Role of NGOs in CSR

NGOs• NGOs are legal organizations that affect decisions

and distribution of resources of governments and companies.

• They aim to be opinion leaders and pressure groups and initiate strategic changes by creating public awareness and reaction via media and web sites.

• Each NGO focuses on certain issue such as protecting human rights, labor rights, and environment.

• NGOs are powerful organizations to inform people, initiate reactions and boycotts against governments and companies.

NGO types by orientation

• Charitable Orientation  It includes NGOs with activities directed toward meeting the needs of the poor -distribution of food, clothing or medicine; provision of housing, transport, schools etc. Such NGOs may also undertake relief activities during a natural or man-made disaster.

• Service Orientation includes NGOs with activities such as the provision of health, family planning or education services in which the program is designed by the NGO

• Participatory Orientation is characterized by self-help projects where local people are involved particularly in the implementation of a project by contributing cash, tools, land, materials, labor etc.

• Empowering Orientation is where the aim is to help poor people develop a clearer understanding of the social, political and economic factors affecting their lives, and to strengthen their awareness of their own potential power to control their lives

NGO Types by level of operation

• Community-based Organizations (CBOs) arise out of people's own initiatives. These can include sports clubs, women's organizations, neighbourhood organizations, religious or educational organizations.

• Citywide Organizations include organizations such as the Rotary or lion's Club, chambers of commerce and industry, coalitions of business, ethnic or educational groups and associations of community organizations

• National NGOs include organizations such as the Red Cross, YMCAs/YWCAs, professional organizations etc. Some of these have state and cuty branches and assist local NGOs.

• International NGOs range from secular gencies such as Redda BArna and Save the Children organizations, OXFAM, CARE, Ford and Rockefeller Foundations to religiously motivated groups. Their activities vary from mainly funding local NGOs, institutions and projects, to implementing the projects themselves.

Perceptions of NGOs

• According to a survey conducted by Environics and Gallup in 47 nations in 2002 48 %-52 % of respondents stated that they had little to no trust in global companies or large national companies.

• Whereas, 32 % of respondents expressed distrust in NGOs and 59 % of respondents stated that they had a lot or some trust in NGOs.

Strategic Approach towards CSR

• NGO’s have strategic missions, visions and goals to achieve and gain support of the public and other stakeholders.

• Have missions that can be shared with the public, other stakeholders and organizations.

• They develop attainable visions, form organizational culture. They determine their approaches to their members and other stakeholders.

• Their strategic plans are consistent with their missions, visions and goals.

Continued• NGOs gain the support of media, opinion leaders,

independents groups and public besides the support of their members.

• Organizing meetings and workshops, using management information systems and effective communication tools such as media and internet to inform these groups and gain their support. This support help to find new funds and not to be controlled by governments and other organizations.

• The strategic cooperation between NGOs at national and global levels support their growth strategies, help to develop core competencies and get the advantage of different expertise.

• They reveal reports to public to inform about their practices and their results to survive and gain the public support.

The Business Environment

• There are approximately 60.000 global companies and 500.000 foreign affiliates in the world. They are central organizers of the global economy. They invest $600 billion abroad annually and control two thirds of international trade .Global FDI exceeded $US 916 billion and around $US 334 billion of it was made to developing countries in 2005

• Although some companies act responsibly most of the time, there are many national and global companies that do not care about corporate social responsibility and try to extract benefits and profits by harming natural resources and exploiting employees and people in poor countries.

• International agreements and national laws should encourage global companies to move beyond corporate social responsibility to corporate accountability. Corporate accountability means that companies have a legal obligation to uphold international standards and protect the rights of their stakeholders.

• Governments, NGOs, multilateral institutions such as the United Nations and the World Bank affect companies to be aware of their social responsibility, act based on ethical values, help poor people and countries; protect the environment, human, labor and customer rights.

Role of Media• Press, TV channels and web sites are widely used by NGOs to create public

awareness and coercion for corporate social responsibility practices of companies.

• There are several publications and web sites that highlight the best and the worst corporate social and environmental responsibility practices. Publications such as Ethical Consumer exist to help consumers to make ethical purchases.

• There are ethical pensions and stock portfolios for people who prefer to invest in socially responsible companies..

• According to a survey by MORI, 80 percent of people thought large companies had a moral responsibility to society in 2002. According to another survey by MORI, 46 percent of people thought that social responsibility in corporate behavior was very important in 2001

• On the other hand, it is very difficult to monitor, manage and report corporate social responsibility practices of companies. E.g.:Shell emphasises that it aims to be a good neighbour in Nigeria but it does not clean up oil spills quickly not to ruin local villages. Coca Cola stresses that it uses natural resources responsibly but it depletes village wells in an area where water is scarce in India. BP, Shell, Nike, Reebok, and Disney are critisized by human rights groups and labor unions in the past few years.

• People for the Ethical Treatment of Animals (better known as PETA) maintain a list on their Web site of companies who do animal testing and encourage others to refer to this data.

• A dedicated animal-loving researcher named Alex Poulos keeps his own list of “good” (no testing) and “bad” (testing) companies on a site called “Vida Compassion” or “Alex’s List.” .

• Another list comes from the American Anti-Vivisection Society (AAVS)—which now has set up a “Leaping Bunny” certification program.  If you are interested in the animal testing issue, you should probably explore the information on these sites and many others listed here.

• NFP sources give us information on things like mercury in fish (Oceana), involvement in Burma (The Burma Campaign and Global Union Burma), and a list of who is in the coal industry (Coal Mining Engineer’s List).

• NGOs can influence the media and the public opinion, mobilise people on the streets so they can exert pressure on the corporate sector

• NGOs have different roles at different times, use different tactics from protests to collaboration to enforce their messages

• NGO’s use several tactics to encourage companies to accept their social responsibility: advocacy of social accounting and independent verification schemes, the filing of resolutions of the shareholders, documentation of moral shaming and abuses, calls for boycotts of products of company and divestment of stocks, advocacy of selective purchasing laws and government-imposed standards and litigation seeking punitive damages

Role of NGOs• Sustainable development by regulating

hazardous wastes.• NGOs have begun to fix their sights on powerful

corporations - many of which can rival entire nations in terms of their resources and influence.

• NGOs have helped organizations to focus on externalities apart from economic gain.

• Increasing pressure from activists and from NGOs

• Auditing audits – Labour Human and Environmental records.

• Stakeholder theory adoption by activists – not shareholder centric but society centric.

• Integration of stakeholder theory into the decision making process.

• Example - Devotion of energy and resources by companies to environmental and social affairs.

• Companies are taking responsibility for their externalities and reporting on the impact of their activities on a range of stakeholders.

Cos and NGOs cooperation

• NGOs needo Public support, o New members ando Financing

• To achieve this – Projects for the welfare of the society – to gain public trust.

• Companies can approach NGOs to conduct corporate responsibility projects whereas NGOs can approach companies to find financing for their prospective projects.

• Appropriate partners should be chosen - with good reputation.

• They should prepare reports that show the needs for the projects in the society and to companies.

• Mutually beneficial goals and missions of the project• Projects should aim at long term relationships • Marketing strategies should be effective and should be

agreeable by both the parties • CSR projects should be supported by top management and

other stakeholders.• Top management plays an important role in the success of the

projects.

• Ikea, the international retailer of furniture and household goods, has a reputation for low prices and fresh, innovative design. However, it is also keen to develop a reputation for environmental stewardship and sensitivity to social issues.

• The Ikea Group of Companies has around 150 stores in 22 countries. It was founded in 1943, and in 2001 had a turnover of 11.3 billion euros. It employs 70,000 people, and purchases its raw materials from more than 50 countries, principally China, Sweden, Poland, Germany and Italy.

• Most of Ikea's sales take place in Germany (21%), the USA (13%), the UK (12%), France (9%) and Sweden (7%).

• In September 2000, Ikea launched The Ikea way on purchasing home furnishing products, a three-page 'code of conduct' for its 2,000 suppliers, focusing on working conditions and environmental impacts

• As a first step, suppliers were asked to return a questionnaire to ascertain how well they already complied with the code.

• Ikea has also shown itself not to be shy of working with lobby groups. As long ago as 1991, it collaborated with Greenpeace to find a way of printing its catalogues on chlorine-free paper.

• Several years later, Greenpeace was enlisted again, this time to advise Ikea on how to phase out PVC from its product range

• One of Ikea's most weighty environmental issues is forestry, and in particular the impact of timber extraction on ancient forests. At the end of the 1990s, pressure from Greenpeace and other environmental groups led Ikea to introduce a policy prohibiting the use of wood from intact natural forests, except those certified by the Forest Stewardship Council. This was formally launched in November 1999.

• 'Ikea is joining the movement of responsible corporate consumers concerned about ancient forests,' commented Greenpeace's forest campaigner, Christoph Thies.

• At the beginning of 2000, the company has donated US$2.5 million to help launch Global Forest Watch, a World Resources Institute project set up to gather information about the world's remaining intact natural forests.

• 'Ikea dissociates itself from child labour, and works actively against it.' To this end, the retailer requires suppliers to keep it informed about where production is taking place - including the activities of subcontractors.

Starbucks• On the other hand, Starbucks has worked with NGOs since 1996. Global Exchange that is a

non-governmental organization focused on human rights criticized Starbucks not buying Fair Trade coffee in 2000.

• It accused Starbucks to profit at the coffee farmer’s expense by paying low prices and not buying ‘Fair Trade’ coffee beans. Starbucks made an agreement to collaborate with the Ford Foundation, Oxfam America, and CEPCO to get rid of this critisicm in 2002.

• Oxfam America that is a member of Oxfam International is an NGO dedicated fighting poverty, hunger, and social injustice in the world. CEPCO is the largest association of small-scale coffee producers Oaxaca that is one of the poorest state in Mexico. Its members are 16.000 farmers and 44 cooperatives.

• The Ford Foundation is a private, non-profit institution that provides loans and grants to organizations that support its goals around poverty, democratic values, injustice, human achievement and international cooperation. Starbucks and the Ford Foundation provided financial support, each committing $125.000 per year for the two-year pilot project for a total of $500.000.

• This collaboration had four overreaching goals: Increase the supply of high quality Certified Fair Trade coffee for specialty coffee market in US from small-farmer cooperatives; improve the skills of small-scale coffee farmers by providing training and resources to implement and standardize post-harvest quality improvement; provide information and support to enable farmers to earn Premium prices by producing a high-quality coffee; and enable farmers to disseminate their knowledge and experiences to other coffee cooperatives.

• Oxfam also shared its broader view of human rights with Starbucks. Oxfam and Starbucks developed greater mutual respect for each other.

Bharat petroleum• BPCL has continued its focused action in the area of Corporate

Social Responsibility (CSR) with thrust in the areas of Education and Water Conservation.

• Through the various CSR initiatives along with NGOs across the country, BPCL has been able to impact the lives of around 70,000 people.

• Projects were also initiated for the education of 1050 tribal children in Araku Valley in 3 residential schools in collaboration with Naandi foundation, a NGO working in this field.

• BPCL also partnered Agastya International Foundation, a NGO in a ‘Science on Wheels’ project to reach out to 10,000 children across 70 rural schools near the Solur LPG plant in Bangalore.

• Under Project Boond, 20 villages were converted from ‘water scarce to water positive’. The project is being extended to districts in Karnataka and Uttar Pradesh.

Continued• As a part of the Livelihood Programme, BPCL has, in collaboration with

SEWA, a reputed NGO, imparted chikankari skills to 500 women in Lucknow.

• In an effort to bring agro-based knowledge through technology, making the process simple and easily accessible to the women farmers, a programme has been initiated with the MS Swaminathan Research Institute for the widows of farmers in the district of Wardha.

• A Corporate CSR Booklet ‘ Umang’ was released, capturing all the CSR initiatives undertaken across the country.

• BPCL won the ‘CIDC Vishwakarma Award 2012’ for CSR for the second consecutive year and also won the ‘Aqua Excellence Award’ for Project Boond.

• BPCL was recently conferred with the Aaj Tak Care award under the Livelihood category for the project ‘Economic Empowerment and Income Generation’ which has benefited and impacted rural women in Lucknow.

EDF and McDonalds Collaboration

• 23 years old• Joint task force established: EDF scientist,

Economist, Chemical engineer and McDonald’s managerial team to review McDonald’s operations.

• EDF decided to take no money from McDonald’s

• Transparency maintained by EDF•  Waste Reduction Action Plan

 developed 

Outcome of EDF & McD Collaboration

• Phase-out of McDonald’s polystyrene Styrofoam clamshells that used to encase all hamburgers

• 70-90 per cent reduction in packaging waste as the switch was made over to paper-based wrapping.  

• No extra costs incurred• Recycling of one million tons of corrugated

boxes, • packaging reduced by 300 million pounds• Waste reduction from restaurants by 30

percent.

WWF & Coca Cola •  Coca-Cola partnership with the World Wildlife

Fund (WWF) to improve the water quality in the western stretches of the Yangtze (Chinese River)

• Partnership on 3 Fronts• First, watershed management projects in two

crucial upper Yangtze tributaries. For example, one project works with farmers to encourage them to prevent the runoff of pig waste into water, diverting the material into bio-gas instead.

• Bottling plants in the Yangtze basin also adopted best practices for water usage, to the point at which they can claim “water neutrality.”

• Coca-Cola is improving water recycling at the company’s factories, and is encouraging the same throughout its supply chain

• Both Coke and WWF staff also work with Chinese sugar farmers to streamline their production and reduce water use.

Challenges• Chinese government officials tend to shun non-

profits, choosing to micro-manage such work through locally-approved NGOs. WWF has come under fire from other advocacy groups because of its cooperation with corporations that they view as the central part of the problem.

Conclusions• Companies should balance their social, environmental and financial

responsibilities. • They should choose NGOs and projects based on their missions, visions

and goals. • They shouldn’t try to conduct to corporate social responsibility projects just

for public relations activities. • They should act based on values and ethical standards. They shouldn’t

harm the environment and exploit people for benefits of their shareholders and profits.

• On the other hand, NGOs should not be used by companies to gain public support. They shouldn’t only focus on having reputation, big funds and many supporters.

• They should convince companies to conduct projects that will provide substantial benefits and funds to protect the environment, human, labor and customer rights; improve the living conditions of people, serve nutrition, health care and education for poor, old, sick and disabled people.

• The cooperation projects between NGOs and the private sector should initiate big changes and improvements in the society and the lives of people.

Current Scenario in India

• Govt Regulation: Mandatory 2% spending on CSR Activities• NGOs would have to learn to work with the corporate world

for maximising the social benefits• Corporate Sector has no clue how to spend that 2% (est.

Rs 8000cr to 20000cr) on CSR Activities• It is a challenge for NGOs to absorb the CSR allocations

and translate it into effective programmes. • NGOs should not be just implementing the CSR projects

but also help the companies in strategising• Social sector attractive for youngsters by making it a

remunerative sector. • NGOs need to be more transparent and accountable as

they look forward to be funded by the business houses

THANK YOU

Made by:• Nitin gupta(514)• Pranav Prateek(515)• Shashank sharma(519)• Yogendra yadav(530)• Arpit goel • Parag Gidh(564)