colloquium corporate social responsibility: practice, …€¦ · · 2012-07-0974 the external...

VIKALPA • VOLUME 37 • NO 2 • APRIL - JUNE 2012 73

KEY WORDS

Sustainable Development

Corporate Governance

Environment

Climate Change

Energy Conservation

Globalization

Shared Value

CSR Education

Urban Poor

Public-Private Partnership

Management Education

Inclusive Growth

Institutional Theory

Multiple Stakeholders

includes debate bypractitioners and

academicians on acontemporary topic

C O L L O Q U I U M Corporate Social Responsibility:Practice, Theory, and Challenges

P S Narayan, Niraj K Lal, Archana Dutta, Tushna Mehta,Aloka Majumdar, Ananya Madhavan, Vijayta Doshi,Pradyumana Khokle, Vasanthi Srinivasan, Lalitha Vaidyanathan,Melissa Scott, Sasmita Palo, Rohan Sarma andNeharika Vohra and Rahul Sheel (Coordinators)

Introduction

Neharika Vohra Rahul SheelProfessor Doctoral StudentOrganizational Behaviour Organizational BehaviourIIM Ahmedabad IIM Ahmedabade-mail: [email protected] e-mail: [email protected]

Corporate social responsibility (CSR) has gained considerable interest amongacademicians and business organizations in the past decade. More and moreIndian business organizations embrace the practice of CSR under different

names such as corporate sustainability, social responsibility, and corporate citizen-ship. These are well reflected in corporate reports on their respective websites aswell as other surveys and rankings of CSR conducted by organizations such as TheTimes Foundation and Karmayog.

Little is left to argue on the debate initiated by Friedman1 where he argued that theonly social responsibility of business is to increase profits. Most business organiza-tions now believe that investing a part of their profits and efforts in the society andnatural environment from which they draw resources has positive implications fortheir own well-being. The benefits of CSR are also substantiated by research focus-ing on the relationship between CSR activities and firm’s financial performance,competitive advantage, reputation and legitimacy, employee attitudes, andsynergistic value creation2. Recent meta-analysis studies have reported an overallpositive relationship between presence of CSR activities and financial performance3,4.The jury is still not out on many such relationships; nonetheless, organizations aregoing ahead and making investments in CSR.

1 Friedman, M. (1970). The Social Responsibility of Business is to Increase its Profits (In Zimmerli, W. C.,Holzinger, M. & Richter, K. (Eds.). The New York Times Magazine, 32(13), 1-5. Springer. Retrieved fromhttp://www.springerlink.com/index/m2141pp14981487h.pdf

2 Kurucz, E., Colbert, B., & Wheeler, D. (2008). The business case for corporate social responsibility. InCrane, A., McWilliams, A., Matten, D., Moon, J. & Siegel, D. S. (Eds.), The Oxford Handbook of Corpo-rate Social Responsibility (pp. 83-112). Oxford: Oxford University Press.

3 Margolis, J. D., Elfenbein, H. A., & Walsh, J. P. (2007). Does it pay to be good? A meta-analysis andredirection of research on the relationship between corporate social and financial performance. Workingpaper, Harvard University.

4 Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403-441.

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The external environment also poses compulsions fororganizations to put together a CSR agenda. For exam-ple, in a recent development, the Government of Indiahas proposed in the Companies Bill 2011 that all com-panies having a net worth of Rs 500 crore or more willhave to constitute a committee of three members on theirboard which would oversee the CSR policy, spending,monitoring and reporting for the company. There is aproposal to make it mandatory to spend at least 2 percent of average net profits for the last three years on CSR.Though much needs to be discussed about theoperationalization of making such aproposal applicable to all businesses,it clearly says how important CSR hasbecome in public discourse. This de-velopment along with several awards,conferences, and rankings related toCSR has increased the spotlight on theimportance of CSR.

Though CSR as a concept has gainedimmense popularity, there is a lack ofagreement on what it really means5,6.There are different expectations fromdifferent stakeholder groups, differ-ent standards, and different practicesleading to a fragmented understand-ing of CSR. Considering the presentscenario, there may be a need for con-solidation in the understanding ofCSR. To illustrate our point, if we con-sider the practice of CSR, it can be im-plemented with both for-profit andnon-profit/philanthropic intentions.Some examples of for-profit CSR ini-tiatives are - developing a marketing channel aimed forrural population where a company is empowering poorwomen entrepreneurs to sell company products orstrengthening health delivery systems in rural locationsby selling the company healthcare products through thehealth care delivery system. Examples of non-profit ini-tiatives can range from corporate giving initiatives tocommunity development initiatives such as livelihoodpromotion, setting up schools or digging a well in a vil-

lage. Further, some organizations contribute without anydesire for publicity; others want to contribute with awide publicity in expectation of a positive brand image.Standards of CSR practice not only vary from one com-pany to another but also from one industry to another.Some organizations tailor their CSR activities to reduceharmful effects to the community or environment as aresult of the business they are involved in. For example,oil companies focus on improving air and water qualityor soft drink companies invest in replenishing water forthe community from which they draw water. The CSR

activities of companies are targeted toensure the continued supply of peo-ple and products for their operations.For example, companies invest in ag-ricultural promotion programmes forconstant supply of quality raw mate-rial and technical education pro-grammes for a supply of qualifiedworkforce. Diversity in CSR offeringsmay be fruitful in terms of innovativesolutions offered to the target popu-lation. They help in building relation-ships ranging from symbiotic todependent between the communityand the company.

The CSR programmes are aimed notonly at the external community butalso towards internal ones (employ-ees and their families) apart from cus-tomers and supply chain. As moreand more companies like to providebenefits to their employees for greaterproductivity and retention, it is un-clear if benefits provided to employ-

ees could also be considered a part of CSR activity. Thereis also a recent trend where social activism is being mixedwith branding. In this case, it is difficult to understandif the activity is a CSR activity or just a branding initia-tive. It becomes important in this context to understandthe intent of organizations practising CSR. What are theirexpectations from their own CSR activity towards thesociety and towards their own organization? So, one ofthe questions that remains to be answered is: Are thereboundaries that need to be drawn to delineate CSR fromemployee benefits, welfare, creative public relationscampaigns, and eye-catching brand building activities,being a responsible citizen by not harming the environ-

5 Lantos, G. P. (2001). The boundaries of strategic corporate social re-sponsibility. Journal of Consumer Marketing, 18(7), 595-632.

6 McWilliams, A., Siegel, D., & Wright, P. M. (2006). Corporate socialresponsibility: strategic implications. Retrieved from http://www.economics.rpi.edu/workingpapers/rpi0506.pdf

CORPORATE SOCIAL RESPONSIBILITY: PRACTICE, THEORY, AND CHALLENGES

Though CSR as a concept

has gained immense

popularity, there is a lack

of agreement on what it

really means. There are

different expectations

from different stakeholder

groups, different

standards, and different

practices leading to a

fragmented

understanding of CSR.

Considering the present

scenario, there may be a

need for consolidation in

the understanding of CSR.


ment, etc.? Or does it really matter as long as the organi-zation is involved in doing some good!

In their community/society-based interventions, busi-ness organizations follow numerous structures for meet-ing their CSR obligations/ambitions. As their in-houseimplementing unit, they either register their own foun-dation or create separate CSR units which act as an im-plementing agency for delivery of services. They alsopartner with relevant non-governmental organizations(NGOs) working in the area and fund them to carry outthe work. Some other organizationswork in partnership with the govern-ment agencies for their CSR obliga-tions. These partnerships may becarried out by the foundation or theCSR unit or sometimes even inde-pendently. It is yet to be assessedwhich particular structure providesbetter service delivery for commu-nity/society based interventions.

Apart from structure, an interestingaspect is the scale of intervention.Many organizations continue to re-main at the same scale of operationsin CSR even when their turnover andprofit increases manifold. It may bedue to a fixed amount of money allo-cated for CSR rather than a percent-age of profit diverted to CSR. Thisbrings to us a few other questions:How much do organizations spend onCSR and how much should they?Would supporting two schools be sufficient when thereare lakhs of schools that remain unattended and uncaredfor? Is CSR spending a token for remaining in the goodbooks of the external stakeholders or a conscious effortto bring about a change? Apart from money, are thereother resources of business organizations that can beused to bring about a desired change in society? As apowerful member of the society, does the organizationhave a responsibility to the society that goes beyond thatmay be expected of individuals within the society?

There is an influx of ideas and practices regarding CSRfrom international organizations. It remains to be seenif CSR is conceptualized and practised differently inmultinational versus local organizations? Do multina-

tional organizations focus on similar activities across allgeographic locations or do they align with the currentneeds of the local community? Do Indian companies runCSR programmes that are more suited to the currentcontext of the community? What happens when there isa calamity or emergency? Does the organization haveflexibility to help and spend its resources when an earth-quake or flood hits? A more sticky issue is when there ispolitical unrest. Can the organization help the needy ir-respective of which side of the political fight they arein? It has been seen that organizations act in their self-

interest when such difficult situationsarise. It may be argued that Fried-man’s debate continues to reign. It ismost responsible for the organizationto protect itself in such situations. Likeall society arguments, this is also com-plex: organizations are not neutral andthey often take sides for growth andsurvival; thus they cannot simply say,“We will look the other side when thesituation makes our dependenceovert.” Some of these decisions be-come even more difficult when the or-ganization is multinational in nature.Thus again interesting questions areraised: How does an organization de-cide what to support and what not to?Are there clear or unstated principlesof what is within bounds and what isnot in deciding about the area ofspend. If yes, who states such bounda-ries?

We have been referring to the organization as an entitythat can decide and think. However, it is true that it isindividuals within the organization who need to takethese decisions. So, the question remains — who shouldthink and who should decide within the organization –the owner, the chief, a representative group, the HRdepartment, or the concerned individuals? In most or-ganizations, the CSR efforts are an extension of the phil-anthropic giving of the owner or decided by the topmanagement but can a group at the top represent andbe sensitive to the ambitions of the employees. Is theview of the employee significant? In the interest of effi-ciency, it may be decided that a small group can decidewhere and how the CSR effort may be directed. How-

Are there boundaries that

need to be drawn to

delineate CSR from

employee benefits,

welfare, creative public

relations campaigns, and

eye-catching brand

building activities, being

a responsible citizen by

not harming the

environment, etc.? Or

does it really matter as

long as the organization

is involved in doing some

good!

76

ever, it may in the process drain out the voices of sev-eral employees who may feel they have a right becausethe money that is being generated out of their efforts isbeing spent. What might be the mechanisms to makethese decisions more participative?

There are also questions about the assessment of thebenefits of CSR? How should they be measured? Whoshould provide the data? Are there indirect benefits ornegative consequences that need to be accounted for?Questions such as what makes CSR effective would alsoneed to be answered. Is CSR effective in bringing thedesired change in the community? Will it be effective ifit helps employees become more committed? Or will itbe so, if it impacts the bottomline of the organizationover time? How do organizations measure the efficiencyof CSR programmes? Is increase in scale a possible meas-ure of efficiency?

As CSR is gaining prominence, thereis a growing need for incorporatingsocial responsibility in managementcurriculum. Numerous courses in eth-ics and business responsibility andeven specialized MBA in this area arenow being offered by major manage-ment schools. However, developingknowledge, skills, and more impor-tantly, attitude towards social respon-sibility and ethics is challenging and requires personalreflection and exploration of self. There is a need to en-hance these courses continuously to make them morerelevant and useful to management professionals.

As is obvious from above, the range of issues that needto be looked at in the field of CSR are many and varied.Thus, we felt that it would be useful to put together acolloquium to understand these issues and hence weinvited a few business organizations of India who areactive in the field of CSR and requested them to sharetheir experiences. Analytical experiences in the area ofCSR have been shared by articles from Arvind Mills,Coca-Cola, HSBC, and Wipro. We also invited academi-cians and CSR consultants working in this area to con-tribute to the contemporary developments in theory andpractice. Vijayta Doshi and Pradyumana Khokle havelooked at the Institutional Theory perspective as the ra-tionale behind engagement of CSR by companies.Sasmita Palo and Rohan Sarma have critically looked atCSR with reference to globalization and governance in

India. They discuss how CSR in the present context isan “indiscriminate shooting” and there is a need for ac-tion by both the government and corporations to createa “boomerang society”. As business schools strive toeducate their students in the field of responsible busi-ness, Vasanthi Srinivasan proposes ideas on designinga course on responsible business. Lalitha Vaidyanathanand Melissa Scott from FSG consulting describes “cre-ating shared value” as a future of CSR and how it dif-fers from traditional approaches to CSR.

The outcome of the myriad of perspectives presented isa rich dialectic on the ideas, practices, and challenges inthe field of CSR. We hope this colloquium contributestowards better understanding of CSR theory and prac-tice for both industry and academics. Admittedly, it doesnot provide many answers to the questions we have

raised, but it does show that there is aneed for continued thought on thistopic for the organizations to be ableto deliver value and the society to ben-efit from it.

Both the stories of Wipro and ArvindMills show how they are experiment-ing, correcting, and implementingpractices that they think will makesense. The continuous improvementlens is an important lens for other CSR

practitioners to learn from. The practices of HSBC andCoca Cola are very much related to their own domainsof business. For a bank it makes sense to invest in thefinancial literacy of the people and for Coca Cola it makessense to invest in the holistic healthy lifestyle of people.The fact that they are in areas that are related to theirbusiness does not diminish the contribution they make.However, it may be useful to deliberate on the fact thatthe nature of practice of these two multinational com-panies is very different from that of the local compa-nies. We recognize that it would be incorrect to genera-lize based on data from four organizations. It is hopedthat researchers and practitioners would do more re-search on this. Questions on structures that support CSR,the process of decision-making within organizationsabout CSR spend, and the financial decision- makingstructure for CSR remain largely unanswered.

No endeavour is complete at any time. This is no excep-tion. It opens up the possibility of dialogue of many suchimportant and interesting debates.


As CSR is gaining

prominence, there is a

growing need for

incorporating social

responsibility in

management curriculum.


Setting the Context

The terms ‘Sustainability’ and ‘Sustainable Develop-ment’ have become catch all phrases in the last few

decades. The seminal book ‘Silent Spring’ by RachelCarson, published 50 years back in 1962, is widely cred-ited as having triggered off the whole environmentalmovement. The subsequent decades saw a risinggroundswell of sustainability consciousness that gradu-ally encompassed within its fold concerns on economicdevelopment, resource limits to growth, and social in-equity. The 1992 Rio Conference firstsaw the emergence of global warm-ing as a serious concern in the publicarena; the strong scientific evidence ofcorrelation between a warming cli-mate and anthropogenic emissions ofgreenhouse gases put the spotlightfirmly on the role of industry. For itwas clear that the energy-intensivenature of our industrial civilizationand the consequent dependence onfossil fuels required the business sec-tor to wake up and act. Alongside, theissues of water stress, biodiversityloss, relentless urbanization, and so-cial failures in providing universal access to healthcareand education started being seen as challenges that gov-ernment alone cannot and should not handle. Business’ssingular focus on shareholder value maximization to theexclusion of other stakeholders increasingly came un-der scrutiny. In the last decade or so, we have seen thebusiness sector respond to this call for change slowlybut surely. From company boardrooms to evangelicalemployees to B-Schools, the larger purpose and respon-sibility of business seems to be much more a part of com-mon conversations than ever before.

Prima facie therefore, there seems to have been remark-able increase in sustainability awareness and actionsaround it in the five decades since ‘Silent Spring’. Andyet, the reality on the ground points to a picture of elu-sive progress. A telling example is that of the Kyoto Pro-

tocol that requires developed countries to adopt man-dated targets on GHG emission reductions. Nearly adecade after the protocol’s adoption, the results in 2010reveal the rather dismal scenario of 8 out of 10 countriesnot only falling far short of the targets but actually ex-ceeding the baseline numbers. Several international andnational initiatives and many millions of dollars ofspending later the story is not too different on any ofthe other dimensions of sustainable development. As apartial explanation of this paradox, our proposition is

that this failure represents a deepersystemic shortcoming in our educa-tion system – a shortcoming that is asmuch cognitive and intellectual as itis moral. It is precisely this issue thatis at the centre of ‘earthian,’ Wipro’snationwide initiative on sustainabi-lity-in-education that we launched inearly 2011. In this short paper, wepresent an overview of ‘earthian’ andits vision along with the concepts andprinciples in which it is rooted. Butfirst, we articulate a summary ofWipro’s sustainability charter.

An Overview of Wipro’s Sustainability Programme

Wipro started its formal sustainability journey more thana decade back with Wipro Cares, our community careprogramme followed by Wipro Applying Thought inSchools (WATIS), an initiative that addresses issues ofsystemic reforms in school education. Over the years,these programmes have expanded in scope and scalewhile simultaneously other significant initiatives gotadded around ecology, workplace and employee en-gagement, customer stewardship, and suppliers. Run-ning through these diverse programmes is a commonthread of thinking that reflects our position onsustainability.

• Business wields enormous power and influence intoday’s world, both, economic and sociopolitical.With this power comes the concomitant responsibil-

Back to School: Sustainability in Education and Wipro ‘earthian’

P S NarayanVice President and Head - SustainabilityWipro Ltd.e-mail: [email protected]

Business wields

enormous power and

influence in today’s

world, both, economic

and sociopolitical. With

this power comes the

concomitant

responsibility to do good

in the larger canvas.

78

ity to do good in the larger canvas. For us, this startswith a set of foundational values as embodied in theSpirit of Wipro: ‘Intensity to Win’, ‘Act with Sensi-tivity’ and ‘Unyielding Integrity’. These values em-phasize respect for all stakeholders and are the ethicalbedrock of conducting business which is non-nego-tiable under any circumstance.

• In engaging with the issues of sustainability, busi-ness must do so in a manner that is consistent withits core drivers; a spirit of innovation, financial andoperational rigour, a keen focus on outcomes arehallmark attributes of the business sector and thesemust inform business action in sustainability in equalmeasure. In the absence of this, the approach tosustainability is likely to be peripheral and hollow.What this also implies is that there is nothing thatbusiness must do that seems to be driven by the needto oblige or comply.

• Related to the previous point is our conviction thatthe organization must completely avoid cheque book

philanthropy and must get involved directly. Thisinvolvement must manifest in a carefully and delib-erately chosen set of initiatives without spreadingoneself thin. For similar reasons, we prefer to avoidusing the term Corporate Social Responsibility as theterm can be perceived to have a patronizing conno-tation to it; sustainability is a more inclusive and ap-propriate term that suggests a proactive, comprehen-sive, and future-oriented range of engagements.

Over the years, we have established a formal frameworkfor our sustainability programme, that is driven as muchby our foundation of values, Spirit of Wipro as by for-mal standards that are globally accepted like the triplebottomline framework of principles as embedded instandards like the AA1000 and GRI (Global ReportingInitiative). We think that our sustainability programmehas matured and progressed both in terms of breadthand depth. As Figure 1 illustrates, there are sixteen ma-jor initiatives that between them address seven

Figure 1: Sustainability Programme Framework

Sustainability Dimensions

Energy & Carbon Water Waste Recycling Biodiversity

Workforce Diversity Green Computers Green IT Services Employee Engagement

Reforms inSchool Education

EngineeringEducation

PrimaryHealth Care

Post DisasterRehabilitation

Ecology andEducation

Supply ChainResponsibility

SustainabilityDisclosures

PublicAdvocacy

Stakeholders

Employees Customers Suppliers Investors

FutureGeneration

ProximateCommunities

EducationEcosystem



stakeholders – Customers, Employees, Suppliers, Inves-tors, the Education ecosystem, Proximate communities,and the Government.7

Structure and Governance

The operating structure of Wipro’s multiple sustainabi-lity initiatives is based on the idea of building a coali-tion or network of partners – internal and external – withnodal responsibility lying with a distinct group. Thus,the sixteen+ initiatives mentioned above are handled byfour groups at the corporate level – ecoeye, Wipro Ap-plying Thought in Schools (WATIS), Wipro Cares, andMission10X – along with the appropriate functions anddivisions. The sustainability groups carry distinct re-sponsibility and accountability but are part of a com-mon sustainability charter under the Chief SustainabilityOfficer. Table 1 illustrates the collaborative nature of theoperating structure.

Funding Model

Sustainability programmes in Wipro follow the regularplanning and budgeting process. As part of the annualplanning exercise, each sustainability group prepares an

annual budget that is then extensively discussed withthe Chairman, the members of the Corporate ExecutiveCouncil and with Finance before approval.

Our position on funding is that it should not be basedon a targeted percentage (of revenues, PAT, etc.) as thatis counter to the spirit in which companies should en-gage in sustainability, i.e., it must spring from a deepconviction and should not be compliance-driven. Also,the quantum of spending is unlikely to work as an ef-fective metric; in social sectors like education and com-munity care, we think that capacity creation andcapability building are crucial and have a strong multi-plier effect which mere infrastructure creation cannotmatch. Thus, using a ‘spending’ norm can be a mislead-ing indicator of effectiveness.

Goals and Measuring Effectiveness

We have a comprehensive dashboard of sustainabilitygoals for each of the dimensions, e.g., for GHG emis-sion reduction, we have an ambitious target of reducingGHG intensity per employee by 40 per cent over the five-year period of 2010 to 2015. However, we think thatmeasuring impact or effectiveness on sustainability out-

7 Note: Comprehensive details about Wipro’s sustainability programme are available in the sustainability reports that we publish annually ; thesecan be viewed and downloaded at http://www.wipro.org/sustainability/sustainability_disclosures.htm

Table 1: Operating Structure of Wipro’s Sustainability Initiatives

Sustainability Nodal Sustainability Internal Business External Partners

Energy, GHG, Water, Ecoeye Facilities and Infrastructure Consulting partners onWaste, Biodiversity Group (FMG) demand for Energy, Water

and Biodiversity

Workforce Diversity, Ecoeye All the ‘People’ groups –Employee Engagement, Recruitment, TalentHealth & Safety Engagement and Learning

Green Computers and IT Ecoeye The Computing andfor Green Solutions EcoEnergy divisions and

Chief Technology Officer

Supply Chain Responsibility Ecoeye Chief Procurement Officerand team

Reforms in School Education, Wipro Applying Thought Corporate Brand & Network of nearly 30 educationEcology and Education in Schools, ecoeye Communication partners across country

Engineering Education Mission10X Corporate Brand & Network of global and IndianCommunication partners e.g., IIT-B,IIT-M,

Dale Carnegie Center

Disclosures, Public Advocacy Ecoeye Investor Relations, HR, FMG, Partners in energy,Corporate Communication biodiversity and water

Primary Health Care, Urban Wipro Cares NGO partners in theEnvironment, Education for respective domainsthe Disabled

80

comes is an area that is fraught with complications andthat one must tread very carefully, e.g., systemic reformsin education can take decades to show results. Also, oneshould not fall into the trap of trying to quantify goalsand outcomes in areas like education or environmentalissues without adequate qualifying caveats.

Transparency and Disclosures

Driven by the belief that disclosures act as catalysts forcontinuous improvement, we have been active partici-pants in the major frameworks that assess the Environ-ment, Social and Governance (ESG)performance of companies, e.g., theDow Jones Sustai- nability Index, theCarbon Disclosure Index, World’sMost Ethical Companies byEthisphere, and the OekomSustainability Rating. Wipro has beenconsistently rated among the leaders,both globally and in India (see Table2). Feedback attributes this to ourcomprehensive and well-definedframework of goals and inclusivestakeholder reach supported by asolid governance process.

Our Vision on Education

We think that it is not enough to earn the economic li-cense to operate and businesses must earn a broadersocietal license to operate which implies the willingnessto engage with difficult social challenges. For us, thedecision to involve deeply in education came from therealization that in an area like education in India, socialaction will be complete only when all the large

stakeholders participate. Also, to us, it was clear that ina country like ours that has a long list of problems tograpple with, education can have the maximum multi-plier impact. Corporates also bring in an energy andapproach that complements that of government, civicsociety, and academia.

In our work of more than a decade, our strategy has beenprimarily driven by the concerns we have about schooleducation in India and is centred on five areas: Domainsof knowledge, assumptions about the child, school andclass environment, how to assess, and supporting the

teacher.

Our vision is that the school educa-tion system has to continuously re-spond to the changing needs of thesociety. Schools should become spacesthat not only develop the student’sindividual capabilities but also furtherthe idea of democracy and sensitivityto social and ecological responsibili-ties. It is from such thinking that theidea of ‘earthian’ took root. Sustaina-bility issues are important, trans-dis-ciplinary, and complex and thereforeshould be widely debated in society

and surely in schools and colleges too. But our educa-tional institutions, as they are, are simply not geared forthis kind of thinking and acting.

Sustainability in Education

Given that sustainability will be one of the defining chal-lenges of the twenty-first century, making it axiomaticto education is going to be as critical as ‘technology learn-ing’ was in the twentieth century. Our long experiencein engaging with fundamental issues in education andour more recent involvement in ecology led us to thequick realization that at the heart of it, the problem ofsustainable development is as much epistemic and cog-nitive as it is moral. Let me explain what we mean bythis – sustainability is an epistemic problem becausewhat we know about it is not only grossly inadequatebut often even directionally incorrect for reasons ex-plained below.

• Sustainability is inherently trans-disciplinary wherethe disciplines of ecology, biology, economics, com-plexity science, systems theory, behavioural sciences,

It is not enough to earn

the economic license to

operate and businesses

must earn a broader

societal license to

operate which implies

the willingness to engage

with difficult social

challenges.

Table 2: Rating of Wipro

� Member of DJSI for two years in succession

� Member of Nasdaq Global 100 Sustainability Index

� Listed in World’s Most Ethical Companies 2012 byEthisphere

� In Top 2 of Carbon Disclosure Leadership Index (CDLI),India

� In the Top 50 of Newsweek’s global ranking of 500 GreenCompanies

� Ranked #1 in India and #6 in Asia in the AsianSustainability Rating (ASR)

� Ranked #1 in Morgan Stanley Capital InternationalSustainability Rating of Emerging Markets Firms



applied engineering, etc., interplaywith each other in ever changingconfigurations. Our educationaltraining does not prepare us at allto understand this well enough.

• The paradigm of linear, Cartesianthinking which is central to ourcurrent education system cannothelp us understand the non-linearnature of feedback loops andcause-effect chains in natural eco-systems that typically cascadeacross time and space. Climate sci-ence is a good example of this syn-drome.

• Another apt example of thinkinggone wrong is that of our account-ing and financial systems that failto value services provided by natu-ral ecosystems; and even whenthey attempt to do so, they adoptan instrumental approach and use mechanistic valu-ation tools such as cost-benefit analysis, marginal util-ity value, etc. A well known 1997 Nature8 paperestimated the total value of ecosystem services at US$33 trillion, twice that of the global GDP in that year.While this seems pragmatic and reasonable, a nor-mative approach would even hesitate to put a valueto an ecosystem service like pollination because thereare no known alternate methods to make plants re-produce.

Let us examine this cognitive deficitin understanding sustainability in alittle more detail through the praxisof climate change and our collectivestruggle in understanding and ad-dressing it. Shortly after the Copen-hagen Conference of Parties (COP) onClimate Change in 2009 failed to ar-rive at a consensus on the successorto the Kyoto Protocol which was dueto expire in 2012, an eclectic group ofscientists and economists gathered at Hartwell, UK tobrainstorm and do an honest assessment of where we

stood on climate change progress. TheHartwell Group’s9 (as this gatheringcame to be known) broad prognosison the failure of the Kyoto Protocolpointed to systemic deficiencies in ourapproach rather than a failure in ex-ecution. The group emphasized thedifference between ‘Wicked, Com-plex’ vs ‘Tame, Complicated’ prob-lems. Complex, wicked problems bytheir very nature can only be partiallyunderstood and therefore cannot besolved through technological fixes orotherwise; on the other hand, most ofthe problems that can be resolved bythe application of science, technology,and human ingenuity are knowableand therefore tame even though theymay be complicated, e.g., buildingand launching a space satellite. Table3 tries to summarize some of the

Hartwell Group’s conclusions.

Ecological or Sustainability literacy is thus many thingscoming together; some of the cognitive approaches andtools for understanding wicked, complex issues are:

• The ability to understand the organizing principlesof ‘living ecosystems’ and apply them to human com-munities, e.g., interdependence, flexibility, resilience,

cyclical patterns, etc.• The concepts of stocks, flows,

feedback loops, buffers, delays asapplied to the ecological and so-cial spaces that we live in

• The tradeoffs between efficiency,throughput, resilience, and stabil-ity.

Till now we have only spoken aboutthe intellectual and cognitive deficitin our meager sustainability educa-tion. What about the moral and psy-

chological dimensions? In our minds, there is little doubt

Sustainability is an

epistemic problem

because what we know

about it is not only

grossly inadequate but

often even directionally

incorrect.

8 Constanza, Robert and D’Arge, Ralph (1997). The value of the world’secosystem services and natural capital. Nature, May.

9 Prins, Gwyn, et al. (2010). The Hartwell paper: A new direction forclimate policy after the crash of 2009. Institute for Science, Innova-tion and Society, University of Oxford and MacKinder Centre for theStudy of Long-Wave Events, London School of Economics. Also, referto the book by Roger Pielke Jr, The Climate Fix, where he discussesthe Hartwell group in detail.

Our vision is that the

school education system

has to continuously

respond to the changing

needs of the society.

Schools should become

spaces that not only

develop the student’s

individual capabilities

but also further the idea

of democracy and

sensitivity to social and

ecological

responsibilities.

82

that the ethical and the cognitive must come together ifwe have to stand a decent chance of making someprogress. The ethical dimension is rooted in a holistic,integrated approach to everything around us – a ster-ling illustration of which is what is called the seventhgeneration outlook that many indigenous culturesaround the world share. The spirit of this approach canbest be summarized in these two sentences: “Tread softlyon the earth so that future generations may live. Act onlyif you are sure that at least up to seven generations hencewill not be affected by your actions.”

Fritjof Capra10, the renowned scientist and ardent vo-tary of integrative thinking, characterizes the latter bycontrasting it with our current mode of self-assertivethinking, as summarized in Table 4.

Table 4: Self-Assertive vs Integrative Thinking

Self Assertive Integrative

Expansion Conservation

Analysis Synthesis

Reductionist Holistic

Linear Non-linear

Competition Cooperation

Quantity Quality

Domination Partnership

To our minds, what we have spoken on till now repre-sents deep fault lines in our education system; if thiscontinues, it will be futile to hope that either current orfuture generations will be able to cope with the chal-lenges of sustainability or come anywhere close to it.We present a brief overview of ‘earthian,’ the Wipro ini-tiative that was conceived with the vision of trying toaddress these issues

‘Earthian’: Wipro’s Sustainability inEducation Programme

Launched in April 2011, ‘earthian’11 is our nation-wideprogramme that seeks to work with schools and collegesas partners in change — change at a fundamental levelleading to a future scenario where sustainability wouldhave become axiomatic to learning and education. Thiswill be an ongoing programme that is structured asshown in the schematic in Figure 2. In the first stage,schools and colleges participate in writing a criticalanalysis paper on pre-defined sustainability themes andscenarios, based on which 10-20 best institutional en-tries are recognized with awards. In the second stage,Wipro along with a network of partners will work closelywith the winning institutions on multiple educationalinterventions around the foundational concepts, organ-izing principles, and actions around sustainability. Par-ticipation is open from high school onwards (Class 9)till Masters level programmes and above in colleges.

‘earthian’s’ first edition met with outstanding response;starting with 2,800+ registrations, we had nearly 1,000entries covering nine themes – Climate Change, Citiesand Urbanization, Homes, Agriculture, Water, Produc-tion and Consumption, Biodiversity, Role of Policies, andRole of Information Technology.

A short-list of the 50 best entries were evaluated by anindependent jury of experts over a two-month cycle cul-minating with the selection of the 10 best entries, five atthe school level and five at the college level. The actionwill now move to Stage 2 when Wipro and its partnerswill work closely with the winning institutions over athree-year cycle. Some of the educational interventionsthat are being currently planned are articulated below;however, we must say here that there are not many prec-

Table 3: Summary of Hartwell Group’s Conclusions

Climate Change is a ‘wicked’ problem – comprising open, Climate Change can be better understood as a persistentcomplex, and imperfectly understood systems – which condition that needs to be coped with and that can only becannot be ‘technologically’ resolved. partially managed – it is axiomatically as much an economic

development problem and a land use problem as it is anAttempting to solve it through a ‘corporate’ system of Energy problem.Targets, Cap and Trade, ‘Prizes for breakthroughinnovation’ can only lead up the wrong trail. A more oblique approach may help – ensuring affordable

energy access for all, pricing it to incorporate true costs, etc.

10 Fritjof, Capra (1997). The Web of Life, New York: Anchor Books, pp348.

11 Note: Details of the Wipro Earthian programme are available atwww.wipro.org/earthian



edents or references for us to leverage and therefore, aswe slowly evolve over the years, the contours, the de-sign, and the execution of the programme are likely tochange.

• Measurement of the ecological footprint of the insti-tution campus on energy/carbon, water, waste andbiodiversity; tracing the sources and trails of thesedimensions, e.g., where does the water that I drinkcome from and where does it go? Is my institution’sconsumption equitable when placed against that ofthe proximate communities which share commonresources?

• Empirical citizen science programmes that may in-volve observing, recording and analysing (i) infor-mation on tree phrenology (flowering) and linking itto changing weather patterns (ii) ground water lev-els and how they change at different parts of the yearor with changes in local topography.

• Field outreach programmes in biodiversity sensitiveareas that will combine observation and experientiallearning combined with theoretical principles ofbiodiversity and its value.

• Continuing programmes that involve working withthe local communities on their most prominentsustainability issues; this is particularly relevant forinstitutions that are located in semi-urban or ruralcontexts.

• Summer or interim internships for the college stu-dents that involve working with an expert field or-ganization on any of the sustainability issues, e.g.,‘Behavioural Science nudges that can help reduce en-ergy or water consumption in homes’ or ‘ The corre-lation between deforestation and livelihood loss’.

• We will eventually start work on higher level cur-ricular and pedagogic changes that try to weave insustainability into the core learning. For example, atthe college level, trans-disciplinary courses that com-bine systems theory, complexity science, and ecol-ogy principles will help orient students towards amore integrated understanding of problems in theirdomain. An illustrative example at the high schoollevel will be learning the source trails of the food thatwe eat and its intricate inter-dependencies on thewater cycle flowing through the planet and the lat-ter’s linkages to the climate system and carbon cy-cle.

We will shortly be launching the second edition ofearthian where we will build on the foundation of thefirst edition and in addition, make it more inclusive interms of its reach to smaller towns across the country; asoft launch in the global arena is also planned.

Where do Schools and Colleges Stand Today onSustainability Learning?

Against the vision that we have set ourselves, the cur-rent state of sustainability education indeed seems to bein its early infancy. This is reinforced by some of thefindings of a two-year study on Quality of Education12

that we did along with our partner, Education Initia-tives13 (EI) (Figure 3). One of the questions asked of

Figure 2: Structure of the ‘earthian’ Programme

Stage I Stage II Stage III

Paper Selection of Winning Institutions ContinuousSubmission followed by ‘Awards Forum’ Engagement

Authoring of‘Papers’ on any of

the identifiedeco themes

Two-stageselection process

for identifyingwinning entries

Presentationsand Awards

at forum

Continuousengagementwith winninginstitutions

3 months 6 months ongoing

12 Details of the Wipro-EI Quality of Education study can be viewed anddownloaded at http://www.wiproapplyingthoughtinschools.com/

13 Established in 2001, Education Initiatives was started by a group ofIIM(A) alumni with the vision of making a difference in educationthrough personalized learning and ensuring that every child learnswith understanding.

84

school students on “Disposal of toxic batteries” resultedin a variety of responses – for example, 19-23% of thestudents thought that battery disposal is the responsi-bility of a higher institution like the government.

Very clearly, the child in today’s schools does not un-derstand ecology well enough to realize that it is as cen-tral part of our lives as the internet or computers is andtherefore it becomes incumbent on us to take responsi-bility and act.

Concluding Thoughts

David W Orr, the leading visionary thinker and a pio-neer of sustainability education in his classic address,‘What is Education for?’14 remarked that all educationis environmental education. In saying this, he impliedthat true education consists of being able to see thewhole, not the fragments. The following extract fromthat speech presents to us a picture of what we havebeen deprived of through our education, and therefore,what we must strive to regain and reclaim.

“A myth of higher education is that we can adequately re-store that which we have dismantled. In the modern curricu-

lum we have fragmented the world into bits and pieces calleddisciplines and subdisciplines. As a result, after 12 or 16 or20 years of education, most students graduate without anybroad integrated sense of the unity of things. The consequencesfor their personhood and for the planet are large. For example,we routinely produce economists who lack the most rudimen-tary knowledge of ecology. …..We add the price of the sale ofa bushel of wheat to GDP while forgetting to subtract thethree bushels of topsoil lost in its production. As a result ofincomplete education, we’ve fooled ourselves into thinkingthat we are much richer than we are.”

As we get ready to launch the second edition of ‘earthian’in early June 2012, we invite schools, colleges, and edu-cational partners across the country to come aboard asfellow travellers in this journey. If India has to assume aposition of real leadership amongst nations in rebuild-ing a more resilient world, we think that it is imperativethat our future generations of policy makers, adminis-trators, educationists, and technocrats need to be ad-equately schooled in ecological issues and itssensibilities. We clearly see a long journey ahead but itis one that we are committed to with a sense of determi-nation and optimism.

Figure 3: Responses to Question on Environmental Responsibility in Wipro-EI QES Study 2011

Some items we commonly use like batteries and bulbs often contain poisonous substances. If we dispose them carelessly, theycan be dangerous. It can cause death or injury to living creatures.

What is the best thing to do in this case?

A. Dispose them in another country B. Bury them deep in deserts or oceansC. Avoid or reduce the use of such items D. The governments should take care of this problem

Note: Color Legend: 1-4 – Answer Options A-D ; 5 – Not attempted ; 6 – Invalid entries

Environmental Awareness - Class 4 Environmental Awareness - Class 6 Environmental Awareness - Class 8

1.1

9.2

14.4

32.1

22.4

20.7

0.4 0.5

11.8

19.0

40.7

18.9

9.1 10.1

12.4

42.9

23.1

11.0

14 David W Orr’s classic commencement address in 1990-91 at Arkan-sas College ‘What is Education for?’ Adapted transcript can be down-loaded at http://www.davidworr.com/files/What_is_Education_For.pdf



Background

The Strategic Help Alliance for Relief to DistressedAreas (SHARDA) Trust was created in 1995 by

Arvind Limited to address major societal issues in Ur-ban India. Since its inception, the Trust has carried outmany programmes to help the urban poor. The founda-tion of the Trust’s strategy for helping the urban poorlands on articulation of five important needs of the ur-ban poor. Arranged according to their importance in thehierarchy of an individual’s needs, these are:

• High quality infrastructure that provides the basicamenities to a family

• Primary health care• Access to quality secondary and tertiary health care• “3 R’s” (skills in reading, writing, and arithmetic)• Scope for upgrading an individual’s skills to build

the individual’s capacities

The SHARDA Trust has worked on all the areas exceptthe primary healthcare. Following paragraphs presenta glimpse of all the activities that SHARDA has carriedout so far with a focus on the ambitious education pro-gramme of the Trust – “Gyanda – Fountain of knowl-edge” that aims to improve the quality of education inthe Municipal Schools.

Infrastructure Improvement of Slums

The first programme that the SHARDA Trust workedon after its inception in 1995 was a Public Private Part-nership programme to improve the physical infrastruc-ture of a slum. It joined hands with the AhmedabadMunicipal Corporation to upgrade the physical environ-ment and living conditions in a slum pocket called“Sanjay Nagar.” The Municipal Corporation assignedthe task of implementation to the Trust, which completedthe project within time and budget – something not verycommon with regard to public projects in this country.So innovative was the Trust’s approach that the UnitedNations Centre for Human Settlement (UNCHS) in-

cluded Sanjay Nagar project in their “100 Best PracticesGlobal List”.

Following the completion of this project, the SHARDATrust has worked in a number of areas. Providing sec-ondary and tertiary healthcare to the urban poor throughnetworking with prominent hospitals in the city is onesuch area.

Upgrading the skills of the urban poor for enhancingthe income of the unemployed youth by training themas sewing machine operatives is another area that theTrust was active in. The Trust undertook this initiativein collaboration with the National Institute of FashionTechnology (NIFT) Gandhinagar and organized place-ment for all the successful participants with the localgarment manufacturers. It has so far trained and placedover 300 persons in Ahmedabad. Almost 200 of the 300people trained were placed with Arvind itself.

In line with upgrading skills and placing the successfulparticipants, the Trust also offered programme in Prac-tical English for the youth belonging to poor familiesand then equipped them with computer skills under aProgramme in Practical English and Computer Appli-cations (PECA) Training. The Trust undertook this incollaboration with the sister Trust, Chandraprasad DesaiMemorial Foundation. This activity enhanced the em-ployability of the participants in the BPO and ITEeS in-dustry where data processing and comprehension wasrequired. The Trust trained about 250 persons and placedmajority of them with suitable jobs with ITEeS and BPOIndustries.

These programmes were conducted during the first dec-ade of the Trust between 1995 and 2005. The focus ofthese programmes was to bring immediate relief to thepresent condition of the target group in the urban seg-ment. All the programmes addressed the needs of theurban population that the Trust had identified.

In 2006, after a review of its programmes, the Trust de-

SHARDA Trust: An Arvind Limited Initiativeto Help the Urban Poor

Niraj K Lal Archana DuttaHead – CSR Coordinator-Academics, R&DArvind Limited SHARDA Truste-mail: [email protected] e-mail: [email protected]

86

cided to initiate primary education for the urban poorchildren to improve quality of education in city’s mu-nicipal schools.

Rationale for Initiating Educational Programme forMunicipal Primary Schools

Despite considerable improvement in the literacy sta-tus, India is still home to the largest number of illiteratepeople in the world, accounting forabout one-third of all illiterates15. Al-though, the number of studentsgraduating in India has almost dou-bled from 6 per cent of the total stu-dents enrolled in 2006 to 12 per centin 2011,16,17 the quality of graduatesin terms of the knowledge and skillthat they possess leaves much to bedesired. The recent NASSCOM sur-vey suggests that only about one-thirdof the graduates are employable. Asthe Indian economy becomes part ofthe global economy, the country now requires peoplewith relevant knowledge, appropriate skills, and rightattitude to face the challenges of a knowledge economy.

If the quality of education provided at the school leveldoes not improve dramatically, the country may faceextreme crunch for qualified knowledge workers. Therecent statistics released by the Ministry of Human Re-source Development prove that the number of dropoutsincrease with every advancing class throughout schooland higher education. Table 1 has the details.

Though the data does not indicate who drops out, it isnot far to seek. As India’s vast major-ity still lives in rural areas, childrenwho drop out are from the underprivi-leged families of rural India. Thosechildren who drop out from urbanareas are from very lower strata ofsociety studying in Government orMunicipal Schools. Those who con-tinue find it extremely difficult to copeup with the increasing level of com-plexity of content and drop out at onelevel or the other. The main reason for

this dismal performance is weak foundation of all sub-jects taught. If quality and holistic education is providedto underprivileged students at primary level, it will in-crease their chances of completing their education thus

15 Human Development Report 2011, Planning Commission of India.16 All India Survey on Higher Education: Pilot Report (2011), MHRD, New Delhi.17 Higher Education in India: Strategies and Schemes during Eleventh Year Plan Period (2007-12) for Universities and Colleges, (2011), UGC, New

Delhi.

If the quality of education

provided at the school

level does not improve

dramatically, the country

may face extreme crunch

for qualified knowledge

workers.

Table 1: Statistics of School Education

Class Enrollment Retention as compared to Class 1 (%) Dropout as compared to Class-I (%)

I 3,15,83,599

II 2,79,95,226 89 11

III 2,68,57,195 85 15

IV 2,53,06,249 80 20

V 2,39,27,574 76 24

VI 2,11,22,735 67 33

VII 1,96,60,955 62 38

VIII 1,86,37,312 59 41

IX 1,61,79,992 51 49

X 1,44,18,527 46 54

XI 93,81,098 30 70

XII 82,86,246 26 74

Total enrolment 37,90,332 12 (2011 data) Government intends to increase enrolmentof youth in graduation courses by 3% by the end of

XIth Plan (2007-2012)

Source: Statistics of School Education 2009-10. MHRDLink: http://education.nic.in/stats/SES-School-2009-10-P.pdf



SHARDATrust’sModel

making them self-reliant.

In 2006, when the Trust initiated this programme, a simi-lar data by MHRD shocked the Trustees. Data suggestedthat only about 6 per cent of the children enrolled inprimary education completed graduation. Ninety-fourper cent dropped out before reaching class XII. Thoughthe Trustees had conceptual clarity about the situation,it was difficult to believe that the situation was so grave.If this continued, the Trustees argued, it would be diffi-cult for the country to sustain the economic growth rate.At the local level, in Ahmedabad, over 150,000 childrenstudy in Municipal Schools. If the majority do not re-ceive quality education and fail to complete their edu-cation, in years to come, the local industry will find itextremely difficult to get a talent pool. This will ad-versely affect the already stretched manpower scenarioin the region. Though the Trust is aware that it is only asmall step in the right direction, it believes that theGyanda model that it had started in 2006 and tested oversix years is a unique model and could be the answer foreducating the poorest of the poor children — the criticalproblem the country faces.

Education Model and Strategy

Gyanda – Fountain of Knowledge

The Gyanda Model was designed keeping in view thestrong understanding that Arvind’s CSR team had about

the condition of urban poor in the context of the emerg-ing socio-economic scenario and the dire need for pro-vision of Quality Education and completion of educationfor the poorest of the poor children studying in Govern-ment and Municipal Schools.

The Gyanda Model is a unique and comprehensivemodel which has four basic components (Exhibit 1):

i) Partnership with the local Government – the Munici-pal School Board

ii) Creation of supportive infrastructureiii) Development of innovative-teaching-learning meth-

ods and materials, teaching through Trust’s teachersiv) Continuous monitoring, evaluation and tracking of

every child.

There would be very few models which take care of allthe four components, which makes it a comprehensiveand unique programme.

The programme aims to work with children for aboutsix to eight years and ensure that the bright and inter-ested students complete their education and hope thatit is the last generation in poverty for them. Besides aca-demics, maintaining strong communication with theparents to ensure their active involvement in their chil-dren’s learning process and exposing children to manyco-curricular activities like drawing, painting, field vis-its, and giving them opportunity to talk to people from

Exhibit 1: Gyanda – Fountain of Knowledge

Partnership with the local Government• MoU with Local School Board• MSB allows use of infrastructure & provides

electricity free of cost• Providing Teaching Hours

Innovative Teaching Learning Method & Materials• Teaching Eng, Comp & Maths• Teaching Approach based on students’ strength• Real life example, Practical Knowledge• Subject’s Reinforcement• Teaching by Trust’s Teachers• Using Computers in teaching

Supportive Infrastructure• Upgrading School Infrastructure• Establishing Quality Computer Lab• Projection facility (LCD monitor)• Internet for Faculty & Students• Ergonomic furniture• Neat and clean Classrooms

Monitoring, Evaluation & Tracking• Teaching days, schedules, curriculum, tests and

evaluation criteria pre-defined• Tracking Student’s attendance & performance• Following up irregular & weak students• Interaction with parents

88

different walks of life, are the majorstrengths of the programme.

With the above mentioned thought,the Trust implemented the model.

In 2006, the SHARDA Trust launchedthe programme ‘Gyanda – Fountainof Knowledge,’ an initiative designedto improve the quality of education inAhmedabad’s municipal schools. TheTrust has signed a Memorandum ofUnderstanding with MunicipalSchool Board that allows eatablishingeducation centres within the schoolsand teaching English, Computers, and Mathematics tothe students from standard V to VII through the Trust’sInstructors. Bright and capable students are identifiedafter class VII through a carefully designed monitoringand evaluation process and are sponsored for furtherstudies till class XII in city’s better schools. They are thencoached for all subjects regularly after their school hours.For this purpose, the Trust has a team of 20 full-timeteachers and coordinators and 5 visiting teachers. Thestrength of Gyanda programme lies in regular teachingand maintaining attendance of students. Last but notthe least, maintaining strong communication with par-ents through a series of Parent’s meets on pre-decideddates helps in constantly updating parents about theirchildren’s progress, establishing a strong emotional rap-port between the parents and the students, and moti-vating them for continuing with education.

It has been realized that students would attend schoolonly if they understand and relate to what is being taughtin the school and parents have faith in the system.

Organic Growth of Education Programme

The educational programme for stu-dents of Municipal Schools wasstarted in 2006. The Trust initiated thisactivity by setting up Computer Cen-tres at Municipal Schools on its owncost for teaching classes V-VII. Soon,it was observed that teaching Englishand Mathematics would be necessaryfor making the students more compe-tent. For this purpose, in-house teach-ing material was developed which

was continuously evaluated and re-fined on the basis of session feedbacksgiven by our instructors.

Initially, the programme aimed atthree-year continuous teaching forclasses V to VII with the hope that asthese students moved from the pri-mary to the secondary section, theywould become self-sufficient for fur-ther studies. It was soon realized thatthree years were not enough for thesaid purpose. As a logical extension,the Trust started teaching the second-ary classes, i.e., VIII-X, making it a six-

year continuous programme.

It started with one secondary centre at Rachna School,Shahibaug. The strength increased and it was decidedto come up with two secondary centres for the students.Today around 100 students of secondary section aresponsored by the Trust and also provided with regularcoaching. This number is expected to reach at least 300within the next two years. Hence, from 2013-14, the Trustwill have about 900 students in its primary section and300 in the secondary section.

Challenges Faced

The first major challenge that remains to be overcome isto attract the best brains of the academic world to comeand work with the poorest of the poor children at theprimary education level. It is important because the chil-dren studying in the Municipal Schools are largely firstgeneration learners and cannot have any academic oreconomic support from home for their study. SHARDATrust recruits committed individuals who are qualifiedbut may not be appropriately skilled and upgrade their

skills over a period of time to helpthem interact and teach children ef-fectively.

The second major challenge is to de-velop the relevant teaching materialthat the students can identify and re-late to. The Trust’s team develops itsown teaching material and the teach-ers use them to undertake preparedteaching sessions. The Trust’s teach-

The first major challenge

that remains to be

overcome is to attract the

best brains of the

academic world to come

and work with the

poorest of the poor

children at the primary

education level.

The major challenges that

we see in CSR is that it is

still being considered as

an act of charity rather

than a strategy to

improve corporation’s

competitive context.



ing approach is based on MahatmaGandhi’s suggestion to the teachers -“Teach for life, through life, andthroughout life.” It demands thatteaching of a subject must emphasizethe logical structure of the subject, usestudents’ intuitive feel for the subject,and highlight the subject’s practicalapplications. To do so, the Trustmakes special efforts to write casesfrom the occupation of the students’parents. Presenting cases from the oc-cupations of the students’ parents hasan added advantage because studentshave a good understanding of their parents’ occupations.This should not surprise us since the students studyingin the Municipal Schools come from the poorer sectionof the city’s population and, they help their parents intheir occupation.

The third major challenge is to maintain close rapportwith the parents and communicate to them the attend-ance and performance of their children on a regular ba-sis. We are conscious of the fact that that the parentsstruggle to make two ends meet and spending any timeaway from their work is a monetary loss to them. How-ever, we have spent enormous time in planning the par-ent’s meets. Generally, we meet with the parents aboutsix times in a year on pre-decided dates, write to themin advance reminding them about each meeting, andconduct meetings with a prepared and pre-definedagenda on a convenient time to ensure that we spentminimum of their time. In addition, we have startedParent’s workshops for helping them to deal with theiradolescent children and answer theirquestions effectively. Our constantefforts have resulted into better at-tendance and performance for ourstudents. When we started in 2006,our average attendance in class washardly 50 per cent. This is now almost80 per cent. Initially, our conversionfrom class V to VIII was about 25 percent. Now we have at least 50 per centconversion. These positive resultshave come to us through the intenseinvolvement of the parents.

Our View of Corporate SocialResponsibility

Our view of ‘CSR’ is based on our con-viction that corporations and societyare interdependent. Though distinct,they are not mutually exclusive. Theyexist together and function together.Social issues affect corporations andthe corporations’ actions in turn affectthe society. Once we accept the viewthat corporations and the society mustexist together and work together, thedebate whether corporations shouldaccept ‘Social Responsibility’ becomes

futile. Social Responsibility then gets integrated with thecorporation’s total functioning and results in what Pro-fessor Michael Porter calls ‘corporate social integration’.Translating ‘CSR’ into ‘corporate social integration’would result in corporations treating ‘CSR’ as an inte-gral part of their strategy and not as an act of philan-thropy.

The major challenges that we see in CSR is that it is stillbeing considered as an act of charity rather than a strat-egy to improve corporation’s competitive context. Also,working on many issues rather than focusing on a fewto bring in qualitative and quantitative results which canbe perceived by the poorest of the poor is another areaof concern. Many corporates in a region working indi-vidually and not pooling their resources to work on theircommon focus area is another area of concern. Bringingcorporates together on a common platform for under-taking result-oriented social programmes is the need ofthe hour. Finally, convincing corporations to move away

from signing cheques to NGOs andself initiating work for bringing socialgoods that help the community andthe corporations alike is another chal-lenging area.

Discussion

Any development programme isjudged based on whether it can sus-tain over a period of time. Needlessto add, we must look at sustainability

and the replication as two different things. We stronglybelieve that all programmes which grow in numbers donot necessarily add value and all programmes that have

Convincing corporations

to move away from

signing cheques to NGOs

and self initiating work

for bringing social goods

that help the community

and the corporations

alike is another

challenging area.

All programmes which

grow in numbers do not

necessarily add value and

all programmes that have

small numbers are not

necessarily low on value.

90

small numbers are not necessarily low on value. Oneimportant criterion to judge a programme should be tojudge its effectiveness by judging whether students arecompleting the education till the desired level. Gyandahas strongly proved that if the community and the stu-dents are followed up well and their involvement in theprogramme is sustained, it is possible to ensure the en-rolled students that theirs would be the last generationin poverty.

For the financial sustainability, programme is fundedthrough a committed corpus and recurring cost model.It ensures that the programme continues without any

problem. This is important because education for us is aprogramme and not a project that require continuance.

The basic premise of the programme is that providinginfrastructure or material aid will not suffice actual needof providing quality education and ensuring comple-tion of education especially to first generation learnersstudying in Municipal Schools. There is a need for work-ing closely with students and parents for at least 6 to 8years and tracking their educational achievement, at-tendance, and thus grooming them into independentindividuals.

HSBC: CSR for Corporate Sustainability

Tushna Mehta Aloka MajumdarManager - Corporate Sustainability Head—Corporate SustainabilityHSBC India HSBC Indiae-mail: [email protected] e-mail: [email protected]

The sustainability movement at HSBC has seen sev-eral stages while evolving into what it is today. Over

the past decade, the bank has taken initiatives which,taken together, have now become a part of its ethos anddefines what HSBC is about. The movement is borneout of a deep understanding of what really drives busi-nesses, and that sustainability is notjust a nice thing to do; it is the rightthing to do for every business.

Why sustainability? HSBC believes,for any business to sustain and growin the long term, it cannot see itself asbeing isolated from the communityaround it. Hence, for an institutionlike HSBC, the community must meanpeople and the environment in whichwe live. While these two componentsare, in a sense, universal and will beat the centre of most sustainability ini-tiatives, there are various componentswhich make up this huge canvas.HSBC, therefore, realized it was imperative for it to pickwhat it felt were areas where its contribution could bemore meaningful and decided to concentrate on those.These were the areas of ‘Financial Inclusion’ (that com-

prises of education, financial literacy, like skills devel-opment, livelihood and women’s empowerment) and‘Environment and Climate Change’ which today are thepillars of its sustainability strategy.

The three major ways by which we, at HSBC, conveyCorporate Sustainability (CS) are:

• Our business practices• Our proactive CS programmes –

community investment andvolunteerism

• Managing our footprint

HSBC’s corporate sustainability strat-egy includes the development of sus-tainable business opportunities,management of its own environmen-tal footprint, and its community in-vestments.

For the bank, therefore, CS is muchmore than funding of social sector

projects. HSBC believes in the true spirit of partnership,and is an active player in all the CS initiatives which itundertakes. Alongside funding of projects, imparting oftechnical expertise and knowledge are equally critical

HSBC’s corporate

sustainability strategy

includes the development

of sustainable business

opportunities,

management of its own

environmental footprint,

and its community

investments.



in the journey towards sustainability.

Let us consider financial inclusion.The financial crisis has highlighted,among other things, the need for bet-ter financial literacy so that people canunderstand and manage their own fi-nances better, becoming self-sufficientin the process. HSBC’s financial inclu-sion initiatives support the educationof children from underprivilegedcommunities, life skills training fordisadvantaged youth, and financialliteracy and entrepreneurship capacity building for ru-ral women in marginalized communities.

Given that the Bank has a limited network of branches,it has adopted a partnership-based approach to helpscale its initiatives beyond our branch network. As aresult, HSBC works closely with not-for-profit organi-zations, microfinance institutions, social enterprises, andvarious state governments to deliver the financial inclu-sion agenda. Besides, the bank’s Inclusive Business Unit(IBU) looks after the banking requirements of the bot-tom of the pyramid, working on delivering products andtechnology for financial empowerment of the under-privileged.

The IBU supports microfinance institutions (MFIs), em-powering individuals to gain financial independenceand help their communities to prosper. By facilitatingmicrofinance-oriented capacity building support to en-trepreneurial activities in a cost-effective way, thesepartnerships are helping thousands of rural women be-come sustained and successful entrepreneurs. The ben-efits accruing to society because of such economic andsocial stability will indeed be many.

The following case study is a goodexample of how business and CSworked together to deliver a verystrong programme on the financialinclusion agenda.

Case Study 1: The MannDeshi Story

In 2010-11, HSBC India supported awomen’s NGO, MannDeshi Founda-tion, to launch an IT-enabled financialinclusion eCard solution, for a wom-en’s co-operative bank in rural India

– the MannDeshi Mahila SahakariBank. Based in Satara, ruralMaharashtra, this bank for the last 13years has been serving the needs ofunder-banked women by providingboth banking and knowledge supportto help them become self-sufficient.The bank operates through a doorstepbanking model, wherein the staff visitcustomers door-to-door to carry outbanking transactions at their doorstep.

The HSBC and MannDeshi co-branded eCard helped the cooperative bank automatetheir doorstep banking (sourcing, field investigation,credit appraisal, disbursement, collection and customerservice) thereby enhancing efficiency and improving theentire process. The card supported implementation ofthe specialized skill-based training and subsequent loan-use monitoring. By automating the existing manual proc-ess, the eCard enabled the delivery of errorless andtimely service.

For customers, the eCard works like an electronic pass-book that helps them access basic customer information,such as account balance, status of loan account, as wellas repayment history at their doorstep.

The initiative helped HSBC gain field experience in man-aging mass volume business with the help of a businesspartner network and supported by a technology-linkedplatform.

The seeds of this project were, in fact, sown earlier, in2006, when HSBC provided a grant to MannDeshi Foun-dation for setting up a rural business school for women– the MannDeshi Uddyogini. The school was set up in

the remote district of Satara to trainyoung girls who dropped out ofschool and women with limited or noformal education, to prepare them tobe successful entrepreneurs. Thesewomen received training in a rangeof skills in financial literacy, market-ing, negotiation, and confidencebuilding. But subsequent supportfrom HSBC to scale up the pro-gramme has led to the creation of over24,000 women graduates (in financialliteracy and skills training), over

CS is much more than

funding of social sector

projects. HSBC believes

in the true spirit of

partnership, and is an

active player in all the CS

initiatives which it

undertakes.

HSBC works closely with

not-for-profit

organizations,

microfinance institutions,

social enterprises, and

various state governments

to deliver the financial

inclusion agenda.

92

11,500 successful women entrepre-neurs, and 6,800 new businesses in theregion. In 2011-12, HSBC supportedthe transition of the school to a man-agement institution for women entre-preneurs and start-ups.

HSBC believes, financial inclusion cannever be looked at in isolation. Criti-cal to its success is education. Takingoff from this conviction, the bank invests in educationalprojects around the world for disadvantaged youngstersand children – particularly those which are driven byinnovation – believing that access to education offersthe best opportunity for mainstreaming and growth.

Case Study 2: The “Radiophone” Education Project

In 2011-12, HSBC partnered with two Delhi-based organi-zations, The Restoring Force (TRF) and the Sesame Work-shop, for India’s first and only indigenously producededucational television programme for young children.

The “RADIOPHONE” project builds on the success ofGurgaon ki Awaaz Samudayik Radio Station, a popularlocal community radio station run by TRF, to addressthe educational and health needs of disenfranchisedchildren (ages 4 to 8 years), particularly girls, and fami-lies of primarily migrant labour population of Gurgaon.

The programme involves a school-based intervention forclasses I and II. The radio show is accessible over radioand cell phones in a 200 sq. km. areaof Gurgaon, and has an anticipatedreach of 30,000 listeners per day.

The “RADIOPHONE” project isunique in that it uses community ra-dio (mass media) as part of an educa-tion programme, thus strengtheningnot only the schools that form part ofthe intervention, but also creates com-munity awareness about educationissues in the larger community. Inaddition, the project can become a sus-tainable model for scale-up to com-munity radio stations around India,by providing a large set of pre-set(canned) radio content on educationthat can be localized, customized, andrepeated.

Environment and Climate Change

Tackling climate change is one of thebiggest challenges the world facesover the next few decades. Corporatesacross the world have begun takingnote of this challenge and are draw-ing up action plans to seek solutions.Businesses are showing leadership byvoluntarily reducing their carbon

emissions. A growing number of companiesare publicly comparing their performance against strin-gent sustainability indicators. Increasing levels of invest-ment in sustainable initiatives are helping greenbusinesses to grow.

At HSBC, while we acknowledge the challenges posedby climate change, we also recognize the opportunitiesit creates. The role of a financial institution assumesgreater significance in this context. Financial institutionsassume the risk of companies and plants and can exer-cise considerable influence over investment and man-agement decisions which could be brought into play forthe benefit of the environment.

HSBC anticipates playing an important role in the tran-sition towards a low-carbon economy over the long term.The bank also believes that water will be an essentialarea of concern to be addressed for going forward.

There is also increased realization of the need for pub-lic-private partnerships. We believe it requires a con-

certed effort between business andgovernments on policies and pro-grammes to accelerate the world’stransition to clean energy technolo-gies. Importantly, climate change is anarea where the role of advocacy canhardly be overemphasized.

Case Study 3: Partnership with theBureau of Energy Efficiency (BEE)

In 2010-2011, the Bureau of EnergyEfficiency (BEE) and HSBC signed aMemorandum of Understanding towork closely on the former’s EnergyEfficiency Financing Platform (EEFP).The objective of EEFP is to create amechanism towards mainstream fi-nancing of energy efficiency projects.


HSBC believes, financial

inclusion can never be

looked at in isolation.

Critical to its success is

education.

It requires a concerted

effort between business

and governments on

policies and programmes

to accelerate the world’s

transition to clean energy

technologies.

Importantly, climate

change is an area where

the role of advocacy can

hardly be

overemphasized.


It will provide instruments like bank-able Detailed Project Reports (DPRs)and other risk mitigation measures toenhance comfort for lenders towardsaggregated energy efficiency projects.

The partnership aimed to strengthenEEFP that seeks to overcome barriersto financing of energy efficiencyprojects through risk sharing strate-gies and capacity up-gradation of fi-nancial institutions.

The association enabled HSBC to bepart of BEE’s initiatives in its missionto develop the power market for optimal utilization ofenergy during the XII Plan which include programmeslike Demand Side Management (DSM), Energy Conser-vation Building Code, Energy Efficiency in existing com-mercial buildings, and Standards and LabelingProgramme.

As part of this exercise, HSBC and BEE have engagedInternational Institute for Energy Conservation (IIEC),an international not-for-profit, to develop a customizedcapacity building programme for bank managers thatwill provide them improved capabilities to effectivelyappraise and finance energy efficiency (EE) projects.

But no initiative of this magnitude can come without itsown set of challenges, given India’s social and economicimperatives. Specific to the community investmentswhere HSBC partners with a large number of not-for-profit organizations across the country, the key chal-lenges lie in:

• Selection of partners (therefore, a robust due-dili-gence process had to be developed to ensure we as-sociate with the right partner)

• Gauging the partners’ capacity toupscale

• Ensuring sustainability of the pro-gramme

• Inadequate documentation andreporting skills in spite of havingvery strong on-ground pro-grammes.

While there is no quick solution, thesechallenges have resulted in:

• Development of a robust due dili-gence process to ensure selection ofthe right partner

• Creation of ‘Catalyst’, a network ofemployees in all HSBC offices andbranches across the country whoengage with the respective partnersnear their location

• Investment in building capacity ofthe not-for-profit partner.

Besides, the seriousness and scale ofthe problems being confronted meansthat institutions like HSBC will con-

stantly have to work on forging partnerships – bothpublic and private – and in generating awareness at thehighest policymaking levels by way of advocacy.

With the successes already seen in the partnershipsforged thus far, HSBC is working towards more suchjoint efforts in the future.

Corporations globally have realized that sustainabilitymust now be a part of core business strategy to have themaximum impact. We, at HSBC, have institutionalizedthis thinking with respect to CSR, by involving the topmanagement and forming full-fledged CS departmentto chalk out the CS strategy for the bank and also moni-tor its progress and impact. In addition, we also believethat our colleagues are among the most significantstakeholders. Their understanding and engagement arecritical to the success of any CS strategy. We follow atwo-pronged strategy to engage a large number of em-ployees through ‘event based volunteering’ and ‘skill-based volunteering’ efforts; employees including seniorsoffer their specialized skills and expertise ranging fromaccounts to marketing, legal, taxation and the like, and

help build capacity of our NGO part-ners.

Being one of the world’s biggest finan-cial institutions means we can make abig difference. With that comes theresponsibility to ensure that our ac-tivities are a force for good. At HSBC,we aim to lend and invest responsi-bly, avoiding projects where the po-tential for environmental damageoutweighs the economic benefits.

Institutions like HSBC

will constantly have to

work on forging

partnerships – both

public and private – and

in generating awareness

at the highest

policymaking levels by

way of advocacy.

At HSBC, we aim to lend

and invest responsibly,

avoiding projects where

the potential for

environmental damage

outweighs the economic

benefits.

94

“Thee one common denominator we see among the most suc-cessful and prosperous communities we serve is a strong com-mitment to sustainability. A commitment shared by business,government and civil society” said Muhtar Kent, Chair-man and CEO, Coca-Cola Company.

Corporate Social Responsibility ensures that a company does business in an ethical manner and is ac-

countable for the social and environmental impacts thatthe business creates for the society. Coca-Cola sees itssustaina-bility efforts first and fore-most as the right thing to do, a con-tinuation of responsible corporatecitizenship that began 125 years ago.In a world where populations aregrowing, natural resources arestressed, communities are forced to domore with less, and our consumers’expectations are expanding, we un-derstand that sustainability is core toour business continuity and dependson how we create long-term value. Itis our belief that a business can onlybe sustainable if the people and com-munities that we touch are sustainableand enriched along the way.

As the world’s largest beverage sys-tem, Coca-Cola has a presence inthousands of communities, acrossmore than 200 countries, worldwide.This kind of widespread reach not only provides us withenormous business potential, but also gives us a rareopportunity to make a real and lasting difference to thecommunities that we operate in. CSR and sustainabilityis a central part of our business strategy and we havededicated manpower and resources to work towards oursustainability goals. Sustainability is a crucial compo-nent of Coca-Cola’s global 2020 Vision which is basedon our goals in each of the 6 ‘Ps’ (pillars) of our business- People, Portfolio, Partners, Planet, Profit, and Produc-tivity. The Planet component of our 6P strategy defines

our focus areas in the realm of environment andsustainability.

Sustainability Framework

In order to further refine our approach to sustainabilityand bring about a focus to our efforts in the field of com-munity development and sustainability, together withour bottling partners and stakeholders, we have workedto create a Sustainability Framework, focusing on 7 pil-

lars of ‘Live Positively’. ‘Live Posi-tively’ is Coca-Cola’s system-widecommitment to making a positive dif-ference in the world. It is focused inthe areas of Marketplace, Workplace,Community, and Environment and hasseven core elements that are key to ourbusiness sustainability: Active life-styles, Beverage benefits, Climateprotection, Community, Sustainablepackaging, Water stewardship, andWorkplace rights. We define our pri-orities for each of the seven focus ar-eas:

Beverage benefits: Strive to offer bev-erages for every lifestyle and occasion,while providing quality that consum-ers trust. Our commitment to consum-ers is to provide a variety of productsfor every lifestyle and occasion.

Active healthy living programmes: Aspire to help peo-ple lead active, healthy lives by providing product vari-ety, nutrition information and consumer healtheducation; and supporting physical activity pro-grammes.

Building sustainable communities: Foster sustainablecommunities through economic development, philan-thropy and the creation of economic and social oppor-tunities.

CSR at Coca-Cola

Ananya MadhavanSenior ExecutiveCoca-Cola India and South-West Asiae-mail: [email protected]

In a world where

populations are growing,

natural resources are

stressed, communities are

forced to do more with

less, and our consumers’

expectations are

expanding, we

understand that

sustainability is core to

our business continuity

and depends on how we

create long-term value.



Energy efficiency and climate protection: Aim to be theindustry leader in energy conservation and climate pro-tection by not increasing carbon emission from manu-facturing products.

Sustainable packaging: Creating value at every stage ofthe packaging lifecycle, through efforts to reduce, re-cover, and reuse.

Water stewardship: Work to safely return to nature anamount of water equivalent to what we use in our bev-erages and their production..

Workplace rights: Create a diverse, healthy, inclusive andsafe work environment aligned with internationally re-spected human rights principles.

Through ‘Live Positively’, we see ourrole as reducing our own environmen-tal footprint while helping sustaincommunities through economic de-velopment and community supportand continuing to deliver great-tast-ing, refreshing beverages that are en-joyed around the world. We areworking continuously towards im-proving our water and energy effi-ciency across our system. Increa-singly, we are developing innovativepackaging that uses fewer resourcesand costs less to manufacture andtransport. These actions will enable usto operate more efficiently and havethe resources to continue investing inour growth. We are supporting thedesire of individuals to lead healthierand more active lifestyle by introducing an ever-widen-ing variety of beverages to meet evolving refreshment,nutrition, and hydration needs. We also support com-munity sports programmes to give people the opportu-nity to be active throughout their lives

For example, in the realm of Active Lifestyles, we havea global commitment to support at least one active, liv-ing programme in every country around the world. InIndia, among other programs, we support the Coca-ColaUnder-16 football tournament in partnership with AIFFand the national Under-16 Cricket tournament withProcam International. These initiatives promote physi-

cal activity and encourage students to lead active lives.These grassroot level initiatives provide a platform forover 100,000 young players from various parts of thecountry to showcase their talent and skill and take upsports as a career.

On Climate Protection and Energy Conservation, ouraim is to grow the business and not the carbon. Coca-Cola India launched a new innovation named, eKOcool,a solar powered refrigerator, in electricity deficient ar-eas. This innovation is environment-friendly, reducesCFC’s and HFC’s emission from refrigerators and is aninitiative that supports our efforts to building sustain-able communities, by economically empowering theemerging population in rural India, especially women.

Due to intermittent or no supply ofelectricity, electric powered refrigera-tion is not a good option in rural ar-eas. The eKOCool overcomes thebarrier of grid power availability andprovides growth opportunities formany small business enterprises inareas which have unreliable or no ac-cess to grid power.. The refrigeratoruses solar power innovations tocharge mobile phones and a solarpowered lantern. The mobile charg-ing dock provides additional moneygenerating activity and the solar lan-tern brings light to the shop duringevening and night time, thus helpingretailers remain open for longer hours.Coca-Cola India has already installed20 such coolers and plans to expandthe deployment of up to a total 500

coolers by this year end.

In the arena of water stewardship, our global goal is tosafely return to nature an amount of water equivalentto what Coca-Cola uses in all beverages and productionand we achieved this goal for our India operations in2010 with respect to the use of groundwater. This weaccomplished by reducing our water usage ratio (effi-ciency); recycling the water used in our operations(wastewater treatment); and replenishing the water weuse in our manufacturing process through communitywater access and watershed restoration and protection.Throughout the Coca-Cola system, we are intensely fo-

Through ‘Live Positively’,

we see our role as

reducing our own

environmental footprint

while helping sustain

communities through

economic development

and community support

and continuing to deliver

great-tasting, refreshing

beverages that are

enjoyed around the

world.

96

cused on water stewardship, and we have establishedpartnerships with NGOs and communities to help usprogress in each area. Our water stewardship strategyis built on the needs of our business and the communi-ties where we operate and is informed by a comprehen-sive water risk analysis of the Coca-Cola system.

At the end of 2011, our system in India had installedmore than 500 rainwater-harvesting structures spreadacross 20 states. These structures have been installed inpartnership with Resident Welfare Associations, Mar-ket Welfare Associations, Educational Institutions, In-dustry Associations, NGOs and local communities. Wehad also undertaken the restoration ofseveral ponds including the historicalSarang pond in Sarnath and Lehartarapond in Varanasi. We had also con-structed check dams in several areasof the country like at Kalahasti inChittoor, in Andhra Pradesh, atRamnagaram near Bangalore and atWada near Mumbai.

Drip Irrigation Projects

In partnership with farmers andKrishi Vigyan Kendra (KVK – a gov-ernment agency), Chomu, Rajasthan,the Company and its bottling partnerhave embarked on a three-way part-nership to promote drip-irrigation forinitiating water-efficient agriculture inKaladera area, near Jaipur. Drip irri-gation, also known as trickle irrigation or micro irriga-tion is an irrigation method which minimizes the use ofwater and fertilizer by allowing water to drip slowly tothe roots of plants, either onto the soil surface or directlyonto the root zone, through a network of valves, pipes,tubing, and emitters. The Coca-Cola system providespart funding to farmers to install the equipment whileKrishi Vigyan Kendra provides the knowhow, training,and insights to the farmers to carry out drip irrigation-based farming. At the end of 2011, we had supportedthe installation of 400 drip irrigation projects spread overan area of 200 hectares.

Likewise, for the local communities where we have op-erations, we employ local people, sources local ingredi-ents, and produces and sells its products locally —

directly and indirectly creating millions of jobs. As acompany, we believe that the sustainability of our busi-ness depends on sustainable economies.

Some of the interventions that we have made for thecommunities include a free retailer training programmecalled “Parivartan” run by The Coca-Cola University.Under this program we teach and trains retailers in class-rooms as well as a mobile customized bus. The mobilebus is equipped with LCD’s, screens, and chairs to pro-vide a full classroom-training atmosphere. The trainingprovided is on cash management, stock keeping, dis-play and merchandising, and finance management. Each

retailer also receives a Coca-Cola“Certified Retailer” certificate at theconclusion of the program. We nowhave four buses which act as mobileclassrooms, having started from class1. We also provide retailers with anaccidental death insurance of Rs 1lakh free of cost as a protection againstany eventualities. After three years ofthe program, we achieved a majormilestone of training 100,000 retailers,free of cost, in rural areas and villagesin January 2012.

To contribute to positive change andachieve our sustainability goals, wepartner with several local and inter-national partners, government agen-cies, NGO’s and trade bodies, oncommunity projects to ensure accu-

rate implementation and widespread awareness ofprojects.

One of our signature programmes to promote educa-tion in rural areas is the Coca-Cola Support My Schoolprogramme. This is based on our belief that every childhas a right to learn in a happy, healthy environment,which is critical for the overall development of the child.Today, many children in India do not have access to basicamenities in their school. Lack of proper sanitation fa-cilities in schools in rural India continues to remain ahuge challenge.

Coca-Cola in partnership with NDTV launched the Sup-port My School (SMS) campaign on the 24th of January,2011. This is a nationwide attempt to create Awareness

In the arena of water

stewardship, our global

goal is to safely return to

nature an amount of

water equivalent to what

Coca-Cola uses in all

beverages and

production and we

achieved this goal for our

India operations in 2010

with respect to the use of

groundwater.



on Water and Sanitation, Environment, Healthy ActiveLiving and providing a holistic environment in schools.The Support My School campaign is expected to directlyimpact at least 50,000 students in 100 schools across In-dia. Each of the 100 schools will receive improved ac-cess to water and gender-specific sanitation, infrastruc-ture for water conservation and rainwater harvesting,landscape improvement, library construction, teachertraining, and new sports facilities. The campaign directlyimpacts at least 50,000 students in 100 schools acrossIndia.

SMS partners with UN-HABITAT, Charities Aid Foun-dation India, and Sulabh International. Pearson Foun-dation is a Learning Partner andLuminous has installed inverters foreach school. Merck, H2O for Life andGlobal Water Challenge are the glo-bal partners of this programme.

The Coca-Cola Company has dedi-cated resources at the Business Units,at Bottling Plants and at its Corporateand Group offices that plan,strategize, and execute sustainabilityprojects and goals. A case in point isthe appointment of a dedicated teamand office under the leadership ofBeatrice Perez, focused on achievingsustainability goals. Bea Perez as theVice President and ChiefSustainability Officer, leads the glo-bal office of Sustainability and is re-sponsible for creating and overseeingan integrated sustainability strategy; setting high-levelgoals and commitments; assessing and driving scaledinvestments; and managing global sustainability part-nerships and programmes. The global office developsstrategies, programmes and goals that need to beachieved, in partnership with sustainability officers foreach country, our bottling partners, stakeholders, andemployees.

In India, CSR and Sustainability fall under the PublicAffairs and Communications department at the Busi-ness Unit level, with dedicated resources for CSR activi-ties. Even our bottling offices have human resourcesdedicated to sustainability and CSR projects to take for-ward the company’s sustainability initiatives in partner-

ship with local NGO’s and government organizations.In addition to that, Coca-Cola in India also has a Foun-dation called ‘Anandana’. The Coca-Cola India Foun-dation (Anandana) is now taking forward in thecommunity at large, projects and programmes of socialrelevance to carry forward the message of inclusivegrowth and development.18

We recognize the need to report quantifiable metrics andtargets, in particular as they relate to our environmen-tal, social, and economic impact. The Coca-Cola Com-pany releases an annual Sustainability Report, usingexternal standards, such as the Global Reporting Initia-tive (GRI) and a third-party external verification agency,

FIRA. We also structure our report-ing on the principles outlined in theUN Millennium Development Goals,the UN Global Compact, and the CEOWater Mandate. The India BusinessUnit also releases an AnnualSustainabi-lity report, detailing thevarious activities undertaken duringthe year and the progress made un-der each of the seven ‘Live Positively’parameters. Other than this, an exter-nal and independent Advisory Coun-cil for Environment & Sustainability(ACES) led by General V P Malik(former Chief of Army Staff) helps thecompany track and monitor its CSRactivities in the Business Unit.

In a world where populations aregrowing, natural resources are

stressed, communities are forced to do more with lessand our consumers’ expectations are expanding, weunderstand that sustainability is core to our businesscontinuity and how we create long-term value. We un-derstand that consumers worldwide choose products notjust based on their quality but also on the basis of thereputation of the companies producing them.

We know that our employees, bottlers, suppliers, cus-tomers, and consumers, have a key role to play in oursustainability efforts. They are key to our recovery andrecycling efforts and are often deeply involved in im-

18 For more details on activities of the Coca-Cola India Foundation, pleasevisit the website of the Coca-Cola India Foundation, www.anandana.org.

In a world where

populations are growing,

natural resources are

stressed, communities are

forced to do more with

less and our consumers’

expectations are

expanding, we

understand that

sustainability is core to

our business continuity

and how we create long-

term value.

98

Corporate Social Responsibility (CSR) has been ex-tensively researched in the last four decades but

little attention has been paid to ex-plain its theoretical underpinnings.Addressing this gap in the literature,this paper takes the help of institu-tional theory to explain why organi-zations indulge in CSR.

There are broadly two streams of lit-erature seeking to explain CSR activi-ties: ethical and instrumental. Ethicalarguments emphasize CSR to be a self-less altruistic activity that involvesethical obligations of going beyondthe interests of organization19,20 evenif it results in unproductive resourceexpenditure for the company. On theother hand, instrumental argumentsexplain CSR as a purposive activityinvolving benefits in the long term,rectifying past mistakes, and lessen-ing the repercussions of future mistakes21. The presentstudy aims to examine the latter.

Institutional theory is particularly well-equipped to ex-plain organizational activities such as CSR primarily

because under institutional theory, the ‘field’ is givenimportance. This field includes an organization’s social

context, area of activities, practices/norms, and social relationships. Insti-tutional theory provides CSR with amultilevel theoretical explanationwhich includes actions within andoutside an organization22.

Institutional Determinants of CSR

Players in the institutional field of anorganization shape its CSR activities23.While internal organizational factorsmay enable or inhibit CSR, institu-tional players such as industrial asso-ciations, institutional investors, labourunions, consumers, media, and thegovernment are equally importantdeterminants of CSR activity of an or-ganization.

Industrial associations may havesome standards binding on their members. Membershipof such associations gives organizations a legitimate po-sition in the eyes of stakeholders. Corporations act insocially responsible manner if they belong to associa-tions supporting CSR24. Institutional investors may also

An Institutional Perspective on Corporate Social Responsibility

Vijayta Doshi Pradyumana KhokleDoctoral Student Assistant ProfessorIndian Institute of Management, Ahmedabad Indian Institute of Management, Ahmedabade-mail: [email protected] e-mail: [email protected]

While internal

organizational factors

may enable or inhibit

CSR, institutional players

such as industrial

associations, institutional

investors, labour unions,

consumers, media, and

the government are

equally important

determinants of CSR

activity of an

organization.

19 Frederiksen, C. S. (2010). The relation between policies concerningcorporate social responsibility (CSR) and philosophical moral theo-ries – An empirical investigation. Journal of Business Ethics, 93, 357–371.

20 McWilliams, A., & Siegel, D. S. (2011). Creating and capturing value:Strategic corporate social responsibility, resource-based theory, andsustainable competitive advantage. Journal of Management, 37(5),1480-1495.

21 Campbell, J. L. (2007). Why would corporations behave in sociallyresponsible ways? An Institutional theory of corporate social respon-sibility. Academy of Management Review, 32(3), 946–967.

22 Aguilera, R. V., Rupp, D. E., Williams, C. A., & Ganapathi, J. (2007).Putting the s back in Corporate Social Responsibility: A multileveltheory of social change in organizations. Academy of ManagementReview, 32(3), 836–863.

23 Jackson, G, & Apostolakou, A. (2010). Corporate social responsibilityin Western Europe: An institutional mirror or substitute? Journal ofBusiness Ethics, 94, 371–394.

24 Galaskiewicz, J. (1991). Making corporate actors accountable: Insti-tution-building in Minneapolis–St.Paul. In W. W. Powell & P. J.DiMaggio (Eds.), The new institutionalism in organizational analysis(pp. 293-310). Chicago: University of Chicago Press.


proving their communities, providing guidance, connec-tion, and collaboration for our community improvementefforts. By using our widespread network and exper-tise, we help not just our employees, but people all over

the world act responsibly towards the environment.Coca-Cola is focused on sustainability and we strive tobe a force for lasting, positive change.


play a role in monitoring social behav-iour of organizations by opting out oforganizations performing low onCSR. Cox, Brammer & Millington25 intheir study of 500 companies foundthat long-term institutional investorsrejected the firms with low corporatesocial performance.

In India, Bombay Stock ExchangeBSE-GREENEX, a carbon footprints’index has been prepared by Indian In-stitute of Management. The index re-veals carbon emissions by the BSElisted companies. It is meant to miti-gate the financial risks of investors.An organization with bad reputation in society is likelyto be perceived riskier by institutional investors and maylie low in their priority list. Petersen and Vredenburg26

empirically found that social responsibility has bearingon the decision making of institutional investors affect-ing the perceived value for not only investment but

whether to hold or sell the shares andconsequentially impacting the capitalmarket’s valuation of the organiza-tion. Therefore, institutional investorsimplicitly force organizations to havea favourable image in the society.

Another source of pressure for organi-zations to engage in CSR is labourunions. Organizations with strong la-bour unionization act in more sociallyresponsible manner towards theiremployees27. These organizations fearretaliation or bad reputation amongtheir employees as well as the societyat large. Here again, the purpose is to

gain legitimacy in the eyes of stakeholders. For exam-ple, in 2005, labour unions of Wal-Mart, dissatisfied withworking conditions, created websites to influence pub-lic opinion against Wal-Mart, including Wake Up Wal-Mart and Wal-Mart Watch. As a result, by the end of2005, Wal-Mart launched ‘Working Families for Wal-Mart’ and other public relations campaigns throughwebsite and television in order to regain the trust andlegitimacy. This legitimacy helps organizations improveor ameliorate both intangible reputation and tangiblefinancial performance28. Empirical evidence was foundby Doh, et al.,29 on the marketplace rewarding organiza-tions following CSR (both in terms of reputation andfinancial performance).

Imitation of CSR Activities

CSR may have benefits for an organization in the formof image/reputation improvement among customers,media limelight, satisfied employees, and better wordof mouth, leading to better financial performance. Manyorganizations (like IKEA, General Electric, HermanMiller and several private hospitals) became more prof-itable or more competitive because of their green or other

25 Cox, P., Brammer, S., & Millington, A. (2004). An empirical examina-tion of institutional investor preferences for corporate social perfor-mance. Journal of Business Ethics, 52, 27–43.

26 Petersen, H. L., & Vredenburg, H. (2009). Morals or economics? Insti-tutional investor preferences for corporate social responsibility. Jour-nal of Business Ethics, 90, 1-14.

Organizations with strong

labour unionization act

in more socially

responsible manner

towards their employees.

These organizations fear

retaliation or bad

reputation among their

employees as well as the

society at large.

The FocalOrganization

IndustrialAssociations

Government

Competitors

Media

Consumers

LabourUnions

InstitutionalInvestors

CSR Activitiesof an

Organization

27 Miller, J. I., & Guthrie, D. (2007). Corporate social responsibility: In-stitutional response to labor, legal and shareholder environments.Academy of Management Annual Meeting Proceedings.

28 Waddock, S. A., & Graves, S. B. (1997).The Corporate social perfor-mance – Financial performance link. Strategic Management Journal,18(4), 303–319.

29 Doh, J. P., Howton, S. D., Howton, S. W., & Siegel, D. S. (2010). Doesthe market respond to an endorsement of social responsibility? Therole of institutions, information, and legitimacy. Journal of Manage-ment, 36(6), 1461-1485.

Figure 1: Institutional Players determining CSR Activityof An Organization

100

CSR activities30.

Organizations observe benefits ac-crued by others from their CSR activ-ity and try to imitate their norms andpractices31. Another reason for imita-tion stems from institutional inves-tors’ and governmental benefits forsocially responsible organizations.Imitation helps in risk mitigation asother firms have already tried some-thing that turned out to be successful.Imitation reduces the threat of mak-ing poor autonomous decisions withpotentially negative consequencesand saves costs associated with ex-ploring potential alternative options32.Organizations conform to industrial and social normsset by successful organizations in order to remain so-cially relevant33. Non-adopters fear being different frommany successful adopters34. O’Connor & Schumate35

empirically discovered within-industry mimicry of CSRcommunication. CSR communication helps organiza-tions establish a public dialogue and create positive re-lationships with other institutional players. Due to thebandwagon effect, a growing number of adopters of anadaptive change drive a focal organization to subse-quently adopt a similar change. Firms will participatemore in CSR when other firms in the same industry haveparticipated36.

CSR as a Cushion for Actual orPerceived Harm Done to Society

CSR is more extensive in sectorswhere organizations have strongnegative impact on stakeholders37. Forexample, oil companies tend to spendmore on CSR because of environmen-tal impact – their adverse impact onsociety in the form of extraction of oil(depleting fossil fuels), oil spills, en-ergy use for operation and more sig-nificantly their impact on climatechange due to use of the oil by thecustomers. Similarly, automobile or-ganizations carry out CSR by educat-ing people with traffic rules and bymanufacturing less polluting hybrid

cars.

Various institutional factors may force firms to correcttheir actual or perceived harm done to society. Socialmovement organizations pressurize organizations torectify the harm done to society38. Media disciplines or-ganizations in their own way39. It plays an importantrole in quickly disseminating information to masses.Consumer activism also forces organizations to changetheir actions which cause harm to societal stakeholders,for example, Coca Cola, Starbucks, and Nike40. Coca Colain India in 2008 faced a lot of criticism for dumping haz-ardous waste near bottling plants and discharging wa-ter into agriculture land. Nike and Starbucks in the pasthave been charged with unfavourable working condi-tions for their employees.

Role of Governments

Most national governments today have regulations, actsand sanctions for corporate social responsibilities of or-

Due to the bandwagon

effect, a growing number

of adopters of an

adaptive change drive a

focal organization to

subsequently adopt a

similar change. Firms will

participate more in CSR

when other firms in the

same industry have

participated.

30 Esty, D. C., & Winston, A. S. (2006). Green to gold: How smart orga-nizations use environmental strategy to innovate, create values andbuild competitive advantage. New Haven, CT: Yale University Press.

31 McGuire, J. B., Sundgren, A., & Schneeweis, T. (1988).Corporate so-cial responsibility and organization financial performance. Academyof Management Journal, 31(4), 854-872.

32 Ordanini, A., Rubera, G., & DeFillippi, R. (2008). The many moods ofinter-organizational imitation: A critical review. International Journalof Management Reviews, 10(4), 375–398.

33 Muthuri, J. N., & Gilbert, V. (2011). An institutional analysis of corpo-rate social responsibility in Kenya. Journal of Business Ethics, 98, 467–483.

34 Abrahamson, E., & Rosenkopf, L. (1993). Institutional and competi-tive bandwagons: Using mathematical modelling as a tool to exploreinnovation diffusion. Academy of Management Review, 18(3), 487-547.

35 O’Connor, A., & Shumate, M. (2010). An economic industry and in-stitutional level of analysis of corporate social responsibility commu-nication. Management Communication Quarterly, 24(4), 529–551.

36 Luo, X., & Zhang, J. (2009). Institutional or instrumental: What affectscorporate social responsibility behavior in emerging economies? Acad-emy of Management Annual Meeting Proceedings, 1-6.

37 Jackson, G., & Apostolakou, A. (2010). Corporate social responsibil-ity in Western Europe: An institutional mirror or substitute? Journal ofBusiness Ethics, 94, 371–394.

38 Smith, J. (2005). Globalization and transnational social movementorganizations. In D. Davis, D. McAdam, W. R. Scott, & M. Zald (Eds.),Social movements and organization theory (pp. 226-248). New York:Cambridge University Press.

39 Campbell, J. L. (2006). Institutional analysis and the paradox of cor-porate social responsibility. American Behavioral Scientist, 49(7), 925-938.

40 O’Connor, A., & Shumate, M. (2010). An economic industry and in-stitutional level of analysis of corporate social responsibility commu-nication. Management Communication Quarterly, 24(4), 529–551.



ganizations irrespective of whether itis a developed country like USA or atransition country like India. To namea few, USA has the Fair Labor Stand-ards Act (1938), Energy Policy Act(EPA), and Clean Water Act (1948);India has the Companies Act, 1956that had nothing on CSR until theCompanies Bill 2009, the Child LaborAct, 1986, and Environment Protec-tion Act (1986) came in. Despite theseacts and regulations, there are evi-dences of socially irresponsible behav-iour by organizations in the abovecountries, for example, the case ofWal-Mart, Exxon Mobil in the USA,and Satyam in India. Soon, the Government of India maymake it mandatory for coal mining organizations tospend a part of their net profit on people affected bytheir activities41.

Currently, CSR practices in India aredictated by guidelines notified by theMinistry of Corporate Affairs in De-cember 2009. These guidelines arevoluntary and require business enti-ties to formulate a CSR policy to guideits strategic planning and a roadmapfor its CSR initiatives. Thus, govern-ment regulations exist but there isabsence of monitoring and enforce-ment of these regulations on the partof government42. Inefficient legal sys-tems and loose monitoring of govern-ment regulations leave scope forvarying degree of compliance to theacts by the organizations43, resulting

in socially irresponsible behaviour of organizations.Chih, Chih and Chen44 empirically found that financialorganizations in countries with stronger legal enforce-ment tend to engage in more CSR activities. “Corpora-

Inefficient legal systems

and loose monitoring of

government regulations

leave scope for varying

degree of compliance to

the acts by the

organizations, resulting in

socially irresponsible

behaviour of

organizations.

41 Indiacsr (2011). Mandatory CSR spending for coal mining firms in India. Retrieved on 20/12/11 from http://www.indiacsr.in/en/?p=304042 Scott, W. R. (2004). “Institutional theory” p. 408-14 in Encyclopedia of Social Theory, George Ritzer, ed. Thousand Oaks, CA: Sage.43 Campbell, J. L. (2006). Institutional analysis and the paradox of corporate social responsibility. American Behavioral Scientist, 49(7), 925-938.44 Chih., H., Chih, H., & Chen, T. (2010). On the determinants of corporate social responsibility: International evidence on the financial industry.

Journal of Business Ethics, 93(1), 115-135.

Imitation

Explicit forces

Implicit forces Imitation of othersuccessful companies

Compliance with themandatory rules(Explicit forces)Compliance with the

institutional norms(implicit forces)

InstitutionalTheory

C S R

Legitimacy in theeyes of stakeholders

Mitigation of currentand future harms

Legitimacy

Performance

Lower cost ofadoption of CSR

Imitation

Figure 2: Institutional Reasons for CSR and its Outcomes

102

tions will be more likely to act in socially responsibleways if there are strong and well- enforced state regula-tions in place to ensure such behaviour”45. Regulatorysystems have potential to promote CSR implementationamong organizations with stricter monitoring and en-forcement.

Conclusions

While the debate on a widely accepted definition of CSRis on for the last four decades, an understanding of itstheoretical grounding has been neglected by the re-searchers. This paper has endeavoured to explore vari-ous reasons behind CSR with the help of institutional

theory. Institutional force, implicit or explicit, comesfrom media, consumers, institutional investors, indus-trial associations, and government. Consistent withCampbell’s conceptualization, we conclude that CSR isan outcome of various institutional factors such as com-pliance with the institutional norms, compliance withthe mandatory rules, and imitation of other successfulcompanies.

These factors help organizations in gaining legitimacyin the eyes of stakeholders, mitigating actual or per-ceived harms done to the society, and leveraging on CSRin case of future harms.

Developing a “Responsible Business” Course forBusiness Schools in India

Vasanthi SrinivasanAssociate ProfessorOrganizational Behaviour and HRMIIM Bangaloree-mail: [email protected]

In recent years, the financial crisis and the environ-mental upheavals that the globe is experiencing calls

for systemic thinking on issues that affect human life. Itis evident that in transition economies like India, the rolesof the key actors namely the Government, the civil soci-ety, and the business (both Indian companies and MNCsin India) are changing and interdependencies across thethree entities are increasing. Arguably, there is a needto examine the role of corporations in ways distinctlydifferent from the current dominant discourse.

In the last decade, in India, several social, ethical, andenvironmental challenges have resulted in significantchanges that are increasingly changing the contours oftraditional CSR/Ethics teaching in business schools. TheIndian corporations have entered into fields like educa-tion and health with innovative and sustainable deliv-ery models that are affordable and scalable. This has ledto the development of inclusive business models thatshape the social responsibility discourse in a manner that

traditional CSR discourse does not. Similarly, the en-demic corruption that exists in India is forcing businessesto adopt practices that signal integrity in ways signifi-cantly different from what are found in the literature onethical conduct of corporations. Several large companiestrain their dealers, vendors, and other external and in-ternal parties who provide goods and services on ethi-cal conduct and expected behaviour while dealing withthe external environment. In the field of environmentand sustainability, strong judicial activism coupled witha strong role of a watch dog by the civil society is begin-ning to put immense pressure on the responsibilities ofbusiness. There is also a growing recognition that goodCorporate Governance practices are a source of riskmanagement strategy for the sustainability of corpora-tions. Several industry initiatives in this area like theNASSCOM Committee on Corporate Governance hea-ded by Mr.Narayana Murthy were intended to sharpenand strengthen the corporate governance practices in theIT and BPO industry. All of these initiatives are likely toput pressure on corporations in behaving more respon-sibly than they have done in the past. Given the inter-play among the issues of CSR, Ethics, Governance, and

45 Campbell, J. L. (2007). Why would corporations behave in sociallyresponsible ways? An Institutional theory of corporate social respon-sibility. Academy of Management Review, 32(3), 946–967.



Sustainability in any large corporation, the need of thehour is to educate management graduates and practis-ing managers on how businesses can be responsible incountries like India across the entire spectrum. In emerg-ing economies like India, where economic developmentis occurring at a pace higher than the rate of social de-velopment processes, management education has to beable to equip the students to take a wholistic, integrated,and systemic perspective to respon-sibility in business. It also needs to becontemporary and relevant by incor-porating the various adaptive inter-ventions and models used byorganizations to mitigate the negativeeffects and encourage positive contri-bution. The silos of CSR, CorporateGovernance, Ethics and Sustainabilitythat have been part of the curriculumin global business schools need to bere-examined and integrated in a man-ner that students are provided with aricher and deeper understanding ofthe business-society relationship andare also equipped to think criticallyabout such issues and their impact onthe future of corporations in the In-dian and global context.

In recent years, management educa-tion has come under fire and has of-ten been accused of perpetuating adominant self-interested ideology46.Several alumni of top ranked globalbusiness schools have featured infrauds and governance failures of thecentury. In this context, it is worth-while to examine in what mannerbusiness schools in India may structure their curricu-lum given the unique characteristics of our managementeducation, namely, young student population with nowork experience and the presence of a large number ofbusiness schools with very significant challenges in get-

ting faculty to teach courses which do not have a domi-nant functional orientation.

In this paper, I draw upon my experience of designingand teaching courses in the field of responsible businessto provide some frameworks for faculty who teach thesecourses in business schools. It is interesting to note thatthere is a great need felt in executive education pro-

grammes for such courses which ex-pose practising managers to the ideasof business-society relationships.

Frameworks Enabling Teaching ofan Integrated Course on Respon-sibilities of Business

There are two frameworks which ap-pear to provide opportunities for in-tegration across CSR, ethics, environ-ment, and governance in teaching acourse on “Responsible Business.”The first framework is drawn fromArchie Carroll’s conceptualization ofCSR “as a construct relating to fourdifferent areas of business-society re-lationship consisting of economic, le-gal, ethical, and philanthropicresponsibilities”47. The economic re-sponsibility of business largely fo-cuses on the shareholder perspectiveof ensuring that businesses operate ina manner that they are financially vi-able. The courses on corporate gov-ernance are largely focused onproviding this perspective in businessschools. The legal responsibility refersto compliance with the laws of the

land and play by the “rules of the game”. In countrieslike India, where there is weak enforcement of the rules,the need to strengthen the understanding on the legalaspects is critical. There are laws that protect the inter-est of the various stakeholders. The ethical responsibil-ity of corporations goes beyond the legal, to questionsof right, fair, and just across the stakeholders. The em-

46 Jacobs, M. (2009). How business schools have failed business. TheWall Street Journal. April 24.

Ghoshal, S. (2005). Bad management theories are destroying goodmanagement practices. Academy of Management Learning and Edu-cation, 4(1), 75-91.

Bennis, W & O’Toole, J. (2005). How business schools lost their way.Harvard Business Review, May.

The silos of CSR,

Corporate Governance,

Ethics and Sustainability

that have been part of the

curriculum in global

business schools need to

be re-examined and

integrated in a manner

that students are provided

with a richer and deeper

understanding of the

business-society

relationship and are also

equipped to think

critically about such

issues and their impact

on the future of

corporations in the Indian

and global context.

47 Carroll A. B. (1979). “A three-dimensional conceptual model of cor-porate performance.” Academy of Management Review, 4(4) 497-505.

Carrroll A. B. (1991). “The pyramid of CSR: Towards the moral man-agement of organizational stakeholders.“ Business Horizons. 34(4),39-48.

104

phasis on interests of different stakeholders brings in todiscussion the social and environmental aspects thatbuild sustainable organizations for the future. Finally,the philanthropic responsibilities of business includecharitable donations, sponsoring projects, etc., which aredesired of corporations. In recent years, the concept of“strategic philanthropy”48 has gained attention. In stra-tegic philanthropy, “corporations can use their charita-ble efforts to improve their competitive context – thequality of the business environment in the location orlocations where they operate. Using philanthropy to en-hance context brings social and economic goals intoalignment and improves a company’s long-term busi-ness prospects”49. This view provides the faculty an op-portunity to position responsiblebusiness as a source of competitiveadvantage for businesses.

The second framework draws up onthe tenets of “whole and wholeness”of the General Systems Theory in thecontext of an organization50. It at-tempts to focus on the three systemlevels in the organizational landscape– namely, the global geopolitical busi-ness systems, the national systems inwhich businesses operate, and finally,the organizational systems and proc-esses that align with the national andglobal agenda. This alignment is notnecessarily linear since there could becompeting pressures between the dif-ferent levels and within a single level.With increased globalization, several countries havecommitted to the Millennium Development Goal andother multilateral agreements and conventions. Theseinternational agreements are binding on national gov-ernments which in turn are expected to deliver theseobjectives by involving the stakeholders within the re-spective countries, namely, the state governments, thecorporations, civil society, and other groups. India is asignatory to many of these conventions and therebybusinesses have commitments that need to be delivered

to the global community. The Global Compact is a casein point where several Indian corporations are signato-ries to the agreement. These organizations require strat-egies, systems, and processes which allow them todemonstrate higher ethical, social, and environmentalresponsibility that in turn becomes a source of competi-tive advantage.

While Carolls’ framework allows the faculty to struc-ture an integrated course from a firm perspective, themulti-level systems approach allows the course to beplaced within a global or international business perspec-tive. These two perspectives provide a large canvas forthe faculty to address issues at the micro level of the

firm and its manager, at the meso levelof a sector or an industry group, andfinally, at a macro national and inter-national level. For practising manag-ers, faculty can combine the fourresponsibilities proposed by Carrollwith the three system-level approach,thereby providing an eclectic perspec-tive which allows capturing the com-plex reality of being a responsibleorganization in the Indian context.

Designing a Course on “Respon-sible Business”

The primary objective of a course on“Responsible Business” in the man-agement school curriculum would beto stimulate critical thinking amongyoung managers about their roles as

professionals in business organizations in the larger con-text of sustainable growth. The course would requiresensitization and awareness to the larger geo-political,social and business systems, which would lead tosustainability and growth. The broad themes that thecourse could focus on are as follows:

Changing Landscapes

This part of the course could focus on the changes tak-ing place in the society like globalization, increasingpenetration of information, communication and technol-ogy, global warming, and climate changes, dispropor-tionate allocation of global resources across nations.Leaders in corporations need to understand the dynam-ics in the context for them to manage it effectively. A

48 Porter, M. & Kramer, M. (2002). The competitive advantage of corpo-rate philanthropy. Harvard Business Review, 50(12), 56-69.

49 Ibid, pp 58.50 Bertalanffy, Ludwig von (1972) The history and status of general sys-

tems theory. In Kiir, George J. (Ed.), Trends in general systems theory.New York: Wiley-lnterscience.


The primary objective of

a course on “Responsible

Business” in the

management school

curriculum would be to

stimulate critical thinking

among young managers

about their roles as

professionals in business

organizations in the

larger context of

sustainable growth.


discussion on consumption dynamics,rise of civil societies, globalization andtrade, environment and sustainability,role of international organizations likethe UN, Global compact, corruptionand income inequality will enable stu-dents to appreciate the larger geopo-litical reality of trade and theimplications for organizations.

Understanding Business Society Inter-relationships

All organizations operate in a marketand a non-market environment. Themarket environment refers to the re-lationships that a firm has with itssuppliers, competitors, and custom-ers. This is recognized as a source ofcompetitive advantage for companies.The non-market environment refers torelationships that a firm has with thecivil society, media, government, andthe general community. All of these relationships areintangible and therefore impact the reputation of thefirm. It is because non-market contexts are intangiblethat they are often not taken cognizance of by the lead-ers in organizations. In a globalized world, where so-cial networking and information technology dominate,the potential for non-market factors to impact the mar-ket environment seems to be increasing. The manage-ment graduates who are future leaders of the industryneed to understand the non-marketforces and their impact on organiza-tions. The recent National VoluntaryGuidelines on social, environmental,and ethical responsibilities of businessin India created through a process ofconsultation by the Ministry of Cor-porate Affairs is a case in point in thecontext. These guidelines provide op-portunities for businesses to under-stand in detail the impact of manynon-market features on competitive-ness of firms. This module in thecourse would focus on understandingbusiness-society relationship at thebroadest level possible.

Ethical Leadership

At the heart of responsible decision-making are individuals. Sometimesthese individuals act in their personalcapacity and at other times they actas agents on behalf of a corporation.In countries like India where there iswidespread corruption, there is a needto introduce the role of ethical conductin organizations and in particular theethical choices that leaders confrontin performing their roles. It would beappropriate to discuss several ele-ments of functional ethics namely eth-ics in marketing, HR, accounting,advertising, supply chain, etc., to raisequestions pertaining to ethical orien-tation of students. A key part of thismodule would be to explore the keyethical theories namely utilitarianism,deontological, virtue and place themin perspective.

Personal Values and Ethical Decision-making

There is a need to highlight the role of individual valuesin ethical decision-making processes in organization.There is a long-standing debate on the role of free choicein individuals. In contrast, there are deterministic argu-ments that no individual really makes free choices.Group processes impact choices that individuals make.

An exploration of the personal valuesversus group values in ethical/unethi-cal behaviours needs a discussion.Most management graduates arehired with functional responsibilities.In discharging their functional roles,they are likely to encounter significantethical challenges. For example, mis-representation of facts to a customer,withholding of information from anystakeholder, or terminating an em-ployee without due process, are oftengrey areas in organizations. One of thekey aspects of this module would beto provide them with tools for engag-ing in functional aspects of ethics. Thefaculty needs to engage the students

In a globalized world,

where social networking

and information

technology dominate, the

potential for non-market

factors to impact the

market environment

seems to be increasing.

The management

graduates who are future

leaders of the industry

need to understand the

non-market forces and

their impact on

organizations.

In countries like India

where there is

widespread corruption,

there is a need to

introduce the role of

ethical conduct in

organizations and in

particular the ethical

choices that leaders

confront in performing

their roles.

106

on the grey areas and getting them to see the ethical is-sues there.

Institutionalizing Ethics and Responsibility throughStrategy, Structure and Culture

How do organizations institutionalize their responsibil-ity to society into their systems and processes? Draw-ing on the strategy implementation and organizationalchange literature, we could posit that this is donethrough their planning process. Using the BalancedScorecard approach, it is possible for organizationsengaged in these areas like governance, CSR, andsustainability to focus both on tangible and intangibles.The intangible focus can offer a good framework to dis-cuss institutionalization of ethical practices within theorganization. This will help students appreciate how theincentive structures, performancemetrics, and control systems in or-ganization create conditions for indi-viduals to behave in an ethical orunethical manner. The students needto be questioned on how organiza-tions can align their financial goalsand integrity and responsibility di-mensions more effectively. The role oforganizational culture and its impacton institutionalizing ethics and re-sponsibility is well understood. Therole of senior leadership in strength-ening the ethical competence of an or-ganization should be examined morecarefully. Students have to be pro-vided with real life stories of the man-ner in which large Indianorganizations have institutionalized and embedded ethi-cal behaviours within their organizations.

Responsible Business and Stakeholder Perspective

Corporations exist in complex environments with mul-tiple stakeholders who have legitimate expectations fromthem. Some of the stakeholders that provide businessesthe licence to operate include employees, consumers, andsuppliers. As fragmentation of work occurs due to im-proved information, communication and technology,issues related to working conditions, employment termsand conditions, diversity, sexual harassment, privacyand health-related aspects gain greater attention. Theimplications of 24X7 factories in developing countries

given time differences create social and ethical problemswhich leaders of the future need to take cognizance of.In transition economies like India, consumer rights arein its infancy. Many consumers are now becoming awarethat they have rights pertaining to quality and deliveryof products and services. In India, the poor and the vul-nerable are often the most illiterate. They are unable toaccess quality of services and products which are guar-anteed to consumers. For example, the discriminatorypricing adopted by chemists while providing medicinesto the patient or irrational use of drugs raised seriousquestions on consumer rights. Finally, the role of sup-pliers in responsible business is the least understood.Nearly 90 per cent of the Indian economy is the infor-mal sector which comprises of manufacturers for do-mestic and export markets. Several companies are part

of the large global supply chains. Howdo we look at ethical or non-exploita-tive supply chains that result in re-sponsible competitiveness? Some ofthese questions become relevant in theIndian context.

There are other actors in the largerenvironment like civil society and thegovernment who have expectationsfrom corporations. Last but not theleast, given the manner in which en-vironmental degradation and climatechange have received attention in thelast two decades, environment needsto be treated as a separate stakeholder.In the same manner, community re-quires special attention in the Indian

context. With large scale infrastructure projects comingup in the next two to three decades, displacement ofpeople is likely to be a key consideration for organiza-tions. Thus a holistic understanding of the variousstakeholders and ethical issues and specialized concernsabout them would form an important part of the coursecurriculum.

Corporate Governance and Shareholder

Much of the discourse in management education is cen-tred on the shareholder perspective. All functionalcourses reinforce the performance of corporations froma shareholder perspective. Given the dominant share-holder value creation paradigm, there is a need to ex-amine the role of owners and the board more systemati-


Corruption is the abuse of

entrusted power for

private gain. It is one of

the more serious barriers

to overcoming poverty.

Young managers need to

be sensitized to the

national integrity systems

approach recommended

by the Transparency

International.


cally. The fiduciary and oversight responsibilities asso-ciated with the shareholder perspective require particu-lar emphasis in the Indian context where ownership islargely closely held by families. The long-term perspec-tive of going beyond compliance, into good governanceneeds to be emphasized significantly. In emerging mar-kets like India, where the Company Law is undergoingchanges, the challenges while teaching the course aremany. While it is inevitable that several legal aspectswould enter into a classroom discussion, yet the chal-lenge is to make the course contemporary and relevantfor the student community. A deeper contextual under-standing of corporate governancepractices globally would be the objec-tive of this module in the course.

Corruption

Corruption is the abuse of entrustedpower for private gain. It is one of themore serious barriers to overcomingpoverty. Young managers need to besensitized to the national integritysystems approach recommended bythe Transparency International. Somediscussion on the initiatives taken inIndia to tackle this endemic problemwould help build perspective andempowerment for taking action.

Compliance to Global Agreements

In a globalized world, there is increasingly greater pres-sure on nation states to comply with global agreements.These compliance systems are based on the principlesof sustainable development. Since most of these agree-ments are multi-stakeholder in nature and businessesare a part of the solution, there is a need to sensitizemanagement students to these realities. In particular, inrecent years, non-tariff barriers arising out of social andenvironmental issues have been a source of challenge toemerging economies. The role of an integrated coursewould be to help students to recognize the tensions in-herent in human development and economic develop-ment in the context of a larger geo-political reality.Students need to be familiar with the different perspec-tives that exist in a global context so that they can exam-ine the firm strategies vis-à-vis the global tensions andbe equipped to deal with such issues in their manage-rial roles more effectively.

Global Context, Diverse Cultures: How do Ethics andCSR Differ in Cross-cultural Environments?

While there is a growing recognition that national con-texts differ and that ethical decisions, CSR actions, gov-ernance frameworks, and sustainable solutions aregoverned by national cultures and business systems,there is an emergence of universal principles of behav-iour of corporations. Since different countries are at dif-ferent stages of economic and social development, thetensions in implementing global standards and univer-sal principles in different nations is a reality experiencedby many international agencies. An in-depth discussion

on the interplay between individual,corporate, and national culture withinthe discourse of ethics would help stu-dents develop their own ethical com-pass when faced with a businessproblem or dilemma.

Conclusion

As is evident from the themes thatrequire to be covered in the course,there is a need for faculty to draw upon multi-functional and multi-disci-plinary perspectives to deliver thecourses. The two frameworks pro-vided for structuring the course re-quire a deliberate and consciousintegration across the spectrum of

CSR, Corporate Governance, Ethics, and Sustainability.The teaching capacity of faculty for this course is likelyto be quite diverse. Faculty need to be comfortable inbringing multi-disciplinary perspectives to the courseand also in handling the grey areas in the field. The fac-ulty themselves will need to demonstrate a high ethicalstamina and conduct in the manner in which they en-gage with the student community. A critical perspec-tive need to be adopted in enabling students to addresssuch problems rather than a normative or prescriptiveperspective. Such a critical perspective would requirefaculty to play the role of a facilitator, bringing togetherdifferent viewpoints, presenting the tensions and thedillemmas in ways that students can appreciate andengage with in a highly reflective manner. Faculty willneed to draw up on the frameworks discussed earlier tobuild their course curriculum. This calls for rigour, rel-evance, and an understanding of the global literatureand a deep sensitivity to the local discourse and a

Students need to be

familiar with the different

perspectives that exist in

a global context so that

they can examine the

firm strategies vis-à-vis

the global tensions and

be equipped to deal with

such issues in their

managerial roles more

effectively.

108

Creating Shared Value: Key toInclusive Business Growth

We at FSG (Foundation Strategy Group) believethat India Inc. is not only uniquely positioned to

lead the country to economic advancement, but alsoholds the power to solve many societal problems andhelp achieve inclusive growth. Thisrequires a new mindset to view suc-cess for business and society as inex-tricably linked, an idea we call creatingshared value. Shared value focuses onfinding the business opportunitieshidden in social problems.

There is no doubt that India representsone of the world’s fastest growingeconomies, with its annual growth ac-celerating at 8 per cent on average,and at times reaching upwards of 10per cent. This growth transformed thecountry, lifting hundreds of millionsof poverty-stricken population, bringing both interna-tional attention and investment. However, despite in-creasing the incomes, health, and financial security formillions, this growth has been far from inclusive. Thecountry will still fall short of several of its MillenniumDevelopment Goals: For example, by 2015, we expectthat 40 per cent of the Indian children will remain un-

der-nourished. The government alone cannot solve thesecomplex social problems. Philanthropy can also helpcatalyze change, but charity has a limited ability toachieve scale in a sustainable manner. The private sec-tor, however, possesses skills and technologies neces-sary for innovation, and excels at developing sustainablesolutions to identified needs and taking such solutions

to scale.

The FSG co-founders – Michael Por-ter, Professor at the Harvard BusinessSchool, and Mark Kramer, Senior Fel-low at the Harvard Kennedy School— first introduced the concept of “cre-ating shared value” (CSV) in “Strat-egy and Society,” in their 2006 HarvardBusiness Review article. The authorsmore recently expanded on this ideain a January 2011 follow-up piece en-titled, “Creating Shared Value.”

Creating shared value means closelyexamining the linkages between economic and socialprogress. When businesses invest to spur better health,improve education, and generate higher productivity,they expand their customer base and increase the pur-chasing power for their goods and services. Similarly,the discovery of new business models that addressunmet social needs can be the source of future business

Creating Shared Value in India: The Future for Inclusive Growth

Lalitha Vaidyanathan Melissa ScottMD, FSG FSG Social Impact Consultantse-mail: [email protected] e-mail: [email protected]

India Inc. is not only

uniquely positioned to

lead the country to

economic advancement,

but also holds the power

to solve many societal

problems and help

achieve inclusive growth.


contemporariness to examine and engage with the reallife complexity that is likely to unfold as the course isbeing taught.

An integrated course on responsible business is like awoven tapestry. It has the richness of texture contain-ing aspects of Governance, ethics, CSR, and sustaina-bility. Its colours are the various themes that have beendiscussed above. The role of the faculty is that of aweaver who is able to design and weave the tapestry.

While there is a science to weaving tapestry, what capti-vates is the aesthetics, the designs, and colours in thetapestry. A course on responsible business in a similarmanner has a science associated with the content in thefour areas of CSR, corporate governance, sustainability,and ethics; however, its richness lies in the manner inwhich, individual managers and collectives in organi-zations through their personal orientations shape andtransform the future of ethical corporations and respon-sible business.


growth. New processes that conserveenergy and natural resources can in-crease profit margins. CSV compelsfirms to view social progress as a keydriver of long-term economic valuecreation.

The time for CSV in India is now andthe good news is that it is not a ques-tion of IF Indian companies need toundergo this transformation butHOW they will successfully do so.

Creating Shared Value: Goingbeyond Traditional CSRApproaches

Corporate social responsibility (CSR)has been the primary mechanism bywhich Indian companies have con-tributed to societal development. Indian corporationshave long believed that the purpose of business extendsbeyond simply generating share-holder value to also address socialproblems. From the Tata Group morethan a century ago to the Bharti andWipro examples more recently, Indiancorporations have embraced their ob-ligations to society and given gener-ously to their communities.

However, much of Indian CSR mani-fests as philanthropic efforts that tar-get the well-being of employees andlocal communities around the place ofbusiness operation. While these ef-forts have yielded important results,they are rarely able to achieve socialimpact at a large scale and in waysthat are sustainable in the long run.

These efforts touch only a fraction of acompany’s financial resources (oftenless than 1%-2% of net profits) and relyon limited opportunities for employeevolunteerism, rather than capitalizingon the most valuable assets that busi-nesses bring to bear – the full use oftheir core competencies while in pur-suit of profit. As a result, our largestCSR efforts reach hundreds of thou-sands of recipients, while the need isin the millions.

CSV offers an alternative path. Ratherthan viewing social needs as the pre-rogative of solely CSR and philan-thropy, CSV focuses on finding thebusiness opportunities hidden in socialproblems. Issues like poverty, pollu-

tion, and poor health are core business concerns that havea substantial impact on growth and operational effi-

ciency. When businesses tackle socialproblems as a central part of theircompetitive strategy, they achievelarge-scale and fundamentally sus-tainable changes in society.

Shared value differs from traditionalCSR in that it compels firms to viewsocial progress as a key factor in thedevelopment of their business strat-egy (Figure 1). It requires companiesto break previous assumptions thattrade-offs exist between social goodand corporate profitability. In theirmost recent article, Porter and Kramersuggested that companies can createshared value opportunities in threeways:

Figure 1: Comparison of Traditional CSR and Creating Shared Value

Traditional CSR Shared Value

Motivation Corporate reputation and license to operate Competitive advantage

Driver External stakeholders Corporate strategy

Measurement Spending, standard ESG metrics Social and economic value created

Management CSR departments Across the whole company

Social Benefit Successful projects Large-scale sustainable change

Business Benefit Risk reduction and goodwill New business opportunities

Shared value differs from

traditional CSR in that it

compels firms to view

social progress as a key

factor in the development

of their business strategy.

It requires companies to

break previous

assumptions that trade-

offs exist between social

good and corporate

profitability.

Creating shared value

means closely examining

the linkages between

economic and social

progress. When

businesses invest to spur

better health, improve

education, and generate

higher productivity, they

expand their customer

base and increase the

purchasing power for

their goods and services.

110

1. Reconceiving products and mar-kets: Companies can meet socialneeds by developing innovativeproducts and services that betterserve existing markets or allowaccess new ones

2. Redefining productivity in thevalue chain: Companies can im-prove the quality, quantity, cost,and reliability of inputs, produc-tion processes, and distributionsystems, while simultaneously act-ing as a steward for essential natu-ral resources and driving economicand social development

3. Enabling local cluster development: Companies donot operate in isolation from their surroundings. Tocompete and thrive, they need a strong competitivecontext that includes reliable local suppliers, func-tioning infrastructure of roads, and telecommunica-tions, access to talent, and an effective and predictablelegal and regulatory framework.

The key enabler for creating shared value, and there-fore competitive advantage, is innovation in all aspectsof business operation including product development,business modeling, delivery channel development, andmanagement approaches. Sharedvalue cannot be achieved through in-cremental change of existing prod-ucts, processes, or approach – for ifthat were the case, business wouldhave already identified and capital-ized on these opportunities.

Opportunities to create shared valueare particularly abundant in develop-ing markets like India where the so-cial needs are so pressing and sopresent that business will struggle toprosper in the long term without ad-dressing them. It is important to notethat the specific social issue that isaddressed and the shared value thatis created will differ markedly acrossindustries and companies – but fromFSG’s experience in helping a multi-

tude of companies identify sharedvalue opportunities, we can say de-finitively that every company hasthem.

Creating Shared Value in India:Case Examples

FSG’s recent research into sharedvalue efforts in India uncovered anumber of innovative efforts that arecreating economic value while con-tributing to meaningful and sustainedsocial impact at scale. Below we pro-file a few of these efforts we uncov-ered in our research.

Reconceiving Products and Services

We are seeing companies gear up to fulfill the demandfor products and services that meet the pressing needsof the society such as low-cost urban housing, improvednutrition, and clean air and water. For example, foodcompanies that were traditionally occupied with driv-ing consumption by improving taste are now refocusingon addressing society’s need for better nutrition. Britan-nia’s Milk Bikis and Tiger biscuits are fortified with iron,a micro-nutrient that is deficient in 60 per cent of theIndian children. Supplemented with education and ad-vocacy, Britannia has used its reach into half a billion

households in India to increase aware-ness and availability of iron in the In-dian diet. The key to Britannia’ssuccess was innovation. The companydescribes how it took the R&D team16 trials to get the balance of iron-ef-fectiveness, taste, and cost, just right.

Redefining Productivity in the ValueChain

A company’s value chain inevitablyintersects society in numerous ways -for example, in energy and water use,greenhouse gas emissions, waste dis-posal, and employee skills. A deeperunderstanding of productivity andthe negative consequences of short-term cost reductions is bringing a newapproach to company’s value chains.

Food companies that

were traditionally

occupied with driving

consumption by

improving taste are now

refocusing on addressing

society’s need for better

nutrition. Britannia’s Milk

Bikis and Tiger biscuits

are fortified with iron, a

micro-nutrient that is

deficient in 60 per cent of

the Indian children.


Shared value cannot be

achieved through

incremental change of

existing products,

processes, or approach –

for if that were the case,

business would have

already identified and

capitalized on these

opportunities.


One example of a shared value ap-proach to procurement is Nestle’s ap-proach to its Moga milk factor inPunjab. Nestle’s approach goesagainst the commonly accepted pro-curement principle of commoditizingand exerting maximum bargainingpower on suppliers to drive downprices. Since opening the Moga fac-tory in 1961, Nestle has invested invillage infrastructure such as storagetanks, chilling centres, artificial in-semination centres, and veterinaryaid. It provided training and adviceon improving dairy practices through field camps andeducational tours. Finally, Nestle subsidized the pur-chase of equipment such as milking machines andhelped farmers access financial services. Such effortsdrastically increased Nestle’s supply of milk to 9,50,000kgs per day in 2005, from 511 kgs per day in 1961. Thisimproved production trickles down to every farmer sup-plying to the milk factory.

Enabling Local Cluster Development

Clusters are geographic concentrations of interconnectedbusinesses, suppliers, and associated institutions in aparticular field. Clusters increase the productivity andcompetitiveness of companies and as such, are a criticalaspect of business strategy. Novartis, through its socialbusiness, Arogya Parivar has developed local healthcareclusters in rural parts of India. Through its local healtheducation programmes, addressing health-seeking be-haviour, health camps bringing physicians to rural ar-eas, and dedicated sales force with culturalunderstanding to mitigate mistrust,Arogya Parivar has succeeded in bring-ing healthcare to 42 million Indians.This expanded market has brought in-creased revenues to Novartis, whichsells a portfolio of appropriate and af-fordable medicines to these patients.

Shared Value is the Future

In today’s increasingly competitivecontext, paired with global economicslowdown, there is no question thatshared value is the future. Sharedvalue is an especially ripe opportunity

for Indian business leaders to securenew competitive positions while ad-dressing the unmet social needs at thebottom of the pyramid. Although eachcompany’s approach to shared valuewill be unique, we have identified tencommon building blocks of creatingshared value that together provide ablueprint for successfully adoptingthis approach (Figure 2).

1. Vision: Creating shared valuestarts with an explicit strategic de-cision by corporate leaders. With-

out a commitment at the top, companies are unlikelyto be able to marshal the resources, focus, and long-term thinking required to make a meaningful impact.Moreover, engaged senior managers set the tone, andthey unleash the energy and creativity of the entirefirm.

2. Prioritize key shared value issues: A good strategyshould be tailored to reflect a company’s unique po-sitioning, capabilities, and competitive landscape. Itshould identify a handful of genuine social challengesthat also represent cost-reduction or growth oppor-tunities, and prioritize the areas where it is bestplaced to act. Equally important, companies mustshape this identification and prioritization processinternally, rather than allow external stake-holdersto be the driving force. That way, they can retain con-trol over their strategic agenda and maximize theirchances of advancing strategic goals in ways that cre-ate value for society and the business.

3. Set specific, ambitious goals:Goal-setting is an essential man-agement tool for creating sharedvalue. It focuses on activities, cre-ates and sustains momentum, andprovides a basis for internal andexternal accountability. Well-crafted goals are ambitious — justas business units do not outper-form without being stretched, cau-tious incrementalism is unlikely tospur the leaps in innovation thatare needed to make a serious im-pact. However, companies also

Shared value is an

especially ripe

opportunity for Indian

business leaders to secure

new competitive

positions while

addressing the unmet

social needs at the

bottom of the pyramid.

Goal-setting is an

essential management

tool for creating shared

value. It focuses on

activities, creates and

sustains momentum, and

provides a basis for

internal and external

accountability.

112

strike a balance between clearly defining desired out-comes and allowing managers the freedom to decidehow to meet them.

4. Deploy a wide range of assets to address the issue:These assets can include cash, goods, and services;the skills of employees; and political and businessinfluence. The most effective companies bring to bearan imaginative combination of assets in areas wherethey have an edge over other actors.

5. Manage efforts holistically acrossthe organization: In the most ef-fective companies, social engage-ment is not confined to an isolatedsilo, but instead is integrated intoa wide variety of roles and func-tions, and often overseen at theboard level.

6. Collaborate with partners: Mostcompanies consult with stake-holders and work with NGOs, ei-

ther as an implementing partner or a grantee. How-ever, companies that create shared value go beyondthis. They develop consultation processes that informaction, but do not allow the loudest voices to domi-nate the agenda. They also take part in coalitions thattap into a range of complementary capabilities fromacross fields and industries to tackle a common is-sue.

7. Measure progress on key indica-tors: Companies that create sharedvalue track the usual performancemeasures against a baseline, butthey also gauge underlyingchanges in the targeted issue.

8. Learn from measurement to im-prove efforts: The most successfulinitiatives are constantly on thelookout for opportunities to opti-mize investments and to rethinkaspects that are not working aswell as hoped.


Figure 2: The Building Blocks of Creating Shared Value

VISIONAn explicit vision of the company asan engine for creating shared value

STRATEGYA robust strategy that identifies a clearfocus and articulates ambitious goals

DELIVERYEffective delivery that leverages assets andexpertise across functions and businessunits within the company, as well as fromexternal partners and stakeholders

PERFORMANCEManagement for performance thatseeks to measure and learn fromresults, bring successful efforts toscale, and communicate progress

Engagement isseen as integralto strategy byboard & senior

leadership

Key issues ofshared value

are prioritized

... for whichambitious

shared valuegoals are set

An array ofassets areleveraged,

including cash,goods, expertise,

and influence

Efforts aremanaged

holisticallyacross thecompany

Partners aremobilized for

information andaction

Relevant resultsare activelymeasured

Learnings fromengagement are

used

Successfulefforts are

brought to scale

Progress iscommunicatedinternally and

externally

There is no doubt that

transforming a company

to create shared value is

a change process. It will

take time, effort, and

persistence, but will bring

results for both business

and society.


In a context where the benefits of globalization andliberalization are constantly being debated upon, there

is a pressing need to discuss the costs that have tonedthese socio-economic processes. Globalization was en-visaged to make the world into a better, more egalitar-ian place, resulting in improved productivity and betterliving standards, especially in developing countries.However, it has thrown up new challenges such as grow-ing inequality across and within nations, instability infinancial markets and environmental corrosion. Whileliberalization has several dimensions, simply put, it ne-cessitates minimal State interference and greater partici-pation of and control by private players. On the face ofit, one may argue that this has meant more freedom sincethe authoritative government mechanism has beencurbed, but a society driven by and modeled forcorporates (whose sole motive is profit maximization)is dangerous in a poor, agrarian country like India. Lib-eralization has also meant that the government haspulled out of the social sector, shirked its responsibilitytowards ensuring basic needs of the people like health,sanitation, clean drinking water, housing, and educa-tion. This has left an institutional void that can effec-

tively discharge these functions and social obligations.Thus with mandatory Corporate Social Responsibility(CSR) for all Central Public Sector Enterprises (CPSE)by the Department of Public Enterprises since 2010, itappears that the government (through its enterprises)has re-established itself as a responsible armament toits teeming population of hungry, illiterate, and poorchildren. While the State machinery has pulled out ofthe social sector, the Public Sector Undertakings (PSU)owned by it are mandated to earmark a certain percent-age of their net profits towards investment in commu-nity development and environmental protection andconservation. CSR has transformative potential byrefashioning both the corporate blitzkrieg as well as thestep-parently State.

In India, where people are divided on the basis of vari-ous social indicators, Darwinian ‘survival of the fittest’logic does not convince. Marginalized communities needsupport systems of ‘positive discrimination’ in order forIndia to really ‘shine’ in its human development indi-ces, rather than boast of a mere economic growth. Un-der such circumstances, which social constituency is to

From Indiscriminate Shooting by Corporate Hunters toCreation of Responsible ‘Boom-E-Rang’ Societies

Sasmita Palo Rohan SarmaAssociate Professor and CSR Training Coordinator Programme OfficerNational CSR Hub National CSR HubTata Institute of Social Sciences Tata Institute of Social Sciencese-mail: [email protected] email:[email protected]

9. Address issues at scale: Opportunities to createshared value often lie in large, complex social chal-lenges. To unlock solutions, it is essential to act atscale — otherwise, the impact on both social progressand corporate competitiveness will be negligible.

10. Communicate progress to both external and inter-nal audiences: Effective companies go far beyond tra-ditional CSR reporting, employing a range of commu-nications approaches to reach specific groups in tar-geted ways. The organizations have a clear sense ofwho consumes the information they provide, whatthose people need to know, and how to meet thoseneeds efficiently.

There is no doubt that transforming a company to cre-ate shared value is a change process. It will take time,effort, and persistence, but will bring results for bothbusiness and society.

India’s strong economic growth as well as severe socialchallenges and national desire for change, put the coun-try in a unique position to show the world how to createshared value at scale. We hope that ideas and examplesin this paper inspire companies, government, and civilsociety to leverage the power of business to achievemeaningful and lasting inclusive growth.

114

be held responsible for socio-eco-nomic inequities and growing dispari-ties between the rich and the poor? Wewish to use symbolism to further ourcase.

It cannot be doubted that in a freemarket economy, the corporates arecalling the shots (literally) and today,development flows from the barrel ofthe gun. The corporate honchos are inpossession of the gun. Thesecorporates cannot be accused of be-ing discriminatory because whileshooting, they do not differentiate be-tween natural resources, people, andother marginal corporates. They sparenone. But, this indiscriminate huntingby the corporate is an unsustainablemodel which leads to the endanger-ment of the ‘hunted’, which includeseverything from the ecology to indig-enous cultures to ‘other’ people. Thus,the solution to the promises of globali-zation in ensuring an equitable world lies in re-fashion-ing the hunter by a shift to what we refer to as a‘boom-e-rang’ society. In a ‘boom-e-rang’ society, ‘boom’or economic growth remains an ideal, but just like a boo-merang comes back to its original destination, a modelneeds to be developed whereby what is used up, is bal-anced by a striving to replenish, regenerate, and buildresilience. This is the fundamental essence of CSRwhereby the corporate hunter is held responsible andaccountable to give back to the community and envi-ronment all that it extracts from it.

However, the concept of CSR is fluid and lacks clarity.At the very outset, one must acknowl-edge that the acronym of CSR has var-ied definitions. For us, CSR is anideology that is governed by the lawsof Co-creation, Sustainability and Re-silience. Thus, ascribing to this defi-nition of CSR, CSR as an idea is not tobe viewed just as a moral obligationof the corporate, but as fundamentalto the very essence of living. In the In-dian context, CSR is vulnerable to thefollowing crises:

Crisis of conceptualization: There isno universal definition. Although theessence remains welfare of people andcommunities, CSR may be maskedthrough vested interests.

Crisis of agenda: Corporate are oftenfaced with the dilemma of prioritizingsectors for implementing CSRprojects. In a country like India facedwith multiple challenges, CSR initia-tives are often burdened withprioritizing sectors.

Increasingly, the term CSR is being re-placed by CSV (Common SharedValue). CSV is premised on the logicthat what is good for the communityis inevitably good for business. Manycorporates have started investing re-sources and efforts to generate sharedvalue by conjuring up the crossroadsbetween society and corporate per-formance. However, the need of the

hour is a paradigm shift to conceptualizing economicgrowth and social development as existing along a con-tinuum rather than assuming that profit maximizationis realized at the expense of the community.

While the private corporate is difficult to tame, for onecan simply be optimistic that his sense of responsibilitytowards society and nature is restored urgently, the gov-ernment has managed to crack the whip on the state-owned enterprises by mandating CSR initiatives. Thecomponent of mandatory CSR, though a step in the rightdirection, is not an encouraging trend. CSR as an effec-tive, sustainable business model cannot be successful un-less there is an element of voluntarism associated with

the entire process. The real challengefor CSR lies in an organization draft-ing CSR policies and approaches thatare cognizant of the fact that the veryexistence of the corporate is deter-mined by its sustainable practices.

In India, the notion of CSR has in away always been ingrained in the cul-tural ethos. In traditional societies likeIndia, the welfare of the communityhas always gained precedence over

CSR as an effective,

sustainable business

model cannot be

successful unless there is

an element of

voluntarism associated

with the entire process.


Just like a boomerang

comes back to its original

destination, a model

needs to be developed

whereby what is used up,

is balanced by a striving

to replenish, regenerate,

and build resilience. This

is the fundamental

essence of CSR whereby

the corporate hunter is

held responsible and

accountable to give back

to the community and

environment all that it

extracts from it.


individual greed. For a culture basedon the principles of VasudhaivaKutumbakam, restraint, and renuncia-tion, why does the question of CSR asan isolated concept even arise?

It was with privatization and eco-nomic liberalization in the 1990s thata sense of corporate greed was born.The corporate hunter, from huntingto survive, began hunting to accumu-late. He (deliberate usage of gender)quickly transformed into the corporate blitzkrieg thatwas bent upon shooting the planet and other (inferior)people to make profits. He was no longer interested inthe Effects of Trickle Down but was forced to take ref-uge in the Triple Bottom Lines. Under these circum-stances, some corporate hunters (mostly hailing from‘modern’ civilizations), who were visionaries, realizedthat if their counterparts continued to shoot and huntindiscriminately, their very survival and most impor-tantly their legacy would come to an end once the al-ready scarce resources got exhausted. Thus, fuelled byglobalization, which is capitalism in its most aggressiveform, there was a need to establish a new face of con-scious, sustainable capitalism – CSR. If we were to rear-range the term, we would have RSC or RagingSustainable Capitalism. Even the Department of PublicEnterprises guidelines on CSR for theCentral Public Sector Enterprisesstates, ‘Every CPSE should shoulderresponsibility for restoring/compen-sating for any ecological damage thatis taking place as a result of its opera-tions’ (Clause 3.1, ix, pg.9).

Thus, in no way does the neo-liberalState propose a restraint on corporategreed for capitalist appropriation; nei-ther does it suggest an alternative tothe current trajectory of development.It is indeed a ridiculous propositionto suggest that destruction of ecologyor displacement of people can eitherbe restored or be compensated. Interms of the symbolism essayed in thispaper, CSR is thus a means of sustain-ing conscious capitalism where hunt-ing is not altogether banned, but

simply curbed.

Our experiences in CSR have shownus that many corporates undertakecommunity development activitiesnot so much for the welfare of thecommunity per se, but to either extendbenefits to employees or increase thechances of its survival in a highly com-petitive environment through build-ing a positive brand image throughgoodwill creation. In several cases,

CSR activities are identified adhering to a top-down ap-proach whereby corporates decide the nature of com-munity intervention by considering themselves ‘theknower’. In many cases, these interventions, undertakenwithout conducting a needs assessment study, do notbenefit the community in actual terms. It simply pro-vides the corporate with statistics to boast of with re-gard to CSR. It may be mentioned in this context, thatthere often appears to be a sense of competition amongcorporates with respect to their CSR budgets and scaleof activities. In our opinion, rather than competing onthe scale of implementing CSR activities, corporatescould synergize their efforts in identifying backwardareas in the country and work collectively towards per-ceivable and measurable impacts.

Being cognizant of such ineffective, adhoc CSR practices in the past, the Min-istry of Heavy Industries and PublicEnterprises, GOI, came out with a setof guidelines on Corporate Social Re-sponsibility for Central Public SectorEnterprises. The Ministry also set upthe National CSR Hub to facilitate theCSR activities of CPSEs. The NCSRHub is essentially a think tank, a na-tional repository of CSR data and pro-vides professional consultancyservices to various stakeholders ofCSR. The NCSR Hub also helps CPSEsidentify needs of communitiesthrough recommendations in baselinestudies. Moreover, through its inten-sive, multi-layered scrutiny process,the NCSR Hub empanels credible or-ganizations as partner organizations,to implement CSR activities.

Fuelled by globalization,

which is capitalism in its

most aggressive form,

there was a need to

establish a new face of

conscious, sustainable

capitalism – CSR.

Many corporates

undertake community

development activities

not so much for the

welfare of the community

per se, but to either

extend benefits to

employees or increase

the chances of its survival

in a highly competitive

environment through

building a positive brand

image through goodwill

creation.

116

Reflecting on the need for corporatepersonnel to be well-versed with CSRapproaches and policies, the NCSRHub conducts regular training work-shops for CPSEs to build capacities ofemployees. This CSR training is cru-cial considering the fact that most cor-porations do not have a separate teamdedicated to CSR and are often oblivi-ous to the sensitivity and ethics in-volved in the development sector.Apart from the central vision of ac-quainting personnel with CSR, thelogic behind the training workshopsat the NCSR Hub is to create an ena-bling framework whereby allstakeholders of CSR can actively participate in ‘doingCSR’.

However, the lacunae in the ‘doing CSR’ aspect for PSUsmay be attributed to a lack of a holistic commitment tothe same. While some CPSEs are purely driven by theCSR marks, some continue to perceive CSR as philan-thropic exercise rather than as an extension of their busi-ness goals. Even today, after two yearsof the CSR guidelines being issued bythe DPE, CSR for corporates continueto be limited to merely earmarkingbudgets for CSR activities and in somecases monitoring CSR activities with-out a clear methodology. The NationalCSR Hub is committed to bringingabout a shift in corporate mindsetfrom the philanthropic, ad hoc ap-proach to a sustainable approachwhereby corporates can become ‘ac-tual doers’ of CSR rather thanoutsourcing various aspects of theCSR exercise.

However, it may also be pointed outthat the essence of CSR has alwaysbeen embedded among the public sec-tor corporations in India. Post-inde-pendence, the state-owned enterpriseswere not only agents of nation building, for most, CSRwas embedded in their very operations. In the areas

where public sector corporations op-erated, community development ac-tivities and employment generationwere an integral part of their opera-tions and their success stories may beattributed largely to their ability tocreate ‘trust capital’ in the communi-ties where they operated. Thus, man-datory CSR for CPSEs, though a stepin the right direction, does not markprogress in the Indian CSR trajectory.For CSR to be truly a successful model,it needs to be voluntary and the pri-vate sector should champion thecause, voluntarily. Corporations needto expand their prism and initiate sus-

tainable projects. This shift in corporate mindset in inte-grating business goals with social goals has potential inmaking CSR a workable model in India. For a businessto sustain itself, the business must have a larger socialpurpose. However, simply having a social purpose isnot enough for doing CSR. Corporates not only need tomove beyond shareholder value and embrace a (multi)stakeholder approach, they also need to focus on areas

in which they operate. By doing CSRin areas that are related to the core ofthe business, the corporate is able toadopt a sustainable CSR policy andapproach. After all, the corporate sec-tor has an unwritten contract with so-ciety whereby it is obliged to ensurethat it does not pursue immediateprofit objectives at the cost of long-term interests of the society. CSR poli-cies must be devised in ways thattransform the corporate hunter into anactive regenerator. We are hopeful thatthis kind of a business paradigm willensure the achievement of high eco-nomic growth rates as well as createhappy citizens. But the question re-mains, which one of us hun-ters shalltake the first bold step in exercisingrestraint and caution in order to

emerge responsible citizens?


The corporate sector has

an unwritten contract

with society whereby it is

obliged to ensure that it

does not pursue

immediate profit

objectives at the cost of

long-term interests of the

society. CSR policies

must be devised in ways

that transform the

corporate hunter into an

active regenerator.

Simply having a social

purpose is not enough for

doing CSR. Corporates

not only need to move

beyond shareholder

value and embrace a

(multi) stakeholder

approach, they also need

to focus on areas in

which they operate.

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