Successful examples of Corporate Social Responsibility
Amita V Joseph ,Director Business and Community Foundation
Today, we live in an age in which companies, businesses and society are more connected and interactive than ever before in the past. Corporations are more aware of their role towards the society. They are expected to be responsible bodies that feel a sense duty towards common resources and the environment that comes with a growing realisation that they, as an integral part of this society themselves, can contribute to its development. Consumers and citizens' campaigns can make all the difference. This is the foundation thought behind the golden handshake between tripartite relationships between companies, society and nation; Corporate Social Responsibility or CR.
Corporate Social Responsibility (CSR) is expected today to be integral to business today. It has also become the password to not only overcome competition but to ensure sustainable growth. It has been supported by the shareholders and stakeholders, by and large encompassing the whole community. CSR in truth is the alignment of business operations with social values. It takes into account the interests of stakeholders in the company's business policies and actions. It focuses on the social, environmental, and financial success of a company - the so-called “triple bottom line” - with the aim to achieve social development while achieving business success. More importantly, CSR is the point of convergence of various initiatives aimed at ensuring socio-economic development of the community as a whole in a credible and sustainable manner.
In comparison to individual efforts and even just government effort is not enough to bring changes at a pace that it is actually needed. Fortunately, with the popularity of CSR, more and more companies now perform in non-financial arenas such as human rights, business ethics, environmental policies, corporate contributions, community development, corporate governance, and workplace issues. Now, social and environmental performances are considered side by side with financial performance. From local economic development concerns to international human rights policies, companies are being held accountable for their actions and their impact. Companies are also more transparent in disclosing and communicating their policies and practices as these impact employees, communities, and the environment as per global reporting norms.
The belief among the companies is that every aspect of a corporation’s CSR should be linked to corporate strategy by connecting it as tightly as possible to the company’s unique capabilities and competitive context. Infosys is an interesting example of this new-age CSR. The company is utilising its core competence in the area of technology to bring larger good to the community. We also have the ITC group whose socio-forestry initiative & echoupal is an excellent paradigm where CSR and business have created harmonious associations.The cynic would however argue that 70% of ITCs revenues still come from tobacco & wonder whether its CSR is just a smokescreen?
Some companies, though fewer in numbers, are realising the advantages in linking corporate strategy with CR. In order to work out a comprehensive plan for its not-for-profit initiatives, the Tata group has instituted the Tata Council for Community Initiatives — a central body that acts as a facilitator for the entire group’s social initiatives. While the Tata group companies may continue to provide health services, education and other tangible benefits, its focus is more on building self-reliant communities, and working towards sustainable livelihoods. However after Nandigram & Kalinganagar even the fair name of the Tata group is sometimes controversial.
Mahindra & Mahindra is one such company, that decided in its 60 th year to donate 1% of profits after tax(around Rs 1.3 crore as per figures shown)into CR.Its activities include the K.C. Mahindra Education Trust, which promotes education at various levels and Nanhi Kali, a programme aimed at helping the underprivileged girl child at the Mahindra Foundation, accompany the midday meal program in AP & Rajasthan, Affirmative Action through its Mahindra Pride Schools & most importantly has constituted a CSR council within with heads of all its varios businesses from tractors to holiday homes!!It has also the ESOPS program –“Employee Social Options” & not just a stock option, promotes volunteering & works in partnership with Naandi Foundation & other organizations. For all these current initiatives Mahindras were awarded the FICCI –SEDF award 2007 ,one of the first CSR awards in the country that includes a 360 degree reality check by civil society who meet up with Trade unions, Govt reps,employees etc before presenting its findings to a eminent jury.
CSR has moved from being a public relations tool or a feel-good factor to a key parameter to keep companies open and transparent. It now no longer stands in isolation but has become a part of good Corporate Governance policies. The reality today is that companies are taking the issues of ‘reputational risk’ very seriously and it is no longer seen as an option. Most CSR models are based on the principle that goodwill earned from the stakeholders leads to benefits to the corporation. Which in turn enables the corporation to further enhance stakeholder value.
The oft quoted concept of triple bottom line reporting of CSR suggests that there are three separate and distinct bottom lines - each of equivalent standing. It is believed that in the context of sustainable development, it's impossible to consider the economic dimension in isolation from the social or the environmental, and vice versa. To be a truly sustainable organization, in the broadest definition of its terms, an organization must perform well across all three dimensions. Corporate social responsibility is also seen as basically a new business strategy to reduce investment risks and maximise profits by taking all the key stake-holders into confidence. The proponents of this perspective often include corporate social responsibility in their advertising & marketing initiatives.
There is also the eco-social perspective. The proponents of this perspective are the new generation of corporations and the new-economy entrepreneurs who created a tremendous amount of wealth in a relatively short span of time. They recognise the fact that social and environmental stability and sustainability are two important prerequisites for the sustainability of the market in the long run. They also recognize the fact that increasing poverty can lead to social and political instability. Such socio-political instability can, in turn, be detrimental to business, which operates from a variety of socio-political and cultural backgrounds. Seen from the eco-social perspective, corporate social responsibility is both a value and a strategy to ensuring the sustainability of business. It is a value because it stresses the fact that business and markets are essentially aimed at the well-being of society. It is a strategy because it helps to reduce social tensions and facilitate markets.
For the new generation of corporate leaders, optimisation of profits is the key, rather than the maximisation of profit. Hence there is a shift from accountability to shareholders to accountability to stakeholders (including employees, consumers and affected communities). There is a growing realisation that long-term business success can only be achieved by companies that recognise that the economy is an "open subsystem of the earth's ecosystem, which is finite, non-growing and materially closed".
There is a third and growing perspective that shapes the new principles and practice of corporate social responsibility. This is a rights-based perspective on corporate responsibility. This perspective stresses that consumers, employees, affected communities and shareholders have a right to know about corporations and their business. Corporations are private initiatives, true, but increasingly they are becoming public institutions whose survival depends on the consumers who buy their products and shareholders who invest in their stocks. This perspective stresses accountability, transparency and social and environmental investment as the key aspects of corporate social responsibility.
Corporate social responsibility is qualitatively different from the traditional concept of corporate philanthropy. It acknowledges the debt that the corporation owes to the community within which it operates, as a stakeholder in corporate activity. It also defines the business corporation's partnership with social action groups in providing financial and other resources to support development plans, especially among disadvantaged communities. The emerging perspective on corporate social responsibility focuses on responsibility towards stakeholders (shareholders, employees, management, consumers and community) rather than on maximisation of profit for shareholders. There is also more stress on long-term sustainability of business and environment and the distribution of well-being.
Successful experiments of CSR
Successful experiments are as yet few far between in India. As the saying goes “In the land of the blind, the one eyed is the king ” ; so is the few examples of good CSR. Companies tend to pay lip service or remain in the philanthropic mode. Writing away cheques to ‘soft issues’ such as children issues, disability, health checkups, Blood donations and building temples tend to remain the most favoured while questions remain on “ how the money” was made, official issues around responsible business practice remain completely unanswered.
Companies either tend to give away financial resources to NGOs or organizations or charities and this continues to be the favoured route. Others set up their own in-house foundations such as Infosys, Wipro and Satyam .
India evolved a tradition of ‘Trusteeship’ propounded by Mahatma Gandhi and this was later adopted by Corporate leaders such as GD Birla and Jamnalal Bajaj. These were initiatives pre independence. Some of these CSR experiments have succeeded in the establishment of excellent institutions such as Indian Institute of Science, TIFR, TISS by the Tatas, the establishment of BITS Pilani by Birla’s, and the Jamnalal Bajaj Institute by Bajaj. GlaxoSmithline Consumer Healthcare works to support a large number of partnerships spread across the country with issues such as reducing of infant & maternal mortality, access to health care for tribal communities, breast cancer awareness for low income communities, school education for dropouts, etc. During Emergencies such as Tsunami & the recent Bihar floods it distributed material in kind such as crocin, biscuits as well as donation of office infrastructure.It recognizes that NGOs & local partners are some of the best ways of quickly reaching affected communities & has worked with a large number of respected organizations including Gandhian ones.
The Reddy’s “LABS” experiment has created thousands of new livelihoods and the Byrraju Fondation established by Satyam group has created rural jobs, rural BPO’s in Bhimavaram, Godavari District in Andhra Pradesh, apart from the establishment of EMRI and HMRI. It makes drinking water available to families at a subsidized costs & has pioneered the concept of rural BPOs. It is an amazing sight to see young men & women cycle down to work in a serene rural environment rather than migrate in search of opportunities. The Eicher group have also transformed the primary education scenario in Harchandpur Block of Uttar Pradesh, without any publicity of any sort.
The Mahindras have set up a foundation called Nanni Kali Trust, which is carrying out primary education work focusing on girl children in Udaipur, where the company has no factory. Mindtree has closely works with Spastics Society of Karnataka having their logo itself designed by them, volunteering programs, etc.Kinetic Engineering’s support to “Dreamland” an NGO in its formation & therafter in its response to the farmers suicide is exemplary.Its outsourcing to leprosy affected communities has led to their empowerment.The Janaki Bajaj Gram Vikas Sansthan has worked extensively towards rural education & information in the villages of Maharashtra with clearcut exit strategies once basic indicators have been met.
In the traditional paradigm, most corporate bodies viewed CSR as the extension of a financial input for a humanitarian cause. However, the contemporary context is more complex: "A company that undertakes activities aimed at communities (be they philanthropic, social investment or commercial initiatives) but does not comply with ethical business practice cannot be termed socially responsible. Corporate Responsibility is increasingly becoming an important aspect of corporate behavior. Corporate contribution to society, environment and business when guided by enlightened self-interest improves quality of life for all. Effective corporate responsibility requires a good level of commitment from the entire organisation and especially the top management who can ensure that not only is CSR practiced but also that it is practiced well.
Godrej Industries Ltd , one of the largest industrial groups in India has not only integrated conservation of natural resources in its business operations but has also diversified into renewable to minimize its carbon footprint. The company’s windmills have brought down carbon emissions , earning it carbon credits. In a recent Green Business Survey released by Financial Express and Emergent Ventures India (FE - EVI Survey 2008) , revealed that senior managements have realized various risks related to climate change and are putting pressure on their companies to manage climate change risks. Financial companies (67%) acknowledges this risk before others and put pressure on borrowers to come up with mitigation plans.
To create synergy, leaders from corporates, international agencies and Governments should come together to assess the contribution businesses has made, can make. And like Nelson Mandela once said, “Without question, businesses must respond for its own good, and what is good for them is invariably good for the community.”
Case Study
Mahindra Group
Significant milestones in Mahindra group CSR
- K.C. Mahindra Education Trust
1953 - K. C. Mahindra Education Trust formed with an objective to ‘Transform the lives of people in India through education, by providing financial assistance and recognition to them, across age groups and across income strata’.
- Grants and Vocational Scholarships
- 1956 - K C Mahindra Scholarship for Post Graduate Studies Abroad is an interest free loan scholarship for students pursuing post-graduate studies overseas.
859 scholarships awarded till date.
- 1983 - Mahindra Search for Talent Scholarship to enthuse and reward excellence in academics, set up in 35 schools in India.
3467 scholarships awarded till date.
- 1995 - Mahindra All India Talent Scholarship for students from low income group families who wish to pursue job-oriented diploma courses at recognized polytechnics in India.
4220 scholarships awarded till date.
- K C Mahindra UWC Scholarship set up to allow deserving meritorious students to study at the United World Colleges around the world and at Mahindra United World College in Pune.
42 scholarships awarded till date.
- The K. C. Mahindra Education Trust has also established several awards and scholarships to encourage academia.
1996 - Project Nanhi Kali is an education sponsorship programme aimed at providing 10 years of quality education to the underprivileged girl child in India. Through this sponsorship the girl child receives not just academic support but also comprehensive material support including uniforms, school bags, books, and footwear which enable her to go to school with dignity. The Nanhi Kali project is a participatory project where any individual or corporate can sponsor the education of an underprivileged girl child for just Rs. 1800 per year (for a child studying in Grade 1-7) and Rs. 2500 per year (for a child studying in Grade 8-10). The project today extends educational opportunities to over 47,000 Nanhi Kalis.
2005 - Mahindra Pride School - As part of its 60th year celebrations, the Mahindra Group through the K. C. Mahindra Education Trust committed to setting up two Mahindra Pride Schools. The schools aim to empower the youth from socially disadvantaged sections of society (specifically SC/ST/OBC) by extending livelihood training which will enable them to gain employment based on the skills learned at these schools. 999 students have graduated from the first Mahindra Pride School in Pune and have been placed in lucrative jobs with monthly salaries ranging from Rs. 42000 to Rs. 180000 per annum. The second Mahindra Pride School is being set up in Jaipur.
- Supporting 6 Government Schools
2005 - With an aim to improve the learning level of children in government schools, the Mahindra Group has entrusted KCMET to support 6 government schools in Mumbai.
- Mahindra Education Society
The Mahindra Group has established schools near its factories at Malad in Mumbai (1970), Khopoli (1977) and Zaheerabad (1998) primarily for the children of their employees.
- Mahindra United World College
1997 - Mahindra United World College was set up by the Mahindra Group near Pune. This college is a part of the global United World College (UWC) movement which aims to promote peace and understanding through education.
- HEALTH and ENVIRONMENT
- As a responsible citizen, the Mahindra group is also concerned with health and environmental issues such as global warming.
1969 - Mahindra Foundation was set up with the specific objectives of providing relief to the poor, education and encouragement of healthy sports and physical fitness and medical relief and family planning.
- Gifting of 60 Cochlear Implants
To celebrate its 60th Anniversary, the Mahindra Group pledged to gift 60 Cochlear Implants to profoundly hearing-impaired, underprivileged children. The Mahindra Group collaborated with renowned ENT surgeon Dr. Kirtane for this initiative. These implants are being gifted over a three year period and currently 51 children have benefited from this initiative.
A Midday meal kitchen has been set up in Rajasthan through a tri-partite agreement between the Mahindra Group, Government of Rajasthan and Naandi Foundation, to provide hygienic, nutritious and wholesome mid day meals to approximately 25000 – 35000 children studying in classes 1 – 4 in government schools in two blocks of Chomu and Govindgarh in Jaipur.
2007 - Project Hariyali - helping 'green' the environment by planting a million trees by 2008.
2007 - The Lifeline Express was undertaken by the FES plant in Rudrapur, where 647 surgeries were performed free of cost (Cleft Lip, Polio, Cataract and Deafness). This activity garnered immense employee and community participation.
2007 - AIDS Awareness Campaign conducted in partnership with an NGO AAS Centre for Human Hope, aims to create awareness among Mahindra Group employees, school/ college students, vendor/ suppliers and other citizens of Nashik city. By December 2007, the program had reached out to over 33,660 people with the help of 497 volunteers in 77 camps.
Redefining CSR to celebrate 60 YearS
- 2005 - CSR Council set up to steer the CSR activities of the Mahindra Group.
- 1 percent of PAT committed for CSR initiatives specifically to benefit the socially and economically disadvantaged sections of society.
- In addition to the ongoing social welfare initiatives, a commitment was made to:
1. Adopt 6,000 under privileged girl children under the Nanhi Kali education sponsorship programme.
2. Support 6 Government Schools.
3. Double Mahindra All India Talent Scholarships from the present 300 to 600 per year i.e. an additional 300 scholarships per year.
4. Set up 2 Mahindra Pride Schools, which would equip the socially weaker sections of society, particularly the Scheduled castes and Scheduled Tribes, with employable skills.
5. Gift 60 cochlear implants to hearing impaired children from socially and economically disadvantaged families.
6. An offer of Esops – Employee Social Options was made to employees, through which all employees were offered a menu of volunteering options through which they could contribute to society.
- Mahindra Sustainability Council
2007- Mahindra Sustainability Council set up to reduce the ecological footprints of r activities.
