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This CSR Initiative will push the nation towards achievement of sustainable development goals and public-private partnership in transforming India. Read More. Successful companies have a social responsibility to make the world a better place and not just take from it. CSR Extends beyond Corporate Philanthropy: It is a collective responsibility to build a society which supplements Government's efforts to achieve inclusive growth which includes broad-based benefits and ensures equality of opportunity for all.
Give Your Feedback on Specific Project. National News. Kavitha Creations. It will help you to make a powerful and innovative presentation to present your social responsibilities. In addition, its simple and colorful layout will help you to design an easily understandable presentation. It has five textbox model designs, which are arranged in a zigzag manner.
It is extremely difficult to manage for a variety of stakeholders if there is no measurement of how the organisation has performed for those stakeholders. Thus for each stakeholder identified it is necessary to have a performance measure by which the stakeholder performance can be considered. Due to the nature of the stakeholders and their relationship with the organisation this will not necessarily be easy not it will necessarily be possible in monetary terms.
Therefore non-financial measures will be of great importance but this information is often considered more subjective than financial information. Therefore measures of customer satisfaction are sometimes based on surveys and sometimes on statistical performance measures such as numbers of complaints or returns, or market share or customer retention.
Recently there have been a number of multi-dimensional performance measurement frameworks that can be argued to have some level of stakeholder orientation. Another example is the service profit chain Heskett et al. Again this model specifically considers the first two stakeholders as means to achieving superior financial results. Thus they argue that satisfied and motivated employees are essential if service quality is to be of a high standard and hence customers are to be satisfied.
Further it is then argued that satisfied customers provide the base for superior financial results. Both of these models acknowledge the needs of stakeholder groups and thus deem it necessary to measure performance for these groups but still target financial performance as the ultimate goal. A stakeholder managed organisation therefore attempts to consider the diverse and conflicting interests of its stakeholders and balance these interests equitably.
The motivations for organisations to use stakeholder management maybe in order to improve financial performance or social or ethical performance howsoever these may be measured. In order to be able to adequately manage stakeholder interests it is necessary to measure the organisation's performance to these stakeholders and this can prove complicated and time-consuming.
Please click the advert Deadline 15 January Download free ebooks at bookboon. This shows the vast number of stakeholder measures that could be used to any organisation although it is not expected that all of these will be relevant for an individual organisation. This again highlights the potential complexity of measuring performance for stakeholders as these numerous measures will provide conflicting evidence on performance that somehow must be reconciled.
In comparison VBM techniques that propose the use of a single metric to measure performance as well as set objectives and reward executives appear far simpler. Nor does it mean that all such disclosure is necessarily voluntary.
The regulatory regime which operates in any particular country means that certain actions must be taken by firms which affect their influence upon the external environment. Equally certain actions are prevented from being taken. These actions and prohibitions are controlled by means of regulation imposed by the government of that country — both the national government and local government.
For example those regulations probably govern the type of discharges which can be made by organisations, particularly when these are considered to cause pollution. Such regulations govern the way in which waste must be disposed of and the level of pollutants allowed for discharges into rivers, as well as restricting the amount of water which can be extracted from rivers.
The regulatory regime which operates in every country is continuing to change and become more restrictive as far as the actions of an organisation and its relationship with the external environment are concerned5. It seems reasonable to expect these changes to continue into the future and concern for the environmental impact of the activities of organisations to increase.
These regulations tend to require reporting of the activities of organisations and such reporting also involves an accounting connotation. This accounting need is both to satisfy regulatory requirements but also to meet the internal needs of the organisation. This is because the managers of that organisation, in both controlling current operations and in planning future business activities, must have accounting data to help manage the organisational activities in this respect.
The growth of environmental data, as part of the management information systems of organisations, therefore can be seen to be, at least in part, driven by the needs of society at large.
In this way it is a reflected in the regulations imposed upon the activities of organisations. It should not be thought however that the increase in stature and prominence accorded to environmental accounting and reporting among organisations is driven entirely by present and anticipated regulations.
To a large extent the external reporting of such environmental impact is not determined by regulations — these merely require reporting to the appropriate regulatory body. Nor can it be argued that the increasing multinational aspect of organisational activity, and the consequent need to satisfy regulatory regimes from different countries, has alone driven the increased importance of environmental accounting. Organisations which choose to report externally upon the impact of their activities on the external environment tend to do so voluntarily.
In doing so they expect to derive some benefit from this kind of accounting and reporting. The kind of benefits which organisations can expect to accrue through this kind of disclosure will be considered later. At this point however we should remember the influence of stakeholders upon the organisation and it can be suggested that increased disclosure of the activities of the organisation is a reflection of the growing power and influence of stakeholders, without any form of legal ownership, and the recognition of this influence by the organisation and its managers.
When the UK government, for example, initiated its process of the privatisation of nationally owned utilities it was felt necessary to compensate for the inadequacy of the market mechanism for mediating between the conflicting needs of the stakeholders to these industries. Thus the concept of regulation was devised, with appropriate bodies formed, to compensate for the imperfections of competition in the quasi-markets which came into being. One of the functions of the regulators created in this manner was to control the prices charged by these privatised utilities in order to ensure that the benefits and efficiencies gains vaunted as a benefit of privatisation were shared between shareholders and other stakeholders, principally the customers.
The main mechanism for this has been achieved by means of a periodic review of pricing policy. For other industries however the effects of regulation vary in extent but in general terms can be stated to be increasing over time and this increase can be expected to continue into the future. A stakeholder approach to decision making and managing the organisation is likely to identify more risks and to manage them better6.
This allows for the kind of confusion which is taking place. We do not necessarily claim that such obfuscation is deliberate but we do suggest that it indicates a certain amount of disingenuity, which it is convenient for corporations to exhibit. Moreover we suggest that methodologies for the evaluation of risk are deceived by this rhetoric and are deficient in their evaluation of risk — particularly environmental risk. In order to fully recognise and incorporate environmental costs and benefits into the investment analysis process the starting point needs to be the identification of the types of costs and revenues which need to be incorporated into the evaluation process.
The completion of an environmental audit will enhance the understanding of the processes involved and will make this easier. In considering environmental benefits, as distinct from financial benefits, it is important that an appropriate time horizon is selected which will enable those benefits to be recognised and accrued.
This may imply a very different time horizon from one which is determined purely by the needs of financial analysis. Once all the data has been recognised, collected and quantified it then becomes possible to incorporate this data, in financial terms, into an evaluation which incorporates risk in a more consistent manner.
It is important to recognise benefits as well as costs, and it is perhaps worth reiterating that many of these benefits are less subject to quantification and are of the less tangible and image related kind. Hence the need to select an appropriate time horizon for the evaluation of the risk and associated effects. This time horizon will very likely be a longer one than under a traditional financially based evaluation.
Obviously cash flows need to be considered over that period and an appropriate method of evaluation eg a discounted cash flow technique needs to be used in the evaluation. None of this will change with the incorporation of environmental accounting information, except for assessment of risk and its associated impact upon the cost of capital, which can be expected to rise as the true extent of the environmental impact is fed into the calculation.
It is particularly important for an understanding of CSR and its incorporation into organisational activity. There are various aspects to this which we have considered in this chapter.
At the same time we have introduced a variety of other aspects which are related. Our purpose is to chow that all of these concepts are inter-related in the management of an organisation and that CSR cannot be considered in isolation from the rest of organisational activity. We will see this more clearly throughout this book.
Atkinson, A. Clarkson, M. Kaplan, R. Mitchell, R. These can be reduced dramatically thanks to our systems for on-line condition monitoring and automatic lubrication.
We help make it more economical to create Please click the advert cleaner, cheaper energy out of thin air. By sharing our experience, expertise, and creativity, industries can boost performance beyond expectations. Therefore we need the best employees who can meet this challenge! Visit us at www. Waddock, S. What justification does Stakeholder Theory use for considering stakeholders? How can we classify stakeholders?
Name a multi-dimensional performance measurement framework. What are the steps involved in the incorporation of environmental accounting into the risk evaluation system of an organisation?
Issues concerning Sustainability People of the same trade seldom meet together, eve for merriment or diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which could either be executed, or would be consistent with liberty and justice.
Adam Smith 4. Consequently we are devoting a complete chapter to dealing with this topic. It is one that has recently become very important for businesses and all large businesses — and many smaller ones — have a sustainability plan, or at least claim to have such a plan. We need therefore to start by establishing exactly what we mean by sustainability. The starting point for every definition of sustainability comes from the Brundtland Report, which was published in It is generally known however as the Brundtland Report after its chair.
Strictly speaking the Brundtland Report was concerned with sustainable development which they regarded as unquestionningly both possible and desirable. This definition of sustainability starts from the premise that if resources are utilised in the present then they are no longer available for use in the future.
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Siginificantly however the Bruntland report made an assumption — which has been accepted ever since — that sustainable development was possible and the debate since has centred on how to achieve this. Thus ever since the Bruntland Report was produced by the World Commission on Environment and Development in there has been a continual debates concerning sustainable development.
Similarly emphasis has been placed on such things as collaboration, partnerships and stakeholder involvement. It has however been generally accepted that development is desirable and that sustainable development is possible — with a concomitant focus on how to achieve this. Quite what is meant by such sustainable development has however been much less clear and a starting point for any evaluation must be to consider quite what is meant by these terms.
Moreover, sustainable development is often misinterpreted as focusing solely on environmental issues. In reality, it is a much broader concept as sustainable development policies encompass three general policy areas: economic, environmental and social. Its concern with the effect which action taken in the present has upon the options available in the future has directly led to glib assumptions that sustainable development is both desirable and possible and that corporation can demonstrate sustainability merely by continuing to exist into the future.
Both are based upon an unquestioning acceptance of market economics predicated in the need for growth and are based upon the false premise of Brundtland to which we will return later. An almost unquestioned assumption is that growth remains possible and therefore sustainability and sustainable development are synonymous. Indeed the economic perspective considers that growth is not just possible but also desirable and therefore that the economics of development is all that needs to be addressed and that this can be dealt with through the market by the clear separation of the three basic economic goals of efficient allocation, equitable distribution, and sustainable scale.
Concomitantly all corporations are becoming concerned about their own sustainability and what the term really means. Such sustainability means more than environmental sustainability. As far as corporate sustainability is concerned then the confusion is exacerbated by the fact that the term sustainable has been used in the management literature over the last 30 years to merely imply continuity.
Thus Zwetsloot is able to conflate corporate social responsibility with the techniques of continuous improvement and innovation to imply that sustainability is thereby ensured. Consequently the trajectory of all of these effects is increasingly being focused upon the same issue. There have been various descendents of Brundtland, including the concept of the Triple Bottom Line. This in turn has led to an assumption that addressing the three aspects of economic, social and environmental is all that is necessary in order to ensure not just sustainability but to also enable sustainable development.
And all corporations imply that they have recognised the problems, addressed the issues and thereby ensured sustainable development. It is therefore time to re-examine the legacy of Bruntland and to redefine what is meant by sustainable activity. In order to do this we reject the accepted terms of sustainability and sustainable development, preferring instead the term durability to emphasise the change in focus.
From this we argue for a rejection of the Triple Bottom Line as insufficiently refined for practical use, suggesting instead alternatives developed from our own work. Therefore it is generally recognised that the larger, more established companies are a more certain investment and therefore have a lower cost of capital. This is all established fact as far as finance theory is concerned and is recognised in the operating of the financial markets around the world.
Naturally a company which is sustainable will be less risky than one which is not. Consequently most large companies in their reporting mention sustainability and frequently it features prominently.
Indeed it is noticeable that extractive industries — which by their very nature cannot be sustainable in the long term — make sustainability a very prominent issue. The prime example of this can be seen with oil companies — BP being a very good example — which make much of sustainability and are busy redesignating themselves from oil companies to energy companies with a feature being made of renewable energy, even though this is a very small part7 of their actual operations. In their report8 is stated: That is why we care about the sustainability of our activities and why, throughout the company, we work to ensure that the things we do and the way we do them are genuinely sustainable.
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