Climate Change and Corporate Responsibility

As a generation affected and afflicted by a global pandemic, global warming has been wiped from public consciousness as a source of concern and corrective action but our ignorance in lieu of the pandemic should not be mistaken as a lapse in the grave issue of climate change.  The temperature is rising, the snow is melting, water levels are rising, forests are uprooting, species are getting displaced- climate change is happening, it’s real. Over the course of decades, various discourses have arisen with respect to mitigation of climate change as a global issue. The public opinion on climate change is as diverse as what the governments and authorities sought to contend. All sorts of opinions have made their way to the realm of deliberation but most studies and reports over the years have highlighted the impact of industrial activity on climate depletion. Undoubtedly, a strong segment shrill amplifies the opposite but the root of their argument is swaddled in layers of self-interest and incomprehension. The interconnection of climate change disclosures with human activity dates back to the beginning of Capitalism and Industrialisation in the early seventeenth century. Today, as we thrive in the 21st century with technology at our service and a rapidly modernizing world, it is eerie to notice how the escalation of climate depletion has been complemented with a row of solutions too though their interaction has been far away from the imagined and expected impact. 

Today we see relative and limited involvement from all sides. The Brundtland Report published by the World Commission on Environment in 1987 highlighted the importance of sustainable development paving the way for scholars and businesses to increasingly incorporate environmental keys of concern in their policies. As all three economic sectors are trying to substitute their processes to encompass a holistic purview of the environment, the onus today lies on the big companies and organisations to cater to climate action. Corporate Social Responsibility hereby, plays a pivotal role in this assortment. Also called sustainable business, Corporate Social Responsibility (CSR) represents various interests of business owners and other stakeholders in relation to the society. A series of viewpoints help us understand and hence, project the concept of CSR from different perspectives keeping the baseline based on what European Union has projected for CSR to be i.e. “The voluntary integration of companies’ social and ecological concerns into their business activities and their relationships with their stakeholders.” The foundation of CSR is sustainability which is often channelized through business elements like people, technology, transport etc. Ethical issues pertaining to climate change signal towards bioethics that brings to the forefront justice and equity issues about responsibility. While responsibility is a key component of CSR, issues pertaining to the same can be analysed at micro as well as macro levels. Despite the consistent deliberation on what CSR entails, it has been largely agreed that the central focus of CSR is to encompass economic, ethical, social, philanthropic and legal multitudes of what the society expects from a business enterprise in return. As underlined by John Elkington, CSR accounts for 3 Ps– People, Planet and Profit. In the present realm, the P for planet that caters to the environmental fraction of businesses is becoming increasingly important. While the space to make this transition is bigger than ever at the moment, various business organisations like IKEA, Lyft, UPS etc. have already started resorting to environmental friendly measures. The centrality of environment to CSR approaches is self-explanatory since environmental CSRs come with a great degree of scope and can help swift response towards global climate crisis on multiple levels of the corporate structure like environmental policy programmes, environmental impact mechanisms and environmental performance measurement. It is therefore required that goals for successful CSR are directed towards resource management and mitigation through a human oriented society driven approach that caters to a multitude of issues. The financial and the corporate governance sector can be further very well regulated under CSR to obtain measures and practices that are sustainable in nature. Over the last decade, Financial institutions are adopting various measures to mitigate their costs through means of reduction in their energy consumption. The State Bank of India stopped using paper receipts of ATM transactions and started sending messages to the mobile phones of the customers instead setting a benchmark for other institutions to follow. The Karnataka Bank Spent 0.54 Cr animal welfare and afforestation practices in Delhi and Karnataka. In hindsight, if we follow what Waddock and Graves have to say about the link between corporate social and financial performances it is revealed that CSR affects profitability positively and vice versa. Thus, financial institutions contribute to CSR on account of both ethical and profit motives. If we ignore the moral contentions and scrutiny here, it is widely evident that CSR has helped in  the expansion of the financial sector in retaliation for what CSR has managed to contribute to society. A hoard of studies also substantiate the claim and reveal that financial services engage in corporate social responsibility out of institutional motives. Thus,  apart from the obvious contributions made to the society and environment per se, CSR significantly contributes to the brand reputation, its profits and market standing as well. It should be therefore understood that CSR does not stand aside from the business prospects or economic goals of the organization but is a natural offshoot that, if not directly, caters to the economic objectives significantly well. For a successful CSR planning and implementation, it needs to be ensured that all extremes from product design to waste reduction are in purview. The long term nature of the goals require strict climate change leadership awareness to regulate the identified plans as well as by striking awareness with other industries through relevant advertising communication campaigns to build a model that trickles down to grassroot communities. 

It is vital to understand here that Business Ethics and Corporate Social Responsibility while together may incorporate the same principles yet their limits differ significantly.CSR aims for a more wide role in the overall spectrum.  In the Indian context, CSR has managed to shift from the traditional approach to a liberal one and roots of philanthropy are seeping down the soil of sectoral change. The shifts that have arisen from the public sector to a private one since 1991 have encompassed the welfare function originally intended to be borne by the state. The mandate of CSR in India includes Organizing programmes on environmental management, Pollution control, Green belt development, Animal care, Land Restoration, Job development related to agro products, Afforestation. The focal point for enforcing environmental CSR programmes is to understand that environmental concerns need to be incorporated in daily business irrespective of whether the company contributes to those problems directly or not. Every organisation must themselves establish a heavy and safe working environment that rallies around preservation of the environment. Globally identified as an emerging economy, Indian organisations have very well identified and acknowledged the tri-directional role of CSR. Dabur for instance, has ventured into providing protection of flora and fauna, adoption  of wastelands and their cultivation  as well as promotion of biodiversity. Hindustan Unilever’s Environment Policy thrives on development, verification, assessment and reduction in the realm of environment management. The Clean India mission has been further accelerated by the involvement of various business organisations that have advocated and proliferated the issue to cater other aspects of the issue. As India lays down a wide series of development goals, CSR spending has mostly been positive and various companies have committed  growth and development to local communities through an integrated model of CSR with conventional decision making processes. While a prompt answer to the workability of CSR in India is a subtle nod, there is still a constant need to ensure that the programmes launched under CSR percolate to the most backward regions of the country to ensure a more inclusive and sustainable development. It’s important that laws continuously evolve for the good and CSR spending is not clustered around the same fields. CSR Tracker by CII reveals that 60% of India’s CSR projects are in the field of healthcare and education. While the impact created by these projects is invaluable, it is persistently important that other realms, especially environmental sustainability, are brought to the mainstream. Similarly, CSR environment projects also need to be expanded across geographies to scale impact. Maharashtra currently receives 16% of CSR funds. While issues of pollution are of sorts that are best tackled in cities and developed states, other issues of water conservation, wildlife protection, forest conservation require efforts that cut across geographical differences. Other similar issues of NGO Clustering also need to be catered to with equal intensity and ensure that small and medium sized businesses too that are still developing and trying to make a mark too venture into the realm of CSR. The less developed communities and states need to be taken into the purview of bringing change to strive for a more just and equitable society that can be together appraised for being pro-environment. 

References

Dans, E. (2018, September 16). Corporate Social Responsibility Is Turning Green, And That’s A Good Thing. Forbes. https://www.forbes.com/sites/enriquedans/2018/09/14/corporate-social-responsibility-is-turning-green-and-thats-a-good-thing/?sh=7a8ee0cf4dca. 

Waddock, S., & Graves, S. (1997). The Corporate Social Performance-Financial Performance Link. Strategic Management Journal, 18(4), 303-319. Retrieved July 22, 2021, from http://www.jstor.org/stable/3088143

What is CSR? UNIDO. (n.d.). https://www.unido.org/our-focus/advancing-economic-competitiveness/competitive-trade-capacities-and-corporate-responsibility/corporate-social-responsibility-market-integration/what-csr. 

www.ETCFO.com. (2018, April 16). Nearly 60% of India’s funds for CSR are spent on education and healthcare – ETCFO. ETCFO.com. https://cfo.economictimes.indiatimes.com/news/nearly-60-of-indias-funds-for-csr-are-spent-on-education-and-healthcare/63786203. 

Picture Source: Advisory Excellence