CORPORATE CORPORATE SOCIAL SOCIAL

RESPONSIBILITRESPONSIBILITY IN INDIAY IN INDIA

What is Corporate Social What is Corporate Social Responsibility?Responsibility?

Also known as:Also known as: Corporate Conscience,Corporate Conscience, Corporate Citizenship,Corporate Citizenship, Corporate Social Performance, orCorporate Social Performance, or Sustainable Responsible BusinessSustainable Responsible Business

What is Corporate Social What is Corporate Social Responsibility?Responsibility?

It :It : is submission of social and ecological is submission of social and ecological

responsibility of companies,responsibility of companies, functions as a built-in, self-regulating functions as a built-in, self-regulating

mechanism,mechanism, it ensures active compliance of it ensures active compliance of

companies with the spirit of law, companies with the spirit of law, ethical standards, national and ethical standards, national and international norms. international norms.

What is CSR?What is CSR?

In a Developed In a Developed Country, CSR Country, CSR includes:includes:

Governance,Governance, Business ethics,Business ethics, Human Rights, andHuman Rights, and EnvironmentEnvironment

In a Developing In a Developing Country, CSR Country, CSR includes:includes:

Nation Building,Nation Building, Socio-economic Socio-economic

development,development, Employment,Employment, Education,Education, Health Care, andHealth Care, and Community Support.Community Support.

CSR DefinitionCSR Definition

Prince of Wales International Business Leaders Prince of Wales International Business Leaders Forum define CSR on basis of four issues:Forum define CSR on basis of four issues:

Corporate governance to include reputation, Corporate governance to include reputation, transparency, accountability and anti-corruption,transparency, accountability and anti-corruption,

Safety and Environment which comprises product/service Safety and Environment which comprises product/service safety, worker health and safety local environment safety, worker health and safety local environment quality,quality,

Access/development that includes initiatives in education, Access/development that includes initiatives in education, health-HIV/AIDS, digital divide, enterprise development, health-HIV/AIDS, digital divide, enterprise development, and;and;

Human Rights that include labour standards, security and Human Rights that include labour standards, security and indigenous people.indigenous people.

Carroll’s Four Part Carroll’s Four Part DefinitionDefinition

Carroll’s Four Part Carroll’s Four Part DefinitionDefinition

Understanding the Four Understanding the Four ComponentsComponents

Responsibility Societal Expectation Examples

Economic RequiredBe profitable.

Maximize sales, minimize costs, etc.

Legal Required Obey laws and regulations.

Ethical Expected Do what is right, fair and just.

Discretionary(Philanthropic)

Desired/Expected

Be a good corporate citizen.

CSR Philosphies in IndiaCSR Philosphies in IndiaMODELMODEL FOCUSFOCUS LEADERSLEADERS

ETHICALETHICAL

Voluntary Voluntary commitment by commitment by

companies to public companies to public welfare.welfare.

M K M K GandhiGandhi

LIBERALLIBERAL

Corporate Corporate Responsibilities Responsibilities

limited to private limited to private owners owners

(shareholders).(shareholders).

Milton Milton FriedmanFriedman

STAKEHOLDSTAKEHOLDERER

Companies respond to Companies respond to the needs of the needs of stakeholders-stakeholders-customers, customers, employees, employees,

communities, etc.communities, etc.

R Edward R Edward FreemanFreeman

CSR Paradigm in IndiaCSR Paradigm in India

SUSTAINABLEBUSINESS

CORPORATE COMMUNITYINVESTMENT

COMMUNITY AFFAIRS

PHILANTHROPY

POFIT FOCUS

CSR-UnderstandingCSR-Understanding

CSR as Value Creation.CSR as Value Creation. CSR as Risk Management.CSR as Risk Management. CSR as Philanthropy.CSR as Philanthropy.

CSR-UnderstandingCSR-Understanding

CSR Mandate-Company CSR Mandate-Company Bill 2013Bill 2013 Clause 135 (CSR clause) of the Company Bill Clause 135 (CSR clause) of the Company Bill

requires qualifying corporations to spend on CSR requires qualifying corporations to spend on CSR at least 2 per cent of its average net profit made at least 2 per cent of its average net profit made in the preceding 3 financial years.in the preceding 3 financial years.

Net Profit = Rs.5 Crore Turnover = Rs. 1000 Crore

Net Worth = Rs.500 Crore

ELIGIBLECOMPANIES

Myths surrounding CSRMyths surrounding CSR

CSR is not for small businesses

It is too complicated and technical

It is too expensive

It is a market gimmick

It is a separate corporate initiative

MythsMyths

What accounts as CSR ?What accounts as CSR ? Eradicating Hunger,Eradicating Hunger, Promotion of Education,Promotion of Education, Gender Equality & Empowering Women,Gender Equality & Empowering Women, Reducing child mortality & improving Reducing child mortality & improving

maternal health,maternal health, Combating HIV virus, other diseases,Combating HIV virus, other diseases, Ensuring Environmental Sustainability,Ensuring Environmental Sustainability, Employment Enhancing Vocational Skills,Employment Enhancing Vocational Skills, Contribution to the Prime Minister’s Contribution to the Prime Minister’s

National Relief Fund, andNational Relief Fund, and Other such matters.Other such matters.

PROCEDURE TO PROCEDURE TO COMPANYCOMPANY

“CSR Committee”

“CSR Committee”

Create “

“Corporate Social

Responsibility Policy”

““Corporate

Social Responsibility

Policy”

Develop

“Two percent of net profit”

“Two percent of net profit”

Allocate“CSR

Initiatives to be Reported”

“CSR Initiatives to be Reported”

Report

ExamplesExamples HUL’S Lifebuoy SWASTHYA CHETNA-a HUL’S Lifebuoy SWASTHYA CHETNA-a

health & hygiene education program, health & hygiene education program, educates people about health related educates people about health related precautions to 200 people million in rural and precautions to 200 people million in rural and urban areas.urban areas.

Tata Tea’s communication and is positioning Tata Tea’s communication and is positioning itself as a catalyst for social awakening itself as a catalyst for social awakening through JAAGO RE campaign.through JAAGO RE campaign.

Colgate Palmolive- SPREADING SMILES AT Colgate Palmolive- SPREADING SMILES AT PRATHAM (NGO), in association with IDA PRATHAM (NGO), in association with IDA organizes free dental checkups camps, organizes free dental checkups camps, supports free surgery of children and young supports free surgery of children and young adults suffering from cleft lips. adults suffering from cleft lips.

ExamplesExamples

Marico Industry’s brand Saffola Marico Industry’s brand Saffola organises FREE HEART CARE organises FREE HEART CARE CAMPS on World Heart Day every CAMPS on World Heart Day every year.year.

ITC- every 4 notebook that is bought ITC- every 4 notebook that is bought re. 1 goes for EDUCATION OF re. 1 goes for EDUCATION OF UNDER PRIVILEGED CHILDREN, & UNDER PRIVILEGED CHILDREN, & e-Choupal.e-Choupal.

ExamplesExamples

Idea Cellular – Infrastructure Idea Cellular – Infrastructure Development Of Mumbai PoliceDevelopment Of Mumbai Police

Cannon India – i-CARECannon India – i-CARE

P&G – SIKSHAP&G – SIKSHA

TOI – Lead IndiaTOI – Lead India

ExamplesExamples

Where Indian Companies Where Indian Companies Stand?Stand?

CompanyCompany RevenueRevenue Avg PATAvg PAT Actual Actual Spent on Spent on CSRCSR

2% of PAT2% of PAT

Indian OilIndian Oil 442,459442,459 7,7837,783 8383 156156

RILRIL 368,571368,571 21,13821,138 288288 423423

Tata SteelTata Steel 135,978135,978 3,8953,895 146146 278278

TCSTCS 48,89448,894 8,9358,935 5151 179179

Cairn IndiaCairn India 11,86111,861 5,1085,108 NANA 102102

HDFCHDFC 27,60627,606 4,1084,108 NANA 8282

InfosysInfosys 33,73433,734 7,1287,128 2626 143143

INDIA’S TOP 100 INDIA’S TOP 100 COMPANIESCOMPANIES

2% of PAT- 5611 Crores2% of PAT- 5611 Crores

Actual Spent – 1765 CroresActual Spent – 1765 Crores

ChallengesChallenges

Non-availability of Clear GuidelinesNon-availability of Clear Guidelines

Lack of Consensus on implementing CSR Lack of Consensus on implementing CSR issuesissues

Visibility FactorVisibility Factor

Narrow perceptions towards CSR Narrow perceptions towards CSR initiatives.initiatives.

ConclusionConclusion Increasing social issues impacts the entire Increasing social issues impacts the entire

society in general & business in particular society in general & business in particular because to a large extent business is because to a large extent business is dependent on the society for its growth & dependent on the society for its growth & prosperity.prosperity.

Both public & Private efforts must be extended Both public & Private efforts must be extended to solve the social problems identified.to solve the social problems identified.

CSR can thus be expressed in terms of three CSR can thus be expressed in terms of three principles: legitimacy, public responsibility & principles: legitimacy, public responsibility & managerial discretion.managerial discretion.

Need of the hour is to create innovative Need of the hour is to create innovative strategies & methodologies which creates win-strategies & methodologies which creates win-win situation for all & communicate to others win situation for all & communicate to others how consultative & collaborative model of how consultative & collaborative model of change is profitable for all concerned. change is profitable for all concerned.