ST.

ANDREWS COLLLEGE OF ARTS, COMMERCE AND

SCIENCE
BANDRA (W), MUMBAI-400050
TITLE OF THE PROJECT
CORPORATE SOCIAL RESPONSIBILTY : TATA GROUP

SUBMITTED FOR THE COURSE

HUMAN RESOURCE MANAGEMENT
IN
SEMESTER-2

NAME OF THE STUDENT- LAVITA MASCARENHAS

CLASS- M.COM
ROLL NO- 9044

ST.ANDREWS COLLLEGE OF ARTS, COMMERCE AND SCIENCE

BANDRA (W), MUMBAI-400050

CERTIFICATE

This is to certify that the project CORPORATE SOCIAL RESPONSIBILTY:TATA

GROUP has been prepared and submitted by LAVITA MASCARENHAS of M.Com
Semester-2, Roll no-9044 under the guidance of Prof. PARVEEN NAGPAL during the
academic year 2015-2016.

Date:

Signature:

Place: Mumbai

(Prof Parveen Nagpal)

Signature of the

Signature of the

Signature of the

Internal Examiner

External Examiner

Principal
2

DECLARATION

I, LAVITA MASCARENHAS, a student of ST. ANDREW`S COLLEGE OF ART ,

SCIENCE
AND COMMERCE, Bandra West ( affiliated by the Mumbai University ) hereby declare that
this Project Report entitled CORPORATE SOCIAL RESPONSIBILTY : TATA GROUP,
is my individual and original work and that no part of this project has ever been submitted
before for the award of any other degree, diploma, fellowship or any other similar titles.

PLACE: MUMBAI

NAME OF THE STUDENT

(LAVITA MASACARENHAS)

DATE:

ROLL NO: 9044

ACKNOWLEDGEMENT
I owe a great many thanks to a great many people who helped and supported me during the
making of this project.

My deepest gratitude to Professor PARVEEN NAGPAL for guiding me and correcting

various flaws of mine with accuracy and care. She has taken the pain of going through my
project and making the necessary corrections as and when needed.

I express my gratitude to the Principal DR. MARIE FERNANDES of ST. ANDREWS

COLLEGE OF SCIENCE, ARTS AND COMMERCE, BANDRA (W.) for her extending
support.

I would also thank all my Institution and my faculty members without whom this project would
have been a distant reality. I also extend a heartfelt gratitude to my family and well-wishers for
their vital inputs and support.

INDEX

No.
1.1
1.2
1.3
1.4
2.1
2.2
2.3
3.1
3.2
3.3
3.4
4.1
4.2
4.3
4.4
5.1
5.2
5.3
5.4
5.5

Chapters
CHAPTER 1
EXECUTIVE SUMMARY
INTRODUCTION
OBJECTIVE OF STUDY
RESEARCH METHODOLOGY
CHAPTER 2
DEFINITION
EVOLUTION OF CSR
THE PHASES OF DEVELOPMENT IN INDIA
CHAPTER 3
TYPES OF CORPORATE RESPONSIBILTY
CLASSIFICATION OF CSR
BENEFITS OF CSR
SETBACKS OF CSR
CHAPTER 4 CSR RULES BY THE GOVERNMENT
INTRODUCTION : TATA
TATA & CSR
CHANGES IN TATA FOR CSR
CHAPTER 5 TATA CSR ACTIVITIES
TATA CSR SUSTAINABILTY POLICY
CONCLUSION & RECOMMENDATION
SIGNIFICANCE OF STUDY
BIBLOGRAPHY

PAGE NO.
01
02
03
04
05
06
09
11
13
14
16
17
19
22
23
24
30
32
34
35

CHAPTER 1

EXECUTIVE SUMMARY
INTRODUCTION
OBJECTIVE OF STUDY
RESEARCH METHODOLOGY

EXECUTIVE SUMMARY

Corporate social responsibility (CSR) is a business approach that contributes to sustainable

development by delivering economic, social and environmental benefits for all stakeholders.
6

CSR may also be referred to as "corporate citizenship" and can involve incurring shortterm costs that do not provide an immediate financial benefit to the company, but instead
promote positive social and environmental change.
CSR is a concept with many definitions and practices. The way it is understood and
implemented differs greatly for each company and country. Moreover, CSR is a very broad
concept that addresses many and various topics such as human rights, corporate governance,
health and safety, environmental effects, working conditions and contribution to economic
development. Whatever the definition is, the purpose of CSR is to drive change towards
sustainability.
Although some companies may achieve remarkable efforts with unique CSR initiatives, it is
difficult to be on the forefront on all aspects of CSR. Considering this, the example below
provides good practices on one aspect of CSR environmental sustainability.

Example

Unilever is a multinational corporation, in the food and beverage sector, with a comprehensive
CSR strategy. The company has been ranked Food Industry leader in the Dow Jones
Sustainability World Indexes for the 11 consecutive years and ranked 7th in the Global 100
Most Sustainable Corporations in the World.
One of the major and unique initiatives is the sustainable tea programme. On a partnershipbased model with the Rainforest Alliance (an NGO), Unilever aims to source all of its Lipton
and PG Tips tea bags from Rainforest Alliance Certified farms by 2015. The Rainforest
Alliance Certification offers farms a way to differentiate their products as being socially,
economically and environmentally sustainable

INTRODUCTION

Corporate Social Responsibility (CSR), also referred to as corporate citizenship or socially

responsible business, is a form of corporate self-regulation integrated into a business model.
The interest in CSR has grown with the spread of socially responsible investing, the attention
of nongovernmental organizations (NGOs), and ethics training within organizations. Recent
incidents of ethics-based corporate scandals have also increased awareness of CSR.
Organizations that embrace CSR hold themselves accountable to others for their actions and
seek to make a positive impact on the environment, their communities, and the larger society.
Corporate social responsibility may include philanthropic efforts such as charitable donations
or programs that encourage employee volunteerism by providing paid time off for such
activities. Many organizations seek to have an even greater impact through CSR initiatives that
integrate social values into operational and business strategies. For example, to protect scarce
natural resources, a firm may make a commitment to use only recycled materials in its
packaging of consumer goods.
Many organizations promote their CSR efforts as a way of shaping public perceptions,
attracting customers, and building good will with stakeholders. Public companies often report
CSR policies and activities in their annual reports; some create separate documents or use their
websites to describe and publicize their CSR-related efforts. Organizations and
interested external third parties assess CSR performance by comparing, or benchmarking, the
activities and their results with competitors or other sets of organizations. Measures include
amount of expenditures or investment, degree of executive engagement, impact
of implementation, and CSR outcomes relative to objectives.

The scale and nature of the benefits of CSR to an organization can be difficult to quantify.
Those driven by strategic and operational choices may result in higher or lower costs, but
directly linking CSR initiatives to revenue increases is not always possible. Many organization
use non-financial measures to assess the benefits of CSR. For example, socially responsible
practices can improve employee recruitment and retention efforts, be a means of managing
risk, and provide brand differentiation. Some business critics of CSR, however, argue that too
often it competes washing" efforts to draw attention away from unpopular practices such as
polluting the environment or outsourcing jobs overseas.

OBJECTIVE OF THE STUDY

1. To understand the concept of Corporate Social Responsibility (CSR) in detail.

2. To find out the scope of CSR.
3. To know how the Tata group has fulfilled its responsibility towards all stakeholders;
what specific activities, programs and strategies it has set, devised and implemented
for the same.

RESEARCH METHODOLOGY

Theoretical research is done for this paper.

The data used in the project is secondary data.
The data collection sources include:

Internet
Books
Journals
Blogs
Magazines
Articles.

Data collected from the above sources is analyzed and interpreted as per the content need of
the specific research.

10

CHAPTER 2

DEFINITION
EVEOLUTION OF CSR
THE PHASES OF CSR IN INDIA

11

DEFINITION

Corporate social responsibility, often abbreviated "CSR," is a corporation's initiatives

to assess and take responsibility for the company's effects on environmental and social
wellbeing. The term generally applies to efforts that go beyond what may be required
by regulators or environmental protection groups.
(investopedia.com)
"Corporate Social Responsibility is the continuing commitment by business to
contribute to economic development while improving the quality of life of the
workforce and their families as well as of the community and society at large."
(wbcd.com)
Corporate Social Responsibility is how companies manage the business processes to
produce an overall positive impact on society
(Baker, 2004)
Corporate social responsibility is continuing commitment by business to behave
ethically and contribute to economic development while improving the quality of life of
the workforce and their families, as well as of the local community and society at large
(World Business Council for Sustainable Development in Hopkins, 2007)

EVOLUTION OF THE CONCEPT OF CSR

12

Increasingly, local communities, the media, NGOs, consumers, and civil society in general are
demanding that business be carried out in an ethical and socially responsible manner.
Though great progress has been made by many companies operating responsibly in highly
regulated countries, there remains challenges in less developed regions.
A number of guidelines have emerged to help companies shape their CSR practices, and
the International Organization for Standardization (ISO) is looking to build standards around
CSR.
By and large, many companies are recognizing the need to balance environmental, social, and
governmental issues (ESG). Most have willingly begun to implement practices in their day to
day operations, demonstrating how CSR should be a core value. And a wealth of civil society
organizations (CSOs) and other bodies are available, both to ensure companies work towards
CSR objectives, and to help them meet those goals.
THE 60`s & 70`s
Examples of corporate social responsibility began to emerge, and the civil rights movement,
consumerism, and environmentalism greatly changed the way society expected the business
world to behave.
In 1960, the Organization for Economic Co-operation and Development (OECD) convention
was created to promote policies aimed at achieving "highly sustainable economic growth and
employment, and a high standard of living in Member countries, all while maintaining
financial stability."
The convention also sought to "contribute to sound economic expansion in Member as well as
non-member countries in the process of economic development; and to contribute to the
expansion of world trade on a multilateral, non-discriminatory basis in accordance with
international obligations."
With the '70s came the common use of the term CSR, along with many attempts to officially
define the phrase.
The UN conference of 1972 in Stockholm considered the ever-growing need to find a common
ground between both communities and businesses across the globe to preserve the human
environment.
This conference led to the establishment of the United Nations Environment
Programme (UNEP), amongst many other national environmental protection agencies.

13

The mid 1970s gave birth to "Impact and Benefit Agreements" (IBAs) between Canadian
Aboriginal groups and extractive sector companies. These agreements outlined commitments
by the company for re-location, employment, and training on projects constructed near
Aboriginal communities.
In 1976, Canada played a major role in the development of the OECD's guidelines, which were
set in place to promote national treatment and complement the Foreign Investment Review
Act.
THE 80`s & 90`s
In 1980, the International Union for Conservation of Nature (IUCN) released The World
Conservation Strategy. It identified the main culprits of habitat destruction as "poverty,
population pressure, social inequity, and the terms of trade." (CSRQuest)
The new International Development Strategy focused on achieving a more stable
world economy, stimulating economic growth, evening out social inequities and
countering the worst impacts of poverty.

In '87 the concept of sustainable development was introduced and finally defined in the
groundbreaking report Our Common Future. The World Commission on the Environment and
Development, under Chair Gro Harlem Brundtland, delivered the report to the United Nations.
Former Canadian Ambassador Jim MacNeil served as Secretary General to the commission. In
response to the Brundtland Report, then Prime Minister Brian Mulroney announced Canadas
intention to establish an international institute devoted to sustainable development to the UN in
1988. Thus the International Institute for Sustainable Development (IISD) and the National
Round Table on the Environment and the Economy were created in the '89-'90 time period.
In 1992, the UN Earth Summit was held in Rio de Janeiro. The summit introduced the "triple
bottom line" business model, as well as the idea of using sustainable development to a
company's competitive advantage.
Canada pledged over $90 million to key Summit Conventions, and was one of the
first countries to involve external stakeholder groups in these political events.

In '93, the launch of the Whitehorse Mining Initiative (WMI) led to the signing of the WMI
Leadership Council Accord in '94. The Accord sought, in a nutshell, to achieve a sustainable
mining industry within the framework of an evolving and sustainable Canadian society.
In 1998, Canada, along with Natural Resources Canada (NRCan), IDRC, and the leadership of
IISD, organized a major workshop in Lima, Peru. The multi-stakeholder event brought together
14

11 Latin-American countries and Canada in order to cohesively work towards a sustainable

future in the region. Five working groups were then formed to act on this goal.
THE NEW MILLENIUM
The year 2000 saw more mergers and acquisitions than any other year in history. In November,
the international "Partners for Progress" conference was held in Paris. It stressed the
importance for businesses to adopt socially responsible behaviour, in an effort to move forward
towards sustainable local development.
The results of the conference were published in Corporate Social Responsibility: Partners for
Progress, OECD, in 2001.
In 2003, Canada played a major role in the enforcement of the Kimberly Process; a
diamond certification process (launched in 2000) that was initiated in order to
prevent the trade of conflict diamonds and address the peace and security
concerns in Africa.

As a signatory to the Kimberly Process, Canada does not trade diamonds with non-signatories,
and all Canadian diamonds are required to be accompanied by a Canadian Certificate.
Over a period of several years, presentations were made to the SCFAIT on the conduct of
petroleum and mining companies in foreign countries such as Colombia, Sudan, the
Philippines, and the Democratic Republic of Congo. This resulted in the report Mining in
Developing Countries - Corporate Social Responsibility, which was submitted to the
Government of Canada in June 2005. The report called on the government to take action in
ensuring that Canadian mining companies operating abroad do so "in a socially and
environmentally responsible manner and in conformity with international human rights
standards." (PDAC)
The GOC's response came in October, at which point they agreed that the CSR system had its
weak points, and that this could best be examined by a series of 4 national roundtables.
"Specifically, the roundtables would examine measures that could be taken during the next one
to three years to enable Canadian extractive sector companies operating in developing
countries to meet or exceed leading CSR best practices."
On March 29, 2007 the roundtables report was finally released.(PDAC)
In March 2009, the Government of Canada announced its action plan on CSR,
Building the Canadian Advantage, which featured 4 points, including supporting
the creation of the Centre for Excellence in CSR, and setting up the Office of the
Extractive Sector CSR Counsellor.
15

In October 2009, the Government of Canada appointed its first ever corporate social
responsibility counsellor, Marketa Evans. Some saw this decision as a giant step forward
towards social and environmental improvement, while others were disappointed, feeling the
counsellor's role would not extend far enough to enact notable change.
Meanwhile, in its early stages, the work towards the government's action plan has continued
throughout the year.
THE PHASES OF DEVELOPMENT IN INDIA

The history of Corporate Social Responsibility in India has its four phases which run parallel to
India's historical development and has resulted in different approaches towards Corporate
Social Responsibility. However the phases are not static and the features of each phase may
overlap other phases.

THE FIRST PHASE

In the first phase charity and philanthropy were the main drivers of Corporate Social
Responsibility. Culture, religion, family values and tradition and industrialization had an
influential effect on Corporate Social Responsibility. In the pre-industrialization period, which
lasted till 1850, wealthy merchants shared a part of their wealth with the wider society by way
of setting up temples for a religious cause. With the arrival of colonial rule in India from 1850s
onwards, the approach towards Corporate Social Responsibility changed. The industrial
families of the 19th century such as Tata, Godrej, Bajaj, Birla, Singhania were strongly inclined
towards economic as well as social considerations. However it has been observed that their
efforts towards social as well as industrial development were not only driven by selfless and
religious motives but also influenced by caste groups and political objectives.

THE SECOND PHASE

In the second phase, during the Independence movement, there was increased stress on Indian
Industrialists to demonstrate their dedication towards the progress of the society. According to
Gandhi, Indian companies were supposed to be the "temples of modern India". Under his
influence businesses established trusts for schools and colleges and also helped in setting up
training and scientific institutions. The operations of the trusts were largely in line with
Gandhi's reforms which sought to abolish untouchability, encourage empowerment of women
and rural development.
16

THE THIRD PHASE

The third phase of Corporate Social Responsibility (196080) had its relation to the element of
"mixed economy", emergence of Public Sector Undertaking and laws relating labor and
environmental standards. During this period the private sector was forced to take a backseat.
The public sector was seen as the prime mover of development. Because of the stringent legal
rules and regulations surrounding the activities of the private sector, the period was described
as an "era of command and control".

THE FOURTH PHASE

In the fourth phase (1980 until the present) Indian companies started abandoning their
traditional engagement with CSR and integrated it into a sustainable business strategy. In
1990s the first initiation towards Globalizations and Economic Liberalization were undertaken.
Controls and licensing system were partly done away with which gave a boost to the economy
the signs of which are very evident today. Increased growth momentum of the economy helped
Indian companies grow rapidly and this made them more willing. Globalization has
transformed India into an important destination in terms of production and manufacturing
bases of TNCs are concerned. As Western markets are becoming more and more concerned
about and labour and environmental standards in the developing countries, Indian companies
who export and produce goods for the developed world need to pay a close attention to
compliance with the international standards.

17

CHAPTER 3

TYPES OF CSR
CLASSIFICATION OF CSR
BENEFITS OF CSR
SETBACKS OF CSR

18

TYPES OF CORPORATE SOCIAL RESPONSIBILITY

1. ENVIRONMENTAL RESPONSIBILITIES.

It is more and more common that organizations are starting to focus on their carbon footprint
and look for ways in which this can be reduced. Additionally, companies are looking at ways
that their operations can be more sustainable overall for the environment, by having a minimal
impact. Some companies are now required by law in the UK to report on their emissions of
greenhouse gases. This makes it more likely than in the past that a company would focus on
environmental areas of corporate social responsibility.
EXAMPLE:

A company that is focusing on environmental forms of corporate social responsibility

is Toyota. This company has a range of different initiatives running, all of which it claims seek
to work towards a low carbon society. In addition to this it also has an emphasis on working
towards a recycling based society and a society in harmony with nature. To achieve this it
looks at the ways in which its business has an environmental impact during the process of
building and selling cars. This looks at everything from the design phase through to sales and
recycling of cars when they are no longer useful. It has an environmental plan that it works
towards and specific goals and targets. One is a focus on developing vehicles that use
electricity rather than petrol, for example. Others are specific to reducing emissions.
2. PHILANTHROPIC RESPONSIBILITIES.
This type of corporate social responsibility is most commonly associated with giving money to
charities. Often, organizations will have specific charities that they support, and these may be
linked to their line of business. This is not always linked to charity work however.
EXAMPLE:
Google carries out several initiatives in China that help to improve the prospects of people.
One such example is the Google China Social Innovation Cup for College Students which
19

seeks ideas from college students in China to drive social change. The best proposals get
funded and the social projects run. Google also gives money to support earthquake relief
efforts.
3. ETHICAL RESPONSIBILITIES.
Most of the ethical corporate social responsibility programmes out there focus on fair treatment
of employees, which includes employees that may not be directly working for the organisation.
What this means is that ethical corporate social responsibility usually considers the entire
supply chain. That means that some companies that source clothes from Asia have corporate
social responsibility programmes to make sure that the people that work to produce the clothes
that they buy are treated fairly. This may include a minimum wage or certain standards to be
met in the factories. Some of this can be quite difficult to enforce in the supply chain. Another
example is that small farmers in developing countries that supply produce such as coffee,
bananas or other crops are paid a fair price for their goods.
Ethical corporate social responsibility is not just limited to making sure that people in less
developed countries are treated fairly. It is also focused on making sure that all stakeholders
receive fair treatment. This includes employees, but also customers, shareholders and other
stakeholders that the company may impact through its activities.
EXAMPLE:
One company that has made impressive strides with ethical corporate social responsibility is
Nestle. Nestle was ranked highly by KPMG in a study to see which companies were the most
sustainable. This is a big turn around for the organisation that was once criticised for the fact
that its powdered milk products were leading to malnutrition in children in developing
countries. Nestle was the only food and drink company in the top 10 rated companies for
excellence in corporate social responsibility. Other organisations in the top 10 included BMW,
Cisco Systems, Repsol, Siemens and Toyota.

4. LEGAL RESPONSIBILTIES
A company's legal responsibilities are the requirements that are placed on it by the law. Next to
ensuring that company is profitable, ensuring that it obeys all laws is the most important
responsibility, according to the theory of corporate social responsibility. Legal responsibilities
can range from securities regulations to labor law, environmental law and even criminal law.

20

CLASSIFICATION OF SOCIAL RESPONSIBILITY

Responsibility towards itself

It is the responsibility of each corporate entity run business and to work towards growth,
expansion and stability and thus earn profits. If the corporation is to achieve social and
economic ends, organizational efficiency should be boosted up.

Responsibility towards Employees

Employees are the most important part of an organization. Following are some of the
responsibilities which a business entity has towards its employees Timely payment
Hygienic environment
Good and impartial behavior
Health care through yoga
Recreational activities
Encouraging them to take part in managerial decisions

Responsibility towards shareholders

It is the responsibility of corporate entity to safeguard the shareholders investment and

make efforts to provide a reasonable return on their investment.

Responsibility towards state

Out of the profit available, the state is entitled to a certain share as per the income tax
laws. Utmost transparency has to be exerted regarding the profit &loss account and the
balance sheet.

Responsibility towards consumers

The Company should maintain high quality standards at reasonable prices. It should not
resort to malpractices such as hoarding and blackmarketing.

Responsibility towards environment

It is the responsibility of the organization to contribute to the protection of environment.

It should produce eco -friendly products. Moreover, industrial waste management must
be taken care of.

21

BENEFITS OF CORPORATE SOCIAL RESPONSIBILITIES

1. THE ABILITY TO HAVE POSITIVE IMPACT IN THE COMMUNITY.

Keeping social responsibility front of mind encourages businesses to act ethically and to
consider the social and environmental impacts of their business. In doing so, organisations can
avoid or mitigate detrimental impacts of their business on the community. In some cases,
organisations will find ways to make changes in their services or value chain that actually
delivers benefits for the community, where they once didnt.

2. IT SUPPORTS PUBLIC VALUE OUTCOME.

Public value is about the value that an organisation contributes to society. A sound, robust
corporate social responsibility framework and organisational mindset can genuinely help
organisations deliver public value outcomes by focussing on how their services can make a
difference in the community. This might happen indirectly, where an organisations services
enable others to contribute to the community, or directly through the organisations own
activities, such as volunteerism and philanthropy.

3. IT SUPPORTS BEING AN EMPLOYER ON CHOICE.

Being an employer of choice typically translates into the companys ability to attract and retain
high calibre staff. There are ways to approach being an employer of choice, including offering
work life balance, positive working conditions and work place flexibility. Studies have shown
that a robust corporate social responsibility framework can also help a company become more
attractive to potential future employees who are looking for workplaces with socially
responsible practices, community mindedness and sound ethics.

22

4. IT ENCOURAGES BOTH PROFESSIONAL AND PERSONAL DEVELOPMENT.

Providing employees with the opportunity to be involved in a companys socially responsible
activities can have the benefit of teaching new skills to staff, which can in turn be applied in
the workplace. By undertaking activities outside of their usual work responsibilities, employees
have the chance to contribute to work and causes that they might feel passionate about, or learn
something entirely new which can help enrich their own perspectives. By supporting these
activities, organisations encourage growth and support for employees.

5. IT ENHANCES RELATIONS WITH CLIENTS.

A strong corporate social responsibility framework is essential to building and maintaining
trust between the company and clients. It can strengthen ties, build alliances and foster strong
working relationships with both existing and new clients. One way this can be achieved is by
offering pro-bono or similar services where a company can partner with not-for-profit
organisations to support their public value outcomes, where funds or resources may be limited.
In turn, this helps deliver public value outcomes that may not have been delivered otherwise.

5 SETBACKS OF CORPORATE SOCIAL RESPONSIBILITIES

23

1. WORK ENVIRONMENTS CAN BE FRUSTRATING.

From antiquated technology to bureaucratic red tape, working at a nonprofit can be downright
exasperating. Employees are asked to do more work with fewer resources, create miracles on
a daily basis, and satisfy competing interests. The pace of change is often slower than it is in a
for-profit environment, given that so many opinions must be considered and the bottom line is
not as clear.
2. THE LEVEL OF BURNOUT IS HIGH
Those who enter the nonprofit workforce with a specific mission and goal in mind do so with
great purpose. This great purpose often places a heavy weight on the shoulders of those doing
the work.
3. THE STAKES ARE HIGHER.
A bad day in a corporate job is unlikely to resemble a bad day in a nonprofit job. Consider the
difference between losing a few percent off your stock price and losing a mentored young
person to drugs. The stakes are simply higher when you are dealing with a cause close to your
heart.
4. THERE IS A CONSTANT FOCUS ON FUNDRAISING.
Nonprofit executives wake up every morning and go to bed every night worrying about the
location of their next fundraised dollar. This constant pressure leads to certain internal issues
going unaddressed until a crisis emerges, takes the chief executive away from the office for
long periods of time, and can lend itself to mission drift.
5. INCREASE IN WORKLOAD.
CSR brings about more workload to the organization thus increasing the task for the
employees. Non profit task for a corporate organization needs a huge amount of motivation to
be carried out.

CHAPTER 4
24

 CSR RULES LAID BY THE GOVERNMENT

INTRODUCTION ON TATA
TATA & CSR
CHANGES IN TATA POLICY FOR CSR

CSR RULES LAID DOWN BY THE GOVERNMENT OF INDIA

The concept of corporate social responsibility (CSR) has acquired tremendous prominence in
India since the enactment of the Companies Act, 2013 and the Companies (Corporate Social

25

Responsibility Policy) Rules, 2014 (the CSR Rules). They are applicable to large companies,
whether or not they are listed on the stock exchange.

Now, the Ministry of Heavy Industries & Public Enterprises of the Government of India has
issued theGuidelines on Corporate Social Responsibility and Sustainability for Central Public
Sector Enterprises(Guidelines). These apply to central public sector enterprises (CPSEs), which
are essentially companies or undertakings owned or controlled by the Central Government.
These new Guidelines come into effect from April 1, 2014.

The Guidelines represent an important step in Indias foray into CSR in an unparalleled
manner. Some of the unique features of the Guidelines are discussed below.

APPLICABILITY
The Guidelines are applicable to all CPSEs and are in addition to the provisions of the
Companies Act and the CSR Rules. In other words, CPSEs are subject to a higher standard of
social responsibility than companies in the private sector. Although the operation of CPSEs (or
other state-owned enterprises) in India have not been the subject-matter of a detailed study
from a corporate governance perspective, this sector encapsulates a larger element of public
interest compared to other companies run on largely commercial lines with profit-making being
the principal motive.
By imposing higher standards on CPSEs, the Government appears to require them to pave the
way for greater social obligations among business enterprises. This is a welcome move. In the
past, government companies have been criticized for their lackadaisical attitude towards
corporate governance and for adopting and implementing practices that were not only inferior
to those in the private sector but also below par judging by the legal requirements (e.g. for
board independence). By spearheading the efforts towards CSR, the CPSEs may now have to
take the lead in introducing and implementing sustainable and socially responsible business
practices.

Sustainability and CSR

One of the criticisms of the Companies Act and the CSR Rules is that they focus on CSR
spending (which is essentially corporate philanthropy) and in fact specifically provide that
26

matters carried out by companies in pursuance of their business are not covered within the
ambit of CSR.
CSR excludes activities undertaken in pursuance of the normal course of business of the
company. This appears somewhat paradoxical in that the companies normal business conduct
will not be taken into account for CSR. This is because the Companies Acts focus on CSR as a
matter of expenditure of funds by companies rather than as a matter of conduct or corporate
behaviour. It must be re-emphasized that CSR goes beyond mere spending, and must also
promote social responsible and sustainable business practices.

The Guidelines applicable to CPSEs go a step further and lay significant emphasis on
sustainability in business practices. They expressly state that CSR and sustainability are
complementary in nature and must be dealt with together. Hence, sustainability issues must be
ingrained into the business policies and strategies of the CPSEs to the extent possible.

This approach is combining sustainability and CSR is a necessary one. It is important for
companies to imbibe sustainability in their regular business practices by taking into account the
interests of long-term stakeholders, including shareholders and other affected parties such as
creditor, employees, consumers and the community. This is also consistent with the broader
duties of the directors in section 166(2) of the Companies Act, 2013. Under the Guidelines, this
would be complemented through CSR, which essentially relates to corporate spending (of a
share of profits) into specified activities. This approach combines socially responsible business
practices as well as spending (as a form of corporate philanthropy). While the Companies Act
and the CSR Rules applicable to all companies provide for the spending aspect, they pay short
shrift to the sustainability aspect (in that there is nothing in that regime to provide for
sustainability or social responsibility in regular business practices). To this extent, the
Guidelines for CPSEs score over the Companies Act and the CSR Rules. Perhaps, one might
even suggest that the next round of reforms or amendments to company law must consider
adopting the CPSE approach for all companies under the broader CSR mandate.

Mandatory Nature
Although it was initially intended to make CSR mandatory under the Companies Act, the
provision was subsequently diluted. In its final form, CSR spending represents a compromise
which allows companies to adopt a comply-or-explain approach. However, for CPSEs the
27

Guidelines adopt a strict mandatory approach. The Guidelines state that it would be
mandatory for all CPSEs which meet the criteria as laid down in Section 135(1) of the Act, to
spend at least 2% of the average net profits of the three immediately preceding financial years
in pursuance of their CSR activities as stipulated in the Act and the CSR Rules. They also add
that in case of CPSEs mere reporting and explaining the reasons for not spending this amount
in a particular year would not suffice and the unspent CSR amount in a particular year would
not lapse. It would instead be carried forward to the next year for utilisation for the purpose for
which it was allocated. Even here, CPSEs are held to a much higher standard of CSR
spending than companies in the private sector.
Overall, the Guidelines embrace a more overarching approach towards CSR than the
Companies Act and the CSR Rules. It is indeed heartening to note that government companies
are leading the way in this regard. As always, much however depends upon the implementation
of the Guidelines in determining the success of this approach towards CSR.

TATA
INTRODUCTION :
Tata Industries was set up by Tata Sons in 1945 as a managing agency for the businesses it
promoted. Following the abolition of the managing agency system, Tata Industries' mandate
was recast, in the early 1980s, to promote Tata's entry into new and high-tech businesses.

28

Tata Industries has initiated and promoted Tata ventures in several sectors, including control
systems, information technology, financial services, auto components, advanced materials,
telecom hardware and telecommunication services.
Areas of business
Tata Industries has two operating divisions which function as independent profit centres:

Tata Strategic Management Group: An independent management consulting division

that assists Tata as well as non-Tata companies in enhancing their competitive edge.

Tata Interactive Systems: Among the world's leading e-learning organisations, it offers
services such as project management, instructional design and graphics, and technical
know-how.

Tata Industries' main activities are:

To promote Tatas' entry into new businesses

To maintain shareholding in promoted companies

To invest in operating companies to facilitate growth

Board of directors

Cyrus P Mistry, Chairman

Dr Nirmalya Kumar

KRS Jamwal, executive director

RR Bhinge, executive director

Ashish Dhawan

Ireena Vittal

Location
Tata Industries is based in Mumbai.

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Founded by Jamsetji Tata in 1868, the Tata Group is a global enterprise, headquartered in
India, comprising over 100 independent operating companies. The group operates in more than
100 countries across six continents, with a mission 'To improve the quality of life of the
communities we serve globally, through long-term stakeholder value creation based on
Leadership with Trust'.

In 2014-15, the revenue of Tata companies, taken together, was $108.78 billion.[2] These
companies collectively employ over 600,000 people. [2] Each Tata company or enterprise
operates independently under the guidance and supervision of its own board of directors and
shareholders. There are 30 publicly-listed Tata enterprises with a combined market
capitalisation of about $134 billion (as on March 31, 2015). [3] Tata companies with significant
scale include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata
Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian
Hotels Company.

Many Tata companies have achieved global leadership in their businesses. For instance, Tata
Communications is #1 international wholesale voice provider and Tata Motors is among the
top ten commercial vehicle manufacturers in the world. Tata Steel is among the top fifteen best
steelmakers and TCS is the second largest IT services company in the world by market cap and
profit. Tata Global Beverages is the second-largest tea company in the world and Tata
Chemicals is the worlds second-largest manufacturer of soda ash. Employing a diverse
workforce in their operations, Tata companies have made significant local investments in
different geographies.

In tandem with the increasing international footprint of Tata companies, the Tata brand is also
gaining international recognition. Tata companies bring to their customers worldwide a whole
host of reputed brands which touch their lives every day. Brand Finance, a UK-based
consultancy firm, has valued Tatas multi-brand portfolio at over $23 billion in 2015.

30

TATA & CSR

RECOGNITION OF CSR :
In a free enterprise, the community is not just another stakeholder in business but is in fact the
very purpose of its existence
- Jamsetji Nusserwanji , Tata Founder, Tata Group.
"Corporate Social Responsibility should be in the DNA of every organization. Our processes
should be aligned so as to benefit the society. If society prospers, so shall the organization..."
- Manoj Chakravarti, G M - Corporate Affairs & Corporate Head - Social
Responsibility, Titan Industries Limited in 2004.
Corporate Social Responsibility has always been taken care of by the Tata group. The founder
Mr. Jamshedji Tata used to grant scholarships for further studies abroad in 1892 . He also
supported Gandhijis campaign for racial equality in South Africa . Tata group has given
country its first science center and atomic research center . "The wealth gathered 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. Jamshed Irani, Director, Tata Sons Ltd, says, "The
Tata credo is that 'give back to the people what you have earned from them'. So from the very
inception, Jamshetji Tata and his family have been following this principle."
In July 2004, B. Muthuraman, Managing Director, Tata Steel Limited (TISCO) announced that
in future TISCO would not deal with companies, which do not conform to the company's
Corporate Social Responsibility (CSR) standards. Speaking at the annual general meeting of
the Madras Chamber of Commerce and Industry, He stated, "We will not either buy from or
sell to companies that do not measure up to Tata Steel's social responsibility standards."

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INTRODUCING CHANGES IN THE COMPANYS ARTICLE AND RULES FOR

SUSTAINING CSR CLAUSE NO. 10 OF TATA GROUP
A Tata Company shall be committed to be a good corporate citizen not only in compliance with
all relevant laws and regulations but also by actively assisting in the improvement of the
quality of life of the people in the communities in which it operates with the objective of
making them self reliant. Such social responsibility would comprise, to initiate and support
community initiatives in the field of community health and family welfare, water management,
vocational training, education and literacy and encourage application of modern scientific and
managerial techniques and expertise. This will be reviewed periodically in consonance with
national and regional priorities. The company would also not treat these activities as optional
ones but would strive to incorporate them as integral part of its business plan. The company
would also encourage volunteering amongst its employees and help them to work in the
communities. Tata companies are encouraged to develop social accounting systems and to
carry out social audit of their operations.
Amendments were made to the Articles of Association of the major Tata group companies in
the 1970s. Newly included was an article stating that the "company shall be mindful of its
social and moral responsibilities to consumers, employees, shareholders, society and the local
community. To institutionalize the CSR charter, a clause on this was put into the group's 'Code
of Conduct.' This clause states that group companies had to actively assist in improving quality
of life in the communities in which they operated. All the group companies were signatories to
this code. CSR was included as one of the key business processes in TISCO. It was one of the
eight key business processes identified by TISCO's management and considered critical to the
success of the company.

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CHAPTER 5

TATA CSR ACTIVITIES

TATA CSR SUSTAINABILTY POLICY
CONCLUSION & RECOMMENDATION
SIGNIFICANCE OF STUDY
BIBLOGRAPHY

CSR ACTIVITIES OF TATA COMPANIES & SOCIETIES

Through the following companies and societies Tata group keeps on heading towards the
fulfillment of corporate social responsibility
33

TATA STEEL
Tata Steel has adopted the Corporate Citizenship Index, Tata Business Excellence Model and
the Tata Index for Sustainable Development. Tata Steel spends 5-7 per cent of its profit after
tax on several CSR initiatives.
(a) Self-Help Groups (SHGs)
Over 500 self-help groups are currently operating under various poverty alleviation
programs; out of which over 200 are engaged in activities of income generation thorough
micro enterprises. Women empowerment programs through Self-Help Groups have been
extended to 700 villages. From the year 2003 to 2006, the maternal and infant survival
project had a coverage area of 42 villages in Gamharia block in Seraikela Kharsawa and a
replication project was taken up in Rajnagar block. For providing portable water to rural
communities 2,600 tube wells have been installed for the benefit of over four Lakh people.
(b) Supports Social Welfare Organizations
Tata Steel supports various social welfare organizations.
They include;
Tata Steel Rural Development Society- Tribal Cultural Society;
Tata Steel Foundation for Family Initiatives- National Association for the Blind
Shishu Niketan School of Hope - Centre for Hearing Impaired Children
Indian Red Cross Society, East Singhbhum.
(c) Healthcare Projects
In its 100th year, the Tata Steel Centenary Project has just been announced. The healthcare
projects of Tata Steel include facilitation of child education, immunization and childcare,
plantation activities, creation of awareness of AIDS and other healthcare projects

(d) Economic Empowerment

A program aiming at economic empowerment through improvised agriculture has been

taken up in three backward tribal blocks in Jharkhand, Orissa and Chhattisgarh. An
34

expenditure of Rs 100 crore has been estimated for the purpose and this program is
expected to benefit 40,000 tribal living in over 400 villages in these three States.

(e) Assistance to government

Tata Steel has hosted 12 Lifeline Expresses in association with the Ministry of Railways,
Impact India Foundation and the Government of Jharkhand. It has served over 50,000
people. Five thousand people have got surgical facilities and over 1,000 people received
aids and appliances. Over seven lac rural and another seven Lac urban population have
been benefited by the CSR activities of Tata Steel. The National Horticulture Mission
program that has been taken up in collaboration with the Government of Jharkhand has
benefited more than a thousand households. In collaboration with the Ministry of Non
Conventional Energy and the Confederation of Indian Industry, focus is laid on renewable
energy aiming at enhancing rural livelihood.

TATA MOTORS

(a) Pollution Control

Tata Motors is the first Indian Company to introduce vehicles with Euro norms. Tata Motors'
joint venture with Cummins Engine Company, USA, in 1992, was a major effort to introduce
emission control technology in India. To make environment friendly engines it has taken the
help of world-renowned engine consultants like Ricardo and AVL. It has manufactured CNG
version of buses and also launched a CNG version of its passenger car, the Indica. Over the
35

years, Tata Motors has also made investments in the establishment of an advanced emissiontesting laboratory.

(b) Restoring Ecological Balance

Tata Motors has planted 80,000 trees in the works and the township and more than 2.4 million
trees have been planted in Jamshedpur region. Over half a million trees have been planted in
the Poona region. The company has directed all its suppliers to package their products in
alternate material instead of wood. In Pune, the treated water is conserved in lakes attracting
various species of birds from around the world.

(c) Employment Generation

Relatives the employees at Pune have been encouraged to make various industrial cooperatives engaged in productive activities like re-cycling of scrap wood into furniture,
welding, steel scrap baling, battery cable assembly etc. The Tata Motors Grihini Social Welfare
Society assists employees' women dependents; they make a variety of products, ranging from
pickles to electrical cable harnesses etc ; thereby making them financially secure.

(d) Economic Capital

In Lucknow, two Societies - Samaj Vikas Kendra & Jan Parivar Kalyan Santhan have been
formed for rural development & for providing healthcare to the rural areas. These societies
have made great efforts for health, education and women empowerment in rural areas.

(e) Human Capital

Tata motors has introduced many scholarship programs for the higher education of the
children. Through a scholarship program Vidyadhanam, the company supports 211 students.
Out of these students 132 students are from the marginalized sections of the society. These
students get books, copies and other study materials. They also undergo different kinds of
workshops, creative & outdoor sessions and residential camps as well. The company has
entered into Public-Private Partnership (PPP) for upgrading 10 Industrial Technical Institutes
(ITI) across the country.
36

(f) Natural Capital

On the World Environment Day, Tata Motors has launched a tree plantation drive across India
and countries in the SAARC region, Middle East Russia and Africa. As many as 25,000 trees
were planted on the day. Apart from this more than 100,000 saplings were planted throughout
the monsoon.

TATA CHEMICALS
Tata Chemicals is making an effort for sustainability. Sustainability for the group means
honesty and transparency towards stakeholders, environmental protection , generating
economic value, promoting human rights and creating social capital. Tata Chemicals
supports the UN Global Compact and is committed to reporting its sustainability
performance in accordance with GRI (Global Reporting Initiatives) guidelines.
Its main operations for environment protection include optimal use of resource, finding
and/or generating alternative sources of fuel and raw materials, and maximizing reuse and
recycling . All in all they have the policy of avoid, reduce and reuse. The company runs a
rural development program at Okhamandal and Babrala.

37

Tata Chemicals Limited was one of the first organizations to hold an Impact camp, which
was held at Mithapur in the year 1982, providing eye care to hundreds of patients at the
Mithapur Hospital. Tata Chemicals Limited was also the first organization to run world's
first hospital on wheels - the Life Line Express, through Jamnagar district for the first time
between November 21, 2004 and December 21, 2004.

TATA ARCHERY ACADEMY

The Tata Archery Academy was established in Jamshedpur in 1996 . The academy has all
the training facilities like highly efficient coaches, archery grounds, equipment from India
and abroad. It also provides hostel and multi gymnasium facilities for its cadets. After a
rigorous selection process being carried all over India, the Academy selects boys and girls
between the age group of 13 to 18 years for the four years course and it provides the
training during which the cadets are also imparted with formal education.
Some of the major championships where the of the Tata Archery Academy cadets have
participated and have won several medals are Junior world Archery Championship, Senior
World Archery Championship, Asian Archery Championship, Commonwealth Games and
Asian Games.

TATA TEA

Tata Tea has been working hard since the 1980s to fulfill the needs of specially-abled people. It
has set up the Srishti Welfare Centre at Munnar, Kerala; its various programs provide
education, training and rehabilitation of children and young adults with special needs.
Srishti has four projects:
a.The DARE school
b.
The DARE strawberry preserve unit
c.Athulya
d.
Aranya.
Tata Teas welfare officers help identify and encourage relatives or children of employees who
are handicapped to join the Welfare Centre for special education and rehabilitation.
a. The DARE
38

It provides the students with training in basic academics, self-help skills and skills like
gardening, cooking, weaving etc. Children are taught to paint and some of the paintings are
printed and sold as greeting cards. The sales proceeds of which are used back into the units

b. The DARE strawberry

It preserves unit trains youngsters to make natural strawberry preserve. The trainees are paid
for the work; they receive social cover, free medical aid and other benefits.
c. Athulya
It has two units - (i) A vocational training center that imparts training in stationery-making
(ii) A handmade paper-making unit which trains physically challenged persons in the art of
making recycled paper.
d. Aranya
This project was started to nurture the lives of the disabled and also to revive the ancient art of
natural dye. Individuals are given training in various natural dyeing techniques including block
printing, tie and dye, batik work, etc. Their products are sold in and outside the country .

Tata Teas Jaago Re! Campaign exemplifies the Social-Cause Marketing Initiatives .
TATA CORPORATE SUSTAINABILITY POLICY

"No success or achievement in material terms is worthwhile unless it serves the needs or
interests of the country and its people. - J R D Tata
The corporate policy of the group encompasses the sustainable development of all the
stakeholders. The major points included in the corporate policy are following :

Demonstrate responsibility and sensitivity to biodiversity and the environment

Comply with rules and regulations relating to environment

constantly upgrade technology and apply state-of-the-art processes and practices with
institutional
arrangements that will combat larger issues like climate change and global warming

39

Create sustainable livelihoods and build community through social program pertaining
to health, education, empowerment of women and youth, employee volunteering,

Find ways to enhance economic human, social and natural capital for bringing and
maintaining a balance among business, society and environment.

DEDICATION TO THE NATION AT A GLANCE

Tata Health Infrastructure

Tata main hospital at Jamshedpur

ICU in Joda and Balangpur
CHC in Bari and Kuhika
Hospitals in Gobarghati,sukinda, joda, belpahar, belipada and bamnipal
Lifeline Express- the hospital on wheels
Mobile health clinics
Centre for hearing impaired children

Tata Educational Infrastructure

Institute of mathematics
Sukinda college
40

Joda college centenary Learning centre at XIMB

J N Tata Technical Education centre
School of hope
Shishu Niketan
Balwadi schools assisted by Tata Steel

Tata Sports Infrastructure

Tata athletics academy

Tata archery academy

Tata Football academy

Tata steel adventure foundation

Sports feeder centres

Stadium at keonjhar

Preservation of culture & Heritage

Contribution to setting up national Center for performing arts Mumbai

Tribal cultural centers showcases legacy of nine tribes Jharkhand and Orissa
Gramshree mela activities

CONCLUSION
For bringing back and maintaining the general balance in the economic and social arena it
is evident to think deeply and act wisely about CSR. Every business house owe some
responsibility towards the society, nation and world in general which provide it with all
human , material and natural resources. Considering the long run growth and sustainable
development following the norms of CSR , devising new policies and effective
implementation is inevitable to bring and sustain a balance between corporate world and
society, present generation and upcoming generation, man and nature .
As far as the Tata group is concerned , it has gone a long way in fulfilling its duty and
responsibility towards the society and the nation. It has reached the masses to elevate their
lives, to nurture their dreams and to hone their skills justifying the statement of the founder
We do not claim to be more unselfish, more generous and more philanthropic than other
people. But we think we started on sound and straightforward business principles,
41

considering the interests of the shareholder, our own, and the health and welfare of the
employees, the sure foundation of our prosperity.

Significance of the study

A. To the Policy Makers

B.

This study encourages Private Public Partnership (PPP) for CSR promotion
encompassing infrastructure, pollution, child labor, labor productivity & morale.
It may become helpful to make the policy makers at political and corporate level as
well consider CSR an investment and not an expense as it can become instrumental in
increasing goodwill and corporate image.
To the Society

Development of infrastructure i.e. parks, water purification, education etc.

Environment protection
Uplifting of the rural populace
Bringing the tribes into the mainstream of the country

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C.

To the Economy as a whole

Increase in the growth rate
Strategic CSR at political and corporate level can make the country a better investment
destination .
Cumulative results may improve Human Development Index (H.D.I.) of the country.

RECOMMENDATIONS
The concept of private-public partnership (PPP) should be applied in the effective
implementation of CSR i.e. government and business houses should act in collaboration for the
cause.

The Human Resource department (at the political and private level both) should be
entrusted with the responsibility of measuring and evaluating in CSR activities . It can
be done in two forms
a) direct results, such as, economic and financial savings,
b) indirect results like increase in employee satisfaction, less absenteeism, less
employee turnover evaluated by staff surveys

Periodic review of the CSR activities should be conducted by every business entity so
as to identify the pitfalls and the areas left out.

Innovation should essentially be a matter of concern ; be it searching the untouched

areas and scope of CSR or the formulation of CSR strategy or the implementation
thereof.
43

NGOs should be encouraged to act in collaboration for the CSR activities under
different schemes and projects as they play a crucial role in the upliftment of the
masses.

BIBLOGRAPHY
WEBSITES:

(n.d.). Retrieved from http://www.investopedia.com/terms/c/corp-socialresponsibility.asp

(n.d.). Retrieved from http://www.wbcsd.org/work-program/business-role/previouswork/corporate-social-responsibility.aspx
(n.d.). Retrieved from
http://www.cim.org/en/CIMSubSites/CenterForExcellence/About-Us/Brief-history-ofCSR.aspx
(n.d.). Retrieved from http://www.intelligenthq.com/latest-news/part-3-typescorporate-social-responsibility/
(n.d.). Retrieved from http://cubegroup.com.au/top-5-benefits-of-corporate-socialresponsibility/
(n.d.). Retrieved from http://forbesindia.com/article/real-issue/csr-report-cardwhere-companies-stand/34893/1
(n.d.). Retrieved from http://www.tata.in/company/index/Tata-companies

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