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Abstract
Corporate Social Responsibility (CSR) is becoming an increasingly important activity to
businesses nationally and internationally. As globalisation accelerates and large corporations
serve as global providers, these corporations have progressively recognised the benefits of
providing CSR programs in their various locations. CSR activities are now being undertaken
throughout the globe.
The term is often used interchangeably for other terms such as Corporate Citizenship and is
also linked to the concept of Triple Bottom Line Reporting (TBL), which is used as a
framework for measuring an organisations performance against economic, social and
environmental parameters. The rationale for CSR has been articulated in a number of ways.
The theme of my study is corporate social responsibility. I have chosen this theme because it
is one of the main issues of modern business which is developing fast and is widely
discussed. Due to the historical past of our country CSR is a rather new phenomenon for
business, but most companies have already started to run social programs. Still business has a
long way to go to become really socially responsible and the economic situation in the world
can now ruin all previous attempts. Thats why, in my opinion, we should pay great attention
to CSR, its problems and future prospective. I am going to divide my study into several main
parts: short history of CSR, arguments for and against it and make a research on Russian CSR
special traits, crisis situation, CSR and advertising market. Also I would try to make some
hypothesis about future prospective and measures that can be taken to develop CSR. I will
use material from business news, articles, official documents, statistics and surveys to make a
clear picture of the situation.
Actually nowadays there is no choice. In spite of all disadvantages most companies have
started to develop social responsibility and CSR is necessary to be successful in the market
and avoid contradictions with government, consumers and mass media.
Purpose The concept of corporate social responsibility (CSR) has a long history associated
with how it impacts on organizations behavior. In order to understand CSR's impact on
organization behavior, therefore, it is necessary to comprehend its progression. Subsequently,
the purpose of this paper is to trace the conceptual evolution of CSR.



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In essence it is about building sustainable businesses, which need healthy economies, markets
and communities.
-Enlightened self-interest - creating a synergy of ethics, a cohesive society and a sustainable
global economy where markets, labour and communities are able to function well together.
-Social investment - contributing to physical infrastructure and social capital is increasingly
seen as a necessary part of doing business.
-Transparency and trust - business has low ratings of trust in public perception. There is
increasing expectation that companies will be more open, more accountable and be prepared
to report publicly on their performance in social and environmental arenas
-Increased public expectations of business - globally companies are expected to do more
than merely provide jobs and contribute to the economy through taxes and employee.

RESEARCH OBJECTIVES
1. Corporate Social Responsibility in Developing Business Markets?
2. Microsofts CSR


RESEARCH APPROACH AND METHODS
Classical approaches to CSR research include the instrumental approach and the ethical
approach. The instrumental approach to CSR holds the position that companies engage in
CSR only when their underlying motivation is the attainment of financial performance, while
the ethical approach to CSR states that companies engage in CSR because it is the right thing
to do according to some ethical pathway.
RESEARCH METHODS
A series of CSR Questions prepared and distributed among Business Units and
common people for analysis.
Datas Collected from Microsofts Executive Reports


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INTRODUCTION
Corporate Social Responsibility is a management concept whereby companies
integrate social and environmental concerns in their business operations and interactions with
their stakeholders. CSR is generally understood as being the way through which a company
achieves a balance of economic, environmental and social imperatives (Triple-Bottom-Line-
Approach), while at the same time addressing the expectations of shareholders and
stakeholders. In this sense it is important to draw a distinction between CSR, which can be a
strategic business management concept, and charity, sponsorships or philanthropy. Even
though the latter can also make a valuable contribution to poverty reduction, will directly
enhance the reputation of a company and strengthen its brand, the concept of CSR clearly
goes beyond that.
Promoting the uptake of CSR amongst SMEs requires approaches that fit the
respective needs and capacities of these businesses, and do not adversely affect their
economic viability. UNIDO based its CSR programme on the Triple Bottom Line (TBL)
Approach, which has proven to be a successful tool for SMEs in the developing countries to
assist them in meeting social and environmental standards without compromising their
competitiveness. The TBL approach is used as a framework for measuring and reporting
corporate performance against economic, social and environmental performance. It is an
attempt to align private enterprises to the goal of sustainable global development by
providing them with a more comprehensive set of working objectives than just profit alone.
The perspective taken is that for an organization to be sustainable, it must be financially
secure, minimize (or ideally eliminate) its negative environmental impacts and act in
conformity with societal expectations.
Key CSR issues: environmental management, eco-efficiency, responsible sourcing,
stakeholder engagement, labour standards and working conditions, employee and community
relations, social equity, gender balance, human rights, good governance, and anti-corruption
measures. A properly implemented CSR concept can bring along a variety of competitive
advantages, such as enhanced access to capital and markets, increased sales and profits,
operational cost savings, improved productivity and quality, efficient human resource base,
improved brand image and reputation, enhanced customer loyalty, better decision making and
risk management processes.


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We define corporate social responsibility strategically. Corporate social responsibility
encompasses not only what companies do with their profits, but also how they make them. It
goes beyond philanthropy and compliance and addresses how companies manage their
economic, social, and environmental impacts, as well as their relationships in all key spheres
of influence: the workplace, the marketplace, the supply chain, the community, and the public
policy realm.
The term "corporate social responsibility" is often used interchangeably with
corporate responsibility, corporate citizenship, social enterprise, sustainability, sustainable
development, triple-bottom line, corporate ethics, and in some cases corporate governance.
Though these terms are different, they all point in the same direction: throughout the
industrialized world and in many developing countries there has been a sharp escalation in
the social roles corporations are expected to play. Companies are facing new demands to
engage in public-private partnerships and are under growing pressure to be accountable not
only to shareholders, but also to stakeholders such as employees, consumers, suppliers, local
communities, policymakers, and society-at-large.
Laggard firms and governments can sometimes use the existence of corporate social
responsibility programs to shirk their roles. Government ultimately bears the responsibility
for leveling the playing field and ensuring public welfare. In order for corporate social
responsibility programs to work, government and the private sector must construct a new
understanding of the balance of public and private responsibility and develop new
governance and business models for creating social value.








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CORPORATE SOCIAL RESPONSIBILITY (CSR)
Definition:
The World Business Council for Sustainable Development has defined corporate social
responsibility (CSR) as:

'The commitment of business to contribute to sustainable economic development, working
with employees, their families, the local community and society at large to improve their
quality of life'. An equally valid but more concise definition of CSR in practice is 'companies
managing their business processes to produce an overall positive impact on society'.

Corporate initiative to assess and take responsibility for the company's effects on the
environment and impact on social welfare. The term generally applies to company efforts that
go beyond what may be required by regulators or environmental protection groups.

Corporate social responsibility may also be referred to as "corporate citizenship" and can
involve incurring short-term costs that do not provide an immediate financial benefit to the
company, but instead promote positive social and environmental change.


CONCEPT:
Corporate social responsibility (CSR) can be defined as the economic, legal, ethical and
discretionary expectations that society has of organisations at a given point in time.
The World Business Council in its publication wrote that Corporate Social Responsibility
is 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
-CSR is a form of corporate self regulation integrated into a business model. It is when a
corporation realizes its responsibility towards its stakeholders and other members in the
public sphere.
-An ethical and moral component is underpinned in this rapidly developing concept.


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-The concept of CSR means that organisations have moral, ethical, and philanthropic
responsibilities in addition to their responsibilities to earn a fair return for investors and
comply with the legal norms.
-It emphasizes on the realisation of the ethical responsibility towards the stakeholders.
According to Post, Lawrence and Weber- stakeholders are individuals and groups that are
affected by an organisations policies, procedures and actions. The PRIMARY stakeholders,
such as employees and owners have specific legal rights and expectations in regard to the
organisations operations while the SECONDARY stakeholders not, but may perceive that
they have moral rights.
-CSR is synchronized with the concept of sustainability in Development. In 1987, the UN
appointed Brundtland commission which defined sustainable development as development
which meets the needs of the present without compromising the ability of future generations
to meet their own needs. Since then, the concept has caught up very fast. CSR introduces the
concept of sustainability into business operations meaning that business organisations do
not just become wealth hoarding chambers but also fulfil their duty towards the larger
community by investing in socially benefiting concerns. Our planet has limited resources.
Corporations and industrial houses cannot go on exploiting this wealth without significant
efforts for its refurbishment.
CSR is holistic in its approach. It does not include only one aspect but embraces all aspects
that a corporate organisation touches and affects.











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HISTORY
In the late 18th century a Scottish philosopher and economist named Adam Smith wrote
numerous articles on these subjects, his magnum opus being The Wealth of Nations in which
he espoused the concepts of free trade and the free market on which the classic market
economy was based.
Smiths principles were borne out. By the early 19th Century, new technology saw jobs being
created and living standards improved. Unchecked by regulation businesses flourished and
industrialists in Europe and the USA amassed huge fortunes. However few of these wealthy
new industrialists were concerned about the wellbeing of their employees, society or the
environment. The appalling conditions under which people worked were documented in the
novels of Charles Dickens and inspired radical theorists such as Karl Marx and Friedrich
Engels to write about new concepts on labour, socialism and communism.

By the start of the 20th century, powerful corporations suffered a backlash against their
widespread exploitation. Labour unions were formed, giving a voice to the workers, and
governments began to assume more responsibility for welfare and infrastructure, gradually
introducing anti-trust legislation.
In the 1950s, emerging consumer power saw companies start taking a new interest in the
social and human aspects of their markets it was at about this time scientists and
environmentalists started noticing some worrying changes to the environment.
The 1960s saw a shift in attitudes towards government and business. In 1962 Professor
Milton Friedman, Nobel Prize-winning economist, published his controversial Capitalism
and Freedom. In it he makes the case for economic freedom as a precondition for political
freedom.


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The 1980s and 1990s saw communism collapse, globalization emerge and the information
revolution change the way the world did business. As globalization intensified, so did
environmental awareness and the emergence of responsible business practice. Key
developments include: the Brundtland Commission, the formation of the World Business
Council for Sustainable Development, and the United Nations Global Compact.
Evolution in India
The Four Phases of CSR Development in India
The history of CSR in India has its four phases which run parallel to India's historical
development and has resulted in different approaches towards CSR. However the phases are
not static and the features of each phase may overlap other phases.
The First Phase: In the first phase charity and philanthropy were the main drivers of CSR.
Culture, religion, family values and tradition and industrialization had an influential effect on
CSR. In the pre-industrialization period, which lasted till 1850, wealthy merchants shared a
part of their wealth with the wider society by way of setting up temples for a religious
cause.Moreover, these merchants helped the society in getting over phases of famine and
epidemics by providing food from their godowns and money and thus securing an integral
position in the society. The industrial families of the 19th century such as Tata, Godrej, Bajaj,
Modi, Birla, and Singhania were strongly inclined towards economic as well as social
considerations.
The Second Phase: In the second phase, during the independence movement, there was
increased stress on Indian Industrialists to demonstrate their dedication towards the progress
of the society. This was when Mahatma Gandhi introduced the notion of "trusteeship",
according to which the industry leaders had to manage their wealth so as to benefit the
common man. "I desire to end capitalism almost, if not quite, as much as the most advanced
socialist. Gandhi's influence put pressure on various Industrialists to act towards building the
nation and its socio-economic development. According to Gandhi, Indian companies were
supposed to be the "temples of modern India". Under his influence businesses established
trusts for schools and colleges and also helped in setting up training and scientific
institutions.


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The Third Phase: The third phase of CSR (196080) had its relation to the element of
"mixed economy", emergence of Public Sector Undertakings (PSUs) and laws relating labour
and environmental standards. During this period the private sector was forced to take a
backseat. The public sector was seen as the prime mover of development. Because of the
stringent legal rules and regulations surrounding the activities of the private sector, the period
was described as an "era of command and control". The policy of industrial licensing, high
taxes and restrictions on the private sector led to corporate malpractices. However the public
sector was effective only to a certain limited extent. This led to shift of expectation from the
public to the private sector and their active involvement in the socio-economic development
of the country became absolutely necessary. In 1965 Indian academicians, politicians and
businessmen set up a national workshop on CSR aimed at reconciliation.They emphasized
upon transparency, social accountability and regular stakeholder dialogues. In spite of such
attempts the CSR failed to catch steam.
The Fourth Phase: In the fourth phase (1980 until the present) Indian companies started
abandoning their traditional engagement with CSR and integrated it into a sustainable
business strategy. In 1990s the first initiation towards globalization and economic
liberalization were undertaken. Controls and licensing system were partly done away with
which gave a boost to the economy the signs of which are very evident today. Increased
growth momentum of the economy helped Indian companies grow rapidly and this made
them more willing able to contribute towards social cause. Globalization has transformed
India into an important destination in terms of production and manufacturing bases of TNCs
are concerned. As Western markets are becoming more and more concerned about and labour
and environmental standards in the developing countries, Indian companies who export and
produce goods for the developed world need to pay a close attention to compliance with the
international standards.


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IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY

Many companies are starting the New Year by examining exactly how effective their
branding is and how they are perceived by their customers and the general public. With all
else being equal, companies that take an active role in promoting their corporate social
responsibility programs are generally viewed more favorably than those that do not have
highly visible programs. Having goals and a vision for your company that go beyond
products and profits definitely provides a warmer image of your business that consumers will
be more eager to engage with.
Showing a True Commitment
The most successful corporate social responsibility programs integrate these two types of
CSR together to show a true commitment to a cause. For example, a company that uses
sustainable materials in their products, donates financial resources to environmental causes,
and allows employees to take paid time off for volunteering at environmental charities would
be showing a true commitment to the environment that goes beyond any single CSR
initiative.
Social Media Visibility
One of the reasons that corporations should have visible CSR campaigns is due to the
importance and prevalence of social media. Corporations that want to protect their brand
understand that social media is an integral part of public perception. When a corporation
exercises social responsibility in the form of fundraising or setting up employee giving
programs, using social media to promote these actions helps to create a positive branding
environment and it is a great way to engage with your audience on a deeper level that goes
beyond your products or services.
Public Relations Benefits
Public relations is a potent tool for shaping consumer perception and building a companys
image. Corporations that actively promote their social responsibility activities often take steps
to publicize these efforts through the media. Getting the word out about corporate donations,
employee volunteer programs, or other CSR initiatives is a powerful branding tool that can
build publicity for you in both online and print media.




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Government Relations
Corporations that place an emphasis on corporate social responsibility typically have an
easier experience when dealing with politicians and government regulators. In contrast,
businesses that present a reckless disregard for social responsibility tend to find themselves
fending off various inquiries and probes, often brought on at the insistence of public service
organizations. The more positive the public perception is that a corporation takes social
responsibility seriously, the less likely it is that activist groups will launch public campaigns
and demand government inquiries against it.
Building a Positive Workplace Environment
Finally, one of the greatest benefits of promoting social responsibility in the workplace is the
positive environment you build for your employees. When employees and management feel
they are working for a company that has a true conscience, they will likely be more
enthusiastic and engaged in their jobs. This can build a sense of community and teamwork
which brings everyone together and leads to happier, more productive employees.

Five Dimensions of Corporate Social Responsibility

Traditionally, companies have had one responsibility: to make a profit. But the concept of
corporate social responsibility holds that companies should be responsible to more than just
their owners. Corporate social responsibility holds that there are multiple dimensions that
should affect a company's actions. Understand these dimensions when planning your own
company's corporate social responsibility efforts.
Environmental:
The environmental dimension of corporate social responsibility refers to your business's
impact on the environment. The goal, as a socially responsible company, is to engage in
business practices that benefit the environment. For example, you might choose to use
recycled materials in your packaging or ad renewable energy sources like solar power to your
factory.


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Social:
The social dimension of corporate responsibility involves the relationship between your
business and society as a whole. When addressing the social dimension, you should aim to
use your business to benefit society as a whole. This could involve sourcing fair trade
products, for example, or agreeing to pay your employees a livable wage. It could also
involve taking on endeavors that benefit society, for instance using your resources to organize
charitable fundraisers.
Economic:
The economic dimension refers to the effect that corporate social responsibility has on the
finances of your company. In an ideal world, where corporate social responsibility had no
costs, there would be no reason to limit it. But in the real world it is important to recognize
the financial impact that these actions have and to balance being a good corporate citizen
with making a profit.
Stakeholder:
The stakeholders are all of the people affected by your company's actions. These include
employees, suppliers and members of the public. When considering the stakeholder
dimension of corporate social responsibility, consider how your business decisions affect
these groups. For example, you might be able to increase your output by having employees
work more, but you should consider the impact it will have on them, not just your bottom
line.
Voluntariness:
Actions that fall into the voluntariness dimension are those that you are not required to do.
These actions are based in what your company believes is the correct thing to do. They may


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be based in specific ethical values that your company holds. For example, you may believe
that using organic products is the right thing to do even if you are not required to do so.
The Principles of CSR
Because of the uncertainty surrounding the nature of CSR activity it is difficult to
define CSR and to be certain about any such activity. It is therefore imperative to be able to
identify such activity and we take the view that there are three basic principles which together
comprise all CSR activity. These are:

Sustainability
Accountability
Transparency

Sustainability:
Sustainable development has been defined in many ways, but the most frequently quoted definition
is from Our Common Future, also known as the Brundtland Report:
"Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. It contains within it
two key concepts:
the concept of needs, in particular the essential needs of the world's poor, to which
overriding priority should be given; and
the idea of limitations imposed by the state of technology and social organization on
the environment's ability to meet present and future needs."
This is concerned with the effect which action taken in the present has upon the options
available in the future. If resources are utilised in the present then they are no longer available
for use in the future, and this is of particular concern if the resources are finite in quantity.

Thus raw materials of an extractive nature, such as coal, iron or oil, are finite in quantity and
once used are not available for future use. At some point in the future therefore alternatives


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will be needed to fulfil the functions currently provided by these resources. This may be at
some point in the relatively distant future but of more immediate concern is the fact that as
resources become depleted then the cost of acquiring the remaining resources tends to
increase, and hence the operational costs of organisations tend to increase.
Sustainability therefore implies that society must use no more of a resource than can be
regenerated. This can be defined in terms of the carrying capacity of the ecosystem (Hawken
1993) and described with input output models of resource consumption. Thus the paper
industry for example has a policy of replanting trees to replace those harvested and this has
the effect of retaining costs in the present rather than temporally externalising them.

Viewing an organisation as part of a wider social and economic system implies that
these effects must be taken into account, not just for the measurement of costs and value
created in the present but also for the future of the business itself. Measures of sustainability
would consider the rate at which resources are consumed by the organisation in relation to the
rate at which resources can
be regenerated. Unsustainable operations can be accommodated for either by developing
sustainable operations or by planning for a future lacking in resources currently required. In
practice organisations mostly tend to aim towards less unsustainability by increasing
efficiency in the way in which resources are utilised. An example would be an energy
efficiency programme.

Every organisation mentions sustainability and most claim to have developed
sustainable practices. A lot of this is just rhetoric from people who, we would claim, do not
want to face the difficult issues involved in addressing sustainability. There is a danger
therefore that sustainability has taken over from CSR itself as a target for greenwashing.
Nevertheless although the relationship between organisations and society has been subject to
much debate, often of a critical nature, evidence continues to mount that the best companies
make a positive impact upon their environment.

Furthermore the evidence continues to mount that such socially responsible behaviour
is good for business, not just in ethical terms but also in financial terms in other words that
corporate social responsibility is good for business as well as all its stakeholders. Thus ethical
behaviour and a concern for people and for the environment have been shown to have a
positive correlation with corporate performance. Indeed evidence continues to mount


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concerning the benefit to business
from socially responsible behaviour and, in the main, this benefit is no longer questioned by
business managers. The nature of corporate social responsibility is therefore a topical one for
business and academics.



Accountability:

This is concerned with an organisation recognising that its actions affect the external
environment, and therefore assuming responsibility for the effects of its actions. This concept
therefore implies a quantification of the effects of actions taken, both internal to the
organisation and externally. More specifically the concept implies a reporting of those
quantifications to all parties affected by those actions. This implies a reporting to external
stakeholders of the effects of actions taken by the organisation and how they are affecting
those stakeholders.

This concept therefore implies a recognition that the organisation is part of a wider
societal network and has responsibilities to all of that network rather than just to the owners
of the organisation. Alongside this acceptance of responsibility therefore must be a
recognition that
those external stakeholders have the power to affect the way in which those actions of the
organisation are taken and a role in deciding whether or not such actions can be justified, and
if so at what cost to the organisation and to other stakeholders.

Accountability therefore necessitates the development of appropriate measures of
environmental performance and the reporting of the actions of the firm. This necessitates
costs on the part of the organisation in developing, recording and reporting such performance
and to be of value the benefits must exceed the costs. Benefits must be determined by the
usefulness of the measures selected to the decision-making process and by the way in which
they facilitate resource allocation, both within the organisation and between it and other
stakeholders. Such reporting needs to be based upon the following characteristics:




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-Understand ability to all parties concerned
-Relevance to the users of the information provided;
-Reliability in terms of accuracy of measurement, representation of impact and freedom
from bias;
-Comparability, which implies consistency, both over time and between different
organisations.

Inevitably however such reporting will involve qualitative facts and judgements as
well as
quantifications. This qualitativeness will inhibit comparability over time and will tend to
mean that such impacts are assessed differently by different users of the information,
reflecting their individual values and priorities.

A lack of precise understanding of effects, coupled with the necessarily judgmental
nature of
relative impacts, means that few standard measures exist. This in itself restricts the inter-
organisation comparison of such information. Although this limitation is problematic for the
development of environmental accounting it is in fact useful to the managers of organisations
as this limitation of comparability alleviates the need to demonstrate good performance as
anything other than a semiotic.


Transparency:
Transparency, as a principle, means that the external impact of the actions of the organisation
can be ascertained from that organisations reporting and pertinent facts are not disguised
within that reporting. Thus all the effects of the actions of the organisation, including external
impacts, should be apparent to all from using the information provided by the organisations
reporting mechanisms. Transparency is of particular importance to external users of such
information as these users lack the background details and knowledge available to internal
users of such information. Transparency therefore can be seen to follow from the other two
principles and equally can be seen to be a part of the process of recognition of responsibility
on the part of the organisation for the external effects of its actions and equally part of the
process of transferring power to external stakeholders.




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THE PROMINENCE OF CSR

It is quite noticeable how much more prominent corporate social responsibility (CSR) has
become not just in the academic world and in the business world but also is everyday life.
We can highlight a lot of factors which have led to this interest such things as:

Poor business behaviour towards customers
Treating employees unfairly
Ignoring the environment and the consequences of organisational action.


Since then other things have also featured prominently in popular consciousness. One of
these which has become more pronounced is the issue of climate change and this has affected
concern about CSR through a concern with the emission of greenhouse gases and particularly
carbon dioxide. Nowadays it is quite common for people to know and discuss the size of their
carbon footprint whereas even three years ago people in general did not even know what a
carbon footprint was.


Another thing which has become prominent is a concern with the supply chain of a business;
in other words with what is happening in other companies which that company does business
with their suppliers and the suppliers of their suppliers. In particular people are concerned
with the exploitation of people in developing countries, especially the question of child
labour but also such things as sweat shops.

So no longer is it acceptable for a company to say that the conditions under which their
suppliers operate is outside of their control and so they are not responsible. Customers have
said that this is not acceptable and have called companies to account

Interestingly the popularity of companies increases after they have admitted problems and
taken steps to correct these problems. In doing this they are thereby showing both that
honesty is the best practice and also that customers are reasonable. The evidence suggests
that individual customers are understanding and that they do not expect perfection but do


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expect honesty and transparency. Moreover they also expect companies to make efforts to
change their behaviour and to try to solve their CSR problems.


CHANGING EMPHASIS IN COMPANIES

Companies themselves have also changed. No longer are they concerned with green washing
the pretence of socially responsible behaviour through artful reporting. Now companies are
taking CSR much more seriously not just because they understand that it is a key to business
success and can give them a strategic advantage, but also because people in those
organisations care about social responsibility.

So it would be reasonable to claim that the growing importance of CSR is being driven by
individuals who care but those individual are not just customers, they are also employees,
managers, owners and investors of a company. So companies are partly reacting to external
pressures and partly leading the development of responsible behaviour and reporting. So
accountability one of the central principles of CSR is much more recognised and is being
responded to by increasing transparency another of the principles of CSR.



Globalisation and CSR
Globalisation is a leading concept which has become the main factor in business life during
the last few decades. This phenomenon affects the economy, business life, society and
environment in different ways, and almost all corporations have been affected by these
changes. We can see these changes mostly related with increasing competition and the rapid
changing of technology and information transfer. This issue makes corporations more profit
oriented than a long term and sustainable company. However, corporations are a vital part of
society which needs to be organized properly. Therefore we need some social norms, rules
and principles in society and business life for socially responsible behavior.

Globalisation can be defined as the free movement of goods, services and capital. This
definition does not cover all the aspects of globalisation or global changing. Globalisation
also should be a process which integrates world economies, culture, technology and


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governance. This is because globalisation also involves the transfer of information, skilled
employee mobility, the exchange of technology, financial funds flow and geographic
arbitrage between developed countries and developing countries. Moreover globalisation has
religious, environmental and social dimensions. In order to encompass this broad impact area
globalisation covers all dimensions of the world economy, environment and society.
Moreover it is apparent all over the world and the world is changing dramatically. Every
government has a responsibility to protect all of their economy and domestic market from this
rapid changing.

How Globalisation Affects CSR

The question might be how globalisation affects CSR. But the answer to this question is not
only related to the last quarter of the 20th century but also related to previous centuries. John
Maynard Keynes calculated that the standard of living had increased 100 percent over four
thousand years. Adam Smith had an important (seminal) idea about the wealth of
communities and in 1776 he described conditions which would lead to increasing income and
prosperity. Similarly there is much evidence from economic history to demonstrate the
benefit of moral behaviour; for example, Robert Owen in New Lanark, and Jedediah Strutt in
Derbyshire both in the UK showed the economic benefits of caring for stakeholders.
More recently Friedman has paid attention to the moral impact of the economic growth and
development of society.

It is clear that there is nothing new about economic growth, development and globalisation.
Economic growth generally brings out some consequences for the community. This is
becoming a world phenomenon. One of the most important reasons is that we are not taking
into account the moral, ethical and social aspects of this process. Some theorists indicated the
effect of this rapid changing more than a hundred year ago. Economic growth and economic
development might not be without social and moral consequences and implications.

Another question is who is responsible of this ongoing process and for ensuring the wellbeing
of people and safeguarding their prosperity. Is this the responsibility of governments, the


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business world (businessman), consumers, shareholders, or of all people Government is part
of the system and the regulator of markets and lawmakers. Managers, businessmen and the
business world take action concerning the market structure, consumer behaviour or
commercial conditions. Moreover, they are responsible to the shareholders for making more
profit to keep their interest long term in the company. Therefore they are taking risk for their
benefit/profit. This risk is not opposed to the social or moral/ethical principles which they
have to apply in the company. There are many reasons for ethical and socially responsible
behaviour of the company. However, there are many cases of misbehaviour and some illegal
operations of some companies. Increasing competition makes business more difficult than
before in the globalised world.

The good news and our expectations are that competition will not have any longer bad
influence on company behaviour. According to international norms (practice) and
expectations, companies have to take into account social, ethical and environmental issues
more than during the last two decades. One of the reasons is more competition not always
more profit; another reason is consumer expectation is not only related to the cost of products
but also related to quality, proper production process and environmental sensitivity.

Moreover shareholders are more interested in long term benefit and profit from the company.
The key word of this concept is long termism which represents also a sustainable company.
Shareholders want to get long term benefit with a sustainable company instead of only short
term profit. This is not only related to the company profit but also related to the social and
environmental performance of the company. Thus, managers have to make strategic plans for
the company concerning all stakeholder expectations which are sustainable and provide long
term
benefit for the companies with their investments. However, Sustainability can be seen as
including the requirement that whatever justice is about fair distribution of goods, fair
procedures, respect for rights is capable of being sustained into the future indefinitely. Thus
sustainability requires that the values of justice are capable of being continued into the future:
if
current practices for instance were just from the present point of view but would prevent the
same practices from occurring in the future, that would be rejected from the point of view of
sustainability (Dower, 2004). So investor or shareholder expectations and all other


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stakeholders approaches are supporting a socially responsible and ethical company more than
other companies. Globalisation has had a very sharp effect on company behaviour and still
we can see many problems particularly in developing countries. This is one of the realities of
the
globalisation process. However we are hoping to see some different approaches and
improvements to this process with some of them naturally related to some international
principles, rules and norms. But most of them are related to the end of this flawed system and
the problem of capitalisation.

The challenge of CSR in a globalizing world is to engage in a process of political deliberation
which aims at setting and resetting the standards of global business behaviour. While
stakeholder management deals with the idea of internalizing the demands, values and
interests of those actors that affect or are affected by corporate decision-making, we argue
that political CSR can be understood as a movement of the corporation into environmental
and social challenges such as human rights, global warming, or deforestation (Scherer &
Palazzo, 2008), .
THE EFFECTS ON BUSINESS PERFORMANCE
If corporate social responsibility has grown as a business objective, has this in any way
impinged upon business performance? Studies, empirical and otherwise, suggest that rather
than detracting from business performance and harming shareholder value, in fact the
opposite appears to be the case. Corporate social responsibility appears to offer a positive
contribution to business performance, especially over the longer term.
The following factors have been identified as some of the positive economic benefits that
businesses have gained from adopting a more socially responsible position.
Improved economic performance
A large number of studies have attempted to identify and evaluate the economic returns from
social responsibility. Factors that have been considered include business growth rates, stock
prices and sales and revenue.


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A 1999 survey by Roman, Hayibor and Agle evaluated the findings of 52 studies that
considered the link between business ethics and enhanced profits. They concluded that 33
studies showed a positive link, 14 suggested neutral effects or were inconclusive, and the
remaining 5 suggested that there was in fact a negative relationship.
Although this evidence would on balance favour an argument that corporate social
responsibility is good business practice, the whole area of linking ethics and responsibility to
profit is a contentious one. When considering ethics and social responsibility, what are we
including within this definition? Is the business merely complying with a business code,
either developed within the business or by a third party. Such codes essentially state. What is
not acceptable business behaviour, such as taking bribes or pursuing anti-competitive
behaviour. Or does the understanding of an ethical business go further and entail positive
social actions, ranging from giving money to good causes, to contributing to particular
programmes in which the business has competency. For example, a pharmaceutical company
might develop a drug that might benefit the populations of the worlds poorest countries, with
no possibility of profit. So at what level do we identify an ethical business, and to what
degree might this level of responsibility influence profitability?
Enhancing the brand
Related to profitability is the issue as to how far corporate social responsibility enhances
brand image and the firms reputation. Not only would this strengthen consumer loyalty but
also aid the firm in raising finance and attracting trading partners. An increasing number of
studies have identified that value-based criteria are becoming increasingly important in
consumer buying decisions. A 1997 study by Walker Research found that, given two
products with similar quality and price criteria, 76 per cent of those surveyed stated they
would purchase the product produced by the company most associated with good causes.
Factors such as environmental responsibility and active participation in the community were
most often cited as those factors most likely to affect consumer purchasing behaviour.
Business may be further encouraged to develop the social image of their brand with the
increasing number of awards given to recognise and promote corporate social responsibility.
Most Admired Companies Lists, such as that presented by Management Today in the UK and
Fortune in America, are based around an assessment of corporate social responsibility
criteria, such as reputation for ethics and honesty, use of corporate assets and community and
environmental responsibility. The public relations and marketing potential that might be


23
gained from such awards would go a long way in helping the business to further strengthen
its socially responsible brand image.


Attracting and retaining employees
It increasingly appears to be the case that companies with clear ethical and social positions
find it easier, to not only recruit but to hold on to their employees. In a number of surveys of
graduate employment intentions, students have claimed that they would be prepared to take a
lower salary in order to work for a business with high ethical standards and a commitment to
socially responsible business practices.
A survey conducted in June 2000 by Burson Marsteller and the Prince of Wales Business
Leaders Forum found that when employees were asked to rank the reason for admiring
certain companies, 24 per cent identified respect for their employees, and a further 21 per
cent identified environmental responsibility. The survey concluded that the reputation of the
employer was crucial in the recruitment and retention of staff. As John Browne the chairman
of BP Amoco has remarked,
Access to capital
The growth in ethically screened investment funds has grown by over 238 per cent since
1995. This phenomenal growth is driven not only by the demands from shareholders for
ethical funds, but also by a realization from investors generally, that socially responsible
business has the potential to be hugely profitable. A recent survey by the Ethical Investment
Research Service has revealed that 77 per cent of members of pension schemes wanted their
pension funds to adhere to some form of socially responsible investment, so long as it did not
impinge upon their returns.
The likelihood of returns being lower in ethically screened funds has been questioned by the
findings of two recent reports. Innovest Strategic Value Advisors and the Alliance for
Environmental Innovations, both concluded that, in respect to environmental responsibility in
particular, those companies that exhibit superior environmental performance over their peers
achieve better financial performance in the stock market. It is suggested that the reason for


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this is that environmental performance is a good indicator of general management quality,
which is the main determinant of stock price.
The benefits from being socially responsible appear not only to be diverse, but from an
economic point of view, worth having. Not only is business performance likely to be
enhanced, but brand image will be strengthened, employee turnover minimized and
access to stock market funds readily available. The next step for research is to attempt
to quantify the benefits, and try to relate the economic advantages directly to the level of
social responsibility a business adopts.
OTHER POTENTIAL BUSINESS BENEFITS
Triple bottom line : People planet profit, also known as the triple bottom line, are
words that should be used and practiced in every move an organization makes.
I. People relates to fair and beneficial business practices toward labour, the community
and region where corporation conducts its business.
II. Planet refers to sustainable environmental practices. A triple bottom line company
does not produce harmful or destructive products such as weapons, toxic chemicals or
batteries containing dangerous heavy metals for example.
III. Profit is the economic value created by the organization after deducting the cost of all
inputs, including the cost of the capital tied up. It therefore differs from traditional
accounting definitions of profit. Despite the fact that adopting this triple measure has
helped some companies be more conscious of their social and moral responsibilities

Human resources : A CSR program can be an aid to recruitment and retention,
particularly
within the competitive graduate student market. Potential recruits often ask about a
firm's CSR policy during an interview, and having a comprehensive policy can give
an advantage. CSR can also help improve the perception of a company among its
staff, particularly when staff can become involved through payroll giving, fundraising
activities or community volunteering. CSR has been found to encourage customer
orientation among frontline employees.

Risk management: Managing risk is a central part of many corporate strategies.
Reputations that take decades to build up can be ruined in hours through incidents


25
such as corruption scandals or environmental accidents. These can also draw
unwanted attention from regulators, courts, governments and media. Building a
genuine culture of 'doing the right thing' within a corporation can offset these risks.

Brand differentiation: In crowded marketplaces, companies strive for a unique
selling proposition that can separate them from the competition in the minds of
consumers. CSR can play a role in building customer loyalty based on distinctive
ethical values several major brands, such as The Co-operative Group, The Body Shop
and American Apparel are built on ethical values. Business service organizations can
benefit too from building a reputation for integrity and best practice.

License to operate: Corporations are keen to avoid interference in their business
through taxation or regulations. By taking substantive voluntary steps, they can
persuade governments and the wider public that they are taking issues such as health
and safety, diversity, or the environment seriously as good corporate citizens with
respect to labour standards and impacts on the environment.

Satisfied Employees: Employees want to feel proud of the organization they work
for. An employee with a positive attitude towards the company is less likely to look
for a job elsewhere. It is also likely that you will receive more job applications
because people want to work for you.
More choice means a better workforce. Because of the high positive impact of CSR
on employee wellbeing and motivation, the role of HR in managing CSR projects is
significant.

Positive PR: CSR provides the opportunity to share positive stories online and
through traditional media. Companies no longer have to waste money on expensive
advertising campaigns. Instead they generate free publicity and benefit from worth of
mouth marketing.

More Business Opportunities: A CSR program requires an open, outside oriented
approach. The business must be in a constant dialogue with customers, suppliers and
other parties that affect the organization. Because of continuous interaction with other
parties, your business will be the first to know about new business opportunities.


26

Long term future for your Business : CSR is not something for the short term. Its
all about achieving long term results and business continuity. Large businesses refer
to: shaping a more sustainable society

CORPORATE SOCIAL RESPONSIBILITY IN DEVELOPING MARKETS
Developing markets can be an attractive alternative for businesses facing stagnating home
markets. When you enter such new markets, you have to be aware of ethical, legal and social
considerations that come under the term corporate social responsibility. Addressing the CSR
issues in a comprehensive way allows you to avoid conflict with local culture and helps your
company prosper in its new market.

Workplace
Social responsibility issues related to work include salary, workplace safety, sexual
harassment, work hours and employee benefits. While it is unrealistic to expect employers to
pay U.S. level wages in a developing country, pay should be enough for a living wage.
Companies are responsible for employee safety and personal security. Work hours must
allow a reasonable life-work balance and your company should pay for benefits that reduce
employee stress due to medical or other concerns.
Market
Introduction of your products to the new market has to avoid disruptions and take place in a
way that respects local traditions. Reviewing how other American companies entered the
market and how local companies operate gives you an overview of approaches that work and
actions you must avoid. Test marketing with small local groups can yield additional insights.


27
While you may want to differentiate yourself from local suppliers and call attention to your
products, you have to do so in positive ways.
Governance
It may seem customary in some developing countries to make payments to decision-makers
in order to obtain contracts or other benefits. In addition to many of these payments being
unethical, the U.S. Foreign Corrupt Practices Act makes it illegal to pay to obtain work that
companies would not otherwise receive. When you participate in such payment schemes, you
support a local corrupt system that hurts the general population of the country. If you find
that you can't do business in a country without making illegal payments, you may want to
reevaluate your involvement in the market.
Environment
Some developing countries have weak or non-existing environmental protection legislation.
Even so, it is unethical for corporations to allow their activities to pollute as a result. CSR
requires companies to act in an environmentally friendly manner when operating in
developing countries. You have to go beyond legal compliance and minimize your company's
production of waste and pollution.
Social
A key component of CSR in developing markets is social investment. If you are profiting
from your operations in the country, it is ethical to return some of the profit to the
community. Typical initiatives are helping to fund education, medical care and infrastructure
such as water and sewers. Companies publish their involvement in such projects and benefit
from a positive influence on their image, both in the developing country and in their home
market.


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SOCIAL RESPONSIBILITY STRATEGIES
Social responsibility is a form of self-regulation that businesses adopt as a part of their
corporate conscience and citizenship. Often referred to as corporate social responsibility or
CSR, this policy spurs businesses to develop means to monitor the publics social perception
of them as a responsible business. The business goal of social responsibility is to encourage
the companys actions toward the positive impact of consumer, community and employee
responsibility.
Voluntary Hazard Elimination
Companies involved with social responsibility often take action to voluntarily eliminate
production practices that could cause harm for the public, regardless of whether they are
required by law. For example, a business could institute a hazard control program that
includes steps to protect the public from exposure to hazardous substances through education
and awareness. A plant that uses chemicals could implement a safety inspection checklist to
guide staff in best practices when handling potentially dangerous substances and materials. A
business that makes excessive noise and vibration could analyze the effects its work has on
the environment by surveying local residents. The information received could be used to
adjust activities and develop soundproofing to lessen public exposure to noise pollution.
Community Development
Companies, businesses and corporations concerned with social responsibility align with
appropriate institutions to create a better environment to live and work. For example, a
corporation or business may set up a foundation to assist in learning or education for the
public. This action will be viewed as an asset to all of the communities that it serves, while
developing a positive public profile


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Philanthropy
Businesses involved in philanthropy make monetary contributions that provide aid to local
charitable, educational and health-related organizations to assist under-served or
impoverished communities. This action can assist people in acquiring marketable skills to
reduce poverty, provide education and help the environment. For example, the Bill and
Melinda Gates Foundation focuses on global initiatives for education, agriculture and health
issues, donating computers to schools and funding work on vaccines to prevent polio and
HIV/AIDS.
Creating Shared Value
Corporate responsibility interests are often referred to as creating shared value or CSV, which
is based upon the connection between corporate success and social well-being. Since a
business needs a productive workforce to function, health and education are key components
to that equation. Profitable and successful businesses must thrive so that society may develop
and survive. An example of how CSV works could be a company-sponsored contest
involving a project to improve the management and access of water used by a farming
community, to foster public health.
Social Education and Awareness
Companies that engage in socially responsible investing use positioning to exert pressure on
businesses to adopt socially responsible behavior themselves. To do this, they use media and
Internet distribution to expose the potentially harmful activities of organizations. This creates
an educational dialogue for the public by developing social community awareness. This kind
of collective activism can be affective in reaching social education and awareness goals.


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Integrating a social awareness strategy into the business model can also aid companies in
monitoring active compliance with ethical business standards and applicable laws.



















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Microsoft Corporation is an American multinational software corporation headquartered in
Redmond, Washington that develops, manufactures, licenses, and supports a wide range of
products and services related to computing. The company was founded by Bill Gates and
Paul Allen on April 4, 1975. Microsoft is the world's largest software maker measured by
revenues.It is also one of the world's most valuable companies.
Microsoft was established to develop and sell BASIC interpreters for the Altair 8800. It rose
to dominate the personal computer operating system market with MS-DOS in the mid-1980s,
followed by the Microsoft Windows line of operating systems. The company's 1986 initial
public offering, and subsequent rise in its share price, created an estimated three billionaires
and 12,000 millionaires from Microsoft employees. Since the 1990s, it has increasingly
diversified from the operating system market and has made a number of corporate
acquisitions. In May 2011, Microsoft acquired Skype Technologies for $8.5 billion in its
largest acquisition to date.









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MICROSOFT&CORPORATE CITIZENSHIP



























Working responsibly
Good corporate citizenship starts at home. To meet
our responsibilities as a global company, were
continually working to create a respectful and
rewarding work environment for our nearly
100,000 employees.

Were also pioneering new ways of reducing our
environmental impact. This year, we introduced an
internal carbon fee that helped us meet our goal of
carbon neutrality. In addition, were continually
strengthening expectations for our hardware
production suppliers to improve the working
conditions and environmental performance of
electronics factories around the world.
We recognize the important responsibility we have
to respect human rights, and we work to bring the
power of technology to bear to promote respect for
human rights throughout the world. Through the
Microsoft Technology and Human Rights Center,
were working internally to promote the integration
of human rights into the companys culture,
business operations, and strategies. Externally,
were seeking to advance public understanding of
the role business can play in driving respect for
human rights.
Since the release of our first product in 1975, weve demonstrated the promise of computing to change
the world. But as weve grown as a company, so have the worlds social and economic challenges.
Were responding by applying our technology, ingenuity, and collaborative spirit to help solve these
critical challenges and create fulfilling and exciting opportunities for people everywhere.
We focus our commitment to corporate citizenship in two ways: working responsibly in our own
business and serving our communities around the world.


33
CORPORATE SOCIAL RESPONSIBILITY
OF MICROSOFT


1. Citizenship at Microsoft
Working responsibly
Serving communities
Citizenship governance
Setting priorities and
stakeholder engagement
External frameworks


2. Serving Communities
Microsoft YouthSpark
Empowering youth through technology and education
Inspiring future innovators
Helping youth realize their potential
Technology for Good
Donating software and services to nonprofits worldwide
Improving access to hardware
Sharing knowledge to deepen impact
Solutions in action
Employee giving


34
Making a difference
Humanitarian response
Accessibility
Expanding opportunity for people with disabilities
Improving wellness for seniors


3. Working Responsibly
Environmental sustainability
Making our operations carbon neutral
Developing technologies to reduce environmental impact
Human rights
The power of technology to promote human rights
A global approach
Engagement
Good governance and the rule of law
Privacy and data security
Responsible sourcing
Hardware and packaging production
Conflict minerals
Governance
Corporate governance
Maintaining strong practices and performance
Public policy engagement
Compliance


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CORPORATE CITIZENSHIP AT MICROSOFT

Our Commitment to Citizenship
Our commitment to citizenship is brought to life by the work we do in serving communities,
championing the growth of our people, and meeting our commitment to responsible business
policies and practices. Steve Ballmer

SERVING COMMUNITIES






At the heart of Microsoft efforts is the passion of its employees, who generously donate their
time and money to causes around the world. This year, the 30th year of our employee giving
campaign, we met an exciting milestone $1 billion in employee contributions and
Microsoft matching gifts to more than 31,000 nonprofits since 1983.
Launched in September 2012, Microsoft Youth Spark initiative is also a major focus of our
community work. Through partnerships with governments, nonprofits, and businesses, they
are working to empower young people to imagine and realize their full potential by
connecting them with greater education, employment, and entre-premiership opportunities.
Furthermore, Microsoft donate, on average, $2 million a day in software to more than 70,000
nonprofits around the world one of many ways our technology and resources help
nonprofit organizations serve individuals and communities in need.


36





Water Filter Provides Safe Drinking Water for 100 Girls
India - For the 100 girls who live together at an Udaan school in Mewat, Haryana province,
India, getting an education is a dream come true. This residential school provides for nearly
all of their needs: education, food, shelter, and recreation. But the girls needed a consistent
source of clean drinking water. The lack of clean drinking water affected the health of the
girls at the Udaan school throughout the academic year. Most of the students suffered from
skin problems, infections, and typhoid. With funding from YouthSpark on GlobalGiving, the
CARE.org project was able to provide a reverse-osmosis water filter cooler for the school.
This filter can serve safe drinking water for the 100 girls at the residential campus, helping
them stay healthy and focused on their studies so that they can prepare for the next level of
education.
Entrepreneur Opens Mobile Repair Shop for Villagers
India - Ranjeet Kumar is the oldest of seven children and lives with his family in a remote
flood- and famine-prone village in the Muzaffarpur District of Northern Bihar in India. Like
others in Bihar, where half of people in the state live below the poverty line, Ranjeets family
has struggled to eke out a living. Despite the challenges, people in this area look to Ranjeet as
a testament of perseverance, entrepreneurial spirit, and family ties. Ranjeets family worked
hard to support his studies, but even with their combined effort, their monthly income wasnt
enough. Most technical college courses were too expensive to pay for without neglecting
food and other necessities for the family. Yet Ranjeet remained determined to gain access to
higher education. He learned about the Aga Khan Foundation (AKF), an organization


37
dedicated to developing and promoting creative solutions to problems that hinder social
development. AKF partners with YouthSpark, a Microsoft initiative to create opportunities
for 300 million young people around the world, to provide curriculum, computers, and
teacher training for technology centers, including one in Ranjeets district. Ranjeet signed up
for a computer technology course and a mobile repairing class. After completing his training,
he opened a mobile repair shop in his home, and he now provides mobile services for the
people of his village. Because there is no electricity, the generators he uses provide the power
for villagers to charge their mobile phones and complete other tasks. In a place where
farming is the expectation for most young people, Ranjeet serves as a role model, proof that
viable alternatives exist and can be reached with the right opportuni
















38
Donating software and services to nonprofits worldwide

With the right software, nonprofits can provide
faster, better service and operate more efficiently.
We donate hundreds of millions of dollars in
software each year through our Technology for
Good program.

Increased software donations to 13 percent more nonprofits in FY13, empowering
70,286 organizations globally. We now have software donation programs in 117
countries around the world

Provided $795 million worth of software to non-profits around the world including
matched donations through our employee giving program.

Launched new software donation programs in Austria, Indonesia, and Vietnam
through our partnership with TechSoup Global.

Developed a pilot program to help nonprofits implement Microsoft Office 365, a
cloud-based software solution that provides email, productivity, and collaboration
tools in the familiar Microsoft Office format. We will launch the full Office 365 for
Nonprofits program in FY14.






39













EMPOWERING YOUTH THROUGH TECHNOLOGY
AND EDUCATION
For young people to succeed in todays economy and help build the economy of the future
they need direct access to both technology and relevant skills, along with support from
teachers, leaders, governments, and nonprofits. Microsoft is connecting youth with the
resources they need to make a real impact for a better tomorrow.
Helped youth gain new skills, education, and training by providing Youth Spark grants to
nonprofits worldwide. As part of our commitment to create opportunities for 300 million
youth globally over the next three years, we launched partnerships with the European Youth
Forum; the China Foundation for Youth Employment and Entrepreneurship; Trust for the


40
Americas; and the African Centre for Women and ICT, among many other youth-focused
nonprofits. In FY13, Microsoft awarded grants to a total of 186 nonprofit organizations in 62
countries.
Accelerated learning and collaboration among students and teachers worldwide through
Office 365 for Education, which provides access to Word, PowerPoint, and Excel, and a
range of communications tools, including email, instant messaging, group video, and voice
chat.
Fostered shared learning experiences around the world while building global communities for
students to meet new people, speak to experts, and share ideas through Skype in the
Classroom. Nearly 2 million students worldwide have benefited from the program.















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Environmental sustainability
Technology can help create a more sustainable future. This year, Microsoft modeled a way
forward by making their operations leaner and more energy efficient helping us meet their
goal of carbon neutrality and reducing the environmental impact of our services and devices.





Be green: More renewable energy, less waste
Using resources efficiently requires both commitment and investment. Weve increased our
purchase of green energy while making responsible choices with our energy, waste, and
water.
More than doubled our investment in renewable energy in FY13 by purchasing 2.3 billion
kWh of green power globally.
Recognized by the U.S. Environmental Protection Agency (EPA) as the second largest
purchaser of green energy in the United States. Our totals increased nearly 70 percent from
last year, andwere equivalent to the energy consumed by 204,000 average American homes.
Offset more than 300,000 metric tons of CO2 emissions through a growing portfolio of
innovative carbon-offset projects.
Invested $5.5 million in a demonstration project to power a data center in Cheyenne,
Wyoming, using biogas from a wastewater treatment facility, providing ultra-clean, carbon-
neutral electricity.Known as the Data Plant, it will be completely independent of the grid and
will sustainably power cloud services.


42
Be accountable: Holding ourselves to a new standard
A critical aspect of addressing climate change is holding ourselves accountable. For the first
time ever, weve integrated carbon use into the financial decision making of the company.
Our internal carbon fee builds a more responsible corporate culture while giving us a new
perspective on the external costs of our emissions.
Held every business group at Microsoft responsible for their emissions with our
internal carbon fee the cornerstone of our commitment to carbon neutrality. Using
technologies to measure the impact of our operations, we charge our business groups
according to their actual carbon impact, from electricity use to air travel. This adds
discipline to our business decisions and helps guide the resource choices made both
at our corporate headquarters and through our local subsidiaries.
Created an internal investment fund for our carbon fee payments. The fund will be
used to support a variety of energy-efficiency and carbon-offset projects, helping us
reduce net emissions and meet our carbon neutrality goal.

Improved transparency by measuring emissions with advanced tracking software. We
rolled out the cloud-based Carbon Systems Enterprise Sustainability Platform
based on Microsoft technology to more than 600 facilitiesin 100 countries, providing
visibility into our energy use and emissions.







43









'Microsoft has best global CSR reputation'
Microsoft has been named as the company with the best reputation for corporate social
responsibility for the second year in a row, but consumers perceptions of the number of
companies they trust to actually deliver their CSR programs overall has dramatically
dropped since last year.










44

The IT company topped Reputation Institutes Global CSR RepTrak 100 study ahead of The
Walt Disney Company, which overtook Google this year to take the second place spot (see
tables below).

Microsoft gave more than $900m in cash and software to nonprofits worldwide last year,
reduced its carbon emissions by 30 per cent per unit of revenue compared with 2007 and
made the companys biggest ever investment in overall employee compensation, according to
its 2012 citizenship report.

Almost three quarters (73 per cent) of global consumers are willing to recommend companies
that are perceived to be delivering on their social responsibility programmes, yet they only
believe 5 per cent of companies to actually be delivering on their CSR promises. This is a
dramatic drop on the previous year, when consumers believed 12 per cent of companies
were delivering on their CSR programmes.

While the top 100 companies in the study spend $50m a year on average on CSR activities,
the report suggests they are not getting their messages across to consumers. More than half
(55-61 per cent) of consumers are neutral or not sure if those companies can be trusted to be
good corporate citizens, behave ethically nor are appealing places to work that treat their
employees well.

CB Bhattacharya, E.ON chair professor in corporate responsibility at the European School of
Management and Technology in Germany, says: Unfortunately, corporate responsibility is
still equated to philanthropy in many organisations and hence, given short shrift when it
comes to strategic formulation and implementation. Although the top 100 companies all have
well developed websites detailing their corporate responsibility initiatives, how many of them
do rigorous research to find out how their key stakeholders view these same initiatives?

The Reputation Institute says the results from its study enable companies to determine a
business value from their CSR programmes, which could encourage brands to invest more in
the area. It claims that for every 5 points a company improves its CSR perception on its scale,
recommendations increase by 9 per cent.

Kasper Ulf Nielsen, executive partner at Reputation Institute, says: One of the main
critiques of the CSR field is the lack of data to prove the ROI on activities. Now that the CSR


45
field has grown up from being a feel-good community to having major impact on business
value, its time to move from feelings to facts.

Reputation Institutes 2013 Global CSR RepTrak 100 study surveyed more than 55,000
consumers from 15 countries.