Assignment_Trends in CSR

8/3/2019 Assignment_Trends in CSR

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PGDIE-40 (Sec-B)

Assignment on

Industrial

Environment and

Policy

By

Pankaj Tadaskar | 70,

Sapanjit Mohanty | 88,

Sunit Mhasade | 105,

Sanjay Jena | 120,

Vivek Tiwari | 117

PGDIE-40 (Sec-B)

Trends in Corporate Social

Responsibility


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Trends In Social Corporate Responsibility Page 2

CONTENTSINTRODUCTION .................................................................................................................................................................................... 3

CSR PHILOSOPHY ................................................................................................................................................................................. 4

DEFINITION OF CORPORATE SOCIAL RESPONSIBILITY ................................................................................................ 4

CORPORATE PHILANTHROPY ................................................................................................................................................... 4

GROWTH OF CSR IN INDIA .............................................................................................................................................................. 5

OBJECTIVE OF A BUSINESS FIRM .................................................................................................................................................. 6

ECONOMICS AND CSR ................................................................................................................................................................... 7

BUSINESS ETHICS AND CSR ........................................................................................................................................................ 8

The Rise in Ethical Consumerism .................................................................................................................... 8

Globalisation and market forces ..................................................................................................................... 8

Transparency in corporate activity ................................................................................................................. 9

EMERGING TRENDS IN CSR .......................................................................................................................................................... 10

Private sector Enterprises ........................................................................................................................................................ 10

Public Sector Enterprises .......................................................................................................................................................... 11

Suggestions to Improve CSR activities in India ..................................................................................................................... 12

CSR IN INDIA ....................................................................................................................................................................................... 13

CSR AT TATA GROUP .................................................................................................................................................................. 13

Institutional Grants ....................................................................................................................................... 13

Non-Government Organisation (NGO) Grants .............................................................................................. 14

Individual Grants ........................................................................................................................................... 14

CSR AT HSBC .................................................................................................................................................................................. 15

CSR AT OIL INDIA LIMITED ..................................................................................................................................................... 16

CSR AT ITC LIMITED ................................................................................................................................................................... 17

ITCs e-Choupal path breaking initiative (2000) ......................................................................................... 17

CSR AT HUL ..................................................................................................................................................................................... 18

CONCLUSION ....................................................................................................................................................................................... 19

WORKS CITED..................................................................................................................................................................................... 20

TABLE OF FIGURES1. Figure 1: The Business in Society .................................................................................................................................. 32. Figure 2: Relationship between different conceptions of Ethics and Economics ...................................... 9


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INTRODUCTIONThe strategic imperative for Corporate Social Responsibility (CSR) continues to build as both the social

need and the business case for corporate giving grow over time. From the early beginnings in the

1950s with the proposal that corporations should focus on more than just profit, CSR has developed

into an integrated approach of social involvement. The initial attempts at philanthropy in the form of

charitable donations for the sake of positive publicity have become programs that reach to the core

business of corporations and involve all levels of employees.

This exponential growth in CSR has come in response to increased accountability and heightened

expectations from employees, customers and shareholders for corporations to start giving back to

the community. Globalisation of the media has also meant that social issues all over the world are at

the forefront of consciousness and environmental concerns have reached fever pitch with global

warming awareness.

In a survey of corporate executives from around the world, The McKinsey Quarterly found that 84

percent of CEOs believe that society now expects businesses to take a much more active role in

environmental, social, and political issues than it did five years ago. (Thomas W. & Kees van der,

2009)

Different organizations have framed different definitions - although there is considerable common ground

between them. My own definition is that CSR is about how companies manage the business processes to

produce an overall positive impact on society.

Take the illustration given in Figure 1 below:

Figure 1: The Business in Society


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Companies need to answer to two aspects of their operations.

1. The quality of their management - both in terms of people and processes (the inner circle).

2. The nature of and quantity of their impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the company. Most look to the outer

circle - what the company has actually done, good or bad, in terms of its products and services, in terms of

its impact on the environment and on local communities, or in how it treats and develops its workforce. Out

of the various stakeholders, it is financial analysts who are predominantly focused - as well as past financial

performance - on quality of management as an indicator of likely future performance. (Mallen Baker, 2004)

CSRPHILOSOPHYAs corporations take on more ambitious CSR programs, the relationships they build within the

community are becoming more meaningful, particularly with the charities they contribute to.

However these relationships have also placed added pressure on charities to be more transparent in

their accounting and feedback processes. In many cases they have failed to do this and it has led

many large corporations to form their own corporate foundations to channel their CSR contributions.

The challenge is now before charities to address these issues and build back the confidence in their

ability to play an active role in the development of CSR worldwide.

DEFINITIONOFCORPORATESOCIALRESPONSIBILITY

The World Business Council for Sustainable Development defines Corporate Social Responsibility (CSR) as

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 (Mallen Baker, 2004)

Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain

share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit

from the giving.

Business for Social Responsibility defines CSR as :

Operating a business in a manner that meets or exceeds the ethical, legal,

commercial and public expectations that society has of business. (Mallen

Baker, 2004)

CORPORATEPHILANTHROPY (CP)

This is the practice of companies of all sizes and sectors making charitable contributions to address a

variety of social, economic and other issues as part of their overall corporate citizenship strategy.


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Companies make philanthropic donations through either company-sponsored foundations or direct

giving programs. These are different in their relationship to the company and it is important to

understand the difference.

Although foundations are separate legal entities, they maintain close ties with the parent company

and their giving usually reflects the company interests. They generally rely on regular contributions

from the parent company as a percentage of profit. This means that the contributions fluctuate with

the profit level of the company, so can be difficult to predict. On the other hand, direct giving

programs are not separately incorporated and enable the corporation to deduct up to 10% (but more

often around 1%) of its pre-tax income for direct charitable contributions. Whereas foundations must

report annually to the tax department and are therefore accountable, direct giving programs require

no public disclosure.

As well as cash donations, in-kind support such as the donation of equipment, the use of corporate

facilities or access to staff expertise are common forms of corporate giving. The difference between

CSR and CP is therefore that while CP consists of mainly donations and charity, CSR involves a more

involved approach of ongoing community involvement. Corporate philanthropy is often a component

of a corporations broader social responsibility and includes cash gifts, product donations and

employee volunteerism. So in fact, Corporate Philanthropy is one component of CSR.

GROWTHOFCSRININDIA

Post-independence India saw the growth of the public sector, many of whom had a community

development focus .The Tatas, through their various trusts in early nineteenth century, showed the

way to the rest of the world in terms of working hours and social security measures, earning them

goodwill for many future decades. However, corporate responsibility was rarely practiced by senior

management teams in a strategic way across sectors. Post-1990, India adopted a policy of

liberalization and many Multi and Trans National Corporations (MNCs/TNCs) made forays into the

growing Indian market. Very few foreign companies neither had a robust CSR programme nor were

they known for responsible practices in fact the practice of double standards was rampant where

companies took advantage of weak regularity environments to get away with shoddy goods and

weak consumer services.

In 1984, the Union Carbide gas leak in Bhopal led to one of the most irresponsible industrial accidents

and many lives were lost. This led to one of the longest litigations, resulting in the company paying

inadequate compensation for the accident. India witnessed more examples of irresponsible business

practices. Coke and Pepsi found communities & civil society up in arms due to depletion of the water

table and pesticides in colas. Clothing group GAP was found with child labour in their outsourced

supply chains leading to debates on the use of exploitative child labour in carpets, garments and

sports goods.GE was embroiled in a controversy surrounding the use of ultrasound machines in

female foeticide. McDonalds gave universal access the go by in their outlets in India and their use of


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beef tallow led to public uproar. Vedanta was found violating environmental laws with far-reaching

adverse impacts for tribal communities settled in Niyamgiri and other examples of failure in

corporate governance continued.

The Prime Ministers Social Charter called for inclusive growth & affirmative action from thecorporate sector. In December 2009 voluntary CSR guidelines were issued by the Ministry of

Corporate Affairs . Subsequently the Indian public sector was issued a set of policy guidelines by the

Department of Public Enterprises which also linked to CSR and the Millennium Development Goals.

One significant guideline in the public sector policy is that companies need to put at least 5 % of their

Profit after Tax (PAT) into CSR.

Although India has over a million NGOs (non governmental organisations) and a vibrant civil society,

very few are engaged in CSR per se and the trend has sometimes been an adversarial relationship

fuelled by mutual suspicion. Many companies set up their own Foundations, often run by anemployee of the company, and work with civil society was minimal coming within the realm of

project implementation than partnership. Management focused education is gradually seeing the

writing on the wall and many institutions which target future managers at a young age are

introducing compulsory credits for CSR. However, presently less than 50 Indian companies report on

the Global Reporting Initiative (GRI) while a voluntary movement for accountability within the NGO

sector called the Credibility Alliance has over 600 member organizations.

Mining Companies in India today are, in particular, at the eye of a storm with local communities up in

arms against inequitable practices that lead to poor human rights, destruction of the environment,pollution of rivers, lack of mine closure standards, etc. Displacement from ancestral lands, uprooting

of livelihoods, inadequate compensation and equity are some of the issues that increasingly take

away the social license to operate.

India has 37.2% of its population as per the Planning Commission living below the poverty line, an

agrarian and water crisis, income disparities and lack of access to basic necessities, therefore as

country it requires calls for action from all stakeholders including the corporate sector which can

respond with not just financial resources but also with strategies, tools & management techniques

that can address development priorities in the country. (Joseph, 2010)

OBJECTIVEOFABUSINESSFIRMThere are two basic motivations types viz. internal and external motivations which are driving the

companies to develop their CSR policies, including, first of all, corporate ethics, corporate policy

towards society, environment protection policy, HR policy, humanitarian aspects of relations with

suppliers and consumers. The increasing of environmental problems caused social tension, directed

at states; governments, in their turn, pushed for stricter environment protection standards; trade

unions are forcing new standards in protection of labour and social policies, adding to new statestandards in the labour legislation field constitutes external motivation factors.


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The major internal reason for forming CSR policy was the realization by the management and the

owners of the direct correlation between the economical results of the companies activities and their

image, behavior patterns towards personnel, partners, society in general and the environment.

Image can be a tool of commercial success. Such hierarchy of aims and means is leading towards

basing CSR policy building not on eternal ethic principles, rooted at the Christianity, but on

opportunistic ethics, public opinion. Of course, there are companies, which perceive or at least

declare healthy development of a company as a living body, the wellbeing of all stakeholders, society

in general and the environment as priority objective. (Sergei Lukin, 2001)

ECONOMICSANDCSR

The relative health of an economy, along with the economic health of the firm itself, creates conditions

for the firm to behave in a socially sensitive manner. Firms with weak financial performance are less likely

to engage in socially responsible behaviour than those with stronger financial grounding. The primaryreason for this notion is that, a less financially stable firm would find it difficult to spare any resources for

CSR activities while a financially well-off company can easily devote a noticeable share of its resources to

CSR. Thus, it is not surprising that most of the firms that are diligent CSR practitioners are the ones with

biggest market capitalisation such as Shell and General Electric (GE). Further, one can also argue that if

the economic environment is not conducive for reaping profits (eg. the global financial crisis and

subsequent recession), the chances of firms investing behind CSR is also diminished since they cannot

afford to further risk any losses in shareholder investment and would be less inclined in some cases to

even meet the minimum standards of socially responsible behavior.

The level of competition that a firm faces vis--vis other firms, is another factor that can influence a

companys need to carve a CSR agenda. If this belief holds true, then a companys inclination to be socially

responsible may also be governed by its competitors and the level of competition it faces. In cases where

firms face intense competition, there is an added pressure to sustain bottom lines and profit margins and

thus, there is a need to cut down on all additional expenses. Hence, philanthropy is likely to take a back

seat and may even push firms into socially irresponsible acts, such as reducing jobs and incentives or

increasing working hours, in a bid to survive. Furthermore, firms from developing countries may not have

adopted CSR practices since they need to devote their resources to setting up business and subsequently

compete with established brands, before they can inculcate the social responsibility habit. This problem,

however, may be restricted to developing countries and their homegrown firms. In India, however, there

has been an increasing shift in favour of CSR both by domestic as well as foreign players and is especially

visible in the fast moving consumer goods (FMCG) sector, where firms seem to be competing not only in

the traditional market place but also on the CSR turf.

The motivation for CSR may especially be strong for firms involved in what may be described as socially

objectionable businesses such as tobacco and alcohol. Often, such firms try to gain the trust of consumers

and civil society by trying to cover the negative business aspects under the CSR umbrella. For example,

companies like British American Tobacco (BAT) and even McDonalds have indulged in distracting the

public eye from their core business. For other firms that have not been criticised yet for their field of

work, CSR assumes the role of a risk management exercise.13 Oil and mining firms, involved in high risk


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businesses are likely to have stronger CSR programmes to mitigate the risk of reputation in crisis. The bad

press that followed Nike for years after its infamous sweat shop and human rights controversy compelled

it to champion the cause of CSR. A more recent example is that of Deepwater Horizon Oil Spill of 2010 in

the Gulf of Mexico, which brought much public ire to British Petroleum (BP) besides the plethora of

lawsuits that tainted the companys name. (Suvi Dogra, 2011)

BUSINESSETHICSANDCSR

THERISE INETHICAL CONSUMERISM

As global population increases, so does the pressure on limited natural resources required to meet

rising consumer demand. Consumers are becoming more aware of the environmental and social

implications of their day-to-day consumer decisions and are beginning to make purchasing decisions

related to their environmental and ethical concerns.

Ethical consumerism has also evolved substantially from an almost exclusive focus on environmentalissues to a concept that more broadly covers all matters of conscience including human rights, labour

standards, social impact and environmental impact. Consumers use their ethical choices to either

purchase products or services that meet certain ethical standards, or by choosing to boycott products

that do not meet these standards. (True Volunteer Foundation, 2004-2008)

In their 2007 report Measuring the Importance of Ethical Consumerism: A Multi-Country Empirical

Investigation, Auger, Devinney and Louviere observe that the number of groups focusing their

attention on the social behaviors of companies seems to have increased in recent years. For example,

they identified over forty anti-sweatshop organisations in the U.S. alone, a large number considering

the focus of those organisations is on a single issue. Even larger numbers of groups and members can

be found in areas such as environmental protectionism, human rights, and animal rights.

The breadth of issues associated with ethical consumerism suggests that it has wide-ranging

implications for managers and can affect the strategic decisions firms are makingfrom entering and

selling into foreign markets to outsourcing work to specific countries. For example, the importance

consumers attach to the use of child labor in production could affect decisions about the use of

offshore production, the selection of a country in which to produce, the human resources policies of

sub-contractors, and/or whether or not to sell a particular product in a specific country market. It

also provides a very real reason for corporations to develop their CSR programs to fulfill the growing

demands of the general public for ethical products.

GLOBALISATION AND MARKET FORCES

The expansion of world trade and investment has led to the increasing integration of the world

economy in recent decadesa process often referred to as globalisation. Some view globalisation

as fostering economic growth, increasing employment, and improving living standards in both

developed and developing nations. At the same time, others view globalisation as resulting in

negative social impacts and raise concerns about the expanding activities of multinationalcorporations, particularly in developing countries.


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There are many opponents of the offshoring model on the basis that it relies on the exploitation of

workers in developing countries to achieve economic advantage for large corporations. Some

companies use CSR methodologies as a strategic tactic to gain public support for their presence in

global markets, helping them sustain a competitive advantage by using their social contributions to

provide a subconscious level of advertising. Global competition places particular pressure on

multinational corporations to examine not only their own labour practices, but those of their entire

supply chain, from a CSR perspective.

TRANSPARENCY IN CORPORATE ACTIVITY

A major driver of CSR is the new level of transparency of business activities brought about by the

media and internet. Now information is not only available freely but it is expected that all levels of

business provide information about their business activity. Where once Annual Reports were read by

only a few of the most interested in the community, now the disclosure of all aspects of corporate

management is demanded. This also gives corporations the opportunity to promote their good

practices and receive recognition for their efforts in CSR. (True Volunteer Foundation, 2004-2008)

the role of CSR in the global dynamics of the economically represented society is indicated by the

types of actions deployed in interaction by the members of society, but mainly by the goals inserted

within the agents action plans. What makes something be considered good or bad, etc. is not the

content of the prescriptions, but the personal practical decision processes: ethics is internalized in

human action, although other sources of norms would exist.

The entrepreneur will be socially responsible if his action plans place special importance on ethicalgoals. Figure 2 offers a graphic summary of this idea (Muoz, Encinar, & Caibano, September 2009)

Figure 2: Relationship between different conceptions of Ethics and Economics


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EMERGINGTRENDSINCSR

PRIVATE SECTOR ENTERPRISES

The conceptualization of corporate social responsibility uptill the 1990s was purely in terms of

philanthropy or charity. Welfare programs or initiatives were introduced not as a duty or a

responsibility but as a form of charity that was supposed to indicate the virtues of the company or

the organization. Many industrial groups like the TATAs or Birlas setup charitable trusts that provided

financial grants for various worthy causes where the corporation took up a more active role like the

establishment of the Birla Institute of Technology, Pillani by the Birlas or setting up of primary schools

by several major industrial groups for their workers children but even in these cases the approach

was philanthropical. The problem with the this philanthropy based model has several problems like

The corporation does not commit its resources fully behind such a project and often confinesitself to one-time or periodical financial grants.

Since it is an act of charity, the corporation does not feel the need for communityparticipation in the designing or management of such initiatives and people participation, if

any, is restricted to limited implementation aspects reducing the efficiency and effectiveness

of corporate social responsibility measures at the ground level.

The lack of involvement from the primary resource provider i.e. the corporation leads to lowlevels of accountability and transparency at the implementation level.

An impending crisis in Indian economy led the Rajiv Gandhi and Narashima Rao governments to

dismantle the license raji and introduce much-needed economic reforms in the country, which

marked the beginning of the economic liberalization and the free market economy in India. The

major impact of these economic reforms has been the increased presence of transnational

corporations in the country and transformation of Indian businesses into large global enterprises. In

this scenario, there is an increased focus on the social role of these private enterprises by both the

proponents and opponents of liberalization in India.

However the post-liberalization phase has seen a fundamental shift from this philanthropy-based

model of corporate social responsibility to stakeholder- participation based model. The change isevident in the statements about corporate social responsibility being made by Indias leading

industrial groups like the TATAs, over the years, the nature of the company's involvement with the

community has undergone a change. It has moved away from charity and dependence to

empowerment and partnership and the consistent transformation in their corporate social

responsibility practices in the last decade. With the shifting of the corporate social responsibility

paradigm to a stakeholder centric approach, practices at the ground level have also undergone a

radical transformation. The focus has been on initiatives that are people-centric with active

community participation at all levels. Further, the corporations themselves have moved away from

the charitable initiatives like giving financial grants or sponsorships to providing products and servicesin a manner that would make a real difference in the target communities.


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The first perceptible change has been the introduction of a host of innovative programs and schemes

in several areas like education, healthcare, rural development, environment protection, protection of

artistic and cultural heritage and disaster management that are customized to meet the specific

needs of the target group and corporations devote not only financial resources but expertise,

manpower, products and services for the successful implementation of these schemes:

Lupin India Ltd, Indias third largest manufacturer of pharmaceuticals has started a project forproviding sustainable development in 154 villages across Rajasthan. The scheme instead of

providing for piece-meal assistance that does not lead to effective alleviation of poverty or

adequate development is designed as a holistic action plan that includes an Agricultural

Income Generation Scheme, land cultivation and fruit plantation programs, fodder

preservation schemes, sericulture and water-recycling programs, establishment of medical

and educational centres, adult literacy programs and credit schemes.

Cipla, another Indian pharma major has found a novel approach to fulfil its corporate socialresponsibility obligations by offerering to sell a cocktail of three anti-HIV drugs, Stavudine,

Lamivudine and Nevirapine, to the Nobel Prize-winning voluntary agency Medicine Sans

Frontieres (MSF) at a rate of $350, and at $600 per patient per year to other NGOs over the

world. This offer has to led to an significant decrease in the prices of these drugs worldwide

increasing the accessibility of these drugs especially in the developing countries.

Ranbaxy, one of Indias major pharmaceutical firms operates seven mobile healthcare vansand two urban welfare centres that reach over a lakh people in various parts of northern and

central India as part of its corporate social responsibility initiative.

Tata Consultancy Services (TCS) has set up a fully-equipped computer training laboratory forchildren from the Society for the Welfare of the Physically Handicapped and Research Centre,

in Pune for imparting basic computer knowledge. NIIT has launched a highly popular hole-in-

the-wall scheme where it places a computer on a public wall in urban and rural areas so that

neighbourhood children can learn computer basics using the play-way method.

Bharat Electronics Ltd built cyclone proof houses for the victims of the super cyclone in withthe help of the victims themselves so that the houses are built according to their needs.

Ion Exchange has founded a profitable venture for environmental protection through watertreatment, a forestation and organic farming

PUBLIC SECTOR ENTERPRISES

In case of Public Sector Enterprises or Undertaking (PSU) companies, there is a greater societal

obligation. India, also, has a large public sector with several huge corporations and companies

operating in various sectors like petroleum, heavy industries, aviation, mining, steel, equipment

manufacturing and shipping. The Indian public sector has had a long tradition of corporate social

responsibility and the initiatives of corporations like the Oil and Natural Gas Commission (ONGC),

Steel Authority of India Ltd (SAIL) and Gas Authority of India Ltd. (GAIL) have critical in thedevelopment of several backward regions of the country. Indian Airlines and Bharat Heavy Electronics


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have been widely acclaimed for their disaster management efforts. While the situation in the private

sector seems satisfactory, there is fierce debate on the social role of the Indian public sector in the

post-liberalization phase especially in the light of the twin processes of privatization and the

dismantling of monopoly/quota regimes. There is a need for extensive research especially in form of

empirical studies to address the questions related to this issue. (Visalaksh & Mahapatra, 2002)

SUGGESTIONS TO IMPROVE CSR ACTIVITIES IN INDIAPolicymakers in India should consider certain factors before finalising the CSR diktat under the

Companies Bill.

Firstly and foremost, there is a dire need to arrive at a clear definition of CSR and what it entails in

the Indian context. Since CSR should be applicable to all companies regardless of their size and

sector, the MCA should aim to level the playing field keeping in mind that each industry works underdifferent sets of constraints. It is essential to try and accommodate the stakeholders as far as possible

in order to make CSR more effective.

Secondly, CSR agendas in middle and low income countries have traditionally been less visible

internationally and at times have not been recognized as and granted a CSR label. In this context it is

important that the Government does not set the national CSR agenda just to gain acceptance by

international watchdogs and not to promote socially responsible practices by businesses. The

Government can play a fundamental role in imparting education and assisting small and medium

enterprises (SMEs) in responding to these global demands instead of formulating a law and leaving

small businesses to their own devices.

Thirdly, a compulsory CSR provision would entail a long process of legislations, and a series of allied

legislations would also be required to ensure the desired end-use. For India, which has been dogged

by a series of money laundering and similar scams, a CSR mandate by law could add to yet another

avenue of fraud and illegality. Wipro Chairman Azim Premji too expressed his concerns recently, I

don't think you generate CSR by putting statutory requirements. I think there is enough social

consciousness among the larger companies to drive it on the basis of what they consider their

responsibility, (Press Trust Of India, 2011). Another consideration in this regard is whether charity by

force can actually yield to desired outcomes? This is an important consideration in the context of the

CSR debate in India.

Fourthly, Indias CSR story can be successful only if companies could view CSR from their own

perspective as a part of business strategy that also benefits the community. A goal based approach

rather than a diktat-based approach could incentivise firms to adopt CSR.


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CSRININDIASeveral major CSR initiatives have been launched in India since the mid-1990s. Nearly all leading

corporates in India are involved in corporate social responsibility programmes in areas like education,

health, livelihood creation, skill development, and empowerment of weaker sections of the society.

Notable efforts have come from the Tata Group, Infosys, Bharti Enterprises, ITC Welcome group,

Indian Oil Corporation among others. The 2010 list of Forbes Asias 48 Heroes of Philanthropy

contains four Indians. The 2009 list also featured four Indians. India has been named among the top

ten Asian countries paying increasing importance towards corporate social responsibility disclosure

norms. Tata Group an India-based indigenous multinational enterprise with a unique 140-year old

commitment to the community is the pioneer in India for CSR activities. Despite the 2008-2009 global

recessions, the Tata Group topped the economic value creation charts. In 2008-2009, the Group had

grossed US$70.8 billion in revenues. 64.7 per cent of the Groups revenues were now coming from

outside India. (Oana Branzei, 2010)

Although corporate India is involved in CSR activities, the central government is working on a

framework like CSR Credits for quantifying the CSR initiatives of companies to promote them further.

Moreover, in 2009, the government made it mandatory for all public sector oil companies to spend 2

per cent of their net profits on corporate social responsibility. Today, CSR in India has gone beyond

merely charity and donations, and is approached in a more organized fashion. It has become an

integral part of the corporate strategy. Companies have CSR teams that devise specific policies,

strategies and goals for their CSR programs and set aside budgets to support them. For example,

organizations like Bharath Petroleum Corporation Limited, Maruti Suzuki India Limited, andHindustan Unilever Limited, adopt villages where they focus on holistic development. They provide

better medical and sanitation facilities, build schools and houses, and help the villagers become self-

reliant by teaching them vocational and business skills.

CSRATTATAGROUP

Established in 1932, the Sir Dorabji Tata Trust is one of Indias oldest, non-sectarian and philanthropic

organisations. With its Allied Trusts, it forms the largest single private sector donor entity in the

country. Devoted to working on the twin goals of providing succour to the needy and building up thebest, it operates in a dynamic environment promoting excellence and relevance in areas of human

endeavour The Trusts make three types of grants:

Grants to Institutions set up or supported by the Group Grants to Non-Government Organisation (NGO) Individual grants

INSTITUTIONAL GRANTS

The Sir Dorabji Tata Trust and the Allied Trusts have pioneered several leading institutions, the first of

their kind, in India, and in doing so have created centres of excellence in several fields particularlymedicine, science and education. Institutions supported from the trusts include: (Tata Sons, 2010)


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Indian Institute of Science, Karnataka Tata Institute of Social Sciences,

Maharashtra

Tata Memorial Centre, Maharashtra Tata Institute of Fundamental

Research, Maharashtra

The Tata Agricultural and Rural TrainingCentre for the Blind, Gujarat

National Centre for the PerformingArts, Maharashtra

National Institute of Advanced Studies,Karnataka

Foundation for Revitalisation of LocalHealth Traditions, Karnataka

Centre for Study of Science, Technology& Policy, Karnataka

Tata Medical Centre Trust, West Bengal Tata Education and Development

Trusts, Maharashtra

NON-GOVERNMENTORGANISATION(NGO)GRANTS

The pattern of grant making support extended to NGOs is in accordance with the chosen strategy.

The grants are made in six thematic areas:

Natural Resource Management andRural Livelihoods

Urban Poverty and Livelihoods Education Health

Civil Society, Governance and HumanRights

Media, Art and Culture Natural Resource Management

INDIVIDUAL GRANTS

The Trusts provide merit and need-based educational assistance as well as medical grants to

deserving individuals.

MedicalThe increasing costs of medical treatment places a huge burden, especially on those from theeconomically weaker sections of society. The Sir Dorabji Tata Trust and JRD Tata Trust extend

financial assistance to meet the cost of medical treatment, with the JRD Tata Trust mainly

focussing on the relatively younger age group, who with such medical assistance can go on to

live a better quality of life.

Education and TravelThe Sir Dorabji Tata Trust gives financial assistance for education by way of :

General education grants for studies in India after taking into account factors such asacademic record, fees and the economic background of the family

Scholarships for undergraduate studies in India Study in Urban and Rural Community Development

Travel grants are given to meet the cost of pursuing studies overseas as well as for presenting

papers at conferences, undergoing advanced training, research and exchange programmes.

Institutional GrantsThe bulk of these are in the areas of Rural Livelihoods and Communities and Education.

Within Rural Livelihoods and Communities, the Trust focuses on key initiatives within two

broad areas:

Land and Water Development Microfinance

In most of the thematic areas, the Trust focuses its grants on well-defined initiatives. Some ofits key initiatives are Central India Initiative (CInI), Himmothan Pariyojana, Kharash


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Vistarotthan Yojana (KVY), Drought Proofi ng in West Rajasthan, Reviving the Green

Revolution, Sukhi Baliraja Initiative (SBI), Drinking Water Initiative, District Education Initiative,

Roopantaran, etc

Endowment GrantsThe Trust has developed and used endowments to sustain mission-driven institutions that

influence positive change in society. It has a formal endowment strategy with well-set norms

and clearly defined criteria that enable it to identify and appraise deserving institutions.

Small GrantsThese cater to the needs of small, welfare-oriented organisations, and those needing support

to implement innovative ideas. They are also given to large organisations that need funding

for strategic planning, focused research activities, or strengthening internal systems.

CSRATHSBCHSBC Holdings is a public limited company incorporated in England and Wales. With its headquarters in

London, the HSBC group operates in five regions: Europe, Hong Kong, the rest of Asia-Pacific including

the Middle East and Africa, North America, and South America, hence called the worlds local bank.

The case deals with the CSR initiatives at HSBC and how these activities are viewed as complementary

to the nature of businesses at the bank.

Nigel Pate, Senior Manager of the 'HSBC in the Community' program, said, "Through Green-Works we

found an innovative solution to ensure that our furniture will be put to good use. Our partnership has

led to the opening of Green-Works' Silvertown warehouse, which in turn had created local jobs, and

training and development. We are delighted that such a good social enterprise is now expanding on a

national level."

The final destination of the office equipment discarded by HSBC was Gambia where the equipment was

distributed to schools, hospitals, and a wide range of non-government organization projects under the

President's Award Scheme. Though the cost of disposal of the furniture through the Green-Works

option was 10% higher than the landfill option, the company went ahead with it as it was in line with

their values and principles on environmental management and social responsibility.

Main areas of their commitment are community, environment and education comprising many projects

supporting charities and volunteering programmes along with sponsoring. Some of their activities

include

Sponsorships in the areas of the arts and sports include the "HSBC World Women's Match PlayChampionship" and the "HSBC World Match Play Championship".

Education Initiatives concentrate on providing education to disadvantaged children, to giveyoung people around the world opportunities for education and success. Through direct funding

or employee volunteering HSBC provides practical and financial support to young people.

Education projects include among others "Helping children off the street", "Empowering Schools

to Excel". Since 2002 HSBC funds the TEAK programme which supports students from low-


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income families in gaining access to top high schools.

Environment: The company recognizes the danger of climate change and contributes to

environmental sustainability through its "Investing in Nature" partnership through which HSBC

supports three leading charities Botanic Gardens Conservation International (BGCI), EarthwatchInstitute and WWF. Water Aid Splashes Out in Africa and Asia WaterAid, a UK based charity is

dedicated to provide water, sanitation and hygiene education to the world's poorest people in Africa

and Asia. HSBC supports them with donations and money raised by employees.

CSRATOILINDIALIMITED

In 1964, CSR was introduced in Indian Oil for the first time. Initially the Corporation's objective was to

"help and enrich the quality of life of the community". Later on it extended its mission statement by

adding preservation of ecological balance and heritage through strong environmental conscience" to

its objectives.

CSR at Indian Oil is based on the four pillars of care, innovation, passion and trust. CSR here is not

just to perceive as corporate behemoths that exist for profits but for the good of the society and for

improving the quality of life of the community they serve. They are aware of the need to work

beyond financial considerations and put in a little extra effort that can make the society a better

place to live in. The Corporation respects human rights and values its employees, share holders and

customers. In the last five decades, Indian Oil has supported innumerable social and community

initiatives in India and has taken up concrete actions towards the society.

One of the major steps of CSR at Indian Oil is sharing of profits. Every year a fixed portion of Indian

Oil's profit is set aside for community welfare and developmental programmes. It has also concerted

social responsibility programmes with communities. The company has a number of community

focussed initiatives such as development in health, education, sanitation. It also includes family

welfare, providing portable water, women empowerment and welfare of schedule caste and

schedule tribe beneficiaries. Allotment of petrol/diesel station dealerships and LPG distributorships

to beneficiaries from among schedule caste and schedule tribes, physically handicapped, ex

servicemen, war widows, etc are some of the other initiatives under community welfare.

The corporation also provides extended help to farmers to reach out to larger markets through

Kissan Seva Kendras .To enforce the additional objective ofpreservation of ecological balance and

heritage, Indian Oil has founded the Indian Oil Foundation, a non profit trust to protect, preserve

and promote national heritage monuments. It is exclusively funded by Indian Oil. It has an initial

corpus of twenty five crore and an annual contribution of ten crore. Under this initiative Indian Oil

will adopt atleast one heritage site in each state and promote it.

Indian Oil being a green company has set up some environment protection initiatives. For the

production of green fuels in its refineries it has invested nearly Rs. 7000 crore in state-of-the-art

technologies. Further the corporation is now in the process of commercialising various options in


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alternative fuels such as ethanol blender petrol, biodiesel, hydrogen and hydrogen-CNG mixture to

reduce dependence on precious petroleum products and secure the nations security.

To promote community development, Indian Oil has undertaken a number of initiatives such giving

scholarships, allocation of funds etc. The community development unit of Indian Oil identifies variousdeserving causes for allocation of funds from the community development budget and involve

various grassroots level organisations like local gram panchayats, district administration, NGOs and

social workers whenever necessary. To ensure that the benefits of the programmes flow directly to

the identified groups, fund utilisation is closely monitored and whenever necessary the corporation

directly executes projects. To promote all sided development of the society , Indian Oil also offers

sports scholarships to upcoming players and potential/ talented players. Indian Oil also supports art,

culture, music and dance under the banners ofIndian oil sangeet shabha, Indian oil art exhibitions.

It has also worked towards better education in India by encouraging special scholarships among girl

students and disadvantaged groups hence trying to reduce dropout rates in higher secondary levels.

(Tridiv Hazarika)

CSRATITCLIMITED

It started off as the Imperial Tobacco Company in 1910, and shares ancestry with Imperial Tobacco of

the United Kingdom, It was rechristened to Indian Tobacco Company in 1970 and then to I.T.C.

Limited in 1974. ITC has been a leader in the cigarette industry for decades. After Indian

Independence the Government policies have put this industry in a disadvantageous position due to

raising of excise duties in many national budgets. ITC have therefore been diversifying into areas

other than tobacco. In 1975, ITC entered the hotel industry and had been planning to invest in

properties at the premium end of the market. ITCs green journey began with farm forestry benefiting

poor tribal area in 1998. This was followed by social development initiatives with water shade and

agricultural development, livestock productivity and womans economic empowerment, primary

education health and sanitation.

ITCS E-CHOUPAL PATH BREAKING INITIATIVE(2000)

The endemic constraints that shackle the Indian Agriculture sector are well known - fragmented

farms, weak infrastructure, numerous intermediaries, excessive dependence on the monsoon, and

variations between different agro-climatic zones, among many others. These pose their own

challenges to improving productivity of land and quality of crops. The unfortunate result is

inconsistent quality and uncompetitive prices, making it difficult for the farmer to sell his produce in

the world market. ITC's trail-blazing answer to these problems is the e-Choupal initiative; the single-

largest information technology-based initiative. ITC's diversified business portfolio has enabled the

Company to create and nurture numerous farmer partnerships in many value chains.

E-Choupal delivers real-time information and customized knowledge to improve the farmer's

decision-making ability, thereby better aligning farm output to market demands; securing better

quality, productivity and improved price discovery. The model helps aggregate demand in the natureof a virtual producers' co-operative, in the process facilitating access to higher quality farm inputs at


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lower costs for the farmer. The e-Choupal initiative also creates a direct marketing channel,

eliminating wasteful intermediation and multiple handling, thus reducing transaction costs and

making logistics efficient. (Bidwai Shreeniwas V)

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). (ITC Limited)

The three major global environmental milestone achieved by ITC are carbon positive, water

positive and solid waste recycling positive. The other Millstones achieved are in areas-eg- e-

choupal, social & farm forestry, watershed development, womens empowerment, livestock

development, primary education (Bidwai Shreeniwas V)

CSRATHUL

Hindustan Unilever is involved in number of CSR initiatives in India. The main objective of Project

Shakti of Unilever is creating rural entrepreneurs. It trained 13,000 underprivileged Indian women

distribute the companys products to 70 million rural consumers. The company is working with

womens 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 Indias 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. (Dr. G.

Muruganantham, London 2010)


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CONCLUSIONThe concept of corporate social responsibility is not new in India. Right from the pre-independence

times, the Gandhian model has been in practice. Many family owned businesses continue to engage

in philanthropic activities. However with the passage of time and increased privatization and

globalization, the stakeholder model is gaining more importance. Hence, corporate responsibility isbecoming an integral part of the business strategy. Reliance Industries Limited Chairman Mukesh

Ambani, who is also the richest Indian, feels that CSR needs to evolve into Continuous Social

Business. The purpose of any business cannot be only profit. Profit for the shareholders is important.

But unless entrepreneurs have a larger purpose and businesses that change lives of millions of

people, a sustainable business cannot be created. (Press Trust of India, 2011)

The CSR policy of most companies is formulated in very general terms and does not contain explicit

commitments. According to companies, CSR has to be tailor-made and their code of conduct is not a

contract. Stakeholder involvement has become common practice among most large MNCs, but is

hardly developed among SMEs. NGOs approaches do not always receive companies approval.According to companies, NGOs are mainly single issue oriented and focussed on media attention. In

some instances companies have been confronted with representatives of local communities which

were less concerned with general interests but more with their own gains. Contribution to socio-

economic development plays an important role in the Indian context. Companies are expected to

contribute both to community development (responsibility at local level) and to have an added value

to the economic development of the country (responsibility at macro level). These aspects are not

incorporated in the CSR. A CSR policy should not only be communicated top-down but should be

supported by a credible stakeholder assessment and dialogue as well as clear implementation

measures. (Consultancy and Research for Environmental Management (CREM), February 2004)

Basically, from economic point of view, this activity is not feasible especially if there is an intense

competition, since firms have to sacrifice its profit. In addition, CSR activity is not only feasible, but

also desirable from the economic point of view, in terms of cost.


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WORKSCITED1. Bidwai Shreeniwas V. CSR AT ITC LTD VIEWING THROUGH STRATEGIC LENS. IBS Mumbai:

Babasaheb Gawde Institute Of Management Studies.

2.

Consultancy and Research for Environmental Management (CREM). (February 2004). CorporateSocial Responsibility in India: Policy and practices of Dutch companies. Amsterdam, Netherlands:

Consultancy and Research for Environmental Management.

3. Dr. G. Muruganantham. (London 2010). Case study on Corporate Social Responsibility of MNCs inIndia. International Trade & Academic Research Conference (ITARC) .

4. ITC Limited. (n.d.). e-Choupal. Retrieved from www.itcportal.com: http://www.itcportal.com/itc-business/agri-business/e-choupal.aspx

5. Joseph, A. (2010, JUNE 4).A Picture of CSR in India. Retrieved from www.csr360gpn.org:http://www.csr360gpn.org/magazine/feature/a-picture-of-csr-in-india/

6. Mallen Baker. (2004, June 8). Retrieved from www.mallenbaker.net:http://www.mallenbaker.net/csr/definition.php

7. Muoz, F.-F., Encinar, M.-I., & Caibano, C. (September 2009). On Economics, Ethics, andCorporate Social Responsibility. Instituto de Investigaciones Econmicas y Sociales Francisco de

Vitoria , 1-19.

8. Oana Branzei. (2010, May 10). Tata: Leadership With Trust. Richard Ivey School of Business casecollection , 24 pages. London, UK: http://hbr.org/product/tata-leadership-with-

trust/an/910M25-PDF-ENG.

9. Press Trust Of India. (2011, March 24). Azim Premji against law on mandatory CSR spending bycorporates. The Economic Times .

10.Press Trust of India. (2011, March 1). Not just CSR but Continuous Social Business need of thehour: Mukesh Ambani. The Economic Times .

11.Sergei Lukin. (2001). Corporate Social Responsibility and Business Objectives. Belarus StateEconomic University.

12.Suvi Dogra. (2011, April 6). Political Economy of CSR:The Companies Bill Debate in India. ISASInsights (No. 121) .

13.Tata Sons. (2010). CSR at TATA Group. Mumbai: Group Corporate Affairs.14.The.Econimics.Times. (2011, March 24). Azim Premji against law on mandatory CSR spending by

corporates. PTI.

15.Thomas W., M., & Kees van der, G. (2009, DECEMBER). McKinsey Quarterly. Retrieved fromhttp://www.mckinseyquarterly.com:

http://www.mckinseyquarterly.com/Making_the_most_of_corporate_social_responsibility_2479

16.Tridiv Hazarika. CORPORATE SOCIAL RESPONSIBILITY:-The OIL Way. Oil India Limited.17.True Volunteer Foundation. (2004-2008). Corporate Social Responsibilty - A White Paper. United

Kingdom.

18.Visalaksh, K., & Mahapatra, S. (2002, March 21). Emerging Trends In Corporate SocialResponsibility: Perspectives And Experiences From Post-Liberalized India. The Hindu Buisnessline, pp. 1-8.

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