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CONFERENCE THEME:


                    Emerging Competitiveness Paradigms
                                           TITLE:

                           India’s Competitiveness Edge
                              - A Study of the Role of
                           Corporate Social Responsibility
                      ________________________________________


                                       Author Details:




                                                    Prof. Ms. Ketna L Mehta
Prof. Dr. Uday Salunkhe
                                                    Editor & Associate Dean, Research
Director
                                                    Welingkar Institute of Management
Welingkar Institute of Management
                                                    L.N. Road, Matunga (E), Mumbai – 400019
L.N. Road, Matunga (E), Mumbai – 400019
                                                    Tel.Nos: 022 – 2417 8300 Extn: 705
Tel.Nos: 022 – 2417 8300 Extn: 705
                                                    ® - 022 – 2407 1952
Email Id: director@welingkar.org
                                                    Email Id: ketna@vsnl.com /
                                                    ketna.mehta@welingkar.org




                                                                                          1
India’s Competitiveness Edge - A Study of the Role of
                          Corporate Social Responsibility

ABSTRACT

The theme of corporate social action assumes pivotal significance in the world wide debate on
sustainable development. Modern corporation exert considerable influence on the economy,
polity & society of the nation. The world over increasingly, there is an evidence of extraordinary
economic power exercised by mega corporations, their impact being more severe in the case of
developing countries. As more of the developing countries in the world opted for a democratic
framework, the issues of economic & social governance became very important; these subsume
issues like human rights, labour standards, health care and poverty among others. Secondly the
competitiveness index in India is very low due to the existing social problems & there is a need
for companies to join in to raise the competitiveness level of the country.


The paper firstly examines the trends in the area of CSR over the years from cheque
philanthropy to community projects to corporate governance. Continues by providing an insight
in the space of CSR in India and highlights the research done on the initiatives undertaken by
different companies in this regard. It also includes a detailed study of the current CSR policies &
initiatives of one of India’s pioneering companies in this field, Tata Steel.


The paper concludes with a few thoughts on what is the future & the need of the hour i.e.
a tripartite action on part of government, public enterprises and the corporate sector to face the
challenges put forth by the changing economy.


Lastly the focus is on the proposal of building a CSR Index for India which will help
improve corporate responsibility by providing a systematic process that compares companies’
management processes and performance with those of others in their sector. It would provide a
benchmark for companies who are committed to managing, measuring and reporting their
impact on society. It will also help companies who want to venture into a certain area of CSR to
know how much work has been done there and what has been their experience.




Research Assistance: Altaf Patel and Ramit Munshaw are Welingkar students pursuing
                          PGDBM (Year 2005 – 07)


                                                                                                 2
CORPORATE SOCIAL RESPONSIBILITY:
The role of business in society has been debated in economic literature for a long time. By the
term ‘Corporate Social Responsibility’ (CSR), what is generally understood is that business has
an obligation to society that extends beyond its narrow obligation to its owners or shareholders.
This idea has been discussed throughout the twentieth century, but it was Howard R. Bowen’s
book on “Social Responsibilities of Businessman” published in 1953, which was the origin of the
modern debate on the subject. Bowen reasoned that there would be general social and
economic benefits that would accrue to society, if business recognized broader social goals in
its decisions.

Corporate Social Responsibility is nothing but what an organization does to positively influence
the society in which it exists. It could take the form of community relationship, volunteer
assistance programmes, healthcare initiatives, special education / training programmes and
scholarships, preservation of cultural heritage and beautification of cities. The philosophy is,
basically to give back to the society, what it (business) has taken from it, in the course of its
quest for creation of wealth. Social responsibility becomes an integral part of the wealth creation
process - which if managed properly should enhance the competitiveness of business and
maximize the value of wealth creation to society.

The World Business Council for Sustainable Development in its publication "Making Good
Business Sense" by Lord Holme and Richard Watts used the following definition.
"Corporate Social Responsibility is the continuing commitment by business to behave ethically
and contribute to economic development while improving the quality of life of the workforce and
their families as well as of the local community and society at large."


Another definition is "CSR is about capacity building for sustainable livelihoods. It respects
cultural differences and finds the business opportunities in building the skills of employees, the
community and the government."




                                                                                                 3
CORPORATE SOCIAL RESPONSIBILITY – A BROADER PERSPECTIVE
Since 1990, a number of developments such as increasing democratization of governments,
creation of newer social and economic institutions, rapid growth of volunteerism in the form of
non-profit organizations, increasing consumer awareness, focus on the need for reducing
poverty, dealing with the human rights issues, among others have reinforced the need to
articulate policies and actions to incorporate responsiveness.


CSR is concerned with treating the stakeholders of the firm ethically or in a socially responsible
manner. The aim of social responsibility is to create higher standards of living, while preserving
the profitability of the corporation. (Michael Hopkins 1998)


Expected outcomes of social responsibility are: improved financial performance, increased
customer loyalty, higher ability to attract to attract and retain employees, reduced regulatory
oversight, workforce diversity, product safety and decreased liability, employee volunteer
programmes, and greater use of renewable resources.


Simon Zadek (2001) describes the development of CSR broadly in terms of three
generations:
   The 1st generation of CSR showed that companies can be responsible in ways that do not
   detract from commercial success. The most prominent changes include adoption of strategic
   approach to philanthropy, expansion of the geographic focus of corporate, and evolving of
   measurement tools.
   The 2nd generation is focusing on CSR as an integral part of long term business strategy
   The 3rd generation of CSR is expected to make a significant contribution to address issues
   such as poverty, exclusion and environmental degradation. This will involve both
   partnerships with civil society and changes in public policy.


Today we find that as more and more industries are setting up their factories, they are
encroaching on the land which belonged to the community residing there, and therefore through
their activities they end up affecting the existing lifestyles of the community members.
For maintaining cordial relations between the members of the community and the organization it
is essential for the organization to depict a fair behavior and must give back to the community
through various community related initiatives. This strategic move is of mutual benefit and is




                                                                                                4
critical for the success of the organization as it can gain a competitive advantage as it is seen as
an organization which is concerned for the people and all its stakeholders.


To illustrate the convergence between the community and the corporation the use of the
‘The London Group Benchmarking Model’ is valuable. The LBG seeks to develop and
expand the reporting of company activities in the community so that they are more
transparent and can be judged by the impact they achieve.




                                    Philanthropy: Intermittent support; wide range of
                                    causes; in response to needs and appeals of charitable
                                    and community organizations; in partnership between
                                    companies, employees, customers and suppliers.




                                          Social Investment: Long-term and strategic
                                          involvement in community partnerships;
                                          limited range of social issues chosen by the
                                          company; to protect long-term corporate
                                          interest and to enhance its reputation.



                                                   Commercial Initiatives in the
                                                   Community: Activities in the
                                                   community led by commercial
                                                   departments; directly support
                                                   company success, brands and other
                                                   policies; in partnership with NGOs




                                                          Business Basics: Core business
                                                          activities; meeting society’s
                                                          needs for cost-effective goods
                                                          and services; in a manner that is
                                                          ethical, socially and
                                                          environmentally responsible.




                                                                                                  5
‘The London Group Benchmarking Model’


  The Philanthropic component: This is typically what all companies, including Indian
  companies do. The distinctiveness of this component is that it satisfies the lowest level need
  of the organization i.e. it provides a reputation of being a ‘caring company’. Here companies
  not only make donations of money or kind but also employee volunteering.


  The Social Investment component: Here the company looks at a more systematic and
  strategic activities with its community involvement with a view of attaining business benefits in
  the medium term. Such activities are typically aimed at communities, but at times both
  employees as well as their families can be the beneficiaries.


  The Commercial Initiatives: Here while addressing social issues the company is also
  focusing on the commercial benefits it can derive from the activity undertaken. Typical
  examples include Cause-related marketing or event sponsorship.


  Triple-bottom-line’. The company studies the impact of its activities on the society and planet
  i.e. societal and environmental returns, apart from the financial returns.


The relative sizes of the components are meant to reflect the impact of that activity on the
community. Hence here we see that ‘business ethics’ impacts the society more than the
‘philanthropic’ activities.


This model is very useful as it is a good representation of the strategic community involvement,
the business links with the community and the stakes emerging from the accountability, ethical
and management perspectives.


In India we have not yet witnessed significant development in these fields but steps are being
taken towards addressing the rights of communities across the business landscape.




                                                                                                 6
CORPORATE SOCIAL RESPONSIBILITY - TODAY
CSR can affect a variety of stockholders, including customers, employees & their families,
investors, local communities, environmental groups, government, suppliers & competitors.
Accordingly, CSR involves a wide range of practices in the area human rights, employee
relations, diversity, consumer protection, environmental protection, fiscal responsibility &
accountability, market practices & philanthropy.


Indian MNC’s like the, ITC, Ranbaxy & DuPont India, have endeavored to create a better social
order. What is significant with these companies is that they initiated the process of CSR from
their doorstep by providing a better & healthy work atmosphere to their employees.


 Part of the wealth created should be made available for the benefit of the nation.
 In creation of wealth, care must be taken to not only protect the environment but also enhance
 it so that this world, which we have borrowed from our children, is left in better shape for them.
 Leadership in business is living by these ideals and leading by example.
 In today’s world, the only constant is change. Leaders must anticipate change, drive it, make
 acceptable to all stake holders, and turn threats into opportunities through their vision & their
 actions.


People argue that there must be legal provisions for CSR, just like the concept of corporate
governance in structuring the board of a company. It is seen that the company name
independent directors in their board of directors as a statutory requirement. The very notion &
goal of protecting shareholders’ interest is defeated as in many companies independent
directors are “friends” of promoters and act as rubber stamps. The point of submission here is
not to formalize CSR in a legal boundary. Let it come from within the company, let it evolve as a
company’s philosophy, something attached to the company’s brand…and let society be the
judge of its sincerity of purpose and honesty of action.


A survey by the Capital Care of the London business community points out “Over three quarters
of the business here agree that organizations should do more than the law requires on
environmental concerns & over half think that they should do so on social objectives.”


Of course, all companies must conform to the basic legal requirements pertaining to CSR, such
as environmental norms, labour welfare requirements, and advertising laws. But they must



                                                                                                  7
55strive beyond the legal requirements. Here I would like to cite the example of DuPont’s India
Safety Standards where all employees have a prescribed code of conduct – something beyond
the legal requirement.


There must be a set of ethical & moral values to guide all business processes at the workplace
as well as the market place. In the words of Kofi Annan, U.N. Secretary General: “We have to
choose between a global market driven only by calculations of short term profit, and one which
has a human face……Between a selfish free-for-all in which we ignore the fate of the losers,
and a future in which the strong and successful accept their responsibilities, showing global
vision & leadership”.


CORPORATE SOCIAL RESPONSIBILITY - GROWTH OVER THE YEARS:
In India, the term CSR might be new but the concept is not. It has been there since the earliest
times, going back to an age where society itself was in its formative stages. It has incorporated
in the various religious laws where a part of one’s earnings are donated for the benefit of the
poor and community welfare. The Hindus call it ‘Dharmmada’, the Muslims ‘Zakatah’, the Sikhs
‘Dashant’; call it by whatever name you will, the concept has been imbibed in the society from
the very beginning. As individuals joined hands to form organizations, the same concept
became embedded in the originations.


Gandhi’s philosophy of trusteeship is similar to the CSR of the modern business world; the
Gandhian notion of trusteeship has been followed by the Tatas and Birlas ever since their
inception.


Jamshedji Tata with his vision to create the Indian Iron & Steel Industry transformed an
unknown village ‘Sakchi’, later named as ‘Jamshedpur’ into a model town of planning &
community care.


The National Dairy Development Board (NDDB) has transformed huge areas in Indian
villages by empowering producers & creating a manufacturing outlet for their produce. Dr.
Kurien’s AMUL-led Operation Flood was the forerunner of this initiative, which has spread to
many states & similar operations.




                                                                                               8
The Tata’s under the chairmanship of S.P.Kotwal conducted a social audit, the aim of which
was to find out areas where Tata was not able to discharge its responsibility towards society.


The reason for all this hectic society is not far to seek. CSR adds value to the social
environment, the work environment, and ultimately to the company. According to a report, nine
of the top ten Forbes 500 firms have something in common besides success: CSR
programmes. Corporate philosophy is undergoing a change, from “Profit making” to
“value creation”- something far more enduring.


‘Operation Muskan’, this Smile Train project was flagged off in October by Tata Steel Rural
Development society (TSRDS) - Tata Steel’s NGO community service arm. The TSRDS
realized the urgent need for this form of reconstructive surgery at various health camps. At one
week long camp in Ghatshils, doctors treated 108 cleft palate cases; in Deoghar, 149 people
requested for the surgery.


While India Inc. still calculates the plusses & minuses of good corporate conduct, corporate
social responsibility for the Tatas & Birlas is an old tradition. The Tata Group invested more than
150 crore on the social sector in 2002, the A.V. Birla Group Rs. 57 crore, Reliance Rs. 30 crore,
& Infosys Rs. 5 crore. Tata Steel set aside as much as 12-14% of its profit after tax (PAT for
2003-04 is Rs. 1746.22 crore) for welfare activities.
The Infosys Foundation supports disadvantaged people directly or through organizations. The
foundation prefers to work through smaller organizations & donates in kind father than in cash.
For instance, recently gave books in Kannada worth Rs. 10,000 to a village library, so that it
could help strengthen the local language.


The middle class founders of the mega-successful Infosys believe that wealth must be equitably
distributed “Unless you create wealth by legal means, you cannot distribute it. And without the
two, you don’t have progress” says N. R. Narayanmurthy of this celebrated & brilliantly
successful IT company. “Putting public good ahead of private good in every decision you
make, will in fact, result in reaching the private good.”


To distribute its substantial wealth & formalize its social support initiatives Narayanmurthy & his
wife Sudha set up the Infosys Foundation in March 1997 which receives 1% of the




                                                                                                 9
company’s after tax profit. All financial assistance to the needy is given in the form of rule-
based distribution of money.


In the field of education, the foundation has instituted 26 scholarships for Ph.D scholars in 13
prestigious institutions. It has also anchored the ‘train & trainee program’ in which computer
science students form engineering colleges are exposed to the latest IT trends. The foundation
has also played an important role in setting up science centers & libraries and to date, 1001
libraries have been inaugurated with assistance from this foundation.


The Infosys Foundation is committed to giving 30% of its funds to old people, the
destitute & the handicapped, 15% for rural development, 30% for education of poor but
talented children, 15% for cultural activities & 10% for health care, both in village and in
cities.


Dr. Irani propounded five basic tenets of CSR at the 27th annual meet of the US-India business
council meeting: “The aim of the industry should not be to make money. The aim should be to
serve customers & other stake holders and the result would surely be more money. And
pursuing excellence would enable it to create even more wealth”. Companies are increasingly
required to apply corporate social responsibility by balancing the economic, social &
environmental dimensions of their operation whilst building shareholder value. Corporate
Governance is about promoting corporate fairness, transparency & accountability.


Companies used to see this area of corporate social philanthropy as the last thing on their
agenda ten years ago, but now they agree that social & economic issues are intertwined.
Corporate philanthropy - or corporate social responsibility – is becoming an ever more important
field for business. Today’s companies ought to invest in corporate social responsibility as a part
of their business strategy to become competitive. Corporate success depends on the local
environment: an appropriate infrastructure, the right types & quality of education to future &
current employees, cooperation with local suppliers, quality of institutions, local legislation & so
on. In this corporate competitive context, the company’s social initiatives can have great impact
no only for the company but also for the local community.




                                                                                                 10
CSR BUDGETS OF SOME OF THE TOP COMPANIES IN INDIA
Sr.   Name of the company                        Total Funds Deployed on
No.                                              CSR Last Year (2004-05)
1.    ABB Ltd.                                   Rs. 0.9 crores
2.    Amway India Enterprises                    Rs. 0.45 crores
3.    British Gas                                Rs. 1 crore
4.    Hindustan Lever Ltd                        Rs. 24.6 crores
5.    Infosys Technologies Ltd.                  Rs.18 crores (1.5% of PAT)
6.    Jankidas Bajaj Gramvikas Sanstha (Bajaj)   Rs. 0.45 crores


7.    Tata Steel                                 Rs. 189 crores


8.    Tata Sons                                  Rs. 144.9 crores
9.    Titan                                      Rs. 1.75 crores
10.   Wipro Corporation                          Rs. 0.3 crores




                                                                              11
TATA STEEL – THE PIONEERS IN CORPORATE SOCIAL RESPONSIBILITY
Organizational Profile


Organization type:                            MNC


Number of employees:                          39,646


Areas of operation:                           Mainly in Jharkhand & Orissa


Gender Balance: (M: F):                       Non officers m/f ratio: 20:1
                                              Officers m/f ratio: 14:1


Products:                                     Steel products from wire rods, cold rolled
                                              sheets,     blooms,   slabs,   bearings,   agricultural
                                              implements & minerals etc.


Gross income/Turnover FY 2004-05:             Rs. 16,663 crores


Net Profit FY 2004-05:                        Rs. 3604 crores


Total Funds deployed for CSR:                 Rs. 189 crores




Main Stakeholders:                            Shareholders/investors
                                              Customers
                                              Employees


CSR Interface / Responsibility
Tata Steel relates itself to CSR as a service provider.




                                                                                                  12
CSR Affiliations
Tata Steel is a signatory or member of:
 United Nations Global Compact
 Global Reporting Initiative
 CII-UNDP
 Global Business Coalition for HIV/AIDS
 CII SDCA National Committee
 STOP TB India Business Alliance
 SA 8000
 THE Mining Geological & Metallurgical Institute of India


CSR Policies
Founder & Group Chairman first articulated Tata Steel’s explicit CSR policy in 1904. It was later
formalized as various policies from 1980 onwards. It is monitored & enforced through the Tata
Business Excellence Model.


Tata Steel has an entire organizational structure to enforce/monitor the policy. Formal
departments & divisions (Environment & safety, Public Health, Medical Services, Social
services, & family initiatives, community development & social welfare, ethics, HR & IR) are
responsible for CSR reports to the managing director through deputy managing director
corporate services & deputy managing director steel. Deputy managing director corporate
services is also a Tata Steel Board member.


The company claims to have lined compensation of the board members & senior
management to sustainability performance:


1. Anti-corruption or bribery
   Tata Steel covers concerns of bribery through the Tata Code Of Conduct (COC), which has
   specific clauses on Gifts & Donation & Conflict of Interest. Moreover, it has an explicit Gift
   Policy, which is step towards abating rivalry. The Tata COC was implemented in 1998-1999,
   Gift Policy on 1st January 2005. The company has an ethics structure, with ethics counselor
   (Ombudsperson) and departmental ethics coordinators for enforcing & monitoring
   complaints of COC. The Ethics Counselor has been implemented since 1997-1998.




                                                                                              13
2. Antidiscrimination or rivalry
   While recruiting also its press advertisements always specify, “We are an equal opportunity
   employer. Women candidates are encouraged to apply.” The company appoints fresh
   professionals from reputed campuses that have an all India selection pattern. This ensures
   diversity amongst its employees.


3. Grievance Redressal
   For any complaint, the employees can approach the ethics counselor. There is an individual
   grievance handling procedure, which handles any deviation from the standardized rule. An
   IT based grievance handling procedure called “Samadhan” is also in place.
   Issues relating to any biases & unfairness can reported to the ethics counselor who reports
   to the managing director. A “whistle blower committee” ensures to maintain confidentiality of
   the employees making complaints in this regard. A service rule & standing order laid down
   the procedure and policies of the company by which all employees are guided. Any
   deviation from this is dealt by the management. Grievance handling procedure is in place
   since 1920s.


4. Transparency or disclosure
   Tata Steel provides access to company’s policies through its website.


5. Corporate Governance
   Tata Steel complies with the requirements under clause 49 of the listing agreements entered
   into the stock exchanges of India. It also discloses compensation required by the Board
   members/Senior management.


6. Environmental Management
   Tata   Steel’s   environmental     policy   has   been   implemented     since   1994    and
   monitored/enforced through environment management system which also provides for a
   known complaints procedure.


7. Human Rights
   Tata Steel does not have an exclusive human rights policy, however the social
   accountability policy is keeping with the principle of SA 8000. Standard includes
   commitment to conventions such as Universal Declaration of Human Rights, Rights of Child



                                                                                             14
& ILO. This has been implemented since December 2003, monitored/enforced through the
   SA8000 MR System, with a known complaints procedure.


CSR Practice (Internal):


1. Employee Benefits
   Tata Steel seeks to create a world class development environment through processes such
   as performance management, talent review, recruitment through skills assessment,
   succession planning & leadership development etc. Training & development plans are in
   place across the organization for worker & officer cadres. The ISO 9000, ISO14001, and
   OHSAS 18001 certification have clauses taking care of employee welfare.


2. Gender
   The HR Policy is committed to equal employment opportunity. About 3.5% of the senior
   management executives are women. There are no women executives in board level. As per
   statutory norms all women employees are provided the facility of maternity leave & crèche.
   The facility provided are more than what has specified in the act.


3. Employee Union
   Tata Steel allows for the unionization of the employees. There are in all ten unions across all
   locations with which the management interacts. Interaction takes place through joint
   departmental council & joint consultative of management having equal representation from
   both management & union.


4. Environment & Safety
   Tata Steel has a formal environment policy in place. It provides internal environment
   awareness trainings and health & safety. The company does not have a zero emission
   policy, but endorses to complaints with regulations and going beyond it as per its
   environmental policy. 100% of its production is recyclable & therefore environment friendly.


5. Products & services
   Tata Steel’s products are used by all sections of the society including the weaker ones. The
   company has products & services extended to rural areas as well.




                                                                                               15
6. Suppliers Screening
   The company does not screen its suppliers on suitability parameters. However it has started
   capturing details against some parameters for each supplier.


CSR Practice (External)


1. Social/Community/Charitable contributions
   Tata Steel’s top 5 community development projects in terms of priority:


Issue                                                            Supporting since
Integrated Rural Development                                            1979
Reproductive Health                                                     1957
Education   &      Vocational   Training     for                        1980
Marginalized Communities
HIV/AIDS Prevention                                                     1990
Sport’s Training                                                        1990
Relief during Natural Calamities                                        1974


2. Infrastructure Development


Year                            Project                              Location
Year 1995 onwards               Rural      Road      (300    kms Bihar, Jharkhand, Orissa,
                                approx),       school        (312 Gujarat, Tsunami victims
                                assisted, 171 early child etc.
                                education               centers).
                                Irrigation    projects,     check
                                dams (86 allied projects,
                                190        water      harvesting
                                structures)        Houses    after
                                natural calamities.




                                                                                             16
3. CSR Socio-Economic Impact
   Social Audits survey is conducted once in every ten years by eminent panel of independent
   judges. Report on the survey conducted last year is awaited.


CSR & Media
Tata Steel believes that publicizing its CSR activities can be an effective way of raising
standards in its sector, mobilizing public opinion in favour of CSR, and boosting the company’s
profile. Tata Steel’s efforts for promotion of CSR through CII has motivated new company’s to
adopt CSR policies and initiatives.




                                                                                            17
RESEARCH UNDERTAKEN - INITIATIVES TAKEN BY OTHER CORPORATE:


Company       Domain        Project (s)   Partner (s)   Special Features

Allianz       Sustainable   Micro                       Allianz Bajaj has launched a “Invest
Bajaj Life    Finance       Insurance                   Gain”, a life insurance plan where
Insurance                                               sustenance of income is combined
                                                        with a lumpsum payment. The plan
                                                        offers a monthly family income
                                                        benefit (1% of the sum assured)
                                                        guaranteed for a minimum period of
                                                        10 years. This allows the family to
                                                        cope with loss of regular income

Ambattur      CSR           CSR                         The company has been pioneering
Clothing                    (Internal)                  concepts of employee welfare,
                                                        human rights & adhering to anti
                                                        child laws. It is a FLA (Fair Labour
                                                        Association) compliant and its
                                                        facilities are WRAP (Worldwide
                                                        Responsible Apparel Production)
                                                        certified. Employees benefit from a
                                                        wide range of facilities including a
                                                        child care centre, a primary health
                                                        clinic, subsidized/free vacancies &
                                                        free transport.

America       Micro         Micro         Self Help     AIG has a joint venture TATA
Intnl Group   Finance       Insurance     Groups        Group for its insurance business in
                                                        India. TATA AIG sells micro
                                                        insurance to the rural poor by
                                                        leveraging      existing distribution
                                                        networks. It uses SHGs (Self Help
                                                        Groups) and community enterprises
                                                        as low-cost delivery and servicing
                                                        channels which also help in creating
                                                        livelihood for the poor.

Asian         Water         Rainwater     Glen Croft    The company has implemented a
Paints        Management    Harvesting                  rainwater harvesting project at Glen
                                                        Croft housing society in Mumbai.
                                                        The society has benefited by
                                                        reducing its fresh water intake from
                                                        the BMC (Brihanmumbai Municipal
                                                        Corporation). The residents are not
                                                        required to order water tankers
                                                        during water shortages. This has
                                                        also reduced the health hazard of
                                                        residents from contaminated tank
                                                        water during seasons.




                                                                                                18
Company       Domain         Project (s)   Partner (s)    Special Features

Bajaj Auto    Basic issues                 NGOs           The         company          supports
                                                          environment, health, education &
                                                          rural     development       initiatives
                                                          through the Janki Devi Bajaj
                                                          Gramvikas Sanstha. The trust
                                                          oversees integrated development of
                                                          24 villages adjoining the locations of
                                                          Bajaj Auto factories in Pune &
                                                          Aurangabad. The activities include
                                                          improvement of natural resources,
                                                          increased productivity of land,
                                                          empowerment of women, health,
                                                          education, sanitation & income
                                                          generation programmes.

BG India      Education                    NGOs           The company supports the local
                                                          communities in which it operates. It
                                                          is also involved in a number of
                                                          educational       &         charitable
                                                          development projects. The group
                                                          has an integrated health, safety &
                                                          environment (HS&E) management
                                                          upstream for its international
                                                          upstream        &       downstream
                                                          businesses     &    conducts        its
                                                          businesses with due regard for
                                                          environment, health & safety of
                                                          employees, those involved in its
                                                          operations & the public at large.

Bharti Yuva   Entrepreneur                 Business &     BYST develops entrepreneurs by
Shakti        ship                         Industry       providing people in the age group of
Trust                                      Associations   18-35, who are either unemployed
(BYST)                                                    or with loans against no collaterals.
                                                          Business potentials from potential
                                                          entrepreneurs are screened by an
                                                          Entrepreneur Selection Panel (ESP)
                                                          comprising experts        from     the
                                                          industry in marketing, finance,
                                                          management etc. On approval,
                                                          BYST provides a range of business
                                                          development services along with a
                                                          mentor, who gives guidance until
                                                          the venture takes off.
                                                          Presently BYST is operational in
                                                          Delhi, Chennai, rural Haryana,
                                                          Pune,      Hyderabad       &     rural
                                                          Maharashtra. Out of these six
                                                          regions, four regions run the urban
                                                          program, while two regions run the
                                                          rural program.




                                                                                                    19
Company     Domain        Project (s)   Partner (s)   Special Features

Cadbury     Women         Women’s       NGOs          The      company      launched      the
India                     Empowerment                 ‘Gurikha Project’, close to its factory
                          & Female                    at Malanpur near Gwalior at
                          Infanticide                 Madhya Pradesh. The project’s key
                                                      focus is on various aspects of
                                                      women’s         inequality,     female
                                                      infanticide & rights of a girl child.
                                                      According to a survey (2003), the
                                                      project has succeeded in giving a
                                                      sense of direction & confidence to a
                                                      large number of women of the area
                                                      & a marked improvement has been
                                                      noticed in the general well being of
                                                      the girl child.

                                                      Apart from this, the company is also
                                                      working on issues like primary
                                                      education, health & vetenary care,
                                                      women’s        income    generation
                                                      activities & strengthening of the
                                                      village council. Under the income
                                                      generation program nore than 10
                                                      SHGs with monthly savings ranging
                                                      from Rs.20,000 to 50,000 are
                                                      functional in the area.

                                                      Besides this, Cadbury has also
                                                      helped build a pre-school section to
                                                      the village school building for the
                                                      girl children & a set of classrooms in
                                                      another village under the same
                                                      panchayat.

Cadence     NGO                         CRY, Sai      Supports Child Relief & You (CRY)
Design      Partnership                 Kripa,        and its various projects across
Systems                                 Tapovan       geographical locations. Supports
                                                      two NGOs in its neighbourhood Sai
                                                      Kripa & Tapovan.

Colgate     Health,       Oral Care     Pratham       The IDA-Colgate initiative to
Palmolive   Education     Elementary    Movement      educate school children on the
India                     Education                   basics of oral care has covered
                                                      over 26 million children in more
                                                      than 50,000 schools spanning 120
                                                      towns.

                                                      Colgate partners with Pratham
                                                      Movement on the issue of
                                                      Universalisation of  Elementary
                                                      Education.




                                                                                                20
Company      Domain        Project (s)   Partner (s)   Special Features

Citigroup    Cause-                      FWWB,         Out of its cards business, Citigroup
Marketing    related                     SPARC         contributes    some    amount      of
                                                       earnings        for      community
                                                       development. For instance each
                                                       time a consumer uses her Citibank
                                                       women’s card, Citibank contributes
                                                       a percentage of its earnings to two
                                                       NGO partners of the women’s micro
                                                       credit programme- Society for
                                                       Promotion of Area Resource
                                                       Centers (SPARC) & Friends of
                                                       Women World Banking (FWWB).
                                                       Similarly collaborations are made
                                                       with WWF & CRY on its other credit
                                                       card types.

Charities    Cause-                                    CAF mainly focuses on primary
Aid          Related                                   education by providing better
Foundation                                             learning    facilities to    primary
(CFA)                                                  schools. It provides a one time
                                                       grant to primary schools without
                                                       basic needs such as toilets, drinking
                                                       water, black boards, & a better
                                                       learning environment. It also
                                                       provides financial & technical
                                                       support to increase the enrollment
                                                       rate & decrease the drop out rate in
                                                       some of the most backward states
                                                       such as Bihar, Madhya Pradesh,
                                                       Uttar Pradesh, Rajasthan & Orissa.
                                                       Primary schools are identified by a
                                                       Primary Group survey of facilities
                                                       available with them.

Cummins      Education,                  Cummins       CIF      has    undertaken   various
India        Environment                 India         initiatives like ‘School on Wheels’
                                         Foundation    wherein they educate children and
                                         (CIF)         adults          on       cleanliness,
                                                       environmental issues, education
                                                       etc. They have also established the
                                                       Cummins school of engineering for
                                                       providing higher education to girls.
                                                       Apart from this they have donated
                                                       hearing aids to deaf people and
                                                       established models for channeling
                                                       water in areas troubled with water
                                                       shortage.




                                                                                               21
Company    Domain       Project (s)     Partner (s)   Special Features

CRISIL     Corporate    Rating                        In order to evaluate the behavior of
           Governance                                 corporates towards all of its stake
                                                      holders, CRISIL has devised a tool
                                                      called “Governance & Value
                                                      Creation Rating.” It also measures
                                                      the tangible value such behaviour
                                                      creates for stake holders. By
                                                      combining these two elements of
                                                      corporate practices and the tangible
                                                      output that gets generated as a
                                                      result, Crisil seeks to directly link
                                                      the input side parameters of
                                                      government practices with the value
                                                      created on the output side. For
                                                      good measure both the governance
                                                      and value creation are captured for
                                                      all constituents that form the
                                                      stakeholders community for the
                                                      entity that is being rated.

Fabindia   Education                                  The FabIndia school in Rajasthan
                                                      subsidizes tuition fees for girls and
                                                      instills in them the competency to
                                                      perform as well as their male
                                                      counterparts. It also works to
                                                      develop a sense of pride and
                                                      belongingness in their local heritage
                                                      and exposing them to issues of the
                                                      larger world.

Forbes     Health,      Skills                        The social initiatives of Forbes
Marshall   Education    Development                   Marshall are located in three main
                                                      geographical areas of Pune, mainly:
                                                      Kasarwadi, Morwadi & Pimpri.
                                                      These initiatives are in the areas of
                                                      health and education, legal rights
                                                      and awareness building for women
                                                      and skill building for women so that
                                                      they can earn an additional income.

Gokuldas   CSR          CSR(internal)                 The company follows stringent
Images                                                international laws on human rights
                                                      and child labour. Employees benefit
                                                      from health insurance, pensions,
                                                      bonuses, gratuity, paid sick leave
                                                      and day care centers.




                                                                                              22
Company       Domain           Project (s)     Partner (s)   Special Features

GlaxoSmith    Basic Issues                     NGOs,         The company has partnered with
Kline (GSK)                                    Government    NGOs, government organizations
Consumer                                                     and the local communities and has
Healthcare                                                   started various initiatives in the
                                                             areas     of     urban    community
                                                             development, rural development,
                                                             disaster relief, workplace initiatives
                                                             and medical fraternity initiatives. It
                                                             regularly conducts health camps,
                                                             provides cattle insurance, free
                                                             supply of portable water and is
                                                             engaged in rain water harvesting. It
                                                             has also started a programme
                                                             called ‘positive action’ to create
                                                             awareness of HIV/AIDS and to
                                                             support people suffering from the
                                                             disease.

HDFC          Sustainable      Micro Finance                 HDFC operates as a wholesaler in
              Finance                                        micro-finance and weaker section
                                                             housing while advancing the
                                                             reconstruction activities in Gujarat.

Hindalco      Poverty          Integrated                    The      integrated   rural  poverty
Industries    Alleviation      Rural Poverty                 alleviation programme is initiated in
                               Alleviation                   Uttar        Pradesh,     Jharkhand,
                                                             Chattisgarh and Dadar & Nagar
                                                             Haveli among the most backward
                                                             areas of India. The company has
                                                             adopted 340 villages for poverty
                                                             alleviation in a phased manner over
                                                             a decade. In the 1st phase 71
                                                             villages have been zeroed in on
                                                             where the focused projects will run
                                                             for 3 years.

HSBC          NGO              Education       40 NGOs in    Support those organizations which
              Partnership                      18 cities     concentrate     on   primary   and
                                                             secondary     schooling    of   the
                                                             underprivileged, impart informal
                                                             learning to foster an understanding
                                                             of hygiene, health & nutrition and
                                                             help children who are mentally and
                                                             physically handicapped.

ICICI         Sustainability   Micro                         The     company      offers   rainfall
Lombard                        Insurance                     insurance schemes tailored to
General                                                      provide       protection     against
Insurance                                                    deficient/excess rainfall and low
                                                             temperatures     to    farmers    not
                                                             covered by government’s crop
                                                             insurance schemes.


                                                                                                      23
Company       Domain         Project (s)      Partner (s)   Special Features

ICICI         Sustainable    Micro                          ICICI Prudential offers insurance
Prudential    Finance        Insurance                      protect to low income members
Life                                                        through schemes like MITR and
Insurance                                                   Suraksha

IOCL          Culture        Heritage Sites   ASI and       Created a non-profit trust name The
                                              NCF           Indian Oil Foundation (IOF). The
                                                            objective of their initiatives is to
                                                            protect, preserve and promote
                                                            India’s national heritage and culture
                                                            and built a corpus of Rs. 25crores
                                                            and an annual recurring contribution
                                                            of Rs. 10crores.

Jet Airways   Fund Raising   ‘Magic Box’      Save the      Runs       an     in-flight  collection
                                              Children      programme, the ‘Magic Box’ in
                                                            association with the NGO Save the
                                                            Children      India.     The  initiative
                                                            contributed above Rs. 25million till
                                                            end April 2002. This fund has been
                                                            used in the development activities
                                                            at Kargil in Kashmir, improvement
                                                            of education & health care facilities
                                                            in quake affected Osmanabad
                                                            district in Maharashtra, and in the
                                                            fight against trafficking of women &
                                                            child prostitution in the Indian sub
                                                            continent.

Kanoria       Basic Issues                    NGOs          Community Services: Contributions
Chemicals                                                   to various schools & medical relief
&                                                           camps, tree plantation schemes,
Industries                                                  safety, health & environment groups
                                                            & disaster management centers.
                                                            Social Development Schemes:
                                                            educational programmes, health &
                                                            medical      programmes,    cultural,
                                                            games & sports programmes.
                                                            Agricultural     &    Environmental
                                                            Schemes: fruit tree plantation
                                                            programmes, distribution of free
                                                            saplings,     vegetable   cultivation
                                                            programmes & water resource
                                                            development.

                                                            Self     Employment      Schemes:
                                                            execution of training programmes
                                                            for tailoring, basket making &
                                                            sealing wax farming, amongst
                                                            others.




                                                                                                       24
Company       Domain          Project (s)    Partner (s)   Special Features

Lupin         Rural Welfare                  Lupin         Lupin’s community involvement is
                                             Human         carried out through the Lupin
                                             Welfare &     Human Welfare & Research
                                             Research      Foundation. The foundation’s rural
                                             Foundation    construction activity, till date, has
                                                           been said to have benefited over
                                                           1900 villages in 11 districts of 4
                                                           Indian states covering nearly 1.45
                                                           million people, in areas of
                                                           infrastructure,    rural     industry,
                                                           agriculture,    animal     husbandry,
                                                           health & sanitation & education &
                                                           social welfare.

Mahindra &    Education                      KC            K C Mahindra educational trust is
Mahindra                                     Mahindra      involved in & contributes to various
                                             Educational   education initiatives. These are:
                                             Trust         Providing     interest    free    loan
                                                           scholarships to post graduate
                                                           students going abroad for higher
                                                           studies.

                                                           Mahindra    Search    for    Talent
                                                           Scholarships in schools in India to
                                                           encourage & reward students who
                                                           have       achieved       academic
                                                           excellence.

                                                           KC Mahindra Chair at the Institute
                                                           of Science, Mumbai, to encourage
                                                           students in nuclear chemistry.

Nokia India   Environment     Helping Hand                 Packaging of all Nokia phones is
              Employee                                     done from recycled paper. With
              volunteering                                 every handset clear instructions are
              for social                                   provided for correct disposal of
              services                                     used batteries. Keeping in line with
                                                           their international programme of
                                                           employee      volunteering    called
                                                           ‘Helping Hand’, Nokia India is
                                                           involved with NGOs working with
                                                           disabled children in Delhi. Nokia’s
                                                           employees provide support in terms
                                                           of help & training in accounts,
                                                           human resources, IT, working with
                                                           children & other activities.




                                                                                                    25
Company       Domain         Project (s)   Partner (s)   Special Features

Nestle        Basic Issues                 NGOs          Supports       various    community
                                                         projects in education, health,
                                                         welfare & infrastructure around its
                                                         factories. In Moga, Punjab, the
                                                         company established milk collection
                                                         centres with cooling tanks, milking
                                                         machines & providing farmers with
                                                         training in breeding & feeding
                                                         practices to increase the yield of
                                                         their herd. This has helped improve
                                                         the quality of milk produced in the
                                                         region, which in turn helped local
                                                         farmers increase their income.
                                                         The company has facilitated various
                                                         initiatives to provide clean drinking
                                                         water for students of local schools
                                                         around its factories & also
                                                         organizes projects with the Indian
                                                         red cross, which include blood bank
                                                         services, immunization & health
                                                         awareness.

Panalpina     Children       Literacy      Charity Aid   It runs a computer literacy
World                                      Foundation    programme for the underprivileged
Transport                                                in the Pahar ganj area of New
(India) Pvt                                              Delhi. It works in partnership with
Ltd.                                                     charity aid foundation & Salam
                                                         Balak Trust. Under this programme
                                                         the company teaches 25 children in
                                                         three batches. The company also
                                                         helps other charities & NGOs by
                                                         buying Christmas cards from CRY,
                                                         UNICEF, Helpage India, & crafts
                                                         from     visually   &    Physically
                                                         Handicapped people.

Philips       Strategy       CSR                         Philips India has rolled out its
India                                                    supplier        declaration        on
                                                         sustainability in 2003. It outlines
                                                         minimum behavioural expectations
                                                         in the areas of environment, health
                                                         & safety & labour conditions. Social
                                                         audits of suppliers are carried out
                                                         by a social responsibility agency &
                                                         quaterly reports are submitted to
                                                         Philips global headquarters. This
                                                         data is subject to external audits as
                                                         well.




                                                                                                 26
Company       Domain          Project (s)      Partner (s)   Special Features

Pizza         Under-          Food for Good                  A part of the profits of every pizza
Corner        privileged                                     sold at pizza corner goes to a fund
India         Children                                       called ‘Food for Good’ which is
                                                             meant to benefit lesser privileged
                                                             children. Beneficiaries of the
                                                             programme include 20 street
                                                             children in Bangalore who receive
                                                             term deposits by the company.
                                                             These term deposits will fund the
                                                             higher education of these children
                                                             who will then complete 10th grade &
                                                             age 18.

Polaris       Education       Education-       Akanksha,     Setup the Ulhas trust to help &
Software                      Financial        Pratham       support     the    education    of
Lab                           Support          Movement      economically backward children
                                                             through scholarships of Rs. 1500
                                                             which takes care of their annual
                                                             educational    expenses.    Career
                                                             counseling and training sessions
                                                             also happen throughout the year to
                                                             mentor the progress of these
                                                             children. About 1500 students were
                                                             awarded in 2003.

Star TV       Awareness-      Public Service   Children      Runs         public       services
              Social Issues   Announcemen                    announcements on a range of
                              ts & Children                  social, health & environmental
                              related                        issues such as child labour, polio,
                                                             AIDS, pollution & conservation.
                                                             These announcements have been
                                                             effective     in     disseminating
                                                             information.
                                                             Donations from the Star Care
                                                             Payroll programme go to two
                                                             registered charities working on
                                                             children’s   primary    education-
                                                             Akanksha & Pratham Movement.

Tata          Education       Support &        Central &     Set up the Audit literacy programme
Consultancy                   Improvement      State         (ALP)       to   help    the    Indian
Services                      of Adult         Government    Government eradicate illiteracy.
                              Literacy                       The ELP uses the Computer Based
                              Programme                      Functional Literacy (CBFL) model,
                                                             an innovative teaching method
                                                             designed by TCS, where the
                                                             instructor uses multimedia software
                                                             to teach the adults to read. Adult
                                                             illiterates can learn to read after 40
                                                             hours of instruction of over 8 to 10
                                                             weeks.




                                                                                                      27
Company      Domain        Project (s)   Partner (s)   Special Features

Tetrapak     Health        School Milk                 The idea behind School Milk
                           Programme                   Programme (SMP) is to deliver
                                                       tasty, nutritious and safe milk using
                                                       Aseptic Technology.

                                                       The     SMP     is  designed      for
                                                       addressing health & nutrition needs
                                                       school     going   children.     The
                                                       programme       encourages       milk
                                                       consumption amongst children. It
                                                       also focuses on actions that would
                                                       contribute to the educational &
                                                       overall development of the children.

Titan        Women         Empowerment   Myrada        Titan are looking at avenues to
Industries                 of women in                 enhance the standard of living of
                           Dharampuri                  women in Dharampuri village &
                                                       those near Hosur in Karnataka.
                                                       Titan started by getting the women
                                                       to make chappatis for the factory
                                                       workers. Later, they were asked to
                                                       take care of the Laundry. In 1995,
                                                       Titan joined hands with Myrada, an
                                                       NGO that works on social causes &
                                                       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
                                                       called Meadow, owned & run by the
                                                       women themselves. Today, about
                                                       200 women own meadow.

Wockhardt    Health        HIV/AIDS      WHARF         Wockhardt had established WHARF
                                                       (Wockhardt HIV/AIDS Education &
                                                       Research Foundation) an NGO,
                                                       with the help of Harvard medical
                                                       international, a Harvard university
                                                       affiliate to control the spread of
                                                       HIV/AIDS      in   India.  WHARF
                                                       provides training to clinicians,
                                                       nurses, paramedics & counselors in
                                                       areas of HIV/AIDS.

Yes Bank     Sustainable   Project       USAID         With support from USAID, Yes
             finance       financing                   Bank has increased financing of
                                                       small & medium enterprises for
                                                       energy efficiency. The aim is to
                                                       commercialize renewable energy,
                                                       energy efficiency & water
                                                       technologies related products &
                                                       services. The U.S. guarantee
                                                       covers upto 50% new principal loss



                                                                                               28
in case of default. This lowers the
                                                                   risk for YES Bank to invest in small
                                                                   & medium scale enterprises.



Just to give a broad idea of the areas in which Indian companies are practicing their CSR
activities, a small graph has been made showing the areas of concentration & the
number of companies (from the above stated) who are working for it.




35
30
25
20
                                                                                     Number of Companies
15
10
 5
 0
      LC   CV   EW     RD    EM    H &E   NGO    CG   W & C R HIV/AIDS   PIC




     LC              Local community development

     CV              Customer Value through CSR

     EW              Employee Welfare

     RD              Rural Development

     EM              Environment Management

     H&E             Health & Education

     NGO             NGO Support
     CG              Corporate Governance

     W&CR            Women & Children’s Rights

     HIV/AIDS        HIV/AIDS awareness & rehabilitation

     PIC             Protecting Indian Culture




                                                                                                          29
THE FUTURE:
The theme of corporate social action assumes pivotal significance in the world wide debate on
sustainable development. Modern corporation exert considerable influence on the economy,
polity & society of the nation. The world over increasingly, there is an evidence of extraordinary
economic power exercised by mega corporations, their impact being more severe in the case of
developing countries. As more of the developing countries in the world opted for a democratic
framework, the issues of economic & social governance became very important; these subsume
issues like human rights, labour standards, health care and poverty among others. There is
sufficient evidence to show that in many countries of the developing world governments have
not been able to provide investible resources for the social sector development, and further
where the government has been able to do so, they have not been able to create requisite
institutional framework for the implementation, monitoring and evaluation of such endeavours. It
is therefore recognized that developing countries need to create alternatives for social sector
development, and of the suggested routes for doing so is to develop viable & strategic public-
private partnership.


It is also increasingly acknowledged by the academics & the public policy makers that the
beginning of withdrawal by the state in many developing countries signifies the potential onset
of an era full of opportunities for developing public-private partnership. It is also because neither
the public nor the private sector alone can counter effectively the challenge of social sector
development. The government on its own cannot get involved any further in several sectors
simultaneously as it did in the last four decades in many countries. One of the biggest
challenges for governments in the developing countries like India is to create and nurture a
durable framework of institutions who will translate public policies into deliverables. India needs
a strong institutional framework for meeting the multiple objectives of economic growth and
development. The second requirement is the commitment of the top management of the public
enterprises and the corporate sector to move away from a mere philanthropy to corporate social
action. In the public enterprises, corporate social responsibility is practiced largely as per the
mandate of the controlling ministry and is based significantly on the basis of commercial
considerations such as displacement and rehabilitation of communities due to large scale site
development of newer projects. In the corporate sector also one of the primary drivers for the
introduction of corporate social responsibility is commercial such market access to rural
hinterland. However, what is needed is some commonality and continuity of themes for
sustainable development.



                                                                                                  30
There is a need for training and development of a large pool of voluntary sector personnel and
co-operatives so that they can get substantively involved; non-governmental organizations in
many cases have played an important role in initiating several innovative programmes and
activities in the social sector; however, a lot more is required to have them further involved in as
professional a manner as possible.


It is therefore, suggested that all the agencies and institutions including the multilateral
institutions assisting social sector development in India world re-look at the cumulative
experience of promoting corporate social action in as transparent and accountable manner as
possible. The public enterprises need to do more than the mandated corporate social
responsibility programmes and the corporate sector should aim at involving the multiple
stakeholders. The larger issues and long run ramifications of public policy on corporate social
action for stakeholders and society need to be integrated into a coherent plan of action in the
future. There has been a lot of debate on the impact of the 73rd and 74th amendments to the
Constitution of India; one of the disturbing aspects of the debate is the uneven and tardy
progress in respect of several schemes of public welfare due largely to such issues as
corruption and deficiencies in institutional infrastructure. Therefore, there is an urgent need for a
tripartite action on part of government, public enterprises and the corporate sector. There is
fortunately no dearth of talented opinion makers and social activists but they need to be
harnessed and put in place to create a suitable platform such that the movement for
internalizing and institutionalizing corporate social responsibility becomes a durable one.




                                                                                                  31
THE CORPORATE SOCIAL RESPONSIBILITY INDEX FOR INDIA:
At this point of time there is no authoritative, voluntary, CSR (corporate social responsibility)
initiative that is business-led and engages with companies from all sectors, publicly ranking their
CSR activity, whilst consolidating information demands made on companies. Thus what is
required is a Corporate Social Responsibility Index which would help meet this need in India.

The Index will help improve corporate responsibility by providing a systematic process that
compares companies’ management processes and performance with those of others in their
sector. It would provide a benchmark for companies who are committed to managing,
measuring and reporting their impact on society. The Index would be based on a framework of
four components shown in the following model:




                                                                             Performance
       Corporate            Integration                                           &
                                                  Management
        Strategy                                                               Impact




   Community               Environment              Marketplace              Workplace




The Corporate Strategy section looks at how the nature of a business’ activities influence its
company values, how these tie into strategy and how they are addressed through risk
management, development of policies and responsibilities held at a senior level in the company.


The Integration section looks at how companies organize, manage and integrate corporate
responsibility throughout the operations. Is it part and parcel of the company culture? Is it
integrated into the strategic decision-making processes of the company and linked through into
internal governance and risk management systems?



                                                                                                 32
The integration is assessed through the Management section where the processes for
managing different stakeholder relationships are reviewed. This section looks at what the key
issues are for the business in the Community, Environment, Marketplace and Workplace, the
objectives and targets set to manage these issues and how it communicates, implements and
monitors its policies, objectives and targets.

Community relates to the interface between business and society that can be both positively
and negatively affected by a project, product or investment on a local or global level.

The Environment comprises the world’s ecosystems and natural resources and is affected
directly and indirectly by a company’s operation, products and services. Being responsible
means safeguarding both the systems and resources for future generations.

Responsibility in the Workplace is the creation of a working environment where personal and
employment rights are upheld.


Responsibility in the Marketplace is maintaining the highest standards of business practice
when developing, purchasing, selling and marketing products and services.


The Performance and Impact section looks at companies’ performance across a range of social
and environmental impact areas.


The Corporate Responsibility Index would be a strategic management tool to enhance the
capacity of businesses to develop, measure and communicate best practice in the field of
corporate social responsibility. It would do this through benchmarking corporate social
responsibility strategy and implementation process.


The Index would be created by the support of leading businesses in the country as well as
leading NGO’S who would be committed to continually improve their positive impact on society.
Every year more & more successful companies would be invited to participate in the Corporate
Responsibility Index by completing an online survey accessible via individual and secure
usernames and passwords.

Even though the Corporate Responsibility Index will be a self-assessment exercise a central
agency will have to monitor the whole process. This central agency will not be involved directly




                                                                                             33
in the task of rating companies, but will act as the 'trustee' overseeing the integrity of the
process.


The implementation of the Corporate Social Responsibility Index

The Corporate Responsibility Index survey will be made available to companies once they have
registered to participate in the Index. The survey would be a web based electronic tool and
would also be password protected for each individual company.


Comprehensive guidance notes would also be provided with the survey in the form of separate
documents. These would provide definitions, and help notes to support the understanding of
why a particular aspect is important and how this may be applied within a business. Together
with the survey this would also provide a roadmap for integrating corporate responsibility within
the business.


The Corporate Responsibility Index would be a self-assessment process. Each submission
would have to be signed off at CEO or main board level to ensure director-level commitment to
the credibility of the responses.


A market research company like ORG-Marg would be required here to take up the responsibility
for the collection, analysis and aggregation of participant responses as well as add expertise to
the validation process; it will examine all responses for completeness and consistency. In
addition it will also be needed to meet with selected participants to check their understanding
and interpretation of the questions and seek further substantiation when necessary.

The robustness of the survey would be demonstrated by the ongoing consultation and
engagement with participants after their surveys are submitted. It is critical that participants
have understood and interpreted the survey correctly.




                                                                                              34
HOW & WHAT WILL THE INDEX MEASURE:
The Corporate Responsibility Index will measure responsible business practices through
evaluating four main areas:
 The corporate responsibility strategy of the business

 How this strategy is implemented across the business

 The management of corporate responsibility within the business

 The performance in a range of social and environmental impact areas

Each Of The Four Components Of The Index Model Would Be Weighted As Follows:

 Section 1: Corporate Strategy 20% of total score
 Section 2: Integration 20% of total score
 Section 3: Management 25% of total score
 Section 4: Performance and Impact 35% of total score

In addition each management section of Community, Environment, Marketplace and Workplace
would be equally weighted (5.625%).

Companies would be given credit for what they implement across their business and questions
within each section will again be generally equally weighted.


Once the validation process has been completed by market research company, the results will
be electronically generated by the survey databases.


To ensure the ongoing sustainability of the Index, a nominal fee for participating companies to
cover part of the validation cost will be charged at a later stage in the life of the index.


Publishing The Index
Results of the index will have to be published in the leading publications for the index to gain
acceptance by more and more companies.


Participating companies will not be named until the results are published. It is at the company’s
own discretion should they wish to publicize their involvement on their own websites or if they
wish case studies of their corporate social responsibility practices to be reported in the
contacted newspapers.


                                                                                               35
BENEFITS FOR THE COMPANIES:
By completing the Corporate Responsibility Index, the company will be using a proven business
tool that enables you to most effectively incorporate best business practice through your
strategy and implementation processes across the whole organisation.

Completing the Corporate Responsibility Index will drive overall performance through enhanced
reputation, the retention and attraction of talented staff, lower costs through eco-efficiency and
building upon existing company profiles for investment purposes.


There will be a confidential individual feedback report which will provide companies with their
position- overall in the Index, in their sector, economic group and leading Indian businesses. It is
a powerful internal management tool helping to engage board members and raise awareness of
the complete range of corporate responsibility issues across the business whilst highlighting
areas of strength and weakness.


The Index will be an important external communications tool enabling companies to underwrite
the public statements that they make on responsible business practice. It is an important
communications tool during a time when stakeholders are becoming increasingly skeptical.


FUTURE OF THE INDEX & SUSTAINABILITY:
The process will improve (less of a time constraint, etc) if this gets through the first cycle. With
enough goodwill and trust from the business community, the belief is that a foundation can be
established which will eventually see companies voluntarily coming forward to be a part of this
index.


However, for this to happen, the need is of business is to embrace the given opportunity. That is
why this is seen as being a collaborative process - in which the central agency will have to be as
flexible as possible in responding to the day-to-day needs of participating companies.




                                                                                                 36
REFERENCES:

 The London Group Benchmarking Model – Partners in Change Strategy Paper 2001-0; Pg42

 Who’s Who in CSR in India – A Resource Guide – 2006

   Harish Srivastava and Shankar Venkateshwaran, The Business of Social Responsibility,
   Books for Change, Bangalore 2000

   Harward Business Review – Articles on CSR

   R. Aga: Embracing CSR – the saner alternative, Forum of Free Enterprise

   Corporate Social Responsibility: Concepts, Practices and Country Experiences – C. V. Baxi
   & Nazy Chadha

   Corporate Responsibility: Dipankar Gupta

   Stakeholder Engagement: The Concept and Practice – Ravi Puranik & Viraf Mehta

   CSR Debate in India: From Philanthropy to Public – Private – People Partnerships, Jagdish
   Gulati

   Management Education and Value Based Curriculum – Ajit Prasad

   The Role of Social and Societal Responsibility as a Core Value of the University and
   Corporate Sectors – R. Natarajan


Surveys:
 ACNielson 2005 Corporate Image Monitor results
 http://www.acnielson.co.in/news.asp?newsID=144
 The state of CSR, Partners in Change (PiC), Indian Market Research Bureau (IMRB) 2003
 Centre for Social Markets (CSM). Corporate Social Responsibility – Perceptions of Indian
 Business

Websites:

   Centre for Social Markets
   http://www.csmworld.org
   CSR World
   http://www.csrworld.org
   Indian Chamber of Commerce Online
   http://www.indianchamber.org




                                                                                            37
Author’s Profile


Prof. Dr. Uday Salunke Director - Welingkar Institute of Management is a mechanical

engineer with a management degree in 'Operations', and a Doctorate in 'Turnaround Strategies'.

He has 12 years of experience in the corporate world including Mahindra & Mahindra, ISPL and

other companies before joining Welingkar in 1995 as faculty for Production Management.

Subsequently his inherent passion, commitment and dedication toward the institute led to his

appointment as Director in 2000. Dr. Salunkhe has been invited as visiting fellow at the Harvard

Business School, USA and European University, Germany. He has also delivered seminars at the

Asian Institute of Management, Manila and has been awarded "The Young Achievers Award-

2003" in the field of Academics by the Indo American Society recently.




                                                                                             38

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Uday Salunkhe - Emerging Competitiveness Paradigms

  • 1. CONFERENCE THEME: Emerging Competitiveness Paradigms TITLE: India’s Competitiveness Edge - A Study of the Role of Corporate Social Responsibility ________________________________________ Author Details: Prof. Ms. Ketna L Mehta Prof. Dr. Uday Salunkhe Editor & Associate Dean, Research Director Welingkar Institute of Management Welingkar Institute of Management L.N. Road, Matunga (E), Mumbai – 400019 L.N. Road, Matunga (E), Mumbai – 400019 Tel.Nos: 022 – 2417 8300 Extn: 705 Tel.Nos: 022 – 2417 8300 Extn: 705 ® - 022 – 2407 1952 Email Id: director@welingkar.org Email Id: ketna@vsnl.com / ketna.mehta@welingkar.org 1
  • 2. India’s Competitiveness Edge - A Study of the Role of Corporate Social Responsibility ABSTRACT The theme of corporate social action assumes pivotal significance in the world wide debate on sustainable development. Modern corporation exert considerable influence on the economy, polity & society of the nation. The world over increasingly, there is an evidence of extraordinary economic power exercised by mega corporations, their impact being more severe in the case of developing countries. As more of the developing countries in the world opted for a democratic framework, the issues of economic & social governance became very important; these subsume issues like human rights, labour standards, health care and poverty among others. Secondly the competitiveness index in India is very low due to the existing social problems & there is a need for companies to join in to raise the competitiveness level of the country. The paper firstly examines the trends in the area of CSR over the years from cheque philanthropy to community projects to corporate governance. Continues by providing an insight in the space of CSR in India and highlights the research done on the initiatives undertaken by different companies in this regard. It also includes a detailed study of the current CSR policies & initiatives of one of India’s pioneering companies in this field, Tata Steel. The paper concludes with a few thoughts on what is the future & the need of the hour i.e. a tripartite action on part of government, public enterprises and the corporate sector to face the challenges put forth by the changing economy. Lastly the focus is on the proposal of building a CSR Index for India which will help improve corporate responsibility by providing a systematic process that compares companies’ management processes and performance with those of others in their sector. It would provide a benchmark for companies who are committed to managing, measuring and reporting their impact on society. It will also help companies who want to venture into a certain area of CSR to know how much work has been done there and what has been their experience. Research Assistance: Altaf Patel and Ramit Munshaw are Welingkar students pursuing PGDBM (Year 2005 – 07) 2
  • 3. CORPORATE SOCIAL RESPONSIBILITY: The role of business in society has been debated in economic literature for a long time. By the term ‘Corporate Social Responsibility’ (CSR), what is generally understood is that business has an obligation to society that extends beyond its narrow obligation to its owners or shareholders. This idea has been discussed throughout the twentieth century, but it was Howard R. Bowen’s book on “Social Responsibilities of Businessman” published in 1953, which was the origin of the modern debate on the subject. Bowen reasoned that there would be general social and economic benefits that would accrue to society, if business recognized broader social goals in its decisions. Corporate Social Responsibility is nothing but what an organization does to positively influence the society in which it exists. It could take the form of community relationship, volunteer assistance programmes, healthcare initiatives, special education / training programmes and scholarships, preservation of cultural heritage and beautification of cities. The philosophy is, basically to give back to the society, what it (business) has taken from it, in the course of its quest for creation of wealth. Social responsibility becomes an integral part of the wealth creation process - which if managed properly should enhance the competitiveness of business and maximize the value of wealth creation to society. The World Business Council for Sustainable Development in its publication "Making Good Business Sense" by Lord Holme and Richard Watts used the following definition. "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." Another definition is "CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government." 3
  • 4. CORPORATE SOCIAL RESPONSIBILITY – A BROADER PERSPECTIVE Since 1990, a number of developments such as increasing democratization of governments, creation of newer social and economic institutions, rapid growth of volunteerism in the form of non-profit organizations, increasing consumer awareness, focus on the need for reducing poverty, dealing with the human rights issues, among others have reinforced the need to articulate policies and actions to incorporate responsiveness. CSR is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner. The aim of social responsibility is to create higher standards of living, while preserving the profitability of the corporation. (Michael Hopkins 1998) Expected outcomes of social responsibility are: improved financial performance, increased customer loyalty, higher ability to attract to attract and retain employees, reduced regulatory oversight, workforce diversity, product safety and decreased liability, employee volunteer programmes, and greater use of renewable resources. Simon Zadek (2001) describes the development of CSR broadly in terms of three generations: The 1st generation of CSR showed that companies can be responsible in ways that do not detract from commercial success. The most prominent changes include adoption of strategic approach to philanthropy, expansion of the geographic focus of corporate, and evolving of measurement tools. The 2nd generation is focusing on CSR as an integral part of long term business strategy The 3rd generation of CSR is expected to make a significant contribution to address issues such as poverty, exclusion and environmental degradation. This will involve both partnerships with civil society and changes in public policy. Today we find that as more and more industries are setting up their factories, they are encroaching on the land which belonged to the community residing there, and therefore through their activities they end up affecting the existing lifestyles of the community members. For maintaining cordial relations between the members of the community and the organization it is essential for the organization to depict a fair behavior and must give back to the community through various community related initiatives. This strategic move is of mutual benefit and is 4
  • 5. critical for the success of the organization as it can gain a competitive advantage as it is seen as an organization which is concerned for the people and all its stakeholders. To illustrate the convergence between the community and the corporation the use of the ‘The London Group Benchmarking Model’ is valuable. The LBG seeks to develop and expand the reporting of company activities in the community so that they are more transparent and can be judged by the impact they achieve. Philanthropy: Intermittent support; wide range of causes; in response to needs and appeals of charitable and community organizations; in partnership between companies, employees, customers and suppliers. Social Investment: Long-term and strategic involvement in community partnerships; limited range of social issues chosen by the company; to protect long-term corporate interest and to enhance its reputation. Commercial Initiatives in the Community: Activities in the community led by commercial departments; directly support company success, brands and other policies; in partnership with NGOs Business Basics: Core business activities; meeting society’s needs for cost-effective goods and services; in a manner that is ethical, socially and environmentally responsible. 5
  • 6. ‘The London Group Benchmarking Model’ The Philanthropic component: This is typically what all companies, including Indian companies do. The distinctiveness of this component is that it satisfies the lowest level need of the organization i.e. it provides a reputation of being a ‘caring company’. Here companies not only make donations of money or kind but also employee volunteering. The Social Investment component: Here the company looks at a more systematic and strategic activities with its community involvement with a view of attaining business benefits in the medium term. Such activities are typically aimed at communities, but at times both employees as well as their families can be the beneficiaries. The Commercial Initiatives: Here while addressing social issues the company is also focusing on the commercial benefits it can derive from the activity undertaken. Typical examples include Cause-related marketing or event sponsorship. Triple-bottom-line’. The company studies the impact of its activities on the society and planet i.e. societal and environmental returns, apart from the financial returns. The relative sizes of the components are meant to reflect the impact of that activity on the community. Hence here we see that ‘business ethics’ impacts the society more than the ‘philanthropic’ activities. This model is very useful as it is a good representation of the strategic community involvement, the business links with the community and the stakes emerging from the accountability, ethical and management perspectives. In India we have not yet witnessed significant development in these fields but steps are being taken towards addressing the rights of communities across the business landscape. 6
  • 7. CORPORATE SOCIAL RESPONSIBILITY - TODAY CSR can affect a variety of stockholders, including customers, employees & their families, investors, local communities, environmental groups, government, suppliers & competitors. Accordingly, CSR involves a wide range of practices in the area human rights, employee relations, diversity, consumer protection, environmental protection, fiscal responsibility & accountability, market practices & philanthropy. Indian MNC’s like the, ITC, Ranbaxy & DuPont India, have endeavored to create a better social order. What is significant with these companies is that they initiated the process of CSR from their doorstep by providing a better & healthy work atmosphere to their employees. Part of the wealth created should be made available for the benefit of the nation. In creation of wealth, care must be taken to not only protect the environment but also enhance it so that this world, which we have borrowed from our children, is left in better shape for them. Leadership in business is living by these ideals and leading by example. In today’s world, the only constant is change. Leaders must anticipate change, drive it, make acceptable to all stake holders, and turn threats into opportunities through their vision & their actions. People argue that there must be legal provisions for CSR, just like the concept of corporate governance in structuring the board of a company. It is seen that the company name independent directors in their board of directors as a statutory requirement. The very notion & goal of protecting shareholders’ interest is defeated as in many companies independent directors are “friends” of promoters and act as rubber stamps. The point of submission here is not to formalize CSR in a legal boundary. Let it come from within the company, let it evolve as a company’s philosophy, something attached to the company’s brand…and let society be the judge of its sincerity of purpose and honesty of action. A survey by the Capital Care of the London business community points out “Over three quarters of the business here agree that organizations should do more than the law requires on environmental concerns & over half think that they should do so on social objectives.” Of course, all companies must conform to the basic legal requirements pertaining to CSR, such as environmental norms, labour welfare requirements, and advertising laws. But they must 7
  • 8. 55strive beyond the legal requirements. Here I would like to cite the example of DuPont’s India Safety Standards where all employees have a prescribed code of conduct – something beyond the legal requirement. There must be a set of ethical & moral values to guide all business processes at the workplace as well as the market place. In the words of Kofi Annan, U.N. Secretary General: “We have to choose between a global market driven only by calculations of short term profit, and one which has a human face……Between a selfish free-for-all in which we ignore the fate of the losers, and a future in which the strong and successful accept their responsibilities, showing global vision & leadership”. CORPORATE SOCIAL RESPONSIBILITY - GROWTH OVER THE YEARS: In India, the term CSR might be new but the concept is not. It has been there since the earliest times, going back to an age where society itself was in its formative stages. It has incorporated in the various religious laws where a part of one’s earnings are donated for the benefit of the poor and community welfare. The Hindus call it ‘Dharmmada’, the Muslims ‘Zakatah’, the Sikhs ‘Dashant’; call it by whatever name you will, the concept has been imbibed in the society from the very beginning. As individuals joined hands to form organizations, the same concept became embedded in the originations. Gandhi’s philosophy of trusteeship is similar to the CSR of the modern business world; the Gandhian notion of trusteeship has been followed by the Tatas and Birlas ever since their inception. Jamshedji Tata with his vision to create the Indian Iron & Steel Industry transformed an unknown village ‘Sakchi’, later named as ‘Jamshedpur’ into a model town of planning & community care. The National Dairy Development Board (NDDB) has transformed huge areas in Indian villages by empowering producers & creating a manufacturing outlet for their produce. Dr. Kurien’s AMUL-led Operation Flood was the forerunner of this initiative, which has spread to many states & similar operations. 8
  • 9. The Tata’s under the chairmanship of S.P.Kotwal conducted a social audit, the aim of which was to find out areas where Tata was not able to discharge its responsibility towards society. The reason for all this hectic society is not far to seek. CSR adds value to the social environment, the work environment, and ultimately to the company. According to a report, nine of the top ten Forbes 500 firms have something in common besides success: CSR programmes. Corporate philosophy is undergoing a change, from “Profit making” to “value creation”- something far more enduring. ‘Operation Muskan’, this Smile Train project was flagged off in October by Tata Steel Rural Development society (TSRDS) - Tata Steel’s NGO community service arm. The TSRDS realized the urgent need for this form of reconstructive surgery at various health camps. At one week long camp in Ghatshils, doctors treated 108 cleft palate cases; in Deoghar, 149 people requested for the surgery. While India Inc. still calculates the plusses & minuses of good corporate conduct, corporate social responsibility for the Tatas & Birlas is an old tradition. The Tata Group invested more than 150 crore on the social sector in 2002, the A.V. Birla Group Rs. 57 crore, Reliance Rs. 30 crore, & Infosys Rs. 5 crore. Tata Steel set aside as much as 12-14% of its profit after tax (PAT for 2003-04 is Rs. 1746.22 crore) for welfare activities. The Infosys Foundation supports disadvantaged people directly or through organizations. The foundation prefers to work through smaller organizations & donates in kind father than in cash. For instance, recently gave books in Kannada worth Rs. 10,000 to a village library, so that it could help strengthen the local language. The middle class founders of the mega-successful Infosys believe that wealth must be equitably distributed “Unless you create wealth by legal means, you cannot distribute it. And without the two, you don’t have progress” says N. R. Narayanmurthy of this celebrated & brilliantly successful IT company. “Putting public good ahead of private good in every decision you make, will in fact, result in reaching the private good.” To distribute its substantial wealth & formalize its social support initiatives Narayanmurthy & his wife Sudha set up the Infosys Foundation in March 1997 which receives 1% of the 9
  • 10. company’s after tax profit. All financial assistance to the needy is given in the form of rule- based distribution of money. In the field of education, the foundation has instituted 26 scholarships for Ph.D scholars in 13 prestigious institutions. It has also anchored the ‘train & trainee program’ in which computer science students form engineering colleges are exposed to the latest IT trends. The foundation has also played an important role in setting up science centers & libraries and to date, 1001 libraries have been inaugurated with assistance from this foundation. The Infosys Foundation is committed to giving 30% of its funds to old people, the destitute & the handicapped, 15% for rural development, 30% for education of poor but talented children, 15% for cultural activities & 10% for health care, both in village and in cities. Dr. Irani propounded five basic tenets of CSR at the 27th annual meet of the US-India business council meeting: “The aim of the industry should not be to make money. The aim should be to serve customers & other stake holders and the result would surely be more money. And pursuing excellence would enable it to create even more wealth”. Companies are increasingly required to apply corporate social responsibility by balancing the economic, social & environmental dimensions of their operation whilst building shareholder value. Corporate Governance is about promoting corporate fairness, transparency & accountability. Companies used to see this area of corporate social philanthropy as the last thing on their agenda ten years ago, but now they agree that social & economic issues are intertwined. Corporate philanthropy - or corporate social responsibility – is becoming an ever more important field for business. Today’s companies ought to invest in corporate social responsibility as a part of their business strategy to become competitive. Corporate success depends on the local environment: an appropriate infrastructure, the right types & quality of education to future & current employees, cooperation with local suppliers, quality of institutions, local legislation & so on. In this corporate competitive context, the company’s social initiatives can have great impact no only for the company but also for the local community. 10
  • 11. CSR BUDGETS OF SOME OF THE TOP COMPANIES IN INDIA Sr. Name of the company Total Funds Deployed on No. CSR Last Year (2004-05) 1. ABB Ltd. Rs. 0.9 crores 2. Amway India Enterprises Rs. 0.45 crores 3. British Gas Rs. 1 crore 4. Hindustan Lever Ltd Rs. 24.6 crores 5. Infosys Technologies Ltd. Rs.18 crores (1.5% of PAT) 6. Jankidas Bajaj Gramvikas Sanstha (Bajaj) Rs. 0.45 crores 7. Tata Steel Rs. 189 crores 8. Tata Sons Rs. 144.9 crores 9. Titan Rs. 1.75 crores 10. Wipro Corporation Rs. 0.3 crores 11
  • 12. TATA STEEL – THE PIONEERS IN CORPORATE SOCIAL RESPONSIBILITY Organizational Profile Organization type: MNC Number of employees: 39,646 Areas of operation: Mainly in Jharkhand & Orissa Gender Balance: (M: F): Non officers m/f ratio: 20:1 Officers m/f ratio: 14:1 Products: Steel products from wire rods, cold rolled sheets, blooms, slabs, bearings, agricultural implements & minerals etc. Gross income/Turnover FY 2004-05: Rs. 16,663 crores Net Profit FY 2004-05: Rs. 3604 crores Total Funds deployed for CSR: Rs. 189 crores Main Stakeholders: Shareholders/investors Customers Employees CSR Interface / Responsibility Tata Steel relates itself to CSR as a service provider. 12
  • 13. CSR Affiliations Tata Steel is a signatory or member of: United Nations Global Compact Global Reporting Initiative CII-UNDP Global Business Coalition for HIV/AIDS CII SDCA National Committee STOP TB India Business Alliance SA 8000 THE Mining Geological & Metallurgical Institute of India CSR Policies Founder & Group Chairman first articulated Tata Steel’s explicit CSR policy in 1904. It was later formalized as various policies from 1980 onwards. It is monitored & enforced through the Tata Business Excellence Model. Tata Steel has an entire organizational structure to enforce/monitor the policy. Formal departments & divisions (Environment & safety, Public Health, Medical Services, Social services, & family initiatives, community development & social welfare, ethics, HR & IR) are responsible for CSR reports to the managing director through deputy managing director corporate services & deputy managing director steel. Deputy managing director corporate services is also a Tata Steel Board member. The company claims to have lined compensation of the board members & senior management to sustainability performance: 1. Anti-corruption or bribery Tata Steel covers concerns of bribery through the Tata Code Of Conduct (COC), which has specific clauses on Gifts & Donation & Conflict of Interest. Moreover, it has an explicit Gift Policy, which is step towards abating rivalry. The Tata COC was implemented in 1998-1999, Gift Policy on 1st January 2005. The company has an ethics structure, with ethics counselor (Ombudsperson) and departmental ethics coordinators for enforcing & monitoring complaints of COC. The Ethics Counselor has been implemented since 1997-1998. 13
  • 14. 2. Antidiscrimination or rivalry While recruiting also its press advertisements always specify, “We are an equal opportunity employer. Women candidates are encouraged to apply.” The company appoints fresh professionals from reputed campuses that have an all India selection pattern. This ensures diversity amongst its employees. 3. Grievance Redressal For any complaint, the employees can approach the ethics counselor. There is an individual grievance handling procedure, which handles any deviation from the standardized rule. An IT based grievance handling procedure called “Samadhan” is also in place. Issues relating to any biases & unfairness can reported to the ethics counselor who reports to the managing director. A “whistle blower committee” ensures to maintain confidentiality of the employees making complaints in this regard. A service rule & standing order laid down the procedure and policies of the company by which all employees are guided. Any deviation from this is dealt by the management. Grievance handling procedure is in place since 1920s. 4. Transparency or disclosure Tata Steel provides access to company’s policies through its website. 5. Corporate Governance Tata Steel complies with the requirements under clause 49 of the listing agreements entered into the stock exchanges of India. It also discloses compensation required by the Board members/Senior management. 6. Environmental Management Tata Steel’s environmental policy has been implemented since 1994 and monitored/enforced through environment management system which also provides for a known complaints procedure. 7. Human Rights Tata Steel does not have an exclusive human rights policy, however the social accountability policy is keeping with the principle of SA 8000. Standard includes commitment to conventions such as Universal Declaration of Human Rights, Rights of Child 14
  • 15. & ILO. This has been implemented since December 2003, monitored/enforced through the SA8000 MR System, with a known complaints procedure. CSR Practice (Internal): 1. Employee Benefits Tata Steel seeks to create a world class development environment through processes such as performance management, talent review, recruitment through skills assessment, succession planning & leadership development etc. Training & development plans are in place across the organization for worker & officer cadres. The ISO 9000, ISO14001, and OHSAS 18001 certification have clauses taking care of employee welfare. 2. Gender The HR Policy is committed to equal employment opportunity. About 3.5% of the senior management executives are women. There are no women executives in board level. As per statutory norms all women employees are provided the facility of maternity leave & crèche. The facility provided are more than what has specified in the act. 3. Employee Union Tata Steel allows for the unionization of the employees. There are in all ten unions across all locations with which the management interacts. Interaction takes place through joint departmental council & joint consultative of management having equal representation from both management & union. 4. Environment & Safety Tata Steel has a formal environment policy in place. It provides internal environment awareness trainings and health & safety. The company does not have a zero emission policy, but endorses to complaints with regulations and going beyond it as per its environmental policy. 100% of its production is recyclable & therefore environment friendly. 5. Products & services Tata Steel’s products are used by all sections of the society including the weaker ones. The company has products & services extended to rural areas as well. 15
  • 16. 6. Suppliers Screening The company does not screen its suppliers on suitability parameters. However it has started capturing details against some parameters for each supplier. CSR Practice (External) 1. Social/Community/Charitable contributions Tata Steel’s top 5 community development projects in terms of priority: Issue Supporting since Integrated Rural Development 1979 Reproductive Health 1957 Education & Vocational Training for 1980 Marginalized Communities HIV/AIDS Prevention 1990 Sport’s Training 1990 Relief during Natural Calamities 1974 2. Infrastructure Development Year Project Location Year 1995 onwards Rural Road (300 kms Bihar, Jharkhand, Orissa, approx), school (312 Gujarat, Tsunami victims assisted, 171 early child etc. education centers). Irrigation projects, check dams (86 allied projects, 190 water harvesting structures) Houses after natural calamities. 16
  • 17. 3. CSR Socio-Economic Impact Social Audits survey is conducted once in every ten years by eminent panel of independent judges. Report on the survey conducted last year is awaited. CSR & Media Tata Steel believes that publicizing its CSR activities can be an effective way of raising standards in its sector, mobilizing public opinion in favour of CSR, and boosting the company’s profile. Tata Steel’s efforts for promotion of CSR through CII has motivated new company’s to adopt CSR policies and initiatives. 17
  • 18. RESEARCH UNDERTAKEN - INITIATIVES TAKEN BY OTHER CORPORATE: Company Domain Project (s) Partner (s) Special Features Allianz Sustainable Micro Allianz Bajaj has launched a “Invest Bajaj Life Finance Insurance Gain”, a life insurance plan where Insurance sustenance of income is combined with a lumpsum payment. The plan offers a monthly family income benefit (1% of the sum assured) guaranteed for a minimum period of 10 years. This allows the family to cope with loss of regular income Ambattur CSR CSR The company has been pioneering Clothing (Internal) concepts of employee welfare, human rights & adhering to anti child laws. It is a FLA (Fair Labour Association) compliant and its facilities are WRAP (Worldwide Responsible Apparel Production) certified. Employees benefit from a wide range of facilities including a child care centre, a primary health clinic, subsidized/free vacancies & free transport. America Micro Micro Self Help AIG has a joint venture TATA Intnl Group Finance Insurance Groups Group for its insurance business in India. TATA AIG sells micro insurance to the rural poor by leveraging existing distribution networks. It uses SHGs (Self Help Groups) and community enterprises as low-cost delivery and servicing channels which also help in creating livelihood for the poor. Asian Water Rainwater Glen Croft The company has implemented a Paints Management Harvesting rainwater harvesting project at Glen Croft housing society in Mumbai. The society has benefited by reducing its fresh water intake from the BMC (Brihanmumbai Municipal Corporation). The residents are not required to order water tankers during water shortages. This has also reduced the health hazard of residents from contaminated tank water during seasons. 18
  • 19. Company Domain Project (s) Partner (s) Special Features Bajaj Auto Basic issues NGOs The company supports environment, health, education & rural development initiatives through the Janki Devi Bajaj Gramvikas Sanstha. The trust oversees integrated development of 24 villages adjoining the locations of Bajaj Auto factories in Pune & Aurangabad. The activities include improvement of natural resources, increased productivity of land, empowerment of women, health, education, sanitation & income generation programmes. BG India Education NGOs The company supports the local communities in which it operates. It is also involved in a number of educational & charitable development projects. The group has an integrated health, safety & environment (HS&E) management upstream for its international upstream & downstream businesses & conducts its businesses with due regard for environment, health & safety of employees, those involved in its operations & the public at large. Bharti Yuva Entrepreneur Business & BYST develops entrepreneurs by Shakti ship Industry providing people in the age group of Trust Associations 18-35, who are either unemployed (BYST) or with loans against no collaterals. Business potentials from potential entrepreneurs are screened by an Entrepreneur Selection Panel (ESP) comprising experts from the industry in marketing, finance, management etc. On approval, BYST provides a range of business development services along with a mentor, who gives guidance until the venture takes off. Presently BYST is operational in Delhi, Chennai, rural Haryana, Pune, Hyderabad & rural Maharashtra. Out of these six regions, four regions run the urban program, while two regions run the rural program. 19
  • 20. Company Domain Project (s) Partner (s) Special Features Cadbury Women Women’s NGOs The company launched the India Empowerment ‘Gurikha Project’, close to its factory & Female at Malanpur near Gwalior at Infanticide Madhya Pradesh. The project’s key focus is on various aspects of women’s inequality, female infanticide & rights of a girl child. According to a survey (2003), the project has succeeded in giving a sense of direction & confidence to a large number of women of the area & a marked improvement has been noticed in the general well being of the girl child. Apart from this, the company is also working on issues like primary education, health & vetenary care, women’s income generation activities & strengthening of the village council. Under the income generation program nore than 10 SHGs with monthly savings ranging from Rs.20,000 to 50,000 are functional in the area. Besides this, Cadbury has also helped build a pre-school section to the village school building for the girl children & a set of classrooms in another village under the same panchayat. Cadence NGO CRY, Sai Supports Child Relief & You (CRY) Design Partnership Kripa, and its various projects across Systems Tapovan geographical locations. Supports two NGOs in its neighbourhood Sai Kripa & Tapovan. Colgate Health, Oral Care Pratham The IDA-Colgate initiative to Palmolive Education Elementary Movement educate school children on the India Education basics of oral care has covered over 26 million children in more than 50,000 schools spanning 120 towns. Colgate partners with Pratham Movement on the issue of Universalisation of Elementary Education. 20
  • 21. Company Domain Project (s) Partner (s) Special Features Citigroup Cause- FWWB, Out of its cards business, Citigroup Marketing related SPARC contributes some amount of earnings for community development. For instance each time a consumer uses her Citibank women’s card, Citibank contributes a percentage of its earnings to two NGO partners of the women’s micro credit programme- Society for Promotion of Area Resource Centers (SPARC) & Friends of Women World Banking (FWWB). Similarly collaborations are made with WWF & CRY on its other credit card types. Charities Cause- CAF mainly focuses on primary Aid Related education by providing better Foundation learning facilities to primary (CFA) schools. It provides a one time grant to primary schools without basic needs such as toilets, drinking water, black boards, & a better learning environment. It also provides financial & technical support to increase the enrollment rate & decrease the drop out rate in some of the most backward states such as Bihar, Madhya Pradesh, Uttar Pradesh, Rajasthan & Orissa. Primary schools are identified by a Primary Group survey of facilities available with them. Cummins Education, Cummins CIF has undertaken various India Environment India initiatives like ‘School on Wheels’ Foundation wherein they educate children and (CIF) adults on cleanliness, environmental issues, education etc. They have also established the Cummins school of engineering for providing higher education to girls. Apart from this they have donated hearing aids to deaf people and established models for channeling water in areas troubled with water shortage. 21
  • 22. Company Domain Project (s) Partner (s) Special Features CRISIL Corporate Rating In order to evaluate the behavior of Governance corporates towards all of its stake holders, CRISIL has devised a tool called “Governance & Value Creation Rating.” It also measures the tangible value such behaviour creates for stake holders. By combining these two elements of corporate practices and the tangible output that gets generated as a result, Crisil seeks to directly link the input side parameters of government practices with the value created on the output side. For good measure both the governance and value creation are captured for all constituents that form the stakeholders community for the entity that is being rated. Fabindia Education The FabIndia school in Rajasthan subsidizes tuition fees for girls and instills in them the competency to perform as well as their male counterparts. It also works to develop a sense of pride and belongingness in their local heritage and exposing them to issues of the larger world. Forbes Health, Skills The social initiatives of Forbes Marshall Education Development Marshall are located in three main geographical areas of Pune, mainly: Kasarwadi, Morwadi & Pimpri. These initiatives are in the areas of health and education, legal rights and awareness building for women and skill building for women so that they can earn an additional income. Gokuldas CSR CSR(internal) The company follows stringent Images international laws on human rights and child labour. Employees benefit from health insurance, pensions, bonuses, gratuity, paid sick leave and day care centers. 22
  • 23. Company Domain Project (s) Partner (s) Special Features GlaxoSmith Basic Issues NGOs, The company has partnered with Kline (GSK) Government NGOs, government organizations Consumer and the local communities and has Healthcare started various initiatives in the areas of urban community development, rural development, disaster relief, workplace initiatives and medical fraternity initiatives. It regularly conducts health camps, provides cattle insurance, free supply of portable water and is engaged in rain water harvesting. It has also started a programme called ‘positive action’ to create awareness of HIV/AIDS and to support people suffering from the disease. HDFC Sustainable Micro Finance HDFC operates as a wholesaler in Finance micro-finance and weaker section housing while advancing the reconstruction activities in Gujarat. Hindalco Poverty Integrated The integrated rural poverty Industries Alleviation Rural Poverty alleviation programme is initiated in Alleviation Uttar Pradesh, Jharkhand, Chattisgarh and Dadar & Nagar Haveli among the most backward areas of India. The company has adopted 340 villages for poverty alleviation in a phased manner over a decade. In the 1st phase 71 villages have been zeroed in on where the focused projects will run for 3 years. HSBC NGO Education 40 NGOs in Support those organizations which Partnership 18 cities concentrate on primary and secondary schooling of the underprivileged, impart informal learning to foster an understanding of hygiene, health & nutrition and help children who are mentally and physically handicapped. ICICI Sustainability Micro The company offers rainfall Lombard Insurance insurance schemes tailored to General provide protection against Insurance deficient/excess rainfall and low temperatures to farmers not covered by government’s crop insurance schemes. 23
  • 24. Company Domain Project (s) Partner (s) Special Features ICICI Sustainable Micro ICICI Prudential offers insurance Prudential Finance Insurance protect to low income members Life through schemes like MITR and Insurance Suraksha IOCL Culture Heritage Sites ASI and Created a non-profit trust name The NCF Indian Oil Foundation (IOF). The objective of their initiatives is to protect, preserve and promote India’s national heritage and culture and built a corpus of Rs. 25crores and an annual recurring contribution of Rs. 10crores. Jet Airways Fund Raising ‘Magic Box’ Save the Runs an in-flight collection Children programme, the ‘Magic Box’ in association with the NGO Save the Children India. The initiative contributed above Rs. 25million till end April 2002. This fund has been used in the development activities at Kargil in Kashmir, improvement of education & health care facilities in quake affected Osmanabad district in Maharashtra, and in the fight against trafficking of women & child prostitution in the Indian sub continent. Kanoria Basic Issues NGOs Community Services: Contributions Chemicals to various schools & medical relief & camps, tree plantation schemes, Industries safety, health & environment groups & disaster management centers. Social Development Schemes: educational programmes, health & medical programmes, cultural, games & sports programmes. Agricultural & Environmental Schemes: fruit tree plantation programmes, distribution of free saplings, vegetable cultivation programmes & water resource development. Self Employment Schemes: execution of training programmes for tailoring, basket making & sealing wax farming, amongst others. 24
  • 25. Company Domain Project (s) Partner (s) Special Features Lupin Rural Welfare Lupin Lupin’s community involvement is Human carried out through the Lupin Welfare & Human Welfare & Research Research Foundation. The foundation’s rural Foundation construction activity, till date, has been said to have benefited over 1900 villages in 11 districts of 4 Indian states covering nearly 1.45 million people, in areas of infrastructure, rural industry, agriculture, animal husbandry, health & sanitation & education & social welfare. Mahindra & Education KC K C Mahindra educational trust is Mahindra Mahindra involved in & contributes to various Educational education initiatives. These are: Trust Providing interest free loan scholarships to post graduate students going abroad for higher studies. Mahindra Search for Talent Scholarships in schools in India to encourage & reward students who have achieved academic excellence. KC Mahindra Chair at the Institute of Science, Mumbai, to encourage students in nuclear chemistry. Nokia India Environment Helping Hand Packaging of all Nokia phones is Employee done from recycled paper. With volunteering every handset clear instructions are for social provided for correct disposal of services used batteries. Keeping in line with their international programme of employee volunteering called ‘Helping Hand’, Nokia India is involved with NGOs working with disabled children in Delhi. Nokia’s employees provide support in terms of help & training in accounts, human resources, IT, working with children & other activities. 25
  • 26. Company Domain Project (s) Partner (s) Special Features Nestle Basic Issues NGOs Supports various community projects in education, health, welfare & infrastructure around its factories. In Moga, Punjab, the company established milk collection centres with cooling tanks, milking machines & providing farmers with training in breeding & feeding practices to increase the yield of their herd. This has helped improve the quality of milk produced in the region, which in turn helped local farmers increase their income. The company has facilitated various initiatives to provide clean drinking water for students of local schools around its factories & also organizes projects with the Indian red cross, which include blood bank services, immunization & health awareness. Panalpina Children Literacy Charity Aid It runs a computer literacy World Foundation programme for the underprivileged Transport in the Pahar ganj area of New (India) Pvt Delhi. It works in partnership with Ltd. charity aid foundation & Salam Balak Trust. Under this programme the company teaches 25 children in three batches. The company also helps other charities & NGOs by buying Christmas cards from CRY, UNICEF, Helpage India, & crafts from visually & Physically Handicapped people. Philips Strategy CSR Philips India has rolled out its India supplier declaration on sustainability in 2003. It outlines minimum behavioural expectations in the areas of environment, health & safety & labour conditions. Social audits of suppliers are carried out by a social responsibility agency & quaterly reports are submitted to Philips global headquarters. This data is subject to external audits as well. 26
  • 27. Company Domain Project (s) Partner (s) Special Features Pizza Under- Food for Good A part of the profits of every pizza Corner privileged sold at pizza corner goes to a fund India Children called ‘Food for Good’ which is meant to benefit lesser privileged children. Beneficiaries of the programme include 20 street children in Bangalore who receive term deposits by the company. These term deposits will fund the higher education of these children who will then complete 10th grade & age 18. Polaris Education Education- Akanksha, Setup the Ulhas trust to help & Software Financial Pratham support the education of Lab Support Movement economically backward children through scholarships of Rs. 1500 which takes care of their annual educational expenses. Career counseling and training sessions also happen throughout the year to mentor the progress of these children. About 1500 students were awarded in 2003. Star TV Awareness- Public Service Children Runs public services Social Issues Announcemen announcements on a range of ts & Children social, health & environmental related issues such as child labour, polio, AIDS, pollution & conservation. These announcements have been effective in disseminating information. Donations from the Star Care Payroll programme go to two registered charities working on children’s primary education- Akanksha & Pratham Movement. Tata Education Support & Central & Set up the Audit literacy programme Consultancy Improvement State (ALP) to help the Indian Services of Adult Government Government eradicate illiteracy. Literacy The ELP uses the Computer Based Programme Functional Literacy (CBFL) model, an innovative teaching method designed by TCS, where the instructor uses multimedia software to teach the adults to read. Adult illiterates can learn to read after 40 hours of instruction of over 8 to 10 weeks. 27
  • 28. Company Domain Project (s) Partner (s) Special Features Tetrapak Health School Milk The idea behind School Milk Programme Programme (SMP) is to deliver tasty, nutritious and safe milk using Aseptic Technology. The SMP is designed for addressing health & nutrition needs school going children. The programme encourages milk consumption amongst children. It also focuses on actions that would contribute to the educational & overall development of the children. Titan Women Empowerment Myrada Titan are looking at avenues to Industries of women in enhance the standard of living of Dharampuri women in Dharampuri village & those near Hosur in Karnataka. Titan started by getting the women to make chappatis for the factory workers. Later, they were asked to take care of the Laundry. In 1995, Titan joined hands with Myrada, an NGO that works on social causes & 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 called Meadow, owned & run by the women themselves. Today, about 200 women own meadow. Wockhardt Health HIV/AIDS WHARF Wockhardt had established WHARF (Wockhardt HIV/AIDS Education & Research Foundation) an NGO, with the help of Harvard medical international, a Harvard university affiliate to control the spread of HIV/AIDS in India. WHARF provides training to clinicians, nurses, paramedics & counselors in areas of HIV/AIDS. Yes Bank Sustainable Project USAID With support from USAID, Yes finance financing Bank has increased financing of small & medium enterprises for energy efficiency. The aim is to commercialize renewable energy, energy efficiency & water technologies related products & services. The U.S. guarantee covers upto 50% new principal loss 28
  • 29. in case of default. This lowers the risk for YES Bank to invest in small & medium scale enterprises. Just to give a broad idea of the areas in which Indian companies are practicing their CSR activities, a small graph has been made showing the areas of concentration & the number of companies (from the above stated) who are working for it. 35 30 25 20 Number of Companies 15 10 5 0 LC CV EW RD EM H &E NGO CG W & C R HIV/AIDS PIC LC Local community development CV Customer Value through CSR EW Employee Welfare RD Rural Development EM Environment Management H&E Health & Education NGO NGO Support CG Corporate Governance W&CR Women & Children’s Rights HIV/AIDS HIV/AIDS awareness & rehabilitation PIC Protecting Indian Culture 29
  • 30. THE FUTURE: The theme of corporate social action assumes pivotal significance in the world wide debate on sustainable development. Modern corporation exert considerable influence on the economy, polity & society of the nation. The world over increasingly, there is an evidence of extraordinary economic power exercised by mega corporations, their impact being more severe in the case of developing countries. As more of the developing countries in the world opted for a democratic framework, the issues of economic & social governance became very important; these subsume issues like human rights, labour standards, health care and poverty among others. There is sufficient evidence to show that in many countries of the developing world governments have not been able to provide investible resources for the social sector development, and further where the government has been able to do so, they have not been able to create requisite institutional framework for the implementation, monitoring and evaluation of such endeavours. It is therefore recognized that developing countries need to create alternatives for social sector development, and of the suggested routes for doing so is to develop viable & strategic public- private partnership. It is also increasingly acknowledged by the academics & the public policy makers that the beginning of withdrawal by the state in many developing countries signifies the potential onset of an era full of opportunities for developing public-private partnership. It is also because neither the public nor the private sector alone can counter effectively the challenge of social sector development. The government on its own cannot get involved any further in several sectors simultaneously as it did in the last four decades in many countries. One of the biggest challenges for governments in the developing countries like India is to create and nurture a durable framework of institutions who will translate public policies into deliverables. India needs a strong institutional framework for meeting the multiple objectives of economic growth and development. The second requirement is the commitment of the top management of the public enterprises and the corporate sector to move away from a mere philanthropy to corporate social action. In the public enterprises, corporate social responsibility is practiced largely as per the mandate of the controlling ministry and is based significantly on the basis of commercial considerations such as displacement and rehabilitation of communities due to large scale site development of newer projects. In the corporate sector also one of the primary drivers for the introduction of corporate social responsibility is commercial such market access to rural hinterland. However, what is needed is some commonality and continuity of themes for sustainable development. 30
  • 31. There is a need for training and development of a large pool of voluntary sector personnel and co-operatives so that they can get substantively involved; non-governmental organizations in many cases have played an important role in initiating several innovative programmes and activities in the social sector; however, a lot more is required to have them further involved in as professional a manner as possible. It is therefore, suggested that all the agencies and institutions including the multilateral institutions assisting social sector development in India world re-look at the cumulative experience of promoting corporate social action in as transparent and accountable manner as possible. The public enterprises need to do more than the mandated corporate social responsibility programmes and the corporate sector should aim at involving the multiple stakeholders. The larger issues and long run ramifications of public policy on corporate social action for stakeholders and society need to be integrated into a coherent plan of action in the future. There has been a lot of debate on the impact of the 73rd and 74th amendments to the Constitution of India; one of the disturbing aspects of the debate is the uneven and tardy progress in respect of several schemes of public welfare due largely to such issues as corruption and deficiencies in institutional infrastructure. Therefore, there is an urgent need for a tripartite action on part of government, public enterprises and the corporate sector. There is fortunately no dearth of talented opinion makers and social activists but they need to be harnessed and put in place to create a suitable platform such that the movement for internalizing and institutionalizing corporate social responsibility becomes a durable one. 31
  • 32. THE CORPORATE SOCIAL RESPONSIBILITY INDEX FOR INDIA: At this point of time there is no authoritative, voluntary, CSR (corporate social responsibility) initiative that is business-led and engages with companies from all sectors, publicly ranking their CSR activity, whilst consolidating information demands made on companies. Thus what is required is a Corporate Social Responsibility Index which would help meet this need in India. The Index will help improve corporate responsibility by providing a systematic process that compares companies’ management processes and performance with those of others in their sector. It would provide a benchmark for companies who are committed to managing, measuring and reporting their impact on society. The Index would be based on a framework of four components shown in the following model: Performance Corporate Integration & Management Strategy Impact Community Environment Marketplace Workplace The Corporate Strategy section looks at how the nature of a business’ activities influence its company values, how these tie into strategy and how they are addressed through risk management, development of policies and responsibilities held at a senior level in the company. The Integration section looks at how companies organize, manage and integrate corporate responsibility throughout the operations. Is it part and parcel of the company culture? Is it integrated into the strategic decision-making processes of the company and linked through into internal governance and risk management systems? 32
  • 33. The integration is assessed through the Management section where the processes for managing different stakeholder relationships are reviewed. This section looks at what the key issues are for the business in the Community, Environment, Marketplace and Workplace, the objectives and targets set to manage these issues and how it communicates, implements and monitors its policies, objectives and targets. Community relates to the interface between business and society that can be both positively and negatively affected by a project, product or investment on a local or global level. The Environment comprises the world’s ecosystems and natural resources and is affected directly and indirectly by a company’s operation, products and services. Being responsible means safeguarding both the systems and resources for future generations. Responsibility in the Workplace is the creation of a working environment where personal and employment rights are upheld. Responsibility in the Marketplace is maintaining the highest standards of business practice when developing, purchasing, selling and marketing products and services. The Performance and Impact section looks at companies’ performance across a range of social and environmental impact areas. The Corporate Responsibility Index would be a strategic management tool to enhance the capacity of businesses to develop, measure and communicate best practice in the field of corporate social responsibility. It would do this through benchmarking corporate social responsibility strategy and implementation process. The Index would be created by the support of leading businesses in the country as well as leading NGO’S who would be committed to continually improve their positive impact on society. Every year more & more successful companies would be invited to participate in the Corporate Responsibility Index by completing an online survey accessible via individual and secure usernames and passwords. Even though the Corporate Responsibility Index will be a self-assessment exercise a central agency will have to monitor the whole process. This central agency will not be involved directly 33
  • 34. in the task of rating companies, but will act as the 'trustee' overseeing the integrity of the process. The implementation of the Corporate Social Responsibility Index The Corporate Responsibility Index survey will be made available to companies once they have registered to participate in the Index. The survey would be a web based electronic tool and would also be password protected for each individual company. Comprehensive guidance notes would also be provided with the survey in the form of separate documents. These would provide definitions, and help notes to support the understanding of why a particular aspect is important and how this may be applied within a business. Together with the survey this would also provide a roadmap for integrating corporate responsibility within the business. The Corporate Responsibility Index would be a self-assessment process. Each submission would have to be signed off at CEO or main board level to ensure director-level commitment to the credibility of the responses. A market research company like ORG-Marg would be required here to take up the responsibility for the collection, analysis and aggregation of participant responses as well as add expertise to the validation process; it will examine all responses for completeness and consistency. In addition it will also be needed to meet with selected participants to check their understanding and interpretation of the questions and seek further substantiation when necessary. The robustness of the survey would be demonstrated by the ongoing consultation and engagement with participants after their surveys are submitted. It is critical that participants have understood and interpreted the survey correctly. 34
  • 35. HOW & WHAT WILL THE INDEX MEASURE: The Corporate Responsibility Index will measure responsible business practices through evaluating four main areas: The corporate responsibility strategy of the business How this strategy is implemented across the business The management of corporate responsibility within the business The performance in a range of social and environmental impact areas Each Of The Four Components Of The Index Model Would Be Weighted As Follows: Section 1: Corporate Strategy 20% of total score Section 2: Integration 20% of total score Section 3: Management 25% of total score Section 4: Performance and Impact 35% of total score In addition each management section of Community, Environment, Marketplace and Workplace would be equally weighted (5.625%). Companies would be given credit for what they implement across their business and questions within each section will again be generally equally weighted. Once the validation process has been completed by market research company, the results will be electronically generated by the survey databases. To ensure the ongoing sustainability of the Index, a nominal fee for participating companies to cover part of the validation cost will be charged at a later stage in the life of the index. Publishing The Index Results of the index will have to be published in the leading publications for the index to gain acceptance by more and more companies. Participating companies will not be named until the results are published. It is at the company’s own discretion should they wish to publicize their involvement on their own websites or if they wish case studies of their corporate social responsibility practices to be reported in the contacted newspapers. 35
  • 36. BENEFITS FOR THE COMPANIES: By completing the Corporate Responsibility Index, the company will be using a proven business tool that enables you to most effectively incorporate best business practice through your strategy and implementation processes across the whole organisation. Completing the Corporate Responsibility Index will drive overall performance through enhanced reputation, the retention and attraction of talented staff, lower costs through eco-efficiency and building upon existing company profiles for investment purposes. There will be a confidential individual feedback report which will provide companies with their position- overall in the Index, in their sector, economic group and leading Indian businesses. It is a powerful internal management tool helping to engage board members and raise awareness of the complete range of corporate responsibility issues across the business whilst highlighting areas of strength and weakness. The Index will be an important external communications tool enabling companies to underwrite the public statements that they make on responsible business practice. It is an important communications tool during a time when stakeholders are becoming increasingly skeptical. FUTURE OF THE INDEX & SUSTAINABILITY: The process will improve (less of a time constraint, etc) if this gets through the first cycle. With enough goodwill and trust from the business community, the belief is that a foundation can be established which will eventually see companies voluntarily coming forward to be a part of this index. However, for this to happen, the need is of business is to embrace the given opportunity. That is why this is seen as being a collaborative process - in which the central agency will have to be as flexible as possible in responding to the day-to-day needs of participating companies. 36
  • 37. REFERENCES: The London Group Benchmarking Model – Partners in Change Strategy Paper 2001-0; Pg42 Who’s Who in CSR in India – A Resource Guide – 2006 Harish Srivastava and Shankar Venkateshwaran, The Business of Social Responsibility, Books for Change, Bangalore 2000 Harward Business Review – Articles on CSR R. Aga: Embracing CSR – the saner alternative, Forum of Free Enterprise Corporate Social Responsibility: Concepts, Practices and Country Experiences – C. V. Baxi & Nazy Chadha Corporate Responsibility: Dipankar Gupta Stakeholder Engagement: The Concept and Practice – Ravi Puranik & Viraf Mehta CSR Debate in India: From Philanthropy to Public – Private – People Partnerships, Jagdish Gulati Management Education and Value Based Curriculum – Ajit Prasad The Role of Social and Societal Responsibility as a Core Value of the University and Corporate Sectors – R. Natarajan Surveys: ACNielson 2005 Corporate Image Monitor results http://www.acnielson.co.in/news.asp?newsID=144 The state of CSR, Partners in Change (PiC), Indian Market Research Bureau (IMRB) 2003 Centre for Social Markets (CSM). Corporate Social Responsibility – Perceptions of Indian Business Websites: Centre for Social Markets http://www.csmworld.org CSR World http://www.csrworld.org Indian Chamber of Commerce Online http://www.indianchamber.org 37
  • 38. Author’s Profile Prof. Dr. Uday Salunke Director - Welingkar Institute of Management is a mechanical engineer with a management degree in 'Operations', and a Doctorate in 'Turnaround Strategies'. He has 12 years of experience in the corporate world including Mahindra & Mahindra, ISPL and other companies before joining Welingkar in 1995 as faculty for Production Management. Subsequently his inherent passion, commitment and dedication toward the institute led to his appointment as Director in 2000. Dr. Salunkhe has been invited as visiting fellow at the Harvard Business School, USA and European University, Germany. He has also delivered seminars at the Asian Institute of Management, Manila and has been awarded "The Young Achievers Award- 2003" in the field of Academics by the Indo American Society recently. 38