2012

Corporate Social Responsibility

The new face of business

Saurabh Misra
Indian Institute of Planning & Management, Lucknow
10/1/2012

ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to FACULTY Mr. TARUN SINGH GANGWAR who gave me the golden opportunity to do this wonderful project on the topic:- CSR THE NEW FACE OF BUSINESSof subject SALES, which also helped me in doing a lot of Research and i came to know about so many new things. I am really thankful to them. Secondly, I would also like to thank my parents and friends who helped me a lot in finishing this project within the limited time. I am making this project not only for marks but to also increase my knowledge. THANKS AGAIN TO ALL WHO HELPED ME.

Table of Content
S No.
1. 2. 3. 4. 5.

Topic INTRODUCTION
Corporate Social Responsibility The Importance Of Corporate Social Responsibility Four Types of Corporate Social Responsibility Disadvantages of Corporate Social Responsibility Functions of Corporate Social Responsibility

Page

CSR in India
6. The four phases of CSR development in India

Case study
7. 8. 9. 10. 11. CASE 1: Integrating Company Practice and Context: Nestls Milk District CASE 2: Hindustan Unilever: Reach untapped markets with a Corporate Social Responsibility Business Model CASE 3: TATA STEEL Corporate Citizenship CASE 4: ITC LIMITED Corporate Citizenship CASE 5: PepsiCo-Corporate Social Responsibility

RESEARCH
12. 13. 14. 15. 16. 17. 18. Introduction Executive Summary Methodology Key Findings Of The Survey Challenges To C S R Initiatives In India Recommendations Sample Survey Questionnaire

Conclusion BIBLIOGRAPHY

INTRODUCTION
Jack Welch, the legendary CEO of General Electric asked for only one thing from his business managers, the worlds most diversified company that made products ranging from light bulbs to aircraft engines. Be the market leader in your business If you are not I will fix it, sell it or close it. He lived the mantra of competitive advantage if you dont have competitive advantages dont compete. The advances in telecommunications and the internet are quickly changing business models and making the business environment even more competitive. Businesses are constantly striving to find new and innovative ways to differentiate their products and services. Some take a rational approach by promoting facts and product features, and while others appeal to customers emotions. The new trend is for businesses to convince their customers that they care, are good corporate citizens, and appeal to altruistic and spiritual factors. At the same time businesses face a lot of pressure from civil society and government to focus beyond profits and contribute to society. The emergence of corporate social responsibility as a recognized function within the corporate sector is a direct result of this pressure. The premise of this article is that in reality, the business of business is business. To engage the businesses truly in any meaningful way towards social goals, we need to explore the business case of doing good is good business. Businesses support society in a number of ways. Foremost among them is providing goods and services to meet the needs of consumers. Other major contributions include providing employment opportunities to public and paying taxes for the functioning of government. In addition to these essential activities, businesses usually give to charities and engage in corporate philanthropy. The most that businesses stand to gain from this kind of generosity is an enhanced image of a good corporate citizen. There is no direct benefit to the businesses. Since 1981 a new type of sales promotion has been witnessed in the corporate world, called Cause Related Marketing (CRM). It is a specialized marketing tool for sales promotion with a social dimension. It involves a corporate organization promising customers that it will donate a portion of its sales to a charity in order to increase its sales. This gives the customers an opportunity to do pain-less charity while they go about buying things of everyday use. The corporate organization benefits through increased sales, improved image and motivated employees. The charity gets muchneeded funds and gets its message across. The consumers get a good feeling by supporting a cause. The ideal win: win: win situation is the reason for marketers high level of interest in this emerging discipline. CRM is the confluence of several factors including sales promotion, corporate social responsibility, individual philanthropy, consumer buying behavior, advertising, etc.
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According to research, consumers view CRM campaigns favorably and gender or income does not have any impact on such attitudes. Currently CRM is estimated to be a $1 billion industry and reportedly 76% of consumers are willing to switch to a brand that supports worthy causes, provided the price and quality are at par with other goods. The number of consumers who are willing to pay a little extra is about 58%. The number of consumers who are willing to try a new brand if they already consume the category is 54%. Consumer behavior specialists have linked this increased support of CRM to the third wave of branding. The theory rests on notion that consumers are now interested in finding out what is it that a company stands for. This third wave of branding is based on spirituality and is different from the earlier trends of rational and emotional appeals of branding. The advantages of CRM go beyond increasing sales and profits for a business. The business is able to differentiate its products or services from the competitors, based on its association with a social cause that consumers care about. Among other advantages are increased customer loyalty, free media coverage, improved employee motivation and better relationships with other stakeholders including channel members and government. Different researchers have reported that employee morale is up to three times higher in companies with a strong degree of community involvement. This satisfaction when coupled with opportunities for employee volunteering can increase employee retention. There are various options for a business to engage in CRM. The most common is giving a percentage of sales to a nonprofit organization. Other choices that can be used to sweeten the deal and increase the impact of CRM are licensing opportunities, using nonprofits as suppliers, donating in kind, sharing office or cyber space, and employee volunteering time. CRM is increasingly being used by marketers and has increased by over 150% over the last three years. The key variables of a CRM campaign that influence a consumer in switching a brand or increasing purchase quantity include a corporate organizations existing image, importance of the cause to the target audience, and the amount being donated. However, it is important to note that companies with good or neutral image gain from such campaigns while companies with an existing negative image tend to lose more credibility through such campaigns. (Tobacco companies watch out!) It is important for businesses to consider two factors while selecting a social cause for its cause related marketing campaign. Firstly, the cause should be related to the companys business and secondly, the company can own the association with the cause. For example, AVON a company dealing in cosmetics has for two decades linked the sale of its products to funding for breast cancer research. To own the association in the minds of customers requires long term commitment. The challenge is that when companies sprinkle their philanthropy to all soft issues like education, health, environment, etc. they dont own the association with any one of the causes.

CORPORATE SOCIAL RESPONSIBILITY

We are living at a time when the social context of business is being redefined. A globalised market place without boundaries has emerged, stimulating unparalleled growth. At the same time, this has also resulted in lopsided development where the divide between rich and poor is growing, leading to social conflicts. Another influential change is the growing democratization that is changing the nature of civil society. Larger numbers of the dispossessed and marginalized are asking for space in the agenda of growth and development. Where an all-pervasive media is highlighting the good life, there is the natural demand for it to be made available to those who have no share in it. Growing civil rights and consumer movements have strengthened this demand for equitable development and a fair sharing of resources and benefits. The environmental debates of the past two decades have amply highlighted the importance of sustainable development. It is now accepted wisdom that sustainability cannot be ensured without combating and overcoming hunger and want. Business can no longer turn a blind eye to these developments, nor can it blandly state that the business of business is only business. In its own enlightened self-interest, it is essential that business play a proactive and supportive role in the communities to which they belong. Some Indian corporate from earlier days have grasped this reality and have played stellar roles in contributing to community life. In recent years, the growing adherence to the tenets of Corporate Social Responsibility (CSR) is an indication that larger numbers of business houses are joining the movement. CSR today has grown beyond the earlier concepts of charity, philanthropy and relief measures. Today, it is recognized that CSR can play a vital role in nation building through public-private partnerships. It can usher in regional progress and renewal of lives in towns and villages by generating employment and by contributing to the education and health sectors. CSR to be meaningful has to reach out to the large majority of our people who are not only without purchasing power, but are fundamentally deprived of basic livelihood. Though business houses realize the importance of the issue, they have to travel the distance from precept to practice, walk the talk. Felt needs & Requirements For a long time, businesses have given back to society in different ways. The domain for such outreach was based more on concerns and thoughtfulness to help people. Assisting in relief work, addressing felt-needs or immediate requirements was natural. This still becomes the prime driver for several Companies and of all types and sizes to make the entry point and select CSR initiatives. It is more visible in the form of programs in Health, Primary Education, Child development, Women empowerment, Vocational training and so on.
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Mitigating Negative Impact Some companies are also driven by the fact that they have negative impacts on society and they have to be addressed. These are typically in the areas of hazardous waste management, emission control, effluent treatment or safety at the work place. This is a good way companies could begin from within and extend gradually to communities outside. SMEs in particular get an opportunity to commence their CSR initiatives from here, but certainly go beyond, to address what really happens and impacts across their supply chain. Extension of Business Competencies In a more contemporary sense, businesses have realized that problems in the communities are complex, that they need to form partners and make a greater impact. While poverty is a tough problem of our times, it is understood that it can be mitigated in our lifetime. And so these partnerships are focused on development- by governments, development agencies, NGOs and all others who come together in their own specialized roles. And the business community does it by defining what it is best suited to deliver - through its own core competencies. Typically companies and volunteers assume the role of 'teachers' and vocational trainers. A chef could teach bakery items to slum women with the same dexterity as a computer expert could take lessons in software training. Medium and larger companies have a huge role to consciously enlist what expertise and technologies are available and how to channel this through its volunteering / CSR programmes. Serving the Underprivileged - as a purpose of Business Business is recently recognized for its power to make a big difference by innovating and reengineering its products and services to reach the large sections of underprivileged people who need to be brought to the first step of the economic ladder. Be it information technology or applications in a set of key technologies to train young people - the purpose is to identify, involve and engage them to participate in the different segments of the supply-chain wherein the corporate sector build symbiotic partnerships with the poor. At a more collective level, they are in a position to work with the government by forging public private partnership, with stated tasks and goals as a more tangible thing to work for, but the overarching purpose is to serve the underprivileged. Multi-stakeholder & Strategic Alliances - Synchronicity for Development As the corporate sector travels through the stages mentioned above, it will mature its response mechanisms to take on greater responsibility for society. At a more strategic level when there are really tough problems and challenges to address, and the business has in place robust CSR processes, it is able to develop or participate in what is becoming popular as multi-stakeholder alliances. Recently, a multi-national with a premier UN agency and some corporate houses in India are setting up such an alliance with Government and NGOs to fight child malnutrition in one State and hopefully take it
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to other States. The Government of India and a State Government with another UN agency and corporate sector partners have taken up a challenge to uplift one of the poorest districts in India. CSR policy for industry

Company will strive to follow responsible business practices Company will be deeply committed towards its employees, their families and communities around its operations including its supply chains to improve quality of life as a whole Company will extend their business processes and have non-financial goals to preserve biodiversity, conserve the environment, work with communities to enrich surroundings Company will partner with other stakeholders including government, development agencies, NGOs, the people to contribute positively towards economic and human development of their cities and villages Company will also strive to constantly build their organizational capabilities, like any other competency, position suitable people and support well designed programs to strengthen its outreach to its people, particularly the underprivileged Company will encourage and recognize their employees for volunteering in the community in the spirit of serving and by sharing expertise / skills and for helping the vulnerable

Social Code for Business In recent years, the concept of Corporate Social Responsibility has emerged as an increasingly important feature of the business philosophy. No longer is business seen as basing its decisions solely on economic criteria. Businesses are now expected to consider the ethical, moral and social impact of their actions and decisions. A corporate that is sensitive to the surroundings and to the needs and aspirations of the community in which it operates not only creates goodwill and a strong market for Its business, but also helps support a sustainable neighborhood. We list here a set of principles and standards for good corporate citizenship for voluntary adoption. Concern, understanding and responsibility are the essence of this set of principles.

The Company affirms the interdependence of its enterprise with the well being and self-reliance of the community. This can be done by adopting an Article of Association on corporate Social Responsibility (CSR) that advocates harmonizing of economic progress with social and environmental considerations. The Company has a specific written policy statement on CSR (social & environmental) which is in the public domain. The Company has an explicit strategy on social and environmental issues that can be seen in the form of an Annual Work Plan mainstreamed with its business process.

The Company has Included CSR as part of its corporate communications Including news-letters and there is reporting on CSR in the Company's Annual Report The Company has a senior executive under the CEO responsible for CSR and managerial level officers tasked specifically with social and environment work. The CEO reviews the CSR programmes twice in a year. The Company ensures equal access to employment and promotion opportunities across gender and cultures through policies and programmes. The Company has allocated specific resources for CSR activities and has monitoring systems to tack Implementation process and impact. The Company demonstrates its CSR by prudent an enabling environment for employees to volunteer that includes recognition and accounting for volunteer time The Company is committed to document Its learning experiences in terms of human achievements, contribution to the community, the learning for all stakeholders for sharing with local governments and development agencies. The Company is also known for the partnership it builds with various development players in the field to synergize all available opportunities to bring about holistic development of the local community. The Companies to expand the scope of learning from each other in their role of being good corporate citizens by way of exchanging data, views, implementation procedures and even exchange of expert personnel whenever necessary.

CSR - A Top Driven Approach

It is essential that CSR flow right down in the hierarchy in any organization. People must be made aware of their responsibility in the area of CSR. This is possible by making the involvement of each employee in an organization a criterion for the evaluation of that employee. This will instill a sense of pressure on each employee to take an active participation the CSR. A CSR index should be formed and a certain proportion of each employee's salary should be directly co-related with this index. On the lines of the quality statement and quality policy each company should have its own CSR policy and statement to which each and every employee of that organization should be accountable. There should be incentives and awards that would motivate the employees towards involvement in CSR. Gone are the days when one man could change the entire community. It's the duty of each and every individual to make in an effort in improving the living of the entire mankind. A continuous method of appraisal with respect to CSR should be undertaken. This will greatly encourage the employees to put in their best efforts in the area of CSR. There should be an annual/ monthly declaration of all the CSR activities undertaken which will make public all documents related to the CSR activities including the investment done, time taken for the result to happen, benefits
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accruing to all the stake holder. This will greatly increase the transparency in the system and will this increase employee participation. Corporate Social Resposibility Strengths and Opportunities 1. Strengths o Improved financial performance o Reduced operating costs o Enhanced brand value and reputation o Long-term sustainability for the company and society o Long-term return on investments o Better risk and crisis management o Increased worker commitment o Good relations with government and communities o Positive HR benefits o Sensitized work environment o Higher employee morale o Higher productivity o Higher awareness of social issues o Respect from consumers o Respect from Society and international partners o Feel good factor of the families of employees o Positive feeling in potential employees o Positive image of the company 2. Opportunities o Shrinking government resources, coupled with a distrust of regulations, has led to the exploration of voluntary and non-regulatory initiatives instead o There is a growing demand for corporate disclosure from stakeholders, including customers, suppliers, employees, communities, investors, and activist organizations o There is evidence that the ethical conduct of companies exerts a growing influence on the purchasing decisions of customers o Investors are changing the way they assess companies' performance, and are making decisions based on criteria that include ethical concerns o Employees are increasingly looking beyond paychecks and benefits, and seeking out employers whose philosophies and operating practices match their own principles o As stakeholders are becoming increasingly interested in business affairs, many companies are taking steps to ensure that their partners conduct themselves in a socially responsible manner

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The Importance of Corporate Social Responsibility

In a recent article from The Wall Street Journal, THE CASE AGAINST CORPORATE SOCIAL RESPONSIBILITY, Professor Aneel Karnani argues the premise that companies have an inherent duty to get involved in social issues is flawed. As society looks to companies to address these problems, the real solutions may be ignored. Companies that simply do everything they can to boost profits will end up increasing social welfare. In circumstances in which profits and social welfare are in direct opposition, an appeal to Corporate Social Responsibility (CSR) will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests, says Professor Karnani. He adds that, by engaging in social issues, managers are sacrificing profits and essentially imposing a tax on shareholders. Therefore, Corporate Social Responsibility conflicts with creating better corporate governance, since the managers job is to act in the shareholders interest. Clearly, Professor Karnani views this as a mainly financial issue and suggests that the only way CSR could work is with strict regulations, such as watchdogs and punitive actions for unacceptable social behavior. However, the professors point of view sparked a large response in defense of CSR. Thomas Lyon, the director of the Erb Institute for Global Sustainable Enterprise at the University of Michigan, agrees there should be consequences for unacceptable behavior, but feels CSR is essential to the business world. He replies, The heart of his [Professor AneelKarnani] argument lies in the assumption of a neat separation between markets and politics. In this idealized world, politics can be counted on to deliver the regulations needed to rein in corporate greed and malfeasance. Then corporations can safely be left in the hands of managers whose sole interest is maximizing profits. The problem with this perspective is that government failure is just as common as market failure. Lyon feels the amount of lobbying between special interest group and the government has gotten out of control. The groups receive special treatment allowing a breakdown in regulation. Basically, Lyon says, corporations are the reason for government failure by blatantly ignoring any regulations imposed on them. He insists corporate political activity become a large part of CSR. However, Mr. Lyon and Prosser Karnani dont mention the essential aspect of corporate responsibility and its benefits. The essence of CSR in business is whats known as the triple bottom line: People, Planet, and Profit. This strategy requires mutual benefit between corporation and nonprofit, authenticity, and credibility. CSR is a powerful way to maintain a good corporate reputation but is not a silver bullet. It has become a widely accepted strategy by both corporations and consumers.

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Increasingly we are seeing Corporate Responsibility and more specifically sustainability become a significant part of Corporate Strategy. It is not uncommon these days to find c-level executives dealing with the issues and opportunities of Corporate Responsibility and sustainability. Rufus Bullough, an Associate in Acre Resources Limited Corporate Responsibility and Sustainability team, says. Eighty-three percent of U.S. consumers want more of the products, services and retailers they use to benefit causes, according to the new 2010 Cone Cause Evolution Study. 85 percent have a more positive image of a product or company when it supports a cause they care about, and 80 percent are likely to switch brands, similar in price and quality, to one that supports a cause. These statistics prove that, while there is no guarantee, CSR can be advantageous for corporations and the world around them. Consumers support the products and services that benefit causes. Corporations are adding CSR as a core business strategy, increasing profits and their reputation. Non-profits are receiving assistance with awareness, as well as monetary resources. As CSR progresses, regulations will likely be put in place to prevent corporate greed and unacceptable behavior. However, even with regulations in place, managers are much more likely to engage in a business strategy that, if done well, boosts more than just profits. Professor Karnani believes corporations are too self-indulgent to properly execute a business strategy where profit isnt the only benefit. Managers see an opportunity to improve on a number of levels with CSR and consumers praise those companies. CSR is no longer a novelty. Its an opportunity.

Four Types of Corporate Social Responsibility

As large corporations begin to dominate the world economy, it raises questions about the importance of corporate social responsibility in business. A variety of types of corporate social responsibilities have emerged in public discussions, and understanding their implications is important. 1. ENVIRONMENTAL RESPONSIBILITY

People expect businesses to exhibit environmentally responsible behavior, as evidenced by a PricewaterhouseCoopers survey that found that the No. 1 issue for companies in the future, according to U.S. respondents, is carbon emissions reductions. Specific environmental issues that affect businesses include global warming, sustainable resources and pollution. Businesses are being urged by environmental groups and governments to reduce their carbon footprint, to obtain their materials from sustainable sources and to reduce their pollution.

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2.

HUMAN RIGHTS RESPONSIBILITY

The 21st-century marketplace is highly global. This means that when a product is purchased in the United States, for example, it may have been produced in China, or have components from South America. The ethical issue for corporations is ensuring that human rights are respected throughout all levels of the supply chain. Major companies have received criticism for their use of sweat shops and for sourcing resources that are harvested by unfairly treated workers. This has lead to a push for the use of strict labor standards to be applied to suppliers, and a demand for fair trade products such as chocolate and coffee. 3. FINANCIAL RESPONSIBILITY

Financial responsibility is an important issue in corporate social responsibility. In the wake of the accounting fraud perpetrated by Enron and Arthur Andersen and Ponzi schemes orchestrated by the likes of Bernie Madoff, businesses are questioned about the accuracy of their financial reporting by increasingly skeptical shareholders and government officials, as evidenced by the Sarbanes-Oxley Act. Employees are expected to act as whistle blowers in such situations, and white collar crime is seeing high-profile prosecutions like that of Martha Stewart or former Worldcom CEO Bernie Ebbers. 4. POLITICAL RESPONSIBILITY

Trading with repressive regimes is a difficult issue in corporate social responsibility. Some businesses argue that working with these regimes will help to advance them and bring rights to the countries. People and governments have demanded that businesses stop trading with repressive regimes, which was most notably observed when several western governments launched an embargo against the Apartheid government in South Africa during the 1980s. Shell Oil received considerable consumer backlash during the 1990s for its complicit involvement with the Nigerian government that murdered anti-oil activists. These issues make doing business with certain governments an important consideration for corporate social responsibility.

Disadvantages of Corporate Social Responsibility

Corporate social responsibility (CSR) is a prominent 21st century business ideology that heightens expectations of companies regarding social and environmental standards. The results of CSR compliance are generally viewed as a good thing by most companies. Challenges lie in allocating time and resources necessary to develop a CSR approach that meets governmental and social standards and achieves compliance with informal CSR guidelines related to social and environmental responsibility.

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1.

ROLE OF PROFIT

One of the biggest features addressed by CSR is its intent to cause companies to recognize responsibilities to stakeholders outside of shareholders. This includes customers, communities, employees and suppliers. While proponents of CSR point out the long-term benefits of taking care of these core relationships, shareholders are often deterred at the notion that companies will invest in anything that does not create immediately obvious financial gain. With CSR, detecting measurable bottom line benefits is a challenge as social and environmental programs are hard to account for with regard to financial gain. 2. COMPETITIVE DISADVANTAGE

One of the most common arguments companies make when indicating reluctance to CSR policies is the disadvantage it causes against companies that do not. In other words, if company A does its part to invest resources to take care of its communities and the environment and company B does not, company B retains its resources, including money, for other business pursuits. Thus, without strict adherence industry wide, some companies argue that they cannot fall behind by putting money into CSR programs. 3. LOSS OF FOCUS

A main driver at the onset of CSR was increased interest in making the customer a primary focus of business operations. This coincides with continued realization that customer retention and loyalty are keys to long-term business success. Detractors of CSR as a major component of corporate governance argue that guidelines have expanded beyond this basic initial emphasis. David Vogel points out in his "CSR Doesn't Pay" article for Forbes that many companies that abide by CSR guidelines do so more from fear of public backlash than because they believe it is good for long-term business performance. He adds that most parties generally agree that taking care of customers is good in the long run, but expensive requirements in human rights, environmental sustainability and community development are too much to ask of many companies. 4. LASTING IMPACT

How long CSR will remain a prominent business concern is a common question asked by those who argue against CSR as a major concern with corporate governance. According to the My Efficient Planet website, CSR has existed for more than 50 years. However, its prominence as a major business consideration has certainly increased in the 21st century due to heightened awareness of ethical issues in business and environmental preservation standards. Detractors argue that CSR emphasis is a shortterm fad in response to prominent scandals like Enron, and current interest in greenfriendly practices.

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Functions of Corporate Social Responsibility

The function of corporate social responsibility is for corporations to hold themselves accountable for the ethical, legal, societal and ecological impacts of their business practices. Corporate social responsibility practices are self-monitoring, meaning there aren't laws requiring corporations to behave in a socially responsible manner. Rules regarding corporate responsibility practices are generally written into the corporate bylaws, mission statements and employee handbooks. 1. ETHICAL FUNCTION

Ethics are one of the most important aspects in corporate governance and therefore have an important function in corporate social responsibility. A company must have internal controls regarding the expected ethical behavior and consequences of unethical business practices of its top executives and employees. Behaving ethically makes the company as a whole accountable to its investors, shareholders and consumers. The ethical function of corporate social responsibility helps to prevent conflicts of interest between earning corporate profits and maintaining the integrity of the company and the goods and services it produces. 2. LEGAL FUNCTION

The legal function of corporate social responsibility is to encourage transparency in a company's business practices and financial reporting. Maintaining high levels of legal business practices, such as adhering to Occupational Safety and Health Administration, or OSHA, regulations promotes goodwill toward employees. Maintaining high levels of legal financial practices maintains good will among investors, stakeholders and government financial-reporting regulatory agencies such as the Securities and Exchange Commission, or SEC. 3. SOCIETAL FUNCTION

The societal function of corporate social responsibility is to respect and invest in the communities in which the company operates. Companies are aware of how the production of their products affects the local community. These companies take necessary actions to diminish the negative impacts of factors such as increased traffic, noise and pollution for the communities in which they operate. The societal function of corporate social responsibility also includes companies reinvesting in the communities in which they operate, such as donating money to local charities. 4. ECOLOGICAL FUNCTION

The ecological function of corporate social responsibility is to not only respect the immediate environment in which the company operates but also to respect the company's effect on the global environment. Companies are aware of the environmental impact the production of their products have on their local communities. In corporate
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social responsibility, these companies adhere to strict standards in an effort to diminish the negative impact of the environmental byproducts such as air and water pollution from the production of their products. Having such standards impacts both the local and global environments.

CSR in India
Given Indias long tradition in this field, its CSR agenda continues to be characterized mainly by philanthropic and community development activities. On the other hand, the survey also revealed that Indian companies and stakeholders are beginning to adopt some aspects of the mainstream agenda, such as the integration of CSR into their business processes and engagement in multi-stakeholder dialogues. To understand the current state and future prospects of CSR and the role India, the countrys political and economic history must be taken into account. Against this background, the development of CSR in India can be divided into four main phases.

The four phases of CSR development in India

According to Sundar (2000), the following four phases of CSR development can be identified. These phases parallel Indias historical development and resulted in different CSR practices. The division into four phases must be regarded as an analytical tool. However, it is not static, and features of one phase can also be observed in the others, as is particularly evident from the last phase. First phase: CSR motivated by charity and philanthropy The first phase of CSR is predominantly determined by culture, religion, family tradition, and industrialization. Business operations and CSR engagement were based mainly on corporate self-regulation. Being the oldest form of CSR, charity and philanthropy still influence CSR practices today, especially in community development. In the pre-industrial period up to the 1850s, merchants committed themselves to society for religious reasons, sharing their wealth, for instance, by building temples. Moreover, the business community occupied a significant place in ancient Indian society and the merchants provided relief in times of crisis such as famine or epidemics throwing open godowns of food and treasure chests (Arora 2004, 24). Under colonial rule, Western types of industrialization reached India and changed CSR from the 1850s onwards. The pioneers of industrialization in the 19th century in India were a few families such as the Tata, Birla, Bajaj, Lalbhai, Sarabhai, Godrej, Shriram, Singhania, Modi, Naidu, Mahindra and Annamali, who were strongly devoted to philanthropically motivated CSR (Mohan 2001, 109). The early pioneers of industry in India were leaders in the economic, as also in the social fields (Arora 2004, 25). Nevertheless, it has been pointed out that their engagement was not only altruistic and stimulated by religious motives: It had business considerations in supporting efforts

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towards industrial and social development of the nation and was influenced by caste groups and political objectives (Mohan 2001, 109). The underlying pattern of charity and philanthropy15 means that entrepreneurs sporadically donate money (e.g. to schools or hospitals) without any concrete or longterm engagement. Charitable and philanthropic CSR is practiced outside the company, focusing on such external stakeholders16 as communities and general social welfare bodies. Second phase: CSR for Indias social development The second phase of Indian CSR (1914-1960) was dominated by the countrys struggle for independence and influenced fundamentally by Gandhis theory of trusteeship, the aim of which was to consolidate and amplify social development. During the struggle for independence, Indian businesses actively engaged in the reform process. Not only did companies see the countrys economic development as a protest against colonial rule; they also participated in its institutional and social development (India Partnership Forum 2002, 11). The corporate sectors involvement was stimulated by the vision of a modern and free India. Gandhi introduced the notion of trusteeship in order to make companies the temples of modern India: businesses (especially well established family businesses) set up trusts for schools and colleges; they also established training and scientific institutes (Mohan 2001, 109). The heads of the companies largely aligned the activities of their trusts with Gandhis reform programmes. These programmes included activities that sought in particular the abolition of untouchability, womens empowerment and rural development (Arora 2004, 25). Third phase: CSR under the paradigm of the mixed economy The paradigm of the mixed economy, with the emergence of PSUs and ample legislation on labor and environmental standards, affected the third phase of Indian CSR (1960-1980). This phase is also characterized by a shift from corporate selfregulation to strict legal and public regulation of business activities. Under the paradigm of the mixed economy, the role of the private sector in advancing India receded. During the Cold War, India decided to take a third course between capitalism and communism. In this scenario, the public sector was seen as the prime mover of development. The 1960s have been described as an era of command and control, because strict legal regulations determined the activities of the private sector (Arora 2004, 8). The introduction of a regime of high taxes and a quota and licence system imposed tight restrictions on the private sector and indirectly triggered corporate malpractices. As a result, corporate governance, labour and environmental issues rose on the political agenda and quickly became the subject of legislation. Furthermore, state authorities established PSUs with the intention of guaranteeing the appropriate distribution of wealth to the needy (Arora 2004).

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However, the assumption and anticipation that the public sector could tackle developmental challenges effectively materialized to only a limited extent. Consequently, what was expected of the private sector grew, and the need for its involvement in socio-economic development became indispensable. An initial and cautious attempt at reconciliation was made by Indian academics, politicians and businessmen at a national workshop on CSR in 1965 (Mohan 2001, 109). According to this agenda, businesses were to play their part as respectable corporate citizens, and the call went out for regular stakeholder dialogues, social accountability and transparency (Mohan 2001, 110). Despite these progressive acknowledgements, this CSR approach did not materialize at that time. The fourth phase: CSR at the interface between philanthropic and business approaches In the fourth phase (1980 until the present) Indian companies and stakeholders began abandoning traditional philanthropic engagement and, to some extent, integrated CSR into a coherent and sustainable business strategy, partly adopting the multi-stakeholder approach. In the 1990s, the Indian government initiated reforms to liberalize and deregulate the Indian economy by tackling the shortcomings of the mixed economy and tried to integrate India into the global market. Consequently, controls and license systems were partly abolished, and the Indian economy experienced a pronounced boom, which has persisted until today (Arora and Puranik 2004, 97). This rapid growth did not lead to a reduction in philanthropic donations; on the contrary, the increased profitability also increased business willingness as well as ability to give, along with a surge in public and government expectations of businesses (Arora2004, 28). Against this background, India has meanwhile become an important economic and political actor in the process of globalization. This new situation has also affected the Indian CSR agenda. With more TNCs resorting to global sourcing, India has become an attractive and important production and manufacturing site. As Western consumer markets are becoming more responsive to labour and environmental standards in developing countries, Indian companies producing for the global market need to comply with international standards.

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Case study
CASE 1: Integrating Company Practice and Context: Nestls Milk District
Nestls approach to working with small farmers exemplifies the symbiotic relationship between social progress and competitive advantage. Ironically, while the companys reputation remains marred by a 30-year-old controversy surrounding sales of infant formula in Africa, the corporations impact in developing countries has often been profoundly positive. Consider the history of Nestls milk business in India. In 1962, the company wanted to enter the Indian market, and it received government permission to build a dairy in the northern district of Moga. Poverty in the region was severe; people were without electricity, transportation, telephones, or medical care. A farmer typically owned less than five acres of poorly irrigated and infertile soil. Many kept a single buffalo cow that produced just enough milk for their own consumption. Sixty percent of calves died newborn. Because farmers lacked refrigeration, transportation, or any way to test for quality, milk could not travel far and was frequently contaminated or diluted. Nestl came to Moga to build a business, not to engage in CSR. But Nestls value chain, derived from the companys origins in Switzerland, depended on establishing local sources of milk from a large, diversified base of small farmers. Establishing that value chain in Moga required Nestl to transform the competitive context in ways that created tremendous shared value for both the company and the region. Nestl built refrigerated dairies as collection points for milk in each town and sent its trucks out to the dairies to collect the milk. With the trucks went veterinarians, nutritionists, agronomists, and quality assurance experts. Medicines and nutritional supplements were provided for sick animals, and monthly training sessions were held for local farmers. Farmers learned that the milk quality depended on the cows diet, which in turn depended on adequate feed crop irrigation. With financing and technical assistance from Nestl, farmers began to dig previously unaffordable deep-bore wells. Improved irrigation not only fed cows but increased crop yields, producing surplus wheat and rice and raising the standard of living. When Nestls milk factory first opened, only 180 local farmers supplied milk. Today, Nestl buys milk from more than 75,000 farmers in the region, collecting it twice daily from more than 650 village dairies. The death rate of calves has dropped by 75%. Milk production has increased 50-fold. As the quality has improved, Nestl has been able to pay higher prices to farmers than those set by the government, and its steady biweekly payments have enabled farmers to obtain credit. Competing dairies and milk factories have opened, and an industry cluster is beginning to develop. Today, Moga has a significantly higher standard of living than other regions in the vicinity. Ninety percent of the homes have electricity, and most have telephones; all villages have primary
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schools, and many have secondary schools. Moga has five times the number of doctors as neighboring regions. The increased purchasing power of local farmers has also greatly expanded the market for Nestls products, further supporting the firms economic success. Nestls commitment to working with small farmers is central to its strategy. It enables the company to obtain a stable supply of high quality commodities without paying middlemen. The corporations other core products coffee and cocoaare often grown by small farmers in developing countries under similar conditions. Nestls experience in setting up collection points, training farmers, and introducing better technology in Moga has been repeated in Brazil, Thailand, and a dozen other countries, including, most recently, China. In each case, as Nestl has prospered, so has the community.

CASE 2: Hindustan Unilever: Reach untapped markets with

a Corporate Social Responsibility Business Model
Hindustan Unilever Limited, Unilever's $3.9 billion subsidiary in India. Unilever is the corporation that produces Axe deodorant, Vaseline, Surf detergent, and Lipton tea, among many other everyday products. India is the second largest country in the world in terms of population. India has also a large number of villages; more than 600.000 villages with poor transport infrastructure making shipments of goods extremely difficult. Most of these villagers dont have access to the very basic hygiene products like soap, toothpaste, shampoo, etc. Many of them have even never used a tooth brush or washed their hairs with shampoo. Instead of investing in costly infrastructure, the Indian government decided to promote entrepreneurship in these villages, targeting women particularly. Hindustan Unilever saw an opportunity in this program and decided to develop a business model accordingly. Within their established organization Hindustan Unilever has created a leadership organization with total freedom for developing the business model. Hindustan Unilever launched the so-called Shakti Entrepreneurship Program. The value proposition was to create in each village and surrounding a chain of entrepreneurs for Hindustan Unilever products. These entrepreneurs (who are selected women) will not only distribute but also educate these villagers on the use of the different corporal hygiene products provided by Hindustan Unilever.

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NGOs have supported Hindustan Unilever with selecting these under privileged women, to become the new Hindustan unilever distributers and the new promoted entrepreneurs. According to H.Unilever, at the beginning, there was a lot of hesitation, since these women were often illiterate or had no math skills. It turns out they were very quick to learn and smart-within 48 hours they would get it. Their motivation was so high that it compensated for any lack of ability.

Today H. Unilever employs between 60,000 and 70,000 women entrepreneurs in villages to sell Unilever products at affordable prices to the Base of the Pyramid (BoP). For the first time, villagers had access to soap, detergent, and toothpaste. The women entrepreneurs were also educating their communities on hygiene issues while selling their products - for example, by explaining how to brush children's teeth - and through community wide health awareness days. Shakti is a good example of CSR. it created a whole new way of life for 60.000 to 70.000 women, with the opportunity to gain a good living. It had a direct effect on their social stature. And millions of people had access to personal care and home products. In terms of distribution and marketing, the business model is using the BoP to distribute products; so the BoP is definitely part of the solution. And it's self-sustaining from the business it generates. Hindustan Unilever has managed to create a sustainable business for itself and for the women distributers, to reach untapped market and to reinforce its brand and its company internal and external culture.

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CASE 3: TATA STEEL CORPORATE CITIZENSHIP

Background of the Company The Tata Steel Group has always believed that mutual benefit of countries, corporations and communities is the most effective route to growth. Tata Steel has not limited its operations and businesses within India but has built an imposing presence around the globe as well. With the acquisition of Corus in 2007 leading to commencement of Tata Steel's European operations, the Company today is the tenth largest steel producer in the world with employee strength of above 81,000 across five continents. The Company has always had significant impact on the economic development in India and now seeks to strengthen its position of pre-eminence in international domain by continuing to lead by example of responsibility and trust. Tata Steel's overseas ventures and investments in global companies have helped the Company create a manufacturing and marketing network in Europe, South East Asia and the Pacific-rim countries. History and Company's definition of CSR Tata Steel, for the last 100 years has been committed to the social upliftment and development of the state of Jharkhand. It has been working towards improving the quality of life of the communities it operates in. Social development and welfare of communities of Jharkhand has been internalized by the Company since its inception and has been followed since then, making Tata Steel a leader in the area of social commitment..The wealth generated by Jamsetji Tata and his sons in half a century of industrial pioneering formed but a minute fraction of the amount by which they enriched the nation. The whole of that wealth is held in trust for the people and used exclusively for their benefit. The cycle is thus complete: what came from the people has gone back to the people many times over. For Jamsetji Tata, the progress of enterprise, welfare of people and the health of the enterprise were inextricably linked. Wealth and the generation of wealth have never "been ends in themselves, but a means to an end, for the increased prosperity of India," The Times of India said in 1912 of the Tatas. Successive generations of Tata Group leaders have always held the belief that no success in material terms is worthwhile unless it serves the interest of the nation and is achieved by fair and honest means. Conscious that the task of social progress, especially in a country as diverse as India, cannot be undertaken by the Government alone, J R D Tata the Chairman of the Tata Group from 1938 to 1991, believed that, "to create good working conditions, to pay the best wages to its employees and provide decent housing to its employees are not enough for the industry, the aim of an industry should be to discharge its overall social responsibilities to the community and the society at large, where industry is located." Guided by this mandate, Tata Steel has for decades used its skills and resources, to the extent it can reasonably afford, to give back to the community a fair share of the product of its efforts. It was the first to establish labour welfare practices, even before these were made statutory laws across the world. In 1912 it invited Sidney and Beatrice Webb, the Founders of the London School of Economics, to prepare a Memorandum of
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Health for the Steel City. The Company also instituted an eight-hour workday in 1912, free medical aid in 1915, a Welfare Department in 1917, leave with pay, Workers Provident Fund and Workmen's Compensation in 1920 and Maternity Benefit for ladies in 1928. With the understanding that the hunger for employment can never be satisfied despite its best efforts, the Company took an enlightened decision to address the needs of those who migrated to its vicinity in search for employment. It first stimulated entrepreneurship and economic development in the Steel City and then reached out to the rural poor, empowering them with the means to create better livelihoods within their own villages. At the same time, Tata Steel also fulfilled their basic need for health care, food security, education and income generation through the development of rural infrastructure, empowerment and community outreach programmes. CSR Policy Tata Steel's Corporate Social Responsibility Policy is rooted in the belief that the primary purpose of a business is to improve the quality of life of the people. It takes into account every single person in its sphere of development and ensures that its socioeconomic initiatives touch the lives of all stakeholders in a positive way. Therefore, in and around the operational areas of Tata Steel, whether it is a functioning facility or a project in the implementation stage, the emphasis is on all-round growth. This encompasses initiatives in income generation, education, healthcare, water, electricity and all other basic services. The Tata Steel CSR policy encompasses initiatives to conserve, sustain and renew the environment, to encourage sustainable socioeconomic development of the community and to improve the quality of life of the people living in the areas in which it operates. In all their programmes, the organisations seek to engage the ultimate beneficiaries of an initiative right from the conceptualisation and planning stage to the implementation, with the company playing the role of a catalyst eliciting positive change. The attempt is to get the people to act out of their own convictions, and support them in their efforts to build a better future. CSR Initiatives 'Lifeline Express in not one of the regular trains which are run for normal passengers. JeevanRekha Express is another name which is used by people for this train. This train is governed by the Impact India Foundation. This train is a running hospital in the simplest words. The Health Ministry of India and the Indian Railways joined their hands for introducing this train. However, the funds for introducing this train were given by Impact UK. 16 July, 1991 is the date when this train was flagged off for the first time. This train is serving a large number of poor regions of the country. Over so many years, this train has benefited around 4 Lakh people. In the last sixteen years, this train has completed around ninety three projects for the health welfare of those people who are struggling for their good health in the remotest regions of India. At present, 2 trains are operated under the Lifeline Express. Other countries like China and Bangladesh have taken a lesson from this Train and introduced similar trains.
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The mission of this train is to reach the disabled people who do not have access to medical facilities in the rural areas of India. On the spot advanced medical diagnosis and surgical treatments are offered to the people who need them. Apart from this, the Lifeline Express also tries to encourage the local people to help the people in need. It tries to make the people aware. For this, it seeks the support of local authorities present in the villages of India. In a way, this train is also educating people to help themselves in the remotest parts of India. It is a truth that even today there are a lot of villages in India which do not have adequate medical facilities. Many villages do not have a single hospital. This train is doing a very great work for the poor people of the rural areas of India. A large number of medical services like Orthopedic/ surgical treatment for restoration of movement of parts in handicapped people, surgery for correcting the cleft palate etc.are offered by this train. Extending better healthcare facilities to the people living in the rural and inaccessible remote areas, TATA Steel hosted the Lifeline Express, the world's first hospital on wheels for the sixth time in Odisha at the Jajpur Road railway station from December 14th 2010 to January 15th 2011. The Lifeline Express is a joint collaboration between the Impact India Foundation, the Rajiv Gandhi Foundation and the Indian Railways. People living in the farthest corner of Jajpur district, parts of Bhadrak and Kendrapara districts benefited from this initiative. Prior to this, TATA Steel has already hosted the train in five locations of OdishaGopalpur, Bamanipal, Jajpur Road, Meramundali and Joda. The Lifeline Express is equipped with a modern operation theatre, which offers diagnostic, medical and surgical treatment for prevention and curative interventions for the handicapped. Through the initiative, polio and orthopedic defects of people would be treated through surgery and provision of calipers; eye testing and restoration of eyesight through cataract operations and providing intra ocular lenses would be done; restoration of hearing through surgery and supply of hearing aids, correction of clefts through surgery, counseling and referral services and arrangements for follow up of the patient's progress with local authorities would be made. TATA Steel is the only corporate house in the country to sponsor the Lifeline Express for the highest number of times across the States of Bihar, Jharkhand, Odisha, West Bengal, and Chhattisgarh. Till date, through this train, TATA Steel has reached out to more than 67,800 persons offering medical
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treatment. The company's entire range of healthcare services has been reaching out annually to 400,000 people in the interior villages of Odisha through five hospitals and mobile health clinics. Aids Awareness Programs

On the occasion of World AIDS Day, TATA Steel Ltd flagged off an initiative of Awareness on Aids campaign. It is a two day campaign to cover a host of prominent colleges and locations all across Kolkata. This included St Xavier's College, Presidency College, Bethune College, Calcutta University, Jadavpur University, Kolkata Airport, City Centre, Forum to name a few. The awareness programs, involved children and community members to be the agents of mass awareness for preventing the spread of deadly HIV/AIDS virus. Various programs were undertaken across Tata Steel's operational areas of Kalinganagar (Orissa), Lohandiguda (Chhattisgarh), and West Bokaro(Jharkhand),Sukinda (Orissa). The activities include hosting rallies, nukkadnataks, quizzes, distributing pamphlets, condoms, blood donation camps, stage show , signature campaigns etc. In addition, acknowledging the importance of contributions made by trucker's community, the TATA Steel Rural Development Society in collaboration with Transport Corporation of India Foundation Jharkhand State Aids Control Society and National Aids Control Society organized a nationwide Trucker's Utsav. Project Kavach which is an endeavor to arrest the spread of AIDS amongst the truckers community was part of this Utsav at Jamshedpur's Transportnagar. It is an informal infotainment event, which acts as catalyst for communicating behavior change messages to sizable groups in a fun, peer supportive context.InJharia, TSRDS collaborated with Mother Teresa High School, Jorapokor to organize a rally of senior students .More than 1,000 people gathered for the cause at the TATA Steel Gopalpur unit at Orissa The program included Signature Campaign Stalls, Folk shows on HIV/AIDS and High School rally. TATA Steel is always recognized for contributing towards the global effort in fighting against HIV/AIDS and it is one of the first corporate houses to have separate HIV/AIDS workplace policy and has bagged many national & international awards in this field. The
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programs undertaken by TATA Steel on the World AIDS Day are addition to the various activities undertaken by TATA Steel. Since early 1990's TATA Steel has been instrumental in spreading awareness and address the concerns of HIV/AIDS, by reaching across to every corner of the country though various programs. On an ongoing basis TATA Steel has been running Targeted Intervention projects, establishing Community Care Centre for People Living with HIV/AIDS and promoting HIV testing through Integrated Counseling & Testing Centre were few of the ongoing initiatives of TATA Steel Rural Development Society. Greenfection

Greenfection" is the resolve to "infect" the whole of India with the will to change towards a greener future. Tata Steel has tied up with the World Wildlife Federation, Star News, MTV, National Geographic and Radio Mirchi 98.3 FM to work on several programmes under this initiative. The Company is using social media and blog sites to attract participation from young people and films on the environment will also be screened. The "Plant a Sapling" and "Click a Sapling" programmes have been launched. Today, the environment is on the brink of irreversible damage. Before the impact becomes critical, we have to act. A world without biodiversity has a very bleak future. Millions of people and millions of species all share the same planet, and only together can we enjoy a safer and more prosperous future. Taking a cue from this, Tata Steel has been investing in environmental sustainability and has played a vital role in boosting the biodiversity of the areas where it operates. Let us reconnect with nature and put in efforts to earn a reputation as a green pioneer and develop a new vision for biodiversity. Tata Steel aspires to be the global steel industry benchmark in Value Creation and Corporate Citizenship. Its commitment towards environmental issues associated with steel production processes is reflected in its Vision 2012 statement. One of the goals of the company is to reduce CO2 emissions to less than 1.7 tonnes per liquid tonne of steel (t/tls) by 2012.

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On this World Environment Day on June 5, Tata Steel has launched the GREENFECTION campaign. Tata Steel believes that actions by a group of people or organizations won't be enough. It needs to spread exponentially, like something infectious. GREENFECTION is the consciousness and resolve to impact the environment in a positive way. That is what the company wants to spread, from person to person, from cities to villages and vice versa, till the whole nation is infected with the will to make a change, to create a greener, happier future. Tata Steel has tied up with WWF (World Wildlife Federation) - to reach out to the school children through the nature clubs in schools across 10 cities in India and conduct a tree planting campaign. Prizes and Recognitions

Recognition from World Steel Association to Tata Steel for demonstrating excellence in safety and health programmes in 2009. The Xiamen Safe Work Place Enterprise Award to NatSteel. National Safety Awards to the West Bokaro and Jharia divisions, and Sukinda Chromite mines. The CSR Leadership Award 2009 to Tata Steel at the Orissa State Safety Awards. The Excellence in Manufacture Award to Siam Construction Steel Company for Quality, Environment and Safety Management from the Department of Primary Industries and Mines, Ministry of Industry.

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CASE 4: ITC LIMITED CORPORATE CITIZENSHIP

ITC Limited (ITC) is one of India's foremost private sector companies having a diverse portfolio of businesses. The company has been undertaking several CSR initiatives over the years and been appreciated for them globally. The case discusses ITC's CSR initiatives and focuses on its approach. The company's innovative ways and heavy investments to achieve the 'triple bottom line' are discussed. The question to be look forward "Is it taking the right initiatives and setting standards to follow?" About ITC ITC is one of India's foremost private sector companies with a market capitalisation of over US $ 30 billion and a turnover of US $ 6 billion. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y. C. Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." CSR philosophy of ITC Inspired by the overarching vision of making a contribution to the national goals of sustainable development and inclusive growth, ITC has innovatively crafted unique business models that synergise long-term shareholder value creation with enhancing societal capital. This commitment is reflected when ITC measures accomplishments not only in terms of financial performance but also by the transformation ITC has consciously engendered to augment the social capital of the nation. in ITC's 'Triple Bottom Line' approach of contributing to the economic, environmental and social capital of the country. Envisioning a larger societal purpose has always been a hallmark of ITC. The company sees no conflict between the twin goals of shareholder value enhancement and societal value creation. The challenge lies in fashioning a corporate strategy that enables realisation of these goals in a mutually reinforcing and synergistic manner. As a corporate citizen with enduring relationships in rural India, ITC has a history of collaboration with communities and government institutions to enhance farm productivity
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and the rural resource base. ITC's commitments in agricultural R&D and knowledge sharing have spanned vital aspects of competitiveness - efficient farm practices, soil and water management. ITC is committed to a national agenda of raising agricultural productivity and making the rural economy more socially inclusive. ITC believes that the urgency and scale of these tasks make market linked solutions and innovations more effective and sustainable than capital intensive approaches.

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Let's put India First ITC's philosophy revolves around goal congruence with the national goals of sustainable development and inclusive growth. Various environmental &Social initiatives are taken by ITC to ensure sustainable growth. Some of the key initiatives taken by ITC for improvement of livelihood of disadvantaged sections of society and the reach of initiatives in mentioned in table below Initiatives Milestones 4 million farmers empowered, 6,500 e - Choupals installed 114,428 hectares greened, generating 51.48 million person - days of employment 56,951 hectares brought under soil and moisture conservation 15,378 women members 1183 self - help groups 176 Cattle Development Centres 3,520 villages covered annually 252,329 children covered through 2,334 Supplementary Learning Centres

e - Choupal

Social & Farm Forestry

Watershed Development

Women's Empowerment

Livestock Development

Primary Education

e-Choupal: Rural digital-physical infrastructure In 2000, harnessing the empowering force of information technology and its scalabilty, ITC launched e-Choupal - a knowledge portal providing farmers with a range of information and services. Designed to enable them to bargain collectively and enhance their transactive power, e-Choupal became the much needed and easily adoptable tool farmers had been waiting for. Today e-Choupal is a vibrant and rapidly growing zone of business and interaction for over 4 million farmers. Today 4 million farmers use e-Choupal to advantage - bargaining as virtual buyers' cooperatives, adopting best practices, matching up to food safety norms. Being linked to futures markets is helping small farmers to better manage risk. e-Choupal has been
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specially cited in the Government of India's Economic Survey of 2006-07, for its transformational impact on rural lives. ITC's strategic intent is to develop e-Choupal as a significant two-way multidimensional delivery channel, efficiently carrying goods and services out of and into rural India. By progressively linking the digital infrastructure to a physical network of rural business hubs and agro-extension services, ITC is transforming the way farmers do business, and the way rural markets work. The network of 6,500 e-Choupalcentres spread across 40,000 villages has emerged as the gateway of an expanding spectrum of commodities leaving farms - wheat, rice, pulses, soya, maize, spices, coffee, aqua-products. The reverse flow carries FMCG, durables, automotives and banking services back to villages.

Social & Farmforestry

ITC's social & Farm forestry program emerged in response to its challenge to source effective pulp wood from sustainable sources to enhance its competitiveness. Instaed of taking easier route to importing pulp, ITC innovatively leveraged it's pulpwood
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requirements to provide sustainable livelihood opportunities to poor and tribal marginal farmers, by assisting them to convert their private wastelands into productive pulpwood plantations. High yielding, disease resistant and site specific clones are developed in ITC's research center. This program has not only created sustainable source of livelihood for a large no. of disadvantaged sections of society but has also bought in a multiplicity of benefits by creating a large green cover that contributes significantly to groundwater recharge, soil conservation and carbon sequestration. Integrated Watershed Development

Recognising the vital role that role plays in the rural economy, ITC promotes watershed projects in waterstressed areas providing precious water resources for agriculture and rural communities and livestock. Based on a participatory approach, the programme facilitates building, reviving and maintaining water harvesting structures as well as management of water resources to reverse land degradation, provide critical irrigation and increase agricultural productivity. The phenomenal example of this was the Ranjangaonara near Pune district in Maharashtra, it was under severe draught during kharip season of 2009 with virtuallyno rains in the project area, farmers and cattle were adversely affected. ITC's watershed programme became the only source of livelihood for more than 350 farmers who participated daily in the work. In another first of its kind agreement in the country, ITC signed MOU with the government of Maharashtra to implement NREGA in 2 blocks of Jalna district on an integrated watershed programme basis covering 50 villages.

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Integrated Agricultural Development

The programme promotes a combination of solutions for optimizing water management and enhancing farm productivity. Farmers are motivated to form agri-business centers, enabling them to pool knowledge and resources, have access to quality inputs on time and improve productivity and quality. A total of 20 agri-business centers provided timely agri-iputs to around 1077 members. To help farmers capture additional value from their holdings, ITC promoted crop diversification with good market linkages. Organic spces, medicinal and aromatic plants were promoted under this initiative. Livestock Development

The programme assists small landless farmers to upgrade livestock quality through cross-breeding by artificial insemination to boost milk productivity by a factor of 6 to 9 times, lading to a threshold increase in household incomes and thereby an improvement in their economic status. The programme also provides integrated animal husbandry services that include pre and post natal interventions. Vaccinations and heath services are provided to more than 1.7 lakh cattle. Women's empowerment ITC's initiative provide sustainable economic opportuinities to poor women in rural areas by assisting them to form self help groups that enable them to build small savings and finance self employment and micro-enterprise. The programme has demonstrated that
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extra incomes in the hands of women lead to positive changes in human development since it is largely invested in children's education, health and nutrition.The total turnover of women managed micro enterprises was Rs. 61.14 lakhs, the bulk of which was accounted by the sale of raw agarbattis and chikankar garments. Universal Education

The programme is aimed at increasing chances of employability either through imparting training in skills or better education.Theprogramme provides infrastructure support to government run primary schools and coaching through Supplementary learning centers to stem drop-outs and enable more children to complete school and move on to higher classes. In order to increase enrolment, poor children receive school uniforms and text/exercise books. A network of rural libraries and resource centers enrich the process of learning for these children. An innovative initiative of roaming laptop programme is also provided to government schools in rural areas. Awards and Recognitions 1. The inaugural Worls Business Award in 2004

Recognises companies which have made significant efforts to create sustainable livelihood opprtuinities and enduring wealth in developing countries. Sponsored by UNDP, ICC and Business leader's forum jointly 2. The development Gateway award in 2005

For trailblazing e-Choupal. ITC is first Indian company and second in the world to receive this award for its contribution towards development initiatives. 3. The Stockholm Challenge Award

For using information technology in economic development of rural areas: e-Choupal

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4.

The corporate social responsibility Crown award

For water practices from UNESCO and water digest 5. TERI corporate award for social responsibility 2008

For integrated watershed programme implemented in 7 states. 6. 7. 8. Golden Peacock Awards for 'Corporate Social Responsibility (Asia)' in 2007 Annual FICCI Outstanding Vision Corporate Triple Impact Award in 2007 United Nations Industrial Development Organisation (UNIDO) Award Readers' Digest Pegasus Award

9.

CASE 5: PepsiCo-Corporate Social Responsibility

About Pepsico India PepsiCo entered India in 1989 and has grown to become the country's largest selling food and Beverage Company. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver joy as well as nutrition and always, good taste. PepsiCo India's expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, and juice based drinks - Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage and a new innovation Nimbooz by 7Up. Local brands - Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands. CSR Motto Performance With Purpose articulates PepsiCo India's belief that its businesses are intrinsically connected to the community and world that surrounds it. At PepsiCo, we're committed to 'Performance with Purpose' - achieving business and financial success while leaving a positive imprint on society.

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CSR Policies 1. Human Sustainability Policies

Quality & Food Safety Programs:-PepsiCo is dedicated to producing the safest, highest-quality and best-tasting beverages and foods in every part of the world. Developing and maintaining robust food safety programs is how we assure safety for every package, every day in every market. PepsiCo has detailed internal programs and procedures for food safety. Responsible Marketing:-Teaching children sensible eating habits at an early age is a critical part of their up-bringing. As a major advertiser, we need to do our part to help parents succeed in this task. Our approach has been to join a leading set of other food and beverage companies in agreeing to change what younger children are seeing advertised on TV and in other media, such as magazines and the internet. Importantly, we are doing this in countries around the world where we do business today. Naturally, we cannot prevent children from seeing our advertising, but we can ensure that media channels that are most targeted at children carry advertisements only for certain products. From PepsiCo's perspective, these are products that meet specific nutrition criteria intended to encourage the consumption of healthier foods and beverages. The policy covers our entire product portfolio and is subject to independent compliance monitoring by Accenture. Healthcare Reform:-PepsiCo values the health and well-being of our associates, partners, customers and consumers. PepsiCo offers a wide range of benefits that encourages wellness, promotes healthy living and gives associates and their families tools and information to make educated healthcare decisions. 2. Environmental Sustainability Policies:-PepsiCo is committed to being an environmentally responsible corporate citizen. We express that commitment in our Environmental Policy and other policies related to Environmental Compliance and Sustainability, a few of which are described in more detail below. PepsiCo's Environmental Policy:-PepsiCo's Environmental Policy applies to all our operations. PepsiCo monitors company-owned operations and joint ventures where we hold a majority share. We encourage our suppliers, service providers, bottlers and other partners to adhere to the policy. Sustainable Agriculture Policy:-We have developed and published our Global Sustainable Agriculture Policy, which demonstrates our approach to sustainable development across our entire agriculture supply chain, including water savings, waste reuse, soil protection and chemical use. Sustainable Packaging Policy:-We have launched a global sustainable packaging policy and formed a Sustainable Packaging Council (SPC). This multidisciplinary team includes leaders from our R&D, Innovation, Procurement, Sales & Marketing and Public
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Policy groups. The council's objectives are to develop sustainable packaging strategies, goals, targets and alternative material technologies and to support responsible disposal practices Core CSR activities Activities are divided in 4 parts 1. Replenishing Water Conserving the world's most precious asset : Water PepsiCo India has pioneered several major initiatives to Replenish water in communities. Our goal is to conserve, replenish and thus offset the water used in our manufacturing process through community water recharge projects and water conservation projects in agriculture. 2009 was a year of immense joy & pride for PepsiCo India. We were able to give back more water than we consumed, through our various initiatives of recharging, replenishing & reusing water. 2. PepsiCo Solid Waste Management Programme PepsiCo India continues to strengthen its Solid Waste Management initiatives in partnership with Exnora, an environmental NGO. This award winning, income generating partnership provides a clean environment to more than 450000 people across Pammal, Chennai, Nagapattinam, Tenkasi and Cuddalore in Tamil Nadu, Sangareddy in Andhra Pradesh and Panipat, Haryana.

Unique income generating partnership with leading environmental NGO, Exnora, a pioneer in waste management. Community members enjoy the benefits of a clean environment and are educated on how to recycle waste, not just relocate it. Households segregate their bio-degradable waste from their recyclable waste. Bio-degradable waste is then converted into organic manure through the process of vermi-culture. Programme recycles 97% of household garbage; this project provides livelihood to more than 500 community members. Bio-degradable waste is converted into high quality organic manure through vermi-culture. Recyclable waste such as PET and plastics, waste paper and tetra packs are recycled. Community awareness programme includes door-to-door campaigns and street plays to motivate people to segregate organic and inorganic garbage at source to enable recycling. Every aspect of programme built around Community and Government participation to help programme evolve into a self sustaining model.
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Awards

The unique PepsiCo-Exnora initiative in Pammal was awarded the environmental Golden Peacock Award for Innovation in 2006.

Zero Solid Waste Centre in Pammal was recognized as a model project by UNICEF in 2007. PepsiCo- Exnora Waste to Wealth program won the BSE NASSCOM Social and Corporate Governance Award 2008. 3. Partnership With Farmers PepsiCo India continues to strengthen its partnerships with farmers across the country to boost their productivity and income. The plan is to strengthen farmer connect from 21,000 in 2009 to 50,000 by 2012. Helping farmers improve yield and income The company's vision is to create a cost-effective, localized agri supply chain for its business by :

Strengthening farmer connect from 21,000 in 2009 to 50,000 by 2012. Building PepsiCo's stature as a development partner by helping farmer grow more and earn more. Introduction of new high yielding varieties of Potato, Oats, Citrus and others. Introduction of sustainable farming methods and contract farming. Making world class agricultural practices available to farmers. Working closely with farmers and state governments to improve agri sustainability, crop diversification and enhance farmer incomes. Helping farmers refine their farming techniques and raise farm productivity. Customized solutions to suit specific geographies and locations. Facilitate financial and insurance services so as to de-risk farming. High Quality Seed Program In order to provide its farmers "The best quality potato seeds", PepsiCo collaborated with the Thapar Institute of Technology to develop quality potato mini-tubers. PepsiCo has also made an investment in a world class potato mini-tuber facility at Zahura in Punjab which helps getting robust and disease-free seeds to its contract farmers.

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Contract Farming Partner in Progress Model PepsiCo has pioneered the concept of contract farming under which the company transfers agricultural best practices and technology and procures the produce at a preagreed price.

A 27-acre research and demonstration farm was set up in Punjab to support the initiative to conduct farm trials of new varieties of potato, chilli, corn, peanut and other crops. PepsiCo India's technical team implemented a high quality seed programme to deliver early generation and disease-free seeds to farmers. Potato Farming The Impact

World class, top quality, high-yielding potato varieties introduced. High yielding potato seeds have enabled farmers to produce world class potatoes and procure higher returns. PepsiCo India has partnered with more than 11,000 farmers working across Punjab, U.P., Karnataka, Bihar, West Bengal, Gujarat and Maharashtra for the supply of world class chip-grade potatoes. Partnered with State Bank of India to get soft loans to all its contract farmers to reduce their cost of cultivation and save them from the clutches of money lenders (higher interest rates). PepsiCo India has also partnered with 1,200 farmers in Rajasthan to cultivate barley in a tie-up with the United Breweries Group. PepsiCo Citrus Project The PepsiCo and PAGREXCO (Punjab Agri Export Corporation) partnered to start a Citrus Development initiative in 2002, marked a step forward in PepsiCo's commitment to diversification of agriculture and improvement in quality of life for farmers. The Impact

Initiative has emerged as one of the most successful models of public-private partnerships in Indian agri-business and would create a localized supply base for citrus juice for Tropicana business. Project played a significant role in introducing a less water intensive alternative to crops such as paddy. Today, farmers can choose from 16 varieties of rootstock and 34 varieties of citrus, largest collection at a commercial nursery.
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Technical support and expertise were extended to the Punjab Government to set up two fruit processing plants in Hoshiarpur and Abohar - prime citrus growing areas in Punjab. Each plant is capable of processing multiple fruits and capable of acting as a catalyst for farmers to adopt horticulture. 4. Healthy Kids PepsiCo's Get Active & a Good Nutrition and Active Lifestyle Program for Children -has seen robust growth and implementation. Designed and supported by the PepsiCo Health & Wellness team, the programs have been implemented in schools in collaboration with prominent NGOs &Hriday, Swashrit and the Indian Medical Association. Get Active programs have a central objective: to raise awareness on the importance of balanced nutrition and regular physical activity for a healthy lifestyle among school children. Starting with a Breakfast Makes Me Smart module in 2008 that emphasized the importance of healthy breakfast to the My Pyramid module launched in April 2009, Get Active school programs promote learning nutrition through active engagement. Get Active believes in combining simplicity and enjoyment. The basic principle is simple & to establish the fundamentals of Calories In = Calories Out. The programs have yielded great results. A look at the Highlights: 2008

Get Active reached 250,000 children across 6 metros and 240 schools in 2008 a significant 150% rise over 100,000 children across 2 metros in 2007 Partnerships with key NGOs and organizations &Swashrit, Hriday Shan and the Indian Medical Association Participation in School/Institutions' Fests and Events Prestigious schools like Modern School, Delhi organized a program to enhance nutrition awareness and the importance of 'Power Breakfast' among children - a first for the school. Scottish High School and Rotary Club also organized similar events The Healthy Lifestyle Exhibition gave visibility to 1000 children from Delhi 2009

Get Active reached 300,000 children across 10 cities and 350 schools in 2009

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RESEARCH
INTRODUCTION
Corporate social responsibility (CSR) is an important function to accelerate the process of overall development and nation-building. India, the second most populous country in the world and home to the largest number of people in need of basic amenities, needs more intensive efforts as part of CSR covering the length and breadth of the country. The concept of CSR applies equally to individuals and corporations as it does to the State. It is a joint and shared responsibility of civil society, activist groups, Government and corporate sector to create appropriate means and avenues for the marginalized and bring them to the mainstream. The success of CSR lies in practicing it as a core part of a companys development strategy. It is important for the corporate sector to identify, promote and implement successful policies and practices that achieve triple bottom-line results. There are over 700,000 registered companies in India out of which about 6545 are traded on the Indian Stock Exchange. They need to ask themselves how best they can bring about social justice, and protection of the environment in co-operation with other sectors of the economy. Non-availability of authentic data and specific information on the kinds of CSR activities, coverage, policy etc. has been generally noticed. We are privileged to be associated with this important survey since in the long run it is expected to facilitate formation of an alliance of CSR initiatives in the country so that such initiatives can be further streamlined, focused and converged into a powerful force of intervention. The survey provides an understanding of the CSR activities in terms of issues, target groups, existence of CSR policy and its vision, duration of implementation of CSR, motivating factors to have CSR initiatives, constraints and suggestions. The survey also provides peer rating of the companies with CSR initiatives on the basis of their performance in CSR. Some of the emerging issues as thrown up by the survey need advocacy while some need intervention and involvement of Government, civil society and corporate houses. The survey results provide an important initial baseline from which a collective vision can be created and progress measured. The corporate and other organizations that responded to the survey are to be congratulated as pioneers in establishing CSR practices in India. Where to from here? In contemplating the future, there are three topics to consider: 1) Current opportunities for the improvement of CSR within India 2) Current global trends in CSR and
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3) Future social trends in India Current Opportunities At one end of the spectrum, CSR can be viewed simply as a collection of good citizenship activities being engaged by various organizations. At the other end, it can be a way of doing business that has significant impact on society. For this latter vision to be enacted in India, it will be necessary to build CSR into a movement. That is to say, public and private organizations will need to come together to set standards, share best practices, jointly promote CSR, and pool resources where useful. An alliance of interested stakeholders will be able to take collective action to establish CSR as an integral part of doing business this is not a passing fad. Some might say that it is easy for corporate houses to support CSR when the economy is growing at 8 per cent and profits are doing well. The real test is what happens to CSR budgets during an economic downturn. That is why it is so important over the next two to three years to embed CSR into the public consciousness, as well as into the executive suite. Current Global Trends Because of the growing size and power of multinational corporate houses, bond rating agencies and investment funds are exerting increasing influence. In particular, they are demanding an accounting for non-financial measures of value creation as they seek to determine risk premiums. These include an assessment of CSR activities, as well as governance practices, management of intellectual capital, and transparency in reporting. There are now multiple CSR rating agencies in North America and Europe. Socially Responsible Investment Funds (SRIs) now consider CSR activity when deciding whether to invest in public traded companies. The Principles for Responsible Investing (PRI) Group was started in conjunction with the UN in 2005. This now includes over 170 institutions representing 15 trillion US dollars in assets. The member institutions take into account six key principles in the area of environmental, social, and corporate governance when making investment decisions. A growing trend in large multinational corporations is the establishment of special committees within the board of directors to oversee CSR and sustainable business practices. More and more, executive compensation is tied to specific outcomes in these areas. Groups of corporate are being encouraged to come together to promote CSR. In 2006, Europe created the European Alliance for CSR. It currently consists of 70 multinational corporate houses and 25 national partner organizations and has become a unique resource for building capability in CSR. Future Social Trends in India The CSR survey revealed, not surprisingly, that organization targeted most of their activities close to home providing services for people who live in villages, towns, and districts near where the organization operates. Education, health, and the environment are the top priorities. More than likely, these priorities will continue.
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There is one social trend in India that looms larger than all others the population tsunami. The current population of India is now over 1.1 billion. Demographers now tell us that India will overtake China by 2026 as the worlds most populous nation with almost 1.5 billion people. Let us put this into perspective. At the time of Independence in 1947, Indias population was approximately 350 million. Between now and 2026, India will add almost as many people as there were in the entire nation in 1947. The implications of this are staggering. Will the additional demands for food, water, housing, education, and health care overwhelm the existing infrastructure? Or can all stakeholders work together to build a literate, healthy, capable society with enough jobs to meaningfully employ all those seeking work? The greater the challenges, the greater the ingenuity required. For CSR in India to have a meaningful impact on society in the coming decade, a national-local approach may be best. National in the sense that there will need to be nationwide alliances and databases in order to quickly learn best practices, share innovations, and scale-up pilot programmes. Local in the sense that it will require organizations to efficiently implement programmes at the grassroots level, as well as mobilize volunteers to serve their local communities. CSR is here to stay and its future is bright. There is much to learn about building worldclass CSR programmes in the Indian context, and this survey is a very good place to start.

EXECUTIVE SUMMARY
The national survey on corporate social responsibility practices in India, amongst leading business and corporate houses and public sector organizations, commissioned by Times Foundation has brought many emerging practices and trends to light. The objective of the survey is to provide an understanding of the role played by corporate and public sector undertakings (PSUs) in CSR domain and their perceptions about it. The survey used online administration of questionnaire and covered employees from 11 PSUs, 39 private national agencies and 32 private multinationals. The organizations covered were from various sectors including information technology, insurance, automobile, cement, paper & pulp, construction, petrochemicals, metal, media, pharmaceutical, sugar, mining and other important sectoral industries. About 90 per cent of the 82 organizations all the 11 PSUs, four-fifth of the private national agencies (85 per cent) and 94 per cent of the private multinationals are involved in various CSR initiatives. The survey highlights that most of the companies implement CSR projects through their own CSR project management divisions, with just about 9 per cent involving voluntary organizations and over one-tenth of the companies giving financial support directly to community or community based organizations. Almost all respondents see CSR initiatives as a catalyst in bringing about positive social change.
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Through a peer review process inbuilt into the questionnaire, TATA Group (67 per cent) emerged as the numero uno company with active CSR initiatives, distantly followed by Infosys (13 per cent), ITC (12 per cent), NTPC (11 per cent), Anil Dhirubhai Ambani Reliance Group (10 per cent), Ambuja Cement (9 per cent), Microsoft (7 per cent), Wipro, BILT and L&T (6 per cent each). The findings of the survey place education, health and environment as three of the most popular areas of intervention for companies as part of their CSR initiatives. The survey also reveals that a majority of the CSR initiatives are regular programmes, whereas a small percentage of surveyed companies implement one-time CSR programme as well.

Some Major Findings

Rise of CSR The involvement of the corporate sector in CSR seems to have picked up after 1991 as 64 per cent of the participating organizations started CSR during 1991-2005. About twothird of the private multinational agencies (70 per cent) and private national agencies (67 per cent) initiated CSR during this period, and one-third of the PSUs too started their CSR programmes during this period. In half of the cases (56 per cent), people living near the organization or industry are covered as part of the CSR programmes. The other groups under CSR initiatives include poor people living in rural areas (42 per cent), tribal people (16 per cent), people selected in consultation with NGOs (41 per cent) and communities selected randomly (11 per cent). In the case of PSUs, coverage of people living near the industry or organization and rural population is more, while selection of people through Nongovernmental Organizations (NGOs) is more common in the case of private enterprises. Education is No.1 The selection of issues under CSR by organizations depends on host of factors including organizational mandate, current relevance of issues and demand from the community. The priority areas that the respondents felt ought to be covered under CSR initiatives include education (82 per cent), environment (81 per cent), health (81 per cent), women empowerment (63 per cent), livelihood promotion (62 per cent), sanitation (61 per cent), microfinance (60 per cent), HIV/ AIDS (54 per cent), child care (55 per cent), slum improvement (50 per cent), disaster management (44 per cent) and agricultural development (29 per cent). Image Does Matter For most companies, CSR is a sure way to improve their public perception, and over half of them do so to brand the company. Only one-tenth of the organizations stated that they are into CSR because it is mandatory, and just about two-fifth of them do it for tax exemption. Public goodwill and branding are high on the agenda in the case of private multinational agencies, and improved perception about the company is the motivation in
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the case of PSUs. Currently, NGOs and International Non-governmental Organizations (INGOs) are involved in implementation of development projects, capacity building of beneficiaries, planning and execution and scalability of projects. The organizations surveyed felt that NGOs and INGOs ought to be more involved in project implementation, providing voluntary support to corporate agencies, monitoring and evaluation of the ongoing projects. Wanted: A Government Policy A quarter of the organizations surveyed felt the government was not doing much in facilitating CSR initiatives. However, half the respondents mentioned the role of the Government in helping with the project implementation. About one-fifth of the respondents felt that the Government did play a role in capacity building and project monitoring. Most of the companies expect greater involvement of the Government, and over three-quarter of them want the Government to develop a proper CSR policy. Most respondents argued that business houses should be involved in formulation of CSR policy. Others whom the respondents felt ought to be involved in CSR activities include industries, civil society organizations, Government functionaries and research organizations. A majority wants the Government to be involved in capacity building and providing an enabling environment, while almost one-third of respondents also envisage a monitoring role from the Government. Most of the organizations stated that they have a definite CSR policy in place. Four-fifth of the private multinational agencies (80 per cent), three-fifth of the PSUs (64 per cent) and half of the private national agencies (52 per cent) have their own CSR policy. Do the Numbers Add Up? About 70 per cent of the organizations surveyed stated that they have separate allocation of funds towards CSR projects. This was reported more in the case of private multinational agencies (81 per cent) followed by PSUs (73 per cent), with the lowest being in case of private national agencies (59 per cent). When asked about the average percentage of annual budget allocated for CSR in the past three years, more than half of the organizations (52 per cent) did not share information citing 'no relation between CSR allocation and annual budget'. Almost a quarter of the organizations stated that no specific budget was fixed for CSR initiatives, while 15 per cent respondents said that the allocation for CSR depended on decisions of the organizations board. More than one-fourth of the organizations (30 per cent) allocate less than 5 per cent of their annual budget for CSR initiatives, according to the surveys findings. Taxing Time Only a little over half of the companies stated that they were not in favour of the Government's proposal to abolish Section 80 G, granting tax benefits to funds allocated
45

to development projects, as this would discourage CSR spending. The rest did not think the proposal would have any impact or were not very concerned about it. This shows a mixed response of the participating organizations on the issue of tax exemptions on projects of a charitable nature. Challenges Galore Some of the challenges faced by the companies in implementing CSR programmes pertain to community participation and capacity building within the organization as well as those of NGOs that they tie up with. Especially in the rural areas, companies face the problem of lack of well-organized civil society groups that could identify the real needs of the society and work to address them. Lack of transparency too is a problem they face. Companies also identified the problem of having no way of scientifically researching and gathering evidence on the impact of their CSR initiatives on the communities they target and work for. Without knowing the impact of their programmes, they felt it was difficult to tailor the programmes according to the needs of the people they were meant for. The respondents rued that event-based activities, which did not go a long way, narrowed the role of CSR. They also felt that the non-availability of clear guidelines on CSR and lack of consensus regarding areas of focus too hampered the ability of CSR initiatives to make a greater difference to the lives of the needy and the underprivileged in their respective areas of intervention. Spread to SME Sector The suggestions put forth by the participating organizations to make CSR initiatives more effective and useful include spreading awareness about CSR among the general public so as to generate project demand and effective partnership between all stakeholders including corporate, community, employees, and the Government. They also felt that the introduction of CSR in the SME sector would help more organizations to reach out to remote areas. Resource pooling, adopting best practices, risk analysis and mapping of CSR initiatives were some of the suggestions offered by the participating firms and organizations. The respondents also recommended accreditation of CSR initiatives by an independent agency and making CSR a part of the curriculum at management schools, colleges and universities. Integration of CSR into the DNA of business, active role played by media in highlighting CSR success stories, top management commitment, streamlining of CSR with stringent monitoring and CSRfriendly laws were other important recommendations put forward by participating organizations. The issues raised by participating organizations and recommendations put forth by involved stakeholders build consciousness about the critical issues involved in CSR initiatives pursued by the companies and the need for better coordination between various stakeholders to provide the necessary support system. These combined efforts together would be able to facilitate the process of effective programme implementation. This is needed to support gradual evolution of a healthy, more educated and greener society with principles of inclusion, equity and justice.
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The survey highlights that the participating organizations often tend to list lofty goals for CSR initiatives ranging from nation-building and providing localized rural employment and livelihood opportunities to people empowerment through wealth creation, raising quality of life and social well-being of communities, striving for harmony with nature and a greener world. The goals set should be realistic and implementable with measurable outcomes in a time-bound manner, sums up the survey. The survey also highlights the role of all stakeholders in making CSR initiatives a success and underlines an urgent need for effective coordination and communication between the companies, communities and the Government. The role of the State as enabler has been highlighted consistently by all participating respondents in the survey.

METHODOLOGY
A. Administration and Coverage of the Survey
The survey used a sample size of 250 companies involved in CSR activities through a method of online administration of questionnaire. The questionnaire was evolved after due diligence including focus group meetings, consultations with key stakeholders and a pilot in four metros. Finally 82 organizations responded to the questionnaire. These comprised 11 public sector undertakings (PSUs), 39 private national agencies and 32 private multinational organizations. The respondent organizations form a satisfactory percentage of 33 per cent of the sample size, given the fact that only those companies that had direct or indirect involvement in CSR activities were chosen to be approached for the survey. It is interesting to note that the companies responding to the questionnaire belong to a range of sectors representing all major cities, regions and sectoral business interests (Table 1).

SECTOR

Public Private Sector agency Undertaking (National)

2 5 4 4 3 3 1 3 2 1 3 2

Private ALL agency (Multinational)

7 4 2 2 3 1 3 1 12 5 5 4 4 4 3 3

IT Mining Automobile Cement Construction Pulp & Paper Insurance Beverage

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Electronics Metal Petrochemical Financial Services Pharmaceutical Steel Textile Media Banking Sugar Jute Fertilizer Tobacco Food Other Sector Not Specified TOTAL N

3 4 3 2 2 2 1 1 1 1 1 6 11

3 1 1 1 1 1 1 1 1 1 24 1 39

1 3 1 2 1 2 1 1 1 14 1 32

3 3 3 3 2 2 2 2 1 1 1 1 1 1 44 2 82

B. Objectives
The survey identified key objectives through a focus group meeting and pilot runs. Some of the important and broad-based objectives identified by the survey are as follows: 1. To provide an understanding of the role played by corporate houses and public sector undertakings 2. To understand the perceptions amongst public about CSR 3. To provide data on CSR practices in India and the role of Government in strengthening CSR and to set the stage for interaction among various stakeholders 4. To understand various issues of social relevance under CSR 5. To elicit views of business houses on CSR policies and role of NGOs and review of existing regulatory mechanism, and 6. To set a stage for interaction amongst various stakeholders and find out challenges and recommend remedial measures.

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The survey also suggests paving way for formation of CSR alliance in India for effective synergy of ideas, innovative practices and resources, if needed, for replicating and scaling up innovative CSR practices in India.

KEY FINDINGS OF THE SURVEY

1. CSR INITIATIVES AND POLICY ISSUES
1.1 Whether Organization has CSR Initiatives On being asked whether the company has CSR initiatives, 90 per cent of the 82 organizations replied in affirmative. Analysis by types of organizations indicates that all the 11 PSUs, about four-fifth of the private national agencies (85 per cent) and most of the private multinational agencies (94 per cent) are involved in CSR initiatives. Fig.1: Organizations with CSR Initiatives (In per cent)

PSUs

Private Agency (National)

Series1

Private Agency (Multinational)

75%

80%

85%

90%

95%

100%

105%

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Year of Initiation of CSR Activities Information on year in which the organization started CSR initiatives was elicited through the administration of the questionnaire. Analysis indicates that involvement of corporate sector in CSR picked up after 1991 as three-fifth of them started CSR activities and initiatives during 1991-2005. Fig.2: Year of Initiation of CSR Initiatives (In per cent)

2006 Onwards

2001-2005

1991-2000 Private Agency (Multinational) Private Agency (National) 1980-1990 PSUs

1971-1980

Before 1970

10

20

30

40

Analysis by types of organization reveals that about two-third each of the private multinational agencies (70 per cent) and private national agencies (67 per cent) initiated CSR activities during this period, while one-third of the PSUs (36 per cent) also reported likewise. Some of the PSUs started their CSR initiatives during 1971-1980 (18 per cent) and 1980-1990 (27 per cent).

50

1.2 Issues Covered and Priority Areas to be Covered under CSR Domain Issues Currently Covered The survey highlights that education (82 per cent), health (77 per cent), environment (66 per cent), livelihood promotion (57 per cent) and women empowerment (55 per cent) are the major thrust areas currently covered under CSR initiatives of participating organizations. Proportion of organizations covering themes of microfinance and livelihood promotion is less in case of private multinationals and PSUs respectively.
Fig 3: Issues Covered under CSR Initiatives (In per cent)

sanitation

micro finance

women empowerment

Private Agency (Multinational) Livelihood Promotion Private Agency (National) PSUs Environment

Health

Education

20

40

60

80

100

120

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Rationale for Selection of CSR Initiatives Regarding the rationale for selection of initiatives covered under CSR by participating organizations, the analysis indicates that the selection of initiatives under CSR by the organizations depends on host of factors including organizational mandate (54 per cent), current relevance of issues (51 per cent) and demand from the community (48 per cent). Fig 4: Rationale for Selection of CSR Initiatives (In per cent)

Not started

As per the organizational mandate Private Agency (Multinational) Private Agency (National) Current relevance of the issue PSUs

Demand from the community

10

20

30

40

50

60

70

80

*Total exceeds 100 due to multiple responses

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Priority Areas to be Covered under CSR Initiatives The respondents were asked about the priority areas that should be covered under CSR initiatives by corporate houses. The analysis revealed that issues such as education (82 per cent), health and environment (80 per cent each) top the list followed by women empowerment (64 per cent), livelihood promotion (63 per cent), sanitation (61 per cent), microfinance (60 per cent), HIV/AIDS (54 per cent), child care (55 per cent), slum improvement (50 per cent) and disaster management (44 per cent). Fig 5: Priority Areas to be covered under CSR Initiatives (In per cent)

Health Education Micro Finance Environment Women empowerment Livelihood Promotion Sanitation HIV/AIDS Child Care/Development Slum Improvement Disaster Management/Rehabitation 0 50 100

Private Agency (Multinational) Private Agency (National) PSUs

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Current and Priority Issues Covered under CSR Initiatives Table 2 below gives a comparative analysis of the current issues covered and priority areas to be considered under CSR initiatives by participating organizations. Table 2: Current Issues Covered vs. Priority Areas to be considered under CSR (In per cent)
Private National Agency
Priority 82 82 9 73 55 46 73 Current 85 64 15 49 42 42 40 Priority 82 82 31 62 62 57 54

PSUs

Private Multinational Agency

Current 64 57 27 30 30 27 40 Priority 78 78 35 53 63 43 50

All

Issues
Health Environment Agriculture Microfinance Sanitation HIV/AIDS Childcare/ Development Education Rehabilitation & Resettlement Slum Improvement Disaster Management & Rehabilitation Livelihood Promotion Women Empowerment

Current 91 100 0 73 64 37 55

Current 77 66 18 45 41 35 42

Priority 81 81 29 60 61 54 55

91 36

82 36

82 36

80 39

80 27

85 37

82 32

82 38

18

64

18

46

17

50

18

50

36

27

24

41

33

53

30

44

46

46

55

67

63

63

57

62

64

64

55

64

53

63

55

63

* Total exceeds 100 due to multiple responses

The general perception of the participating organizations is that other issues captured through the survey also need to be given priority for coverage under CSR. Other equally important issues demanding attention include HIV/AIDS, child development, slum improvement and agriculture across the three types of organizations. The other priority issues cited by the participating respondents include environment, microfinance, sanitation, disaster management, rehabilitation & resettlement.
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There is need to expand the set of issues covered under existing CSR initiatives of various organizations for benefit of community, needy and the under privileged. It is noteworthy to state that education, health and environment the three thrust areas continue to remain on radar of CSR interventions of the corporate houses in different parts of the country.

1.3 CSR Policy of Companies Existence of CSR Policy On being asked if the organizations have CSR policy, almost two-third of the organizations (65 per cent) replied in affirmative. Four-fifth of the private multinationals (80 per cent), three-fifth of the PSUs (64 per cent) and half of the private national agencies (52 per cent) have the CSR policy according to survey findings. Fig 6 : Organizations with CSR Policy (In per cent)

In process

Private Agency (Multinational) No Private Agency (National) PSUs

Yes

20

40

60

80

100

Objectives of CSR Policy Information on the vision and objectives of the CSR policy was also elicited through the questionnaire; the respondents felt that the vision and objectives of CSR policy of the organizations are varied and diverse and therefore can broadly be categorized in the following manner: CSR policy aims to uphold commitment to complement the efforts of the Government in the nation-building process. The policy aims at providing localized rural employment and livelihood opportunities to empower rural communities.

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 The policy is committed towards raising the quality of life and social well-being of community by contributing to basics of life in harmony with nature. The policy aims at creating business leadership ensuring social and environmental sustainability in a responsible manner. This also aims at upliftment of the deprived and creating a sustainable world in which NGOs, Government and other stakeholders would work together to achieve inclusive growth and equity. The policy also aims at improving the lifestyle of rural people, helping in upliftment of the poor, especially scheduled caste and scheduled tribes, and promoting education among slum dwellers. The policy adopts triple bottom line accounting methods expanding the traditional reporting framework to take into account environmental and social performance in addition to financial performance. The policy aims to create sustainable economies and transform stagnant lives into active partnerships through synergized proactive handholding in areas of infrastructure, education, training, health and environment. The policy also aims at fostering innovation by partnering with Indian universities and providing digital inclusion for people who do not have access to Information and Communication Technologies (ICT). The policy pledges to work with international communities towards mitigating global, human and environmental concerns. The participating respondents also viewed CSR policy of the organizations as building blocks between communities and companies. The survey also highlights that the vision and objectives of the organizations on how they need to pursue CSR initiatives for the beneficiaries will play a key role in streamlining and implementing CSR projects. The role of the Government as enabler to deepen CSR engagement with communities was particularly mentioned by all participating organizations. It is also found in the survey that respondents remain optimistic about the ongoing interventions of the corporate houses on critical human development issues such as education, health and environment. It is also reported that there are already visible imprints of successful engagement between local communities and businesses. The role of State seen to be slowly aligning itself with community and locally operating businesses is a welcome revelation of the survey.

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2. CSR IMPLEMENTATION PROCESS AND OUTCOME

2.1 Person Responsible for CSR Implementation in Companies The survey reveals that the CSR Director followed by the CEO of the company is chief canvasser and the main person responsible for implementation of CSR initiatives across organizations. In case of PSUs, HR departments and administrative wings are also responsible for implementation of CSR activities besides CSR Director and the CEO. Fig 7: Person Responsible for CSR Implementation (In per cent)
60

50

40

30

PSU Private Agency (National)

20

Private Agency (Multinational) All

10

57

2.2 Stakeholders in CSR Implementation Process On the question of who are the stakeholders in the implementation of the CSR activities and initiatives, the survey reveals that the CSR initiatives are implemented through companies own CSR project management initiatives (68 per cent), voluntary organizations (29 per cent) and by giving financial support directly to community or community-based organizations (11 per cent). Fig. 8: Stakeholders in Implementation Process (In per cent)
100

50

Financial support to community based organizations Voluntary Organization Project management initatives

*Total exceeds 100 due to multiple responses

2.3 Types of CSR Initiatives All participating respondents were asked whether the CSR initiatives implemented in the past three years were regular programmes or onetime events. The survey highlights that 84 per cent of the participating organizations implemented regular programmes whereas 7 per cent of organizations implemented one time CSR events. Similar trend is noticed in case of PSUs, private multinational and private national organizations. *N=Universe
Type

Total exceeds N due to multiple responses

Public Sector Undertaking Private Agency (Multinational) Private Agency (National) All

One-Time Events Regular Programmes Not Stated Total N*

18 82 0 11

3 82 15 39

9 88 3 32

7 84 9 82

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2.4 Outcome of CSR Initiatives Benefits of CSR On being asked if CSR is seen as a catalyst in bringing positive social change, almost all the respondents replied affirmatively. About three-fifth of the organizations (59 per cent) work on CSR to improve perception about the company, while more than half (54 per cent) do so to brand the company among people. Tax benefit under 80G is a motivating factor in case of two-fifth of the organizations (43 per cent), while one-tenth of the organizations (13 per cent) reported to be taking up CSR work as it is mandatory in their case (Fig. 9a). Fig 9a: Possible Benefits of CSR (In per cent)

Improve perception about company

To brand company among people

All Private Agency (Multinational) Private Agency (National)

To get tax benefit (under 80G)

PSU

As it has been made mandatory by the government

20

40

60

80

100

*Total exceeds 100 due to multiple responses

The respondents were also asked about possible benefits of investing in CSR, the findings indicate that though goodwill is a common factor of CSR initiatives among all the three types of organizations, branding seems to be higher on agenda in case of private multinational companies.

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On the other hand PSUs seem to be more concerned about improving perception of the company in the eyes of the public and their stakeholders. Fig 9b: Possible Benefits of CSR (In per cent)
90 80 70 60 50 40 30 20 10 0 PSU Private Agency (National) Private Agency (Multinational) All branding improved perception about company goodwill

*Total exceeds 100 due to multiple responses

Other possible benefits highlighted by the participating respondents include the following: 1. 2. 3. 4. 5. Positive and long-term relationship with communities Nation-building and prosperity of region of their operations and activities Providing support where Governments support is inadequate and limited Helping supply chain management and Supporting creation of a healthy human resource base for the corporate

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Perceptions about Tax Benefits Though CSR initiatives are not implemented with the sole intention of tax saving, half of the organizations surveyed (51 per cent) felt that Governments proposal to abolish section 80G granting tax benefits would discourage CSR spending by the companies. According to the survey findings, the rest of the organizations are divided in their views as 6 per cent believe that this is a good decision, 17 per cent are of the view that it will not affect the CSR spending and yet another 6 per cent state that it does not have any relevance to CSR spending. Fig 10: Perceptions about Tax Benefits (In per cent)
60 50 40 does not have any relevance 30 20 10 0 PSU Private Agency (National) Private Agency (Multinational) All it will not affect it will discourage CSR spending This is good for companies

*Total exceeds 100 due to multiple responses

Factors Leading to Corporate Houses forming Foundations for CSR Work According to the survey findings, the factors which lead the corporate houses to form foundations for CSR-related work, include the following: 1. 2. 3. 4. 5. Exclusive focus on CSR initiatives and activities Demarcation of commercial activities from the social activities Genuine social concerns for community Transparency in CSR activities and Generation of funds to support CSR activities

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3. AREA AND TARGET GROUPS COVERED

3.1 Geographical Areas Covered The organizations implementing various CSR initiatives were also asked about the geographical coverage of their activities in terms of number of states, districts, towns and villages covered. The findings of the survey indicate that more than two-third (70 per cent) of the organizations cover 1-5 states, while two-fifth of the organizations cover 1-5 districts. Half of the organizations cover 1-3 towns and more than one-fourth cover 1-10 villages Table 4: Geographical Coverage of CSR Activities by Companies
Number of States/Districts/ Towns/Villages covered States 1-3 4-6 7-10 14-18 19-21 22-29 TOTAL Districts 1-5 6-10 11-20 27-50 130-300 TOTAL Towns 1-3 4-7 8-15 200-300 TOTAL Villages 1-10 18-30 32-50 100-200 253- 340 400-670 900 1010 TOTAL Number of Organizations Percentage of Organizations 44 25 14 8 6 3

29 16 9 5 4 2 65 21 13 9 2 2 47 12 8 6 2 28 12 5 7 6 5 4 3 42

45 28 19 4 4

53 29 21 7

29 12 17 14 12 9 7

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3.2 Target Groups Covered The findings of the survey also suggest that more than half of the organizations (56 per cent) cover people living near their organizations. The other groups covered include poor people living in rural areas (42 per cent) and tribal areas (16 per cent). Two-fifth of the organizations indicated that they select the people in consultation with NGOs (41 per cent) while one-tenth select the communities randomly (11 per cent). In the case of PSUs, coverage of people living near organizations and rural population is more common while selection of people through NGOs is more common in case of private sector. Fig 11: Target Groups Covered under CSR (In per cent)

people living nearby industry/organization

selected in consultation with NGO All random selection of area/community Private Agency (Multinational) Private Agency (National) tribal people in any part of country PSU

poor people living in rural areas

50

100

*Total exceeds 100 due to multiple responses

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3.3 Rationale for Selection of the Intervention Areas for CSR Initiatives On the question of rationale for selection of area by participating respondents, the survey findings highlight that an area for implementation of CSR initiatives is targeted as per the area of operation of the organizations (43 per cent), selection criteria of the organization/stakeholder decision (26 per cent) and demand by local community (10 per cent). Random selection of the area was mentioned only in case of private multinational agencies. Selection of the area on the basis of criteria of the organization and stakeholder decision is more common in case of PSUs (Table 5). Table 5: Rationale behind Selecting Area for CSR coverage (In per cent) Public Sector Private Private Rationale All Undertaking Agency Agency (National) (Multinational)

Operation Area Selected Randomly On the basis of Demand by Local Community

36 0

44 0

44 9

43 4

18

10

10

As per the Selection Criteria of Organization/ Stakeholder Decision Not Stated Others TOTAL N*
*N=Universe

46

21

25

26

0 0 11

15 10 39

3 13 32

8 9 82

Total exceeds N due to multiple responses

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4. ASPECTS OF FUND ALLOCATION

4.1 Fund Allocation for CSR Initiatives On being asked if participating respondents have separate allocation of funds towards CSR implementation, more than two-third (70 per cent) of the organizations surveyed replied in affirmative. This was reported more in case of private multinational agencies (81 per cent) followed by PSUs (73 per cent) and private national agencies recording the lowest (59 per cent). Fig 12: Fund Allocation for CSR Initiatives (In per cent)

not stated

All no Private Agency (Multinational) Private Agency (National) PSU yes

20

40

60

80

100

On being further asked about the average percentage of annual budget allocated for CSR initiatives in the last three years, more than half of the organizations did not provide any specific information as participating respondents felt that there is no relation between CSR allocation and annual budget (24 per cent). The respondents also argued that there are no specific budgets set for CSR initiatives (14 per cent) and also suggested that allocation of resources for CSR activities depends on the decisions of the board and the management (13 per cent). One-tenth of the organizations did not provide any information on the issue. An important highlight of the findings is that more than one-fourth of the organizations (30 per cent) allocate less than 5 per cent of their annual budget for CSR initiatives (Table 6).

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Table 6: Average Percentage of Funds Allocated for CSR during last 3 Years Private Private Average PSUs All National Multinational Percentage Agency Agency

<5%

55

26

28

30

5-10%

10-20%

More than this

Depends on the Boards Decision

22

13

Does not have any Relation with the Annual Budget

21

34

24

No Specific Budget Set

23

14

Not Stated

18

22

16

Total N*
*N=Universe

11

39

32

82

Total exceeds N due to multiple responses

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4.2 Suggestions for Bringing in Transparency Regarding Allocation and Utilizations of Funds for CSR Initiatives: The respondents were asked to list out steps the organizations need to take to bring in more transparency regarding fund allocation as well as utilization of funds for CSR initiatives. The dominant factors mentioned by the participating respondents include the following: Better monitoring and evaluation mechanism: It was felt by the respondents that regular monitoring would ensure typical checks and balances in given set of CSR activities pursued by the companies. Monitoring the impact on the beneficiaries would also encourage and motivate other stakeholders. The survey also highlights that the corporate houses with CSR initiatives and activities should follow: a) Internal/external auditing b) Annual social audits; and c) Statutory audits The respondents agreed that any system of internal controls, including internal audit and board of directors supervision, as well as external verification by means of statutory audits and independent verification of CSR reporting would ensure better project implementation including transparency in CSR fund utilization. The findings of the survey also reveal that monitoring committees should be formed through public-private partnership route with representation from academic institutions, reputed NGOs and civic bodies for effective interface and ensuring measurable outcomes. The existing ground realities do suggest that the arrangements indicated by the participating respondents are in tune with majority views of all stakeholders that transparency and impact assessment of the activities by CSR implementing agencies need to be firmed up. Various issues such as monitoring, evaluation, projectisation and impact assessments are key to effective fund utilization and efficient delivery of outcomes for impacting lives of the beneficiaries meaningfully. In many instances where some of such mechanisms are in place, better value for money spent on CSR, better relationship with beneficiaries and effective delivery of results have been achieved. This also sets in motion a better model that has promise and potential to have wider replication and scalability, the important link in the chain of building effective interface with the communities, demonstrating transparency and motivating others to follow a path that has proven to be working effectively on the ground. Organizational issues: The findings of the survey also throw light on the necessity that the corporate houses with CSR initiatives should set aside a fixed percentage of their profit after tax (PAT) towards CSR spend. A CSR plan should accordingly be prepared well ahead of
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commencement of the financial year listing out various activities in form of an annual plan along with CSR objectives, quantifiable benefits and financial allocations. The yearly plan should also be approved by the top management of the companies, preferably at the board level or executive committee level along with an inbuilt project review on half-yearly basis. Involvement of civil society and non-governmental organizations: On the question of involvement of the civil society organizations, the survey results were close to the general belief that the funds for CSR should be allocated in consultation with non-governmental organizations and other specialized agencies having experience in related fields and issues. This process would facilitate sustainability and effectiveness of the project implementation by the corporate houses through their CSR wings. Right to information: The participating companies in the survey felt that for transparency, effective CSR interventions and measurable impacts, CSR may be brought under the preview of the Right to Information Act, if not already covered. Evaluation mechanism: On the issue of the evaluation mechanism, the respondents felt that CSR projects should be evaluated and audited by an experienced agency, still better by an outside agency for effectiveness of approach and for ensuring transparency. The reports and the documents generated through the audit process should be made available in the public domain for better dissemination of information on results achieved and outcomes ensured. The last mile post in the entire effort of implementing of the CSR activities necessarily has to be at the heart of CSR interventions. The respondents also indicated that independent evaluation and appraisal of social, technical and financial components of the implemented project should be carried out to estimate the cost benefit analysis, sustainability and other benefits to bring out necessary lessons to be learnt for future improvement of the CSR programmes. Fund allocation and its utilization: The respondents agreed that the process of allocation of funds and reports of expenditure should be open and out in the public domain. Apart from the impact assessment report, a fund utilization statement should also be brought out clearly showing break up of expenses. This would not only ensure transparency in fund allocations and assessing subsequent expenses but would also create an environment of mutual trust and acceptance between the companies and the communities and other beneficiaries likely to be benefited by CSR programmes and initiatives.

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5 ROLES OF THE GOVERNMENT, CIVIL SOCIETY AND COMPANIES

5.1 Role of the Government in CSR Domain When asked about the role that the Government plays in domain of CSR, more than one-fourth of the respondent organizations (26 per cent) felt that the Government is not doing much to strengthen and deepen CSR initiatives by way of creating an enabling environment. It was however interesting to note that Governments role in facilitating implementation of CSR was mentioned by half of the participating organizations. About one-fifth of the respondents felt that the Government has a role to play in providing facilitation to the agencies that are involved in the implementation of various CSR initiatives. Role of the Government in ensuring implementation of CSR initiatives (23 per cent), capacity building (23 per cent) and monitoring (24 per cent) was adequately highlighted by the respondents. Fig 13: Current Role of Government in CSR Domain (In per cent)
60 50 40 30 20 10 0 Facilitating Agencies in Implementation Capacity Building Monitoring Ensuring Implementation Nothing

*Total exceeds 100 due to multiple responses

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The respondents also felt that the Government should play a positive role in enabling CSR initiatives of the corporate houses including policy development (76 per cent) as the major area of its involvement followed by capacity building (60 per cent), regulation (59 per cent) and monitoring (33 per cent). Fig 14: Expected Role of Government in CSR Domain (In per cent)
80 70 60 50 40 30 20 10 0 Policy Development Capacity Building Regulation Monitoring

*Total exceeds 100 due to multiple responses

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6. CO-ORDINATION BETWEEN THE GOVERNMENT, BUSINESS AND CIVIL SOCIETY

The respondents were asked to rate the extent of co-ordination between the Government, business and NGOs on a 5-point scale with 1 representing very poor and 5 representing very good. The extent of co-ordination between NGOs and business firms was rated as average by almost two-fifth of respondents (38 per cent) whereas co-ordination between Government and business firms was rated as average by almost half of the respondents (42 per cent) Almost two-fifth of the respondents (39 per cent) chose to rate co-ordination between NGOs and business firms as good while four-fifth of the respondents (33 per cent) found co-ordination between the Government and buisness firms as good. In the same perspective, one-third of the respondents (12 per cent) and one-fifth of the respondents (16 per cent) responded denying any operational co-ordination between the NGOs and business firms on one hand and between the Government and business firms on the other. The issue of co-ordination between the Government, the business and the community are of critical relevance as highlighted by the survey in effectively tackling CSR initiatives. Table 8: Co-ordination between Government, Business and Non-governmental Organizations Rating (On Scale of 1-5) Non-governmental Organization and Business Firm (in per cent) 3 9 38 39 11 82
Total exceeds N due to multiple responses

Government and Business Firm (in per cent) 4 12 42 33 9 82

Very Poor Poor Average Good Very Good Total N

*N=Universe

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Stakeholders involvement in CSR Policy Formulation The findings of the survey highlight that a sizeable number of respondents felt that a CSR policy will definitely take forward their CSR initiatives. The respondents argued the case of their involvement in the formulation of a sound CSR policy along with other stakeholders. Most of the respondents (91 per cent) felt that business houses should be involved in formulation of CSR policy. Others to be involved include industry (89 per cent), civil society organizations (88 per cent), government functionaries (78 per cent) and research organizations (70 per cent). Fig.15: Stakeholders Involvement in CSR Policy Formulation (In per cent)

Research Organizations All

Government Functionaries Private Agency (Multinational) Civil Society Organizations Private Agency (National)

Industries

PSU

Business Houses

50

100

150

*Total exceeds 100 due to multiple responses

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7. PEER RATING OF COMPANIES WITH CSR INITIATIVES

All 82 participants organizations were asked to rate the companies with CSR initiatives and indicate their preference for best three companies. TATA Group (67 per cent) emerges as the front runner distantly followed by Infosys (13 per cent), ITC (12 per cent), NTPC (11 per cent) and ADA-Reliance (10 per cent).

Company
TATA Group Infosys Indian Tobacco Company of India Limited (ITC) National Thermal Power Corporation (NTPC) Anil Dhirubhai Ambani, Reliance Energy Limited Ambuja Cement Limited Microsoft Limited Wipro Ballarpur Industries Limited (BILT) Larsen & Toubro (L&T) Aditya Birla Group Dr. Reddys Laboratories Limited Oil and Natural Gas Corporation Limited (ONGC) Integrated Electronics Corporation (INTEL) General Electric Company (GE) Satyam Foundation Bharati Hongkong and Shanghai Banking Corporation Limited (HSBC) TATA Teleservices Limited (TTSL) TV Sundaram Iyengar and Sons Limited (TVS) Total N*

Frequency of Peer Review

67 13 12 11 10 9 7 6 6 6 5 5 5 5 4 4 4 4 2 1 82

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CHALLENGES TO CSR INITIATIVES IN INDIA

The survey elicited responses from participating organizations about various challenges facing CSR initiatives in different parts of the country. Responses obtained from the participating organizations have been collated and broadly categorized by the research team. These challenges are listed below: a) Lack of community participation in CSR activities: There is a lack of interest of the local community in participating and contributing to CSR activities of companies. This is largely attributable to the fact that there exists little or no knowledge about CSR within the local communities as no serious efforts have been made to spread awareness about CSR and instill confidence in the local communities about such initiatives. The situation is further aggravated by a lack of communication between the company and the community at the grassroots. b) Need to build local capacities: There is a need for capacity building of the local non-governmental organizations as there is serious dearth of trained and efficient organizations that can effectively contribute to the ongoing CSR activities initiated by companies. This seriously compromises scaling up of CSR initiatives and subsequently limits the scope of such activities. c) Issues of transparency: Lack of transparency is one of the key issues brought forth by the survey. There is an expression by the companies that there exists lack of transparency on the part of the local implementing agencies as they do not make adequate efforts to disclose information on their programmes, audit issues, impact assessment and utilization of funds. This reported lack of transparency negatively impacts the process of trust building between companies and local communities, which is key to the success of any CSR initiative at the local level. d) Non-availability of well organized non-governmental organizations: It is also reported that there is non-availability of well organized nongovernmental organizations in remote and rural areas that can assess and identify real needs of the community and work along with companies to ensure successful implementation of CSR activities. This also builds the case for investing in local communities by way of building their capacities to undertake development projects at local levels. e) Visibility factor: The role of media in highlighting good cases of successful CSR initiatives is welcomed as it spreads good stories and sensitizes the local population about various ongoing CSR initiatives of companies. This apparent influence of gaining visibility and branding exercise often leads many nongovernmental organizations to involve themselves in event-based programmes; in the process, they often miss out on meaningful grassroots interventions. f) Narrow perception towards CSR initiatives: Non-governmental organizations and Government agencies usually possess a narrow outlook towards the CSR initiatives of companies, often defining CSR initiatives more donor-driven than local in approach. As a result, they find it hard to decide whether they should participate in such activities at all in medium and long run. g) Non-availability of clear CSR guidelines: There are no clear cut statutory guidelines or policy directives to give a definitive direction to CSR initiatives of
74

companies. It is found that the scale of CSR initiatives of companies should depend upon their business size and profile. In other words, the bigger the company, the larger its CSR programme. h) Lack of consensus on implementing CSR issues: There is a lack of consensus amongst local agencies regarding CSR projects. This lack of consensus often results in duplication of activities by corporate houses in areas of their intervention. This results in a competitive spirit between local implementing agencies rather than building collaborative approaches on issues. This factor limits companys abilities to undertake impact assessment of their initiatives from time to time.

RECOMMENDATIONS
The survey focused on various issues including current CSR practices, co-ordination between various stakeholders including private sector, Government and local communities, flagship social projects run by the private sector and role of Government to deepen and strengthen CSR within local communities and business houses. These issues are important in the sense that they present opportunities to take CSR to its logical conclusion as well as enable involved stakeholders find workable solutions to surmount challenges that face CSR. In order to crystal gaze the future of CSR in India and take time bound steps to mainstream it, the recommendations of the survey are firm indications of the existing state of affairs in the CSR domain; they correspondingly call for necessary and appropriate steps to be initiated to put CSR on firmer ground. Keeping in view the broad results of the survey, the following recommendations are listed for serious consideration by all concerned stakeholders for their effective operationalization to deepen CSR in the companys core business and to build collaborative relationships and effective networks with all involved. 1. It is found that there is a need for creation of awareness about CSR amongst the general public to make CSR initiatives more effective. This awareness generation can be taken up by various stakeholders including the media to highlight the good work done by corporate houses in this area. This will bring about effective changes in the approach and attitude of the public towards CSR initiatives undertaken by corporate houses. This effort will also motivate other corporate houses to join the league and play an effective role in addressing issues such as access to education, health care and livelihood opportunities for a large number of people in India through their innovative CSR practices. Thus, the social justice agenda of the day would be fulfilled more meaningfully. 2. It is noted that partnerships between all stakeholders including the private sector, employees, local communities, the Government and society in general are either not effective or not effectively operational at the grassroots level in the CSR domain. This scenario often creates barriers in implementing CSR initiatives. It is recommended that appropriate steps be undertaken to address the issue of building effective bridges amongst all important stakeholders for the successful implementation of CSR initiatives. As a result, a long term and sustainable
75

3.

4.

5.

6.

7.

perspective on CSR activities should be built into the existing and future strategies of all stakeholders involved in CSR initiatives. It is noted that only medium and large corporate houses are involved in CSR activities, that too in selected geographical areas. This issue builds a case for more companies to be brought under the CSR domain. To address the issue of reaching out to wider geographical areas, the involvement of small and medium enterprises (SMEs) in the CSR domain will be essential. It is recommended that a campaign should be launched to both spread awareness on CSR issues amongst the general public as well as to involve SMEs to participate more actively in CSR initiatives. This will help CSR reach out to other locations and cover a large number of communities and help companies play a valuable role in addressing various social and development issues. This approach will help CSR get ingrained into the DNA of core business activities of companies. It is found that corporate houses and non-governmental organizations should actively consider pooling their resources and building synergies to implement best CSR practices to scale up projects and innovate new ones to reach out to more beneficiaries. This will increase the impact of their initiatives on the lives of the common people. After all, both corporate houses and non-governmental organizations stand to serve the people through their respective projects and initiatives. It is recommended that the projectisation, scaling up and sustainability of CSR projects need to be safeguarded at all costs for their efficiency and efficacy. It is found that many CSR initiatives and programmes are taken up in urban areas and localities. As a result, the impact of such projects does not reach the needy and the poor in the rural areas. This does not mean that there are no poor and needy in urban India; they too equally suffer from want of basic facilities and services. While focusing on urban areas, it is recommended that companies should also actively consider their interventions in rural areas on education, health, girl child and child labor as this will directly benefit rural people. After all, more than 70 per cent people still reside in rural India. It is noted that the Government should consider rewarding and recognizing corporate houses and their partner non-governmental organizations implementing projects that effectively cover the poor and the underprivileged. Incentives to be offered to the private sector to strengthen their good work must include a formal partnership with local administration, easy grant of 12A, 80G and Foreign Contribution Regulation Act (FCRA) license and other fiscal incentives including matching project grants and tax breaks for social and development projects. This will be instrumental in encouraging enhanced voluntary participation of greater number of corporate houses in CSR activities. It is noted that CSR as a subject or discipline should be made compulsory at business schools and in colleges and universities to sensitize students about social and development issues and the role of CSR in helping corporate houses strike a judicious balance between their business and societal concerns. Such an approach will encourage and motivate young minds, prepare them face future development challenges and help them work towards finding more innovative solutions to the concerns of the needy and the poor. It is recommended that
76

involvement of professionals from the corporate sector, non-governmental organizations and business schools would be key in ensuring youth participation in civic issues. 8. It is found that there are approximately 250 corporate houses in the country that are directly involved in various CSR initiatives. These companies continue to decide their own projects depending on a number of parameters. These efforts are driven purely by the companys operational perspectives and ease of implementation of their CSR projects. As there are a number of companies involved in CSR activities, it is recommended that an accreditation mechanism should be put in place for companies through an independent agency for mainstreaming and institutionalizing CSR in the main business framework of the companies. 9. It is found that companies involved in CSR implement projects in the areas of health, education, environment, livelihood, disaster management and women empowerment, to mention a few. In many such contexts, its noticed that companies end up duplicating each others efforts on similar projects in the same geographical locations. This creates problems and induces a competitive spirit amongst companies. Considering the diverse issues and different contexts that exist currently in the CSR domain, it is recommended that companies involved in CSR activities urgently consider pooling their efforts into building a national alliance for corporate social responsibility. This alliance, representing various industry interests, should take up broad development agenda and provide high value services to the poor and the underprivileged. Over the years, the alliance would grow into a special purpose vehicle (SPV) and work closely with stakeholders to raise the level and quality of CSR interventions. There are already such models available in different industry segments both within the country and overseas; all that is needed is to identify and leverage these models to set up a national platform for effective thought alignment between companies and other stakeholders, in order to redefine CSR practices in India. 10. It is noteworthy to underline that the Governments policy documents have adequate levers to ensure public co-operation in planning process. The 1951 Plan Documents and other subsequent policy pronouncements amply demonstrate the intent of the Government in this regard, underscoring the value of participatory approach in the context of larger governance mechanics. The public co-operation element has further been ensured by the involvement of various interest groups in drafting of the National Policy on Voluntary Sector2007, under the aegis of the Planning Commission, Government of India. The National Policy was subsequently cleared by the Cabinet in 2007 and is one of the finest blueprints available on partnerships between the Government, the voluntary sector and the private sector. 11. Partnership between the Government and other interest groups have been well defined in policy documents at all levels and as a result have come to stay; the only effort needed now is to develop common strategies to translate policy pronouncements into demonstrable action agendas. This will be of prime importance in ensuring a bottom-up approach for various development initiatives in the country.
77

12. The role and efforts of the private sector in taking development agenda forward with focus on education, health, environment, livelihood, women empowerment, disaster management to mention a few have been visible and effective. Some innovative models are also available of private sector interventions in these areas. In order to push the development agenda in a mission mode, it is recommended that realistic and operational models of engagement between all three important stakeholders the Government, the non-governmental organizations and the private sector are jointly explored and addressed. A sound CSR policy in consultation with the private sector involved directly in CRS initiatives will be the first right step in this direction, sums up the survey.

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SAMPLE SURVEY QUESTIONNAIRE

Sample Questionnaire used for the Survey The rationale behind conducting this survey was to get credible data on CSR initiatives of the companies, current practices in CSR and various issues and challenges facing CSR in India. This survey looked into various issues of social relevance under the ambit of CSR, and elicited viewpoints of business houses on CSR practices, its strengths and challenges. The survey sets the stage for further interaction amongst various stakeholders over a period of time. The participation of companies was voluntary but of immense value and is highly appreciable. The respondents were assured of utmost confidentiality as the information generated through the survey was used only for the purposes of research and analysis and was not meant to be shared with any third party. The views and information shared provided the basis for aggregate analysis without reflecting an individuals or single companys viewpoint. The online questionnaire contained a total of 39 questions, which took responding organizations approximately 20 minutes to complete. Internet technology was fully leveraged during the entire process of the survey administration and presenting it in its current format.

Q No. QUESTIONS

CODING CATEGORIES & CODES

INFORMATION OF RESPONDENT

SKIP TO

1. Your name 2. Designation 3. Contact details 4. Sex 5. Year of total professional experience 6. Year with the present organization CSR INITIATIVES, AWARENESS AND CSR POLICY IN THE ORGANISATION Yes. Does your organization have any No.. CSR initiative Office address Telephone.. E-mail Male.. Female.

7.

If its NO, then go to Q: 14 directly

79

8. If yes what are the issues covered under CSR in your organization

9. When did your company start CSR initiative 10. Does your organization have a CSR policy 11. When did your organization formulate a CSR policy 12. Kindly tell us briefly about the vision and objectives of your organizations CSR policy? 13. If, yes in Q.10, who is mainly responsible for its compliance/implementation

Health Environment Agriculture Water Sanitation HIV/AIDS Child care/development Education Rehabilitation & Resettlement Slum improvement Disaster management/Rehabilitation Livelihood promotion Women empowerment Charitable events Other (SPECIFY) Year..

Yes No In the process Year..

If, no skip to Q.14

14. IF NO in Q-10, what are the reasons for not having a CSR 15. IF NO in Q-10, do you plan to develop a CSR policy in the future?

CEO of the company CSR Director/Manager Administration Finance Department Not fixed, but decided in annual GM HR Department Other (please specify) Organization doesnt feel the need This will come in the near future There is no need to have a CSR policy Its not on our agenda at all Other (please specify). Yes........................................ No.........................................

16.

IMPLEMENTATION PROCESS AND INVOLVEMENT OF STAKEHOLDERS Through voluntary organizations How do you implement your CSR By giving financial support directly to initiatives? the Community/ Community By organizing charitable events every year Funding to Government 80

 18. Can you specify the type of CSR initiative during the last 3 years

17. Which are the target groups covered in your CSR initiative

Through our own CSR project management Other (Specify)............................ People living nearby our industry/ organization Selected in consultation with NGOs Random selection of area or community Tribal people in any part of country Poor people living in rural areas Other (please specify) These are onetime events These are regular running programmes

19.

MAJOR ISSUES UNDERTAKEN IN THE AMBIT OF CSR INITIATIVES Demand from the community What is the rationale behind covering Current relevance of the issue the mentioned issues As per the organizational mandate Other (specify).. Under CSR in organization? Multiple Answers possible GEOGRAPHICAL COVERAGE FOR CSR INITIATIVES

20. Can you specify the coverage and scope of your CSR initiatives Number of State(s)......................... District(s)..................... Village(s)...................... Towns(s)........................ Others (please specify)................ Our operation area Selected randomly On the basis of demand As per the selection criteria of our organization/ Stakeholder decision

21. What is the rationale behind targeting the above mentioned areas?

RELATION AND COORDINATION AMONG GOVERNMENT, BUSINESS AND CIVIL SOCIETY ORGANISATIONS 22. Government and civil society Rate the extent of coordination organizations 1 2 3 4 5 between the mentioned Government and Business Firm organization on a 5 point scale 1 2 3 4 5 (5-Very Good 4 Good 3 Average 2- Poor 1-Very Poor) 23. Do you think there is a lack of communication between Business Firm and Corporate Houses and NGOs? Civil Society organizations and Business Firm 1 2 3 4 5 Yes.................................... No..................................... Cant say............................

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24. Do you think there is a lack of communication among Civil Society, Government and Business firm/Corporate houses on the CSR issue?

Yes.................................... No..................................... Cant say............................

25.

GOVERNMENT POLICY ON CSR Business houses If government wants to develop a Industries policy on CSR in near future, in your Civil society organizations opinion who all should be involvedin Government functionaries this task (PLEASE CIRCLE ALL Research organizations APPLICABLE) Not required to involve any Others (specify).. FINANCING PATTERN & ANNUAL SPENDING AND RATIONALE Yes................... Do you have a separate allocation of No.................... funds or a CSR Implementation corpus? <5% What average percent of your 5-10% Annual Budget is allocated For CSR 10-20% during last 3 years? 20-30% More than 30% Depends upon boards decision (not fixed) Doesnt have any relation with the annual budget No specific budget Can you please tell us the annual allocation for each year (for last 3 years) 2010 2011 2012

26.

27.

28.

LEGAL ISSUES AND CSR 29. What do you think about legal implications/ issues related to CSR? 30. Do you wish to be a member of discussion/ advisory group on CSR issue that may be constituted in future? .. Yes................... No....................

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31.

ROLE OF GOVERNMENT IN CSR None What role does the government play Ensuring implementation in CSR? (PLEASE CIRCLE ALL Facilitating agencies in APPLICABLE) implementation Capacity building Monitoring Other................................. In your opinion, what role should the government play in CSR? (PLEASE CIRCLE ALL APPLICABLE) Policy development Capacity building Regulations Others

32.

33.

ROLE OF CIVIL SOCIEY ORGANISATION IN CSR None As per your experience what type of Implementation when failed role do NGOs/ INGOs/ Voluntary Voluntary role in implementation organizations play in CSR? (PLEASE Capacity Building CIRCLE ALL APPLICABLE) Planning our CSR initiatives Others (Please specify)................ In your opinion, what role should these organizations play in CSR? (PLEASE CIRCLE ALL APPLICABLE) Project implementation Capacity building Monitoring Regulatory Voluntary support to Corporate agencies Other (PLEASE SPECIFY).............

34.

AWARENESS/OBSERVATIONS 35. Can you tell 3 companies which in your opinion have active CSR departments? 36. What should be the priority areas to be covered under CSR initiatives by corporate houses in India? 1. 2. 3. 83 Health Environment Agriculture Micro finance Water Sanitation Child Care /Development Education Rehabilitation & Resettlement Slum improvement Disaster management / Rehabilitation Livelihood Promotion Women empowerment Social events Other (SPECIFY)................

37. What leads the Corporate / Business houses to form separate foundations to company work on CSR? (Multiple Answers) 38. What do you perceive as the possible benefits of investing in Social Initiatives (MULTIPLE ANSWERS) 39. What are your IMPORTANT suggestions for making CSR initiatives more effective and useful?

As it has been made mandatory by Government To get tax benefits (under 80G) To Brand among people Improve perception about company Goodwill Branding Improved perception about company Any other (specify)

..

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Conclusion
Organizations are coming to realize the bottom-line benefits of incorporating sustainability into their DNA. Its beneficial for attraction and retention and its the right thing to do. HR is a key organizational leader and can take the lead or partner with other executives to work cross-functionally to integrate CSR objectives into how business gets conducted. HR practitioners can act as translators of the organizations CSR commitment vertically and horizontally across departments. Most will find upon reading this report that they have many good practices underway. Many will find they have a new structure for their thinking they can apply practically in the workplace. Some will believe the current economic downturn will put these ideas on the backburner until the economy rebounds, while others think that organizations which abandon their CSR integration in the downturn will lose ground and breed cynicism in brighter times. Regardless of the point of view, all agree that effective HR leadership on CSR integration requires Board, CEO and executive commitment to be successful. Indeed, the roadmap is predicated on the assumption of this top level commitment. However, more and more organizations are committing to sustainability and to embedding CSR into all that we do, so it is hoped the 11 steps provide some guidance as to how to go about doing this. The firm of the future is expected to have undergone significant transformation such that CSR no longer becomes managed as a separate deliverable, but is part of the experience of being an employee in an organization that lives its values. For human resource professionals embarking on CSR or deepening their CSR experience, this roadmap can help them understand their role in sustainability and CSR and how they can foster an environment that embeds a CSR ethic in the way we do business around here.

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