In Search of a Dream.......Corporate Responsibility in India
"Communism had a beautiful dream but it did not know the method.
Capitalism knows powerful methods, but does not have a dream, a purpose" Charles Hardy
Powerful lines quoted by Dr. Abhay Bang (SEARCH, Gadchiroli) whose work on Neonatal Mortality Rate(NMR) needs no introduction, at a "CSR Conference in Asia" hosted by the Business and Community Foundation in December 2005 with OWSA. Just as empowerment means different things to different people so does Corporate Responsibility. From flavors of philanthropy, religious beliefs to the concept of 'trusteeship' that the Mahatma propagated to 'giving back to society', Corporate Responsibility - CR - continues to evolve from the triple bottom-line. Its practice in India however has been ad-hoc, bolt on to business, CEO driven than integrated and there is still a wide gap between rhetoric and actual practice on the ground.
What drives CR then? Surveys by PriceWaterHouseCoopers in 2002 and others thereafter disclosed interesting patterns: the desire to be a good corporate citizen, the philosophy of our founding fathers, building a global brand, etc. In addition philanthropy, reputation, building employee morale, ethics and internal standards was the most dominant rationale and this is similar across the industry types - Indian companies, MNCs and PSU's. CR focusing on people and planet in addition to profit has the potential to be an extremely positive force that can fuel business growth, contribute to social, environmental and sustainable development. Very few companies in India however have a written CR policy and across different business segments most companies do not perceive its importance.
Our experiences with companies like Bajaj Auto and Kanoria Chemicals & Industries (KCI) indicate that there is strong and genuine engagement with the local community and with stakeholders. GlaxoSmithKline (GSK) in India supports projects such as The Adyar Cancer Institute, partial support to groups such as Tribal Health Initiative working to reduce infant and maternal mortality in Sitilingi Valley and volunteers in GSK and Nokia give of their time to urban projects. Cadbury supports Sambhav and Nestle is involved with the local community around its plants. There are a number of examples such as Thermax, Mind Tree, Balloons, Gokaldas Images, and others with substantial investment and CR engagement at the ground level. NTPC is one of the public sectors that has a clear CR mandate with a focus on disability.
Business in the Indian context has changed drastically in the 90's when globalization and FDI inflows have created immense prosperity in some segments while many areas are underdeveloped with hunger, starvation and marginalisation of the most vulnerable segments of our society. The gap continues to widen both in urban and rural India. As P.Chidambaram, Union Finance Minister put in 'India is not a poor country - it is a country where a large proportion of its people is poor '. What then are the practical steps forward? Business cannot work in isolation of the country context nor can they be islands of excellence where there are starvation deaths, homelessness and farmers suicides, lack of livelihoods and access to services. Corporate India must respond much more effectively and work for a more inclusive work environment and society.
Companies are normally expected to invest 3% -5% of their profits in to CR programs. The present scenario ranges from 0.1% to 2 % and an exceptional 14% by Tata steel. However companies can and have given their skills and expertise- 'giving' need not always be measured in just financial terms, as can be seen in the Tsunami last year . Emergencies and Disaster Relief seems to be an area where corporate India also responds. Contributions in cash and kind flowed in to non profit organizations (NPOs), to the PM's relief fund, and some directly. The role of the private sector was seen as positive and encouraging and this could be enhanced by a sharing of core competency and expertise by the corporate sector. Just one large garment exporter in Chennai, Ambattur Clothing Limited (ACL) is quietly rebuilding the Government hospital at Nagapattinum with a contribution of few crores while providing a State- of- Art Health Centre to its employees and their families. Given the context of outsourcing, small and medium enterprises and supply/assembly chains attention to labour norms, employee welfare, health, safety and quality standards and internal governance and disclosures need to be emphasized as much as CR.
In India CR is merely not a function of wealth or size of a company. Though India has the lowest level of per capita income among the seven Asian countries as compared to South Korea, Thailand, Singapore, Malaysia, Philippines and Indonesia it has the highest level of CSR practices. Education, health and community development are some of the most popular areas of CR engagement followed by natural resource management, IT and livelihood based activities. Many companies cite constraints and challenges to practicing CR such as overall absence of policy and linkage between CR and financial success, lack of capacity and comprehension to implement CR, mechanisms to measure and monitor and evaluate in discharging their responsibility. These are some of the areas where non profits & foundations working in CR today have a significant role to play. A number of corporates have set up their own in-house Foundations e.g. Infosys, Nandy, etc. Corporates are created by society and must therefore have a vision beyond profits and immediate stakeholders and more companies need to take a stand on issues such as communal violence, female foeticide, misuse of technology, human rights, etc. Presently only eight Indian Companies report on The Global Reporting Initiative.
So what can Corporates do? According to Dr. Bang Corporates can develop new strategies to reach out to the bottom of the pyramid with solutions. Civil Society and NPOs must work together to stimulate CR by generating greater societal demands and expectation of business responsibility e.g.Centre for Environments ( CSE) work in Delhi, CERC in Ahmedabad & VOICE in Delhi. As with most things in life it is the journey that is as important as arriving at the ultimate destination. Is it time to deepen, enhance, and revisit Gandhiji's Principle of Trusteeship? "In his own words "The earth has enough for everyone's need, but not for everyone's greed."
Contributed by Ms Amita V. Joseph for The Financial Express dated 25th December 2005
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