What is Corporate Social Responsibility (CSR)? Corporate social responsibility, also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure their adherence to law, ethical standards, and international norms. Business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, business would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet, and Profit.

The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations.

What is Human Resources Management? Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have and are aware of personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.

Note that some people distinguish a difference between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, including, eg, career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should be organized into large organizations, e.g., "should HR be in the Organization Development department or the other way around?"

The HRM function and HRD profession have undergone tremendous change over the past 20-30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.

What is the role of HR in CSR?

Companies increasingly need to co-ordinate their CSR activities and demonstrate their commitment to CSR. Effective CSR depends on being seen as important throughout an organisation. Delivery, not rhetoric, is the key to stakeholders developing trust in an organisation.

HR has a key role in making CSR work. CSR without HR runs the risk of being dismissed as PR or shallow ‘window-dressing’. And CSR is an opportunity for HR to demonstrate a strategic focus and act as a business partner.

CSR needs to be embedded in an organisation’s culture to make a change to actions and attitudes and the support of the top team is critical to success. HR already works at communicating and implementing ideas, policies, cultural and behavioural change across organizations. Its role in influencing attitudes and links with line managers and the top team mean it is ideally placed to do the same with CSR.

HR is also responsible for the key systems and processes underpinning effective delivery. Through HR, CSR can be given credibility and aligned with how business run. CSR could be integrated into processes such as the employer brand, recruitment, appraisal, retention, motivation, reward, internal communications, diversity, coaching and training.

The way a company treats its employees contributes directly to it being seen as willing to accept its wider responsibilities. Building credibility and trusting their employer are being increasingly seen as important by employees when they choose who they want to work for.

In many cases the board may have developed corporate policies that cover a range of issues, including CSR, but no one ensures they are adhered to, checks the staff awareness, or assesses their impact. It may be that the board’s present mission, objectives and values do not reflect the values of staff or expectations of customers. Arguably, HR is best placed to engage staff in these issues.

HR can play an important role in developing the process where the business objectives are assessed and values re-aligned to match them with staff expectations. There are many ways this can be done:

Workshops to engage with staff and promote the exchange of real life experiences. Develop interactive intranet sites that show case examples of good practice, or build in

opportunities for promotion of good practice at staff meetings.

Review company policy and procedures to ensure values are consistent – procurement, recruitment, training, appraisals and exit interviews.

Consult and involve staff more in the running of a business.

Provide feedback questionnaires for employees, customers and suppliers – to show the organisation is living its values.

HR should also play the gatekeeper role in the development and monitoring of staff policies and practice. It needs to be asking questions such as: ‘Does the business have a social responsibility policy or an environmental policy?’ and ‘How does the business ensure that these policies and the company’s values drive the way the company does business?’ These values need to be reflected in staffing issues – recruitment, training, appraisals, and in other processes such as procurement. HR has an important role to play in ensuring this happens.

The world is a smaller place thanks to the Internet, global trading and new communication and technology advances. More U.S. companies are expanding overseas, and now manage a global workforce that has unique benefits, rules/laws, and different languages and currencies. With this global expansion comes a “responsibility.”

When companies are global, an important challenge in garnering success is to respect other cultures and workforce environments and start forming a global profile or social consciousness. Recognize these differences with a sound Corporate Social Responsibility (CSR) plan that can simultaneously increase shareholder value, boost employee engagement and increase employer brand recognition.

Human Resource Departments play a critical role in ensuring that the company adopts Corporate Social Responsibility programs. Furthermore, HR can manage the CSR plan implementation and monitor its adoption proactively, while documenting (and celebrating) its success throughout the company. Human Resources technology can help with a Corporate Social Responsibility program, including reducing the company’s carbon footprint to benefit the planet. Start with these areas:

Implement and encourage green practices. Foster a culture of social responsibility. Celebrate successes. Share and communicate the value of corporate social responsibility to employees and

the community.

Implement and Encourage Green Practices for Corporate Social Responsibility

Implement green practices to assist in environmental waste reduction, while promoting and encouraging stewardship growth, better corporate ethics and long-lasting practices that promote both personal and corporate accountability. The value inherent in embracing green aspects of corporate responsibility is clearly understood, given the direct impact that rising energy and utility costs has on employees’ pocketbooks. Conservation has become an accepted means of making our planet healthier. Reducing each employee’s carbon footprint is a great way of getting energy conservation and recycling waste initiatives off the ground. Here are suggestions to start:

Recycle paper, cans and bottles in the office; recognize departmental efforts. Collect food and donations for victims of floods, hurricanes and other natural disasters

around the globe. Encourage reduced energy consumption; subsidize transit passes, make it easy for

employees to car pool, encourage staggered staffing to allow after rush hour transit, and permit telecommuting to the degree possible.

Encourage shutting off lights; computers and printers after work hours and on weekends for further energy reductions.

Work with IT to switch to laptops over desktop computers. (Laptops consume up to 90% less power.)

Increase the use of teleconferencing, rather than on-site meetings and trips. Promote brown-bagging in the office to help employees reduce fat and calories to live

healthier lives and reduce packaging waste, too.

Foster a Culture of Corporate Social Responsibility

Creating a culture of change and responsibility starts with HR. Getting the younger employees, who are already environmentally conscious; excited about fresh Corporate Social Responsibility initiatives is a great way to begin. A committed set of employees who infuse enthusiasm for such programs would enable friendly competition and recognition programs.

Over the past few years, major news organization ions have reported on large, trusted companies that have failed employees, shareholders and the public (i.e. Enron, Lehman, WaMu). These failures created a culture of mistrust in the corporate world. All too often, employees and employers at all levels, who competed for advancement and recognition in harsh workplaces, were forced to accept corporate misconduct and waste as “business as usual.”

Employer brands are being eroded and the once sacred trust that employees had with stable pensions, defined benefits and lifelong jobs, are being replaced with pay for performance and adjustment to new learning goals. In this environment, Corporate Social Responsibility can go a long way in rehabilitating the employer brand with potential new hires and society at large. It can help defeat the image that corporate objectives are rooted in single minded profit at the expense of society and the environment.

Social and community connections that are encouraged by employers give employees permission to involve their companies in meaningful ways with the community. Employers can connect with their employees and the community through:

Company matches to employee charitable contributions; Community programs and volunteer days; Corporate sponsorship of community events; and Encouraging employees to participate in walkathons, food banks, and so forth.

Celebrate Corporate Social Responsibility Successes

Celebrating success is important to sustain the momentum of any CSR program. Involving company leaders and praising the success of these initiatives, gives the program real meaning. In the rapidly expanding global workplace, the celebration of these successes not only drives the implementation of Corporate Social Responsibility initiatives, but also allows sound corporate HR practices to enable them.

Additionally the publicity about these successes creates a mutual understanding of the cultures within each region that the company serves. The local population knows that, in addition to providing jobs, the company takes an active interest in, and participates in, local issues.

HR's Leadership Role With company reputation, viability and sometimes survival at stake, one of the critical roles of HR leadership today is to spearhead the development and strategic implementation of CSR throughout the organization and promote sound corporate citizenship. Attracting and retaining competent people is one of the primary business reasons for CSR. While strategically including CSR in the organization can begin from different points (e.g., product safety, the board of directors, business development), it makes good business sense for HR to head the process and partner with strategic leaders in the firm because human capital is arguably the number one intangible value driver. Many HR leaders are already looking ahead to the future. According to the SHRM[R] 2004-2005 Workplace Forecasts, key HR trends are 1) Demonstrating HR's return on investment; 2) HR's role in promoting corporate ethics; and 3) Building people management and human capital components into key business transactions. As this report documents, some HR leaders are taking action now * 63% are increasing spending on learning and training initiatives. * 40% are changing company policy as a response to environmental issues. * 36% are changing company policy as a response to grassroots pressure to change specific business practices. * 32% are increasing involvement in social programs.

Within business, Corporate Social Responsibility (CSR) is managed in a variety of different places. Large FTSE 100 companies have dedicated teams overseeing CSR and their names vary reflecting the different emphasis companies place on it. For example, the bank HSBC Holdings has a community unit that is within corporate affairs.

Last year, a survey of UK businesses active in CSR found that less than a fifth had teams dedicated to the function. Over 80% placed CSR in public relations and HR accounted for a quarter. However, the topic of CSR is becoming a must for HR because of the growing recognition that staffing is an area of risk to business. This link of risk and CSR is fundamental relating it to the business and as this article discusses a key driver for HR involvement

High staff turnover, loss of key employees at critical times, the high cost of recruitment and the training of new staff can all damage a business. CSR strategies and programmes can help manage this risk by creating an environment where staff can enjoy their work and where they can feedback concerns about the company’s behaviour so action can be taken - for example, the identification of illegal workers in the supply chain.

The recognition of the value of staff to an organisation is one of benefits from CSR as it is not just about engaging with external audiences. Moreover, it is about how you interact with your staff. Increasingly businesses are realising the importance of employer brand. Just like other stakeholders, employees expect certain things not just a salary from their employer.

Staff members want to feel they can identify with the company. Employer branding is about making sure that employees feel good about the place they work. They can then be ambassadors for the company and that ‘feel good factor’ can permeate out to others, notably customers and clients. For these benefits to be accrued the organisation needs to be CSR compliant

Three Key Areas of Corporate Social Responsibility

Focusing on three key areas for Corporate Social Responsibility can help create a cohesive map for the present and future:

Community Relations, Training and Development, and A Cohesive Global Corporate Social Responsibility Platform

Encouraging Community Relations through your HR team includes implementing reward programs, charitable contributions and encouraging community involvement and practices. Examples of these programs include sending emails and company newsletters to staff members that highlight employees and managers involved in community relations or creating monthly reward programs to recognize efforts by individuals within the company.

Training and Development programs that explain the connection between the company’s core products or services and the society at large, their value to the local community and ways in which employees can get involved in appropriate CSR projects would sustain and direct these initiatives.

Global Corporate Social Responsibility policy, centrally managed, is important to acknowledge successes and measurements according to accepted standards. Central to measuring and communicating these results is the use of a Web-based Human Resources Information System (HRIS) that is available globally to employees and managers with any Web browser. In order to encourage and maintain a clear and cohesive global workplace, it is critical for the entire global workforce of a company to be on a single, multi-functioning HR platform, which allows for distributing a sound corporate responsibility plan.

Having a global HR solution that offers companies flexibility, ease of use and the right mix of tools is essential to the success of both employees and employers alike, as they manage and maintain work-life balance and thrive in a changing environment that includes taking on social responsibility. The success of your Corporate Social Responsibility plan is possible with an HRIS that provides the capability to effectively plan, control and manage your goals, achieve efficiency and quality, and improve employee and manager communications.

The flexibility of your HRIS system is critical to tracking and pursuing a sound Corporate Social Responsibility plan and a Web-based system provides an unparalleled level of both scalability and accessibility to implement your Corporate Social Responsibility plan at a global level. This is an increasingly important endeavor, as companies, societies and people coexist productively and in harmony, across the planet we all inhabit.

What are the risks in HR’s involvement with CSR?

The trust built through successful CSR is hard to regain if lost. HR needs to ensure that their organisation’s CSR can stand up to the inevitable scrutiny by stakeholders, and that training and communication mean it’s embedded throughout the culture of an organisation.

HR needs to be an active business partner working with other functions, for example finance, PR/marketing etc. It will need to look beyond the boundaries of usual practice and arguably work on its own PR. CSR is a strategic opportunity which is market-led and is restrained by bureaucracy. It needs dynamism, creativity, imagination and even opportunism.

What to consider when starting a CSR strategy?

Clarify your core values and principles.

Make sure you know who your key internal and external stakeholders are and which issues affect your relationship with them.

Get the top team on board, and know how to sell the benefits of CSR to different stakeholders.

Understand how the CSR strategy is aligned to your business strategy and HR practices.

Get endorsement for the CSR strategy from inside and outside your organisation.

Communicate, consistently.

Training is vital, as CSR will only have an impact if employees are engaged: attitudes or behaviour won’t change otherwise.

Effectively measure and evaluate CSR, otherwise the time, effort and money invested are based on assumptions, not results.

Direct results (such as saving fuel resulting in lower carbon emissions) and indirect results (increased employee satisfaction) of CSR strategies can be shown to contribute to business performance. One way outcomes can be measured is through a balanced scorecard approach, which allows for the different types of factors that contribute to a business’s bottom line including internal people, processes and customers.

Global role of CSR

One thing that is for sure - the pressure on business to play a role in social issues will continue to grow. Over the last ten years, those institutions which have grown in power and influence have been those which can operate effectively within a global sphere of operations. These are effectively the corporates and the NGOs. Those institutions which are predominantly tied to the nation state have been finding themselves increasingly frustrated at their lack of ability to shape and manage events. These include national governments, police, judiciary and others.

There is a growing interest, therefore, in businesses taking a lead in addressing those issues in which they have an interest where national government have failed to come up with a solution. The focus Unilever has on supporting a sustainable fisheries approach is one example. Using the power of their supply chain, such companies are placed to have a real influence. National governments negotiating with each other have come up with no solutions at all, and ever-depleting fish stocks. That is not to say businesses will necessarily provide the answers - but awareness is growing that they are occasionally better placed to do so than any other actors taking an interest.

In a global economy, increasingly organizations have a responsibility to facilitate, demonstrate and promote corporate social responsibility (CSR). Long-term sustainability demands that organizations rethink their business goals and objectives from solely focusing on making a profit to corporate citizenship. Today, the impact of CSR is beginning to be seen in communities throughout the world--from human rights and labor practices to health care and the environment. At home and abroad, HR plays a critical role--that of leading and educating their firms regarding the importance of CSR while at the same time strategically implementing sound HR management practices that support the company's business and CSR goals.

HR has the opportunity, through well-managed programs, policies and practices, to engage the

organization and its stakeholders (e.g., owners, employees, management, customers, creditors, the government and other public organizations) in the value of CSR by focusing on communications, employee relations, health, safety and community relations to provide their organizations with a competitive advantage.

Future trends in CSR for HR departmentsCSR is here to stay, how and where it is displayed with business will depend on the board and other external factors. However, for CSR not to be merely an add on but to be actually embedded as part of the business - reflecting the way it does business, its culture and values - then HR will need to play its part.

HR departments may have a natural ally in their financial directors who are beginning to recognise staff as an area of intangible risk. FDs should be prepared to invest to manage this risk and create an employer of choice which delivers benefits to the bottom line in a number of ways from improved staff retention to improved work performance through more motivated staff.

Corporate Social Responsibility in India

ITC’s Agri Business Division, one of India’s largest exporters of agricultural commodities, has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis.

The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others.

The Value Chain - Farm to Factory Gate:

‘e-Choupal’ also unshackles the potential of Indian farmer who has been trapped in a vicious cycle of low risk taking ability > low investment > low productivity > weak market orientation > low value addition > low margin > low risk taking ability. This made him and Indian agribusiness sector globally uncompetitive, despite rich & abundant natural resources.

Such a market-led business model can enhance the competitiveness of Indian agriculture and trigger a virtuous cycle of higher productivity, higher incomes, and enlarged capacity for farmer risk management, larger investments and higher quality and productivity.

Further, a growth in rural incomes will also unleash the latent demand for industrial goods so necessary for the continued growth of the Indian economy. This will create another virtuous cycle propelling the economy into a higher growth trajectory.

The Model in Action:

Appreciating the imperative of intermediaries in the Indian context, ‘e-Choupal’ leverages Information Technology to virtually cluster all the value chain participants, delivering the same benefits as vertical integration does in mature agricultural economies like the USA.

‘e-Choupal’ makes use of the physical transmission capabilities of current intermediaries – aggregation, logistics, counter-party risk and bridge financing –while disintermediating them from the chain of information flow and market signals.

With a judicious blend of click & mortar capabilities, village internet kiosks managed by farmers – called sanchalaks – themselves, enable the agricultural community access ready information in their local language on the weather & market prices, disseminate knowledge on scientific farm practices & risk management, facilitate the sale of farm inputs (now with embedded knowledge) and purchase farm produce from the farmers’ doorsteps (decision making is now information-based).

Real-time information and customised knowledge provided by ‘e-Choupal’ enhance the ability of farmers to take decisions and align their farm output with market demand and secure quality & productivity. The aggregation of the demand for farm inputs from individual farmers gives them access to high quality inputs from established and reputed manufacturers at fair prices. As a direct marketing channel, virtually linked to the ‘mandi’ system for price discovery, ‘e-Choupal’ eliminates wasteful intermediation and multiple handling. Thereby it significantly reduces transaction costs.

‘e-Choupal’ ensures world-class quality in delivering all these goods & services through several product / service specific partnerships with the leaders in the respective fields, in addition to ITC’s own expertise.

While the farmers benefit through enhanced farm productivity and higher farm gate prices, ITC benefits from the lower net cost of procurement (despite offering better prices to the farmer) having eliminated costs in the supply chain that do not add value.

The Status of Execution:

Launched in June 2000, 'e-Choupal', has already become the largest initiative among all Internet-based interventions in rural India. 'e-Choupal' services today reach out to over 4 million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses, and shrimp - in over 40,000 villages through 6500 kiosks across ten states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerela and Tamil Nadu).

The problems encountered while setting up and managing these ‘e-Choupals’ are primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India.

Several alternative and innovative solutions – some of them expensive – are being deployed to overcome these challenges e.g. Power back-up through batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits, installation of VSAT equipment, Mobile Choupals, local caching of static content on website to stream in the dynamic content more efficiently, 24x7 helpdesk etc.

Going forward, the roadmap includes plans to integrate bulk storage, handling & transportation facilities to improve logistics efficiencies.

As India’s ‘kissan’ Company, ITC has taken care to involve farmers in the designing and management of the entire ‘e-Choupal’ initiative. The active participation of farmers in this rural initiative has created a sense of ownership in the project among the farmers. They see the ‘e-Choupal’ as the new age cooperative for all practical purposes.

This enthusiastic response from farmers has encouraged ITC to plan for the extension of the ‘e-Choupal’ initiative to altogether 15 states across India over the next few years. On the anvil are plans to channelise other services related to micro-credit, health and education through the same 'e-Choupal' infrastructure.

Another path-breaking initiative – the ‘Choupal Pradarshan Khet’, brings the benefits of agricultural best practices to small and marginal farmers. Backed by intensive research and knowledge, this initiative provides Agri-extension services which are qualitatively superior and

involves pro-active handholding of farmers to ensure productivity gains. The service are customised to meet local conditions, ensure timely availability of farm inputs including insurance and credit, and provides a cluster of farmer schools for capturing indigenous knowledge. This initiative, which has covered over 70,000 hectares, has a multiplier impact and reaches out to over 1.6 million farmers.