CORPORATE SOCIAL RESPONSIBILITY: THE JOURNEY HAS JUS BEGUN!

TUSHAR GUPTAMONIKA SUKHIJA

FROM THE AUTHORS DESK

“The message is that whatever we do today will have an impact on future generations. It’s not just my kids or your kids or somebody else’s. It’s future generations. We should not hope that the walls we build to protect ourselves will be tall enough to protect our children. Only with very conscious effort we can make the world for them a better place to live…even if we address our most selfish needs we have to address the needs of the next generation. That’s what CSR is about.”

“Corporate Social Responsibility is not a cosmetic; it must be rooted in our values. It must make a difference to the way we do our business.”

BY WILLIAM FORD

“A good company delivers excellent products and services, and a great company does all that and strives to make the world a better place”

CSR- MEANING AND DEFINITION

Philip Kotler defines CSR as “a commitment to improve community well being through discretionary business practices and contributions of corporate resources”.

The totality of CSR can be best understood by three words:

Corporate- means organized business; Social- means everything dealing with

people, the society at large; Responsibility- means accountability with

two.

CSR ALSO KNOWN AS… Sustainable Development Corporate Citizenship Triple Bottom Line Business Ethics Sustainable Business Practices

HISTORICAL PERSPECTIVE

From the 1950’s to the present the concept of CSR has gained considerable acceptance and the meaning has been broadened to include additional components

Frederick provides expanded framework forunderstanding the evolution of CSR concept Divided into 4 phases: Corporate social stewardship, 1950s – 1960s Corporate social responsiveness, 1960s – 1970s Corporate/business ethics, 1980s – 1990s Corporate/global citizenship, 1990s – 2000s

PHASES OF CSR

CONCEPT

In developing countries like India the concept of CSR is not new, the term may be as it gained popularity only in the new millennium.

Major corporate including TATA, ICICI, Reliance, Bajaj have involved themselves in CSR activities today.

But TATA had an early orientation towards service to society.

THREE BOTTOM LINE CONCEPT IN CSR

The triple bottom line popularly described by the 3 Ps: People, Planet and Profit, serves to assist corporations in assisting sustainable development holistically. CSR is distinct from simply donating to NPOs. For example, CSR activities focused on improving educational opportunities and facilities in local region not only help build the brand image of the business but may ultimately help improve the quality of the human resource pool available for hire, ensuring the long term success of the business.

TRIPLE BOTTOM LINE FRAMEWORK OF CSR

•Companies try to maximize shareholder value.

Economic Sphere(Profit)

•Eco-friendly products, recycling waste and reduce carbon footprint.

Environmental Sphere(Planet)

•Address the local issues, infrastructure development and community well-being.

Social Sphere(People)

COMPANIES ACT 2013 Companies having turnover of over 10 billion

rupees or net worth of 5 billion rupees or recorded net profit of 50 million rupees and above are expected to spend 2 per cent of their average net profits in the preceding three financial years towards CSR.

Rough estimates by experts have pegged the amount that could be spent annually on CSR activities to be around 100 billion rupees.

With the new legislation these activities could be done more systematic manner with definite budgets.

MEASUREMENT AND EVALUATION OF THE CORPORATE

PERFORMANCE

It is evident that a business unit has obligation to its employees ,owners, buyers, government, environment and others. The question now is how to assess the performance of a particular business unit with regard to social responsibility? The answer is “Social Audit”.

A sort of breakthrough was achieved in 1979 when TISCO appointed committee to conduct the social audit. The company’s first audit report was published in 1980. the event was historic and was a vibrant example for other industries as well.

BROAD AREAS OF CSR ACTIVITIES

Spectrum of CSR

•No employment

•No concern for indirect effect (land, water, air)

•Destruction of agricultural land

•Not willing to listen to other stakeholders

•Appropriate of land not being compensated

•Non compliance of rule of land

•Taking care of workers

•Low dependence on non renewable resources

•High awareness about CSR initiatives

•Land compensation

•Increased monitoring system

•Environment responsibility

Poor CSR Good CSR

DRIVERS OF CSR

The shrinking role of government

Demands for greater disclosure

Growing investor pressure

Competitive markets

BENEFITS OF CSR… Strengthened brand positioning.

Enhanced corporate image. Increased ability to attract, motivate, and

retain employees.

Increased sales and market share.

Increased appeal to investors and financial analysts.

CSR PERSPECTIVES AND BEST PRACTICES

TCS( Tata Consultancy Services) (Tata Group)TCS has developed a database for Child Line,

which supports children in distress in 54 centers in India, all using volunteers from among its employees; it has also designed and implemented a ‘computer-based functional literacy project, a unique idea that enables to learn to read using low-end computers and a breakthrough solution within 30 to 40 hours, over 2-3 months. The TATA group has evolved the Tata Index a matrix through which Tata companies can implement, direct and measure the social development endeavors they are involved in.

TITAN

Another instance is the association of Titan with “Management of enterprise and Development of Women” (MEADOW) which actually began as a program to help combat female infanticide in the Dharmapuri district, and to improvise the standard of living of women in these communities. In 1995, Titan joined hands with Myrada, an NGO that works on social causes , and started a bracelet making unit. Satisfied with the professionalism displayed by these women, Titan then decided to convert the bracelet unit into a privately held company, one owned and run by women themselves. MEADOW, a subsidiary unit that is solely dedicated to women’s empowerment, was thus born.

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KPMG

There are a few companies which have been committed themselves for the cause they have taken up like KPMG has initiated educational program – SIFE.

SIFE is an international NPO that works with leaders in business and higher education to mobilize university students to make a difference in their communities while developing the skills to become socially responsible business leaders. Participating students from teams on their university campuses and apply business concepts to develop outreach projects that improve the quality of life and standard of living for people i need.

INFOSYS

Infosys CSR team has been distributing books and stationary to underprivileged children across Karnataka since 2001. in 2009, the team touched more than 45000 lives, including the tribal community. Prayaas, their Chandigarh CSR team, organized a program where 60 children from Panchkula slum show cased their creativity in group activities. The children were imparted training in social etiquette. Infocions partner with Nethrodaya, an NGO that works with visually challenged children.

NIIT

NIIT has used its IT expertise for its hole in the wall experiment, where children from slums learn to use computers with a touch screen.

HUL HUL has started a project Shakti in which it

economically empowered rural women with entrepreneur spirit, rural women became distributor of HUL popularly known as Shakti Ammas. This is a best example of profitable CSR.

CORPORATE INTERVENTIONS TOWARDS WOMEN EMPOWERMENT

Company /Groups

Major Institutions established

Trusts/ Foundations

Fields Supported

TATAS •Indian Institute of science•Tata institute of social sciences•Tata memorial rural cancer project•National centre for performing arts•Tata energy research institute etc.

Lady tata memorial trustJRD tata trustJamsetji tata trustSri Dorabji tata trustSir Ratan Tata trust

Scientific researchEducationHealth and community servicesMedicineRural developmentenergy

BIRLAS •Bits pilani & ranchi•Birla institute of scientific research•Birla eco research foundation

Hindustan charity trustBM Birla foundationKM Birla foundationMP Birla foundation

Technical educationAgricultural researchMedicineArt and culture

CSR INTIATIVES OF SOME INDIAN GROUPS

COMPANIES IN TROUBLE Dasani mineral water (part of Coca-

Cola).

Coke’s sale was banned as the result of tests, including those by the Indian government, which found high concentrations of pesticides.

Communities in India , around Coca-Cola's bottling operations are facing severe shortages of water as a result of the cola major sucking huge amounts of water from the common groundwater source.

ISSUES AT NIKE Nike Inc producer of footwear, clothing,

equipment and accessory products for the sports and athletic market.

Selling to approximately 19,000 retail accounts in the US, and approximately 140 countries around the world.

Manufactures in China, Taiwan, Korea, Indonesia , Mexico as well as in the US and in Italy.

People working - 58% young adults between 20 and 24 years old, 83% - women.

Few have work-related skills when they arrive at the factory.

Issue- unhealthy work environment – debates heated arguments, verbal abuse , 7.8% of workers reported receiving unwelcome sexual comments, and 3.3% reported being physically abused. In addition, sexual trade practices in recruitment and promotion were reported

BY J.R.D. TATA

“No Success or achievement in material terms is worthwhile unless it serves the needs or interests of community”

“THANK YOU”