(1.

) Corporate Social Responsibility is a strategic way of an organization to conduct

its business activities in an ethical way, integrating the social and environmental
concerns in their business operations and interactions with their stakeholders. CSR
ensures that the organization is complying with the local laws, international norms and
ethical standards.
L’Oreal is a French-based cosmetic beauty and company with a wide range of cosmetic
brands like Vichy, Skin Cruticals, and Roger & Gallet, and consumer-product divisions
like L’Oreal Paris, Maybelline New York and Garnier. It combines latest in technology
with the highest in quality to develop sustainable products.
The beauty pageant has adopted the following climate-change policies:
1. Reducing the environmental footprint of formulas: L’ Oreal time has focused on
improving the product formula to reduce its effect on the environment by improving the
biodegradability of formulas and reducing the water footprint (impact on aquatic
environment)
Product: In 2017, the luxury product division Biotherm launched its exclusive
Waterlovers sun care range. Research conducted by L’Oreal scientists resulted in a
formula with 96% biodegradable base. (Decomposed by bacteria or other living
organisms and thereby avoiding pollution)
1. Sustainable sourcing policy:
Use of renewable raw materials: L’Oreal product formulators are strongly encouraged
to use ingredients that are sustainably sourced or prepared using green chemistry
principles, i.e. via a process that minimizes the number of chemical synthesis stages as
well as energy consumption.
Ensuring the traceability of raw materials: L’Oreal traces the origin of the plant, and
the country where it was produced. L’Oréal procures rice bran oil from the Isaan region
in north-eastern Thailand. The Group opted to work with a fair-trade certified co-
operative organic farming and an agroforestry program to enrich soil and improve
moisture retention. They planted 67,168 trees that captured 8,843 tonnes of CO2
equivalent. This achieved their carbon balance ambition.
2. Packaging Policy: They have implemented a packaging policy based on three
pillars; Respect, Reduce and Replace. The company uses a systematic eco-design
process ahead of product design, for the packaging of finished products.
Respecting environment: L’Oreal uses materials from responsibly managed forests
where biodiversity is protected for its paper, cardboard and wood-fibre packaging, In
2017, 97% of the recyclable paper used for product use instructions, 100% of the
cardboard used for boxes and 89% of the paper and cardboard used in point-of-sale
was certified from Forest Stewardship Council and Programme for the Endorsement of
Forest Certification.
Reducing resources: The product team develops packaging of an optimal size and
weight that use fewer resources. The Group saved 5,092 tonnes of packaging materials
at the end of 2017 through reduction initiatives at source and light-weighting efforts.
L’Oréal is also working to reduce its resource consumption through refillable packaging.
Replacing materials with sustainable sources: L’Oreal replaces conventional
materials with recycle or bio-sourced materials. They integrate recycled materials within
the plastic component of its packaging. For example, the Redken brand products for
hair-care, hair-styling, shampoos and conditioners packaged in 250ml bottles are made
from 100% recycled plastic.
Products:
1. Under the Lancome Brand, the 50ml jars of facial care products are developed with
a re-filling system that reduces the environmental footprint and also proves to be a
premium experience for consumers. The refillable jar and two refills lead to a packaging
weight reduction of 58%, as compared to the use of three conventional facial products.
2. L’Oreal has launched an entirely sustainable brand Seed Phytonutrients with core
objectives of seed diversity, supporting organic farming and promoting natural beauty.
The brand caters to organic hair and body care products. The external shell is 100%
paper-based, recyclable and compostable. The packaging is water-resistant due to a
blend of unique minerals with the paper fibres. The entire bottle can be re-cycled as well
as up-cycled! Each bottle comes with a packet of seeds, to encouraging consumers to
start their own gardens. The seeds can be traditionally planted, or the cardboard shell of
the bottle can be used to start an indoor garden.

L’Oreal looks at climate change as part of their risk management due to the following
reasons:

1. Raw materials: L’Oreal relies on natural materials like palm oil, which are threatened
by deforestation caused by environmentally destructive farming techniques and rising
global temperatures. So, it has adopted zero deforestation policy to ensure that none of
their raw materials and ingredients are risked being produced due to deforestation.
100% of the Palm Oil, palm oil derivatives sourced from the pulp of palm’s fruit, and
palm kernel oil derivatives extracted from the kernel comply with the Roundtable on
Sustainable Palm Oil standards.

L’Oréal uses the deforestation risk evaluation tool devised by NGO Global Forest
Watch. Furthermore, the soya oil derivatives used by the company are sourced from
zones posing no risk of deforestation. This not only helps them to achieve zero
deforestation, but also procure their main ingredients without variability in raw material
pricing.
2. Change in consumer demand: In 2017, the company has implemented a tool
known as the Sustainable Product Optimization Tool across all brands. SPOT allows
the company to simulate diverse design options (ingredients, packaging, sourcing, etc.)
in order to assess their impact on the environment and society, and identify potential
opportunities for improvement and cost reduction. It also helps them to quantify the
impact reduction across every aspect of the product, leading to cost-effective product
design and more proportion of renewable ingredients sourced sustainably instead of
petroleum-based materials.

Everyday consumers are becoming more health conscious about the products they use,
and investors are rapidly demanding a shift to product formulations away from
petroleum-based materials, which makes it extremely important for L’Oreal to make the
SPOT product assessments accessible to consumers, which not only encourages them
to make choices of sustainable products with natural ingredients, but also to build a
broader consumer base. With environmental conscious habits passed on to consumers
through awareness on environmental issues, price sensitivity would rarely be an issue.
Although a beauty product company is responsible for little emissions, a strategy for
sustainable development not only helps them reduce the risk of losing loyal customers,
but also gain competitive advantage.

Conclusion: In 2017 with product innovation and SPOT tool, L’Oreals’s 76% of
products have an improved social and environmental profile. Reducing the CO2
emissions of its plants and distribution centres by 73%, and increasing its production
volume by 33% within the same period, they combined economic growth with ambitious
climate commitments. Furthermore, consumers will be able to participate in L’Oréal’s
sustainability efforts through a consumer advisory committee.
(2.) As per the section 135 of the new Companies Act 2013, every organization has
to adopt CSR as a mandatory practice. Also, it explains that CSR must accommodate
economic, environmental and social objectives with the organization’s operations. The
regulations under this act ensure that companies conduct their business activities in an
ethical way.

Following could be the advantages of mandating CSR activities as per the schedule VII
of Companies Act.
1. Hunger eradication: Corporations can conduct hunger and poverty eradication
programmes as a part of their CSR in order to reach out to children deprived of nutrition
rural areas, and provide them with access to nutritious food. Achieving food security and
improved nutrition through non-profit programs is directly linked to supporting
sustainable agriculture, empowering small farmers and ending rural poverty. A multi-
national company engaged in production of packaged food can achieve this better with
government, public health authorities, R&D networks and civil society to support these
goals. Furthermore, the corporation understands that good nutrition should always taste
good, especially when it comes to children, otherwise they will buy less health-
alternatives. The company can demonstrate their initiatives through social media
channels, product labels, and their website, as well provide transparent details about
the nutrition in their products, which helps consumers make informed-decisions.
Products with health and wellness dimensions perform better financially since
consumers are becoming more health conscious. This helps the corporation retain a
good image and have loyal customers.
2. Women Empowerment: As a part of their CSR, corporates can conduct women-
empowerment activities in partnerships with NGOs to provide education and right
information to women. Education provides women the skillset to earn a living, and
makes them aware of their basic rights and laws protecting her. Constant source of
revenue helps them achieve financial stability giving them a sense of security, and they
will be strong enough to oppose any kind of harassment against them.
Economic opportunities & productivity: Investing in training women on certain
business skills like accounting, hospitality and marketing create a broader base of
consumers, stronger communities, and potential female employees. Companies can
expand their pool for hiring. This allows companies to recruit among the most qualified
people with diverse skillset. When it comes to problem-solving and innovation, diverse
groups tend to outperform homogenous groups, leading to more productivity and
quality.
Increased sales: With proper training and resources, companies can engage women in
their distribution networks as a way creates local economic opportunities and increase
sales in rural and slum areas. Since women have a broader social network, they can
access insights into customer preferences, in particular, when targeting untapped
female markets. Since purchase decisions for home & health care products are made
by housewives, corporations can invite women to become direct-to-consumer sales
distributors for a range of products targeting the market for range of low-cost household
products in areas where there are weak retail networks.
3. Local communities: Corporations can undertake activities on development of local
communities. This is because the communities living close to their plants & operations
are mostly affected by their negative production externalities. Hence, companies can
undertake rural health-camps to provide free health check-ups to these people and
spend on school education of children living near their plants and in their townships.
This enables them to gain co-operation from the local communities, avoid protest
movements and further government regulations.
4. Risk management: Most of the natural raw material comes from agriculture and
forestry. By adopting a zero deforestation policy, a resource base made for sourcing
natural raw materials is made more secure. This helps them to avoid the variation in raw
material pricing and also remove the operational and reputational risks associated with
unsustainable farming practices. It also offers growth opportunities for smallholder
farmers and small-scale distributors. Moreover, transparent information about the
source of raw materials, production process and alliance certifications is made available
on product packages and company websites, leading to enhanced reputation of the
company as well as increased sales.
5. Operational efficiency: Efficiency increases when organizations invest in eco-
efficiency in ways relevant to their business reduce waste, optimum use of raw
materials and reduce carbon emissions. This saves the environment as well as money.
6. Profitability and Value: CSR also increases company accountability and its
transparency with investment analysts, media and shareholders. This in turn enhances
its reputation among investors such as mutual funds that integrate CSR into their stock
investment decisions. As a result, the company's stock value increases and its access
to investment capital are eased. By reports mentioning their sustainability initiatives,
companies can strongly convince potential sources of equity that they are competitive
and lower-risk investments.
7. Reduction on legislative costs: Proactive environment strategies result in
decreasing cost related to current and future legislations.
8. Reputation: A company adopting a transparent CSR policy providing all the
information on the internet generates goodwill and enhanced reputations that reduce a
risk of boycotts and minimize negative press.
9. Employee Retention: Employees are an organization’s most important stakeholder
group because as they represent the company in its actions. Socially responsible
business practices lead to employee retention as they feel a member of a respected
and reputable team, and this has a positive impact on his or her self-identity. The
existence of fairness and trust in the organization and opportunities for employees to
enact their jobs in a way that is consistent with their personal values and ethic is what
motivates an employee to stay with the company having a high self-esteem. A
transparent report on the CSR activities can bring in voluntary work hours for
community initiatives and more participative working with suppliers and customers.

10. Business opportunity: Being a socially responsible organization can give

companies an opportunity via entry into a new market or a new product creating a win-
win situation for a variety of their stakeholders. This can be done by satisfying
stakeholder’s interest while allowing an organization to engage in profitable operations.
For instance, Unilever along with retailer Walmart encouraged customers to wash their
laundry at a lower temperature (30 degrees) in order to promote their new eco-friendly
washing machine.

Conclusion: Over the last couple of years have there has been an increase in CSR
expenditure by firms. This is due to the objective of corporations to project their brand
reputation as socially responsible. However, the CSR activities by firms depend majorly
on the industry to which they belong. Furthermore, the activities undertaken by major
corporations are based on expert data from social enterprises and research institutes.
However, self-serving CSR tasks or short-term money spending are the core problems
that India’s CSR laws suffer from.
(3A.) Child labour is the practice of engaging children in economic activity on a part-
time or a full-time basis, at the cost of their physical and mental health. It deprives them
of their school education. Children aged 5-17 years are occupied to work in dangerous
conditions in sectors such as mining, construction, manufacturing, as well as in hotels,
bars, restaurants, markets, and domestic service. At an early age, they are more
vulnerable to workplace hazards. Following are the main reasons for child labour in
India:

1. Poverty: Due to poverty, illiteracy and unemployment, parents cannot provide

education to their children, especially girls, and send their children to factories and
shops to earn wages at a tender age, as income is essential for the survival of their
family. Working in hazardous conditions shatters their physical and mental state as they
are deprived of their childhood.

2. Lack of Educational resources: With no proper facilities of free education, children

are deprived of their fundamental right to education in thousands of villages in India.
Such administrative looseness is the reason that leaves the children illiterate and
helpless, and they are forced to live without studying, which pushes them into the trap of
child labour.

3. Addiction, disease or disability: Many families in slum areas, parents are

unemployed, and there is no income due to due to addiction, disease or disability.
Wages earned by children through child labour are the sole means of survival.
Furthermore, population growth leads to more unemployment, having an adverse
impact on child labour prevention. So, parents, instead of sending their children to
school, push them into harmful places like factories, mining, and construction works to
increase family income.

4. Socially backward: Social backwardness is the main reason for child labour.
Socially backward parents, especially in rural areas do not send their children to school.
Due to illiteracy, parents are unaware of various information and schemes for free child
education. Also, uneducated parents do not have knowledge about harmful conditions
at factories and construction sites, which have an adverse effect on children’s emotional
and physical health. Consequently, their children are trapped in child labour.

5. Lure of cheap labour: Due to availability of cheap labour, some factory owners
employ children as they have to pay less to them. Shopkeepers and small businessmen
make children work on a full-time basis, and pay half the wages. Employing children in
shops reduces the chance for theft, greed or misappropriation of money by them.
Furthermore, in some industries like bangle making, delicate hands are required to do
the minute work with extreme precision. Hence, children are employed to do such
hazardous tasks with glass. The requirement for cheap labour and its linkage with
economic needs of poor families, lead to child labour.

6. Family tradition: The culture and traditional family values increase the problem of
child labour at a voluntary level. Many families believe that the age-old tradition of
labour is the only source of their earning and livelihood. Small businessmen also
deprive their children of proper education in order to perpetuate their family trade with
lower production costs.

(3B.) Following can be some strategic actions by corporations to combat child labour:
1. Use collective-bargaining agreements: Collective-bargaining agreement is a tool
that can be used to address child labor. It covers all negotiations between employers
and trade unions with the objective to determine the working conditions and terms of
employment, including wages and benefits. Agreements should include clauses banning
the use of child labour. Through this tool, companies and trade unions may agree to
work jointly to eliminate child labour from business, conduct a study to find out the
causes of child labour and ensure that the plans proposed by government are
implemented to solve this problem.

2. Code of labour practice: A code of labour practice shows that it refuses to employ
child labour. Such a code enhances a company’s reputation and makes it easier to
recruit qualified and motivated staff. All the employees, particularly those involved in
recruitment can be made aware of company’s strict policy against hiring children. This
avoids confusion and makes it easier to find out where the rules are broken. A code
negotiated with workers representative will carry more weight. Furthermore, it should be
noted that the behavior set by the code is practiced inside as well as outside the
company.

3. Supporting education for local communities: The best way to combat child labor
by corporations is to provide free education to children living near the manufacturing
plant of the companies. Getting them into school and providing them free mid-day meals
would not only help the companies to gain cooperation from the local communities for
their business operations, but also help the company recruit and train those children,
after they complete their education. These children, in return could be hired by the
company and generate respectable income for their families, rather than indulging into
hazardous activities. In fact, such employees would remain more loyal to companies out
of moral obligations. Also, increasing the wages for the parent laborers will help to
combat child labour as their children gain education without the burden of earning
wages at a tender age.
4. Adapt business processes: Since the problems of poor management and child
labour occur together, the elimination of child labour would benefit the companies to
improve productivity and be more profitable. Investing in mechanization, especially in
smaller tasks automatically removes the need of employing children, and increases
production efficiency. Analyze the work done by children, and remove them for
processes that can be carried out by improving the layout of the workplace or by adding
machinery. Also, slightly elder workers are more productive. Furthermore, written
assurances from suppliers and all partners in supply chain declaring they would not
employ children below a certain age, regular reports to monitor their practices and
consequences of breaching the conditions, including termination of contract can help to
reduce child labour to a great extent.

Conclusion: Although employing children for hazardous labour activities is still

prevalent in India, there are certain ways to combat child labour. Corporations have to
step up to understand their CSR towards reducing child labour, comply with the laws to
remove child employment not only as a moral duty, but also in order to improve their
business process, enhance their reputation, respond to international buyers having strict
policies on banning child labour. Furthermore, corporations can also reach out to NGOs
to conduct campaigns regarding child labour practices.