CSR Assignment -3

Submitted By – Diksha Yadav

Roll Number – 03512303918

Ques1. Analyse the effectiveness of Triple Bottom Line as a CSR

measurement Framework.
Ans. The triple bottom line (TBL) is a framework or theory that recommends
that companies commit to focus on social and environmental concerns just as
they do on profits. The TBL posits that instead of one bottom line, there should
be three: profit, people, and the planet. A TBL seeks to gauge a corporation's
level of commitment to corporate social responsibility and its impact on the
environment over time.

In 1994, John Elkington—the famed British management consultant

and sustainability guru—coined the phrase "triple bottom line" as his way of
measuring performance in corporate America. The idea was that a company can
be managed in a way that not only earns financial profits but which also
improves people's lives and the planet.

In finance, when we speak of a company's bottom line, we usually mean its

profits. Elkington's TBL framework advances the goal of sustainability in
business practices, in which companies look beyond profits to include social
and environmental issues to measure the full cost of doing business.

Moreover, the TBL tenet holds that if a company focuses on finances only and
does not examine how it interacts socially, that company cannot see the whole
picture, and thus cannot account for the full cost of doing business.

People + Planet = Social + Environmental Responsibility

According to TBL theory, companies should be working simultaneously on
these three bottom lines:

1. Profit: The traditional measure of corporate profit—the profit and loss

(P&L) account.
2. People: Measures how socially responsible an organization has been
throughout its operations.
3. The Planet: Measures how environmentally responsible a firm has been.2
By focusing on these three interrelated elements, triple-bottom-line reporting
can be an important tool to support a firm's sustainability goals.

The 3Ps do not have a common unit of measure. Profits are measured in dollars.
What is social capital measured in? What about environmental or ecological
health? Finding a common unit of measurement is one challenge.

Some advocate monetizing all the dimensions of the TBL, including social
welfare or environmental damage. While that would have the benefit of having
a common unit—dollars—many objects to putting a dollar value on wetlands or
endangered species on strictly philosophical grounds. Others question the
method of finding the right price for lost wetlands or endangered species.

Another solution would be to calculate the TBL in terms of an index. In this

way, one eliminates the incompatible units issue and, as long as there is a
universally accepted accounting method, allows for comparisons between
entities, e.g., comparing performance between companies, cities, development
projects or some other benchmark.

An example of an index that compares a county versus the nation's performance

for a variety of components is the Indiana Business Research Center's
Innovation Index. There remains some subjectivity even when using an index
however. For example, how are the index components weighted? Would each
"P" get equal weighting? What about the sub-components within each "P"? Do
they each get equal weighting? Is the people category more important than the
planet? Who decides?

Ques2. Explain the concept of Sustainability. “Is the concept of

Sustainability a myth or a reality”? Discuss. What is the relationship
between CSR and Sustainability?
Ans. Sustainability focuses on meeting the needs of the present without
compromising the ability of future generations to meet their needs. The concept
of sustainability is composed of three pillars: economic, environmental, and
social—also known informally as profits, planet, and people.

Sustainability encourages businesses to frame decisions in terms of years and

decades rather than on the next quarter's earnings report and to consider more
factors than simply the profit or loss involved. Usually, a company will
issue sustainability goals and will work towards them. The goals are often
reasonable—cut emissions by 5%, for example—so that when the business
achieves their sustainability marks, they are able to call themselves "green" or
"sustainable."

The Three Pillars of Sustainability

In 2005, the World Summit on Social Development identified three core areas
that contribute to the philosophy and social science of sustainable development.
These “pillars” in many national standards and certification schemes, form the
backbone of tackling the core areas that the world now faces. The Brundtland
Commission described it as “development that meets the needs of the present
without compromising the ability of future generations to meet their own
needs". We must consider the future then, in making our decisions about the
present.

 Economic Development: This is the issue that proves the most problematic
as most people disagree on political ideology what is and is not
economically sound, and how it will affect businesses and by extension,
jobs and employability. It is also about providing incentives for
businesses and other organisations to adhere to sustainability guidelines
beyond their normal legislative requirements.

 Social Development: There are many facets to this pillar. Most importantly
is awareness of and legislation protection of the health of people from
pollution and other harmful activities of business and other organisations.
In North America, Europe and the rest of the developed world, there are
strong checks and programmes of legislation in place to ensure that
people's health and wellness is strongly protected. It is also about
maintaining access to basic resources without compromising the quality
of life.

 Environmental Protection: We all know what we need to do to protect the

environment, whether that is recycling, reducing our power consumption
by switching electronic devices off rather than using standby, by walking
short journeys instead of taking the bus. Businesses are regulated to
prevent pollution and to keep their own carbon emissions low. There are
incentives to installing renewable power sources in our homes and
businesses. Environmental protection is the third pillar and to many, the
primary concern of the future of humanity. It defines how we should
study and protect ecosystems, air quality, integrity and sustainability of
our resources and focusing on the elements that place stress on the
environment..
Relationship between CSR and Sustainability

Sustainability describes the ability to maintain various systems and processes —

environmentally, socially, and economically — over time. Sustainability
originated in natural resource economics, but has since gained broader currency
in terms of sustainable development and social equality.
Corporate Social Responsibility, or CSR, usually refers to a company’s
commitment to practice environmental and social sustainability and to be good
stewards of the environment and the social landscapes in which they operate.
Some companies and economists rejected the idea of CSR because it implied an
obligation to society and future generations beyond those contained in the
binding legal requirements of business. However, most companies now embrace
some notion of CSR.Approaches to CSR vary.

Ques3. Write a Detailed Note on Clean Development Mechanism.

Ans. The Clean Development Mechanism (CDM) is one of the Flexible
Mechanisms defined in the Kyoto Protocol (IPCC, 2007) that provides for
emissions reduction projects which generate Certified Emission Reduction units
(CERs) which may be traded in emissions trading schemes.
The market crashed in 2012 when the value of credits collapsed and thousands
of projects were left with unclaimed credits. The struggle about what to do with
the old credits sank the 2019 COP 25 in Madrid.
The CDM, defined in Article 12 of the Protocol, was intended to meet two
objectives:

 to assist parties included in Annex I in achieving compliance with their

quantified emission limitation and reduction commitments (greenhouse
gas (GHG) emission caps).
 to assist parties not included in Annex I in achieving sustainable
development and in contributing to the ultimate objective of the United
Nations Framework Convention on Climate Change (UNFCCC), which is
to prevent dangerous climate change; and
The CDM addresses the second objective by allowing the Annex I countries to
meet part of their emission reduction commitments under the Kyoto Protocol by
buying Certified Emission Reduction units from CDM emission reduction
projects in developing countries. Both the projects and the issue of CERs units
are subject to approval to ensure that these emission reductions are real and
"additional." The CDM is supervised by the CDM Executive Board (CDM EB)
under the guidance of the Conference of the Parties (COP/MOP) of the United
Nations Framework Convention on Climate Change (UNFCCC).
The purpose of the CDM is to promote clean development in developing
countries, i.e., the "non-Annex I" countries (countries that aren't listed in Annex
I of the Framework Convention). The CDM is one of the Protocol's "project-
based" mechanisms, in that the CDM is designed to promote projects that
reduce emissions. The CDM is based on the idea of emission reduction
"production". These reductions are "produced" and then subtracted against a
hypothetical "baseline" of emissions.