2021

CSR ANALYSIS
Ahmad Tariq Bhatti
FCMA (Pak), ACMA (UK), CGMA, FPFA, MA (Eco.), BSc

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Dedicated to CIMA & ACCA students

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 Drivers for CSR, Areas of
4 CSR Application and
Reducing Carbon Foot-Prints
Purpose, Scope,
1 Definitions, Brief History
and Importance of CSR

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Examples of CSR
Compliance and Stakeholder
Influence on CSR Compliance
Examples, Benefits,
2 Framework and Triple
Bottom-line for CSR
Drafting a CSR Policy, Monitoring

6 and Controlling CSR activities,

Cost & Benefit Analysis and
Implementation
Relationship of CSR with

3 Sustainable Development and

the Concept of Corporate
Citizenship Reporting on CSR
7 Activities and Outcomes
of CSR Reporting

Learning Outcomes 4
Purpose of CSR
The purpose of CSR is to return benefits to
the society, participate in philanthropic
causes, protect the environment from
various kinds of harmful effects of industrial
activity and demonstrate positive social
values.

The term CSR refers to the company's

practices and policies aimed at having a
positive impact on the world.

The key idea behind CSR is that in addition

to pursuing profit maximization, companies
must also pursue social and environmental
goals.

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Scope of CSR

► CSR has three pillars: economic, social, and

environmental. These three pillars are connected
with profit, people, and planet respectively
► At first, CSR focused on the social behavior of 
businesses only. Later, it included in its scope, the 
behavior of suppliers and the purpose of a product, as
 well as how to dispose it off after it loses the utility or 
value

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CSR Definitions
Corporate Social Responsibility (CSR) is a management concept whereby
companies integrate social and environmental concerns in their business operations
and interactions with their stakeholders.
- United Nations, Industrial Development Organization

The European Commission defines CSR as, “the responsibility of

an entity for their impact on society.”

Continuing commitment by a business to behave ethically

and contribute to economic development while improving
the quality of life of the workforce and their families as
well as of the local community and society at large.
- World Business Council for Sustainable Development

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Brief History of CSR
1. The term was officially introduced by an American economist, Howard Bowen, in 1953.
2. According to Bowen (1953), CSR is defined as, "the obligation of businessmen to pursue those
policies, to make those decisions or to follow those lines of action which are desirable in terms of
objectives and values of society.”
3. In 1971, the concept of “social contract” was introduced between businesses and society by the
Committee of Economic Development in USA.
4. In 1980s, CSR evolved as more and more organizations started accepting social interest in their
business practices.
5. In 1990s, CSR was approved widely across the industries.
6. In 1991, a professor at University of Pittsburgh, Donna J. Wood, wrote an article entitled as,
“Corporate Social Performance Revisited.” He provided a framework for assessing the impacts and
outcomes of CSR programs.
7. By early 2000s, CSR, became an essential strategy for companies such as, Wells Fargo, Coca-
Cola, Walt Disney and Pfizer.
8. Today, CSR has become an essential part of company reporting and has a legal acceptance all over
the world.
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Importance of CSR
It is becoming increasingly important to have a socially conscious image of a business
organization.

Consumers, employees and other stakeholders prioritize CSR when choosing a brand
or a company. They are holding corporations accountable for effecting social change
with their business ideas, beliefs, norms, standards and practices.
 
"A robust CSR program is an opportunity for companies to demonstrate their good
corporate citizenship and protect the company from outsized risk by looking at the
whole social and environmental sphere that surrounds the company."
- Jen Boynton, CEO of B Targeted Marketing Co. 

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 6. Enhancing working relationship with 5. Attracting, retaining & maintaining a
all stakeholders talented workforce

7. Attracting new and retaining 4. Increasing access to funding

existing business opportunities

8. Increasing influence in the

industry through meeting CSR
Benefits 3. Better brand recognition &
positive business reputation
of CSR
9. Increasing sales through greater 2. Saving money on energy &
customer loyalty operating cost

10. Boosting morale of employees 1. Increasing customer retention

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Framework for CSR

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Carroll’s Pyramid of CSR Phila
nthro
pic
Resp
onsib
ilities
Archie B. Carroll developed in 1991,
Be a
the pyramid of CSR, which explains Good
Corpo
what CSR is and why companies rate
participate in CSR. Citize
Ethical Responsibilities
n
(Desir
Follow Ethics in doing
This pyramid is useful in explaining the ed by
Business
Socie
motives for CSR, which are shown in (Expectedty)by Business
Partners & Society)
the pyramid. The four levels of the
pyramid reflect a company’s reason to Legal Responsibilities
Obey Laws & Regulations
engage in CSR. (Required by Law Enforcement Agencies &
Society)
The purpose of the pyramid is to point
out the defining aspects of CSR and Economic Responsibilities
explain the basic components of the Be profitable – basic requirement of a business enterprise
four-part framework. (Required by Stakeholders)

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 Philanthropy
Philant
hropy • Donations & charities

Monitor Evaluate •Recycling production and industrial wastes

• Conserving energy through use of latest
technology
•Organizing re-forestation campaigns
•Using environment-friendly technologies
Areas of Environm
Environment
ent
Formulate
Volunteerism CSR Conservation
conservat • Separate Codes of conduct for both
Compliance ion company and its employees

• Sponsorships

Explain CSR means that the protection of the

environment and the promotion of
Analysis & social welfare should be prioritized
Ethical
Reporting like the legal requirements in the
Concerns &
Practices
course of conducting business.

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Good Corporate Citizenship
A good corporate citizen refers to a company that is guided by strict ethics and ethical
standards in the execution of daily business.

It includes balancing all stakeholders’ needs and interests (like wealth maximization,
profits, returns, share price increase) with those of society and the environment. It is fully
aware of the environmental impact of its business operations.

Good corporate citizenship establishes a positive brand image – people want to do

business with companies that are respected for fulfilling their social and environmental
responsibilities. In addition, they want to be part of a company that is willing to voluntarily
lend a hand and help our society face difficult social and environmental issues.

In companies that invest time and money in ethical and socially responsible behaviors,
employee morale tends to be higher, and these behaviors directly affect employee
performance and loyalty.

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Examples of CSR Compliance
1. Reducing carbon footprints
2. Controlling emissions to soil, water and air
3. Not allowing child and bonded labor
4. Helping people during a massive and devastative earthquake
5. Helping flood victims by sending food, blankets, medicines, camps, etc.
6. Improving labor policies and working standards
7. Ensuring ethical compliance by all employees through a code of conduct
8. Minimizing industrial effluents and disposing them properly
9. Allowing the fair trade practices
10. Charitable giving
11. Giving scholarships to needy students
12. Making the production of a company environment friendly
13. Recycling industrial wastes and eliminating their harmful effects
14. Volunteering in the community welfare projects
15. Sponsoring a game event for promoting games
16. Devising corporate policies that benefit the environment
17. Participating in go-green drives by planting trees
18. Holding seminars and events for promoting environment protection
19. Making socially and environmentally conscious investments
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Sustainable Development
Sustainability and corporate social responsibility are closely related business concepts that have greatly
affected corporate governance. Sustainable business development involves the use of socially and
environmentally responsible and efficient operating practices along with achieving the target profitability.
Sustainable business development depends on the strong partnerships with all groups concerned with
social and environmental issues and concerns.

PLANET PEOPLE PROSPERIT PEACE PARTNERS

Y HIP

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 Courtesy: DESA, UN

Agenda 2030 for Sustainable Development

United Nations Department of Economic and Social Affairs
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Sustainable The ability of a
business enterprise to
1
Business Growth
generate and build its
positive image and Promoting strong
reputation in a customer and social

Through CSR
society. relationships.
Community-based
service events, give
4 a business greater
recognition and
positive associations
Maintaining a with its potential
consistent customer
Five Factors that  appeal through social
customers.

Promote Sustainable 2 works and

environment friendly
Business Growth measures along with
making profits. Maximizing returns of
the shareholders
through a better
5 financial performance.
More investors will be
attracted on seeing a
healthy bottom-line.
Retaining highly
skilled workforce
3 through their
satisfaction and
following high ethics.
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 Management
of Brand
Image &
Corporate
Diversity Reputation
Benefits,
Good
Governance Corporate
relatedPractices
& Stewardship
to Social
Environmental Citizenship
& Principles
Environmental Issues
Inclusivity

Effective Discharge of
CSR

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"The way a corporation achieves
a balance among its
economic, social, and
environmental responsibilities in
its operations so as to address
shareholder and other
stakeholder expectations.“
- International Standardization Organization

The triple bottom line (3B/L or TB/L) is a report on the impact of a business performance on the economy, society,
and environment. Furthermore, it is used to describe the integration of social and environmental issues and
concerns into a business’s decisions, goals, and operations.
Economic responsibility is to maximize shareholders’ wealth through increasing profits and protecting the rights of
all stakeholders, social responsibility is to obey the laws and follow ethical standards in the conduct of the
business, and environmental responsibility is to protect the environment in which a business enterprise operates.
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Top 10 Companies with the Best CSR Reputation

1.Rolex
2.Lego
3.Disney
4.Adidas Group
5.Microsoft
6.Sony
7.Cannon
8.Michelin
9.Netflix
10.Bosch Report 2018-19
https://youmatter.world

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Drivers for CSR Compliance

Legal & The

The Potential Pressure
Ethical for a
Requirements Competitive of Social
Advantage Groups

The Extent The

Customer of Costs & Threat of
Requirements Investment Media
Involved Groups

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Reducing the Carbon Footprints
Carbon footprint is the amount of carbon dioxide released into the atmosphere as a result of the
activities of an individual, an organization or a community.

Sources of Carbon Emissions

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CSR Analysis

It pertains to people and organizations A responsible business is

behaving and essentially one that benefits
Business Social Responsible
conducting business ethically and with
Responsibility Business
society by eliminating the negative
the sensitivity towards social, cultural, impacts it might have on society,
economic, and environmental issues. people and planet.

Businesses that
practise CSR and sustainable Stakeholders’ Stakeholders play a key role in
development need to operate in ways Sustainable Role in the the decision making process
that are respectful to the general Development Implentation of when businesses decide to
population and their surrounding CSR engage in CSR projects.
environment.

CSR is about a business approach to sustainable development by delivering economic,

social and environmental benefits. It encapsulates the initiatives by which a company
takes responsibility for its effect on social and environmental well-being.
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Business Social Responsibility

Local Community General Public Employees or Workers Government and

Administrative Bodies

Environment Shareholders or Investors Consumers or

Customers

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Stakeholders Influence on CSR Activity

Government bodies looking after CSR activities

1 and ensuring compliance with the laws related with
it.
Customers have policies to buy from companies
2 that fulfill their CSR efficiently and effectively.
Suppliers may be more interested to sell their
goods to a company that has robust system for
3 CSR compliance
Investors would be more inclined towards a
1 2 3 4
4 company that enjoys better reputation with all
internal and external stakeholders and have fulfilled
its CSR.

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 Energy Production & Consumption
Energy production and consumption of all
72% types accounts for 72 percent of all
emissions. Hence, it is the biggest source
of carbon emissions into the atmosphere.

Agriculture
Soil management, enteric fermentation,
11% and manure management from livestock
are the largest sources.
Carbon Emissions Report, 2017
According to a 2017 report by the World Resources Industrial Processes
Institute (https://www.c2es.org), energy production and According to a report, the five industry categories
consumption are the largest sources of carbon emissions
6% of paper, food, petroleum refineries, chemicals
and metal/mineral products are responsible for
into the atmosphere. It is 72% of the total emissions from contributing the most greenhouse gases.
all sources. The breakdown of energy-related carbon
emissions is as follows.
• Electricity and heat 31% Land Change & Forestry
• Transportation 15% Agriculture, livestock-raising, deforestation
6% and the conversion of forest lands all
• Manufacturing and construction 12.4%
• Other fuel consumption 8.4% contribute to substantial carbon
emissions..
• Fugitive emissions 5.2%
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An Example of a CSR Policy
Our company’s CSR policy outlines our efforts to give back to the world.
Scope
This policy applies to our all group companies. It can also refer to suppliers and partners.
Policy Elements
We want to be a responsible business that meets the highest standards of ethics and professionalism in the conduct of the business. Our
company’s social responsibility falls under two categories: compliance and pro-activeness. Compliance refers to our company’s
commitment to legality and willingness to observe community values. Whereas pro-activeness refers to the participation of our company
in every event that promotes human rights, helps communities and protects our natural environment.
Compliance
A: Legal
Our company will:
1. Respect the law
2. Honor its internal policies
3. Ensure that all its business operations are legitimate
4. Keep every partnership and collaboration open and transparent
B: Business Ethics
We’ll always conduct business with integrity and respect to human rights. We’ll promote:
5. Safety and fair dealing
6. Respect toward the consumer
7. Anti-bribery and anti-corruption practices

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Monitoring CSR
The following is the step-by-step approach for monitoring a CSR program:
 Break down the CSR goals into categories. Some classes include philanthropy,
labor practices, social practices and environmental efforts. It is easy to track how
much time and money is invested into each of these categories.

 Track the success of these investments, look for measurable KPIs. How much has
the carbon footprint of the company changed? How many people were reached by
a charitable effort? While doing these things, continue to check the changes
related to each class, and keep an eye on public perception of which issues are
most important?

 Take public feedback through surveys about the effectiveness of CSR policies,
practices and goals. Examine reports of the environmental reporting agencies
about the common violations of environmental laws in the area it operates.

 Recommend corrective actions based on the results of the feedback from public.
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 Purpose

1
Feedback surveys &
9 2 Benefits of a CSR report.
reports

Reporting to potential
investors 8 3 Is CSR report mandatory?.

CSR
Report
Reporting to external Standardized vs
7 4
stakeholders personalized CSR report

Reporting to the internal

6 5 Contents of a CSR report.
stakeholders

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 Monitoring & Evaluation How a CSR program fits to
01 the needs of a business
of a CSR Project Needs an
enterprise?
Initial
Assessment

02
A CSR assessment
A CSR assessment is is the
the monitoring
monitoring and
and evaluation
evaluation of
of The operational design of a
how
how well
well aa company
company hashas integrated
integrated the
the principles
principles project, its CSR objectives and
Indicators
of CSR into
of CSR into itsits business.
business. The
The aim
aim of
of the
the assessment
assessment is is to
to means of monitoring &
get
get aa clear
clear picture
picture of
of the
the CSR practices
CSR practices (i.e.,
(i.e., environment,
environment, evaluation.
social,
social, ethics,
ethics, supply
supply chain).
chain).

06 Final 03
Evaluation Monitoring
Measuring indicators upon & Sharing & Evaluation
Steps for monitoring &
completion of a CSR project and of results evaluation of CSR activities.
sharing the results of such
implementation with the
stakeholders. . Midterm Basic
Assessment Assessment

The assessment of initial conditions

The assessment of indicators during
implementation of a CSR project.
05 04 before the start of a CSR project.

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The End.

THANK YOU
 Ahmad Tariq Bhatti
FCMA (Pak), ACMA (UK), CGMA, FPFA, MA (Eco.), BSc

For Feedback & Queries

at.bhatty@gmail.com