Description
The documentation of the project is to provide an understanding of the role played by corporate and public sector undertakings (PSUs) in Corporate Social Responsibility (CSR)domain and their perceptions about it
CSR
ARE INDIANS COMPANIES WALKING THE TALK?
Table of Contents
EXECUTIVE SUMMARY .......................................................................................................................... 2 REVIEW OF LITERATURE ....................................................................................................................... 3 TNS Research Study ................................................................................................................................. 3 KPMG Study............................................................................................................................................. 3 The Ground Reality - Another Research................................................................................................... 4 INTRODUCTION ........................................................................................................................................ 5 CSR VS CORPORATE PHILANTHROPY................................................................................................. 5 CSR IN INDIA ............................................................................................................................................. 5 CSR SHOULD ME MADE MANDATORY? ............................................................................................. 7 CSR can cloak irresponsibility.................................................................................................................. 7 CHALLENGES TO CSR INITIATIVES IN INDIA.................................................................................... 8 SOME EXAMPLES OF CSR BY DIFFERENT COMPANIES IN INDIA: ............................................... 9 1) 2) CSR at Hindustan Unilever Ltd (HUL) ............................................................................................ 9 CSR at Coca Cola India .................................................................................................................. 12
3) CSR at Infosys Technologies Ltd ...................................................................................................... 14 THE FLIP SIDE OF CSR ........................................................................................................................... 18 RECOMMENDATIONS ............................................................................................................................ 19 REFERENCES: .......................................................................................................................................... 20 1
EXECUTIVE SUMMARY
Corporate social responsibility (CSR) isn‘t new to Indian companies and several business houses have been spearheading community initiatives even before independence. A simple Google search will show you that some of India‘s finest business houses — the Tata‘s, the Birla‘s, ACC, Bajaj — were giving back to the community much before the term CSR found its way into boardroom dictionaries. For Indian businesses CSR can be a source of opportunity, innovation, and competitive advantage while at the same time providing with the opportunity to actively contribute to the sustainable development. Thus, in addition to the obvious, direct, benefits of CSR enjoyed by the ultimate beneficiaries of responsible corporate practices, CSR brings benefits to the companies that practice it. The objective of the project is to provide an understanding of the role played by corporate and public sector undertakings (PSUs) in CSR domain and their perceptions about it. We want to show that are corporate houses in India truly grappling with the balancing act between profits and philanthropy or is CSR merely a fad.
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REVIEW OF LITERATURE
TNS Research Study
According to a research study conducted by TNS India in collaboration with the Times of India, the following results were obtained: ? ? ? A paltry 8 per cent of the 500 top Indian companies have a meaningful CSR programme that reaches out not just to employees, but to the vicinity and to society at large. Among the rest, an estimated 46 per cent are involved in a limited way in CSR initiatives benefiting employees and occasionally, the immediate vicinity. A whopping 46 per cent have no CSR programme currently – and we are talking here of India's largest listed companies.
KPMG Study
A recent KPMG study among 27 Indian companies showed the following results: ? ? A mere 8% mentioned their social expenditures in their annual reports Only 25% filed CSR reports at all.
An estimated 100 corporate foundations and 25 foreign firms are involved in CSR activities in India, but statistics on input and output are elusive. ? ? The Indian corporate sector spent Rs30,000 crore on social expenditure during the last financial year, up from Rs17,500 crore the previous year. Quoting from a government report companies drew total exemptions of Rs5,500 crore under income-tax laws last year.
These figures sound improbable as Indian companies still do not distinguish between philanthropy and internal practices to benefit stakeholders such as employees and community.
Observations from CSR Ratings of top companies in India
? ? ? Only Few Indian companies (from this study) publish a Corporate Sustainability Report to measure and assess the impact of their business on the environment. Very few companies openly state the processes followed by them, the damage caused by these processes, and the steps taken to minimize this damage. Very few companies state how much they spend on CSR. There is no mention of the amount spent in any of their balance sheets or annual reports. Most companies just list and describe their CSR activities and seem to be spending minimal amounts on CSR. 3
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Very few companies are engaged in CSR activities in the local communities where they are based. Very few companies have a clearly defined CSR philosophy. Most implement their CSR in an adhoc manner, unconnected with their business process. Most companies spread their CSR funds thinly across many activities, thus somewhere losing the purpose of undertaking that activity. Generally speaking, most companies seem either unaware or don‘t care about CSR. However, all companies can be considered to be an upward learning curve with respect to CSR and it is expected that the situation will improve. Most companies appear reluctant to themselves fulfill their CSR unless it is mandatory by law.
The Ground Reality - Another Research
According to a recent survey on Corporates and CSR, 82.4% of Indian companies seem to agree strongly that the business means the maximization of benefits, making money and do your job well. No company disagrees on this point. 17.6% agree that they disagree more equal. 76.5% say that business is making money. 88.2% strongly agree as well as appropriate which is all about social responsibility while 17.8% disagree more than agree. ? ? Place for Ethics in Business: 88.3% believe there is room for ethics in business. However, a small majority, 11.8% feel strongly that there is no place for ethics in business. Business and economic attitude: 82.3% believe that business need only economic attitude while 17.7% respondents felt that the business does not need an economic attitude, sense of balance that is needed. Social policies: 70.6% of corporates connecting with the community social activities, and 23.5% through the specific NGO. (52.9%) have only half a policy in the social net. 64.7% feel that social responsibility is to the community and their employees. 29.4% feel that social responsibility is only to its employees. 35.3% have not taken any village or social organization. The company's participation in various activities is mixed, with no clear pattern emerges. Donations: 70.6% feel that the donor of a donation will not increase the company's image. However, 29.4% give the donation for tax benefit.
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However, the cross tabulation of these two parameters revealed that only 71.4% respondents who said the donations do not improve their image while 28.6% respondents said that giving donations enhance image building. About 50% contribute to a social cause, spend as long-term investment. 70% responded that he did not donate for the tax.
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INTRODUCTION
In earlier days philanthropy was the biggest driver of community programmes and perhaps the only other reason companies would initiate welfare schemes was the publicity it fetched for their promoters. In the past two decades, however, the whole concept of giving back has undergone a sea change, both in terms of the scope of activity and for the different set of reasons that drive CSR. Companies are no longer doing it simply to grab headlines or for the ?feel-good? factor and recognize globalization as a bigger impetus. Today, social responsibility is more about how companies align their values and move towards a social cause taking the investors, suppliers, regulators, employees and the society as a whole. Simply put, CSR today is basically linked to the broader issue of corporate governance. “The business of business is to add value to the society while being profitable.”- Narayan Murthy, Chairman Infosys.
CSR VS CORPORATE PHILANTHROPY1
CSR is often confused with corporate philanthropy. But there is a big difference between the two; donating for causes and charities falls under the ambit of philanthropy but CSR is an assimilation of all these and more. Thus, a company in spite of making heavy donations for various charitable causes might be rated rather lowly on the CSR index simply because it does not treat it employees well. In his bestseller, "The Living Company," author Arie de Geus compares an organization to an individual. He talks about how individuals are often conscious about the environment they exist in. Similarly, corporate entities need pay attention to the overall economic condition of the locality they function in. De Geus compares two organizations, namely one that is centered on maximizing gains and the other that is conscious about social upliftment. With time, the company that was solely concerned about profitability withers away, while the second one continues to change with times and lives on for much longer span.
CSR IN INDIA
Most companies carry out CSR programmes as part of their charitable activities, but a few like the ITC, Bharti Airtel and the State Bank of India have included them in their business models. Several companies have also used CSR activities for brand building purposes. The ITC e-chaupal, The Hindustan Unilever Shakti women village entrepreneur, the Tata Kisan Sansar were are successful examples of this.
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http://dqindia.ciol.com/content/industrymarket/focus/2006/206120901.asp
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At a time when ethical investing and corporate social responsibility (CSR) have become buzzwords, Karmayo2g found that 493 of India's top 1,000 companies had almost no CSR activities (Level 0). Another 450 were in the bottom half (Level 1&2) while only 45 (5%) made it even to Level 3. This is a sorry reflection of corporate India's commitment to social responsibility; even if one makes allowances for the fact that some companies may not be reporting their philanthropy in annual reports. Here are the top 10, in alphabetical order. ? ACC is among the first to include commitment to environment protection as a corporate objective. It is active in quarry rehabilitation afforestation, energy conservation, and emission control and water management. Ballarpur Industries is committed to `conduct its business in a responsible manner'; its farm forestry project develops nurseries, supports tree plantation and provides seeds to farmers at subsidized rates. It also helps marginal farmers to take up pulpwood plantation on degraded land through joint liability groups. HDFC's core business itself has a strong CSR element in promoting home ownership. It supports home ownership through micro-finance for low-income housing. It partners over 160 organizations in community development, education, environment and child welfare projects. Infosys focuses on education and research. It has equipped libraries of 10,150 rural schools in Karnataka. The Infosys Foundation supports activities like rehabilitation of old school buildings, helping artists and artisans to preserve and revive cultural and artistic traditions and aiding the destitute and economically disadvantaged. Jubilant Organosys is active in healthcare and education, energy conservation, water management, recycling waste and reducing emissions from its plants. Kansai Nerolac Paints is the rare paint company that takes responsibility for the entire product life-cycle -- from design to disposal. It has developed environment-friendly paints by reducing the use of pollutants like metal-based pigments & dyes. It is also active in health, education and community development. Moser Baer has set up a trust for improving health and livelihoods and works at creating jobs and digital literacy. It supports recycling of plastics, anti-piracy, activity, education and disaster management. Tata Steel works systematically to 'minimize damage and negative impact of its processes' and has several projects focused on improving the quality of life of those connected with the company as well local rural and tribal communities. It has high standards of environment management including emission reduction and waste disposal. TCS is committed `to minimize waste generation from business operations through renewable and recycling initiatives that include building `green' facilities, rainwater harvesting and recycling IT hardware'. It also designed CHILD Net, a call-receiving software and database for CHILDLINE's 24-hour helpline. Its `computer based functional literacy' software has benefited over 100,000 people.
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Pg. 66 of MoneyLife Magazine issue dated 21 May 2009
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Titan Industries considers CSR `an internal process reflecting the soul of the Company'. It provides significant employment opportunities to the physically challenged, outsources manufacture of watch components through self-help groups and is active in education and healthcare projects.
CSR SHOULD ME MADE MANDATORY?3
The government is likely to make it mandatory for big companies to earmark at least 2 per cent of their net profit for corporate social responsibility (CSR) activities in the new Companies Bill. The new provisions will apply to companies having a net worth of Rs 500 crore or more, or a turnover of Rs 1,000 crore or more, or a net profit of Rs 5 crore or more, in a year.4 Directors will have to make suitable disclosures in their reports to members. The committee feels that separate disclosures in their annual reports indicating the company policy as well as the specific steps taken for CSR will be a sufficient check on non-compliance. Apex industry body FICCI has suggested that the government should encourage companies to invest in corporate social responsibility initiatives by giving tax incentives instead of making it binding. "The government may consider incentivizing CSR (corporate social responsibility) activities perhaps through tax incentives...create a market for CSR credits like carbon credits," Ficci said in its CSR draft on which the Ministry of Corporate Affairs has invited comments from the public by December 10. The industry body also suggested that CSR activities should not be made mandatory and companies should be encouraged to adopt the norms on voluntary basis. If such a compulsion (of CSR) is imposed on companies, it may turn counter- productive as companies may resort to camouflaging activities to meet such regulations, particularly, during recessionary periods and economic downturns.
CSR can cloak irresponsibility
Some corporations have won acclaim and awards for CSR. Two of them were BP, the oil giant, and Goldman Sachs, the big investment bank. But BP has just created the greatest environmental disaster in history at its out-of-control Macondo deep-sea well, ruining bird and marine life as well as the livelihoods of fishermen and beach hotels. Goldman Sachs has just paid a whopping fine of $550 million for wrongful investment advice that trapped its clients. They are, rightly, being castigated today. But this
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http://www.telegraphindia.com/1100911/jsp/business/story_12923055.jsp CSR voluntary Guidelines 2009, MCA, Govt of India
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shows how shallow the CSR concept is, and how it can cloak cynicism and irresponsibility. ThomsonReuters columnist Chrystia Freeland has called CSR ?a fetish encouraged by the philanthropies that feed off it, and funded by the corporate executives who find that it serves their bottom line.? Consumers have been willing to pay more and buy more from companies with a CSR halo. Now they should know better.
CHALLENGES TO CSR INITIATIVES IN INDIA
• Lack of community participation in CSR activities: This is largely attributable to the fact that there exists little or no knowledge about CSR within the local communities. Moreover there is a lack of communication between the company and the community at the grassroots. • Need to build local capacities: There is a need for capacity building of the local non-governmental organizations as there is serious dearth of trained and efficient organizations that can effectively contribute to the ongoing CSR activities initiated by companies. This seriously compromises scaling up of CSR initiatives and subsequently limits the scope of such activities. • Issues of transparency: The reported lack of transparency negatively which impacts the process of trust building between companies and local communities is the key to the success of any CSR initiative at the local level. • Non-availability of well organized non-governmental organizations: It is also reported that there is non-availability of well organized nongovernmental organizations in remote and rural areas that can assess and identify real needs of the community and work along with companies to ensure successful implementation of CSR activities. • Visibility factor: The role of media in highlighting good cases of successful CSR initiatives is welcomed as it spreads good stories and sensitizes the local population about various ongoing CSR initiatives of companies. This apparent influence of gaining visibility and branding exercise often leads many non-governmental organizations to involve themselves in event-based programmes; in the process, they often miss out on meaningful grassroots interventions. • Narrow perception towards CSR initiatives: Non-governmental organizations and Government agencies usually define CSR initiatives more as donor-driven as local in approach. As a result, they find it hard to decide whether they should participate in such activities at all in medium and long run. • Non-availability of clear CSR guidelines: It is found that the scale of CSR initiatives of companies should depend upon their business size and profile. In other words, the bigger the company, the larger its CSR programme. • Lack of consensus on implementing CSR issues: This lack of consensus often results in duplication of activities by corporate houses in areas of their intervention. This results in a competitive spirit between
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local implementing agencies rather than building collaborative approaches on issues. This factor limits company‘s abilities to undertake impact assessment of their initiatives from time to time.
SOME EXAMPLES OF CSR BY DIFFERENT COMPANIES IN INDIA: 1) CSR at Hindustan Unilever Ltd (HUL)
"Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business" - Niall Fitzerald, Former CEO, Unilever Hindustan Unilever Ltd.,Formerly known as Hindustan lever Ltd, the Indian Subsidiary of Dutch Consume rproducts multinational Unilevel N.V. is one of the major player in FMCG Segment. It has product portfolio ranging from Value of Rs.5 to Rs.500. It has very wide array of products like Toothpaste, Icecreams, Detergents, Cosmetics and list is endless. The Compnay is not only popular for its extensive presence in Indian markets but is also known for its Project Shakti, Swasthya Abhiyan and few more. The Mission Statement of HUL itself speaks how well thier strategy is well engrosed and inclined with the Socially resposibility. The Statement is ?Do Well By Doing Good?. This implies their objective is not only to grow but to grow along with the growth of all stakeholders including the general public. But it is per se necessary to analyse and evaluate how well the balance is maintained between doing good and doing well and are they both well muddled up? Recently HUL lanched its ?Sustainibility Plan? envisaging the Blue print and roadmap of the company‘s efforts towards being Sustainable. It also has a Sustainibility report published every year evaluating its efforts towards being sustainable towards environment in an year. According to Mr. Harish Manwani, President, Asia and Africa, Unilever, one of the objective of Sustainbility Plan is to decouple business growth with environmental impact5. This is possible by reducing the environmental impact across the value chain. From the point where raw material is sourced to conversion to packaging and stretched till consumption of goods, efforts are made to make the product not only environmentally sustainable but also to contribute towards its growth. For Instance, according to Sustainability Plan, the objective of the Company is to source 100% of its Raw Material from Sustainable sources by 2020. At present it consumes 7.5 Million tonnes of Agricultural products as raw materials. In the year 2009-10, HUL was able to reduce water consumption in Manufacturing by 60% and reduce wastage by 70%.6
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The Forbes Indian Show, CNBC TV 18, Sunday, 21 Nov 2010 “Unilever to halve ecological impact by 2020”- CNBC TV 18, The Forbes Indian Show
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Even at stage of Manufacturing, the machines used and process adopted are also leading to reduce the environmental impact. For Instance the machine used to manufacture the Detergent Soap cakes has ability te reduce Carbon emmisions. The initiative is even streched to Customer end. One of the objectives of HUL towads sustainbility; as reiterated by Mr. Manwani , ?Encouraging Customers in taking Small Actions which leads to large impact?. According to him, if they are successful in encouraging and convincing customes in taking small steps, this would lead to a very large impact since they have a very large customer base. The same is revalidated on the cover page of the Sustainbility report of HUL for 2009-10, “Small Actions, Big Difference”. HUL has inculcated the Sustainibility as primary objective in its product innovation too. ?Every Innovation Programme is alligned with social mission and environmental impact?. For Instance the Major Selling detergent Powder Surf-Excel with the help of R&D, was developed to save 2 Buckets of water. As it is a said fact, water is scarce resource and needs to be conserved, saving of 2 buckets of water on each use by each consumer will lead a very huge saving of water. This not only saves environment but also leads to growth of company by enhancing the market share of the company as the product is liked by consumers. HUL is not only focused towards Sustainable growth, but also has made many efforts towards economical and social development of segment lying at the BOP. For Instance Project Samriddhi, which was focused towards water harvesting in Silvasa (one of the locations where HUL has a Plant). This initiative has helped the farmers of that locale to grow 2 crops in a year leading to increase in income of farmer from Rs 36000 to Rs 85000 per annum7. Also it has made initiatives by providing vocational courses to differently abled persons in rural areas in fields of Computer Training, Sewing, electrical courses. This enables them to earn thier livelihood as they are issued a certificate after completion of course. With the objective of inculcating belief in CSR in employees, HUL has started Project Sankalp. It has tied up with 70 NGOs where employees get opprtunity to volunteer for different tasks like teaching children, awareness campaign etc. The company‘s HIV and AIDS program, initiated in 2002, focuses on protecting the health of its skilled young workforce. Its factories have HIV and AIDS awareness initiatives built into their health and safety training. The program also extends beyond the workplace, spreading awareness about HIV and AIDS through two vehicles: Project Sanjivini, which provides medical care to the poor in remote villages of eastern India, and Project Shakti, which focuses on microcredit, training, and empowerment of women. Here HUL makes good use of its expertise in distribution and management to work with rural entrepreneurs in spreading awareness.
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“CSR: Looking at the philanthropic side of HUL”- Heart of Business, CNBC TV 18
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Project Shakti, started with seed capital of $ 23 Million to tap India‘s Vast , geographical dispersed rural population of villagers.8 The project Shakti‘s primary objective was to expand its presence and strenghten the rural distribution channel. But this was not limited to its business motive, but has also provided opportunity of employment to rural men and women since they act as distributors of HUL products in rural areas. They are tagged as Shakti Micro entreprenuers. They are given training at initial stages as well as periodical review is done to improve their performance. In the year 2001 with just 17 entreprenuers, the Project Shakti has now become a network of 45000 entreprenuers. Since the 1980s HUL has directed most of its investments to designated backward areas and zero-industry districts, helping to revive several sick industries and develop local entrepreneurship. The company also focuses on a range of community support activities, including water management, empowerment of women, and health and hygiene education. Initiatives like Lifebouy Swasthya Abhiyan started by HUL to create awareness about health and importance of washing hands has reached to approx 7.5million users. According to Mr.Manwani, this campaign save more life than any other initiative since it targeted on base root of illness. The HIV and AIDS policy of HUL In 2004, HUL formulated an HIV and AIDS policy that assures employees of a non-discriminatory work environment and assistance in seeking appropriate treatment that is currently available. The overarching goal is to protect employees‘ health. The policy was drafted by HUL‘s Occupational Health Division under the Unilever HIV and AIDS guidelines and communicated to all employees as well as to supply chain partners, including suppliers and distributors.The program HUL launched its HIV and AIDS initiative in 2002 in the units in its southern region. In 2004 it extended the initiative to its eastern and western regions and in early 2005 to its northern region. The basic approach in all HUL units includes reaching out to all employees and business partners through HIV and AIDS awareness programs and educating people living with HIV. But to ensure commitment from those implementing the program, the company allows each unit to improve or modify the program according to local needs. In areas with a high national prevalence of HIV, such as those in the western and southern states, HUL units support comprehensive workplace programs that cover non-discrimination, prevention education, access to counselling and testing, and care, support, and treatment. Units in areas which are less affected by the epidemic support community initiatives in HIV and AIDS education and awareness along with other health issues. Some HUL units have established voluntary blood testing for HIV antibodies.
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‘Innovation from the Inside Out”; MIT Sloan Management Review, Summer 2009
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To ensure the success of the program at the unit level, each HUL unit integrates shop floor employees and managers into the core team, made up of the unit head, human resource personnel, shop floor manager, and a workforce representative. This core team is sensitized to HIV and AIDS issues at the beginning of the unit‘s program. The team participates in the quarterly review of the program undertaken in each unit, meeting with other partners if needed. Thus HUL very succesfully implements the sutainibility mission from its Grassroot level of organisation and practiced at every step of valuechain. This has also helped HUL in saving costs, like innovation in packaging which in environmental friendly has also helped in cost savings. Also the initiatives taken by HUL will also influance other pears to follow to remain competitive. According to Mr. Nitin Paranjpe, (CEO, MD, HUL), “People Needs and aspirations are at the heart of HUL’s Business9”.
2) CSR at Coca Cola India
Awards received by Coca Cola India The following awards have been received by Coca Cola India for its CSR efforts: ? ? ? The Golden Peacock Global Award for Corporate Social Responsibility for three consecutive years The Bombay Stock Exchange Award for Social and Corporate Governance 2009 The Gold Award For Its Citizenship Efforts
CSR Initiatives of Coca-Cola India The Coca-Cola Company exists to benefit and refresh everyone who is touched by our business. ?The Coca-Cola Promise’ Coca-Cola India has always emphasized the importance of before-profit responsible practice. The company has a global tradition of serving local communities by providing financial assistance as well as goods and services, including technical advice during production stages. Assistance is provided to local suppliers enabling them to meet the company's rigorous quality standards. Modern technology and skills have also been made available to bottlers and suppliers. In this way, the company contributes not only to the development of the soft drink industry, but also to the development of related industries and the economy as a whole. However, five years ago a ?Corporate Citizenship Programme? was launched, which has consisted of a series of CSR projects in communities close to company plants. In addition to the sponsoring of sports events and cultural festivals, Coca-Cola India has sponsored projects in education, health, and water conservation. These are detailed below.
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“CSR: Looking at the philanthropic side of HUL”- Heart of Business, CNBC TV 18
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Attacks on Coca Cola India Coca-Cola India‘s commitment to after-profit investment in local communities cannot be denied. The company has worked alongside many government and non-governmental organisations in funding various education, healthcare and water conservation initiatives that target poor communities and those most in need of help. However, criticisms of the company‘s before-profit practice in India have increased over the course of the last year. Two such incidents that have received a lot of criticism are that in Kala Dera and Kerala. 1) Drought worsened by Coca Cola in Kala Dera Coca-Cola have been accused of worsening drought in India. Kala Dera, in Rajasthan has been recently declared a drought disaster area by the Indian Government. The drought has been worsened by CocaCola‘s operations in the region. Its controversial plant draws on the same groundwater sources as used by the local community and farmers and the water levels had fallen 5.83 meters in a year – a huge drop that was never seen before. The local community wanted Coca-Cola to shut down its operations in Kala Dera, as it had significantly contributed to the falling water tables. Coca-Cola’s response to the situation in Kala Dera Coca-Cola India has worked with the government, local bodies & the entire community of Kaladera in the area of water conservation. This includes restoration of historical step wells over 400 years old, providing water to the people of the community. The company has constructed over 140 recharge shafts in the area. Rain water harvesting projects have been set up in various schools, government bodies & the community areas.
2) Protest against the Coca Cola’s plant in Kerala There have been reports of sit-ins and other protests directed at the Coca-Cola plant in Kerala, Southern India. Much of this relates to water conservation. It has been claimed that; o The Kerala plant has drained in excess of one million litres of water per day reducing local supplies leaving many families and farmers with dry wells. This in turn has created unemployment as coconut groves and vegetable crops have dried up.
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The industrial waste (or ?sludge?) that Coca-Cola sells or gives to local farmers as fertiliser due to its high phosphate content has been alleged to be of no chemical use to agricultural land. It is also alleged that the sludge is dumped in dry riverbed which has led to concern over the safety of local drinking water supplies. One report, having analysed water from around the plant, claims that it contains high levels of cadmium and lead – both of which pose serious health risks to flora and fauna and can affect the growth of children‘s nervous systems, and cause cancer, kidney and liver damage in any age group.
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Conclusion Coca-Cola India‘s ?after-profit? initiatives are undoubtedly serving poor communities and benefiting many people. Yet there is still great dissatisfaction regarding the company‘s ?before-profit? behaviour, whether the allegations are valid or otherwise. Indeed, the manner in which a company makes its money is still more important to people in the vicinity of a plant than how the company spends or reinvests its profits later. Therefore CSR might be better understood as charitable after-profit investments only when before-profit policy and practice is environmentally, and socially, responsible.
3) CSR at Infosys Technologies Ltd10
Infosys Foundation has worked to support the underprivileged in society and enrich their lives. Promoted by Infosys Technologies Limited, the Foundation began its work in Karnataka, India, gradually extending its activities to the states of Tamil Nadu, Andhra Pradesh, Maharashtra, Orissa and Punjab. It has successfully implemented projects in four key focus areas: Healthcare Making high-quality healthcare the norm is an ongoing challenge. Since its inception, the Foundation has initiated several activities that benefit the rural and urban poor. Apart from constructing hospital wards, donating hi-tech equipment and organizing health camps, the Foundation also distributes medicines to economically-weaker sections in remote areas. The Foundation constructed the Infosys Super-specialty Hospital on the Sassoon Hospital premises in Pune. This hospital caters to poor patients It has spread its donations for medicines to aged and poor patients suffering from cancer, leprosy, defects of the heart/kidney, mental illnesses and other major disorders. It helps this section meet substantial medical expenses and assures them of a steady source of income for their treatment
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http://www.karmayog.org/csr500companies/csr500companies_8249.htm
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The Foundation installed office management software at the KEM Hospital in Mumbai. This enables the hospital to manage store requirements, keep accounts as well as publish hospital papers and other information on the Web
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Additional blocks have been built at the Swami Sivananda Centenary Charitable Hospital at Tirunelveli in Tamil Nadu Additional blocks have also been built at the Bangalore Diabetic Hospital A dharmashala was constructed at the Kidwai Cancer Institute in Bangalore The Foundation constructed a pediatric hospital at the Capitol Hospital in Bhubaneswar, which caters to poor patients. A CT-scan machine was also donated to the hospital Additional wards were built at the Swami Shivananda Memorial Charitable Hospital in Pattumadai, Tamil Nadu The annex to a cancer hospital in Kancheepuram, Tamil Nadu was added A hospital was built for tribals at H.D. Kote, Mysore. In Bellary, a hospital was constructed to treat patients with brain fever The Foundation air-conditioned the burns ward of the Victoria Hospital, Bangalore
A high-energy linear accelerator unit was purchased for the treatment of cancer patients at the Chennai Cancer Institute in Tamil Nadu. The Foundation has donated ambulances to medical centers and hospitals in Kanchipuram, Tamil Nadu, Gadag, B.R. Hills and South Canara in Karnataka and Kalahandi, Chandrashekarpur and Bhubaneswar in Orissa. It has also donated high-tech surgical equipment to hospitals located at Mysore, Bijapur, Bellary and Hubli in Karnataka. Incubators, air conditioner units, neonatal resuscitation equipment and refrigerators have been given to the Bowring Hospital, Bangalore, while ultrasound scanners have been donated to the Ramakrishna Ashram, Coorg and the Bangalore Government Hospital. The Foundation has made donations to the Drug Foundation for Nuclear Medicine at the cancer hospital in Miraj and the Kidwai Hospital in Bangalore. A leprosy camp was conducted, and relief work was carried out at the Leprosy Colony in Gulbarga Social rehabilitation and rural upliftment Whether it is organizing an annual mela that empowers destitute women or building orphanages that give children a better life, the Foundation's activities address the needs of society's most neglected. The Foundation has organized unique annual melas in different parts of the country, including Bangalore and Sedam in Karnataka, and Chennai in Tamil Nadu, to distribute sewing machines to destitute women and help them earn a livelihood. Prior to the mela, the Foundation even holds tailoring classes and provides materials for the same at some centers. The Foundation has conducted relief work after natural disasters. Apart from monetary contributions, it believes in assessing the real needs of those affected and contributing accordingly. It has worked in the tsunami-affected areas of Tamil Nadu and the Andaman Islands, earthquake-affected areas of Kutch, cyclone-devastated areas of Orissa, tribal areas of Kalahandi in Orissa and drought-hit areas of Andhra Pradesh The Foundation made a donation towards the mid-day meal program of the Akshaya Patra Foundation, Bangalore, for poor children in North Karnataka. It established counseling centers to rehabilitate marginalized devadasis in North Karnataka The Foundation 15
has offered compensation to families whose bread-winners have served in our Defence Forces and died fighting for the country. The Foundation worked with the Red Cross Society to supply aid equipment to the physically challenged in rural areas and economically weaker sections of Karnataka The Foundation offers monetary aid to the Divine Life Society, which is based in the Himalayas. The Society helps senior citizens and destitutes, often picking them up from the street and looking after them with the help of volunteers, some of whom are foreign tourists in the region The Foundation improved a rehabilitation center in Chennai for mentally retarded women The Foundation has improved the lives of children with leprosy and those living on the streets, and in slums The Foundation has constructed: Hostel buildings for under-privileged students at Ramakrishna Mission centers in Tamil Nadu, Orissa, Maharashtra and Andhra Pradesh Orphanages in rural areas of these states, to provide shelter to children of local communities. A free girls' hostel at Maharshi Karve Sthree Shikshana Samsthe, Hingne, Pune A girls' hostel for the blind in Banapur, Orissa, Jagruthi Blind School in Pune, Sri Ramana Maharshi Academy for the Blind in Bangalore and Sri Sharada Andhara Vikasa Kendra in Shimoga, Karnataka Relief shelters in several parts of Orissa The Sri Ramakrishna Students' Home in Chennai, Tamil Nadu The Shakthidhama Destitute Center for Women in Mysore, Karnataka A hall for people with physical disabilities in Belgaum, Karnataka. Learning and education Basic education links the children, whether of the cities or villages, to all that is best and lasting in India," said Mahatma Gandhi. At no time have his words been more prophetic, than now. In a world where education has become the biggest differentiating factor, the Foundation offers an edge to deprived and rural students, through its activities In what is one of the largest rural education programs in the country, the foundation has donated 10,200 sets of books in Karnataka alone, and in Andhra Pradesh, Karnataka, Orissa and Kerala, under its Library for Every Rural School project. Through this program, the Foundation has set up more than 10,150 libraries in rural government schools. A minimum of 200 books, depending on the strength of the school, is provided. Each set has around 200 to 250 books. The cost of each set ranges between Rs. 2,000 and Rs. 3,000. Books on various subjects, including science, history, mathematics, general knowledge, grammar, literature, geography, vocational training and fiction have been donated to cater to the interests of students in all age groups To simplify the standard of computer education for students in rural areas, a separate book has been written and is being distributed under the library project. This book has also been translated into Hindi, Tamil and Telugu In another innovative project that facilitates higher learning, the Foundation has set up libraries in Hubli and Bangalore, that can be accessed by under-privileged students. These well-equipped libraries have the latest books prescribed in hi-tech streams like medicine and engineering. All a student has to do is pay a deposit of Rs 800 for unlimited use of the library through his or her education To identify and help students in dire need, the Foundation works with Prerna, an NGO in Raichur and Bangalore, and Vidya Poshak in Dharwad, to distribute scholarships to poor students. With the help of these organizations, the Foundation reaches out to deserving students across Karnataka The Foundation has also made donations towards the reconstruction of old school buildings. For instance, 14 government schools in slum areas of Hyderabad were reconstructed The Foundation has also renovated the Gandhinagar, Kottara St. Peter's School and Kapikad Zilla Panchayat schools in Mangalore, Karnataka It also contributes towards the construction of additional classrooms, school funds/corpus funds, school furniture, equipment and so on, especially in 16
backward areas The Foundation recently purchased an index Braille printer for the Sharada Devi Andhara Vikasa Kendra in Shimoga, Karnataka The Foundation donated study material, including science kits, to 20 schools in rural Karnataka Donations have also been made towards computer centers in rural areas of Karnataka The Foundation works with various organizations in Maharastra, Tamil Nadu and Orissa, to facilitate the education of slum children in in these states The Foundation collaborated with the Center for Environment Education (CEE), Bangalore, for the orientation of teachers specializing in science and the environment. The Center developed training material on water. During the program, it linked the Science and Social Studies curriculum with the environmental perspective. Around 15 camps were held in various parts of Karnataka over the last 3 years. Totally, around 1,000 teachers were trained It helps the Bangalore Association for Science towards the development and maintenance of the planetarium in Bangalore, including funding of the sky-theater program at the planetarium The Foundation constructed a science center at a rural school in the Kolar District of Karnataka, a one-of-its-kind center in the entire district. It caters to the students of the school, as well as schools in the neighboring villages It made a contribution to fund new self-employment courses at post graduation and post matriculation levels at the Nrupathunga Educational Institute in Hyderabad. Art and culture Preserving our rich heritage and honoring our artisans are some of the ways the Infosys Foundation contributes to this spaceThe Foundation has helped revive the art of the weavers of Pochampalli village in Andhra PradeshIt helps organize cultural programs to promote artists in rural areas of Karnataka and Andhra PradeshIt traces and honors artistes from different parts of India. Today, the scope of the foundation's activities has widened to identifying under-privileged artists from different walks of like, be it writers, painters, poets or musicians, who don't have access to contacts or help. It assists them on a "need" basis, offering financial assistance, promoting their art, or helping them receive much-deserved recognition. It organizes programs like puppet shows and other cultural events to encourage artistes and performers in rural areas of Karnataka and Andhra Pradesh, and offers them financial assistance to carry forward their art.In Karnataka, the Gamaka form of music was fast disappearing. A few years ago, The Foundation coordinated a project to donate more than 200 sets - comprising a Gamaka cassette and record player - to 100 rural schools in Karnataka, to bring the dying art form back to lifeIt has sponsored art exhibitions and performing arts programs in Dharwad and Bangalore in Karnataka. Awards for the Foundation ? ? ? 'Computer World Award - 2001' - International Level 'The Economic Times Corporate Citizenship Award,' on behalf of the Infosys Foundation, for outstanding philanthropic work - National Level Amount spent on CSR : No information regarding the amount spent on CSR was available on the homepage . 17
THE FLIP SIDE OF CSR
Corporate houses everywhere owe their existence to the patronage of the society at large. When they receive something from the society, they are morally bound to give back something to it as well. But, more often than not, this is not the case. Industrial progress and economic development have taken a massive toll in terms of human lives and destroyed livelihoods. Yet, corporates do very little to undo the damage. There is also also a flip side to the CSR initiatives taken by Indian corporates. The corporate philanthropic efforts always have an angle and the corporations often exploit philanthropy as a form of stealth merchandising –a cheap way both to reinforce their brand and associate with ?culture? and ?good works?. A few companies have been discussed as examples in this regard in the following table followed by a detailed case on Coca-Cola India. CSR’s Effects on Brand Image S. No. 1. Mode of CSR Donating nominal cash to highly cash starved organizations such as district football associations, durga puja mandaps, ganpati festivals to carry the brand name on a wide footprint Charitable dispensaries, charitable rest rooms, charitable schools and water wells through NGOs sponsored by family run businesses but not through the company‘s financials directly. Examples Coca-Cola Effects on the Brand Sense of deprivation and being cash starved felt by recipients as earlier without the nominal cash there was no activity. The brand enjoys no ruboff at all. It is the individual that appears greater, which is really the aim of the donation
2.
Ghanshyam Das Birla‘s businesses, Aditya Birla Group
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Extensive public relations and advertising to make the brand appear to be involved in more CSR activities than it really is. Blatant and deliberate CSR activities, which go in the opposite direction of the brand‘s business activities or operations
Pepsi, Unilever
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Shell
Vague sense of brand being involved in a lot of good stuff but brand users can never pin down specific details. The consumer is left with the feeling that the brand has something to hide.
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RECOMMENDATIONS
In order to crystal gaze the future of CSR in India and take time bound steps to mainstream it, we would like to highlight certain recommendations; they correspondingly call for necessary and appropriate steps to be initiated to put CSR on firmer ground. They are the following: ? It is found that there is a need for creation of awareness about CSR amongst the general public to make CSR initiatives more effective. ? It is recommended that appropriate steps be undertaken to address the issue of building effective amongst all important stakeholders for the successful implementation of CSR initiatives. As a result, a long term and sustainable perspective on CSR activities should be built into the existing and future strategies of all stakeholders involved in CSR initiatives. ? It is noted that only medium and large corporate houses are involved in CSR activities, that too in selected geographical areas. To address the issue of reaching out to wider geographical areas, the involvement of small and medium enterprises (SMEs) in the CSR domain will be essential. ? It is found that corporate houses and non-governmental organizations should actively consider pooling their resources and building synergies to implement best CSR practices to scale up projects and innovate new ones to reach out to more beneficiaries. ? It is found that many CSR initiatives and programmes are taken up in urban areas and localities. As a result, the impact of such projects does not reach the needy and the poor in the rural areas. So equally CSR should be implemented after all, more than 70 per cent people still reside in rural India. ? It is noted that the Government should consider rewarding and recognizing corporate houses and their partner non-governmental organizations implementing projects that effectively cover the poor and the underprivileged. Incentives to be offered to the private sector to strengthen their good work
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REFERENCES:
1. CSR Initiatives of Indian Companies- A Study, By Dr. V.V.S.K. Prasad, The Hindu College 2. Corporate Social Responsibility Practices In India, Indu Jain, Suri Sehgal and U.V. Somayajulu 3. Are Corporate Citizens Capable of Doing Enough for Community Development?, By Dilip Cherian 4. Trust and Corporate Social Responsibility: Lessons from India, Ashwani Singla and Prema Sagar 5. Interviews of Mr. Nitin Paranjpe, (CEO, MD, HUL) and Mr. Harish Manwani, President, Asia and Africa, Unilever, on CNBC TV 18 Websites: http://www.moneycontrol.com/video/business/unilever-to-halve-ecological-impact-by-2020harish-manwani_500360.html http://www.moneycontrol.com/video/business/csr-looking-atphilanthropicsidehul_476171.html http://www.moneycontrol.com/video/special-videos/should-corporate-social-responsibility-bemade-mandatory_478170.html http://www.moneycontrol.com/video/management/corporates-hard-at-work-at-grassrootlevels_249812.html http://www.moneycontrol.com/video/business/yc-deveshwar-making-itc-sociallyresponsible_462608.html http://www.ibef.org/artdispview.aspx?art_id=26104&cat_id=926&in=84 http://www.moneycontrol.com/video/business/nr-narayana-murthythebusinessbusiness_453827.html http://www.wcfcg.net/gcsr_proceedings/Thomas%20Antony.pdf http://www.interpraxis.com/quotes.htm
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doc_373059517.docx
The documentation of the project is to provide an understanding of the role played by corporate and public sector undertakings (PSUs) in Corporate Social Responsibility (CSR)domain and their perceptions about it
CSR
ARE INDIANS COMPANIES WALKING THE TALK?
Table of Contents
EXECUTIVE SUMMARY .......................................................................................................................... 2 REVIEW OF LITERATURE ....................................................................................................................... 3 TNS Research Study ................................................................................................................................. 3 KPMG Study............................................................................................................................................. 3 The Ground Reality - Another Research................................................................................................... 4 INTRODUCTION ........................................................................................................................................ 5 CSR VS CORPORATE PHILANTHROPY................................................................................................. 5 CSR IN INDIA ............................................................................................................................................. 5 CSR SHOULD ME MADE MANDATORY? ............................................................................................. 7 CSR can cloak irresponsibility.................................................................................................................. 7 CHALLENGES TO CSR INITIATIVES IN INDIA.................................................................................... 8 SOME EXAMPLES OF CSR BY DIFFERENT COMPANIES IN INDIA: ............................................... 9 1) 2) CSR at Hindustan Unilever Ltd (HUL) ............................................................................................ 9 CSR at Coca Cola India .................................................................................................................. 12
3) CSR at Infosys Technologies Ltd ...................................................................................................... 14 THE FLIP SIDE OF CSR ........................................................................................................................... 18 RECOMMENDATIONS ............................................................................................................................ 19 REFERENCES: .......................................................................................................................................... 20 1
EXECUTIVE SUMMARY
Corporate social responsibility (CSR) isn‘t new to Indian companies and several business houses have been spearheading community initiatives even before independence. A simple Google search will show you that some of India‘s finest business houses — the Tata‘s, the Birla‘s, ACC, Bajaj — were giving back to the community much before the term CSR found its way into boardroom dictionaries. For Indian businesses CSR can be a source of opportunity, innovation, and competitive advantage while at the same time providing with the opportunity to actively contribute to the sustainable development. Thus, in addition to the obvious, direct, benefits of CSR enjoyed by the ultimate beneficiaries of responsible corporate practices, CSR brings benefits to the companies that practice it. The objective of the project is to provide an understanding of the role played by corporate and public sector undertakings (PSUs) in CSR domain and their perceptions about it. We want to show that are corporate houses in India truly grappling with the balancing act between profits and philanthropy or is CSR merely a fad.
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REVIEW OF LITERATURE
TNS Research Study
According to a research study conducted by TNS India in collaboration with the Times of India, the following results were obtained: ? ? ? A paltry 8 per cent of the 500 top Indian companies have a meaningful CSR programme that reaches out not just to employees, but to the vicinity and to society at large. Among the rest, an estimated 46 per cent are involved in a limited way in CSR initiatives benefiting employees and occasionally, the immediate vicinity. A whopping 46 per cent have no CSR programme currently – and we are talking here of India's largest listed companies.
KPMG Study
A recent KPMG study among 27 Indian companies showed the following results: ? ? A mere 8% mentioned their social expenditures in their annual reports Only 25% filed CSR reports at all.
An estimated 100 corporate foundations and 25 foreign firms are involved in CSR activities in India, but statistics on input and output are elusive. ? ? The Indian corporate sector spent Rs30,000 crore on social expenditure during the last financial year, up from Rs17,500 crore the previous year. Quoting from a government report companies drew total exemptions of Rs5,500 crore under income-tax laws last year.
These figures sound improbable as Indian companies still do not distinguish between philanthropy and internal practices to benefit stakeholders such as employees and community.
Observations from CSR Ratings of top companies in India
? ? ? Only Few Indian companies (from this study) publish a Corporate Sustainability Report to measure and assess the impact of their business on the environment. Very few companies openly state the processes followed by them, the damage caused by these processes, and the steps taken to minimize this damage. Very few companies state how much they spend on CSR. There is no mention of the amount spent in any of their balance sheets or annual reports. Most companies just list and describe their CSR activities and seem to be spending minimal amounts on CSR. 3
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Very few companies are engaged in CSR activities in the local communities where they are based. Very few companies have a clearly defined CSR philosophy. Most implement their CSR in an adhoc manner, unconnected with their business process. Most companies spread their CSR funds thinly across many activities, thus somewhere losing the purpose of undertaking that activity. Generally speaking, most companies seem either unaware or don‘t care about CSR. However, all companies can be considered to be an upward learning curve with respect to CSR and it is expected that the situation will improve. Most companies appear reluctant to themselves fulfill their CSR unless it is mandatory by law.
The Ground Reality - Another Research
According to a recent survey on Corporates and CSR, 82.4% of Indian companies seem to agree strongly that the business means the maximization of benefits, making money and do your job well. No company disagrees on this point. 17.6% agree that they disagree more equal. 76.5% say that business is making money. 88.2% strongly agree as well as appropriate which is all about social responsibility while 17.8% disagree more than agree. ? ? Place for Ethics in Business: 88.3% believe there is room for ethics in business. However, a small majority, 11.8% feel strongly that there is no place for ethics in business. Business and economic attitude: 82.3% believe that business need only economic attitude while 17.7% respondents felt that the business does not need an economic attitude, sense of balance that is needed. Social policies: 70.6% of corporates connecting with the community social activities, and 23.5% through the specific NGO. (52.9%) have only half a policy in the social net. 64.7% feel that social responsibility is to the community and their employees. 29.4% feel that social responsibility is only to its employees. 35.3% have not taken any village or social organization. The company's participation in various activities is mixed, with no clear pattern emerges. Donations: 70.6% feel that the donor of a donation will not increase the company's image. However, 29.4% give the donation for tax benefit.
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However, the cross tabulation of these two parameters revealed that only 71.4% respondents who said the donations do not improve their image while 28.6% respondents said that giving donations enhance image building. About 50% contribute to a social cause, spend as long-term investment. 70% responded that he did not donate for the tax.
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INTRODUCTION
In earlier days philanthropy was the biggest driver of community programmes and perhaps the only other reason companies would initiate welfare schemes was the publicity it fetched for their promoters. In the past two decades, however, the whole concept of giving back has undergone a sea change, both in terms of the scope of activity and for the different set of reasons that drive CSR. Companies are no longer doing it simply to grab headlines or for the ?feel-good? factor and recognize globalization as a bigger impetus. Today, social responsibility is more about how companies align their values and move towards a social cause taking the investors, suppliers, regulators, employees and the society as a whole. Simply put, CSR today is basically linked to the broader issue of corporate governance. “The business of business is to add value to the society while being profitable.”- Narayan Murthy, Chairman Infosys.
CSR VS CORPORATE PHILANTHROPY1
CSR is often confused with corporate philanthropy. But there is a big difference between the two; donating for causes and charities falls under the ambit of philanthropy but CSR is an assimilation of all these and more. Thus, a company in spite of making heavy donations for various charitable causes might be rated rather lowly on the CSR index simply because it does not treat it employees well. In his bestseller, "The Living Company," author Arie de Geus compares an organization to an individual. He talks about how individuals are often conscious about the environment they exist in. Similarly, corporate entities need pay attention to the overall economic condition of the locality they function in. De Geus compares two organizations, namely one that is centered on maximizing gains and the other that is conscious about social upliftment. With time, the company that was solely concerned about profitability withers away, while the second one continues to change with times and lives on for much longer span.
CSR IN INDIA
Most companies carry out CSR programmes as part of their charitable activities, but a few like the ITC, Bharti Airtel and the State Bank of India have included them in their business models. Several companies have also used CSR activities for brand building purposes. The ITC e-chaupal, The Hindustan Unilever Shakti women village entrepreneur, the Tata Kisan Sansar were are successful examples of this.
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http://dqindia.ciol.com/content/industrymarket/focus/2006/206120901.asp
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At a time when ethical investing and corporate social responsibility (CSR) have become buzzwords, Karmayo2g found that 493 of India's top 1,000 companies had almost no CSR activities (Level 0). Another 450 were in the bottom half (Level 1&2) while only 45 (5%) made it even to Level 3. This is a sorry reflection of corporate India's commitment to social responsibility; even if one makes allowances for the fact that some companies may not be reporting their philanthropy in annual reports. Here are the top 10, in alphabetical order. ? ACC is among the first to include commitment to environment protection as a corporate objective. It is active in quarry rehabilitation afforestation, energy conservation, and emission control and water management. Ballarpur Industries is committed to `conduct its business in a responsible manner'; its farm forestry project develops nurseries, supports tree plantation and provides seeds to farmers at subsidized rates. It also helps marginal farmers to take up pulpwood plantation on degraded land through joint liability groups. HDFC's core business itself has a strong CSR element in promoting home ownership. It supports home ownership through micro-finance for low-income housing. It partners over 160 organizations in community development, education, environment and child welfare projects. Infosys focuses on education and research. It has equipped libraries of 10,150 rural schools in Karnataka. The Infosys Foundation supports activities like rehabilitation of old school buildings, helping artists and artisans to preserve and revive cultural and artistic traditions and aiding the destitute and economically disadvantaged. Jubilant Organosys is active in healthcare and education, energy conservation, water management, recycling waste and reducing emissions from its plants. Kansai Nerolac Paints is the rare paint company that takes responsibility for the entire product life-cycle -- from design to disposal. It has developed environment-friendly paints by reducing the use of pollutants like metal-based pigments & dyes. It is also active in health, education and community development. Moser Baer has set up a trust for improving health and livelihoods and works at creating jobs and digital literacy. It supports recycling of plastics, anti-piracy, activity, education and disaster management. Tata Steel works systematically to 'minimize damage and negative impact of its processes' and has several projects focused on improving the quality of life of those connected with the company as well local rural and tribal communities. It has high standards of environment management including emission reduction and waste disposal. TCS is committed `to minimize waste generation from business operations through renewable and recycling initiatives that include building `green' facilities, rainwater harvesting and recycling IT hardware'. It also designed CHILD Net, a call-receiving software and database for CHILDLINE's 24-hour helpline. Its `computer based functional literacy' software has benefited over 100,000 people.
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Pg. 66 of MoneyLife Magazine issue dated 21 May 2009
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Titan Industries considers CSR `an internal process reflecting the soul of the Company'. It provides significant employment opportunities to the physically challenged, outsources manufacture of watch components through self-help groups and is active in education and healthcare projects.
CSR SHOULD ME MADE MANDATORY?3
The government is likely to make it mandatory for big companies to earmark at least 2 per cent of their net profit for corporate social responsibility (CSR) activities in the new Companies Bill. The new provisions will apply to companies having a net worth of Rs 500 crore or more, or a turnover of Rs 1,000 crore or more, or a net profit of Rs 5 crore or more, in a year.4 Directors will have to make suitable disclosures in their reports to members. The committee feels that separate disclosures in their annual reports indicating the company policy as well as the specific steps taken for CSR will be a sufficient check on non-compliance. Apex industry body FICCI has suggested that the government should encourage companies to invest in corporate social responsibility initiatives by giving tax incentives instead of making it binding. "The government may consider incentivizing CSR (corporate social responsibility) activities perhaps through tax incentives...create a market for CSR credits like carbon credits," Ficci said in its CSR draft on which the Ministry of Corporate Affairs has invited comments from the public by December 10. The industry body also suggested that CSR activities should not be made mandatory and companies should be encouraged to adopt the norms on voluntary basis. If such a compulsion (of CSR) is imposed on companies, it may turn counter- productive as companies may resort to camouflaging activities to meet such regulations, particularly, during recessionary periods and economic downturns.
CSR can cloak irresponsibility
Some corporations have won acclaim and awards for CSR. Two of them were BP, the oil giant, and Goldman Sachs, the big investment bank. But BP has just created the greatest environmental disaster in history at its out-of-control Macondo deep-sea well, ruining bird and marine life as well as the livelihoods of fishermen and beach hotels. Goldman Sachs has just paid a whopping fine of $550 million for wrongful investment advice that trapped its clients. They are, rightly, being castigated today. But this
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http://www.telegraphindia.com/1100911/jsp/business/story_12923055.jsp CSR voluntary Guidelines 2009, MCA, Govt of India
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shows how shallow the CSR concept is, and how it can cloak cynicism and irresponsibility. ThomsonReuters columnist Chrystia Freeland has called CSR ?a fetish encouraged by the philanthropies that feed off it, and funded by the corporate executives who find that it serves their bottom line.? Consumers have been willing to pay more and buy more from companies with a CSR halo. Now they should know better.
CHALLENGES TO CSR INITIATIVES IN INDIA
• Lack of community participation in CSR activities: This is largely attributable to the fact that there exists little or no knowledge about CSR within the local communities. Moreover there is a lack of communication between the company and the community at the grassroots. • Need to build local capacities: There is a need for capacity building of the local non-governmental organizations as there is serious dearth of trained and efficient organizations that can effectively contribute to the ongoing CSR activities initiated by companies. This seriously compromises scaling up of CSR initiatives and subsequently limits the scope of such activities. • Issues of transparency: The reported lack of transparency negatively which impacts the process of trust building between companies and local communities is the key to the success of any CSR initiative at the local level. • Non-availability of well organized non-governmental organizations: It is also reported that there is non-availability of well organized nongovernmental organizations in remote and rural areas that can assess and identify real needs of the community and work along with companies to ensure successful implementation of CSR activities. • Visibility factor: The role of media in highlighting good cases of successful CSR initiatives is welcomed as it spreads good stories and sensitizes the local population about various ongoing CSR initiatives of companies. This apparent influence of gaining visibility and branding exercise often leads many non-governmental organizations to involve themselves in event-based programmes; in the process, they often miss out on meaningful grassroots interventions. • Narrow perception towards CSR initiatives: Non-governmental organizations and Government agencies usually define CSR initiatives more as donor-driven as local in approach. As a result, they find it hard to decide whether they should participate in such activities at all in medium and long run. • Non-availability of clear CSR guidelines: It is found that the scale of CSR initiatives of companies should depend upon their business size and profile. In other words, the bigger the company, the larger its CSR programme. • Lack of consensus on implementing CSR issues: This lack of consensus often results in duplication of activities by corporate houses in areas of their intervention. This results in a competitive spirit between
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local implementing agencies rather than building collaborative approaches on issues. This factor limits company‘s abilities to undertake impact assessment of their initiatives from time to time.
SOME EXAMPLES OF CSR BY DIFFERENT COMPANIES IN INDIA: 1) CSR at Hindustan Unilever Ltd (HUL)
"Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business" - Niall Fitzerald, Former CEO, Unilever Hindustan Unilever Ltd.,Formerly known as Hindustan lever Ltd, the Indian Subsidiary of Dutch Consume rproducts multinational Unilevel N.V. is one of the major player in FMCG Segment. It has product portfolio ranging from Value of Rs.5 to Rs.500. It has very wide array of products like Toothpaste, Icecreams, Detergents, Cosmetics and list is endless. The Compnay is not only popular for its extensive presence in Indian markets but is also known for its Project Shakti, Swasthya Abhiyan and few more. The Mission Statement of HUL itself speaks how well thier strategy is well engrosed and inclined with the Socially resposibility. The Statement is ?Do Well By Doing Good?. This implies their objective is not only to grow but to grow along with the growth of all stakeholders including the general public. But it is per se necessary to analyse and evaluate how well the balance is maintained between doing good and doing well and are they both well muddled up? Recently HUL lanched its ?Sustainibility Plan? envisaging the Blue print and roadmap of the company‘s efforts towards being Sustainable. It also has a Sustainibility report published every year evaluating its efforts towards being sustainable towards environment in an year. According to Mr. Harish Manwani, President, Asia and Africa, Unilever, one of the objective of Sustainbility Plan is to decouple business growth with environmental impact5. This is possible by reducing the environmental impact across the value chain. From the point where raw material is sourced to conversion to packaging and stretched till consumption of goods, efforts are made to make the product not only environmentally sustainable but also to contribute towards its growth. For Instance, according to Sustainability Plan, the objective of the Company is to source 100% of its Raw Material from Sustainable sources by 2020. At present it consumes 7.5 Million tonnes of Agricultural products as raw materials. In the year 2009-10, HUL was able to reduce water consumption in Manufacturing by 60% and reduce wastage by 70%.6
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The Forbes Indian Show, CNBC TV 18, Sunday, 21 Nov 2010 “Unilever to halve ecological impact by 2020”- CNBC TV 18, The Forbes Indian Show
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Even at stage of Manufacturing, the machines used and process adopted are also leading to reduce the environmental impact. For Instance the machine used to manufacture the Detergent Soap cakes has ability te reduce Carbon emmisions. The initiative is even streched to Customer end. One of the objectives of HUL towads sustainbility; as reiterated by Mr. Manwani , ?Encouraging Customers in taking Small Actions which leads to large impact?. According to him, if they are successful in encouraging and convincing customes in taking small steps, this would lead to a very large impact since they have a very large customer base. The same is revalidated on the cover page of the Sustainbility report of HUL for 2009-10, “Small Actions, Big Difference”. HUL has inculcated the Sustainibility as primary objective in its product innovation too. ?Every Innovation Programme is alligned with social mission and environmental impact?. For Instance the Major Selling detergent Powder Surf-Excel with the help of R&D, was developed to save 2 Buckets of water. As it is a said fact, water is scarce resource and needs to be conserved, saving of 2 buckets of water on each use by each consumer will lead a very huge saving of water. This not only saves environment but also leads to growth of company by enhancing the market share of the company as the product is liked by consumers. HUL is not only focused towards Sustainable growth, but also has made many efforts towards economical and social development of segment lying at the BOP. For Instance Project Samriddhi, which was focused towards water harvesting in Silvasa (one of the locations where HUL has a Plant). This initiative has helped the farmers of that locale to grow 2 crops in a year leading to increase in income of farmer from Rs 36000 to Rs 85000 per annum7. Also it has made initiatives by providing vocational courses to differently abled persons in rural areas in fields of Computer Training, Sewing, electrical courses. This enables them to earn thier livelihood as they are issued a certificate after completion of course. With the objective of inculcating belief in CSR in employees, HUL has started Project Sankalp. It has tied up with 70 NGOs where employees get opprtunity to volunteer for different tasks like teaching children, awareness campaign etc. The company‘s HIV and AIDS program, initiated in 2002, focuses on protecting the health of its skilled young workforce. Its factories have HIV and AIDS awareness initiatives built into their health and safety training. The program also extends beyond the workplace, spreading awareness about HIV and AIDS through two vehicles: Project Sanjivini, which provides medical care to the poor in remote villages of eastern India, and Project Shakti, which focuses on microcredit, training, and empowerment of women. Here HUL makes good use of its expertise in distribution and management to work with rural entrepreneurs in spreading awareness.
7
“CSR: Looking at the philanthropic side of HUL”- Heart of Business, CNBC TV 18
10
Project Shakti, started with seed capital of $ 23 Million to tap India‘s Vast , geographical dispersed rural population of villagers.8 The project Shakti‘s primary objective was to expand its presence and strenghten the rural distribution channel. But this was not limited to its business motive, but has also provided opportunity of employment to rural men and women since they act as distributors of HUL products in rural areas. They are tagged as Shakti Micro entreprenuers. They are given training at initial stages as well as periodical review is done to improve their performance. In the year 2001 with just 17 entreprenuers, the Project Shakti has now become a network of 45000 entreprenuers. Since the 1980s HUL has directed most of its investments to designated backward areas and zero-industry districts, helping to revive several sick industries and develop local entrepreneurship. The company also focuses on a range of community support activities, including water management, empowerment of women, and health and hygiene education. Initiatives like Lifebouy Swasthya Abhiyan started by HUL to create awareness about health and importance of washing hands has reached to approx 7.5million users. According to Mr.Manwani, this campaign save more life than any other initiative since it targeted on base root of illness. The HIV and AIDS policy of HUL In 2004, HUL formulated an HIV and AIDS policy that assures employees of a non-discriminatory work environment and assistance in seeking appropriate treatment that is currently available. The overarching goal is to protect employees‘ health. The policy was drafted by HUL‘s Occupational Health Division under the Unilever HIV and AIDS guidelines and communicated to all employees as well as to supply chain partners, including suppliers and distributors.The program HUL launched its HIV and AIDS initiative in 2002 in the units in its southern region. In 2004 it extended the initiative to its eastern and western regions and in early 2005 to its northern region. The basic approach in all HUL units includes reaching out to all employees and business partners through HIV and AIDS awareness programs and educating people living with HIV. But to ensure commitment from those implementing the program, the company allows each unit to improve or modify the program according to local needs. In areas with a high national prevalence of HIV, such as those in the western and southern states, HUL units support comprehensive workplace programs that cover non-discrimination, prevention education, access to counselling and testing, and care, support, and treatment. Units in areas which are less affected by the epidemic support community initiatives in HIV and AIDS education and awareness along with other health issues. Some HUL units have established voluntary blood testing for HIV antibodies.
8
‘Innovation from the Inside Out”; MIT Sloan Management Review, Summer 2009
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To ensure the success of the program at the unit level, each HUL unit integrates shop floor employees and managers into the core team, made up of the unit head, human resource personnel, shop floor manager, and a workforce representative. This core team is sensitized to HIV and AIDS issues at the beginning of the unit‘s program. The team participates in the quarterly review of the program undertaken in each unit, meeting with other partners if needed. Thus HUL very succesfully implements the sutainibility mission from its Grassroot level of organisation and practiced at every step of valuechain. This has also helped HUL in saving costs, like innovation in packaging which in environmental friendly has also helped in cost savings. Also the initiatives taken by HUL will also influance other pears to follow to remain competitive. According to Mr. Nitin Paranjpe, (CEO, MD, HUL), “People Needs and aspirations are at the heart of HUL’s Business9”.
2) CSR at Coca Cola India
Awards received by Coca Cola India The following awards have been received by Coca Cola India for its CSR efforts: ? ? ? The Golden Peacock Global Award for Corporate Social Responsibility for three consecutive years The Bombay Stock Exchange Award for Social and Corporate Governance 2009 The Gold Award For Its Citizenship Efforts
CSR Initiatives of Coca-Cola India The Coca-Cola Company exists to benefit and refresh everyone who is touched by our business. ?The Coca-Cola Promise’ Coca-Cola India has always emphasized the importance of before-profit responsible practice. The company has a global tradition of serving local communities by providing financial assistance as well as goods and services, including technical advice during production stages. Assistance is provided to local suppliers enabling them to meet the company's rigorous quality standards. Modern technology and skills have also been made available to bottlers and suppliers. In this way, the company contributes not only to the development of the soft drink industry, but also to the development of related industries and the economy as a whole. However, five years ago a ?Corporate Citizenship Programme? was launched, which has consisted of a series of CSR projects in communities close to company plants. In addition to the sponsoring of sports events and cultural festivals, Coca-Cola India has sponsored projects in education, health, and water conservation. These are detailed below.
9
“CSR: Looking at the philanthropic side of HUL”- Heart of Business, CNBC TV 18
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Attacks on Coca Cola India Coca-Cola India‘s commitment to after-profit investment in local communities cannot be denied. The company has worked alongside many government and non-governmental organisations in funding various education, healthcare and water conservation initiatives that target poor communities and those most in need of help. However, criticisms of the company‘s before-profit practice in India have increased over the course of the last year. Two such incidents that have received a lot of criticism are that in Kala Dera and Kerala. 1) Drought worsened by Coca Cola in Kala Dera Coca-Cola have been accused of worsening drought in India. Kala Dera, in Rajasthan has been recently declared a drought disaster area by the Indian Government. The drought has been worsened by CocaCola‘s operations in the region. Its controversial plant draws on the same groundwater sources as used by the local community and farmers and the water levels had fallen 5.83 meters in a year – a huge drop that was never seen before. The local community wanted Coca-Cola to shut down its operations in Kala Dera, as it had significantly contributed to the falling water tables. Coca-Cola’s response to the situation in Kala Dera Coca-Cola India has worked with the government, local bodies & the entire community of Kaladera in the area of water conservation. This includes restoration of historical step wells over 400 years old, providing water to the people of the community. The company has constructed over 140 recharge shafts in the area. Rain water harvesting projects have been set up in various schools, government bodies & the community areas.
2) Protest against the Coca Cola’s plant in Kerala There have been reports of sit-ins and other protests directed at the Coca-Cola plant in Kerala, Southern India. Much of this relates to water conservation. It has been claimed that; o The Kerala plant has drained in excess of one million litres of water per day reducing local supplies leaving many families and farmers with dry wells. This in turn has created unemployment as coconut groves and vegetable crops have dried up.
o
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o
The industrial waste (or ?sludge?) that Coca-Cola sells or gives to local farmers as fertiliser due to its high phosphate content has been alleged to be of no chemical use to agricultural land. It is also alleged that the sludge is dumped in dry riverbed which has led to concern over the safety of local drinking water supplies. One report, having analysed water from around the plant, claims that it contains high levels of cadmium and lead – both of which pose serious health risks to flora and fauna and can affect the growth of children‘s nervous systems, and cause cancer, kidney and liver damage in any age group.
o
Conclusion Coca-Cola India‘s ?after-profit? initiatives are undoubtedly serving poor communities and benefiting many people. Yet there is still great dissatisfaction regarding the company‘s ?before-profit? behaviour, whether the allegations are valid or otherwise. Indeed, the manner in which a company makes its money is still more important to people in the vicinity of a plant than how the company spends or reinvests its profits later. Therefore CSR might be better understood as charitable after-profit investments only when before-profit policy and practice is environmentally, and socially, responsible.
3) CSR at Infosys Technologies Ltd10
Infosys Foundation has worked to support the underprivileged in society and enrich their lives. Promoted by Infosys Technologies Limited, the Foundation began its work in Karnataka, India, gradually extending its activities to the states of Tamil Nadu, Andhra Pradesh, Maharashtra, Orissa and Punjab. It has successfully implemented projects in four key focus areas: Healthcare Making high-quality healthcare the norm is an ongoing challenge. Since its inception, the Foundation has initiated several activities that benefit the rural and urban poor. Apart from constructing hospital wards, donating hi-tech equipment and organizing health camps, the Foundation also distributes medicines to economically-weaker sections in remote areas. The Foundation constructed the Infosys Super-specialty Hospital on the Sassoon Hospital premises in Pune. This hospital caters to poor patients It has spread its donations for medicines to aged and poor patients suffering from cancer, leprosy, defects of the heart/kidney, mental illnesses and other major disorders. It helps this section meet substantial medical expenses and assures them of a steady source of income for their treatment
10
http://www.karmayog.org/csr500companies/csr500companies_8249.htm
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The Foundation installed office management software at the KEM Hospital in Mumbai. This enables the hospital to manage store requirements, keep accounts as well as publish hospital papers and other information on the Web
? ? ? ? ? ? ? ? ?
Additional blocks have been built at the Swami Sivananda Centenary Charitable Hospital at Tirunelveli in Tamil Nadu Additional blocks have also been built at the Bangalore Diabetic Hospital A dharmashala was constructed at the Kidwai Cancer Institute in Bangalore The Foundation constructed a pediatric hospital at the Capitol Hospital in Bhubaneswar, which caters to poor patients. A CT-scan machine was also donated to the hospital Additional wards were built at the Swami Shivananda Memorial Charitable Hospital in Pattumadai, Tamil Nadu The annex to a cancer hospital in Kancheepuram, Tamil Nadu was added A hospital was built for tribals at H.D. Kote, Mysore. In Bellary, a hospital was constructed to treat patients with brain fever The Foundation air-conditioned the burns ward of the Victoria Hospital, Bangalore
A high-energy linear accelerator unit was purchased for the treatment of cancer patients at the Chennai Cancer Institute in Tamil Nadu. The Foundation has donated ambulances to medical centers and hospitals in Kanchipuram, Tamil Nadu, Gadag, B.R. Hills and South Canara in Karnataka and Kalahandi, Chandrashekarpur and Bhubaneswar in Orissa. It has also donated high-tech surgical equipment to hospitals located at Mysore, Bijapur, Bellary and Hubli in Karnataka. Incubators, air conditioner units, neonatal resuscitation equipment and refrigerators have been given to the Bowring Hospital, Bangalore, while ultrasound scanners have been donated to the Ramakrishna Ashram, Coorg and the Bangalore Government Hospital. The Foundation has made donations to the Drug Foundation for Nuclear Medicine at the cancer hospital in Miraj and the Kidwai Hospital in Bangalore. A leprosy camp was conducted, and relief work was carried out at the Leprosy Colony in Gulbarga Social rehabilitation and rural upliftment Whether it is organizing an annual mela that empowers destitute women or building orphanages that give children a better life, the Foundation's activities address the needs of society's most neglected. The Foundation has organized unique annual melas in different parts of the country, including Bangalore and Sedam in Karnataka, and Chennai in Tamil Nadu, to distribute sewing machines to destitute women and help them earn a livelihood. Prior to the mela, the Foundation even holds tailoring classes and provides materials for the same at some centers. The Foundation has conducted relief work after natural disasters. Apart from monetary contributions, it believes in assessing the real needs of those affected and contributing accordingly. It has worked in the tsunami-affected areas of Tamil Nadu and the Andaman Islands, earthquake-affected areas of Kutch, cyclone-devastated areas of Orissa, tribal areas of Kalahandi in Orissa and drought-hit areas of Andhra Pradesh The Foundation made a donation towards the mid-day meal program of the Akshaya Patra Foundation, Bangalore, for poor children in North Karnataka. It established counseling centers to rehabilitate marginalized devadasis in North Karnataka The Foundation 15
has offered compensation to families whose bread-winners have served in our Defence Forces and died fighting for the country. The Foundation worked with the Red Cross Society to supply aid equipment to the physically challenged in rural areas and economically weaker sections of Karnataka The Foundation offers monetary aid to the Divine Life Society, which is based in the Himalayas. The Society helps senior citizens and destitutes, often picking them up from the street and looking after them with the help of volunteers, some of whom are foreign tourists in the region The Foundation improved a rehabilitation center in Chennai for mentally retarded women The Foundation has improved the lives of children with leprosy and those living on the streets, and in slums The Foundation has constructed: Hostel buildings for under-privileged students at Ramakrishna Mission centers in Tamil Nadu, Orissa, Maharashtra and Andhra Pradesh Orphanages in rural areas of these states, to provide shelter to children of local communities. A free girls' hostel at Maharshi Karve Sthree Shikshana Samsthe, Hingne, Pune A girls' hostel for the blind in Banapur, Orissa, Jagruthi Blind School in Pune, Sri Ramana Maharshi Academy for the Blind in Bangalore and Sri Sharada Andhara Vikasa Kendra in Shimoga, Karnataka Relief shelters in several parts of Orissa The Sri Ramakrishna Students' Home in Chennai, Tamil Nadu The Shakthidhama Destitute Center for Women in Mysore, Karnataka A hall for people with physical disabilities in Belgaum, Karnataka. Learning and education Basic education links the children, whether of the cities or villages, to all that is best and lasting in India," said Mahatma Gandhi. At no time have his words been more prophetic, than now. In a world where education has become the biggest differentiating factor, the Foundation offers an edge to deprived and rural students, through its activities In what is one of the largest rural education programs in the country, the foundation has donated 10,200 sets of books in Karnataka alone, and in Andhra Pradesh, Karnataka, Orissa and Kerala, under its Library for Every Rural School project. Through this program, the Foundation has set up more than 10,150 libraries in rural government schools. A minimum of 200 books, depending on the strength of the school, is provided. Each set has around 200 to 250 books. The cost of each set ranges between Rs. 2,000 and Rs. 3,000. Books on various subjects, including science, history, mathematics, general knowledge, grammar, literature, geography, vocational training and fiction have been donated to cater to the interests of students in all age groups To simplify the standard of computer education for students in rural areas, a separate book has been written and is being distributed under the library project. This book has also been translated into Hindi, Tamil and Telugu In another innovative project that facilitates higher learning, the Foundation has set up libraries in Hubli and Bangalore, that can be accessed by under-privileged students. These well-equipped libraries have the latest books prescribed in hi-tech streams like medicine and engineering. All a student has to do is pay a deposit of Rs 800 for unlimited use of the library through his or her education To identify and help students in dire need, the Foundation works with Prerna, an NGO in Raichur and Bangalore, and Vidya Poshak in Dharwad, to distribute scholarships to poor students. With the help of these organizations, the Foundation reaches out to deserving students across Karnataka The Foundation has also made donations towards the reconstruction of old school buildings. For instance, 14 government schools in slum areas of Hyderabad were reconstructed The Foundation has also renovated the Gandhinagar, Kottara St. Peter's School and Kapikad Zilla Panchayat schools in Mangalore, Karnataka It also contributes towards the construction of additional classrooms, school funds/corpus funds, school furniture, equipment and so on, especially in 16
backward areas The Foundation recently purchased an index Braille printer for the Sharada Devi Andhara Vikasa Kendra in Shimoga, Karnataka The Foundation donated study material, including science kits, to 20 schools in rural Karnataka Donations have also been made towards computer centers in rural areas of Karnataka The Foundation works with various organizations in Maharastra, Tamil Nadu and Orissa, to facilitate the education of slum children in in these states The Foundation collaborated with the Center for Environment Education (CEE), Bangalore, for the orientation of teachers specializing in science and the environment. The Center developed training material on water. During the program, it linked the Science and Social Studies curriculum with the environmental perspective. Around 15 camps were held in various parts of Karnataka over the last 3 years. Totally, around 1,000 teachers were trained It helps the Bangalore Association for Science towards the development and maintenance of the planetarium in Bangalore, including funding of the sky-theater program at the planetarium The Foundation constructed a science center at a rural school in the Kolar District of Karnataka, a one-of-its-kind center in the entire district. It caters to the students of the school, as well as schools in the neighboring villages It made a contribution to fund new self-employment courses at post graduation and post matriculation levels at the Nrupathunga Educational Institute in Hyderabad. Art and culture Preserving our rich heritage and honoring our artisans are some of the ways the Infosys Foundation contributes to this spaceThe Foundation has helped revive the art of the weavers of Pochampalli village in Andhra PradeshIt helps organize cultural programs to promote artists in rural areas of Karnataka and Andhra PradeshIt traces and honors artistes from different parts of India. Today, the scope of the foundation's activities has widened to identifying under-privileged artists from different walks of like, be it writers, painters, poets or musicians, who don't have access to contacts or help. It assists them on a "need" basis, offering financial assistance, promoting their art, or helping them receive much-deserved recognition. It organizes programs like puppet shows and other cultural events to encourage artistes and performers in rural areas of Karnataka and Andhra Pradesh, and offers them financial assistance to carry forward their art.In Karnataka, the Gamaka form of music was fast disappearing. A few years ago, The Foundation coordinated a project to donate more than 200 sets - comprising a Gamaka cassette and record player - to 100 rural schools in Karnataka, to bring the dying art form back to lifeIt has sponsored art exhibitions and performing arts programs in Dharwad and Bangalore in Karnataka. Awards for the Foundation ? ? ? 'Computer World Award - 2001' - International Level 'The Economic Times Corporate Citizenship Award,' on behalf of the Infosys Foundation, for outstanding philanthropic work - National Level Amount spent on CSR : No information regarding the amount spent on CSR was available on the homepage . 17
THE FLIP SIDE OF CSR
Corporate houses everywhere owe their existence to the patronage of the society at large. When they receive something from the society, they are morally bound to give back something to it as well. But, more often than not, this is not the case. Industrial progress and economic development have taken a massive toll in terms of human lives and destroyed livelihoods. Yet, corporates do very little to undo the damage. There is also also a flip side to the CSR initiatives taken by Indian corporates. The corporate philanthropic efforts always have an angle and the corporations often exploit philanthropy as a form of stealth merchandising –a cheap way both to reinforce their brand and associate with ?culture? and ?good works?. A few companies have been discussed as examples in this regard in the following table followed by a detailed case on Coca-Cola India. CSR’s Effects on Brand Image S. No. 1. Mode of CSR Donating nominal cash to highly cash starved organizations such as district football associations, durga puja mandaps, ganpati festivals to carry the brand name on a wide footprint Charitable dispensaries, charitable rest rooms, charitable schools and water wells through NGOs sponsored by family run businesses but not through the company‘s financials directly. Examples Coca-Cola Effects on the Brand Sense of deprivation and being cash starved felt by recipients as earlier without the nominal cash there was no activity. The brand enjoys no ruboff at all. It is the individual that appears greater, which is really the aim of the donation
2.
Ghanshyam Das Birla‘s businesses, Aditya Birla Group
3.
Extensive public relations and advertising to make the brand appear to be involved in more CSR activities than it really is. Blatant and deliberate CSR activities, which go in the opposite direction of the brand‘s business activities or operations
Pepsi, Unilever
4.
Shell
Vague sense of brand being involved in a lot of good stuff but brand users can never pin down specific details. The consumer is left with the feeling that the brand has something to hide.
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RECOMMENDATIONS
In order to crystal gaze the future of CSR in India and take time bound steps to mainstream it, we would like to highlight certain recommendations; they correspondingly call for necessary and appropriate steps to be initiated to put CSR on firmer ground. They are the following: ? It is found that there is a need for creation of awareness about CSR amongst the general public to make CSR initiatives more effective. ? It is recommended that appropriate steps be undertaken to address the issue of building effective amongst all important stakeholders for the successful implementation of CSR initiatives. As a result, a long term and sustainable perspective on CSR activities should be built into the existing and future strategies of all stakeholders involved in CSR initiatives. ? It is noted that only medium and large corporate houses are involved in CSR activities, that too in selected geographical areas. To address the issue of reaching out to wider geographical areas, the involvement of small and medium enterprises (SMEs) in the CSR domain will be essential. ? It is found that corporate houses and non-governmental organizations should actively consider pooling their resources and building synergies to implement best CSR practices to scale up projects and innovate new ones to reach out to more beneficiaries. ? It is found that many CSR initiatives and programmes are taken up in urban areas and localities. As a result, the impact of such projects does not reach the needy and the poor in the rural areas. So equally CSR should be implemented after all, more than 70 per cent people still reside in rural India. ? It is noted that the Government should consider rewarding and recognizing corporate houses and their partner non-governmental organizations implementing projects that effectively cover the poor and the underprivileged. Incentives to be offered to the private sector to strengthen their good work
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REFERENCES:
1. CSR Initiatives of Indian Companies- A Study, By Dr. V.V.S.K. Prasad, The Hindu College 2. Corporate Social Responsibility Practices In India, Indu Jain, Suri Sehgal and U.V. Somayajulu 3. Are Corporate Citizens Capable of Doing Enough for Community Development?, By Dilip Cherian 4. Trust and Corporate Social Responsibility: Lessons from India, Ashwani Singla and Prema Sagar 5. Interviews of Mr. Nitin Paranjpe, (CEO, MD, HUL) and Mr. Harish Manwani, President, Asia and Africa, Unilever, on CNBC TV 18 Websites: http://www.moneycontrol.com/video/business/unilever-to-halve-ecological-impact-by-2020harish-manwani_500360.html http://www.moneycontrol.com/video/business/csr-looking-atphilanthropicsidehul_476171.html http://www.moneycontrol.com/video/special-videos/should-corporate-social-responsibility-bemade-mandatory_478170.html http://www.moneycontrol.com/video/management/corporates-hard-at-work-at-grassrootlevels_249812.html http://www.moneycontrol.com/video/business/yc-deveshwar-making-itc-sociallyresponsible_462608.html http://www.ibef.org/artdispview.aspx?art_id=26104&cat_id=926&in=84 http://www.moneycontrol.com/video/business/nr-narayana-murthythebusinessbusiness_453827.html http://www.wcfcg.net/gcsr_proceedings/Thomas%20Antony.pdf http://www.interpraxis.com/quotes.htm
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