Business Ethics

Corporate Social Responsibility

Submitted by : Group 8

ASHWINI SUNIL NAIK JAYASUDHA. S. MANISH SONI RADHIKA P SATWALEKAR SHERIN RACHEL JACOB

10SBCM0499 10SBCM0510 10SBCM0214 10SBCM0530 10SBCM0353

Corporate Social Responsibilities in: Hospitality FMCG Airlines IT

Hospitality Industry For decades, social responsibility has been one of the major issues facing global enterprise. As transnational companies have reaped most of the benefits of globalization and are gaining control over much of the worlds resources, they are increasingly being expected to serve the society from which they profit, and to bear more of the burdens of social responsibility. Demands on corporations to play a greater role in furthering the overall welfare of society has driven many organizations to voluntarily subscribe to codes of ethics and engage in social issues that benefit various groups in society. The balancing of responsibilities to the environment, society and the economy is what has come to be called corporate social responsibility, or CSR. CSR is essentially a concept that embodies the impact a company has on the society in which it operates and its interactions with different interests groups in that society. The concept involves issues that affect all business sectors such as emissions, employment standards and equal employment opportunity as well as industry-specific issues.

Reasons to engage in CSR activities

legal compliance 9% reduced employment turnover 11% response to change 11% improved company culture 12% ethical issues 14% other 8% cost improvements 7% improved risk mgmt. 14%

enhanced company image 14%

Source: Story & Price 2006

An overview of the two areas of corporate social responsibility that are examined in this paper is presented below. While labor and environmental issues are important areas of CSR for hotels to address, they are by no means the only ones. Labor Issues In 2004, the International Society of Hospitality Consultants (ISHC) published a report with a forecast of the 10 most critical issues facing the hotel industry in 2005 (ISHC, 2005). Managing human resources ranked as number two and was denoted an area of growing importance. As the hotel industry is recovering from the aftermath of the terror attacks on September 11, 2001, they are faced with the problem of hiring more people to meet the increased demand at a time when the labor pool is decreasing. The ISHC highlights the need for the industry to work with unions as allies and devote more time and money to recruitment and training. The importance of training was also mentioned in the Initiative for improving Corporate Social Responsibility in the hospitality sector signed by EFFAT and Hotrec, the European social partners for the hospitality industry, in 2004 (Hotrec, 2006). In the initiative they identify vocational and continuous training as an area where firms should go beyond the legal requirements and they particularly emphasize the need for training and life-long learning among younger workers in the industry. The right of younger workers is stressed perhaps due to the high degree to which the hospitality industry relies on them compared with other industries. In 2001, on average 26.4 percent of the European hospitality workforce was between 25 and 34 years of age and an additional 22.7 percent was younger than 25 (EUROSTAT, 2003). In both the Unit ed Kingdom and Sweden, the people in age bracket 15-34 years make up more than 50 percent of the hospitality workforce. Workers in the hospitality industry also tend to leave at an earlier age than in other industries, either to take employment in other industries or to exit the workforce completely via disability pension or unemployment benefits (Baum, Amoah & Spivack, 1997; Mykletun et al., 2000 in Furunes & Mykletun 2005). Employment in the hotel industry is usually characterized by low-wage positions with little opportunity for advancement. A majority of employees are hired at minimum wages set by 15local governments, while managers in higher-paid positions are typically imported from the home countries of the large international hotel chains, allowing them to reap most of the financial benefits (Dodds & Joppe, 2005). Environmental Issues While managing environmental issues can be a good way for hotels to prove commitment to environmental protection, an additional motivation appears to be cost savings. A full-service hotel typically spends between 4 and 6 percent of its revenue on energy, and a luxury hotel can spend as much as 10 percent or more (National Grid, 2004). By adopting energyefficient programs that conserve water and energy, and by reducing waste production, hotels can save a significant amount of money. Every year the hotel industry consumes over US$1 billion worth of energy (WWF & IBLF, 2005). Energy prices increased in 2005, and are forecast to increase even more by the end of 2006 (ISCH, 2005). Reducing energy consumption and the associated costs without compromising the service given to guests and the quality of their stay is one of the most challenging issues faced by the hotel industry (ISHC, 2005). In order to achieve reductions in energy consumption, a hotel must have a system in place for monitoring energy consumption and targeting improvements. Waste

management is another important area for hotels to address. Hotels generate a large amount of waste in the form of aluminium, plastics, glass, steel, cardboard and food, much of which can be recycled. A hotel can lessen its impact on the environment by reducing the amount of waste it sends to landfills and simultaneously reduce energy consumption for the transportation and processing of this waste. The key indicators that are used to measure CSR: Waste Production Water Consumption Energy Use Equal Employment Opportunity Employee Training Employee Organization

CORPORATE SOCIAL RESPONSIBILITY The Tata Group has always held that what comes from the society, must, in reasonable measure, go back to it. The Taj is proud to be a part of this legacy, and is deeply committed to serve the community. We recognize that the community is not just another stakeholder in our businesses, but serving the community, especially the underprivileged sections, is central to our core values. We further believe that serving people in the form of corporate volunteering has positive spin-offs by way of reviving a sense of bonding and the spirit of learning in our employees.

Leveraging our competencies The Taj uses its competencies in areas such as food production, housekeeping and laundry to develop and train raw people to enable their earning a livelihood. For example partnering with NGOs to train underprivileged women housewives in hospitality, self-grooming and house-keeping.

Promoting our culture Globally, the Taj is synonymous to the culture and heritage of India and our Building Livelihoods theme is extended to the artisans and craftsmen of India. The Taj, in association with Paramparik Karigar identifies the artisans and craftsmen across India, in areas close in and around the location of our hotels and assigns projects to trainees who identify projects that the hotel can take forward. The project provides our trainees with exposure to the unique arts and crafts of India. It gives our trainees

a unique opportunity to live within the community and broaden their own outlook. The project has a strong, long-term impact and creates a strong platform for volunteering.

Leading hospitality group builds customer loyalty and strengthens employee commitment through a programme of charitable engagement with the multiple local communities in which they operate. The company InterContinental Hotels Group PLC (IHG) is a leading global hospitality group, with over 3,300 hotels across nearly 100 countries and territories. The company was established in April 2003 following the separation of Six Continents hotels and soft drinks businesses from the retail business. The second largest hotel group in the world (calculated on the number of rooms), the group owns a portfolio of global brands, including InterContinental, Crowne Plaza, Staybridge Suites, Holiday Inn and Express by Holiday Inn. In the area of corporate social responsibility (CSR) IHG is involved in many initiatives aimed at reducing its impact on society, for example energy and water conservation. The focus of this briefing is on its engagement with charities and how it has helped their business. In 2002 IHG donated over 2.1 million in cash and kind to charities who were active in their core interests of Community, Employees, Arts, Youth & Education, Environment and Human Rights. Those supported included UNICEF, the September 11 Fund, Victim Support, Children In Need, the Red Cross, Water Aid, WWF, UNEP and Give Kids the World. With the help of customers, guests and employees on average an additional 8 million is raised per year for good causes. The drivers IHG undertakes CSR activities because successful local engagement is essential to the companys operations. IHG has supported charitable organisations since 1977. Historically, the group took an old fashioned philanthropic approach, responding to multiple requests from a variety of organisations as long as the request matched their core areas of interest. However, that approach was somewhat unfocussed and there was no way of quantifying what these donations achieved so the company found it difficult to get employee buy-in. The group developed a new approach that reflected a desire to be more transparent and promote greater engagement. Its partnership with the United Nations Children Fund (UNICEF) 100% campaign has helped them do this.

Taking action The company formally adopted UNICEF as one of its main global charitable partners in 2001. The group has pledged to donate 100,000 each year during the three-year partnership, as well as inviting employees to raise money via local fundraising events. UNICEF have helped IHG quantify what its donations can actually buy, right down to the level of 6 pence for a pencil. This level of detail allows both employees and customers to easily identify what their fundraising efforts achieve and so encourage greater engagement. The money raised in 2002 has funded a project promoting education in rural areas in the Philippines, which is helping children gain access to education in a number of ways. Local teachers need training in multi-grade teaching, as well as new curriculum materials but as multi-grade schools are generally in rural and isolated areas, facilities can be inadequate. IHG is helping to upgrade these schools with sanitation facilities as well as library and science equipment, workbooks and classroom materials. IHG has linked its CSR activities in with their overall business strategy as it makes what the groups supports in the community have real relevance to operational employees. The General Manager of each hotel has the freedom to identify the local charitable cause that the employees and guests will raise money for - it does not always have to be UNICEF. The groups employee Community Awards programme also encourages employee engagement. By promoting greater engagement the group is encouraging employees to understand and respect the community within which they operate. This fits with IHGs fundamental philosophy as James Wilson, former Vice President, Head of Public Affairs informed, If the CEO and board do genuinely believe that vision and CSR values differentiate the company, then this can make a real difference. Paying lip service is no good, your strategy and action must have real substance. What are the business benefits? There are four main benefits that have been gained from IHGs community activities: 1. 2. 3. 4. Strategic brand differentiation Building culture, reputation and customer loyalty Strengthening employee commitment to the company Positioning the company favourably in respect to competitors when bidding for client accounts. 5. Whilst it is extremely difficult to quantify the business benefits of CSR activities there is anecdotal evidence. For example 6. The Princess Royal was so impressed by the charitable auction organised by the InterContinental in Madrid to raise money for UNICEF that she decided to hold her annual charitable ball there. IHG also recognises investor relations as being a key driver for CSR activities. With increasing focus by investment advisors and agencies with rating indices its important

that we are seen as a business to invest in. External observers have noted IHGs performance in corporate governance, brand management, employee development, particularly organisational learning, to be of high standard. FMCG CORPORATE SOCIAL RESPONSIBILITY, THE AMUL WAY Corporate social responsibility (CSR) has been defined 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, in ways that are both good for business and good for development. To meet with the CSR it is expected that a business in its entire procurement-productionprocessing- marketing chain should focus on human development involving the producer, the worker, the supplier, the consumer, the civil society, and the environment CSR-SENSITIVEORGANIZATIONAL STRUCTURE 1 VILLAGE COOPERATIVE SOCIETY

DISTRICT CO-OPERATIVE SOCIETY 2

STATE LEVEL CO-OPERATIVE SOCIETY 3

1st tier:-co-operative society at the village, of which; milk Producers are voluntary members. They purchase milk form member & sell it to the district level co-operative. 2nd tier: - The district co-operative that processes milk into milk products markets locally & sells surplus to the state co-operative for national & international marketing. There are 12 district co- operatives managed by a 15member board elected by nominated representatives or chairmen of the village co-operatives.

3rd tier:-The state level co-operative - the Gujarat Co-operative Milk Marketing Federation (GCMMF) responsible for national and international marketing of milk and milk products produced and sold to it. It encompasses the entire chain from production of raw material to reaching the consumer with the end product. Accumulation of human capital is important for the development and growth of any enterprise or economy. It believes that technology and capital are replicable inputs but not the human capital. They aim to provide remunerative returns to farmers and members. When the 2001 Gujarat earthquake struck, the Amul Relief Fund donated 50 million Indian rupees to reconstructing schools. Amul Relief Trust A devastating earthquake (Richter scale 7.9) hit Gujarat on 26th January 2001

It caused death of thousands of people, tens of thousands were injured, hundreds of thousands were rendered homeless and damage of billions of Rupees was done

GCMMF formed a specific organization named Amul Relief Trust (ART) under the Chairmanship of Dr. V. Kurien in 2001 with a donation of Rs. 50 Millions for reconstruction of the school buildings damaged in the 2001 earthquake in the Kutch area The Trust reconstructed 6 schools damaged by the above earthquake at a cost of Rs. 41.1 millions in Kutch area

Airlines
British Airways

British Airways Climate Change Programme comprises its own voluntary actions, promotion of industry solutions to policy makers and support of research into areas of uncertainty in climate change science and aviation.

The company The British Airways group consists of British Airways plc and a number of subsidiary companies including British Airways Holidays Limited. British Airways is one of the worlds leading airlines with a network that provides passenger and freight services to 149 destinations in 72 countries. In 2004/05, British Airways carried over 35 million passengers and nearly 900,000 tonnes of cargo. Its airline network is centred on the United Kingdom, where 85% of its 47,500 workforce is based. The mission of the group is to deliver service that matters for people who value how they fly. To realise this, British Airways recognises the importance of working in partnership with its stakeholders. This has influenced its approach to corporate social responsibility (CSR). Its approach has also been influenced by the recognition that airlines generate major social and economic benefits, but also have significant impacts on the environment (for example, through noise and air quality) and on communities around airports. There are several reasons why British Airways chose to engage in CSR. The first is because it is a tool to help achieve the companys long term strategic goals in providing growth opportunities around Heathrow airport. Secondly, improving business efficiency and reducing costs through waste and energy programmes provided a strong business case for CSR. The company also thought CSR could help them with risk management by identifying risks to health, safety and environment that could hinder its opportunity to attract investors and grow the business. Lastly, it recognised that it needed to act to enhance its corporate reputation, and customer feedback (both corporate and from the general public) revealed that they expected British Airways to do the right thing.

This case study focuses on one of British Airways CSR programmes the Climate Change Programme.

The drivers Climate change emerged as an issue for business in the 1990s. The growing evidence led to the establishment of potential damaging impacts of carbon emissions leading to the establishment of the UN Framework Convention for Climate Change and the Kyoto Protocol. Climate change is increasingly relevant to British Airways as aviation is a growing contributor to global carbon dioxide emissions, a main greenhouse gas, and consequently to climate change. The increase in emissions stimulated by a rise in passenger and freight travel coincides with many politicians and civil society groups calling for industry to reduce carbon emissions. This presented a problem for British Airways, especially when it seeks to be a leading player in the industry for environmental issues. This was a major driver for the development of our Climate Change Programme, said Dr Andrew Sentance, Chief Economist and Head of Environmental Affairs at British Airways. Taking action In response to this driver British Airways board decided to develop a Programme of work on Climate Change. The Programme first sought to identify ways in which the company could reduce its own impacts. By auditing its emissions and energy use, targets for reduction in these areas were developed for example, a fuel efficiency target of a 30% improvement between 1990 and 2010. To date this represents a saving of 50m tonnes of carbon dioxide (CO2) emissions. A second strand to the Programme evolved from its interaction with the UK Government, to promote long-term solutions for the industry based on trading carbon emissions. In 2001 British Airways joined the UK Emission Trading Scheme (ETS). The company was asked by the UK Government to set voluntary emission reduction targets covering its domestic air services and UK facilities. (The carbon emissions saved can then be sold to another company, which needs to go above its carbon emission allowance). British Airways agreed to participate as it provided an excellent opportunity to get some firsthand experience in one of the worlds first emission trading schemes. The government also pays an incentive so that companies in the scheme make the best voluntary reduction possible. British Airways set a target of total reductions in annual emissions of 125,000 tonnes of CO2, to be achieved over the five years 2002-2006. In 2004 the company agreed with the UK government to increase the voluntary target. British Airways participation in the ETS has demonstrated that it is workable for the aviation sector. It also served to encourage the companys various departments to take action. For example, the property department set a 2% per annum reduction in energy. So far this has yielded a saving of 31,000 tonnes of CO2 per annum. Since September 2005 and as part of the Programme, British Airways has been piloting

a carbon offsets project. This allows passengers to offset the carbon expenditure caused by their travel, by investing in carbon offsets projects. Take-up so far has been slow, although BA has been active in promoting the scheme with a press launch, emails to executive club members and articles in magazines. One inhibiting factor has been the increase in fuel surcharges, which may have made passengers less interested in paying for other additional costs. Another strand to the Programme arose from the lack of knowledge in atmospheric science and the relationship between aviation, the atmosphere and climate change. For example, what are the effects of aircraft-induced cirrus clouds on climate change? British Airways participates in the European Commissions research programme (IAGOS), which was established in April 2005. As part of the research, British Airways will look at the feasibility of fitting special instruments to the outside of its planes to measure and monitor the atmosphere during flights. In developing its Climate Change Programme, British Airways has had to overcome several challenges, some of which still remain. The political environment in which the company operates harbours many different views on climate change and there are different levels of awareness surrounding the topic. This means that airlines take different views, as do governments. In the UK the government (through its White Paper on aviation) has made it clear that expanding the aviation industry will mean that the industry has to deal with environmental issues. However, the governments of many European countries have not gone through such detailed consultation and analysis and may not have such clarity on the issue. Another challenge to the company was the cost implication of taking action when others within the industry were not. British Airways has attempted to deal with these challenges by improving understanding of the issues, proactively leading and stimulating the debate through direct advocacy with government and participation at various fora. The business benefits Feedback from government and from experts on the environment has revealed that the Climate Change Programme has positioned British Airways as a responsible airline. By becoming more involved in the debate, it has been able to steer that debate towards (in its view) the most sensible proposal of emission trading, rather than other interventions that could be expensive for the industry. In this way, British Airways has been better able to manage its risks. The investment community has acknowledged this, and because of this it has enabled British Airways to attract investment. A final benefit has been that, owing to its and other companies attitudes to environmental sustainability, there is a genuine prospect of expansion at Heathrow Airport offering new opportunities for growth to British Airways.

A school reconstructed by Amul Relief Trust in the earthquake affected Ratadia Village in Mundra Taluka of Gujarat

Information Technology:

Maitree Maitree was started with an objective of bringing TCS associates and their families closer and making them feel a part of the TCS extended family. Soon after, with a view to carry on the TATA tradition of enabling the community, the scope of Maitree was enhanced to include socially relevant activities and endeavours.

Maitree - Even beyond the TCS Community: In addition to working towards bringing our associates and their families closer, Maitree also strives to enable the development of the society. Our approach to social initiatives entails being pro-actively involved and working at the root level. Some of the projects we have undertaken include working with the differently-abled, aiding under-privileged children across various schools in Mumbai, and helping rural community in Vazapur, among others. Many programs initiated by Maitree, like employment opportunities for the differentlyabled, HIV/AIDS sensitization, peer education, Green Audits to check the excess consumption of energy resources have now been accepted as best practices by the organization.

Advanced Computer Training Centre for visually impaired TCS pioneered an Advanced Computer Training Centre (the first of its kind in India) for the visually impaired. This centre, launched at the MN Banajee Industrial Home for the Blind at Jogeshwari, Mumbai, offers courses that are in sync with industry requirements, providing the visually-impaired with life-affirming employment opportunities. TCS-Maitree has pro-actively worked towards providing an inclusive environment for the differently-abled. With the belief that people with disabilities offer incredible reserves of untapped potential and an alternative talent pool, TCS-Maitree has recruited more than 30 differently-abled people in various branches of TCS. The following are some of the roles in which the visually impaired persons are working in TCS: Infrastructure Services Management BPO processes Learning & Development coordinator Human Resource Manager Global Helpdesk Accessibility testing

Rural Development Initiative (at Panvel) Wazapur (Raigad district of Maharashtra) is a village just off the Mumbai-Pune highway, near Panvel. In spite of being so close to the city, the village is devoid of even the most basic infrastructure and amenities. TCS-Maitree has been working at the ground level over the last three years to bring about development in the village. A sustainable model has been built to improve education, healthcare, and the environment in the area.

What started off as a children's education program has today grown into a larger movement with developmental activities in the areas of water supply, illiteracy, and women empowerment in addition to the focal point of education. Apart from setting up a primary and a secondary school, some other highlights of the education initiative are: Mid-day meal scheme for Balwadi kids Computer literacy program A state-of-the-art science lab

Taking up the cause of women empowerment, TCS-Maitree launched the WEP (Women Empowerment Program) where the women of the village were taught basic arithmetic and created awareness in health and hygiene. More than 25 women from three villages in the

area have been trained in embroidery, stitching, and other textile craftwork over the last one year with help from the Women's India Trust. A new Gram Vikas Abhiyaan Kendra was recently inaugurated to facilitate income generation for the women.

TCS-Maitree has also made strides in the area of health, conducting HIV/ AIDS sensitization sessions as well as health check-up camps for the villagers and school children. Thalassaemia Drive TCS-Maitree is organizing lectures, poster displays, and voluntary blood donation drives across TCS offices to support those who suffer from Thalassaemia. In a partnership with Red Cross, TCS embarks on periodic blood-donation drives towards the treatment of Thalassaemia.

HIV AIDS awareness program TCS-Maitree initiated TCS first steps in the area of HIV/AIDS Sensitization and Awareness a few years ago. The focus of the initiative is to treat HIV as a social issue, as against treating it as a solely medical prerogative. Associates across the TCS are participating in TCS-Maitree's aim to spread awareness and sensitize people about HIV/AIDS.

The highlights of this initiative are: Commemorating World AIDS Day Red Ribbon distribution at all offices Online Quiz for creating more awareness s Removing myths and misconceptions through articles Peer Educator Program - Communicating with associates in their own language, through their 'peers' mKrishi is an agro advisory system developed by TCS It connects farmers to their own eco-systems through specially developed applications on mobile phones. The application can support interactive and multimedia content to provide farmers the required information. In mKrishi, data from a farmer reaches the central server through a cell phone. Experts access this information on their PC and reply with their advice in the native language using Roman script. mKrishis features include: weather forecasts, pesticide and fertiliser advice, and market information.

Corporate citizenship Seven years ago, Microsoft started a corporate social responsibility program called Corporate Citizenship. Citizenship is a set of corporate activities that add business value and address a range of social issues. If these activities are merely add-ons, the value that they add will be very limited. Microsoft's Citizenship mission is to globally serve the needs of communities and fulfill our responsibilities to the public. Through partnerships, technology innovations, people and resources Microsoft is proud to help solve societal challenges and create economic opportunities on both a global and a local scale.

Citizenship Leagues First, they developed a global strategy that was summarized in a 12-page memo. Then they asked their citizenship leagues to localize it based on the issues that are most relevant for them. For example, branches in Switzerland chose to address issues around child safety by focusing on protecting children from child predators. They worked with schools and citizen groups to teach parents how to use privacy settings to prevent predators from contacting their children. In Japan, the focus has been on aging populations. The citizenship strategy helped local teams to identify and develop a citizen plan around the issues that are most relevant for their context. In Washington, Microsoft has partnered with the state government to provide training to the unemployed and to veterans. They provide vouchers so that people can take short courses on Microsoft Word, for instance, and gain skills that will help them find work. Energy-Saving Functionality Microsoft is also seeking to reduce its environmental impact. The environmental team worked with developers of the Windows 7 Operating System to increase its energy-saving functionality. Reducing the power usage of the Windows 7 also gave them a new way to market their product. Development For Local Economies Microsoft makes one of its most exciting contributions through their basic business structure. Microsoft has over 600,000 business partners globally. For every $1 that Microsoft makes, their partners make $8.70 on average. This means economic development

for local economies throughout the world. It translates into jobs, income, and food on the table for partners and their employees in developing countries.

WIPRO CARES Wipro Cares is the community initiative that helps marginalized communities living in neighborhoods. This initiative is organized as a trust and works with funds donated by Wiproites and these funds are in turn matched by Wipro.

Operations Wipro Cares works on the model of channelizing voluntary employee efforts to contribute to the needs of the neighbouring communities. Volunteers become members of the local chapter and few may emerge as leaders. These chapters in different locations proactively identify projects based on the requirement of the community in that location. These projects are then evaluated by the project head and the central team to be approved by the trustees. Wipro launched Wipro Cares projects in the following areas: Education Healthcare Environment

Disaster Rehabilitation Wipro Cares has also volunteered efforts in various areas where extreme circumstances required humane interventions.