources: Climate change and population growth
are putting increasing pressure on the global water supply, particularly in developing
countries. With limited supply and greater demand by water-intensive industries such as
mining, oil sands, and natural gas developments, concerns regarding competition for
water resources are likely to rise and become a source of friction for communities and
industries, such as agriculture surrounding large-scale projects.

• Labor relations and regaining worker trust: A series of violent confrontations in South
Africa, Kazakhstan, and Indonesia, among other countries, have brought labor issues to
the forefront for multinational companies, labor unions, and their local partners. Among
mining and oil and gas companies, employees and, perhaps more significantly, contract
workers have begun to demand better pay and working conditions--particularly in
countries with poor governance and weak protection of worker rights.
Unit 2 Ethical Dilemma
Implication of failed Corporate Responsibilities
The Companies Act 2013 requires large firms to spend 2% of their net profits on corporate social
responsibility (CSR) projects. This law came into effect in April 2014. The results on CSR
expenditures by firms in the fiscal year 2015-16 were released recently. It is certainly true that
Indian firms collectively are more than complying with the CSR law.

Due to failure by the organization is formalizing and implementing the Corporate Social
Responsibility policies, it will lead to:
• Creation of Negative Image.
• Difficulty in recruitment of new employees.
• Employees will leave the organization.
• Employees will not become lethargic towards work.
• Lead to reduction in profit of the organization.
• Penalties will be imposed by the government.
• Investors will show less interest in the organization for investing further.
• Unstable cash flow will arise.
• Loss of resources of the organization.

Worker Rights and Health

Workers have the right to information under Occupational Safety and Health Administration.
This includes:
• Records of work-related injuries and illnesses (OSHA 300 Log),
• Results of workplace monitoring for health hazards (chemicals, for example),
• Workers’ medical records obtained by the employer, and
• Information about chemicals in the workplace.

Chemicals in the workplace can be safety or health hazards and are covered under the
Occupational Safety & Health Administration’s Hazard Communication standard. This standard,
also known as HazCom, requires that employers provide information and training to workers who
may be exposed to toxic or hazardous chemicals at work. The standard requires employers to
communicate with employees about hazardous substances in four ways:
• Material Safety Data Sheets (MSDS): These are information sheets that employers must
have available to workers for every chemical in the workplace. They include
characteristics, safety hazards, health hazards, control measures, first aid procedures and
manufacturer information.
 • Labeling: Employers must label all containers of chemicals with the chemical name and
appropriate hazard warnings.
• Training: The training must include names of chemicals, safety & health hazards, labeling,
procedures to protect workers from exposure, labeling, the OSHA standard and the
employer’s written hazard communication program.
• Written Hazard Communication Program: Employers must have a written plan that
explains how that employer will comply with all of the requirements of the HazCom
standard. It also must include a list of all of the hazardous materials on site.

Workers’ Rights under the National Labor Relations Act (NLRA)

Workers who have a union in private-sector workplaces are covered under the NLRA and have
additional rights related directly to health and safety. Workplace rules and policies about health
and safety are a mandatory subject of bargaining, which means that management must negotiate
with the local union before implementing changes that will affect the health and safety of
workers. Local unions must make a timely written request to bargain over these issues.

A local union also has the right to information concerning subjects of bargaining. The local union
can submit an information request for relevant documents including accident/incident reports,
health and safety inspection records, information on workers’ compensation claims, and copies
of any reports or studies by the employer or consultants.

Technology and Privacy in Workplace

The use of new information and communication technologies (ICT) at the workplace has spread
rapidly in recent years. This raises numerous issues for employers, employees and their
representatives, especially in terms of the relationship between workers' privacy and employers'
need to control and monitor the use of ICT.

Information and communication technologies (ICT) now play a significant role in enterprises,
with growing use of computers in all aspects of operations and increasing communication and
dissemination of information through the internet, internal intranets and the use of e-mail. For
both employers and workers, there are new dangers linked to the development of ICT. Notably:
• For the enterprise, there is the danger that vital data may be accessed by unauthorised
parties, creating a need to install devices for protecting and monitoring access to such
data. There is also a fear on the part of employers that ICT facilities will be used by staff
for personal reasons during working hours, to the detriment of their work, and that the
enterprise may be held legally responsible for information transmitted by workers in such
circumstances;
 • As far as workers and their representatives are concerned, the main danger lies in the
new capacity that exists for monitoring and surveillance. New technology may allow
employees' work and productivity to be monitored, and also aspects of their personal
lives, while their use of the internet and e-mail can be subject to monitoring

Effects of Technology and Privacy in Workplace

• Monitoring Employee Communications: Technology in the digital age and the
accessibility of the Internet allow employees to access personal email accounts and talk
to friends and family in a variety of ways. This has led to increased employer monitoring
of employee communications during working hours in an effort to maintain employee
focus on work tasks.
• Working from Anywhere: Easily portable laptops and smartphones with word processing
ability and email make working from any location a simple matter of finding a Wi-Fi
connection. The shifting definition of the workplace also affects the ethics behind the
standard eight-hour workday. Just because technology allows an employer to access her
employees and request work at all times of the day, doesn't mean that it's the ethical
thing to do.
• Using Company Equipment: An employee in possession of company equipment, including
a cell phone or personal computer, may treat the equipment as his own personal property
because of the mental ownership he develops through exclusive use. Ethical problems
arise when an employee chooses to use these pieces of equipment for non-work-related
reasons, including searching for a new job or accepting personal calls.
• Social Networking Websites: Social networking websites can become technological
battlegrounds between employees and management personnel. Monitoring employee
social networking webpages has become a popular tactic for management and business
owners and has blurred the lines as to acceptable workplace conduct and what
constitutes lawful termination.

Adverse effects of Technology and Privacy in Workplace

• Job Elimination and Displacement of Workers: The technological advancements of
recent decades have much in common with the effects of the Industrial Revolution in the
latter part of the 18th century. Specifically, both movements accelerated the
displacement of workers by machines that could perform tasks faster, more accurately
and 24/7. While technology enables business owners to reduce overhead by downsizing
their workforce, individuals whose skill sets are now obsolete have limited options for
employment if their current jobs are eliminated.
 • Electronic Leash and Constant Availability: In earlier generations, you could leave the
office at 5 and not have to think about it again until the next morning, nor were you
expected to take phone calls or respond to requests if you were sick or on vacation.
Thanks to email, cell phones and pagers, the length of the average workday has summarily
increased along with your accessibility by workers and clients. This blurs the line between
work life and home life and may contribute to your stress level.
• Surveillance and Privacy Rights: Surveillance equipment, key cards, and the increased
monitoring of phone and Internet use in the workplace continue to raise issues of
employee privacy. This generates the need for personnel policies that justify the
omnipresent watchfulness of management, as well as methodologies to monitor and
enforce those policies. While such measures strive to ensure that time and resources are
used appropriately, employees may interpret these safeguards as distrust, or feel that
everything they do is being watched.
• Data Security and the Threat of Hacking: The shift to paperless offices leaves companies
vulnerable on two major fronts. The first is that if there is a power outage, electronic data
can't be retrieved unless backup files at an offsite location are accessible. Secondly, any
type of electronic platform is subject to the threat of computer viruses and hacking. These
can compromise vital records, databases and client confidentiality.
• Communications and Greater Impatience: While email enables users to interact with
clients on the other side of the globe, it has also diminished some of the trust and rapport
that previously evolved from face-to-face meetings and phone conversations. Even within
the same office, workers are often more inclined to chat electronically rather than
physically walk to a cubicle or congregate at the water-cooler.

Human Rights
Human rights are rights inherent to all human beings, regardless of race, sex, nationality,
ethnicity, language, religion, or any other status. Human rights include the right to life and liberty,
freedom from slavery and torture, freedom of opinion and expression, the right to work and
education, and many more. Everyone is entitled to these rights, without discrimination.

International human rights law lays down the obligations of Governments to act in certain ways
or to refrain from certain acts, in order to promote and protect human rights and fundamental
freedoms of individuals or groups.

Characteristics/Features Human Rights

• Human rights are not absolute. Like all rights, they may also be restricted in the interest
of public peace, social decency, political security and the like.
 • Human rights imply that everyone should have them. People do not enjoy them as the
member of a particular nation or of a community, rather as the member of the human
society. So human rights are universally applicable to all without any discrimination on
the grounds of caste, class, color, sex, religion etc.
• Human rights, as a comprehensive whole, include socioeconomic, civil, political, cultural
rights which are deemed to be essential for the human beings to lead a life of dignity.
• Human rights are justiciable. They cover legal rights protected by the law of the state.
They also cover fundamental rights as incorporated in the constitution of the land and
they enjoy judicial enforcement.
• Human beings cannot stay without the enjoyment of human rights. All of them possess
these rights as the members of the human society. Since some people are ignorant of
these rights, they must be taught about these opportunities. They only can lead a life of
peace, security and dignity with the growing consciousness of these rights.

Types of Human Rights

• Natural Rights: The concept of natural rights is closely associated with theory of natural
law. According to this theory, nature or god alone regulates the wisdom and activities of
the human. A natural right is nothing but rights based on justice, fairness and
reasonableness. This means individual unites themselves to form political societies
through mutual consent and agree to form a government of their own. It will enable them
to lead their life through common rules and regulations framed either by them or their
representative.

• Ethnic Rights: Nations with multi-linguistic, multi-cultural, multi-racial and multi-religious

populations also safeguard minorities in their charter of rights. The notion of equality
before the law and equal protection of the law underlines the ethnic notions and is
generally included in constitutions which have bills of rights. The idea of equality before
the law implies that persons or groups must not be discriminated without justification.

• Social Welfare Rights: Some constitutions also contain the principles of State policy.
There are social welfare rights inserted for the guidance of the legislatures and
government of the country. However, they cannot be disputed in the court of law.

• Legal Rights: These are rights guaranteed to the citizen of a country by the law to enjoy
certain freedoms without any fear or favor. Legal rights impose an obligation on other
people not to exceed the prescribed limit of the law. They are also known as Statutory
Rights and are given by particular government to its citizens. These rights are codified into
legal statuses by a legislative body.
 • Claim Rights and Liberty Rights: Claim Right means the right that impose obligation on
one person to respect the rights of the other person. Liberty Right means, rights that are
to be exercised at free will by the holder of rights, without any obligation on another
person in exercise of the right.

• Positive and Negative Rights: Some philosophers draw fine distinction between positive
and negative rights. Positive Rights mean those rights for which a person is expected to
discharge some service or do good independently or to the society as a whole. Negative
Rights mean those rights which impose obligation on a person not to interfere with the
liberty or independence of another holder of rights.

• Individual Rights: It means the rights that belong to an individual one. These rights are
mainly economic, political or legal in nature. These rights can be exercised by individual
to enjoy their life and liberty without interference of anybody, including the state.
However, individual rights have positive and negative elements. Positive Element
obligates a person to discharge a right according to law. Negative Element prohibits any
act that is not permitted by law.

Stockholder Rights in Corporate Governance

Corporate governance is the system of rules and responsibilities delegated to several groups
within a corporation as well as procedures on handling corporate matters. One of the groups,
shareholders, is given certain rights as owners of corporations. These rights are protected by law
and honoring them is one of the objectives in corporate governance.
• Voting: Shareholders have rights to vote on company decisions. They can vote on a variety
of corporate matters including voting in officers, company acquisitions and mergers or
liquidations of company assets. Voting on these matters generally take place when
corporations have their annual meetings. Shareholders have the right to vote in person
or by proxy if they can’t attend the meetings. They can also vote by mail, telephone
and/or by mail if corporations have these measures in place.

• Inspecting: Shareholders also have rights to inspect their corporation’s financial

information. Inspecting the books gives shareholders a chance to view how their
corporations are performing. This can be critical to shareholders’ decisions to buy more
shares or sell off what they already own. This right isn’t as important to shareholders in
public corporations because they can get the same information from the Securities and
Exchange Commission. Public corporations have to file their financial information each
year, and it’s available to anyone interested in buying shares.
 • Dividend Entitlement: If corporations are distributing profits in the form of dividends,
each shareholder has the right to receive them. Dividend amounts are determined by the
corporate officers and not by the ownership interests of the shareholders. These amounts
can fluctuate yearly based on the corporations’ earnings for that year. With that in mind,
corporations with low earnings, net losses or have other plans with the profits to improve
their businesses may not pay out dividends. However, corporations must pay every
shareholder a dividend if they’re distributing them and cannot select just a few to pay
profits to and neglect the rest.

• Rights to Sue: Shareholders who have been wronged by their corporations also have the
right to sue. For example, if shareholders didn’t receive their entitled share of dividends
or were denied access to their corporations’ financial information, they can bring legal
actions against their corporations. Shareholders seeking to sue their corporations should
check with their local authorities first on how to proceed.

• Considerations: One of the objectives of corporate governance is to be fair to all

shareholders. However, some corporations are issuing dual stocks that challenge the
fairness and equality of all shareholders the corporate governance is trying to protect.
Dual stocks are not available to all investors, and there are different levels of rights
associated with each one. For example, one class of stocks could be issued for common
investors, while another class is available to company executives, founders and their
families. It’s possible that the shareholders who own common stocks have less voting
power than those who own the other class.

Corporate Governance
Corporate Governance means that company manages its business in a manner that is
accountable and responsible to the shareholders. It is the technique by which companies are
directed and managed. It means carrying the business as per the stakeholders’ desires. It is
actually conducted by the board of Directors and the concerned committees for the company’s
stakeholder’s benefit.

Benefits of Corporate Governance

• Good corporate governance ensures corporate success and economic growth.
• Strong corporate governance maintains investors’ confidence, as a result of which,
company can raise capital efficiently and effectively.
• It lowers the capital cost.
• There is a positive impact on the share price.
• It helps in brand formation and development.
 • It provides proper inducement to the owners as well as managers to achieve objectives
that are in interests of the shareholders and the organization.
• Good corporate governance also minimizes wastages, corruption, risks and
mismanagement.
• It ensures organization in managed in a manner that fits the best interests of all.

Principles of Corporate Governance

• Fairness: Fairness refers to equal treatment, for example, all shareholders should receive
equal consideration for whatever shareholdings they hold. However, some companies
prefer to have a shareholder agreement, which can include more extensive and effective
minority protection. In addition to shareholders, there should also be fairness in the
treatment of all stakeholders including employees, communities and public officials. The
fairer the entity appears to stakeholders, the more likely it is that it can survive the
pressure of interested parties.

• Accountability: Corporate accountability refers to the obligation and responsibility to give

an explanation or reason for the company’s actions and conduct. The board should
present a balanced and understandable assessment of the company’s position and
prospects and is responsible for determining the nature and extent of the significant risks
it is willing to take. The board should maintain sound risk management and internal
control systems.

• Responsibility: The Board of Directors are given authority to act on behalf of the
company. They should therefore accept full responsibility for the powers that it is given
and the authority that it exercises. The Board of Directors are responsible for overseeing
the management of the business, affairs of the company, appointing the chief executive
and monitoring the performance of the company. In doing so, it is required to act in the
best interests of the company.

• Transparency: A principle of good governance is that stakeholders should be informed

about the company’s activities, what it plans to do in the future and any risks involved in
its business strategies. Transparency means openness, a willingness by the company to
provide clear information to shareholders and other stakeholders. For example,
transparency refers to the openness and willingness to disclose financial performance
figures which are truthful and accurate. Disclosure of material matters concerning the
organization’s performance and activities should be timely and accurate to ensure that
all investors have access to clear, factual information which accurately reflects the
financial, social and environmental position of the organization.
Purpose of Corporate Governance
• Facts: Although corporate governance is usually unique to each company, it has a few
universal elements. Corporate governance controls the internal and external actions of
managers, employees and outside business stakeholders. This framework also outlines
the duties, privileges and roles of board members or directors to ensure these individuals
do not take advantage of the company’s resources. Companies may also include
information on the role of shareholders in the organization and their responsibilities for
voting on corporate issues.

• Features: Corporate governance usually outlines the goals and objectives of each
business contract. The rate of return, length of the contract, individuals who can approve
contracts and other obligations are usually included in the corporate governance
framework. Corporate governance also creates a checks and balances system to govern
internal business departments. This system ensures no one individual or department
dominates business decisions or operates outside the company’s mission and values.

• Considerations: Publicly held corporations may require shareholder approval when

setting up their corporate governance framework. Shareholders are the individuals who
have invested money into the business and expect a significant return on their capital.
Rather than allowing the board of directors or executive officers the ability to create and
implement corporate governance, shareholder approval may be required to ensure that
these individuals understand how the company expects to generate financial returns.
Shareholders may also be required to approve any changes to the corporate governance
framework during the annual shareholders' meeting.

• Benefits: Companies using corporate governance may be able to streamline business

operations and increase the potential for maximizing profits. Creating guidelines that
must be followed by individuals working in the business can help companies ensure a
minimum set of operating standards exists in the company. Organizations may also be
able to discipline employees or correct inappropriate workplace situations using the rules
or procedures outlined in the company’s corporate governance framework.

• Expert Insight: Management consultants, public accounting firms, law firms or other
professional organizations may be used by a company creating corporate governance.
These individuals or groups can help companies ensure that the corporate governance
design for the company meets the expectations of all parties involved. Law firms may be
used to ensure that the company’s corporate governance framework meets all legal
requirements regarding its business operations.
Consumerism
Consumer use goods and service from time to time and while making purchases, they maybe
sometimes get exploited by the supplier as:
• Overcharged for goods or service
• Supply of inferior goods or service
• Adulteration
• Use of unethical advertising and making false statement about goods or service.

Consumerism refers to organized-efforts by individuals, groups, and governments to help protect

consumers from policies and practices that infringe consumer rights to fair business practices.

The movement of consumerism may be successful if consumers are aware of their rights &
responsibilities and those rights of consumer are as follows:
• Right to Health and Safety: Means right to be protected against the marketing of goods
and services, which are hazardous to life and property. The purchased goods and services
availed of should not only meet their immediate needs, but also fulfil long term interests.
Before purchasing, consumers should insist on the quality of the products as well as on
the guarantee of the products and services. They should preferably purchase quality
marked products such as ISI,AGMARK, etc.

• Right to Choose: Means right to be assured, wherever possible of access to variety of

goods and services at competitive price. In case of monopolies, it means right to be
assured of satisfactory quality and service at a fair price. It also includes right to basic
goods and services. This is because unrestricted right of the minority to choose can mean
a denial for the majority of its fair share. This right can be better exercised in a competitive
market where a variety of goods are available at competitive prices.

• Right to be Informed: Means right to be informed about the quality, quantity, potency,
purity, standard and price of goods so as to protect the consumer against unfair trade
practices. Consumer should insist on getting all the information about the product or
service before making a choice or a decision. This will enable him to act wisely and
responsibly and also enable him to desist from falling prey to high pressure selling
techniques.

• Right to Consumer Education: Means the right to acquire the knowledge and skill to be
an informed consumer throughout life. Ignorance of consumers, particularly of rural
consumers, is mainly responsible for their exploitation. They should know their rights and
must exercise them. Only then real consumer protection can be achieved with success.
 • Right to be Heard: Means that consumer's interests will receive due consideration at
appropriate forums. It also includes right to be represented in various forums formed to
consider the consumer's welfare. The Consumers should form non-political and non-
commercial consumer organizations which can be given representation in various
committees formed by the Government and other bodies in matters relating to
consumers.

• Right to Seek Redressal: Means right to seek redressal against unfair trade practices or
unscrupulous exploitation of consumers. It also includes right to fair settlement of the
genuine grievances of the consumer. Consumers must make complaint for their genuine
grievances. Many a times their complaint may be of small value but its impact on the
society as a whole may be very large. They can also take the help of consumer
organizations in seeking redressal of their grievances.

Consumer Responsibilities
• Ask Yourself! Have you faced any problems as a consumer? Have you ever complained
when you have had such a problem? Do you know that you could seek the assistance of
a consumer group to protect your interests?
• Be Critically Aware: The responsibility to be more alert and to question more – about
prices, about quantity and quality of goods bought and services used.
• Be Involved: The responsibility to be assertive – to ensure that you get a fair deal as a
consumer. Remember, if you are passive, you are likely to be exploited.
• Be Organized: The responsibility to join hands and raise voices as consumers; to fight in
a collective and to develop the strength and influence to promote and protect consumer
interest.
• Practice Sustainable Consumption: The responsibility to be aware of the impact of your
consumption on other citizens, especially the disadvantaged or powerless groups; and to
consume based on needs – not wants.
• Be Responsible to the Environment: The responsibility to be aware and to understand
the environmental consequences of our consumption. We should recognize our individual
and social responsibility to conserve natural resources and protect the earth for future
generations

Advantages of Consumerism
• Consumerism stimulates economic growth
• It also boosts creativity and innovation
• Cost reductions are encouraged because of consumerism
 • It weeds out the poor performers naturally
• Consumerism encourages freelancing, entrepreneurialism, and self-employment
• It creates safer goods for consumers
• Consumers are given more choices in this society

Disadvantages of Consumerism
• The economy takes precedence over the environment
• It changes the moral fabric of society
• Consumerism encourages debt
• It leads to health problems
• Consumerism does not provide fulfillment
• It can be used as a political tool
• Consumerism conflicts with various spiritual beliefs

Methods to protect Consumer

• Consumer can regulate and discipline their activities by forming voluntary consumer
organization.
• Manufacturer and trader can spread information and awareness about ethical use of their
product.
• Manufacturer and trader can self-regulate and discipline their activities and promise not
to cheat consumers.
• Manufacturer and trader can be regulated by the government legislation to stop carrying
any malpractices.

Consumer Dispute Redressal System

The Consumer Protection Act was passed by the Parliament in 1986 to protect the interest of
the consumer. The act defines the legal relationship between the consumers and the sellers. It
has a framework where aggrieved party can seek redressal under the law. Its main purpose is to
protect the consumer against defective goods, unsatisfactory services, unfair trade practices of
the seller.

What constitutes a complaint?

• Sale of goods that are hazardous to life and safety of the consumer.
• Deficiency in service.
• Defective goods.
• Inferior goods
 • Trader charging price more than what is:
❖ Fixed by the government or law;
❖ Displayed on goods

Where to file a complaint?

A 3-tier consumer dispute redressal system is provided in the consumer protection act.
• District Forum: If cost of goods or service and compensation asked for it is upto 20 lakh,
then complaint can be filed in a district forum, which has been notified by a state govt.,
for the district where the cause if action has arisen or where opposite party resides. A
complaint can also be filed at a place where branch office of opposite party is located.
This forum hears cases for any company that operates an office or branch office in a
district.

• State Commission: If cost of goods or service and compensation asked for it is more than
20 lakhs but less than 1 crore, then complaint can be filed in a state commission, which
has been notified by a state government. It usually deals with following cases:
❖ Appeal from district consumer forum.
❖ Cases against company that operates office or branch in state.
❖ Cases where the actual reason why complaint is filed, partially or fully occurred in
state.
❖ The state consumer court has power to transfer the case from one district forum
to other forum provided there is such a request or it is in interest of law.
❖ If complainant is not satisfied by verdict of state commission court, consumer can
apply in national commission within a period of 30 days.
❖ If verdict has been against company, it can appeal in only after depositing 50%
compensation of complaint or ₹35000 whichever is less.

• National Commission: If cost of goods or service and compensation asked for it is more
than 1 crore, then complaint can be filed in national commission at New Delhi. If the
complainant is not satisfied by the verdict of National commission, the consumer can
appeal in Supreme Court within a period of 30 days. If verdict is against a company, it can
appeal in Supreme court only after depositing 50% of compensation or ₹50000 whichever
is less.
Unethical Issues in Sales
Without sales, businesses die. This unvarnished truth drives businesses and salespeople to work
hard at securing sales. Unfortunately, the drive to sell or pressure from management to increase
sales volume often leads salespeople to use unethical sales techniques to bolster short-term
numbers. Ethical sales techniques produce enduring and profitable relationships with customers,
while unethical sales techniques damage those relationships and long-term profits.
• Unethical Technique – Excessive Fine Print: Some businesses bury warranty limitations,
performance guarantees and other information that might undermine customer
confidence in the fine print. Customers only discover this information when something
goes wrong and they want a refund, repair or alteration to the product. The company
informs the customers that their requests are not covered, not possible, or require an
excessive fee to accommodate. This deliberate obfuscation may lead to short-term sales
that a more honest approach would miss, but at a significant loss to the company’s
reputation over time.

• Unethical Technique – Bait and Switch: A classic unethical technique, the bait and switch
promise customers one thing and offers them something different at the store or on
delivery. For example, a grocery store promises to sell porterhouse steaks at half the
regular price. Customers arrive only to discover the store is “sold out,” except the store
never stocked porterhouses from the advertised brand at all, or only has a few available
that are gone quickly. Instead, it carries a more expensive brand it hopes the customer
will purchase instead.

• Unethical Technique – Misrepresentation: Misrepresentation takes many forms.

Salespeople may misrepresent the capabilities of a product to secure the sale. The
salesperson might misrepresent the actual costs of a product or offer a promotional price
as though it were the recurring cost. Misrepresentation also takes the form of pretending
the customer can expect product upgrades sooner than the company can possibly
institute the upgrades.

Unethical Issues in Marketing

Ethical marketing involves making honest claims and helping to satisfy the needs of customers.
Besides being the right thing to do, ethical marketing can have significant benefits for your
business. For example, if customers believe you’ll live up to your word, brand loyalty will develop,
customer retention will increase and your customers will tell others of their good experiences,
according to the book “Marketing,” by James L. Burrow. Unethical marketing activities, in
contrast, can destroy your business’s reputation and possibly lead to legal troubles.
 • Misleading Advertising: Outright false advertising is illegal. For example, reporting that
your product is safe for people to use when it isn’t can land you in serious trouble.
Misleading advertising might not rise to the level of false advertising, but it’s unethical
and can hurt your reputation with the public. For example, if you claim your product is
much better than it actually is, your company will appear untrustworthy. While it’s
important to put your best foot forward in marketing, avoid crossing the line by making
dishonest or exaggerated claims.

• Exploitation: Manipulating people by exploiting their fears is unethical. For example,

exaggerating the risks people face so you can sell them insurance is a form of
manipulation, as is tricking your customers into buying overpriced or useless extended
warranties. This approach is called the “fear-sell” tactic and is especially nefarious when
it targets people who are disadvantaged in some way. For example, the fear-sell tactic is
often used by insurance salesmen to trick low-income earners into buying unnecessary
insurance.

• Spam: Delivering a sales message to potential customers is part of a marketer’s job, but
it’s unethical to flood consumers with an onslaught of advertisements — especially when
they have not given you express permission to contact them. For example, email spam
and robo-calling using automatic diallers to contact many people without permission
typically are unethical marketing activities. Further, these practices might anger
customers rather than attract them to your business.

• Pushy Sales Tactics: It’s a salesperson’s job to convince customers to buy a product, but
being overly aggressive is unethical. For example, suppose a customer seems interested
in a purchase but asks for more time to consider the deal. An unethical salesperson might
bully the customer into making a quick decision, perhaps by lying about how the deal will
expire soon or how another customer is interested in the same item.

Unethical Issues in Advertising

In modern times, advertising has been playing a significant role in our socio-economic life. It is
considered an effective and cost-efficient tool for communication. Though advertising is used for
non-economic purposes, it is highly used to attain business objectives. In this era of globalization
and deregulation, advertising has acquired a new status. Technological advances have added new
feathers to the entire gamut of advertising, and hectic competition has made advertising more
powerful in the process of attracting and holding customers. As a result, advertising has been the
victim of criticisms and abuses.
Advertising is considered unethical when
• It gives false information.
• It degrades the rival’s product or substitute product.
• It makes exaggerated or tall claims.
• It is against the national and public interest.
• It gives misguiding information,
• It conceals information that vitally affects human life.
• It is obscene or immoral.

Forms of Unethical Advertising

• Alcohol Advertising: Alcohol advertising is banned on broadcast and print media in India.
But we can find manufacturers of alcohol advertising for Soda, in an effort to keep the
brand name afresh in the minds of the consumers.

• Tobacco Advertising: Tobacco advertising is considered an unethical advertising practice.

All cigarette advertisements should carry a Statutory warning that Smoking is injurious to
health in order to highlight the risks involved. But in reality, the advertisers release very
colorful and catchy advertisements of cigarettes that give an impression, especially to the
youth that smoking cigarettes is indeed graceful.

• False Claims:
❖ If an air-conditioning company advertises that it uses imported compressors in
their machines for ensuring better performance while actually using an
indigenously manufactured one, then it is a case of false claim.
❖ Advertisements offering mixtures and substances that claim to possess the ability
to prevent people from ageing are categorized as unethical.

• Exaggerated Claims: Such claims include those that make an assurance which may not be
true. For example, if a shampoo manufacturer claims that their product will remove
dandruff in hair forever even when used only once, is a case of an exaggerated claim.

• Unverified claims: The language used in such advertisements will be quite ambiguous.
For example, if a company advertises that its product offers instant hi-energy drink for
children. But the question arises what do we mean by instant hi-energy drink and what
are its parameters? And also, if there is no scientific verification of the energy it possesses,
such advertisements are included under unverified claims.
Intellectual Property Rights
Intellectual Property (IP) refers to exclusive rights associated to creations of the mind. Under IP
law, intangible assets such as inventions, literary and artistic work, designs, and phrases, symbols
and images can be protected. This protection can be obtained thanks to different kinds of IP
rights like patents, trademark, designs, copyright, and enables their owner to earn recognition or
financial benefit from their creation or invention.

Why is intellectual property rights being important?

• Set your business apart from competitors
• Be sold or licensed, providing an important revenue stream
• Offer customers something new and different
• Form an essential part of your marketing or branding
• Be used as security for loans
• Protect it against infringement by others and ultimately defend in the courts your sole
right to use, make, sell or import it
• Stop others using, making, selling or importing it without your permission
• Earn royalties by licensing it
• Exploit it through strategic alliances
• Make money by selling it

Types of Intellectual Property Rights

• Patents: A patent is a title which provides its owner the right to prevent others from
exploiting the invention mentioned in the patent. It does not allow by itself making or
selling an invention, but it rather gives the right to exclude others from making, using,
selling or importing the patented invention. This monopoly is granted for a specific field,
in a defined country and for a maximum of 20 years in return for the full disclosure of the
invention with the publication of its technical details.

• Trademarks: A trademark is a sign by which a business identifies its products or services

and distinguishes them from those supplied by competitors. It can be distinctive words,
marks or other features. Its purpose is to establish in the mind of the customer a link
between all the different products and/or services that the company offers, and then
distinguish them from those supplied by competitors. A trade mark may consist of any
signs capable of being represented graphically, particularly words, including personal
names, logos, letters, numerals, the shape of goods or of their packaging, provided that
such signs are capable of distinguishing the goods or services of one undertaking from
those of other undertakings.
• Copyrights: Copyright is a legal term describing rights given to creators for their original
literary, musical or artistic works which allow them to control their subsequent use.
Copyright protection has two components:
❖ Moral rights, which are not transferable and give the creator the right to be
identified as the author of the work and the right to object to any distortion or
mutilation of the work.
❖ Economic rights, which entitle the owner to control the use of its creation in a
number of ways and to obtain an appropriate economic reward.

• Design: Designs are concerned with the features, the appearance of a part or the whole
product:
❖ two-dimensional features such as patterns, lines and/or Colour.
❖ three-dimensional features such as shape, texture and/or surface of an article are
protectable by design right if they are not dictated by functional considerations.

Registration of design confers on the owner the exclusive right to use the design and to
authorize others to use it. It also includes the right to make, offer, put on the market,
import, export, or use a product in which the design is incorporated or to which it is
applied, or to stock such a product for those purposes. The maximum duration of design
protection varies from country to country from 5 to 25 years

• Know-How and Trade Secret: Trade secrets and Know-How are two kinds of confidential
information which give a competitive advantage to businesses which hold them with
regard to their competitors. Trade secrets concern secret or proprietary information of
commercial value. These are not covered by specific statutory provisions as other types
of IP are, although there could be aspects of contract law, or employment law that might
be relevant in a particular case.

Know-how is defined as a package of non-patented practical information, resulting from

experience and testing. In addition, Know-how has to be "secret, substantial, identified
and valuable". It is composed by information with economic value, not accessible to the
public, transferable and non-patented. In addition, know-how should be characterized
and / or described on a material support.
Corruption in Business and Administration
Corruption is one of the worst enemies of business because it can result in far-reaching
consequences, including total closure of the company. The vice can be perpetuated by an
individual or a group of employees within a business organization. Corruption in business involves
misappropriation of funds, bribery, misuse of office by company officials and dishonesty in
financial matters. Its magnitude notwithstanding, corruption can hurt the image of the business
and jeopardize its profitability.

Types of Corruption
• Bribery: Bribery is by far the most prolific form of corruption in business. It can take place
between two private individuals or a public official and a private individual. Bribes take
many forms. Sometimes referred to as "grease" money, public employees may require
payment before granting businesses permits or licenses. Public officials may also demand
bribes to accelerate approval processes and to obtain state grants, subsidies, contracts
and loans. Small businesses may bribe larger companies to get contracts, and in newly
developed countries, small businesses may have to provide additional payments to local
utilities in order to receive phone service and electricity.

• Fraud: Fraud is another form of business corruption by which officers of the company
misuse their office for personal gain. Numerous cases of this type of corruption continue
to surface in the United States in both the public and private sectors. In many cases,
particularly related to publicly owned businesses, executives convert public dollars to
private gain by authorizing bonuses for themselves; payouts of vacation or other accrued
time to which they are not entitled; or enriching their own salaries at the expense of lower
level employees. These payouts then increase the public pensions the corrupt individuals
receive, and which the taxpayers must fund.

• Embezzlement: Taking the company's goods or funds for personal gain is called
embezzlement. Persons with the authority to redirect the funds, or the ability to hide the
fact that the funds are missing, are typically the offenders. Embezzlement can involve
taking small amounts of money over time, called "skimming," taking large amounts of
goods or money at one time, then disappearing or under reporting income and keeping
the difference. Additionally, embezzlement by its nature involves income tax evasion, as
the embezzlers may not report the additional income to the IRS as required.
 • Kickbacks: Kickbacks are payments made to businesses by vendors in exchange for
contracts that overinflate the cost of the work performed at the expense of those
receiving the services and paying for the contract. In New York, for example, a building
management company went out to bid on an elevator project. The bid included a kickback
to the management company. The work that was done was substandard and the residents
of the co-op were forced to hire another contractor to repair the prior company's work
and to complete the job.

Effects of Corruption in Business

• Financial Losses: Corruption often results in loss of funds through embezzlement and
graft. Resources that could be useful in implementing business strategies are derailed or
used unproductively. The practice may lead to loss of customers who lose faith in the
organization and prefer rival products, leading to losses. Besides, internal or external
corruption may force a company to inflate its prices so as to recover lost resources.
Competing firms can seize this opportunity to outdo the affected firm, leading to a
significant decline in market share for the affected organization. The firm can also accrue
losses trying to reassure its customers, partners and the general public.

• Discouragement of Shareholders and Investors: Reports of corruption in a firm can cause

shareholders and investors to lose trust and confidence in the business. Perpetuation of
fraud boosts the entrepreneurs’ risk of accruing losses through a decline in sales and
misuse of scarce resources among others. Corruption, either internal or external, can
discourage potential innovators and entrepreneurs from investing in business
opportunities for fear of failure.

• Damaged Business Image: Corruption within a firm can dent the image of the business
organization concerned. As customers and the general public get a negative picture of the
company, they may lose trust in the company and its products. This may result in loss of
clients and reputable business partners. It can take time for a business organization to
rebuild its reputation and win people’s trust again, if ever.

• Business Inefficiency: Because corruption entails improper use of the available resources,
it can jeopardize the efficiency of a business organization. Resources that would be used
in implementing important business operations are instead employed in unrelated or
unproductive functions. Bribery in the process of awarding tenders and contracts may
result in enlistment of incompetent contractors. In the process, business efficiency and
productivity suffer. Inefficiency can also result from employees who are demoralized --
due to corruption in the business. Besides, fraud in the recruitment process may lead to
hiring of incompetent employees who are unproductive in the firm.
Causes of Corruption
• Personal greed that leads to an unfettered desire for money or power, with no regard
whatsoever to moral boundaries. The underlying anthropological cause is the innate
human impulse to own external goods, when it is not subject to personal integrity. Is
personal integrity less valued than it used to be? Is there a need for religious or other
types of motivation that were once stronger?

• Decline of personal ethical sensitivity, either due to lack of education or negative

learning experiences, developed by downplaying perverse conduct in the past. Should
ethical education be put under review? Is it time for a personal reassessment with
sincerity and repentance, to learn more about its influence in promoting positive
learning?

• No sense of service when working in public or private institutions. This is seen, for
instance, in those who use politics for their selfish interests, instead of serving the
common good through politics. How can we promote politicians and leaders with a true
service-oriented spirit?

• Low awareness or lack of courage to denounce corrupt behavior and situations

conducive to corruption. That is the case of someone who is aware of corruption and stays
quiet. They simply cover for the corrupt individuals, perhaps thinking that it is not their
problem, or perhaps out of cowardice, so as not to make their lives more complicated.
Would it help to promote a culture of denouncing corruption?

• Cultural environments that condone corruption. Such as defending or even admiring

crooks (“you have to be pretty smart to evade taxes”). Or rationalizing false arguments
with no moral basis (“everyone does it”; “take advantage while you can”; “life is short”).
Who ought to promote that culture? Social leaders? Everyone?

• Lack of transparency, especially at the institutional level, but also in less formal
organizations. Knowing that what you do is seen by everyone, wouldn’t that deter acts of
corruption?

• Regulations and inefficient controls. Increased regulations and control mechanisms are
probably not the answer. They are costly and tend to stifle initiatives and administrative
dynamics. But why not have better regulation and more effective control in areas prone
to corruption. Is that so difficult?
 • Slow judicial processes. In some other countries, we would have to add “and unreliable”
to that statement. Swift processes can have a greater exemplifying effect than those that,
by the time the sentence comes, the crime already is nearly forgotten. Justice requires
appealing processes and warranties, but not if it means slowing down the administration
of justice. Do we need more judges, but also better processes?

• Lack of moral criteria in promotions. Corruption is prevalent when there are no criteria
for proven integrity and responsibility in the promotion. Such criteria are ignored when
someone is promoted simply because of their loyalty to whoever is in charge or those
in control of the party. Or if it is only their strategic or organizational skills that are
evaluated. Obviously, someone can be wrong when making a promoting someone, but
there should be no problem distinguishing between a simple mistake and culpable
ignorance due to negligence or a lack of ethical assessment. Is it an issue of ethical short-
sightedness?

• Downplaying or reacting mildly to corruption charges. Little power of decision within

organizations to penalize acts of corruption to set examples creates an environment
conducive to perpetuating corruption.

Building a Value Based Corporate Culture

A values-based organization (VBO) is a living, breathing culture of shared core values among all
employees. This is different from the traditional structure which is a more machine-like, business
approach that focuses on an authoritarian type relationship or rigid organizational structure. A
values-based organization is a culture shaped by a clear set of ground rules establishing a
foundation and guiding principles for decision-making, actions and a sense of community. In a
values-driven culture, employees find alignment between their personal values and the
organization’s values creating a unified and motivated workforce.

Management and leadership set examples for their organizations and live the values they preach.
Strongly held value-systems rarely change yet remain flexible to handle changes in strategy or
outside influences such as competition or the economy. A strongly held values-based culture or
purpose will remain more stable over time characterized by productivity and employee
commitment.

There are many components to a values-based approach to management. Some of the most
important are.
• Make sure values are defined in ways that are simple and understandable by everyone in
the organization.
 • Understand the link between stated values and what that means in terms of employee
behaviors.
• You must hire, reward, recognize, and even fire people based upon stated values.
• You must maintain the simple discipline needed to keep your culture from falling into old
habits.

3 Key Steps to Build a Value Based Corporate Culture

• Start at the top: People learn about values less from what we tell them and more by what
we show them. It may seem obvious, but as with most any strategic initiative, support
and modelling from the top of one’s organization is essential. At an organization a CEO,
President, and Executive team were a key part of development and from the beginning,
have integrated values into All-Hands Calls, client meetings, and employee summits.

• On-going training and education are required:

❖ Clearly define terminology – ensure that everyone within your organization
understands how you have defined your values.
❖ Teach the concepts with examples – values can be abstract and therefore using
examples and stories is crucial to cement understanding.
❖ Provide simple opportunities to immediately apply what is learned.
❖ Recognize and reward successes-things which are reinforced tend to be repeated.
❖ Integrate terminology and concepts into everyday conversations and activities

• It takes time and patience: The process of fully integrating values into a culture takes
time. In fact, it is a process that requires on-going support, reinforcement, and resources.
Introducing an initiative like this can take several months to do properly. And, once
introduced, organizational values must be constantly integrated into everyday practices.
This includes:
❖ Integrating values into your recruiting processes to ensure strong fit.
❖ Ensuring that all new hires are introduced to your values early in their onboarding.
❖ Incorporating values into Reward and Recognition programs.
❖ Ensuring that People Leaders include discussions of values into performance
development conversations.

Benefits of Building a Value Based Corporate Culture

• Develop clear and concise values
• Allow employees to pursue opportunities for growth and learning
• Invest in your employees
 • Create a flat and open organization
• Promote transparency

Big Data
Big data is a term that describes the large volume of data – both structured and unstructured –
that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important.
It’s what organizations do with the data that matters. Big data can be analyzed for insights that
lead to better decisions and strategic business moves.

3 Dimensions of Big Data (3 V’s of Big Data)

• Volume. Organizations collect data from a variety of sources, including business
transactions, social media and information from sensor or machine-to-machine data. In
the past, storing it would’ve been a problem – but new technologies (such as Hadoop)
have eased the burden.
• Velocity. Data streams in at an unprecedented speed and must be dealt with in a timely
manner. RFID tags, sensors and smart metering are driving the need to deal with torrents
of data in near-real time.
• Variety. Data comes in all types of formats – from structured, numeric data in traditional
databases to unstructured text documents, email, video, audio, stock ticker data and
financial transactions.

Importance of Big Data

• Determining root causes of failures, issues and defects in near-real time.
• Generating coupons at the point of sale based on the customer’s buying habits.
• Recalculating entire risk portfolios in minutes.
• Detecting fraudulent behavior before it affects your organization.
• Cost & Time reduction
• New product development and optimized offering
• Smart decision making

How Big Data is Stored and Processed?

The need to handle big data velocity imposes unique demands on the underlying compute
infrastructure. The computing power required to quickly process huge volumes and varieties of
data can overwhelm a single server or server cluster. Organizations must apply adequate
processing capacity to big data tasks to achieve the required velocity. This can potentially
demand hundreds or thousands of servers that can distribute the processing work and operate
collaboratively in a clustered architecture.
Achieving such velocity in a cost-effective manner is also a challenge. Many enterprise leaders
are reticent to invest in an extensive server and storage infrastructure to support big data
workloads, particularly ones that don't run 24/7. As a result, public cloud computing is now a
primary vehicle for hosting big data systems. A public cloud provider can store petabytes of data
and scale up the required number of servers just long enough to complete a big data analytics
project. The business only pays for the storage and compute time actually used, and the cloud
instances can be turned off until they're needed again.

To improve service levels even further, public cloud providers offer big data capabilities through
managed services that include highly distributed Apache Hadoop compute instances, the Apache
Spark processing engine and related big data technologies. Amazon Elastic MapReduce (EMR)
from Amazon Web Services (AWS) is one example of a big data service that runs in a public cloud;
others include Microsoft's Azure HDInsight and Google Cloud Dataproc. In cloud environments,
big data can be stored in the Hadoop Distributed File System (HDFS) or in lower-cost cloud object
storage, such as Amazon Simple Storage Service (S3); NoSQL databases are another option in the
cloud for applications that are a good fit for them.

For organizations that want to deploy on-premises big data systems, commonly used Apache
open source technologies in addition to Hadoop and Spark include Yet Another Resource
Negotiator (YARN), Hadoop's built-in resource manager and job scheduler; the MapReduce
programming framework; Kafka, an application-to-application messaging and data streaming
platform; the HBase database; and SQL-on-Hadoop query engines like Drill, Hive, Impala and
Presto. Users can install the open source versions of the technologies themselves or turn to
commercial big data platforms offered by Cloudera, Hortonworks and MapR Technologies,
which are also supported in the cloud.

Big Data: Ethical and Regulatory Framework

Vast quantities of data about individuals are increasingly being created by services such as mobile
apps and online social networks and through methods such as DNA sequencing. These data are
quite rich, containing a large number of fine-grained data points related to human biology,
characteristics, behaviors, and relationships over time. They hold tremendous potential for
scientific inquiry, as they can enable researchers to explore research questions at an
unprecedented level of detail. In addition, the costs of obtaining, storing, and analyzing these
types of data are quite low, and falling, relative to the costs of conducting traditional research
studies.
For these reasons, large-scale data are leading growth in fields such as computational social
science and biomedical big data research. As just one example, public health researchers are
supplementing traditional methods of disease outbreak detection with streams of data from
social networks, chat rooms, and web search queries. Interest in big data for research is expected
to continue to rise as the number of large-scale data sources rises and the capabilities for big
data analysis advance. We argue, however, that the current research framework is ill-suited to
the oversight of large-scale data research.

Privacy self-management gives users the option to control their data by allowing and revoking
access to their data by opting in and out. However, this is not always the reality, because personal
data are collected, used and analyzed and at times shared and abused. Consent is always not
read and if read not always completely understood, and if not accepted by the user he might not
have no access to certain service or choose an inappropriate alternate.

It argues that oversight should aim to provide universal coverage of human subjects research,
regardless of funding source, across all stages of the information lifecycle. New definitions and
standards should be developed based on a modern understanding of privacy science and the
expectations of research subjects.

Principles of Big Data Ethics

• Private customer data and identity should remain private.
• Shared private information should be treated confidentiality.
• Customers should have transparent view.
• Big data should not interfere with human will.
• Big data should not institutionalize with unfair biases.

Four Elements of Big Data Ethics

• Identity: What is relationship between our offline and online identity?
• Privacy: Who should control access of data?
• Ownership: Who owns data, can rights to it be transferred and what are the obligation of
the people who generate and use that data?
• Reputation: How can we determine what data is trustworthy? Whether about ourselves,
others or anything else, big data exponentially increase the amount of information and
ways we can interact with it.
Unit 3 Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a management concept whereby companies integrate
social and environmental concerns in their business operations and interaction with the
stakeholders. It is a way through which company achieves a balance of economic, environmental
and social imperatives. While at the same time addressing the expectations of the shareholders
and stakeholders.

CSR in India
India is the first country in the world to make corporate social responsibility (CSR) mandatory,
following an amendment to The Company Act, 2013 in April 2014. Businesses can invest their
profits in areas such as education, poverty, gender equality, and hunger. Company having:
• Minimum net worth of rupees 500 Crore.
• Turnover up to "1000 Crore"
• having a net profit of at least '5crore'

during any financial year, are covered by this provision.

The Company should constitute a Corporate Social Responsibility Committee as follows:

• The Committee shall consist of minimum 3 including 1 Independent Director, however in
case of Private Company or the Company, which is not required to appoint Independent
Director on board, or Foreign Company committee can be formulated with 2 directors.

• The CSR Policy shall be formulated in accordance with Schedule VII and the CSR
Committee will be responsible for framing the policy, finalizing the amount to be spent
on CSR, monitoring & implementation of the Scheme.

• If Company ceases to fulfill the eligibility criteria for three consecutive years, then the
company is not required to comply until the company will meet the eligibility criteria once
again.

Current CSR Practices of the Firms in India

Brief on CSR Activities as prescribed under Schedule VII of Companies Act, 2013
• Objective to efface the daily life segments including poverty, malnutrition and hunger
while enhancing the standard of living and promoting the facets of better health care and
sanitation.

• Introducing varied projects for Rural Development.

 • Initiative to promote the different segments of education including special education and
programs to enhance the vocation skills for all ages like children, women, elderly and
conducting other livelihood enhancement projects.

• Aim to bring the uniformity in respect of different sections of the society to promote
gender equality and other facilities for senior citizens and developing hostels for women
and orphans and taking initiative for empowering women and lowering inequalities faced
by socially and economically backward groups.

• Elevate the segment of flora and fauna to bring the ecological balance and environmental
sustainability in respect of animal welfare, conservation of natural resources and ago
forestry while maintaining the quality of air, water and soil.

• Enhancement of Craftsmanship while protecting art and culture and measures to restore
sites of historical importance and national heritage and promoting the works of art and
setting up of public libraries.

• Steps to bring worthy to the part of war windows, armed force veterans and their
departments.

• Sports programs and training sessions to enhance the level of rural sports, nationally
recognized sports, Paralympic sports and Olympics sports.

• Favoring to Prime Minister's National Relief Fund and contribution to other fund set up
by the central government to promote socio-economic development and welfare of the
schedule castes and Schedule Tribes and for supporting backward classes, minorities and
women.

• To uplift the technology of incubator that's comes under academic institutions and which
are approved by the Central Government.

Example:
• Tata Group: The Tata Group conglomerate in India carries out various CSR projects, most
of which are community improvement and poverty alleviation programs. Through self-
help groups, it is engaged in women empowerment activities, income generation, rural
community development, and other social welfare programs. In the field of education,
the Tata Group provides scholarships and endowments for numerous institutions.
 • Ultratech Cement: Ultratech Cement, India’s biggest cement company is involved in social
work across 407 villages in the country aiming to create sustainability and self-reliance.
Its CSR activities focus on healthcare and family welfare programs, education,
infrastructure, environment, social welfare, and sustainable livelihood. The company has
organized medical camps, immunization programs, sanitization programs, school
enrollment, plantation drives, water conservation programs, industrial training, and
organic farming programs.

• Mahindra & Mahindra: Indian automobile manufacturer Mahindra & Mahindra (M&M)
established the K. C. Mahindra Education Trust in 1954, followed by Mahindra Foundation
in 1969 with the purpose of promoting education. The company primarily focuses on
education programs to assist economically and socially disadvantaged communities. CSR
programs invest in scholarships and grants, livelihood training, healthcare for remote
areas, water conservation, and disaster relief programs. M&M runs programs such as
Nanhi Kali focusing on girl education, Mahindra Pride Schools for industrial training, and
Lifeline Express for healthcare services in remote areas.

Current CSR Practices of the Firms in Abroad

CSR in US
US companies have had the luxury of defining and interpreting their own view of responsible
business within the context of their own company. Subsequently they have been able to measure
and promote activities with greater freedom than their international counterparts.

CSR in Australia
“Social responsibility is the responsibility of an organization for the impacts of its decisions and
activities on society and the environment, through transparent and ethical behavior that
contributes to sustainable development, including the health and the welfare of society
• Considers the expectations of stakeholders
• Follows applicable law and consistent with international norms of behavior and Is
integrated throughout the organization and practiced in its relationships.”

Corporate Social Responsibility or CSR has been debated since the early twentieth century, but
there has been little agreement over its definition due to:
• Differences in national and cultural approaches to business
• Differences in motivation for CSR – doing it because it is morally correct or doing it
because it makes good business sense
• Differences in disciplinary backgrounds, perspectives and methods of scholars engaged
with CSR
CSR in Canada
Canada’s enhanced Corporate Social Responsibility (CSR) Strategy, “Doing Business the Canadian
Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad”
builds on experience and best practices gained since the 2009 launch of Canada’s first CSR
strategy, “Building the Canadian Advantage: A Corporate Social Responsibility Strategy for the
Canadian Extractive Sector Abroad.”
• Re-focusing the role of the Office of the CSR Counsellor, including strengthening its
mandate to promote strong CSR guidelines to the Canadian extractive sector and advising
companies on incorporating such guidelines into their operating approach. The CSR
Counsellor will also build on the work conducted at missions abroad by refocusing efforts
on working to prevent, identify and resolve disputes in their early stages;
• In situations where parties to a dispute would benefit from formal mediation, the CSR
Counselor will encourage them to refer their issue to Canada’s National Contact Point
(NCP), the robust and proven dispute resolution mechanism, guided by the OECD
Guidelines for Multinational Enterprises on responsible business conduct, and active in
46 countries;
• Companies are expected to align with CSR guidelines and will be recognized by the CSR
Counselor’s Office as eligible for enhanced Government of Canada economic diplomacy.
As a penalty for companies that do not embody CSR best practices and refuse to
participate in the CSR Counselor’s Office or NCP dispute resolution processes,
Government of Canada support in foreign markets will be withdrawn;

CSR in United Arab Emirates

The concept of corporate social responsibility (CSR) in Dubai and the UAE has always been
present from the earliest Islamic times, with people and organizations practising Islamic values,
donating through philanthropy and Shariah compliant ways of commerce. In recent years, there
have been worldwide initiatives to invest responsibly and focus on investing profits into
community life and saving the environment.

International framework of CSR and Sustainability

All aspects of doing business - procurement, production and sales - are part of globally integrated
structures, often putting them outside the influence of exclusively national legislation. But how
can we make sure that in such a world the profit of one person does not result from harming
somebody else? To this end, international organizations have developed guidelines that offer
globally active company’s guidance and are designed to ensure that social and environmental
responsibility are part of the equation.
Global Compact
The United Nations Global Compact is non-binding United Nations pact to encourage businesses
worldwide to adopt sustainable and socially responsible policies, and to report on their
implementation. The UN Global Compact is a principle-based framework for businesses, stating
ten principles in the areas of human rights, labor, the environment and anti-corruption. Under
the Global Compact, companies are brought together with UN agencies, labor groups and civil
society. Cities can join the Global Compact through the Cities Programme.

Principles of Global Compact

Corporate sustainability starts with a company’s value system and a principles-based approach
to doing business. This means operating in ways that, at a minimum, meet fundamental
responsibilities in the areas of human rights, labor, environment and anti-corruption.

The Ten Principles of the United Nations Global Compact are derived from: The Universal
Declaration of Human Rights, the International Labour Organization’s Declaration on
Fundamental Principles and Rights at Work, the Rio Declaration on Environment and
Development, and the United Nations Convention Against Corruption.
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed
human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.

Labor
Principle 3: Businesses should uphold the freedom of association and the effective recognition
of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labor;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and
bribery.
Caux Round Table
The Caux Round Table is an international organization of senior business executives aiming to
promote ethical business practice. The Caux Round Table (CRT) is an international network of
business leaders working to promote moral capitalism and advance living standards, social
justice, and human dignity across the globe. In 1994, CRT developed its "Principles for Business"
to provide guidelines for companies seeking to behave in an ethical and responsible manner. CRT
also translates these “Principles of Business” into action as it suggests tangible standards,
benchmarks, and management practices, and offers ethical training programs for corporate
boards and specially designed ethics curricula for business schools.

Vision
Our VISION is for a world with - Rising Living Standards, Social Justice and Human Dignity for All
Our vision is all about being obsessed with better possibilities for all. This vision is not small; to
facilitate change for the better in humanity's ability to raise living standards, provide for social
justice and realize the fullness of individual human dignity in all our days is a challenge of massive
proportions but it is a challenge we readily accept.

Mission
• To promote moral capitalism and responsible government
• To ensure greater prosperity, sustainability and fairness in a global economy.

General Principles of Caux Round Table

Principle 1. The Responsibilities of Businesses: Beyond Shareholders toward Stakeholders.
The value of a business to society is the wealth and employment it creates and the marketable
products and services it provides to consumers at a reasonable price commensurate with quality.
To create such value, a business must maintain its own economic health and viability, but survival
is not a sufficient goal.

Principle 2. The Economic and Social Impact of Business: Toward Innovation, Justice and World
Community
Businesses established in foreign countries to develop, produce or sell should also contribute to
the social advancement of those countries by creating productive employment and helping to
raise the purchasing power of their citizens. Businesses also should contribute to human rights,
education, welfare, and vitalization of the countries in which they operate.

Principle 3. Respect for the Environment

A business should protect and, where possible, improve the environment, promote sustainable
development, and prevent the wasteful use of natural resources.
Principle 4. Business Behavior: Beyond the Letter of Law Toward a Spirit of Trust
While accepting the legitimacy of trade secrets, businesses should recognize that sincerity,
candor, truthfulness, the keeping of promises, and transparency contribute not only to their own
credibility and stability but also to the smoothness and efficiency of business transactions,
particularly on the international level.

Principle 5. Respect for Rules

To avoid trade frictions and to promote freer trade, equal conditions for competition, and fair
and equitable treatment for all participants, businesses should respect international & domestic
rules. They should recognize that some behavior, although legal, have adverse consequences.

Principle 6. Support for Multilateral Trade

Businesses should support the multilateral trade systems of the GATT/World Trade Organization
and similar international agreements. They should cooperate in efforts to promote the
progressive and judicious liberalization of trade and to relax those domestic measures that
unreasonably hinder global commerce, while giving due respect to national policy objectives.

Principle 7. Avoidance of Illicit Operations

A business should not participate in or condone bribery, money laundering, or other corrupt
practices: indeed, it should seek cooperation with others to eliminate them. It should not trade
in arms or other materials used for terrorist activities, drug traffic or other organized crime.

OECD Guidelines for Multinational Enterprise

The Organization for Economic Co-operation and Development (OECD) is an intergovernmental
economic organization with 36-member countries, founded in 1961 to stimulate economic
progress and world trade. It is a forum of countries describing themselves as committed
to democracy and the market economy, providing a platform to compare policy experiences,
seeking answers to common problems, identify good practices and coordinate domestic and
international policies of its members. Most OECD members are high-income economies with a
very high Human Development Index (HDI) and are regarded as developed countries.

The Organization for Economic Co-operation and Development (OECD)

History: established in 1961
Headquarters: Paris, France
Membership: 36 countries
Budget: EUR 374 million
OECD Secretary-General: Angel Gurría
Secretariat staff: 2 500
Mission By OECD
The mission of the Organisation for Economic Co-operation and Development (OECD) is to
promote policies that will improve the economic and social well-being of people around the
world. The OECD provides a forum in which governments can work together to share experiences
and seek solutions to common problems. We work with governments to understand what drives
economic, social and environmental change. We measure productivity and global flows of trade
and investment. We analyses and compare data to predict future trends. We set international
standards on a wide range of things, from agriculture and tax to the safety of chemicals.

OECD WORKING MECHANISM

OECD uses its wealth of information on a broad range of topics to help governments foster
prosperity and fight poverty through economic growth and financial stability. We help ensure the
environmental implications of economic and social development are considered.

OECD's work is based on continued monitoring of events in member countries as well as outside
OECD area, and includes regular projections of short and medium-term economic
developments. The OECD Secretariat collects and analyses data, after which committees discuss
policy regarding this information, the Council makes decisions, and then governments implement
recommendations.
Peer reviews: Mutual examination by governments, multilateral surveillance and a peer review
process through which the performance of individual countries is monitored by their peers, all
carried out at committee-level, are at the heart of our effectiveness. For e.g., signatory countries
of OECD Convention on Combating Bribery of Officials in International Business Transactions.
The Guidelines cover business ethics on a range of issues, including:
• Employment and industrial relations
• Human rights
• Environment
• Information disclosure
• Combating bribery
• Consumer interests
• Science and technology
• Competition
• Taxation

GRI (Global Reporting Initiative)

The Global Reporting Initiative (GRI) is an international independent standards organization that
helps businesses, governments and other organizations understand and communicate their
impacts on issues such as climate change, human rights and corruption. Under increasing
pressure from different stakeholder, to be more transparent about their environmental,
economic and social impacts, many companies publish a sustainability report, also known as a
corporate social responsibility (CSR) or environmental, social and governance (ESG) report.

GRI helps businesses and governments worldwide understand and communicate their impact on
critical sustainability issues such as climate change, human rights, governance and social well-
being. This enables real action to create social, environmental and economic benefits for
everyone.

Our Vision is: A thriving global community that lifts humanity and enhances the resources on
which all life depends.

Our Mission is: To empower decisions that create social, environmental and economic benefits
for everyone

Focus Area of GRI

In order to deliver on its mission, GRI has identified four focus areas for the coming years:
 • Create standards and guidance to advance sustainable development: Provide the
market with leadership on consistent sustainability disclosures, including engaging with
stakeholders on emerging sustainability issues.

• Harmonize the sustainability landscape: Make GRI the central hub for sustainability
reporting frameworks and initiatives and select collaboration and partnership
opportunities that serve GRI's vision and mission.

• Lead efficient and effective sustainability reporting: Improve the quality of disclosures
made using the GRI Standards, reducing reporting burden and exploring reporting
processes that aid decision making.

• Drive effective use of sustainability information to improve performance: Work with

policy maker, stock exchanges, regulators and investors to drive transparency and enable
effective reporting.

GRI Sustainability Reporting Standards

It help businesses, governments and other organizations understand and communicate the
impact of business on critical sustainability issues. Some of the distinctive elements of the GRI
Standards – and the activity that creates them include:
• Multi-stakeholder input: Our approach is based on multi-stakeholder
engagement, representing the best combination of technical expertise and diversity of
experience to address the needs of all report makers and users. This approach enables us
to produce universally-applicable reporting guidance. All elements of the Reporting
Framework are created and improved using a consensus-seeking approach and
considering the widest possible range of stakeholder interests which includes business,
civil society, labor, accounting, investors, academics, governments and sustainability
reporting practitioners.

• A record of use and endorsement: Of the world’s largest 250 corporations, 92% report
on their sustainability performance and 74% of these use GRI’s Standards to do so. With
over 23,000 GRI Reports recorded in our database, sustainability reporting using the GRI
Standards continues to grow. New audiences for sustainability information, like investors
and regulators, are now calling for more and better performance data. Annual growth in
the number of reporters is expected to continue, as we work towards a key area of our
strategy: more reporters and better reporting.
 • Shared development costs: The expense of developing GRI’s reporting guidance is shared
among many users and contributors. For companies and organizations, this negates the
cost of developing in-house or sector-based reporting frameworks.

• Governmental references and activities: Enabling policy is a key aspect of our overall
strategy and we work with governments, international organizations and capital markets
to further this agenda. As a result of our work, 35 countries use GRI in their sustainability
policies and look to us for guidance as the world’s most widely used sustainability
reporting standards. In addition, we have long-standing collaborations with over 20
international organizations such as the UNGC, OECD and the UN Working Group on
Business & Human Rights.

• Independence: The creation of the Global Sustainability Standards Board in 2014, and
related governance structure changes, have strengthened the independence of the
standards aspect of our work. Our funding approach also ensures our independence. GRI
is a stitching – in Dutch, a non-profit foundation – with a business model that aims for a
degree of self-sufficiency. Funding is secured from diverse sources; governments,
companies, foundations, partner organizations and supporters.

In addition to developing the GRI Standards, we work to support their widespread use and
implementation.
• Companies: The GRI Community offers organizations the opportunity to join a
collaborative, global multi-stakeholder network that works together to reach our
common goal of a sustainable global economy through greater transparency. The GRI
Support Suite offers tools and services to guide and equip those responsible for
developing their organization’s sustainability report at every stage of the process.
• Strategic partners: GRI is an international, not-for-profit organization, generously
supported by a diverse range of partners. These partners help shape our agenda and
support the work we do to advance sustainable development through greater
transparency and accountability, with a focus on emerging markets.
• Policy makers: We advise governments, stock exchanges and market regulators in their
policy development to help create a more conducive environment for sustainability
reporting.
SA-8000 Standard
SA8000 is an auditable certification standard that encourages organizations to develop, maintain,
and apply socially acceptable practices in the workplace. It was developed in 1989 by Social
Accountability International, formerly the Council on Economic Priorities, by an advisory board
consisting of trade unions, NGOs, civil society organizations and companies. The SA8000's criteria
were developed from various industry and corporate codes to create a common standard for
social welfare compliance.
SA8000 certification is a management system standard, modelled on ISO standards. The criteria
require that facilities seeking to gain and maintain certification must go beyond simple
compliance to the standard. Prospective facilities must integrate it into their management
practices and demonstrate ongoing compliance with the standard. SA8000 is based on the
principles of international human rights norms as described in International Labour Organisation
conventions, the United Nations Convention on the Rights of the Child and the Universal
Declaration of Human Rights. It measures the performance of companies in eight areas important
to social accountability in the workplace.
• Child Labor: No use or support of child labor; policies and written procedures for
remediation of children found to be working in situation; provide adequate financial and
other support to enable such children to attend school; and employment of young
workers conditional.

• Forced and Compulsory Labor: No use or support for forced or compulsory labor; no
required ‘deposits’ – financial or otherwise; no withholding salary, benefits, property or
documents to force personnel to continue work; personnel right to leave premises after
workday; personnel free to terminate their employment; and no use nor support for
human trafficking.

• Health and Safety: Provide a safe and healthy workplace; prevent potential occupational
accidents; appoint senior manager to ensure OSH; instruction on OSH for all personnel;
system to detect, avoid, respond to risks; record all accidents; provide personal protection
equipment and medical attention in event of work-related injury; remove, reduce risks to
new and expectant mothers; hygiene- toilet, potable water, sanitary food storage; decent
dormitories- clean, safe, meet basic needs; and worker right to remove from imminent
danger.

• Disciplinary Practices: Treat all personnel with dignity and respect; zero tolerance of
corporal punishment, mental or physical abuse of personnel; no harsh or inhumane
treatment.
 • Freedom of Association and Right to Collective Bargaining: Respect the right to form and
join trade unions and bargain collectively. All personnel are free to: organize trade unions
of their choice; and bargain collectively with their employer. A company shall: respect
right to organize unions & bargain collectively; not interfere in workers’ organizations or
collective bargaining; inform personnel of these rights & freedom from retaliation; where
law restricts rights, allow workers freely elect representatives; ensure no discrimination
against personnel engaged in worker organizations; and ensure access at the workplace.

• Discrimination: No discrimination based on race, national or social origin, caste, birth,

religion, disability, gender, sexual orientation, union membership, political opinions and
age. No discrimination in hiring, remuneration, access to training, promotion,
termination, and retirement. No interference with exercise of personnel tenets or
practices; prohibition of threatening, abusive, exploitative, coercive behavior at
workplace or company facilities; no pregnancy or virginity tests under any circumstances.

• Working Hours: Compliance with laws & industry standards; normal workweek, not
including overtime, shall not exceed 48 hours; 1 day off following every 6 consecutive
work days, with some exceptions; overtime is voluntary, not regular, not more than 12
hours per week; required overtime only if negotiated in CBA.

• Remuneration: Respect right of personnel to living wage; all workers paid at least legal
minimum wage; wages sufficient to meet basic needs & provide discretionary income;
deductions not for disciplinary purposes, with some exceptions; wages and benefits
clearly communicated to workers; paid in convenient manner – cash or check form;
overtime paid at premium rate; prohibited use of labor-only contracting, short-term
contracts, false apprenticeship schemes to avoid legal obligations to personnel.

BS/ISO Guideline on CSR Management (ISO-26000)

ISO 26000 provides guidance on how businesses and organizations can operate in a socially
responsible way. This means acting in an ethical and transparent way that contributes to the
health and welfare of society.

ISO 26000 gives guidance on SR. It integrates international expertise on social responsibility –
what it means, what issues an organization needs to address in order to operate in a socially
responsible manner, and what is best practice in implementing.
It is intended for use by organizations of all types, in both public and private sectors, in developed
and developing countries, as well as in economies in transition. ISO 26000 is a powerful SR tool
to assist organizations to move from good intentions to good actions. ISO 26000 contains
voluntary guidance, not requirements, and therefore is not for use as a certification standard like
ISO 9001:2008 and ISO 14001:2004.

Why is ISO 26000 important?

• Sustainable business for organizations means not only providing products and services
that satisfy the customer, and doing so without jeopardizing the environment, but also
operating in a socially responsible manner.
• Pressure to do so comes from customers, consumers, governments, associations and the
public at large. At the same time, farsighted organizational leaders recognize that lasting
success must be built on credible business practices and the prevention of such activities
as fraudulent accounting and labor exploitation.

• There has been a number of high-level declarations of principle related to SR and, on the
other, there are many individual SR programmes and initiatives. In addition, previous
initiatives have tended to focus on “corporate social responsibility”, while ISO 26000
provides SR guidance not only for business organizations, but also for public sector
organizations of all types.

• ISO’s expertise is in developing harmonized international agreements based on double

levels of consensus – among the principal categories of stakeholder, and among countries
ISO 26000 distils a globally relevant understanding of what social responsibility is and
what organizations need to do to operate in a socially responsible way.

What benefits can be achieved by implementing ISO 26000?

The perception and reality of an organization’s performance on social responsibility can
influence, among other things:
• Competitive advantage
• Reputation
• Ability to attract and retain workers or members, customers, clients or users
• Maintenance of employees’ morale, commitment and productivity
• View of investors, owners, donors, sponsors and the financial community
• Relationship with companies, governments, the media, suppliers, peers, customers and
the community in which it operates.
Who can benefit from ISO 26000 and how?
ISO 26000 provides guidance for all types of organization, regardless of their size or location, on:
• Concepts, terms and definitions related to social responsibility
• Background, trends and characteristics of social responsibility
• Principles and practices relating to social responsibility
• Core subjects and issues of social responsibility
• Integrating, implementing and promoting socially responsible behavior throughout the
organization and, through its policies and practices, within its sphere of influence
• Identifying and engaging with stakeholders
• Communicating commitments, performance and other information related to social
responsibility.

What does ISO 26000 contain?

The contents of ISO 26000 is structured as follows :
• Foreword
• Introduction
• 1 – Scope
• 2 – Terms and definitions
• 3 – Understanding social responsibility
• 4 – Principles of social responsibility
• 5 – Recognizing social responsibility and engaging stakeholders
• 6 – Guidance on social responsibility core subjects
• 7 – Guidance on integrating social responsibility throughout an organization
• Annex A – Examples of voluntary initiatives and tools for social responsibility
• Annex B – Abbreviated terms
• Bibliography.

Social Audit of Government Programs

The Social Audit is a tool to measure the effectiveness of any government/non-government
program. The process ensures people’s participation as well as effective engagement. It is
implemented through specific methodologies and emphasize on programme rather than
financial aspects. It ensures the accountability of government and non-government
professionals. Participation of democratic local government effectively takes place in the process.
The process promotes transparency in different levels.
The general but basic objectives of Social Audit are to ensure the standard and easy accessibility
of local development resources and find out the economic and social gaps; to create awareness
among the beneficiaries and development actors; to more active the local development
initiatives; to formulate or reform policy based on the interest of common people especially rural
people; to end the irregularities of services.

Objective of the Social Audit

• To ensure the standard and easy accessibility of local development resources and find out
the economic and social gaps
• To create awareness among beneficiaries and development actors
• To more activate the local development initiatives
• To formulate policy based on the interest of rural people
• To end the irregularities of services

General Steps in the Social Audit Social audit process follows consistent steps to accomplish
journey in order to bring desired changes. The major 9 steps are as follows:
• Identifying the scope of Social Audit.
• Develop a clear understanding of the management of program(s).
• Define instruments and obtain information on program.
• Develop and conduct training package for building capacity of CSOs.
• Conduct orientation for community-based groups/citizen groups or forums.
• Collate information.
• Dissemination of findings and recommendations.
• Public Hearing.
• Follow up of public hearing.

Steps in Social Audit in Local Bodies

• Clarity of purpose and goal of the local elected body.
• Identify stakeholders with a focus on their specific roles and duties. Social auditing aims
to ensure a say for all stakeholders. It is particularly important that marginalized social
groups, which are normally excluded, have a say on local development issues and
activities and have their views on the actual performance of local elected bodies.
• Definition of performance indicators which must be understood and accepted by all.
Indicator data must be collected by stakeholders on a regular basis.
• Regular meetings to review and discuss data/information on performance indicators.
 • Follow-up of social audit meeting with the Panchayat body reviewing stakeholders’
actions, activities and viewpoints, making commitments on changes and agreeing on
future action as recommended by the stakeholders.
• Establishment of a group of trusted local people including elderly people, teachers and
others who are committed and independent, to be involved in the verification and to
judge if the decisions based upon social audit have been implemented.
• The findings of the social audit should be shared with all local stakeholders. This
encourages transparency and accountability. A report of the social audit meeting should
be distributed for Gram Panchayat auditing. In addition, key decisions should be written
on walls and boards and communicated orally.

BRR (SEBI)
SEBI mandated inclusion of Business Responsibility Report (BRR) as a part of the Annual Report
for top 100 listed entities based on market capitalisation at BSE and NSE. Business Responsibility
Report is a disclosure regarding adoption of responsible business practices by a listed company
to all its stakeholders.
Ministry of Corporate Affairs, Government of India came out with National Voluntary Guidelines
on Social, Environmental and Economic Responsibilities of Business. Business Responsibility
Reports adopts the principles outlined in these guidelines. SEBI also requires the companies to
disclose whether any independent audit/evaluation has been carried out.

Indian Guidelines BRR (SEBI)

Business Responsibility Report is a disclosure of adoption of responsible business practices by a
listed company to all its stakeholders. This is important considering the fact that these companies
have accessed funds from the public, have an element of public interest involved, and are
obligated to make exhaustive disclosures on a regular basis.

Business Responsibility Report has been designed to provide basic information about the
company, information related to its performance and processes, and information on principles
and core elements of the Business Responsibility Reporting.
• Applicability: Business Responsibility Reporting is applicable to all types of companies
including manufacturing, services etc. The principles of Business Responsibility Reporting
are generic in nature and are applicable to all the companies. In case of an MNC which
has its subsidiary in India and which produces a single Global Reporting Initiative ("GRI")
report, the subsidiary is required to prepare its separate Business Responsibility Report
highlighting the responsible business practices it has put in place in India.
 In case of an Indian listed company that already publishes a GRI report for its operations,
Clause 5 of the SEBI Circular says that "those listed entities which have been submitting
sustainability reports to overseas regulatory agencies/stakeholders based on
internationally accepted reporting frameworks need not prepare a separate report for
the purpose of these guidelines but only furnish the same to their stakeholders along with
the details of the framework under which their Business Responsibility Report has been
prepared and a mapping of the principles contained in these guidelines to the disclosures
made in their sustainability reports."

• Penalties: Failure to provide Business Responsibility Report will be construed as non-

compliance with Clause-55 of Equity Listing Agreement. The format has been provided to
capture information in a comparable manner which is important to be adhered to.
Companies are advised to follow the format so that the reports of various companies are
comparable to each other. Business Responsibility Report has to be furnished to the Stock
Exchange where it is listed in electronic format.

• Responsibilities Categorized: The idea behind corporate social responsibility is that

companies have multiple responsibilities to maintain. These responsibilities can be
arranged in a pyramid, with basic responsibilities closer to the bottom. As a business
meets lower-level responsibilities that obligate it to shareholders and the law, it can move
on to the higher-level responsibilities that benefit society.
❖ Economic Responsibilities: The economic responsibilities are the foundations on
which all other rests. All the organizations are operating to generate profit or in
other words try to be profitable. The organizations are required to find the ways
for generating the profit which can be morally, ethically and legally allowed and
accepted.
❖ Legal Responsibilities: A company's legal responsibilities are the requirements
that are placed on it by the law. Next to ensuring that company is profitable,
ensuring that it obeys all laws is the most important responsibility, according to
the theory of corporate social responsibility. Legal responsibilities can range from
securities regulations to labour law, environmental law and even criminal law.
❖ Ethical Responsibilities: Economic and legal responsibilities are the two big
obligations of a company. After a company has met these basic requirements, a
company can concern itself with ethical responsibilities. Ethical responsibilities are
responsibilities that a company puts on itself because its owners believe it's the
right thing to do not because they have an obligation to do so. Ethical
responsibilities could include being environmentally friendly, paying fair wages or
refusing to do business with oppressive countries, for example.
 ❖ Philanthropic Responsibilities: If a company is able to meet all of its other
responsibilities, it can begin meeting philanthropic responsibilities. Philanthropic
responsibilities are responsibilities that go above and beyond what is simply
required or what the company believes is right. They involve trying to benefit
society for example, by donating to community organizations, engaging in projects
to aid the environment or donating money to charitable causes.

NVG Guidelines (Ministry of Corporate Affairs)

The national framework on Business Responsibility is essentially a set of nine principles that offer
businesses an Indian understanding and approach to inculcating responsible business conduct.
India's National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of
Business (NVGs) were released by the Ministry of Corporate Affairs (MCA) in July 2011 by Mr.
Murli Deora, the former Honourable Minister for Corporate Affairs.

“Responsible Business” conduct refers to the commitment of businesses to operating in an

economically, socially and environmentally sustainable manner while balancing the demands of
shareholders and other interest groups. It’s about managing risks and impacts, which affect
business’ ability to meet its objectives. The NVGs are formulated with the objective of creating
positive framework conditions to advance the role of business in economic growth which is
socially and environmentally sustainable, while also ensuring enhanced competitiveness and
integration into the global markets.

The NVGs serves as a guidance document for businesses of all size, ownership, sector, and
geography to achieve the triple bottom line. In 2012, subsequent to the release of the NVGs
the Securities and Exchange Board of India (SEBI), a market regulator, mandated the Annual
Business Responsibility Reporting (ABRR), a reporting framework based on the NVGs.

Business responsibility
While Indian business traditionally stuck to corporate philanthropy, today business leaders
understand that practicing responsible business is of strategic importance to their growth,
longevity and competitiveness. The NVGs are an embodiment of an integrated and
comprehensive understanding of responsible business. The Guidelines encourage and enable
businesses to go beyond compliance and embrace sustainability as part of their business ethos.
The nine principles and the corresponding indicators encompass all the elements of what
constitutes responsible business conduct. It also delineates the fundamentals of implementing
the NVGs.
These are:
• Leadership: the commitment and role of leadership,
• Integration: the weaving in of the principles and core elements into the very DNA of the
business,
• Engagement: continuous engagement with relevant stakeholders,
• Reporting: measuring the impact of business activities on all the nine principles and
communicating these to their stakeholders.

Principles on responsible business

The NVGs are an aspirational and comprehensive guideline to encourage responsible business
behavior in India. The NVGs, a set of 9 principles, cover a broad array of social, economic,
environmental and governance issues and developmental priorities. To actualize the principles a
corresponding set of core elements have also been developed. The NVGs also offer guidance on
implementation, through its four integral actions – leadership, integration, engagement and
reporting. The nine principles
Principle 1: Businesses should conduct and govern themselves with ethics, transparency and
accountability
Principle 2: Businesses should provide good & services that are safe & contribute to sustainability
throughout their life cycle
Principle 3: Businesses should promote the wellbeing of all employees
Principle 4: Businesses should respect interests of, and be responsive towards all stakeholders,
especially those who are disadvantaged, vulnerable and marginalized
Principle 5: Businesses should respect and promote human rights
Principle 6: Businesses should respect, protect, and make efforts to restore the environment
Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so
in a responsible manner
Principle 8: Businesses should support inclusive growth and equitable development
Principle 9: Businesses should engage with and provide value to their customers and consumers
in a responsible manner
Unit 4 Sustainable Development
Challenges of Sustainable Development
Sustainable development is development that meets the needs of the present, without
compromising the ability of future generations to meet their own needs.

The concept of sustainable development can be interpreted in many different ways, but at its
core is an approach to development that looks to balance different, and often competing, needs
against an awareness of the environmental, social and economic limitations we face as a society.
The key objectives for global sustainable development and progress broadly into:
• Economic and social security: Sustainable growth and inclusion by overcoming poverty
and inequality, and enabling equal opportunities for all
• Environmental security: low carbon green growth and environmental protection
• Physical and personal security: protection of individuals, institutions, nations and
advancement of peace

Challenges to sustainable development are:

• Poverty and exclusion
• Unemployment
• Climate change
• Conflict
• Humanitarian Aid
• Building peaceful and inclusive societies
• Building strong institutions of governance
• Supporting the rule of law.

Environmental Challenges as Business Opportunity

• Climate Change: With the planet heating up and ice caps melting due to carbon emissions,
there are serious opportunities for “carbon offsets”. Entire financial models and markets
are being developed and implemented in Europe and now the US around this issue along
with a whole movement towards making lower-impact products and services in virtually
every industry imaginable: manufacturing, construction, transportation, energy, etc.

• Chemicals, Toxics, and Heavy Metals: According to WorldOMeters for the first 30 days
of 2008, the world’s industries have dumped over 772,000 tons of pollutants into the air,
water and land. Any products and services related to the reduction of dumping these
chemicals are being looked at by many private and public sectors worldwide. One of the
fastest growing markets in the US is the organics food industry.
• Energy: Oil will not be able to accommodate the growth in energy for more than another
2-15 years or so before there will not be enough to go around. There are humongous
opportunities for energy consulting, auditing, alternative energy products and services,
industrial design and manufacturing, and so on.

• Water: According to WorldOMeters over 1.3 billion people worldwide currently do not
have access to drinkable water. And the US is not immune as it has become a major issue
in our drier states. Product design, consulting and monitoring resources are just a few of
the many, many opportunities available in water management.

• Biodiversity and Land Use: When huge tracks of rainforest, the home of many, many
species of plants and animals are burned down to grow one crop or raise one animal, we
are losing major important planetary resources. Many opportunities, ranging from
medicinal horticulture to eco-tourism, are available all over the world.

• Air Pollution: According to the World Bank, it is estimated 800,000 people die
prematurely every year from illnesses caused by outdoor air pollution worldwide. There
are many opportunities to improve air quality controls through products and services,
emissions testing, auditing, consulting, air filters, and so on.

• Waste Management: According to Zero Waste America, each American disposed almost
10 tons of waste in 2001. There are huge opportunities in designing and implementing
reusable products, shipping and packaging & take-out containers, consulting, education.

• Ozone Layer Depletion: Known as our natural sun screen, it limits ultraviolet (UV)
radiation to levels necessary for life on earth. With the ozone layers on the polar caps
disappearing since first discovered in 1979, opportunities abound in the health sector,
specifically those addressing issues with skin cancer, cataracts and immune systems.

• Forest and Fisheries: With approximately 70% of the world’s major marine fisheries
depleted, major opportunities arise in food manufacturing, education, biology, vegetarian
products and services, alternative farming practices and environmental non-profits.

• Deforestation: According to WorldOMeters in the first four weeks of 2008, almost 2.25
million acres of forest have been destroyed, contributing to the almost 1.2 million acres
of new desert formed. There are major opportunities available in eco-tourism, land
management and top soil containment as well as all-natural/organic landscaping, farming
practices and education.
Kyoto Protocol
The Kyoto Protocol is an historical agreement in that it was the first international agreement in
which many of the world's industrial nations concluded a verifiable agreement to reduce their
emissions of six greenhouse gases in order to prevent global warming. The major feature of the
Kyoto Protocol is that it sets binding targets for 37 industrialized countries and the European
community for reducing emissions. These amount to an average of five per cent against 1990
levels over the five-year period 2008-2012.

The Kyoto Protocol was an international agreement that aimed to reduce carbon dioxide
emissions and the presence of greenhouse gases. Countries that ratified the Kyoto Protocol were
assigned maximum carbon emission levels and participated in carbon credit trading. Emitting
more than the assigned limit would result in a penalty for the violating country in the form of a
lower emission limit. The Kyoto Protocol predominately targeted six greenhouse gases, including:
• Carbon dioxide
• Methane
• Nitrous oxide
• Hydrofluorocarbons
• Perfluorocarbons
• Sulphur hexafluoride

The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force
on 16 February 2005. The Kyoto Protocol separated countries into two groups. Annex I included
developed nations, while Non-Annex I referred to developing countries. Emission limitations
were only placed on Annex I countries. Non-Annex I nations participated by investing in projects
designed to lower emissions in their countries. For these projects, they earned carbon credits,
which could be traded or sold to Annex I countries, allowing them a higher level of maximum
carbon emissions for that period.

Challenges
Although the Kyoto Protocol represented a landmark diplomatic accomplishment, its success was
far from assured. Indeed, reports issued in the first two years after the treaty took effect
indicated that most participants would fail to meet their emission targets. Even if the targets
were met, however, the ultimate benefit to the environment would not be significant, according
to some critics, since China, the world’s leading emitter of greenhouse gases, and the United
States, the world’s second largest emitter, were not bound by the protocol. Other critics claimed
that the emission reductions called for in the protocol were too modest to make a detectable
difference in global temperatures in the subsequent several decades, even if fully achieved with
U.S. participation.
Clean Development Mechanism
The Clean Development Mechanism (CDM) is one of the Flexible Mechanisms defined in the
Kyoto Protocol (IPCC, 2007) that provides for emissions reduction projects which generate
Certified Emission Reduction units (CERs) which may be traded in emissions trading schemes.
The Clean Development Mechanism (CDM) is one of the Flexible Mechanisms defined in
the Kyoto Protocol (IPCC, 2007) that provides for emissions reduction projects which
generate Certified Emission Reduction units (CERs) which may be traded in emissions trading
schemes.

The Clean Development Mechanism (CDM), defined in Article 12 of the Protocol, allows a country
with an emission-reduction or emission-limitation commitment under the Kyoto Protocol to
implement an emission-reduction project in developing countries. Such projects can earn
saleable certified emission reduction (CER) credits, each equivalent to one ton of CO2, which can
be counted towards meeting Kyoto targets. The mechanism is seen by many as a trailblazer. It is
the first global, environmental investment and credit scheme of its kind, providing a standardized
emission offset instrument, CERs.

A CDM project activity might involve, for example, a rural electrification project using solar panels
or the installation of more energy-efficient boilers. The mechanism stimulates sustainable
development and emission reductions, while giving industrialized countries some flexibility in
how they meet their emission reduction or limitation targets. A CDM project must provide
emission reductions that are additional to what would otherwise have occurred. The projects
must qualify through a rigorous and public registration and issuance process.
Managing Environment Quality
Environmental Quality Management refers to business management practices that reduce or prevent
environmental pollution achieved through Total Quality Management techniques. Most literature on this
topic abates with the increasing adoption of ISO 14001 in around 1995.

Socio-Industrial Facets of Total Quality Environmental Management

Abatement of environmental pollution cannot succeed with the dedicated efforts of an
individual; it takes a village to raise environmental standards. Consequently, businesses can
collectively attain environmental improvements through industry teamwork and in collaboration
with regulators, thereby creating an alternative to stringent regulatory control.

With respect to implementation, most businesses find it impossible to superimpose another

company’s quality organization on their own firm similarly to the way that pouring beer into a
soda pop can will not change the beer’s taste into cola. Thus, Total Quality Environmental
Management implementations must address the unique aspects of each operating facility.

Recent Total Quality Environmental Management Assessment

Jayathirtha (2001) provided a recent examination of Total Quality Environmental Management
after the successful introduction of ISO 14001.

Both ISO 9000 and ISO 14000 series standards make some common requirements:
• Doing business as usual is “unacceptable.”
• Doing business without a systematic management approach is economic doom.
• Providing quality is key.
• Protecting and nurturing the environment is the key.
• Doing it right the first time is crucial.
• Getting your act together is essential.
• Listening to customers and other stakeholders is absolutely necessary.
• Respecting society is mandatory.

The objectives of Total Quality Environmental Management are to:

• Reduce waste and improve continuously,
• Reduce resource depletion,
• Reduce or eliminate environmental pollution,
• Design products for minimal environmental impact in production, use and disposal,
• Control environmental impact of raw material sourcing,
• Control environmental impact of new developments,
• Promote environmental awareness among employees and with the community.
Green IT Initiative
In recent years, an emerging trend in corporate culture has executives and other decision-makers
seeing green — in more ways than one. Green Information Technology (IT) initiatives have been
sprouting up at corporations, organizations and governing entities in a variety of sectors. Green
IT, by definition, includes such practices as reducing energy consumption, recycling or disposing
of old equipment in an environmentally responsible manner and taking steps to manage a
company’s carbon footprint. While companies’ adoption of Green IT strategies is healthy for the
overall environment, the practice also is healthy for their bottom line, making it a win-win for all
concerned.

Some of the policy decisions implemented include:

• Pitt Printing: Pitt Print enables students to send print jobs from anywhere to Pitt Print
Stations located in Student Computing Labs and various remote locations across campus.
Pitt Print enables remote printing from Windows and Macintosh personal computers that
have the Pitt Print Client installed. The effort reduces the likelihood of multiple print jobs
and also stems the tide of students printing a document and not picking it up.
• Web Conferencing: A method that allows employees to schedule and attend meetings
without leaving the office. It eliminates unnecessary travel and, thus, reduces the carbon
footprint. Sharing documents electronically, rather than the traditional hardcopy method,
also saves paper.
• Consolidating Servers: With the help of virtual servers, there has been less reliant on
bulky, energy-consuming infrastructure than in the past. Because of this, less energy has
been consumed to provide the same level of IT service.
• Read Green: This initiative has curtailed the practice of printing newsletters, memos and
other communiqué that previously were shared with staffs. As an alternative, this
information is delivered to employee’s email inboxes. Officials quickly point to a rapid
reduction in paper and ink usage because of the Read Green program.

Green IT Initiative in Corporate Sector

“Green IT is moving up the corporate agenda,” Green Biz’s Leslie Guevarra writes. “While Green
IT initiatives typically are viewed as middle-range priorities for businesses, 37 percent of firms
currently rate Green IT as ‘upper-half organizational priority.’ Only 9 percent ranked Green IT as
highly in 2009. Looking ahead, 54 percent are expected to view Green IT as an upper-tier priority
in 2013.”

Guevarra’s synthesis of the report findings is interesting. In a 4-year span of time, the number of
companies that sought adding Green IT initiatives into their operations plans grew by 45 percent.
Other interesting tidbits, gleaned from the report and shared in the Green Biz article, include:
 • A growing number of companies are budgeting, outright, for Green IT initiatives.
According to the report, one in five companies (as of 2011) had a dedicated budget
devoted specifically to exploring and implementing these types of efforts. An additional
44 percent of respondents said they were interested in doing so.
• An increasingly large number of companies are adopting campaigns that specifically
address some form of Green IT. The most common form is energy conservation, and
respondents frequently reported on efforts to engage employees in the practice.
• Software is commonly being used as a mechanism toward monitoring and controlling
energy within corporate buildings. As app-based Smartphone technology continues to
evolve, a growing number of companies are instituting software that makes it possible to
conserve energy from a remote location.

Benefits of Green IT Initiative

• Legal and Regulatory Compliance: Most states and countries have laws on the books that
mandate environmental compliance in various ways and forms, to varying extents. Every
year more laws are passed on local, state, and federal levels as we understand how
positive going green is in Earth’s ecology. Going green means getting ahead of the curve
– if certain green laws aren’t on the books they soon will be, and it gives a company a leg
up to begin as soon as possible. The Environmental Protection Agency launched its 2020
Action Agenda and it is a truly mind-bogglingly comprehensive plan to reduce carbon
emissions, while promoting sustainability and has actionable consequences.

• Green as a Status Symbol: As more and more internationally known companies go green,
the idea of going green becomes that much more tantalizing. In fact, it’s becoming a
status symbol to be an environmentally friendly business. The computer company Dell
launched a recycling program that enables customers to return notoriously difficult-to-
recycle electronics for free. Auto manufacturer Honda is now known as one of the
greenest businesses in the auto industry by optimizing fuel efficiency.

• Green Marketing Awareness: A business going green makes customers feel that it is a
trustworthy business. In 2015, Nielsen surveyed 30,000 consumers from around the
world, and 66 percent of those consumers agree they would pay more for products from
sustainable sources. The same survey also showed that this number jumped to 77 percent
among Millennial consumers. Green businesses demonstrate that sustainability is part of
their mission and company culture. Word-of-mouth is the most valuable form of
advertising and green businesses can’t buy that kind of publicity. This not only bolsters a
company’s existing market base but extends it – people who may never have heard of
that company may pay attention to one that believes in being eco-friendly.
 • Efficiency Saves Money: Increasing energy efficiency saves on utility costs. Reusing
existing material in creative ways means that fewer dollars are spent purchasing new
stock to create products. Streamlining transportation of employees or shipping saves the
earth as well as a substantial amount of money. Although there is often a bit of money to
be spent establishing green business procedures, it saves a lot of money over time.

• Impact on Employee Morale: Going green doesn’t only foster positive feelings from
customers. Employees feel safer working for green businesses. Involving workers in
company-wide green initiatives boosts morale. Employees feel that their health is cared
for and they aren’t simply expendable commodities. This is also a good way to reduce
turnover, because employees don’t want to leave a place that makes them feel as if they
are a part of a work community that cares.

Emerging Trends in CSR

• Moving from reporting to engagement: The current model of CR reporting has hit
something of a ceiling in terms of the quality of data. We have spent the last ten years
evolving our approach to measuring our progress and still haven't come close to the
original goal - to find ways of measuring CSR in a reliable and meaningful way that enables
us to compare the performance of individual companies. Why have we hit the ceiling?
Because some of the most significant information is difficult, even impossible to measure.
But particularly, because the context behind the data makes it neither valuable nor
reliable to use this information to draw conclusions about how well a company is doing.
And the small improvements in the integrity of the data won't make any difference to
how much companies' different stakeholders actually bother to engage with it.

• It's about the business model: More companies are starting to understand a little more
about the scale of the challenge that faces us in terms of sustainability, and they're
wondering what this means for their business model. Here's the central dilemma. On your
current model, if your company does very well, does that result in damage to the
environment? Or can you find a business model where the better the social outcome you
achieve, the better your business does in terms of profit? It's not as though easy answers
to this one jump out at you from all sides. Interface Flor carpets tried to tackle it when,
for their business customers, they offered a service of professional floor covering rather
than selling a thing, i.e. carpet. The principle was sound - on the service model, you had
the incentive to provide the professional effect with the use of the least amount of
material. With the old model, you make more profit if you replace more physical square
meters of carpet. But this one doesn't go away, so companies will keep trying to crack it,
and we will see more innovation in this space.
• Finding our own identity and respect: CSR Executives have been asking themselves for
some time whether they are part of a proper professional discipline or not. When
Accountability was first formed in the late 1990s, it was styled the Institute of Social and
Environmental Accountability with a view that it would become the professional body for
'accountability professionals'. That didn't happen, but we've seen the CRO in the States
and the Corporate Responsibility Group in the UK tackling the same question. There are
pluses and minuses here. An acknowledged profession can establish standards of
expertise for those entrusted by companies with this important responsibility. It can gain
respect within corporations and increase the authority of its voice in the board room.
That's an appropriate way of being if you're happy to be in an adjunct office doing
mysterious things on behalf of your employer.

• Taking the role of global citizens: Businesses have always taken an interest in influencing
the public policy agenda, but historically purely from a defensive purpose of fending off
potential restrictions on its ability to make profit. But as physical evidence for climate
change increases and the urgency of acting keeps pace, companies are starting to re-
evaluate what is their role as change agents. Companies are pragmatic entities, and ones
that are used to defining themselves around adaptability to change. That makes them
almost uniquely suited to responding to global environmental challenges. Certainly,
governments are struggling in this regard. The global economic situation has placed many
of them in defensive positions where their citizens are holding them responsible for the
fact that suddenly they can no longer afford the things they used to be able to. It is a
difficult backdrop to take bold action in an area that many people will believe to be
separate and disconnected to their current discomfort.