CSR is the new growth mantra

A majority of Indian corporates recognise social responsibility as core to taking their business forward

Joseph Vackayil, The Financial Express

P for Profit’ is no longer the only way the corporate world recognises the alphabet. P also stands for the “planet”, meaning the environment and for “people” now. The one-track approach of just looking at bottomlines is increasingly going out of fashion in corporate boardrooms.

It’s not as if charity and philanthropy hadn’t been part of the action plan of corporates all this while. It’s just that it was somewhere on the fringes, something outside their main business of profiteering.

According to a recent survey by consultancy group, McKinsey & Co, “of the over 4000 executives from 116 countries polled recently, the vast majority of 84% embrace the idea that the social role of a modern corporation goes beyond meeting its obligations to shareholders”. The situation is not different in India. “About 72% of India’s top 50 companies undertake corporate social responsibility (CSR) initiatives supported by well-defined policies now,” says a PricewaterhouseCoopers report. It also adds that Indian companies are ranked number one in terms of CSR penetration.

An indication of corporate commitment to social responsibility was brought home at the Confederation of Indian Industry (CII)-convened national summit on CSR in Chennai last week. The two-day meet was inaugurated by the chairman of the Tata Group, Ratan Tata, and its theme was ‘From awareness to leadership: Making CSR an actionable business agenda’. Over 300 delegates from all over the country in 26 sessions discussed topics like the transformations in business models and in leadership profiles to meet development demands; social entrepreneurs: new models, new ideas; developing CSR priorities that match core business ideology, etc.

Aside from the recently concluded CII seminar, a number of India’s top companies have been doing their share for society too. Take the Tata Group for instance. It has a long tradition of ethical and responsible business and has adopted specific areas of development. Some of the globally competitive IT companies like Wipro and Infosys also have a holistic approach to responsible business.

Then there are others too. Dr Reddy Pharmaceuticals in Hyderabad has a sophisticated approach to environmental management, employee development and community involvement.

ITC Group’s e-choupal initiative uses IT to provide farmers with real-time access to customised knowledge on specially-designed websites in their own languages. This helps them align farm output to market demands, weather conditions and to secure better quality productivity and improved prices. The e-choupal initiative has already helped over 2.4 million farmers in 21,000 villages. The goal over the next decade is to reach 1,00,000 villages and 10 million farmers all across the country.

Project Shakti of Unilever — creating rural entrepreneurs — is training 13,000 underprivileged Indian women distribute the company’s products to 70 million rural consumers. The company is working with women’s self-help groups to teach selling and book-keeping skills and build commercial knowledge. The women who participate in this programme are, by and large, able to double their household income. Shakti has also allowed Unilever to increase its reach to 30% more of India’s rural population since its inception in 2000. The company is joined in its efforts by some 300 groups — NGOs, banks and various government entities — allowing it to take part in strategic public-private partnerships.

Godrej & Boyce Mfg Co Ltd, as part of its CSR programmes, is committed to sustainability and responsible corporate citizenship. A host of initiatives are being implemented in the areas of health and nutrition awareness, education and counselling, rehabilitation assistance, AIDS awareness and medical advice, safety awareness workshops, vocational training schools, entrepreneurial training to people in tribal villages, etc.

While these are some examples of CSR showpieces of Indian corporate giants, there are thousands of communitiy development initiatives undertaken by small and medium enterprises (SMEs) too. CSR has become an all-pervading corporate phenomenon in India now. It might be the result of socio-political compulsions to reach out to the local community, to satisfy the foreign buyers or collaborators who insist on a clean and sustainable supply chain and input source, but the good news is that people are benefitting in one way or the other.

These development models have pioneered the progression towards innovative social and environmental engagement. They also serve as some of the most widely published case studies at top business schools, says a CII ‘thought piece on CSR’.

On its part, CII has a CSR Policy Statement that looks at a series of initiatives both for corporate action on community issues and on corporate environmental practices. It has a CSR Networking Forum that will soon operate in each of its 50 offices across India. The plan is that each local forum will be chaired by an experienced CEO from a committed, responsible business and will involve 20-25 handpicked businesses from large and SME sectors in different states and cities. These, in turn, would be committed to look at CSR more intently.

CII also aims to bring experienced people who will facilitate awareness about CSR. This will assist members to adopt and institutionalise the social code for business, provide training through volunteers and resource persons.

The CII network will help companies adopt CSR policies and practices that are in line with national and international standards and assist CEOs and management in the process. CII has also now proposed to have a centre of excellence in corporate citizenship sponsored by the TVS Group in Chennai.

Tex Gunning, group vice-president, South East Asia & Australasia, Unilever, Singapore Ltd, gave the concluding message to the recent CII summit, calling for a redefinition of businesses. “We need to redefine the logic of business from ‘economic wealth creation’ to a new concept ‘total wealth creation’,” he said.

Summing up the key thoughts and ideas that unfolded at the two-day meet, Gopal Srinivasan, chairman, CII-TN State Council and director, TVS Electronics said, ‘inclusive growth and sustainability’ have emerged as the principal CSR philosophies for Indian corporates. There still are problem areas and dissonance between proclamation and practice, he said, but added that CSR is no longer just a diversion or some form of charity. It will attract more foreign investments, increase market share and above all, build employee loyalty. He also advised that “CSR should be top-inspired”.