CSR (Corporate Social Responsibility)IN INDIA AND FUTURE TRENDS with special reference to ITC’s CSR practice
CSR in India – Past, Present and Future
All of us, who live in society, owe some responsibility towards it. Corporate, which operates in society and make profits from investments, owe a greater responsibility to it.
The Indian economy has been growing fast in recent years. So are the corporates in terms of business turn over and profit. However, there are concerns about sustaining this growth on account of environmental and social factors. While the environmental dimensions are opening up somewhat slowly, the social impacts have been sudden.
As per its Constitutional mandate, enshrined in the Directive Principles of State policy, the Government is responsible for taking care of the disadvantaged. But in a multi-party, developing, democracy, the development process is often slow due to various constraints which affect the delivery mechanism. The choice before business and the civil society today is either to join in sharing this responsibility or to suffer as a mute spectator.
In a developing country, the responsibility of business towards the society needs to be seen from a wider context and this has four dimensions :-
(i) Compliance with the law and statutory provisions in letter and spirit,
(ii) Exploring Business at the Bottom of the Pyramid for helping the poor
as well as enriching the business ;
(iii) Forming strategic partnership with the stakeholders ; and
(iv) Taking care of people other than potential consumers.
It is encouraging that Indian business has appreciated the need of the changing times, with most of the companies talking about CSR, some having a CSR policy and a few mobilizing employees, idle plant and machinery and earmarking part of its profits for CSR activities.
The historical driver of CSR has been philanthropy or a sense of ethics. After the Second World War, a variety of national and international regulations arose through bodies such as the International Labour Organisation (ILO) emphasising the need for an active social policy for transnational companies (TNC’s). This additional driver, international institutions, has relevance for India through the work of the ILO, the OECD, Socially Responsible Investment (SRI), the SA8000 Social Accountability scheme and through the work of the UN Commission on Human Rights which tackled the human rights responsibilities of TNC’s.
In India, some public sector companies can spend up to 5% of their profits on CSR activities. Pressure groups have been quite successful in inducing companies to fund CSR schemes, even to the point of using kidnapping as a tactic! Forms of CSR differ according to the country or region. In Europe, for example, notions of CSR probably developed out of the Church and a sense of ethics. In India, CSR has evolved to encompass employees, customers, stakeholders and notions of sustainable development or corporate citizenship. In transnational companies, the approach to CSR typically emerges from one of three elements including a decentralised strategy (which might examine human rights), a centralised strategy (which would be company-wide) or a globally integrated strategy (which would include Coca Cola or oil companies - where local actions can impinge globally).
Many large companies enter into CSR through acts of philanthropy including, for example, Bill Gates or Warren Buffet. Often, for such companies, the tax advantages are attractive or it may merely be a clever way to retain control of resources. India has been a major beneficiary from the Gates Foundation, particularly in health care.
From the perspective of the employee, CSR has been hugely important in India. For example, after 1945, TATA implemented social welfare provisions for its employees that have since become the legislative norm. Equally, when companies announce they will reduce the number of employees, the workers can be fearful that they benefits they have accrued will be lost. While India has a large comparative demographic advantage with substantial numbers of graduate engineers, for example, probably only one third are actually employable. There is also concern from employees who wonder what would happen to the welfare ethos if an Indian company took control of a European firm.
From the perspective of the customer, CSR initiatives can relate to issues of product quality. For example, Sony recently recalled, on a global basis, batteries it used in Dell computers. In Japan, allegations that a particular form of packaging promoted cancer equally led to huge product safety concerns. The last 15 years has witnessed substantial developments in the area of consumer rights. The Indian Supreme Court has declared that it would be better to lose 1000’s of jobs in order to protect the health of millions through cleaner air and a better environment.
From the perspective of stakeholders in the community, the bigger the company the greater the effort should be to protect the employees or the environment. There is some recognition that it would be hard for smaller companies to undertake CSR initiatives at that kind of level. Communities can pressure companies to provide and improve civic amenities. One scheme, the Provision of Urban Amenities in Rural Areas (PURA) aims to prevent unnecessary urbanisation and help tackle migration from rural areas. Larger companies might also be interested in providing arts and culture activities as a service to the community as a measure to protect local culture. Some companies have encouraged skilled employees to teach in a local community.
One of the arguments against CSR has been that it lowers company profits but the IMI has shown that many companies say the benefits outweigh the costs. Another argument has come from some employees who have been hesitant to demand more CSR, seeing a trade-off between CSR spending and better employee welfare provision - although these would be in a minority
People, planet and profit — Three Ps of corporate social responsibility
The triple bottom line (abbreviated as "TBL" or "3BL", and also known as "people, planet, profit" or the three pillars captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social
The triple bottom line is made up of "social, economic and environmental" the "people, planet, profit" phrase was coined for Shell by Sustainability, influenced by 20th century urbanist Patrick Geddes's notion of 'folk, work and place'.
"People, planet and profit" succinctly describes the triple bottom lines and the goal of sustainability.
"People" (human capital) pertains to fair and beneficial business practices toward labour and the community and region in which a corporation conducts its business. A TBL company conceives a reciprocal social structure in which the well-being of corporate, labour and other stakeholder interests are interdependent.
A triple bottom line enterprise seeks to benefit many constituencies, not exploit or endanger any group of them. The "upstreaming" of a portion of profit from the marketing of finished goods back to the original producer of raw materials, i.e., a farmer in fair trade agricultural practice, is a not unusual feature. In concrete terms, a TBL business would not use child labour and monitor all contracted companies for child labour exploitation, would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force. A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education. Quantifying this bottom line is relatively new, problematic and often subjective. The Global Reporting Initiative (GRI) has developed guidelines to enable corporations and NGOs alike to comparably report on the social impact of a business.
"Planet" (natural capital) refers to sustainable environmental practices. A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and curtail environmental impact. A TBL endeavor reduces its ecological footprint by, among other things, carefully managing its consumption of energy and non-renewables and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner. "Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses which typically conduct a life cycle assessment of products to determine what the true environmental cost is from the growth and harvesting of raw materials to manufacture to distribution to eventual disposal by the end user. A triple bottom line company does not produce harmful or destructive products such as weapons, toxic chemicals or batteries containing dangerous heavy metals for example.
Currently, the cost of disposing of non-degradable or toxic products is borne financially by governments and environmentally by the residents near the disposal site and elsewhere. In TBL thinking, an enterprise which produces and markets a product which will create a waste problem should not be given a free ride by society. It would be more equitable for the business which manufactures and sells a problematic product to bear part of the cost of its ultimate disposal.
Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by TBL companies. Often environmental sustainability is the more profitable course for a business in the long run. Arguments that it costs more to be environmentally sound are often specious when the course of the business is analyzed over a period of time. Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones. A number of respected reporting institutes and registries exist including the Global Reporting Initiative, CERES, Institute 4 Sustainability and others.
"Profit" is the economic value created by the organisation after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment. This is often confused to be limited to the internal profit made by a company or organization (which nevertheless remains an essential starting point for the computation). Therefore, an original TBL approach cannot be interpreted as simply traditional corporate accounting profit plus social and environmental impacts unless the "profits" of other entities are included as a social benefits
Top Ten Most Respected Companies in India, 2003
No.1 Infosys Technologies
No.2 Hindustan Lever
No.3 Reliance Industries
No.4 Wipro
No.5 ICICI Bank
No.6 Gujarat Co-operative Milk Marketing Federation
No.7 Dr. Reddy’s Laboratories
No.8 HDFC
No.9 ITC
No.10 Hero Honda
Source: Businessworld, January 2003 [India’s most respected companies]
ITC’S CSR PRACTICE:
ITC is well known reputed company known for its significant CSR practices. There are number of examples we can take to exemplify CSR practices of ITC. Here we are taking well known example of e- choupal’s, a great initiation by them.
Launched in June 2000, 'e-Choupal', has already become the largest initiative among all Internet-based interventions in rural India. 'e-Choupal' services today reach out to over 4 million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp - in over 40,000 villages through 6500 kiosks across ten states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerela and Tamil Nadu).
The problems encountered while setting up and managing these ‘e-Choupals’ are primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India.
Several alternative and innovative solutions – some of them expensive – are being deployed to overcome these challenges e.g. Power back-up through batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits, installation of VSAT equipment, Mobile Choupals, local caching of static content on website to stream in the dynamic content more efficiently, 24x7 helpdesk etc.
Going forward, the roadmap includes plans to integrate bulk storage, handling & transportation facilities to improve logistics efficiencies.
As India’s ‘kissan’ Company, ITC has taken care to involve farmers in the designing and management of the entire ‘e-Choupal’ initiative. The active participation of farmers in this rural initiative has created a sense of ownership in the project among the farmers. They see the ‘e-Choupal’ as the new age cooperative for all practical purposes.
This enthusiastic response from farmers has encouraged ITC to plan for the extension of the ‘e-Choupal’ initiative to altogether 15 states across India over the next few years. On the anvil are plans to channelise other services related to micro-credit, health and education through the same 'e-Choupal' infrastructure.
Another path-breaking initiative – the ‘Choupal Pradarshan Khet’, brings the benefits of agricultural best practices to small and marginal farmers. Backed by intensive research and knowledge, this initiative provides Agri-extension services which are qualitatively superior and involves pro-active handholding of farmers to ensure productivity gains. The services are customised to meet local conditions, ensure timely availability of farm inputs including insurance and credit, and provides a cluster of farmer schools for capturing indigenous knowledge. This initiative, which has covered over 70,000 hectares, has a multiplier impact and reaches out to over 1.6 million farmers.
Current Opportunities
At one end of the spectrum, CSR can be viewed simply as a collection of good citizenship activities being engaged by various organisations. At the other end, it can be a way of doing business that has significant impact on society.For this latter vision to be enacted in India, it will be necessary to build CSR into a movement. That is to say, public and private organizations will need to come together to set standards, share best practices, jointly promote CSR, and pool resources where useful. An alliance of interested stakeholders will be able to take collective action to establish CSR as an integral part of doing business – this is not a passing fad.
Current Global Trends
Because of the growing size and power of multinational corporate houses, bond rating agencies and investment funds are exerting increasing influence. In particular, they are demanding an accounting for non-financial measures of value creation as they seek to determine risk premiums. These include an assessment of CSR activities, as well as governance practices, management of intellectual capital, and transparency in reporting. There are now multiple CSR rating agencies in North America and Europe. Socially Responsible Investment Funds (SRI’s) now consider CSR activity when deciding whether to invest in public traded companies. The Principles for Responsible Investing (PRI) Group was started in conjunction with the UN in 2005. This now includes over 170 institutions representing 15 trillion US dollars in assets. The member institutions take into account six key principles in the area of environmental, social, and corporate governance when making investment decisions. The United Nations Global Compact was launched in 2000 by the then Secretary General Kofi Annan to create a voluntary alliance of companies throughout the world committed to upholding specific principles of human rights labour rights, environmental stewardship and anti-corruption. To date, 168 Indian multinational corporates, Small and Medium Enterprises (SMEs) and associations have joined the Compact.
A growing trend in large multinational corporations is the establishment of special committees within the board of directors to oversee CSR and sustainable business practices. More and more, executive compensation is tied to specific outcomes in these areas. Groups of corporates are being encouraged to come together to promote CSR. In 2006, Europe created the European Alliance for CSR. It currently consists of 70 multinational corporate houses and 25 national partner organisations and has become a unique resource for building capability in CSR.
Future Social Trends in India
The CSR survey revealed, not surprisingly, that organisations targeted most of their activities close to home — providing services for people who live in villages, towns, and districts near where the organization operates. Education, health, and the environment are the top priorities.
More than likely, these priorities will continue. There is one social trend in India that looms larger than all others — the population tsunami. The current population of India is now over
1.1 billion. Demographers now tell us that India will overtake China by 2026 as the world’s most populous nation with almost 1.5 billion people. Let us put this into perspective. At the time of Independence in 1947, India’s population was approximately 350 million. Between now and 2026, India will add almost as many people as there were in the entire nation in 1947. The implications of this are staggering. Will the additional demands for food, water, housing,
education, and health care overwhelm the existing infrastructure? Or can all stakeholders work together to build a literate, healthy, capable society with enough jobs to meaningfully employ all those seeking work? The greater the challenges, the greater the ingenuity required. For CSR in India to have a meaningful impact on society in the coming decade, a ‘national-local’ approach may be best. National in the sense that there will need to be nationwide alliances and databases in order to quickly learn best practices, share innovations, and ‘scale-up’ pilot programmes. Local in the sense that it will require organisations to efficiently implement programmes at the grassroots level, as well as mobilise volunteers to serve their local communities. CSR is here to stay and its future is bright.
References :
1. CSR in India-present past and future by-
Dr Sanjay Kumar Panda, is a civil servant
2. Wikipedia
3. An introduction on CSR :global opportunities and social trends
4. Article on CSR in business line newspaper
Dated- 18 july,2005.
5. www.echoupal.com
6. Trust and Corporate Social responsibility: Lessons from India :
Aswani singala and Prema Sagar, Genesis Public Relations Pvt. Ltd
submitted to- SEEDS
Submitted by- Naveen Kumar Singh
Date : 03/12/2009
All of us, who live in society, owe some responsibility towards it. Corporate, which operates in society and make profits from investments, owe a greater responsibility to it.
The Indian economy has been growing fast in recent years. So are the corporates in terms of business turn over and profit. However, there are concerns about sustaining this growth on account of environmental and social factors. While the environmental dimensions are opening up somewhat slowly, the social impacts have been sudden.
As per its Constitutional mandate, enshrined in the Directive Principles of State policy, the Government is responsible for taking care of the disadvantaged. But in a multi-party, developing, democracy, the development process is often slow due to various constraints which affect the delivery mechanism. The choice before business and the civil society today is either to join in sharing this responsibility or to suffer as a mute spectator.
In a developing country, the responsibility of business towards the society needs to be seen from a wider context and this has four dimensions :-
(i) Compliance with the law and statutory provisions in letter and spirit,
(ii) Exploring Business at the Bottom of the Pyramid for helping the poor
as well as enriching the business ;
(iii) Forming strategic partnership with the stakeholders ; and
(iv) Taking care of people other than potential consumers.
It is encouraging that Indian business has appreciated the need of the changing times, with most of the companies talking about CSR, some having a CSR policy and a few mobilizing employees, idle plant and machinery and earmarking part of its profits for CSR activities.
The historical driver of CSR has been philanthropy or a sense of ethics. After the Second World War, a variety of national and international regulations arose through bodies such as the International Labour Organisation (ILO) emphasising the need for an active social policy for transnational companies (TNC’s). This additional driver, international institutions, has relevance for India through the work of the ILO, the OECD, Socially Responsible Investment (SRI), the SA8000 Social Accountability scheme and through the work of the UN Commission on Human Rights which tackled the human rights responsibilities of TNC’s.
In India, some public sector companies can spend up to 5% of their profits on CSR activities. Pressure groups have been quite successful in inducing companies to fund CSR schemes, even to the point of using kidnapping as a tactic! Forms of CSR differ according to the country or region. In Europe, for example, notions of CSR probably developed out of the Church and a sense of ethics. In India, CSR has evolved to encompass employees, customers, stakeholders and notions of sustainable development or corporate citizenship. In transnational companies, the approach to CSR typically emerges from one of three elements including a decentralised strategy (which might examine human rights), a centralised strategy (which would be company-wide) or a globally integrated strategy (which would include Coca Cola or oil companies - where local actions can impinge globally).
Many large companies enter into CSR through acts of philanthropy including, for example, Bill Gates or Warren Buffet. Often, for such companies, the tax advantages are attractive or it may merely be a clever way to retain control of resources. India has been a major beneficiary from the Gates Foundation, particularly in health care.
From the perspective of the employee, CSR has been hugely important in India. For example, after 1945, TATA implemented social welfare provisions for its employees that have since become the legislative norm. Equally, when companies announce they will reduce the number of employees, the workers can be fearful that they benefits they have accrued will be lost. While India has a large comparative demographic advantage with substantial numbers of graduate engineers, for example, probably only one third are actually employable. There is also concern from employees who wonder what would happen to the welfare ethos if an Indian company took control of a European firm.
From the perspective of the customer, CSR initiatives can relate to issues of product quality. For example, Sony recently recalled, on a global basis, batteries it used in Dell computers. In Japan, allegations that a particular form of packaging promoted cancer equally led to huge product safety concerns. The last 15 years has witnessed substantial developments in the area of consumer rights. The Indian Supreme Court has declared that it would be better to lose 1000’s of jobs in order to protect the health of millions through cleaner air and a better environment.
From the perspective of stakeholders in the community, the bigger the company the greater the effort should be to protect the employees or the environment. There is some recognition that it would be hard for smaller companies to undertake CSR initiatives at that kind of level. Communities can pressure companies to provide and improve civic amenities. One scheme, the Provision of Urban Amenities in Rural Areas (PURA) aims to prevent unnecessary urbanisation and help tackle migration from rural areas. Larger companies might also be interested in providing arts and culture activities as a service to the community as a measure to protect local culture. Some companies have encouraged skilled employees to teach in a local community.
One of the arguments against CSR has been that it lowers company profits but the IMI has shown that many companies say the benefits outweigh the costs. Another argument has come from some employees who have been hesitant to demand more CSR, seeing a trade-off between CSR spending and better employee welfare provision - although these would be in a minority
People, planet and profit — Three Ps of corporate social responsibility
The triple bottom line (abbreviated as "TBL" or "3BL", and also known as "people, planet, profit" or the three pillars captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social
The triple bottom line is made up of "social, economic and environmental" the "people, planet, profit" phrase was coined for Shell by Sustainability, influenced by 20th century urbanist Patrick Geddes's notion of 'folk, work and place'.
"People, planet and profit" succinctly describes the triple bottom lines and the goal of sustainability.
"People" (human capital) pertains to fair and beneficial business practices toward labour and the community and region in which a corporation conducts its business. A TBL company conceives a reciprocal social structure in which the well-being of corporate, labour and other stakeholder interests are interdependent.
A triple bottom line enterprise seeks to benefit many constituencies, not exploit or endanger any group of them. The "upstreaming" of a portion of profit from the marketing of finished goods back to the original producer of raw materials, i.e., a farmer in fair trade agricultural practice, is a not unusual feature. In concrete terms, a TBL business would not use child labour and monitor all contracted companies for child labour exploitation, would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force. A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education. Quantifying this bottom line is relatively new, problematic and often subjective. The Global Reporting Initiative (GRI) has developed guidelines to enable corporations and NGOs alike to comparably report on the social impact of a business.
"Planet" (natural capital) refers to sustainable environmental practices. A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and curtail environmental impact. A TBL endeavor reduces its ecological footprint by, among other things, carefully managing its consumption of energy and non-renewables and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner. "Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses which typically conduct a life cycle assessment of products to determine what the true environmental cost is from the growth and harvesting of raw materials to manufacture to distribution to eventual disposal by the end user. A triple bottom line company does not produce harmful or destructive products such as weapons, toxic chemicals or batteries containing dangerous heavy metals for example.
Currently, the cost of disposing of non-degradable or toxic products is borne financially by governments and environmentally by the residents near the disposal site and elsewhere. In TBL thinking, an enterprise which produces and markets a product which will create a waste problem should not be given a free ride by society. It would be more equitable for the business which manufactures and sells a problematic product to bear part of the cost of its ultimate disposal.
Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by TBL companies. Often environmental sustainability is the more profitable course for a business in the long run. Arguments that it costs more to be environmentally sound are often specious when the course of the business is analyzed over a period of time. Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones. A number of respected reporting institutes and registries exist including the Global Reporting Initiative, CERES, Institute 4 Sustainability and others.
"Profit" is the economic value created by the organisation after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment. This is often confused to be limited to the internal profit made by a company or organization (which nevertheless remains an essential starting point for the computation). Therefore, an original TBL approach cannot be interpreted as simply traditional corporate accounting profit plus social and environmental impacts unless the "profits" of other entities are included as a social benefits
Top Ten Most Respected Companies in India, 2003
No.1 Infosys Technologies
No.2 Hindustan Lever
No.3 Reliance Industries
No.4 Wipro
No.5 ICICI Bank
No.6 Gujarat Co-operative Milk Marketing Federation
No.7 Dr. Reddy’s Laboratories
No.8 HDFC
No.9 ITC
No.10 Hero Honda
Source: Businessworld, January 2003 [India’s most respected companies]
ITC’S CSR PRACTICE:
ITC is well known reputed company known for its significant CSR practices. There are number of examples we can take to exemplify CSR practices of ITC. Here we are taking well known example of e- choupal’s, a great initiation by them.
Launched in June 2000, 'e-Choupal', has already become the largest initiative among all Internet-based interventions in rural India. 'e-Choupal' services today reach out to over 4 million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses, shrimp - in over 40,000 villages through 6500 kiosks across ten states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerela and Tamil Nadu).
The problems encountered while setting up and managing these ‘e-Choupals’ are primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India.
Several alternative and innovative solutions – some of them expensive – are being deployed to overcome these challenges e.g. Power back-up through batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits, installation of VSAT equipment, Mobile Choupals, local caching of static content on website to stream in the dynamic content more efficiently, 24x7 helpdesk etc.
Going forward, the roadmap includes plans to integrate bulk storage, handling & transportation facilities to improve logistics efficiencies.
As India’s ‘kissan’ Company, ITC has taken care to involve farmers in the designing and management of the entire ‘e-Choupal’ initiative. The active participation of farmers in this rural initiative has created a sense of ownership in the project among the farmers. They see the ‘e-Choupal’ as the new age cooperative for all practical purposes.
This enthusiastic response from farmers has encouraged ITC to plan for the extension of the ‘e-Choupal’ initiative to altogether 15 states across India over the next few years. On the anvil are plans to channelise other services related to micro-credit, health and education through the same 'e-Choupal' infrastructure.
Another path-breaking initiative – the ‘Choupal Pradarshan Khet’, brings the benefits of agricultural best practices to small and marginal farmers. Backed by intensive research and knowledge, this initiative provides Agri-extension services which are qualitatively superior and involves pro-active handholding of farmers to ensure productivity gains. The services are customised to meet local conditions, ensure timely availability of farm inputs including insurance and credit, and provides a cluster of farmer schools for capturing indigenous knowledge. This initiative, which has covered over 70,000 hectares, has a multiplier impact and reaches out to over 1.6 million farmers.
Current Opportunities
At one end of the spectrum, CSR can be viewed simply as a collection of good citizenship activities being engaged by various organisations. At the other end, it can be a way of doing business that has significant impact on society.For this latter vision to be enacted in India, it will be necessary to build CSR into a movement. That is to say, public and private organizations will need to come together to set standards, share best practices, jointly promote CSR, and pool resources where useful. An alliance of interested stakeholders will be able to take collective action to establish CSR as an integral part of doing business – this is not a passing fad.
Current Global Trends
Because of the growing size and power of multinational corporate houses, bond rating agencies and investment funds are exerting increasing influence. In particular, they are demanding an accounting for non-financial measures of value creation as they seek to determine risk premiums. These include an assessment of CSR activities, as well as governance practices, management of intellectual capital, and transparency in reporting. There are now multiple CSR rating agencies in North America and Europe. Socially Responsible Investment Funds (SRI’s) now consider CSR activity when deciding whether to invest in public traded companies. The Principles for Responsible Investing (PRI) Group was started in conjunction with the UN in 2005. This now includes over 170 institutions representing 15 trillion US dollars in assets. The member institutions take into account six key principles in the area of environmental, social, and corporate governance when making investment decisions. The United Nations Global Compact was launched in 2000 by the then Secretary General Kofi Annan to create a voluntary alliance of companies throughout the world committed to upholding specific principles of human rights labour rights, environmental stewardship and anti-corruption. To date, 168 Indian multinational corporates, Small and Medium Enterprises (SMEs) and associations have joined the Compact.
A growing trend in large multinational corporations is the establishment of special committees within the board of directors to oversee CSR and sustainable business practices. More and more, executive compensation is tied to specific outcomes in these areas. Groups of corporates are being encouraged to come together to promote CSR. In 2006, Europe created the European Alliance for CSR. It currently consists of 70 multinational corporate houses and 25 national partner organisations and has become a unique resource for building capability in CSR.
Future Social Trends in India
The CSR survey revealed, not surprisingly, that organisations targeted most of their activities close to home — providing services for people who live in villages, towns, and districts near where the organization operates. Education, health, and the environment are the top priorities.
More than likely, these priorities will continue. There is one social trend in India that looms larger than all others — the population tsunami. The current population of India is now over
1.1 billion. Demographers now tell us that India will overtake China by 2026 as the world’s most populous nation with almost 1.5 billion people. Let us put this into perspective. At the time of Independence in 1947, India’s population was approximately 350 million. Between now and 2026, India will add almost as many people as there were in the entire nation in 1947. The implications of this are staggering. Will the additional demands for food, water, housing,
education, and health care overwhelm the existing infrastructure? Or can all stakeholders work together to build a literate, healthy, capable society with enough jobs to meaningfully employ all those seeking work? The greater the challenges, the greater the ingenuity required. For CSR in India to have a meaningful impact on society in the coming decade, a ‘national-local’ approach may be best. National in the sense that there will need to be nationwide alliances and databases in order to quickly learn best practices, share innovations, and ‘scale-up’ pilot programmes. Local in the sense that it will require organisations to efficiently implement programmes at the grassroots level, as well as mobilise volunteers to serve their local communities. CSR is here to stay and its future is bright.
References :
1. CSR in India-present past and future by-
Dr Sanjay Kumar Panda, is a civil servant
2. Wikipedia
3. An introduction on CSR :global opportunities and social trends
4. Article on CSR in business line newspaper
Dated- 18 july,2005.
5. www.echoupal.com
6. Trust and Corporate Social responsibility: Lessons from India :
Aswani singala and Prema Sagar, Genesis Public Relations Pvt. Ltd
submitted to- SEEDS
Submitted by- Naveen Kumar Singh
Date : 03/12/2009
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