Model Question Paper

Model Question Paper

Please be advised that this just a model; The marks, time etc., may vary when the actual examination takes place.


Type of Examination: Internal Examination – Feb 2008

Model: Multiple Choice Questions – Open Book

Subject: Corporate Social Responsibility

Distribution of Marks: Each question carries 1 mark (total 25) – 25 Marks are awarded for attendance

Total time for the examination: 60 minutes


Tick the most appropriate Statement  for each of the questions below
1.

The following are the three pillars of Sustainability
a) Profits, Environment and Enterprise
b) Economic, Environment and Society
c) Environmental, Ecological and Philanthropy
d) Social, ecological and people

2.

Environmental conflicts arise because of the following:
a) Air Pollution, Water Pollution and Soil Pollution
b) Destruction of biodiversity and loss of flora and fauna
c) Excessive use of resources and increasing cost of non-renewable resources
d) Characteristics of the Physical environment, viz., common property, multiple use and uncovered cost

3.

Established methods for avoiding environmental conflicts include:
a) Dialogue with the stakeholder
b) Complying with legislation
c) Command & Control, Economic Instruments and Voluntary Initiatives
d) Establishing ISO-14001 and ISO-9001 Management Systems

4.

An organization’s stakeholders
a) are the employees and contractors of the organization
b) are the shareholders of the organization
c) are those interested in the organizations activities, products and services including flora and fauna and the Government
d) All the above

5.

Social Issues covered under CSR include
a) Poverty alleviation and social upliftment
b) Provision of clean drinking water, medical facilities and education to the population in and around the operational area of the organization
c) Issues related to inclusion, diversity, bribery, discrimination, donations, child labour etc.
d) All issues covered by UN Global Compact, Universal Declaration of Human Rights, ILO Guidelines, SA-8000, OHSAS-18001, AA-1000 , OECD Guidelines etc.

6.

Sustainable Development is defined as:
a) the development that meets the needs of the present without compromising the ability of the future generations to meet their own needs
b) the development the improves the lives of people who are under the poverty line
c) the development with a futuristic outlook on returns on investment
d) the development that can sustain the livelihood of people

7.

UN Global Compact addresses issues related to:
a) UN Development policies and programmes
b) Labour Rights and Occupational Health & Safety
c) Human Rights, Environment, Labour, Anti-corruption
d) None of the above

8.

Child Labour
a) is allowed under certain circumstances
b) is not allowed under any circumstance
c) is allowed if it is voluntary
d) is allowed in certain industries such as carpet industry and rag picking

9. 

OECD Guidelines are meant especially for
a) Multinational enterprises operating in / from developing countries
b) Multinational enterprises operating in / from developed countries
c) Multinational enterprises operating in / from OECD countries
d) All enterprises operating all over the world

10. 

UN Universal Declaration of Human Rights demands
a) Employment to everyone
b) Equal pay for equal work
c) Work with self-esteem
d) Right to livelihood

11. 

PDCA refers to:

a) Plan, Do, Check, Act cycles
b) Please Do Corrective Actions
c) Please Don’t Carry Anything
d) Programmed Demand Corrective Action

12. 

Environment according to ISO-14001 is:

a) The Physical environment which provides resources, which acts as sink for the waste generated and which provides the Amenity value
b) The bio-sphere consisting of all living species
c) Surrounding in which the organization operates, including air, water, land, natural resources, flora, fauna, humans and their inter-relations
d) All that is happening around us, including the natural phenomenon like earthquakes

13. 

Environmental aspect according to ISO-14001 is:
a) The element of the organization’s activity, product or service that can interact with the environment
b) That aspect of the organization that causes environmental problems
c) That aspect of the organization that is potentially dangerous to the environment
d) That part of the organization that can cause significant environmental impacts

14. 

Environmental impact according to ISO-14001 is:
a) The impact on the society arising out of the activities of the organization
b) Any change to the environment, whether adverse or beneficial, wholly or partially resulting from the organization’s environmental aspects
c) The environmental effect caused by the activities and products of the organization
d) The impact on the organization caused by the environmental activities of the organization

15. 

As per ISO-14001 the environmental policy shall commit the organization
a) To comply with applicable legal and other requirements
b) To prevent pollution
c) To continual improvement
d) All the above

16. 

Significant environmental aspects are addressed in the ISO 14001 by
a) Setting up objectives, targets and programmes
b) Establishing operational control procedures
c) Training employees on significant environmental aspects
d) All the above

17. 

Internal Environmental Management System (EMS) Audit is carried out to:
a) Ensure the continual improvement due to the EMS
b) Ensure that employees are well trained in environmental matters and that the environmental management programmes are carried out without fail
c) Inform the Management the non-conformances to ISO-14001
d) Ensure that the EMS conforms to ISO-14001, that the system is established and maintained and to report the results of the audit to the management

18. 

Inputs to the Management Review of the ISO-14001 Environmental Management System include:
a) The performance of the environmental management system
b) The economic environment and its effect on the organization
c) Quality of products and their sales during the period under consideration
d) Customer complaints and compensations given to customers based on field returns

19. 

Corporate Social Responsibility is defined as:
a) The responsibility of business enterprises to contribute to the GDP of the country and to improve the lives of millions who live below the poverty line
b) The continuing commitment by 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
c) The responsibility of the enterprise towards its employees, neighbours and populations in its area of operation towards better education, health and general life
d) The responsibility of the Corporation towards its social commitments including donations to the society and NGOs towards improving infrastructure and earning capacity of the populations.

20. 

Child Labour relates to employment of persons below the age of:
a) 14 years
b) 16 years
c) 18 years
d) None of the above

21. 

“Insider Trading” is about:
a) Trading in commodities that are dear to the enterprise
b) Trading in areas which were not catered to in the past
c) Trading in company’s stocks and other securities by officials of the company
d) Trading on raw materials used by the company by the officials of the company 

22. 

The triple bottomline approach highlights the need to:
a) Maximize earnings, profits before tax, and profits after tax
b) Compromise between the necessity to meet the demands of the government officials and the demands of the shareholders while taking care of the interests of the employees
c) Address environmental performance, economic performance and health & safety of employees
d) None of the above

23. 

Occupational Health & Safety relates to:
a) Healthy use of products that are safe
b) Employee health and safety related to the operations of the organization
c) Health Security and Safe environment for the employees
d) None of the above

24. 

Discrimination at the workplace can take place, through:
a) Biases based on sex, creed, religion
b) Biases based on language, nationality
c) Biases based on colour
d) All the above

25. 

EcoDesign is about
a) Design for the environment
b) Design of economically sound products
c) Design of Green Buildings
d) None of the above

Part B: Case Studies (Please answer both B.1 and B.2 in the space provided)

B.1. Marks (12)

CEO Quits Amid Resume Questions


ABC Corporation's embattled president and CEO, Tejas Khanna, resigned on Monday following questions about his resume's accuracy. The major electronics retailer said that its board accepted his resignation and has promoted Makhrand Deshpande — executive vice president and chief operating officer — to acting CEO. Rohit Roy, ABC Corporation’s chairman and Khanna’s predecessor as CEO, said that the move was necessary to restore the company's credibility. "One of the most important things we have as a corporation is integrity and trust and we know we have to restore that back to the public," he said.

Khanna issued a brief statement on Monday but did not discuss his resume. "For the last 11 years, it has been my privilege to be associated with ABC," he said. "At this time the board and I have agreed that it is in the best interest of the company for new leadership to step forward so that our turnaround plan has the best possible chance to succeed, as I know it will."
Khanna’s troubles began last Tuesday when errors in his resume were reported by the Sunday News. The company's board said that it stood behind its CEO, a decision Roy said he now regrets.

On Wednesday, Khanna said that he took responsibility for the errors. Separately, ABC Corporation said that it would hire outside lawyers to investigate errors in Khanna’s resume, including claims that he earned two degrees for which the colleges he attended has no records. That investigation won't continue since Khanna quit, the company said.
Khanna, 46, joined ABC in 1994 and had been CEO since May, 2007. Khanna had claimed that he received degrees in Economics and Psychology from XYZ College in Chandigarh, which moved in 1998, due to shortage of space, to Jallundar and renamed itself Great Value College. The College Principal told this correspondent that records showed Khanna completed only two semesters in his course in economics and that the college never offered degrees in psychology.
Khanna said last Wednesday that he believed that he received a diploma in economics by attending two semesters, but not the three year bachelor of arts degree listed on his resume.

Roy said that the company background checks did not include academic verification in 1994 as it does today. Roy said that Khanna’s severance package would be less than Rs.10 lakhs in a cash payout, but said more details would be released on Tuesday in a regulatory filing.

The move did not surprise Ms. Devaki Kulkarni, an analyst for Fulcrum Global Partners Ltd., though she didn't think the change would come on a public holiday, as it did, when financial markets were closed. "If you think about his tenure, it's not as if he's led a turnaround of this company," she said. "That being said, it would be difficult for the board, considering the things that have come out, to find a reason to keep him."

The company has since removed biographical sketches of its executives, including that of Deshpande, and replaced it with the following statement: "We are currently updating and validating all of the biographical information for each of our senior executives."

For now, it will be Deshpande’s job to lead a turnaround that begins with closing 400 to 700 stores and two distribution centers as part of a campaign to fix its financial performance. This plan was announced on Friday, when the company also disclosed that its fourth-quarter earnings fell 50 percent. Its shares tumbled 8 percent, after sinking at midday to a three-year low of Rs. 119.

Roy said that Deshpande is also a candidate to become the permanent CEO; ABC Corporation has hired executive search firmer Au Foi to conduct a nationwide search. A representative of Au Foi said that Desphande, a former Sunrise Corporation executive hired last summer, would fit well as CEO, even if it is temporary. "He is the right candidate," she said. "I like his approach at how he looks at the business. He walks into a store and wants to see it through the consumer's eyes."

1. Write the summary of the above case in 5 sentences

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2. What is/are the ethical issue(s) involved in this case ?

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3. What action would you have taken if you were Rohit Roy ?

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4. What are the ethical issues of your suggested action(s) ?

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B.2. Marks (8)

Dilemma of Chandra

Chandrasekhar, the insurance surveyor, was playing with his 4-year-old daughter Chithra when the telephone rang. At the other end of the line was Chidambaram, the insurance agent, pleading for urgent help. Would Chandrasekhar please visit Mrs. Chitale in his neighborhood who had made claims for bodily and mental injury resulting from a car crash with a person insured by the Insurance company? Mrs. Chitale had consented to a visit from their surveyor to assess the injuries to her nose and her mental state. Apparently the crash had caused her to relapse into a condition of paranoia and manic depression, previously stabilized.
Chandrasekhar agreed readily, but said that he had to take his daughter Chithra along as there was no one in the house to take care of her in his absence.
When Chandrasekhar arrived at Mrs. Chitale’s house, he found no one at home, so he and his daughter Chithra waited in the car. Eventually, Mrs. Chitale arrived, parked, and emerged from her car, at which point Chithra shouted happily, "Miss Chitale!"
"Who is Miss Chitale?" asked Chandrasekhar with surprise. Miss Chitale turned out to be Chitra’s teacher. Chandrasekhar conducted a short interview with Mrs. Chitale on the front steps of her home, satisfying himself that she did indeed have some facial injuries and that she was taking prescription medicine for her mental problems.
Insurance ethics mandates that claims investigations are completely confidential. An insurance professional with knowledge of a claims case is expected to keep silent and to refrain from using the knowledge for personal benefit.
Chandrasekhar had a real dilemma. On one hand, to uphold his industry's code of ethics, he was not to discuss or act on the information he had received about Mrs. Chitale’s (mental) situation. On the other hand, he did not want his daughter under the care of a person who was undergoing treatment for mental illness and who might be dangerous. Chandrasekhar's wife was an insurance surveyor for another company. Even if Chandrasekhar told her, she was bound by the same code of ethics.

1. Give the summary of the case in five sentences

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2. What are the ethical issues of this case ?

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3. What action(s) would you have taken if you were Chandrasekhar ?

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4. What are the ethical issues involved in your proposed action ?

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Question Bank

If you study the answers for these questions you will be able to answer majority of questions in the final examination.

Question Bank

CSR - Question Bank
1. What are the elements of business that make up Corporate Social Responsibility ? Explain each of the elements.

2.What is the triple bottom-line approach ? Explain the three elements of this approach

3.What are the arguments against Corporate Philanthropy ?

4.What are the arguments for Corporate Social Responsibility ?

5.What are the causes for the environmental conflict between the society and business ?

6.What are the methods of resolving environmental conflicts ? Explain each.

7.Which are the UN human rights issues that apply directly to the business ?

8.What are the ten principles of Global Compact ? Explain each of these principles in two sentences

9.How does strategic philanthropy differ from philanthropy ?

10.What are the OECD Guidelines ? Explain the nine principles of OECD guidelines.

11.Child Labour – is this an issue in the Indian context? Discuss.

12.What is forced labour ?

13.What is discrimination at workplace ? Give examples

14.What is the gender bias ?

15.What is workplace harassment ?

16.Write a short note on ISO-26000.

17.What is Sustainable Development ?

18.What is insider trading ?

19.What is the purpose of “Audit Committee”?

20.What is the purpose of “Compensation Committee”?

21.Is product safety a CSR issue ? Discuss

22.Is the safety of workers a CSR issue ? Discuss

23.Identify at least ten areas of focus for ensuring employee safety

24.Who are the stakeholders of a business entity ? Identify five stakeholders of a business organization.

25.What is a PDCA cycle ?

26.What is a Management System ?

27.What is an environmental Management System ?

28.What are the requirements for an environmental policy according to ISO-14001?

29.What is an environmental aspect and how is it related to pollution ?

30.What are the essential inputs for setting objectives, targets and programmes under ISO-14001 ?

31.What are the ways in which significant aspects are addressed in ISO-14001 ?

32.What are operational control procedures under ISO-14001?

33.What is the difference between a potential “emergency” and potential “accident” ?

34.What are the difference between “corrective” actions and “preventive” actions ?

35.What is an environmental management system audit ?

36.What are essential inputs to a Management review under ISO-14001 ?

37.What is WBCSD ? Write a short note on WBCSD activities ? (see www.wbcsd.org)

38.Name five environmental NGOs operating in India

39.What are Core indicators as per GRI ? Give two examples

40.What are additional indicators as per GRI ? Give two examples

41.What are the main themes for the G-3 Report ?

42.How are NGOs classified ? Give a few examples

43.Name three subjects of neighbourhood programmes

44.What is the meaning of BOP ?

45.What are the characteristics of the products and services meant for the BOP market ?

46. How does a BOP project differ from Rural Marketing?

47. Name a few successful BOP projects running in India

48. What is DJSI ?

49. What are the different subjects on which a company is evaluated under DJSI ?

50. What are the developments that make Corporates to look at BOP differently now ?

CSR Lecture 11: 31 Jan 2011

We went through the article The Story of the Sadhu from HBS in this class.  The basic learning is that ethics and morality of individuals have to be supported by institutional frameworks for them to be applied uniformly and to avoid confusion and reluctance.

CSR Lecture 10: EICC Assessments

We started the class with a brief introduction to EICC (Electronics Industry Code of Conduct) which has been endorsed by companies like HP, Panosonic, Sony, Philips etc. Since the code is applicable to the suppliers of these giant electronics companies, it is imperative that it is applicable to them as well. The EICC code elaborates the minimum requirements in five dimensions, viz., (1) Labour, (2) Health & Safety, (3) Environmental, (4) Management Systems and (5) Ethics. Suppliers to the electronics industry are assessed based on the sub-clauses of these five main clauses and generally they cease to be the suppliers if they exhibit any major non-conformance over a long period. Certain issues like Child Labour, Forced Labour, Extended working hours, discrimination, bribery, corruption are strict NOs for these major companies; any non-conformance in these areas warrant an immediate cessation of business with the supplier.

We also quickly went through the ten principles of Global Compact; Global Compact is an initiative of the United Nations for the business and industry urging them to follow the principles:

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.

Labour Standards

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 labour;
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.

We studied all the above principles under different headings throughout the present lectures. I explained to you as to what is the meaning of the "Precautionary Principle" - i.e. extreme caution is required in introducing new substances, technologies or activities that may affect the environment and Health & Safety of people, when decisions are taken with limited scientific data; precautionary principle is mostly applied when chemical and radio-active substances are involved. This also needs to be applied when questions about the eco-system stability arise due to activities or projects. At the same time, lack of scientific knowledge should not come in the way of preventing pollution.

We then moved to the third part of the syllabus - regarding the results of implementing Sustainability in organizations and the evaluation of organizations by stakeholders for their sustainability performance. The first topic taken up was Sustainability Reporting as per GRI (Global Reporting Initiative) G-3 guideline (i.e. the third revision of the GRI reporting guideline).

The following trends are responsible partly for organizations going for publicly reporting their sustainability performance:(1) Expanding Globalization (2)Search for new forms of global governance, (3) Reforms of Corporate governance, (4) Global role of emerging economies (BRICA), (5) Rising visibility and expectations for organizations, (6) Measurement of Progress toward Sustainability, (7) Governments’ interest in Sustainability Reporting, (8) Financial Markets’ interest in Sustainability Reporting, (9) Emergence of next generation accounting etc.

Like the Financial Accounting, Environmental Accounting also has two major disciplines, viz, environmental financial accounting and environmental management accounting. Environmental Financial Accounting deals with accounting for and reporting on environmental transactions and events that affect, or will likely to affect, the financial position of the business. It ensures that environmental costs and liabilities are accounted for by following relevant accounting standards or, in their absence, generally accepted accounting practices and meaningful disclosure of the environmental performance of the business is provided to the stakeholders.
Environmental Management accounting deals with Identification, Collection, Estimation, Analysis, Use, reporting of material & energy flow information, environmental & other cost information for internal purposes. It ensures that appropriate management accounting procedures are, where necessary, developed, and used, for instance, to cost out pollution controls, to compare alternative materials that can be used in manufacturing, and to investigate recycling alternatives etc.

We discussed about the usefulness of environmental accounting in decsion making using two examples, one on energy consumption ($/unit and GJ/unit or Kg of CO2 per unit) and another on waste generation (value in $ or % of cost of material or cost of disposal of hazardous waste generated). We discussed how environmental accounting information in combination with the financial data can help managers to take appropriate decisions.

Environmental Accounting helps the organization to: (1)encourage defensive and prudent operations and waste reduction, (2 improve manufacturing, waste disposal and shipping practices, (3) negotiate and settle disputes with insurance carriers, (4) influence regulators and public policy makers, (5) determine suitable levels of financial resources, (6) reassess corporate strategy and management practices (think green), (7) articulate comprehensive risk management programme, (8) improve public citizenship, (9) identify hidden risks in take-overs and acquisitions etc.

Environmnental reporting is the disclosure by an entity of environmentally related data (verified or not) on environmental risks, impacts, policies, strategies, targets, costs, liabilities, or performance to those who have an interest in such information as an aid to enabling / enriching their relationship with the reporting entity. Compare this with the objective of the Financial reporting: "to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions". Environmental (Sustainability) reporting has the objective of enabling/enriching RELATIONSHIP with ALL STAKEHOLDERS, not for taking economic decisions alone. Hence such reports should be prepared to REACH all types of stakehodlers - local, internationa, educated, not so well educated, NGOs, Government etc. The structure of the Sustainability Report therefore is expected to be different from that of a Financial Report. Normally the Sustainability report has 33 % text, 33 % pictures/photos and 33 % tables and graphs to appeal to majority of the stakeholders.

GRI G-3 provides a framework for such a report. Important subjects to note are: (a) Report content - dealing with materiality, Stakeholder Inclusiveness, sustainability context & completeness, (b) Quality - dealing with balance, comparability, accuracy, timeliness, clarity and reliability and (c)boundary setting. Three different kinds of disclosures (strategy and profile, management approach and performance indicators) of the organization should appear in the report. Indicators are of two types - Core Indicators and Additional indicators.

Core Indicators are those Indicators identified in the GRI Guidelines to be of interest to most stakeholders and assumed to be material unless deemed otherwise on the basis of the GRI Reporting Principles (e.g. EC1- Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retainedearnings, and payments to capital providers and governments; EN1 - Materials used by weight or volume; EN19 - Emissions of ozone-depleting substances by weightEC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.; LA1- Total workforce by employment type,employment contract, and region; HR4 Total number of incidents of discrimination and actions taken etc.)

Additional Indicators are those Indicators identified in the GRI Guidelines that represent emerging practice or address topics that may be material to some
organizations but not generally for a majority (e.g.EC5- Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation; EC9 - Understanding and describing significant indirect economic impacts, including the extent of impacts; EN5- Energy saved due to conservation and efficiency improvements; EN18 - Initiatives to reduce greenhouse gas emissions and reductions achieved; EN30 - Total environmental protection expenditures and investments by type; LA3 - Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations;SO6 - Total value of financial and in-kind contributions to political parties, politicians,and related institutions by country etc.). We also referred to ISO-14031 for more environmental indicators.

The GRI reports are classified as A, B or C and if verified by a third party A+, B+, C+. A, B & C refer to beginner, between beginner and the advanced and the advanced reporters. (+) is an indication of the verification by an independent third party verifiers.

Class 9

We started with the dicussion on Bottom of the Pyramid (BOP) triangle, with over 4.5 billion people at the Bottom of the Economic Pyramid form the BOP market. They live on a daily earning of about US $ 2 (based on purchasing power parity). Prof. C.K. Prahalad and Prof. Stuart Hart brought out a theory in the late 1990s that the poor at the BOP can be a potential market for appropriate products that satisfy their needs. With business models appropriate for this market, multinational companies can expand their market to BOP and potentially to products that are not necessarily for the BOP. Later their ideas have been presented in the book "Fortune and Bottom of the Pyramid" by Prahalad and "Capitalism at the Crossroads" by Sutart Hart. While Prahald still considers BOP as a market (consumer), Stuart Hart considers the BOP not only as a consumer, but also as a producer and partner. Both the books have many examples of BOP Models successfully applied in developing countries. These examples include case studies on Arvind Eye Hospital, Hindustan Lever's Anna Poorna Salt, Velvetr Shampoo in small sachets etc.

Then I explained my own experience, as a member of the global team of Philips Lighting BOP project. We all know that in villages electricity is not available for most part of the day/night. Many houses do not have electricity connection. Poor in these villages use Kerosene lamps, called Dibri (an ink bottle with a hole in the cap through which a cotton wick is inserted into the bottle of kerosene). The light coming out of this dibri is too low to carry out any economic activity or for study. Poor villagers spend on an average about Rs.100/= per month for Kerosene for lighting these lamps (i.e. approximately Rs.3 per day) for a short period. Philips Lighting's project SMILE (Sustainable Method in Lighting Everyone) was to provide a product that could give sufficient lighting (say about 400 lux at the user's point of use) for about 5 hours a day (three hours in the evening and two hours in the morning, say from 6.30 pm to 9.30 p.m and 3.30 a.m to 5.30 a.m) beyond the Sun light hours, in an affordable way. We know that the poor can afford about Rs.100/= per month for kerosene for lamp. If we can provide better lighting at this price, then we will have a win-win-win situation, where the corporate body can sell its products for a long period with sufficient profits, the poor get to work for longer period on their vocation, thereby earning more than what they earn otherwise, kids can play till the Sun set and do their home work later and the house-wife can assist her husband till she goes for cooking (otherwise she has to complete cooking before Sunset); if the product is eco-designed, then environment also gets benefited. We came out with such a product and started pilots all over India. One of the pilots was in Madurai district of Tamil Nadu. In those days Tamil Nadu had plenty of electricity and critics told us that the project would be a failure in Tamil Nadu. To our surprise we found that Madurai sold the maximum number of products during the pilot. The products were sold through a NGO, through its network of Self-Help Groups and the buyers were, apart from normal households, mostly street vendors. They found that the lantern could be used to sell their produce much beyond the Sunset hours. They extended, with the help of the lantern, their sale period by at least three hours a day; in the bright light products looked attractive, bringing in more customers. In a way, the lantern (UDAY) helped the BOP customer to earn more to enable him to pay back the loan taken by him for buying the lantern.

Such approaches are not new to India. Way back in 1960s, V.G. Panneerdas & Co., used to sell Murphy transistors to Narikuravas (a type of nomads) at a very low daily EMI. Narikuravas used to earn their living by selling needle, beads and forest produce and their major assets used to be the tin vessel that they used to carry to pick up food, colourful beads around their neck and the loin cloth for the men and patched dress for the women. They used to live in temporary thatched mud huts and move from one place to another for selling their produce to customers. These are really those who are the bottom of the bottom of the economic pyramid. VGP & Co., could cater to this segment of the society with sufficient profits; in fact, their efforts made Murphy radios the number one brand among the audio products beating even Philips in Chennai. There may be many such examples from the past where the BOP was addressed by proactive entreprenuers. Recognition of their method as unique came in only after Prahalad and Huart "theorized" this model.

The late 1990s provided the right environment for proposing such models. The world had changed quite a lot with Globalization; the economic focus has turned towards the so called BRICA countries, which have more than 80 % of the population of the world - India and China alone account for more than 40 % of the population. More than 2.4 billion of this population is made of children and teens. 98 % of the population in the next twenty years will be in devleoping countries; 85 % of the population in 2025 will be in developing countires. 70 % of the population in developing countries in 2020 will be in their working age. This situation attracts more to understand issues related to developing countries and specially poverty; that explains the new enthusiasm and expectation on these so called Emerging Markets.
Businesses that support stable employment and supply people with products and services that meet their basic needs, that are affordable, accessible, are culturally appealing (aspirational) and are available are likely see that their business grow in these markets.

The following trends do help multinational companies to look at the BOP differently than before:

Many companies see a need to break out of mature market sectors - Most attractive growth opportunities in emerging markets with young, dynamic populations and economies

Framework conditions in many developing countries are improving - Many countries are improving their governance, legal structure and investment infrastructure – the average risk score has improved

Communications are faster and cheaper, making the world a smaller place - Most geographically dispersed production to lower the labour and material cost…should help equitable development and maximize reciprocal benefits to the society

New and better partners are available - Not-for-profit, foundations, citizen’s groups, and multilateral organizations understand that companies can help them to realize their goals of improved sanitation, water supply, health-care, housing and business opportunities in the developing world

Aid and investment are beginning to reinforce one another - FDI flow to developing countries in increasing and bilateral and multilateral agencies adjust their aid to improve the FDI flow.

Public expectations of corporations are changing - Communities and civil society expect companies to become involved in social issues

The opportunity then is: Companies can stimulate local markets and enable the poor to become active participants in these markets as customers and entrepreneurs.

BOP models are different from Rural Marketing in the sense that the BOP models do have a social performance component, either economic, environmental or social improvement along with profits for the seller. BOP model is about improving the lives of people while improving both the top line and the bottom line.

Three main recommendations for BOP projects are:

1) Focus on your Core Competencies when adapting your Business Model (Innovate around key strengths; Re-examine your product line or service – to adapt to the emerging markets; Focus on what the company does well)

2) Partner with local resources that offer complimentary expertise (companies can benefit from the on-the-ground expertise and additional resources; create partner network that off-sets potential risks; involve partners at the very beginning; let them help you to decide on products and process changes; work together to align goals, defining the agenda between company and partners; ensure that expectations on both sides is clearly set, understood and managed over time; design strategies holistically and bring in each others strength; ensure that managers stay at sites long enough to foster good relationships, partnerships and trust)

3) Localize the value creating by harnessing the local intelligence and capabilities (local network and local knowledge to get marketing intelligence, manufacturing capabilities and distribution channels; think of ways to harness local capabilities;
consider how local entrepreneurs and SME can add value to the Company’s value chain; assessment of demand for the new product and service is a key area; franchising is an attractive way of involving local people – grass-root marketing; invest some time and effort in building the capacity of local partners)

The following questions may be asked before embarking on a BOP projecet:

1) What are our drivers and motivation ?
2) How do we shift the mindset ?
3) Do we understand the real needs of the market ?
4) Do we have the right product/service to offer ?
5) How do we finance the investment ?
6) How do we ensure demand for our products and services ?
7) How do we ensure that our customers can afford it ?
8) How do we reach our customers ?
9) How do we collect revenues ?
10) How can we improve our supply chain ?
11) How do we stimulate related economic activities downstream ?
12) How do we scale up or replicate ?
13) How do we measure success ?

We can also build up the project on the work done so far; for example, the following are a few areas where BOP projects my be set up.been identified for work at the BOP:

1) Photo-voltaic generators and renewable energy for small scale applications
2) Fuel efficient stoves
3) Water sanitation and personal hygiene products
4) Mobile communications
5) Internet access in low income country markets
6) Improving access to health-care
7) Improving health education and family planning services
8) Providing Clean Water and widespread immunizations

ITC's e-choupal is an excellent example of how (5) above (ICT Kiosks) has been fulfilled which has reduced the risk taken by Indian farmers. We could not project the Video; we will try tomorrow if time permits.

In the passing, I also mentioned about NGOs like PRADHAN and DHAN Foundation and the work they do with Self-help groups in villages. We also touched upon as to how these self-help groups help village women to be economically independent.

CSR Lecture 9: 18 Jan 2011

The attendance was thin.  We waited for about 10 minutes before starting the class.


We had already studied about ISO-14001 Environmental Management  System.  I explained to you that  the other management systems under our syllabus, e.g. OHSAS 18001 and SA 8000 follow the same principle of PDCA; their focus of course is different.  In the case of OHSAS 18001, the focus is on Occupational Health and Safety and for SA 8000 the focus is workers (including child labour) and their rights.




We started with OHSAS 18001 (2007). The stanard was issued first in 1999 and revised in 2007. The revision is mostly to emphasise the "Health" aspect of OH & S and align with ISO-14001. The standard, again, is based on PDCA. The standard helps the organization to improve its Occupational Health & Safety performance in a systematic way. Occupational Health and Safety issues can arise from various causes like: (a) moving (e.g. circular, linear or angular) machine parts, (b) use of transportation mechanisms like lifts, tackles etc., (c) use of electricity, (d) use of chemical substances (e.g. toxic, inflammable, corrosives, explosives etc), (e) plant layout, (f) Light levels, (g) sound levels, (h) ergonomics, (j) falling objects, (k) working at heights, (l) radiation (e.g. ultraviolet, nuclear), (m) working in hot areas, (n) working with compressed gases etc.

I explained to you that in a manufacturing situation we have hazards arising out of the interaction between man on the one hand and machines, electricity, chemicals etc., on the other hand.  For example, when working with machines the hazards (potential to cause harm) are related to cuts, bruises, crushing and fatal accidents etc.  Similarly chemicals pose toxic, corrosion, explosion and fire hazards.  Electricity poses the hazard of electric shock and of a fatal accident; there is also a fire hazard while handling electricity.  Probability of these hazards actually harming people is called Risk.  For example, when electrical wires are covered by insulators, the probability of electricity giving shock to the person is low; hence it is a low risk situation.

Legal requirements related to OH & S are available in (a) Factories Act (and the Maharashtra Factories Rules, (b) Petroleum Act (and Petroleum Rules), (c) Explosives Act (and Explosives Rules), (d) Gas Cylinders Rules, (e) Static and Mobile Pressure Vessel Rules etc.

Once significant hazards and legal requirements are identified programmes, procedures, training etc., can be initiated to improve the OH & S performance. Checking and Acting Phases are similar to ISO-14001.

The OHSAS 18001 Management System established by an organization can be certified by external certification agencies (similar to ISO-9001 and ISO-14001)

(I have handed over a copy of OHSAS 18001 and other standards that could be distributed to one of your colleagues (Bandiwad); please collect a copy from  him for your reference)

We also discussed SA 8000 which focusses on (a) Child Labour (Child Labour is defined in India as those whose age is less than 14 years) (b) Forced Labour, (c) Collective Bargaining, (d) Occupational Health and Safety, (e) working hours and holidays, (f) wages etc.

Organizations can establish a SA 8000 (2007)management system and get it certified by external certification agencies.


We also discussed very briefly AA 1000 (one of the best documents on the subject for learners) and ISO - 26000 (draft guideline). Both these documents will be useful reading materials.


We ended the lecture with a quick scan of the OECD Guidelines for the Multinational Enterprises and Global Compact.

CSR Lecture 7 and CSR Lecture 8: 03 and 04 January 2011

I wish you all a happy New Year 2011.  Let this new year bring you all the best in life - health, wealth and happiness.

On 3 and 4 January 2011 we discussed various elements of ISO 14001: Environmental Management System.  We agreed that we will spend more time on one management system in the class; the rest are similar in approach and so can be understood by reading the respective document.  Here is the summary of what we learnt:

ISO-14001 Standard: Environmetal Management Systems - Requirements with Guidance for use was first published in 1996 and was revised in 2004. About 130000 organizations all over the world have got themselves certified to ISO-14001 standard by 2008. Japan leads the number of ISO-14001 certifications, followed by China. Both depend on international trade for growing/maintaining their economies. ISO-14001 provides a shield against the use of environmental issues as non-tariff trade barriers by western and other developed countries.

We started with the structure of ISO-14001 (2004) Standard - PDCA - Plan -Do -Check-Act.

There are Four sections in ISO-14001 Standard; the operative part is Section 4.

Before establishing an environmental management system, an organization may carry out an initial review of its environmental issues, procedures, practices, legal requirements and past practices/accidents etc.

4.1 is about the commitment of the organization to establish an environmental management system

4.2 is about the Environmental Policy. The Environmental Policy has to be issued by the TOP MANAGEMENT. The following are the requirement of the environmental policy:

a. It should be appropriate to the nature, scale and environmental impacts of the organization
b. It should commit the organization to compliance with applicable legal and other requirements
c. It should commit the organization to continual improvement and prevention of pollution
d. It should be available to the public

We discussed the meaning of CONTINUAL improvement; i.e. improvement that takes place in one or more areas of the organization, resulting in the overall system improvement. Improvements need not take place in all the areas at the same time or all the time; but some of the areas need to show improvement. These are determined by the resources available to the organization.

We also discussed the meaning of PREVENTION of POLLUTION; according to this standard prevention of pollution need not be complete elimination of the pollutant; it can be a reduction of the pollution.

The meaning of "PUBLICLY AVAILABLE"is that the policy is not a confidential document and hence should be available to any stakeholder who has an interest in the policy.

I showed you a simple Environmental Policy and we checked if all the above elements were present in the displayed policy.

Planning is the First phase of the PDCA Cycle; we discussed the quotatiion: "IF YOU FAIL TO PLAN, YOU PLAN TO FAIL"

4.3 PLanning

4.3.1. Identifying and Assessment of Significant Aspects.

AN ASPECT is an element of the activity, product or service, that can have an impact on the environment. AN IMPACT is the change in the environmental condition, positive or negative.

We discussed the input-output model using the example of an activity like coffee making. The inputs are e.g. Milk, Coffee powder, Sugar, water, LPG Gas, cups, mugs etc. The desirable output is Coffee. There are quite a few un-desirable outputs, e.g. waste heat, waste water, packaging materials etc. These undesirable outputs can have an impact on the environment (hence can be classified as ASPECTS). These aspects for ALL the activities, products and services of the organization have to be identified and recorded. In one way of assessing these aspects, the following criteria are used to assess significance: a) the probability of occurrence, b) the frequency of occurrence, c) the probability of the impact on property, people, flora/fauna and the environment outside the organization and d) the long term effect of the impact. To this one can also add the relevance of the aspect to any legislative requirement. We discussed as to how the significance will vary based on the "size" of the activity, product or service (e.g. emission of alcohol in a bottle and that in a 15 tons tanker). We also discussed that we have to identify DIRECT & INDIRECT impacts (e.g. of indirect impact, electrical energy used in the activity is related to emission of carbon dioxide at the thermal power station, leading to global warming), POSITIVE and NEGATIVE impacts, impacts due to START-UP, SHUT DOWN, ACCIDENTS etc. We also discussed that we need to capture ALL these impacts in the PAST, PRESENT and FUTURE, before assessing the ASPECT. We discussed as to how to use the assessment score to prioritize the aspects as significant as well as to ensure continual improvement. One of the requirements, which is not explicit in the ISO-14001 standard, is to RECORD all the Aspects and Impacts identified, including the significant aspects.

The next step (which can be started concurrently with the initial review) is to identify applicable legal and other requirements.

4.3.2. Legal and other requirements. The organization should establish a procedure to identify and access legal and other requirements.

Legal requirements may be local (e.g. Air (Prevention and Control of Pollution) Act, Water (Prevention & Control of Pollution) Act, Consent for operations under the Air and Water Acts, Authorization under the Hazardous Waste (Management & Handling) Rules, etc.), Country / Region specific (especially if the organization exports to these countries, e.g. RoHS, WEEE, REACH etc.), or Global (where international protocols warrant action, e.g. Montreal Protocol, BASEL Convention etc.). Other requirements include company specific standards, guidelines, policies or industry specific requirements like "Responsible Care" of the Chemical Industry, "Electronics Industry Code of Conduct" of the electronics industry etc. It is a good practice to have a register of legal and other requirements and update it periodically.

The standard requires that the organization identifies as to how these legal and other requirements are related to the environmental aspects of the activities, products and services of the organization. 

4.3.3. Objectives, Targets & Programmes

Once the organization identifies its significant environmental aspects and applicable legal and other requirements, it has to set its objecitves based on the overall intent provided by the Environmental Policy. Objetive is a goal to be achived by a particular time - say, for example, "to reduce energy consumption by 50 % by the year 2010". Target is specific measureable sub-goal, with well defined measurement index. Targets are normally SMART: S = Specific, M=Measureable, A=Achievable, R= Reasonable and T = Timebound. e.g. To reduce energy consumed per product (MJ/Piece) by 20 % by 2009. The Environmental Management Programme is an elaboration of how to achieve the target and goals, with specific responsibility, milestones for various activities, resources required, monitoring methods and review mechanism etc. Objectives on specific significant environmental aspects is one way of addressing significant environmental aspects, so that their impact is reduced once the programme is successfully completed.



The identified significant aspects have to be addressed by one or more of the following: (a) setting objectives, targets, and programmes, (b) training (e.g. training operators as to how to transfer liquid chemicals from one container to the other without spilling and with secondary containers, to avoid soil pollution and consequent water/air pollution. We discussed the Bhopal case, if only the operator had been trained to understand the effect of water on methyl isocyanate, he would have avoided the leakage of water into the MIC tank), (c) communication (e.g. by communicating to people inside and outside the company as to what to do in case of a leakage of a toxic gas, the extent and intensity of any gas leak accident can be reduced - we discussed the Bhopal case - if only people had been communicated that they should close their nose with a wet handkerchief, many lives could have been saved. If only the Plant Director was communicated the minor leak of MIC when it just happened he could have intervened to control the situation - in Bhopal case he was informed more than four hours after the accident, (d) Operational Control Procedures - procedures, with operational criteria, that address identified significant environmental aspects so that the activities related to these aspects are carried out under controlled conditions. (e.g. we discussed that if such a procedure were in place in Bhopal the accident could have been avoided; the operational criteria in the case could be limit for pressure or temperature) and (e) emergency and/or accident response procedure (e.g. We discussed (even though not an environmental emergency) about the procedure to be followed in case of fire at a lower storey in Indsearch. In Bhopal if the company had an emergency procedure, we could have avoided the large number of fatalities. We also discussed the Sandoz case - a typical example of the consequences of emergency response. In the case of the fire in the SANDOZ warehouse in Switzerland, the fire was brought under control by spraying large quantities of water; but the water mixed with burnt and unburnt toxic substances reached the RHINE river, making it unusable for a few years. We discussed that the emergency procedure, therefore, should consider the consequences of that procedure too. Another issue we discussed was that the emergency procedure has to be periodically checked through mock-drills to identify and fill gaps in the preparedness). We also discussed about how these five methods could be applied to vehicular emission in Pune if the PMC identified the vehicular pollution as a significant environmental aspect.

In the next part of the lecture, we discussed the sub-sections under 4.4 - Implementation (DO). This section has seven sub-sections, viz., 4.4.1 - Resources, Roles, Responsibilities and Authority, 4.4.2 - Competence, training and awareness, 4.4.3 - Communication, 4.4.4 - Documentation, 4.4.5 - Control of documents, 4.4.6 - Operational Control and 4.4.7 - Emergency Preparedness and Response.

4.4.1 - Resources are to be provided by the management for establishing, implementing and maintaining the Environmental Management System - these resources are human resources, financial resources, infrastructure and information. The top management has to appoint a Management Representative to establish, implement and maintain an Environmental Management System and to report to the management periodically about the effectiveness of the system. Role is the part played by employees apart from the functions for which they are responsible or results for which they are accountable to. An employee, for example an Accounts Officer, may take the role of an internal auditor or a trainer even though his main responsibility is in Accounting. ( We discussed the ROLE played by individual in real life - a man is a husband to his wife, is a brother to his sister or brother, is a son to his parents, is a friend to his friends etc. These are various roles he plays in his life). In order to ensure that the system is effective the management should document the responsibilities and authority (to take actions, decisions etc.) and make it known to all concerned employees.

4.4.2 - Competence of employees who are responsible for activities related to identified significant aspects need to be ensured; competence is related to qualification, training and experience. ALL employees have to be trained to understand the policy, procedures and other relevant elements of the EMS. ALL is the key word here. We discussed the case of a CEO who had not been trained in the emergency procedure and response; how would he come to know about the emergency and save his life in case of an actual emergency ?

4.4.3 - Communication is of two types, (a) internal communication with employees and contract workers working within the premises and (b) external communication with stakeholders outside the organization, like the Government Departments, Statutory bodies, NGOs, Banks, Neighbours etc. Procedure for both internal and external communication should be effective (e.g. the internal communication should ensure that the receipient of the communication has understood the content of the communication). The procedure for external communication should address the receipt and response to communication from external stakeholders. The organization should decide whether to communicate its significant environmental aspects to external stakeholders and record its decision. One method of external communication is the Global Reporting Initiative (GRI) guideline based Sustainability Reports.

4.4.4 - Documentation - Information with its supporting medium (paper, magnetic tape, CD, DVD etc.) is a document; Records are a sub-set of documents. Procedures, Policy, Objectives/targets/programmes etc., with the medium on which they are captured are documents. Information on the past activity, including measurements, reviews etc., are RECORDS. While documents, except RECORDS, could be changed, RECORDS cannot be changed/altered. Documents, including Records, are used as evidence of the working of the Environmental Management System. Environmental Management System Manual, capturing various elements of the EMS is one such document (ISO-14001 does not prescribe a written manual, but for better working of the system a written manual is recommended)

4.4.5 - Documents are controlled; that means that the documents are checked for their authenticity and are verified and approved by those authrorized to issue documents. This procedure is necessary to avoid obsolete documents being used in the organization. Current documents need to be available at the all places where related work is carried out. Control is also required for documents which have external origin (e.g. standards, legal documents etc). We discussed how a part of the organization was not meeting the requirement of law as they were using obsolete standards for emissions and how this could lead to risk to the organization.

4.4.6 - We already discussed issues related to operational control procedures that are established to address significant environmental aspects

4.4.7 - We already discussed issues related to emergency/accident procedures and the consequence of the procedure.

4.5. Once we plan and implement, the next step is to CHECK. There are Five sub-sections under Checking, viz., 4.5.1 - Monitoring and Measurement, 4.5.2 - Evaluating Compliance (4.5.2.1 - Evaluation of Legal Compliance and 4.5.2.2 - Evaluation of other compliance), 4.5.3 - Non-conformity, corrective action and preventive action, 4.5.4 - Control of Records and 4.5.5 - Internal Audits

4.5.1 All environmental management programmes have to be monitored; where required measurements have to be made on identified parameters. The equipments used for such measurements have to be calibrated and the calibration records have to be maintained

4.5.2 - Procedures have to be established and implemented to periodically evaluate compliance with legal requirements as well as with other requirements to which the organization subscribes. The results of these evaluation have to be documented. In case of non-conformance, corrective and preventive actions have to be in place.

4.5.3 - Once a non-conformance to any element of the system requirements is noticed, corrective and preventive actions have to be taken to eliminate or avoid the recurrence of the non-conformance. A corrective action is the removal of the cause of non-conformance identified so that the non-conformance does not recur. The preventive actions is the change effected to the system to avoid the potential non-conformance. Preventive action is, therefore, a proactive action.

4.5.4 - In order to provide evidence that the system is working the orgnization should maintain records like the training record, record of audits and minutes of the Management Review etc. The organization decides as to which of the records are required to demonstrate the working of the environmental management system.

4.5.5 - Internal audits are carried out to evaluate the working of the EMS. Internal audits may be carried out by competent persons from within the orgnization or by those working outside the organization. An EMS audit is a systematic process of objectively collecting audit evidence against audit criteria, evaluate the audit evidence, to conclude if there sufficient evidence to show if the EMS audit criteria are met and to report to the client the conclusion of the findings. EMS internal audits have to be carried out according to ISO-19011: Guidelines for Quality and/or Environmental Management System Auditing.

4.6 Once the elements of Checking have been established and implemented, the next step to go for the Management Review. The management review addresses issues like a) results of internal audits and evaluations of compliance with legal requirements and with other requirements to which the organization subscribes, b) communication(s) from external interested parties, including complaints, c) the environmental performance of the organization, d) the extent to which objectives and targets have been met, e) status of corrective and preventive actions, f) follow-up actions from previous management reviews, g) changing circumstances, including developments in legal and other requirements related to its environmental aspects, and
h) recommendations for improvement.

The output of the management review includes, decisions and actions related to the possible changes to environmental policy, objectives, targets and other elements of the environmental management system, consistent with the commitment to continual improvement. The discussions and decisions taken at the Management Review are minuted.

Thus the Management Review completes one PDCA cycle of the EMS and triggers off the next PDCA Cycle for improving the organization's environmental performance.

The other management systems like OHSAS 18001 and SA 8000 can be understood if you understand how ISO-14001 Environmental Management system works

CSR Lecture 6: 28 December, 2010

We discussed ethics and Governance, labour issues and human rights issues before proceeding further.

We discussed briefly the Satyam scam - how Corporate Governance failed here and how ethical priciples were not followed. Other examples of failure of Corporate Governance principles are Enron, Worldcom etc. While ethics (business) is about the values of the company and individuals, what is right or what is wrong (the main question of ethics) can be debated based on the context. We discussed about tellig a lie; in absolute terms telling a lie is not RIGHT, that is what you have been taught. But when you play Pokker, you are required to lie. Ethics is related to the value system.

As for Corporate Governance, we discussed about the Board, Board Composition - independent directors, Board committees like the Audit Committee, Remuneration Committee, Appointment Committee etc. (Please see the Guidelines on Corporate Governance issued by the Ministry of Corporate Affairs, Government of India)

Quite a few companies follow a code of conduct for employees, requiring ethical behaviour and following principles of corporate governance. 

We also discussed how many of the topics covered under Sustainability or CSR are derived from codes/guidelines agreed internationally. We quickly went through the CSR Guidelines issued by the Government of India (Ministry of Corporate Affairs); I explained to you that the elements covered under this guideline are the same as we have included in the syllabus for this course.  I explained to you that Corporate Social Responsibility has developed in such a way that other issues of importance to the whole society have been now included in the subject.


I have handed over a copy each of the CSR Guideline and the Corporate Governance Guideline issued by the Ministry of Corporate Affairs to one of your colleagues; she should share both with all of you.


We recapitulated briefly the nine issues related to Social performance, including Child Labour, Forced Labour, Bribery and Corruption, Gender Equality, Diversity, philanthropy etc.


Finally I wrapped up the discussion by defining Sustainability or CSR as the management of the interface between the organization and its stakeholders.  Some of the issues to be managed for the survival, growth, profitability and public acceptance of an organizations are: 

Occupational Health & Safety, Labour Union, Employee Compensation, Discrimination, Inclusiveness, Diversity, Child Labour, Bonded Labour, Indentured Labour, Employee Morale and Loyalty, Bribery, Ethics, Humane treatment,  Harassment, Insider Trading, Fair and Ethical behaviour, Employee Productivity, EcoEfficiency, Resource consumption, Wastes and emissions, Energy efficiency, GHG Emissions, EcoDesign (Design for Environment), Innovation and Quality, Green/Clean processes, Packaging and Logistics, Green Purchasing, R & D and Innovation, Interest and Exchange rates, Credit Rating, Stock Value, Dow Jones Sustainability Indices, Profits and Dividends, Taxes, Competition, Niche Markets, New and Emerging Markets, Product Safety, Compliance, Brand Image, Response to complaints, Emergency response, Ecological footprints, Philanthropy, Social Programmes, Socially relevant business etc.

In the second half we completed the paper by Porter and Linde on Green and Competitive.

CSR Lecture 5: 27 December, 2010

Continuing the life-cycle environmental impacts of products, we identified (a)energy consumption, (b) water consumption, (c) use of hazardous substances, (d) waste generation, (e) emissions, (f) discharges, (g) mass balance (input-output balance) etc., as some of the issues to be considered in the manufacturing operations. Similar issues are applicable to suppliers too. Green purchasing aims at reducing the risk to the organization by ensuring that the supplier meets all the environmental requirements of the organization. It is important to ensure that the supplier complies with environmental regulations, does not use any banned substance (like cadmium, lead, mercury, Chromium vi, PBB, PBBE etc., for products exported to  Europe), improve the energy efficiency of the operations etc. It is also important to help the supplier to be environmentally sound. Issues related to the use of the products, like the toxicity of pesticides, repeated stress syndrome with computer or mobile use, energy consumption etc., were discussed. At the end of life (EOL), the product becomes a waste and it is either recycled, reused, remanufactured etc., or sent for incneration or landfill.

Coming to the social issues related to business, there are a few issues that are not under the control of Business - these are issues like un-employment, lack of educational facilities, poverty, discrimination, poor-hygiene, lack of infrastructure etc., of the society. These are generic issues on which the business organization does not have any control. Through philanthropic activities, however, business can influence these generic issues locally, e.g. by providing medical facilities to the villagers around the factory, by providing clean drinking water to the society, by building roads around the factory, by building townships (e.g. Bhilai, Jamshedpur etc.), by establishing schools, colleges in the villages etc. There are quite a few other issues where the organization has control or influence. These are (a) worker health & safety, (b) Fair wages (above the minimum wages), (c) fair treatment of workers, (d) avoiding discrimation based on sex, race, religion, language, caste, creed, colour etc., (e) avoiding workplace harrassments, (f) working hours (maximum of 60 hrs a week including overtime), (g) weekly holidays (one day off for every six days worked) etc. These are internal to the organization. One major social issue, where the organization has control, that affects people outside the organization is the safety of the products marketed by the company (e.g. burning cell phones).

Other issues that are included under "Social" are: ethical issues, governance issues, corruption and bribery


In the second half we continued with the reading of the paper by Porter and Linde.

CSR Lecture 4: 21 December, 2010

We started with the "voluntary initiatives".  I explained to you the Philips Environmental Programme which was started in 1994 as the Environmental Opportunity Programme.  Philips had taken targets on energy, packaging and management systems in the first programme.  From 1998, the environmental improvement programme has been called EcoVision programme and is implemented throughout the company.  I had shown you how the targets for the whole company were set on not only energy and water, but also on wastes, emissions, green products etc.  The latest programme spells out targets for energy efficiency improvement on activities beyond manufacturing, sales turnover of green products and money to be spent on green innovation.  This is an example of how business organizations move ahead of legislation and have control over their activities and products.

We discussed the life cycle of a product.  Like human beings products also have a life-cycle.  The product life cycle starts with design.  The product, then is manufactured, sold, used by the user and after the use it becomes the end-of-life product (or waste).  Now this waste, as it happens in human beings after death, may be incinerated or burried in land fills.  This type of a life cycle is called "Cradle to Grave".  In the case of human beings, it is also possible that after death, eyes, liver, kidney etc., are donated and a new lease of life is given to those suffering from disabilities and diseases.  The same can happen with the EOL products; parts of the product may be recycled, reused, re-manufactured, repaired for reuse etc.  In this case the resource in the EOL product is being used for a further life period.  This type of life cycle of a product  is called "Cradle to Cradle", meaning that the EOL product gives rise to a new product.  If a product has a "cradle to Cradle" or "Cradle to Grave" lifecycle is decided at the design stage.  This aspect of design is called "Design for Environment" or EcoDesign.  Eco Design is a design methodology which seeks to improve both ecological and economical performance of the product at the same time.

The lifecycle environmental performance of a product can be improved by addressing the following key improvement areas while designing a new product
a. Mass
b. Energy
c. Hazardous Substances
d. Recyclability
e. Packaging
f. Life

When the mass of the product is reduced, a) there is a reduction in the use of resources (material), b) there is a reduction in the use of process solvents/substances/chemicals, c) there is a reduction of the packaging mass, d) there is a reduction in the space occupied and hence more products can be shipped in a standard container and e) the mass of the EOL waste is reduced and to that extent the waste reaching the municipal dump yard gets reduced.

When energy consumed by the product is reduced it has a tremendous effect on the total energy consumption of the product during the life cycle.  For a consumer product (electronics and electricals) the energy consumed during the life of the product is about 80 % of the total energy used during the life cycle.  We discussed the example of a potted choke vs. open construction electromagnetic choke for a 36 W tubelight; by changing the design from potted to open construction we found that we could save on iron, copper, polyester resin and many MW of power.

The third important aspect of ecodesign is avoidance of hazardous and toxic substances.  In Europe it has already been legislated through the Restriction of Hazardous Substances Directive (RoHS, 2004).  According to RoHS, all products exported to Europe should not contain Cadmium, Lead, Mercury, Chromium (vi), Polybromobiphenlys, polybromobiphenylethers.  There are exceptions, of course, to this general rule.  Avoiding these and similar substances in products and processes will help the general environment and avoid health related problems for the consumer and workers handling these products and processes.  Other substances of concern are Chlorofluorocarbons (CFCs), tricholoroethylene (tri), perchloroehtylene (per), trichloroethane, carbontetrachloride (ctc), asbestos, pentachlorophenol, azodyes, polycholorbiphenyls (PCB) etc.  In general heavy metals have to be avoided as much as possible in products.  If polybromobiphenyl ether is used in the product (plastic), there is a possibility of formation of dioxins, substances known to cause cancer, when the waste containing this substance is incinerated.

The fourth issue to be considered is to design in Recyclability into the product.  For example, if two plastics parts made of different plastics have to be joined, the following methods can be used:  gluing, welding, press-fitting, using mechanical fasteners (nut and bolt).  If the plastics are glued or welded, it will be difficult to recycle them at the end of life as the separation of the two plastics is difficult (one has to cut them to separate and waste the glue/weld line).  If they are fitted with nuts and bolts, the disassembly may take some time leading to reduced productivity of the recycling operation. Press fitting may be a good choice if the properties of the plastics allow this to be done.  If the plastic has to be recycled, it is advised to avoid painting on it.  Insert moulding may be avoided.  Thermoset plastics may be avoided.  Filled plastics may avoided.  It is better to design a product with least number of materials to enable better recycling at the end of life.

Packaging is an important part of the product; but it has the least life.  Packaging is used to protect the product from damages on its journey from the manufacturing unit to the final customer.  It also has the added function of attracting prospective buyer to the product. The third aspect of packaging is to provide information on the product to the customer.  This information may be on the contents of the product, operational aspects of the product, handling instructions etc.  It may also inform the user on the product characteristics such as vegetarian (green dot), toxic (skull with cross bones), flammable (flame) etc.  Once the consumer buys the product, he/she generally throws the packaging; thus packaging uses resources only for a short time.  The waste generated at this short period joins the municipal waste stream.  By reducing the packaging mass the designer will be able to reduce the municipal solid waste generated per product sold.

The most important aspect of ecodesign is the extended life of products; if product life is extended, then the resource use per product per unit time comes down and to that extent the use of limited natural resources per unit time is reduced while giving  the same service benefit to the customer.

Thus by introducing the ecodesign principles at the design stage of a product an enormous amount of environmental impacts of products can be reduced; i.e. ecodesign is one of tools for Sustainable Development.

In the second half of the class we continued with the paper by Porter and Linde.