csr initiatives of indian companies

8/7/2019 CSR Initiatives of Indian Companies

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to meet theirown needs", and isgenerally understood asfocusingon how to achieve the integratioeconomic, environmental, andsocial imperatives. CSR alsooverlaps andoften issynonymous with featuresofotherrelated conceptssuch as corporatesustainability, corporate accountability, corporresponsibility, corporate citizenship, corporatestewardship, etc..

CSR commitments and activities typically address aspectsofa firm's behaviour (including its policie

practices) with respect tosuch key elements as; health andsafety, environmental protection, humarights, human resource management practices, corporategovernance, community development, anconsumer protection, labour protection, supplierrelations, businessethics, andstakeholderrights.

Corporations are motivated to involvestakeholders in theirdecision-making and to addresssocietalchallenges because today'sstakeholders are increasingly awareof the importance and impact ofcorporatedecisions upon society and theenvironment. Thestakeholders can rewardor punishcorporations. Corporations can be motivated to change their corporate behaviour in response to thebusiness case which a CSR approach potentially promises. This includes:

1. strongerfinancial performance and profitability (e.g. through eco-efficiency),

2. improved accountability to and assessmentsfrom the investment community,

3. enhancedemployee commitment,

4. decreased vulnerability through strongerrelationships with communities, and

5. improvedreputation and branding.

Criticisms and concernsCriticsofCSR as well as proponentsdebate a numberofconcernsrelated to it. These include CSR'srelationship to thefundamental purpose and natureofbusiness and questionable motivesforengag

CSR, including concerns about insincerity and hypocrisy.

Critics concerned with corporate hypocrisy and insincerity generally suggest that bettergovernmeninternational regulation andenforcement, rather than voluntary measures, are necessary toensurecompanies behave in a socially responsible manner. CSR could prove to be a valuable asset in an aMergers & Acquisitions, as it helpsfirmsspread their brand nameINDIAN SCENARIOEven much before the issue became a global concern, India was awareofcorporatesocial responsib(CSR), due to theeffortsoforganisationssuch as the Tata Group. (Around 66 per cent ofTata Sonsholdinggroup ofthe Tata Group, is today owned by a trust).

Corporate companies like ITC have madefarmerdevelopment a vital part of its businessstrategy, amade majorefforts to improve the livelihoodstandardsofrural communities. Unilever is using micrenterprises tostrategically augment the penetration ofconsumer products in rural markets. IT comlike TCS and Wipro havedevelopedsoftware to help teachers and children in schools across India tofurther the causeofeducation. The adult literacy software has been a significant factor in reducingilliteracy in remote communities. Banks and insurance companies are targeting migrant labourers astreet vendors to help them through micro-credits andrelatedschemes.


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In June 2008, a survey was carriedout by TNS India (a research organization) and the Times Founwith the aim ofproviding an understandingoftheroleofcorporations in CSR. Thefindingsrevealedover 90 per cent ofall major Indian organizationssurveyed were involved in CSR initiatives. In factprivatesector was more involved in CSR activities than the public andgovernment sectors. The leaareas that corporations were involved in were livelihood promotion, education, health, environmentwomen'sempowerment. Most ofCSR ventures weredone as internal projects while a small proport

were asdirect financial support to voluntary organizationsor communities.

In a survey carriedout by the Asian Governance Association, which ranks the top 10 Asian countriecorporategovernance parameters, India has consistently ranked among the top three along withSingapore and Hong Kong, for the last eight years.

In anotherstudy undertaken by automotiveresearch company, TNS Automotive, India has been rasecond in global corporatesocial responsibility. State-owned Bharat Petroleum and Maruti Udyog wranked as the best companies in India. Bharat Petroleum and Maruti Udyog cameon top with 134 each, followed by Tata Motors (133) and Hero Honda (131). Thestudy was basedon a public goodwindex and India received 119 points in the index against a global averageof100. Thailand was at thslot with 124 points.

Several foundationsrun by corporate houses plan todevise a common strategy toensure transparetheirsocial and community development operations, such as trackingspending in and progressofsprojects in their annual reports.

Theeffort issignificant because it brings together a widerangeof Indian companies toshare ideasinnovatingsustainable programmes. Among them are Multi Commodity Exchangeof India Ltd, AnilDhirubhai Ambani Group and media company Bennett, Coleman and Co. Ltd,

Audit firm KPMG will partner with them toofferguidanceon evaluating corporatesocial responsibiliCSR programmesa trend companies areslowly embracing as India'sexpandingeconomy contrastsharply with growing local protestsover landforfuture industrial projects.

The network alliancestemsfrom thefirst sustainability summit that wasorganized in January by thAssociated ChambersofCommerce and Industry of India.

CSR could prove to be a valuable asset in an ageofmergers and acquisitions, especially as it helpscompaniesspread their brand name, The new network will alsoserve as a common ground to lobbythegovernment for taxexemptions andsafeguardother interests in thefuture.

Indian companies have made little progress in reportingdevelopment projects. Andonly 48 companhavesofargiven their commitment tosupport the United Nations Global Compact, a charterforimproving theglobal businessenvironment through standards, such as labourrights andfightingcorruption.

Addressing business leaders in May last year, Prime Minister Manmohan Singh said "Corporatesociaresponsibility must not bedefined by tax planningstrategies alone. Rather, it should bedefined witframework ofa corporate philosophy, which factors the needsofthe community and theregions in a corporateentity functions."

Somesay companies have an inherent "mental block" in reportingdevelopment programmes. A recKPMG study among 27 Indian companiesshowed that a mere 8% mentioned theirsocial expenditurtheir annual reports, andonly 25% filed CSR reports at all. But a quarterof them are alsosignatori


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the Global Reporting Initiative, a 10-year-old movement started by an NGO called Coalition forEnvironmentally ResponsibleEconomies (CERES) and the United NationsEnvironment Programme. encourages companies to make voluntary disclosures and laysdown framework on improvingreporprinciples.

"Most companies tend togive to charities than make long-term development commitments. When a

company voluntarily opens up forself-evaluation, it creates valueforshareholders when competingother companies," saidParul Soni, associatedirectorofKPMG's Aid and Development Services.

An estimated 100 corporatefoundations and 25 foreign firms are involved in CSR activities in Indiastatisticson input andoutput areelusive.

According to Times' Pandey, the Indian corporatesectorspent Rs30,000 croreon social expenditureduring the last financial year, up from Rs17,500 crore the previous year. Quotingfrom a governmereport, hesaid, companiesdrew a total exemptionsofRs5,500 crore under income-tax laws last yeThesefigures, an analyst said, sound improbable as Indian companiesstill do not distinguish betwephilanthropy and internal practices to benefit stakeholderssuch asemployees and community.

Companies, too, continue torely on different models toearmark itssocial expenditure, making it dito measure theoverall impact.

For instance, the Steel Authority ofIndia Ltd (SAIL), the country's largest steel company, spent Rs1croreon CSR last year; this was 2% of its profit after tax, exclusiveofdividend tax, according to SAspokesperson N.K. Singhal. Yet others, such as Tata Steel Ltd, which runs a 850-bed hospital andrprojects in 800 villages around Jamshedpur, spends an averageofRs150 crore as part of its annuarevenueexpenditure.

What eventually makes up for CSR ofa company ultimately dependson leadership; as part ofcompdecision, about 66% ofTata Sons, the holdinggroup of the Tata group, is today owned by a trust.

Pharmaceuticals company Jubilant Organosys Ltd, already runs an anti-tuberculosis programme witgovernment ofUttarPradesh. Apart from schools and hospitals that arerun by trusts andsocieties,government, too, isexploring to widen thescopeofpublic-private partnerships to build and maintaschools and hospitals in return for a fixed annuity payment.

CONCLUSIONThe concept ofcorporatesocial responsibility hasgained prominencefrom all avenues. Organizationmust realize that government alone will not be able toget success in itsendeavor to uplift thedowntrodden ofsociety. The present societal marketing concept ofcompanies is constantly evolvinghasgiven rise to a new concept-Corporate Social Responsibility. Many of the leading corporations athe world hadrealized the importanceofbeing associated with socially relevant causes as a means

promoting their brands. It stemsfrom thedesire todogood andget selfsatisfaction in return as wesocietal obligation ofbusiness.

The Indian corporatesectorspent US$ 6.31 billion on social expenditureduring 2007-08, up from 3.68 billion spent during the previousfiscal. The Steel Authority of India Ltd (SAIL), the country's lasteel company, spent US$ 21.05 million on CSR last year; Tata Steel Ltd, (which runs a 850-bed hoandrural projects in 800 villages around Jamshedpur), spends about US$ 31.58 million as part of itannual revenueexpenditure. Now there are plans to also introduce CSR in thesmall and medium


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enterprises (SME) sector to increase itsreach in remote areas.

About "CSR( Corporate social responsibility) ofBanking Industry" topic:

Corporate Social Responsibility has become an integral part of corporate management strategy forbanking industry participants in recent times.

The banks are not only under pressure from the shareholders but also from other stakeholders such assuppliers, customers, brokers and so on to become more and more responsible in dealing with socialissues in its day to day operations. So, let us discuss everything about CSR initiatives from the bankingperspective.

csr initiatives of indian companies

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