CSR 3 CATALYST FOR HUMAN DEVELOPMENT
EDITORIAL TEAM Dr. Bhamy V. Shenoy Catalyst Chief Editor [email protected] FOR HUMAN DEVELOPMENT Ms. Bharati Kalasapudi An insight into the complex Mr. Nasy Sankagiri Ms. Aarti Iyer problems of development and an Mr. Lakshman Kalasapudi attempt to provide solutions Ms. Padmaja Ayyagari Mr. Rajesh Satyavolu
Dr. Srinivasa Rao (Editor) [email protected]
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Mr. Ram Krishnan [email protected]
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INVITATION TO AUTHORS Catalyst For Human Development provides a platform for those people who have a concern for sustainable human development. The mission of this magazine is to disseminate information on the NGO movement and publish well-documented features and articles produced by highly qualified professionals, on various issues related to human development activity in India. The topics range from healthcare, sanitation, agriculture and housing to transportation, employment, energy, water, women and child welfare, financial matters, rural development, ecology and activities of NGOs. We invite contributors to enhance the value of the magazine and make it more purposeful - all to promote the cause of the global NGO movement. Guidelines for Contributions Article 1200-1500 words (approximately two or three printed pages) Format Double-spaced, 1 inch margin, 12 pt. text and soft copy in MS Word Artwork The two or three images (to accompany your article) should be of high resolution (300 dpi). Try to provide captions for the artwork, as needed Author Bio 50-80 words Author Photo Bust shot (high resolution) in JPEG, TIFF or BMP format Send in your contributions to [email protected] along with your postal address TITLE PAGES AND HIGHLIGHTS OF FIRST FIVE ISSUES OF Catalyst FOR HUMAN DEVELOPMENT
HIGHLIGHTS OF JANUARY '06 ISSUE Scaling up Primary Education Services in Rural India Healthcare in India Water Management in 21st Century - Policy and Planning Food and Nutrition Through Value Addition to Agri Resources Scaling up Primary Health Services in Rural India Cross-Fertilization Needed Between Universities & Scientific Labs Balasakhi - A Village Voice NRI Pioneers - Catalytic Agents for Development
HIGHLIGHTS OF APRIL '06 ISSUE Agenda For the Nation: An Approach Economic Reforms in India - The Unfinished Agenda A Villager's Agenda For a Healthy India Consumer Movement - An Agenda India's Development - Agenda for NRIs Stop Child Poverty Could Our Classrooms Shape India's Destiny Unscrupulous NGOs are Denting Movement
HIGHLIGHTS OF OCTOBER '06 ISSUE Scaling up Primary Education Services in Rural India Healthcare in India Water Management in 21st Century - Policy and Planning Food and Nutrition Through Value Addition to Agri Resources Scaling up Primary Health Services in Rural India Cross-Fertilization Needed Between Universities & Scientific Labs Balasakhi - A Village Voice NRI Pioneers - Catalytic Agents for Development
HIGHLIGHTS OF JANUARY '07 ISSUE Non-Resident Indians' contributions - Answering a Call to Action Eliminating Elephantiasis and Waterborne Diseases Association for India's Development - Improving Literacy in Rural India Leading India toward Millennium Development Goals How NRIs Can Help in Poverty Alleviation Is Mega Philanthropy Going to Make a Difference? Nobel Peace Prize 2006 - Muhammad Yunus Indian National Development Congress
HIGHLIGHTS OF MARCH '07 ISSUE Safe Drinking Water in Villages: A Step Towards Rural Transformation Water Wars: National Problems from a Regional Perspective Rain Centre in Chennai, India Get real, Coke: Water Rights Protest Promoting Effective Waste Management: The Clean Himalaya Initiative Examples of Social Contribution from IIT Madras Alumni Gravity Head Ensures a Green Plant and Sustainability: A Case Study of Gangtok City Sustasinable Rural Water Management - A Replicable Case Study Catalyst MEMBERSHIP FORM FOR HUMAN DEVELOPMENT
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For membership in America, mail to: For membership in India, mail to: CATALYST FOR HUMAN DEVELOPMENT CATALYST FOR HUMAN DEVELOPMENT 208, Parkway Drive, Roslyn Heights, IHFD, Balaji Residency, 12-13-705/10/AB NY, 11577, USA Gokul Nagar, Tarnaka, Hyderabad 500017, A.P., India CONTENTS 7 CATALYST FOR HUMAN DEVELOPMENT
Preface: Dr. Bhamy V. Shenoy ... 8 A Better Understanding of CSR : Ruby Thapar ... 9 Magic School Bus : Evolving a CSR Model - The Bilt Forging Successful Experience : Yashashree Gurjar ...11 Partnerships: Toward CSR : Prabhudev Konana ... 15 Alison Adnitt 13
Inclusive Development As Self-sustaining Business: P.V. Indiresan ...19
2007 CSR: Interesting Revelations from a Survey ... 22 CSR to Society’s Advantage or Corporates’ ?: CSR: Two Exemplary Rajen Varada 17 Corporations: Sandhya Rawal ... 23 CSR: The Other Point Of View: Gurucharan Das ... 24 But...Tata Lays the Path ... 25 ... PM’s Word of Advice to Corporates 27 Corporate-backed China Late in Joining World of CSR : Sha Yu ... 28 Community Enterprises Unending Debate on CSR: A UNDP Report ... 29 Flourish in Southern India: Muthu Velayudham 31 CSR Contact Database Grows Further ... 33 CSR Initiatives and Examples ... 34 Zulieben’s Success Story: Jayant Shroff ... 38
Non-Functioning MPs, Indifferent Citizens: C.V . Madhukar ... 42 Yamuna River Cleanup Effort ... : Karmayog Plays Crucial Role In Resolving Subijoy Dutta 40 People’s Problems: Vinay Somani ... 43
Thanks to Infrasys Kottapalayam is Out of the Dark: Murthy Sudhakar ... 45 FEC Initiative Building Resource Alliance Helping NGOs in Business-Social Developing Countries ... 48 Partnerships: Venkatesh Raghavendra & Unfortunate Fall of an NGO Titan: Malini Sekhar 46 Lessons to learn: Dr. Bhamy V. Shenoy ... 49 Pledge 2007 - An Evening for Child Rights ... 52 Premji a Crusader for Humane Society ... 54 Book Review ... 55 ... 2007 Skoll Awards for Social Entrepreneurship 56 Rural Innovations: Biodiversity for Development: Dr. K. Srinivasa Rao ... 58 A shining Example 51 8 PREFACE CATALYST FOR HUMAN DEVELOPMENT
HILE working on this issue of Corporate Social Responsibility (CSR), it became obvious from the beginning that there is considerable variance in its interpretations and, as a re- Wsult, in its implementation. While almost all the large Indian corporations and MNCs have well defined CSR activities, medium and small companies have yet to imbibe the true spirit of CSR. This is both because of the misunderstanding of CSR concept and their daily grind to survive in the corruption–ridden inspection Raj.
There are some who think that merely generating maximum returns to the shareholders, while complying with all the rules and regulations of the government, is the ultimate in fulfilling the needs of responsible CSR activities. They think that applying corporate assets for solving social problems rather than maximizing shareholder value is an act of irresponsibility. There are others who think that private companies also have the responsibility of taking care of the poor and down- trodden in their areas as well as protecting the environment while practising sustainable production strategies. Who is right in the long term? Can we learn from the lessons of Shell in Nigeria or oil companies in Bolivia who failed to observe the true spirit of CSR?
To a large extent, most of the CSR activities, whether by MNCs or domestic companies in India, are influenced today by their counterparts in the developed world. This raises the fundamental question of why they have failed to see the vastly different situation in India.
It is stating the obvious that when poverty, and that too grinding poverty, is the norm in India de- spite all the sound bites on “India Shining”, can corporations be oblivious to this stark and unpleas- ant fact. In the developed world, for most part, the system works with good governance and reasonable level of public participation. But, in India we are a long way from good governance. De- spite all the hype of vibrant democracy, it is only the tiny minority of the political class that take part in solving the civic problems and that too for their own selfish ends. Under this widely different scenario, why do companies with vast management resources and better knowledge of the system dynamics simply ape the CSR paradigm of the developed countries?
Those companies, who want to contribute to India’s development through their investment in highly controversial SEZs, are often perceived as ignoring the needs of the poor whose lands they have taken over. Does paying market rates to their lands absolve them of the responsibility? Why can’t they carry them as shareholders so that they can also be partners like other investors (in fact they have risked their livelihood) and share their prosperity? A correct interpretation of CSR would have helped these companies to adopt such a strategy to win over the poor.
When millions in India still remain functionally illiterate because of dysfunctional education system, can companies pat themselves by announcing that they have contributed to starting some schools or gave crores of rupees for scholarships or trained hundreds of teachers or donated thousands of books? What we need is a revolutionary systemic change so that every child irrespective of accident of birth has equal opportunity to have good schooling. An enlightened CSR should attempt to fol- low the principle of teaching how to fish rather than just giving out a fish to overcome the imme- diate hunger.
CSR should go beyond mere philanthropy especially in a country like India where people living in below poverty level are more than 50%. It is not just spending some percentage of profits for a social cause. Just like an individual living in a society cannot be concerned only with his self–in- terest as described in Wealth of Nations by Adam Smith, corporations cannot be indifferent to so- cietal problems as suggested by Milton Friedman. Dr. Bhamy V. Shenoy CSR 9 CATALYST FOR HUMAN DEVELOPMENT A Better Understanding of Corporate Social Responsibility
RUBY THAPAR Corporate Social Responsibility is not a subsidiary responsibility of a corporate body or an option. Indeed it is very much a complementary responsibility or rather a compulsion of any corporate body that aims to add value to it’s operations.
ORPORATE Social Responsibility, or CSR, as it is commonly referred to these days is rapidly becom- Ruby Thapar earned her Masters Cing a jargon. The phrase is on the brink of losing Degree in Child/Human Development the sheen of its nobility. Increasingly the oft-used-and- from the SNDT University, Mumbai abused phrase CSR is being commoditised, not just in its and subsequently PG Diploma in meaning but also in its concept. Business Management from XLRI, Jamshedpur. Ruby Thapar is now the What exactly is corporate social responsibility? Is it a pa- Group Head, CSR, at Vedanta tronising way to salve a corporate guilt? Or is it a bejew- Resources plc. Prior to joining eled crown that corporate houses need to wear for vanity? Vedanta Resources, Ruby worked in the arena of CSR Or is it truly a responsibility that is as indispensable for a in academic capacity as a lecturer, as an implementing partner with an NGO and as strategic thinker with corporate body as its responsibility to its shareholders? corporations. A widely quoted definition by the World Business Council for Sustainable Development states that "Corporate social responsibility (CSR) is the continuing commitment by busi- about meeting the target of installing 5 tube wells or ness to behave ethically and contribute to economic devel- cleaning the drains, it is about sustenance and growth. It opment while improving the quality of life of the is as much about social responsibility as it is about making workforce and their families as well as of the local com- a company more efficient. CSR is about improving the bot- munity and society at large." tomline and maximizing returns to the stakeholders.
Community work A well-planned CSR programme, even with a short-term It is important to distinguish CSR from charitable dona- impact, can have direct co-relations with the following op- tions, "good works" and philanthropy. Corporations have erational aspects of an organisation. often, in the past, spent money on community projects, the endowment of scholarships, and the establishment of Human resources foundations. They have also often encouraged their em- A CSR programme can be seen as an aid to recruitment ployees to volunteer to take part in community work and and retention, particularly within the competitive graduate thereby create goodwill in the community, which will di- student market. Potential recruits are increasingly likely to rectly enhance the reputation of the company and ask about a firm's CSR policy during an interview and hav- strengthen its brand. ing a comprehensive policy can give an advantage. CSR can also help to build a "feel good" atmosphere among ex- CSR goes beyond charity and requires that a responsible isting staff, particularly when they can become involved. company take into full account its impact on all stakehold- ers and on the environment when making decisions. This Brand differentiation: CSR can play a role in building cus- requires the company to balance the needs of all stake- tomer loyalty based on distinctive ethical values. Several holders with its need to make a profit and reward share- major brands, such as The Co-operative Group and The holders adequately. Body Shop are built on ethical values. Closer home, the en- tire Amul Story crafted by Dr. Kurien is a prime example of In today’s networked corporate arena, Corporate Social corporate social responsibility that evolved into a profitable Responsibility is not an option, it’s a compulsion. It is not business venture. 10 CSR CATALYST FOR HUMAN DEVELOPMENT
License to operate: Corporations are often set at a supranational level like the keen to avoid interference in their busi- Kyoto Protocol. Some investors and in- ness through taxation or regulations. By vestment fund managers have begun to taking substantive voluntary steps they take account of a corporation’s CSR policy can persuade governments and the in making investment decisions (so-called wider public that they are taking current ethical investing). issues like health and safety, diversity or the environment seriously and so avoid Having said this, it is not something that intervention. can be accomplished alone by any corpo- ration. The need of the hour is neutral Complimentary resposibility platforms of collaborations, interactions The definition of CSR used within an and task-orientedness among NGOs, the organisation can vary from the strict "stakeholder impacts" civil society, the government and the corporations to hasten to include charitable efforts and volunteering. CSR may be the pace of social development in line with the economic based within the human resources, business development reforms. or PR departments of an organisation, or may be given a What needs to be kept in mind about CSR is that it is not separate unit reporting to the CEO or in some cases directly a subsidiary responsibility of a corporate body. Indeed it is to the board. Some companies may implement CSR-type very much a complementary responsibility of any corporate values without a clearly defined team or programme. body that aims to add value to its operations. Today’s heightened interest in the role of businesses in society has been promoted by increased sensitivity to and [email protected] awareness of environmental and ethical issues. In some (The views expressed here are of the author countries government regulation regarding environmental and do not represent the views of and social issues has increased. Standards and laws are Vedanta Resources plc)
Hyundai Motors India is Deeply Committed to Corporate Social Responsibility
YUNDAI Motors India last year gifted 100 cars Elementary School and Government High School at to Chennai City Police. The company is now Irungattukottai near Kanchipuram. To cover all schools Hdonating furniture to needy schools across Tamil in the state, the company plans to distribute 10,000 Nadu as part of its community development pro- furniture sets per year. gramme. The Korean company, which has a manufacturing fa- A study conducted recently by the Hyundai Motors cility in Irigattukottai for the past 10 years, has emerged India Foundation has found as the country's second largest that most schools in rural Tamil car manufacturer. To mark the Nadu lacked good furniture. In success, the company dedicated some schools, they found that Rs 100 per car sold for social students sat on the floor for welfare programmes. lack of furniture. Hyundai is also undertaking Hyundai Motors India pre- repair works of schools in a six sented 350 desks and benches kilo meter radius of the Irigat- in June, 2007 to the Panchayat tukottai plant. CSR 11 CATALYST FOR HUMAN DEVELOPMENT Evolving a Corporate Social Responsibility Model - The Bilt Experience YASHASHREE GURJAR Ballarpur Industries Limited (Bilt) CSR programmes reach out to 150 remote villages and 50 urban slums in Orissa, Andhra Pradesh, Mahrashtra and Haryana states, impacting the lives of 2,00,000 people. Bilt partners with 12 local NGOs as implementers of the projects. The programmes focus on the issue of livelihood creation with communities.
S the world moves towards globalization, companies Yashashree Gurjar holds a worldwide are under pressure to ensure that their Masters Degree in Sociology, a Post products and process have minimum negative impact A Graduate Diploma in Education, on environment and people. Responsibly managing the com- both from Pune University, and an pany’s manufacturing process, the back–end, the supply Executive MBA from the Asian chain, and the front–end, marketing, is becoming increasingly Institute of Management in Manila, important. Companies are not only putting such systems in Philippines. place but they are auditing and reporting such activities vol- She started her career in the social development field in untarily. Awareness is also on the rise within various stake- 1988 and worked ever since with the Government and a holder groups about a company’s products and how they number of NGOs mainly in the areas of education, child impact the environment and societies. rights and advocacy. In 1993, she joined Reliance Industries Limited and initiated the CSR activities there. Innovative contribution Later on she joined Rio Tinto India Ltd, a Multi-National In India this trend is quickly catching up as demonstrated by mining company, and worked on rehabilitation and many of the large companies beginning to include Corporate re-settlement issues on their projects in Maharashtra, Orissa and Rajasthan. She currently heads the CSR Social Responsibility (CSR) in their business agenda. Industry initiatives of Bilt as the Chief General Manager. associations like CII and FICCI have also included CSR as part of their agendas. There is increasing evidence to show that companies that are high on such responsible behaviour The nineties brought in the era of economic liberalization. are also high on the list of the most respected companies in Opening up the economy resulted in a number of opportu- India. CSR is understood differently by different companies in nities, seen in the accelerated industrial and economic growth India. Some perceive it as periodic donations to charity, others of the last decade. However, the focus on a market–driven look at it as a strategic long term support to issues. Whatever economy has also contributed to the widening of the income, definitions companies may use, the important underlying knowledge, and opportunity divides, pushing some sections concern is the need to contribute to the vast development of people deeper into the abyss of poverty. One of the main challenges that the country faces. reasons for this downward spiral is that the benefits of this ac- celerated pace of development can not be accessed by every- one equally.
In a vast country like India where large numbers still live below one dollar per day, this problem is compounded by the inability of the government systems to ensure reach of its development programmes to the most marginalized living in the remote areas of the country. This increasing divide is not good news for the corporate sector simply because the larger the number of people that get left out of development the stronger the backward pull manifesting itself as shrinking markets in future for the goods and services that the com- panies produce, community unrest and aggression, inability to get skilled labour etc. 12 CSR CATALYST FOR HUMAN DEVELOPMENT
The CSR agenda as outlined by the developed North does the correct people to do so as we did not have the adequate not include these unique challenges. The global framework competencies required to handle development. We developed and standards of CSR will therefore need to be continuously a model that included partnering with local NGOs to imple- fine–tuned by CSR practioners in India to make them more ment long term projects based on the identified needs of the relevant to the Indian context. The immense challenges that communities in the area. the country faces vis-à-vis development impacts the way CSR is perceived and implemented by companies in India. Issues Farm-based activities like poverty, inadequate livelihood options, lack of quality ed- Some of the programmes that we have taken up to make ucation and illiteracy and the challenges arising from these is- these people economically productive are vocational and skill sues are what most companies have to deal with as part of training, providing loans to youth to set up micro enterprises their daily operations. like carpentry units, motorcycle repairing units and units for products outsourced from the company. The projects also con- Therefore, CSR in India cannot be limited to being viewed centrate on expanding the scope of traditional farm-based ac- as a way of doing good business or managing business tivities to those without education, to include commercial processes well. It needs to go much be- vegetable farming, floriculture, provid- yond business, to actively participate in ing improved variety of seeds and helping resolve some of the above men- technical know how. Loans are also tioned issues. Majority of the companies provided for off farm activities like that include CSR in their agendas em- poultry, goat rearing, dairy and pisicul- phasize addressing these issues through ture etc. These programmes gave the their CSR programmes and practices. community a financial hold over their The Indian CSR model has evolved over lives. Health and education are also an the last few decades to give rise to some extremely important component of innovative ways to address develop- the poverty alleviation programme in ment issues. the pursuit of livelihood. The outreach programme on health has reached Partnership with NGOs more than 50,000 people in this year alone. Availability of Ballarpur Industries Ltd (Bilt) is one of India’s leading paper health care at their doorstep lead to improved health status es- companies in India and the market leader in the manufacture pecially among women and children. Trained health workers of writing and printing paper. As a manufacturing company are now available in each village with basic medicine kits and located in some of the most remote parts of the country Bilt safe delivery kits available with them all the time. is faced with many of the previously mentioned challenges. The communities living around these locations are poor and Informal education and bridge courses are provided to chil- marginalized and have had limited access to opportunities for dren out of schools in the community. Bilt provides training to development. In most cases Bilt is one of the only, business selected youth from a village to conduct these classes. Today, entities in the area. Bilt as part of CSR is empowering local communities so that they can play a constructive role in their own development In remote areas the avenues for income generation are lim- thus decreasing their dependence on the company. It also en- ited and the focus of people becomes industry related em- courages employee prevention volunteerism. Through ployment. Expectations from people all around are generally HIV/Aids prevention activities and other health interventions high; however since a company cannot fulfil all these expec- it tries to create a healthy workplace. Internal monitoring and tations, even some of the positive social impacts of it being in reporting mechanisms are in place and are an important part the area, like availability of jobs, get diluted due to the limited of this process. Bilt also developed a participatory monitoring numbers in which they are generated and the vast majority of system wherein the participating stakeholders are part of the people desirous of accessing them. This results in dissatisfac- review systems. tion among people in the area and a worsening of the rela- tionship with communities. These efforts lead to the development of a holistic CSR model that is based on a win-win partnership. It is working for Over the last few years Bilt realised that sporadic inputs in Bilt and is bringing returns in terms of better relations with an area are not adequate to address the issues brought about communities, governments, NGO’s and civil societies besides by decades of it being left out of the mainstream develop- meeting the needs of the stakeholders in a sustainable ment. Although we decided to address the issue in a system- manner. atic way with a long term focus, we realised that we were not [email protected] CSR 13 CATALYST FOR HUMAN DEVELOPMENT Magic School Bus: Forging Successful Partnerships
ALISON ADNITT For Magic Bus, raising awareness in privileged communities of the potential of our children is extremely important for the social inclusion element of our work. Corporate social responsibility is certainly not just about writing a cheque.
CSR and beyond… I remember meeting one of the senior members of Nike’s Alison Adnitt joined Magic Bus philanthropy team last year who said to me – he never from Christie’s Fine Art wants to receive another funding proposal that arrives on Auctioneers, where she worked for his desk with a cover page that reads: Just do it….. six years as a senior specialist in with….(a very worthy community based children’s project British and Anglo-Indian Art. no doubt)……I made a mental note to self: ‘change cover She has an MA Joint Honours in page of pending Magic Bus proposal to Nike…..’ History of Art and German from Edinburgh University and Berlin Admittedly, it is a little obvious…. “Think global, act local Freie Universität. Before moving to India, she – the HSBC Magic Bus partnership”, “Where vision gets volunteered for Magic Bus as a fundraiser in the UK built: the Lehman Brothers Magic Bus partnership”, but and has worked as Operations Director in Mumbai what it stands for is an aligning of vision. The intention to since October 2002 before moving into her enter into a partnership with the business, where risk and current role looking at partnerships and strategic development. She has just completed a post-graduate benefits are shared, rather than an old fashioned diploma at Cambridge University in Cross-Sector donor/charity relationship. The gesture of reiterating a Partnerships and has worked on a number of CSR companies’ strap line on the front of your proposal is per- relationships with leading MNCs, such as Lehman haps a little obvious, but researching a potential partner and Brothers, KPMG, GE and HSBC. understanding how your project can benefit their business objectives is very important and makes for a far more suc- cessful project. to forge lasting partnerships where a company’s financial commitment is matched by us with a commitment to deliver Resource requirements a rewarding staff engagement programme and communica- Since its inception, mobilising local funding has been tion strategy. Magic Bus’s objective and we have seen the engagement with local businesses rather than trusts, as providing us with A typical Magic Bus partnership with a business involves the most sustainable solution to our resource requirements. a commitment to sponsor a particular group of children, Admittedly, we school or institution. Over the year, staff from that company sourced fund- would join for sports days, events, learning and develop- ing overseas to ment camps at our centre and in staff-organised fundraising meet the initial drives such as running in the Mumbai marathon. Managers demand of our and HR teams have reported to us that their staff have ben- setup costs, efited from what they have learnt alongside our children in curriculum de- terms of leadership, communication skills and general out- velopment look on life. There is no doubt that a highly engaging com- phase and cap- munity project delivers a business benefit in terms of staff ital investment. development, reward and retention. But from the beginning we Magic Bus has always seen its corporate donors as worked hard partners, even if in the early days the feeling wasn’t 14 CSR CATALYST FOR HUMAN DEVELOPMENT mutual ! Our long standing partners, Indian Advisory Corporate training Partners, GE, HSBC, JP Morgan, Lehman Brothers, and But this is not where it ends. Imagine if you could Deutsche Bank are, however, certainly of the opinion that know that your company is supporting a child develop- they have benefited from the communication to the ment programme through the purchase of something community and their stakeholders of the partnership and you already have in your annual HR budget? The Magic most importantly a vibrant staff engagement programme Bus partnership with businesses is going one step further with our children. and our philanthropy partners will also become our clients. In a social enterprise model, Magic Bus set up an Community youth organisation-owned revenue project to offer corporate This model will always remain important to us. How- training to its partners. Over the last 4 years we raised ever, in the future it will be community youth coming in the funds to buy over 20 acres of land in the hills outside to renew the annual partnership rather than the fundrais- Mumbai built a state–of–the–art outdoor learning and ing director, as Magic Bus turns over the responsibility of development centre complete with an international chal- its programme to the graduates from each community. lenge course, water sports facilities, football pitch, and Imagine when Pooja, a 21 year old rescued street girl, obstacle course. The centre is packed with Magic Bus children during certain seasons of the year. But even when the children are there, the centre is so expansive that we can offer an extremely high quality of corporate team building and leadership devel- opment pro- grammes simultaneously.
With the cur- rent shining economy in India, The 9% GDP growth last year and the opening and now a Magic Bus coach, comes in to ask for a grant up of international investment, companies’ greatest of $6,000 to deliver her programme to over 300 children, problems lie in the recruitment and retention of staff. As I am convinced that community affairs managers will find a result, the training market is thriving and is yet not it difficult to say no. Whereas saying no to one of a long very sophisticated. Corporate Social Responsibility has line of fundraising directors like me, is much easier! never been so key, with companies required not to just comply with environmental, human resource and com- Magic Bus seeks social sustainability for its pro- munity development best practices but to exceed it in grammes and hence the project has to become commu- the competition to offer the best to customers and at- nity-owned. A Magic Bus coach might decide to fund tract the best staff. his or her programme through an affordable joining fee from the children or from conducting private coaching in For us the growing desire of the business community the evenings for a local corporate partners’ children. to excel at corporate social responsibility is a major con- Whatever happens, it will be community-driven and lo- tributor to our sustainability and long may it last. cally supported, and our partnerships with businesses will remain crucial. [email protected] CSR 15 CATALYST FOR HUMAN DEVELOPMENT Toward Corporate Social Responsibility
PRABHUDEV KONANA CSR has much broader implications for the nation as a whole. It reduces dependency on the government for social change. Most governmental programmes quickly become embroiled in political, administrative, and communal wrangles. There is a need for public-private partnership for the best use of the available resources.
ARIVEDA Solutions in Dallas, Texas, USA is a firm that takes corporate social responsibility seriously. Prabhudev Konana is a One of my students and a current hire for the com- Distinguished Teaching Professor P at the University of Texas at pany, steven Huan, writes as follows: Austin. He received his PhD in Information Management from the "Pariveda is a three–year–old company that prides itself University of Arizona. He has on team work and helping one another out. In fact, that published over 70 articles in even the lowest paid employees in the company are within journals, magazines, conferences the top 1% of wage-earners on the planet teaches us how and newspapers. His articles on economic and social important it is to share what we have with everyone else. issues have appeared in The Hindu. He has numerous Service to the community is not an option but rather a re- teaching and research awards including the NSF quirement of the company and there is a direct relationship CAREER Award. He is one of the co-founders of Pragathi, a non-profit organization to support elementary between salary (or more directly location on the organisa- education in India. tional ladder) and the amount of service hours required. Therefore, the senior partners have to do the most amount of service. and Dr. Reddy's Laboratory, have taken a keen interest in corporate activism to improve healthcare, education, and Corporate activism living conditions, and reduce poverty. These foundations “I went to meet my company executives and new co- support numerous government primary schools and have workers as part of Habitat for Humanity build day developed processes and methodologies for effective event...I realised that I hadn't seen the president of the change. They support hundreds of non-governmental or- company since I got there. Eventually I found him, in the ganisations and have built orphanages, hospitals, and rafters of the house, hammering away, drenched in sweat. schools. This 50+year old person wasn't telling anybody what to do. He took the initiative and, without saying a word, had Challenges people working with him because he was working harder However, the challenges in India are enormous. Social than anyone else around him. This was a man who people responsibility should not be limited to large successful cor- wanted to work with.” porations; there should be greater participation from most small, medium, and large businesses. The goodwill that Habitat for Humanity is a non-profit organisation of vol- firms can generate from acts of social responsibility may, in unteers engaged in building affordable housing for the fact, be worth far more to the businesses than the amounts needy. This e-mail articulates the need for corporate so- they give. Corporations collectively can make India a better cial responsibility (CSR), even while the firm's main ob- place to live. jective is to increase shareholder value. The Pariveda executives are great role models for the new recruits. This Corporate social responsibility is about tradition and cul- corporate activism is acceptable, sustainable, and valuable ture. Firms can institutionalise voluntarism among employ- as a change agent, particularly in the context of India. So- ees through appropriate incentives and recognition. cial reforms driven by the community will bring people Internal performance evaluation of employees could together, turn the attention of the masses to tasks that recognise community work. Community work can be of benefit society, and reinforce peace and harmony. many forms: teaching in government schools, supporting NGOs financially, empowering women, cleaning parks, In recent times, a number of foundations set up by planting trees, volunteering in orphanages, protecting the leading Indian firms, including Infosys, Wipro, Tatas, TVS, abused. Many corporations in America allow employees 16 CSR CATALYST FOR HUMAN DEVELOPMENT to write about their community service as part of their an- Inculcating corporate social responsibility is also about nual evaluation report. Even if companies do not reward training young minds and helping future generations or- community activities, at least, the idea that the company ganise themselves for greater good. Social responsibility cares will have a positive impact. needs to be deeply ingrained from childhood. In America, increasingly admission to elite private and public universities Creating Demand is not only based on academic grades, but also participation Corporate social responsibility can be much more than in community activities and leadership roles. Social respon- charity. An innovative way to contribute socially is for sibility is about leadership, respect for fellow human beings, firms to spend in towns and villages, and to buy products and checks and balances. It is not uncommon to find high from millions of artisans who are at the bottom of the school students volunteering in community work. Scholar- economic pyramid. ‘Fortune at the Bottom of the Pyra- ships are awarded to those who show community leader- mid’ (Author: C. K. Prahalad) calls for corporations to ship and academic performance. design products/services for the enormous population at the bottom of the pyramid. The basic assumption is that Change needed this population segment has some disposable income and Unfortunately, in India, admissions to even some of the firms can still make profits on large volume. Why not best institutions are purely based on performance in en- consider creating wealth at the bottom of the pyramid, trance exams. Worse, entering the civil services is also which can increase disposable in- about securing high grades in ac- come and buying power? ademic subjects. Thus, parents and young minds are focussed in- For example, firms can give arti- tently on examinations and exam- sans' products as corporate gifts inations alone. Obviously, the next or use them for interior decora- generation is groomed likewise. To tion, which may have socially break this cycle, there needs to be more redeemable value than cur- a radical change in the incentive rent methods. If there are quality structure in the educational sys- issues, then corporations can use tem, and admission and hiring their resources to increase quality process. Consideration must be awareness among artisans. Un- given not only to grades, but also fortunately, the above roles to create demand and im- to leadership roles and societal impact; these may have prove quality rest on the government and the resources greater value to corporations and society. spent for such activity hardly reach the intended benefi- ciaries. Throughout my schooling not once did I engage in social or charity activity. There were hardly any role models at the Building facilities faculty level or friends to look beyond classroom/books. Further, corporate spending outside large cities can My engineering institution in India never promoted societal help spread wealth. Large corporations can exploit hun- responsibilities. Contrast this with the UT-Austin, which ac- dreds of historical places in rural towns and villages for tively supports and nurtures over 900-plus student-led or- corporate training, conferences, and getaways. Of ganisations under the "Student Activities and Leadership course, innovative ways are needed to create decent Development" (SALD) programme. Likewise, high schools hotels, restaurants, and basic amenities outside major engage with a large number of student-led organisations. cities. The Indian Government has championed building While not all these organisations are about social work, hotels to promote tourism. However, the initiatives are many explicitly create awareness of leadership qualities and riddled with inefficiencies, poor service, and wasted re- social responsibility. sources. Private entities with support from several cor- porations can collectively build facilities on a Every country should embrace the remarkable concept time-sharing basis that will help invigorate economic of individuals and businesses forming a partnership to sup- activity. It is necessary to create jobs and economic ac- port social causes. In the context of India, such a partner- tivity in rural communities to uplift the masses. Unless ship has enormous potential for strengthening society. wealthy corporations and individuals spend on goods and services that touch the masses (like artisans' prod- [email protected]. ucts), economic prosperity for most of the population will remain a dream. (The article was originally published in The Hindu) CSR 17 CATALYST FOR HUMAN DEVELOPMENT Corporate Social Responsibility to Society’s Advantage or Corporates’?
RAJEN VARADA Seemingly good corporates have claimed that the work of an NGO has been because of their support.
HERE are two sides to the Corporate Social Responsi- bility (CSR) coin. Many corporate companies see CSR Rajen Varada is the founding member of Technology as an opportunity to boost the brand image of their For The People (TFTP), an NGO based in south India, T that works towards providing IT based livelihood companies, The attitude is, let us partner with an NGO and use the partnership to build the image of the company. In options for deprived and marginalized communities. this endeavour, they spend more time on promotional activ- Prior to dedicating himself fully to TFTP, he was an ICT consultant to UNICEF, Hyderabad, India. He has ities which are well publicised. The company’s commitment designed and managed the development of the ICT starts and ends at that. package for health called “Sisu Samrakshak”, which won the 2005 Manthan award and the World Summit There are cases where companies have promised comput- award in e-health. He has also designed modules on ers, the NGO discovered that they have been palmed off HIV/AIDS using ICT for Indian rural communities. with e-waste; a very smart move where the company is con- cerned as they build brand image while getting rid of their waste. The NGO is then stuck with the costs of trying to sides of the CSR coin and decided not to be a part of the CSR make the computers work. There are many such stories and projects at all. So how can NGOs work with the corporate I feel if a study is done, a lot of dirt would be dug up and sector? many large companies will find holes in the citadels of their character. TFTP looks at developing business partnerships with com- panies so that programs are more sustainable. This involves Adding values studying companies’ work flows and if the communities we On the other side, there are companies who have real com- work with can be trained to fit into those work spaces. We mitment and look beyond the CSR idea to add value to soci- jointly develop training programs so that the community ety. They support blood donation camps, eye testing camps, meets industry standards and further partners with the com- etc. However these are all limited to the extent of the budget pany to see if the work flows can be outsourced into the com- available to the CSR unit. munity itself. In this process we have developed an “Industry Mapping Method” where we can now map the industry re- Technology For The People (TFTP) has experienced both quirements and the skills available with the community.
The following is a case study of our intervention in the old city of Hyderabad where such an exercise has been undertaken.
Partnerships We are now partnering with other companies who have seen what can be done and are looking for a win-win situation.
This kind of partnerships between NGOs and companies, I believe, is the way CSR should evolve, enabling ways which can help industry address problems of attrition and work flows will go a long way in making the community initiatives more sustainable. Companies, in turn, will gain with more loyal work forces and resource pools of persons from the NGOs. 18 CSR CATALYST FOR HUMAN DEVELOPMENT
Collaboration with Industry: a Crucial Link dard exams along with livelihood training in animation. In the animation industry, while the investment in Students with different grades of skills are identified and human resources is high, turnover of trained personnel is TFTP, in liaison with Star Features, conducts a training also high, which affects business plans of the firms. Cre- module on animation to suit their levels of learning. The ating skilled artists is advantages as they can serve as a course starts with basic drawing skills and progresses to reserve pool of personnel with more stability in employ- converting the hand movement techniques from mehendi ment. to animation.
TFTP partnered with Star Features Studio to develop After completing the six months course, internships are the training methodology for conversion of the traditional organised in Star Features as an extension of the regular craftspeople into animation artists. Star Features is an In- classes, so that a smooth transfer to the new employment dian Firm involved in developing animation series in the is facilitated. Inputs on personality development, commu- area of education. While this collaboration will address nication, and spoken English are also incorporated in the the issue of high turnover of artists, trained people from curriculum so that the students are empowered for this this initiative will be employed in the existing market by transition in their lives. the studio. Towards this, the studio is willing to outsource its work to young trained people. Adolescent girls, who dropped out of school and earn a meagre income by way of helping their mothers in hand- TFTP established resource centres in five locations in embroidery and mehendi-designing during wedding sea- parts of the old city of Hyderabad to provide education sons, are now full time graphic and animation artists for and livelihood alternatives for adolescent girls who are Star Features, an animation studio in the city of Hyder- vulnerable to early marriages and other exploitative forms abad. of labour. Students are prepared to appear for the X Stan- [email protected]
Bharti Group To open 1,000 Schools In 5 Yrs
HE Bharti Foundation and its associates will soon open 1,000 primary schools in villages across India with an in- Tvestment of Rs 200 crore. According to Rakesh Bharti Mittal, vice-chairman and managing director of Bharti group, the aim is to help the needy children who drop out of school without completing their school education due to family cir- cumstances.
The group already opened 200 primary schools under the banner of "Satya Bharti School" in different states in the coun- try.The target is to establish 1,000 schools in 5 years. The Bharti Foundation is running eight schools in Ludhiana district, in association with the Punjab School Education Board. Mittal said that Nehru Siddhant Kendra Trust, Ludhiana, will finance the entire schooling of 10 percent students at the Sat Paul Mit- tal School, so that meritorious students of low and medium income groups may get the opportunity to study in a good public school. CSR 19 CATALYST FOR HUMAN DEVELOPMENT Inclusive Development as Self-sustaining Business
P. V. I NDIRESAN Inclusive development model should interest businesses for their schemes of corporate social responsibility: Instead of providing charity, businesses could support no-loss, no-profit exercises of far larger magnitude, and enjoy greater goodwill than through smaller charities.
number of hospitals in India, starting with the ven- erable Christian Medical College (CMC), Vellore, Professor P.V. Indiresan has offer highly expensive services, like heart opera- taught in the IITs for forty years. A He has been Director of IIT tions, free to poor patients. Inclusion of the poor, irrespec- Madras and was also the Past tive of their origin, demonstrated by hospitals like CMC, President of the Indian National Vellore, Narayana Hridayalaya in Bangalore and Kolkata, L Academy of Engineering, and also V Prasad Eye Institute in Hyderabad (to name a few) pro- of the Institution of Electronics and Telecommunication vides the basis for devising a generalised model of inclu- Engineers. He is one of the sive development. two-dozen Honorary Members of the Institute of Electronics and Electrical Engineers, This model should interest businesses for their schemes USA, among whom a dozen are Nobel Prize winners. He has been awarded the Padma Bhushan and his students of corporate social responsibility. Instead of providing have built a hostel in his name at IIT Delhi. He writes on charity, businesses could support no-loss, no-profit exer- alternate Mondays in the Hindu Businessline. cises of far larger magnitude, and enjoy greater goodwill than smaller charities will. These schemes will also en- hance the economic status of the community, increase That person is not going to give us the money. So we tell purchasing power and indirectly enhance their main busi- him that we are going to operate on this child and offer ness. our services free. Can you help us do it? This has worked. A lot of people have given money. In an interview, Dr. Devi Shetty of Narayana Hridayalaya emphasised the salient philosophy of his inclusive move- Dr Devi Shetty’s hospital, with 75, or even 50% treat- ment: ment devoted to the poor, is an extreme case. The CMC boasts of three classes of services that may be roughly de- If I am given a choice I would like to treat only the poor scribed as cost-plus, cost-equal and cost-minus categories. patients. But unfortunately the economic reality will not The cost-plus category offers luxurious non-medical facil- allow me to do that. So instead what we do is, offer 25% ities like special wards and cross subsidises poor patients of the beds for the rich people and 75% we leave for the who get lower non-medical facilities (general wards) but poor. (In the new 5000-bed hospital he is constructing in same medical treatment. Kolkata, share of the poor is 50%.) Different services Intermediary job We may generalise the idea by postulating a hospital In this society there are a large number of people who that operates as a non-profit company and provides four need help but do not know where help will be available. classes of service: And there are a good number of people with money with (a) The poorest who get all treatment free the intention to help but don't know who requires it. We (b) The less poor who pay only for medicines do that intermediary job. We are the brokers between those (c) The normal group who pay both for medicines who need and those who have. If we tell people that we are and labour costs going to charge one-and-a half lakh rupees for an opera- (d) The rich who are charged interest and deprecia tion, can you give us Rs 30,000? Does it make any sense? tion costs also. In addition, they make a 20 CSR CATALYST FOR HUMAN DEVELOPMENT contribution to a Charity Fund run by a separate trust. or as a non-profit company. When run as a society, the management runs the risk of being captured by pressure The Charity Trust (which may receive contributions from groups. Several societies, which started with noble inten- non-patients too) meets the costs of treating the poor and tions, are known to have been politicised. Operating as a subsidises the treatment of the second category. Those trust, the institution faces less risk of take-over but can contributions will enjoy tax benefits. To the extent the suffer from inbreeding. Functioning as a non-profit com- state offers tax rebates, it shares the cost of treating the pany has two advantages: One, power is distributed ac- poor in a private hospital. cording to the financial contribution made. Two, its accounting standards will be high and transparent. As a non-profit company, the hospital may be allowed to issue bonds that get the same tax benefits as infrastructure This process may be extended to education, public bonds enjoy. Such tax rebates are better than either gov- transport and even dwellings. In the case of schools, we can consider three classes: Full fees in regular hours; marginal fees in evening classes and free tuition over weekends. Alter- nately, we can ask (or es- timate) at the time of admission what each stu- dent will be willing to pay. An admission test is then held on a need-blind basis. The merit list and the fees list can then be combined to meet the re- quired income to run the school with a maximum of meritorious students. Harvard operates its ad- missions in this manner and has been able to maintain high standards of admission for over a century. The system also attracts charitable endowments. ernment subsidies or the government itself operating the facilities: One, subsidies are subject to political whims of In the case of public transport, we can have, in every the moment; they are not always objective. Two, when vehicle, a section with standing passengers only where the government itself runs the institutions, more often fares are nominal or even free. Alternately, no fares may than not, efficiency suffers. It also becomes difficult to at- be charged during off-peak hours and the number of serv- tract charity. ices that can be operated during peak hours may be deter- mined by the number of services operated free during Tax rebates off-peak hours. Tax rebates avoid these problems. The sacrifice the gov- ernment makes in tax collections will be a fraction of the Supply in excess costs it would have incurred if it had provided the same In the case of dwellings, cost of land is the primary prob- social services, which, normally is its duty. In other words, lem, not the cost of construction. Typically, the poor oc- these tax rebates formalise the financial shares of a Pub- cupy a third of the average space. The bottom 30 per cent lic-Private Partnership in a transparent, non-selective man- needs only ten per cent of the total dwelling space, at the- ner. most 15 per cent. Many town planners do make such a provision and yet slums proliferate. It happens because In general, the hospital can be run as a society, as a trust supply is kept less than the demand. CSR 21 CATALYST FOR HUMAN DEVELOPMENT
India will need another 200 million dwellings. In- rich will go elsewhere taking their surplus and their stead of waiting for shortages to develop, and then, charities with them. Politicians rarely appreciate the organising residential plots, suppose the supply is al- importance of maintaining quality. When money is ways kept in excess of demand. Then, the poor will scarce, they should improve quality; they should start not be short-changed so long as their due share of 10- attracting more and more paying customers. Unfor- 15 per cent space is kept open for them. tunately, those who talk of inclusive development al- most never appreciate this counter-intuitive argument. Basically, all these systems operate with separate Come budget crunch, they sacrifice quality, lose pay- supply-demand schedules for different categories of ing customers and set off an unstoppable downward customers. They operate with one schedule where full spiral. It is no accident that all self-supporting institu- costs are charged, and a separate one at the lower tions that help the poor, like the CMC, Narayana Hri- marginal cost. They are effective where economy of dayaylaya, or Harvard University, offer world class scale applies but not after the Law of Diminishing Re- service. turns sets in. In brief, inclusive development is not charity; it is self-sustaining business. It is not obvious, but vital, that institutions of this type must offer world-class service: If they do not, the [email protected]
The Indian media is surely one of the biggest and most comprehensive of any in the world. The print media alone consists of over 2,00,000 newspapers and magazines, published in a wide range of Indian languages and in English. The rise of the regional media matches the economic growth of some of the key regions.
INEPNEXT, the only news agency focusing on EU-India relations, has chosen to work with a media company based in Kolkata, home to some of the country’s oldest English and Indian language newspapers. INEPNEXT is a joint venture between the India News in Europe Programme (INEP) and the Kolkata-based 'Brand Next" media organisation. Its aim is to provide detailed information and analysis of EU-India relations on trade, the economy, science and technology, culture or politics. from Brussels, the home of key EU institutions and the world's largest news centre. INEPNEXT aims, in short, to raise the profile of two of the world’s leading soft powers – India and the 27- nation European Union. INEPNEXT prepares regular news reports, interviews and analyses for Indian news outlets; it will also disseminate news and information from India for news outlets in Europe. INEPNEXT will also be looking at the EU's ties with India’s neighbours : Bangladesh, Pakistan , Nepal and Sri Lanka and regularly reporting on the activities of the Indian Diaspora in Europe.
For further information, and for a two-week free subscription, please contact: [email protected]
Brussels office: Kolkata office: IPC, Residence Palace, Block C, Room Nr. 02256 FD-121, Salt Lake CityRue de la Loi, 155 1040 Brussels, Belgium Kolkata-700091, West Bengal, India Tel : 00322-235 22 13 Tel : 009133 - 64175987 www.inepnext. com 22 CSR CATALYST FOR HUMAN DEVELOPMENT 2007 Corporate Social Responsibility: Interesting Revelations from a Survey On CSR, an analytical study was made by ten professional survey groups of global fame in seven countries including India and China. A Pilot Study revealed variations in the sizes of participation between countries, some following informal CSR policies, and others not having any policy at all.
N Corporate Social Responsibility, an analytical izations (69%) to participate in corporate social study was made by ten professional survey responsibility practices. Ogroups on global fame in seven countries includ- ing India and China. Called “A Pilot Study”, it brought Organisations that participated in corporate social re- out some interesting revelations, such as vast variations sponsibility demonstrated their commitment to such in the sizes of participation between countries, some fol- practices to their stakeholders. About two out of three lowing informal CSR policies, and others not having any HR professionals across each of the surveyed countries policy at all. reported that their organisations documented corporate social responsibility efforts in their newsletters and/or Although four out of five human resource (HR) profes- other publications. Additionally, more than one-half of sionals across seven countries including India and China, HR professionals from each of the seven countries that reported that their organizations partici- participated in the pilot study indicated pated in practices that could be consid- that their organizations’ commitment to ered as corporate social responsibility, corporate social responsibility was inte- smaller proportions from each of the grated with their organisational business countries reported that their organiza- strategy through inclusion in the organi- tions had either formal or informal cor- sations’ goals and/or mission. porate social responsibility policies. Different practices Most organizations without corporate HR professionals employed by social responsibility policies did not in- medium organizations (94%) in tend to create them. The exception, China were more likely than those among other nations, was China’s plan employed by small organizations to create corporate social responsibility (59%) to report that their organiza- policies. tions participated in practices that could be considered as corporate so- Participation cial responsibility. The proportions of HR professionals who reported that their organisations participated in se- There are a number of possible explanations for why lected corporate social responsibility practices and activ- rates of participation in corporate social responsibility ities varied greatly. Participation in select corporate social practices differ among countries, including availability responsibility practices was found to vary within countries of financial resources, issues of work/ life balance and according to organizational staff size, indicating that cultural factors. However, despite the differences in re- availability of resources may affect the types of corporate ported participation percentages, it is worth noting social responsibility practices in which organisations en- that the two most frequently reported corporate social gage. responsibility practices—donating/collecting money for local charities and donating/collecting money for According to respondents in India, large organi- natural disasters—were the same for five out of seven zations (96%) were more likely than small organ- countries. (The ten survey groups which carried out the study were SHRM, AHRI, NHRDN, HRinIndia, HRA, CIIC, CCHRA, AMEDIRH, COMARI and ABRH) CSR 23 CATALYST FOR HUMAN DEVELOPMENT Corporate Social Responsibility: Two Exemplary Corporations
SANDHYA RAWAL CEMEX and GE proved beyond doubt that it is possible to run profitable companies while being accountable to the community and environment.
ORPORATE Social Responsibility (CSR) is the concept that points to organizations having an obligation to Sandhya Rawal is a rising shareholders, customers, employees, communities, senior at the Bergen County C Academies in the Global and ecology in every aspect of the operation. It covers all as- Leadership Exchange, a pects of an organization’s operations and can be divided into program focusing on leadership daily operations – diversity, community relations, litigation, and biotechnology. Sandhya moral righteousness, diversity, patriotism, environmental sus- plans to pursue these interests in college. She enjoys writing, tainability, and much more. reading, bioresearch, volunteer work, and dance. A few accreditation groups came together to form the In- ternational Social and Environmental Accreditation and La- beling (ISEAL), which sets voluntary international standards do-it-yourself home building business that dominated Mex- and ensures that these social and environmental standards ico. The company sent a team of managers to live in the are widely recognized. neighborhoods where the build-it-yourself approach was ISEAL Members follow the ISEAL Code of Good Practice popular, in order to take a walk in the shoes of the potential for Setting Social and Environmental Standards. The groups customers. This exchange resulted in Patrimonio Hoy, a include the Social Accountability International (SAI), the For- CEMEX program that makes credit and materials available to est Stewardship Council, the International Federation of Or- poor, while also offering their expertise to optimize space, ganic Agriculture, the Dutch Max Havelaar Foundation, and build safely, efficiently, and with little waste or harm done. FairTrade. There has been an attempt by the United Nations The members of CEMEX took less than a third of the time to make CSR a global phenomenon by launching The Global the average homebuilder in their area takes. The members Compact in July 2000. The principles of the Global Compact also used materials more efficiently due to the advice they address human rights, labor standards, environmental re- received from the program. sponsibility and corruption include: A current and pressing environmental Businesses should support and respect the protection of issue is global warming. In 2005, Gen- internationally proclaimed human rights eral Electric announced its greenhouse They should make sure that they are not complicit in gas and energy use goals in an agree- human rights abuses ment with the U.S. Environmental Pro- They should uphold the elimination of all forms of forced tection Agency (EPA). The 2002 decision and compulsory labor to remove PCB (polychlorinated biphenyls)-containing sed- They should uphold the effective abolition of child labor iments, a major contributor to toxic waste, from the Upper They should uphold the elimination of discrimination in Hudson River was the motivation for the deal. In this man- respect to employment and occupation ner, General Electric (GE) achieved the best performance on Businesses should support a precautionary approach to air exceedances ever. (An air exceedance is overstepping the environmental challenges limit on air pollutants emitted without a required permit.) In Businesses should work against all forms of corruption, in- 2004 and 2005, GE reduced more than 250,000 tons of cluding extortion and bribery green house gas emissions, the equivalent of removing nearly 50,000 cars from the road, resulting in US $14 million CEMEX is one of the world’s in annual energy cost savings. largest cement companies. CEMEX decided to study the [email protected] 24 CSR CATALYST FOR HUMAN DEVELOPMENT Corporate Social Responsibility: The Other Point of View GURUCHARAN DAS Glib talk about CSR reflects our prejudice against business... A company’s social responsibility is to make profits legally...Companies should focus single-mindedly on their competence, providing better goods and services than their competitors.
MUCH admired lady, who was raising funds for her NGO, once asked me what I did for a living. I Gurcharan Das is an author and management consultant. told her that I worked for a company. “Oh, but A In 1995, after a 30-year career in what do you really do—I mean for society?” she said. I 6 countries, he took an early became defensive and began to recount some of our phil- retirement to become a full-time anthropic activities. ‘Is that all!’ thundered the eminence writer. He writes a regular Sunday grise. CSR has become a buzz word these days, and one column for the “Times of India” and newspaper even has a CSR reporter. But why is it that “Dainik Bhaskar” and occasional something so worthy and high-minded leaves me uneasy? guest columns for the “Wall Street Journal,” “Financial I think it is because companies have no business engaging Times” and “Time” magazine. He graduated with honors from Harvard University in Philosophy and Politics. in philanthropy and businessmen don’t value more what they do. ceived from Tata companies. CSR should thus be relabelled “The social responsibility of business is to make a profit,” ISR, Individual Social Responsibility, and each of us ought famously said Milton Friedman, a Nobel Prize winner. He to feel the need to give back. explained that in making a profit a company creates thou- This is fine in theory, but the reality is that few Indians sands of jobs, both directly and indirectly through suppli- feel the philanthropic urge, which emerges it seems at a ers, distributors and retailers. It imparts valuable skills to its later stage of capitalism. In order that the few sources of employees. It pays crores in taxes. It improves the lives of present funding don’t dry up, we cannot allow corporate millions of satisfied customers with its products and serv- funding to cease. We can ensure its legitimacy if companies ices. This is an enormous service to society. If some share- fix rigorous criteria for giving. Corporate philanthropy must holders get rich along the way, so what? Companies enhance company profits, strengthening the brand or pro- should focus single-mindedly on their competence, pro- moting goodwill in the community. viding goods and services better than their competitors, and not get distracted by extraneous activity. A company’s Glib talk about CSR reflects our prejudice against busi- social responsibility is to make profits legally, not to harm ness. Adam Smith wrote in his Theory of Moral Senti- nature, and uphold the highest standards of governance. ments that he didn’t much care for those who spent their lives chasing “baubles and trinkets”, but he was “im- Promoting goodwill mensely grateful that such creatures abounded for Yet, I intensely admire individuals who engage the whole of civilisation, and the welfare of all in philanthropy. I was deeply moved by Warren societies depended on people’s desire and Buffet’s selfless gesture when he gave away all ability to accumulate unneeded capital his wealth to the Bill Gates’ foundation. I agree and show off their wealth. Indeed, it…first with Andrew Carnegie that to die rich is to die prompted men to cultivate the ground, to disgraced. If it is immoral to spend the company’s build houses, to found cities and common- money, it is businessmen’s duty to spend their own wealths and to invent all the sciences and arts money on charity (from after-tax profits). It is a theft which ennoble and embellish human life.” I think busi- against Reliance’s shareholders if Reliance Indus- nessmen, in particular, need to understand this and tries builds a hospital, but it is Mukesh Ambani’s not get defensive about what they do. duty to do so. Hence, Tatas do their charity work through their trusts, from dividends re- [email protected] CSR 25 CATALYST FOR HUMAN DEVELOPMENT But...Tata Lays The Path The Tata Group’s Jamshedpur social experiment is a laudable example of corporate social responsibility . Tata Steel pays full health and education expenses for all employees and runs schools and a 1000-bed hospital in, and around the steel town.
ATA is a window into the M.B.A.s, have all read about Welch, and dismiss many of rise of India. While that his American tactics-from mass layoffs to hostile Trise is often traced to free- takeovers-as violations of the Tata way. market reforms that began in the early '90s, Tata executives Ratan Tata says his company is not driven to grow emphasize that even now, the "over everybody's dead bodies." Some 66 percent of the company grows despite obsta- profits of its investment arm, Tata Sons, go to charity, cles thrown up by red tape and and executives make clear they have no intention of re- special interests. Unlike China's linquishing control to Wall Street. At Tata, "corporate so- boom, which was orchestrated cial responsibility," to use the Western buzzword, has by the state, India's is primarily the story of an enterpris- real money behind it. ing private sector. However far-flung Tata’s markets are, they are near in In recent years, as Tata began listing some of its affil- spirit to the social experiment of Jamshedpur, the steel iates on Wall Street, Americans often compared Tata to town with a population of 8,00,000 Tata carved from the model-conglomerate they know best: General Elec- the jungle a century ago. It still pays full health and ed- tric. But CEO Ratan Tata, 67, is no Jack Welch. "Certainly ucation expenses for all employees, and runs the schools not," he says. Tata executives, many armed with Western and a 1,000-bed hospital.
Karmayog Wants to Know from Corporates: