Corporate Social Responsibility, India

Corporate Social Responsibility, India

Indian companies are now expected to discharge their stakeholder responsibilities and societal obligations, along with their shareholder-wealth maximisation goal.

Nearly all leading corporates in India are involved in corporate social responsibility (CSR) programmes in areas like education, health, livelihood creation, skill development, and empowerment of weaker sections of the society. Notable efforts have come from the Tata Group, Infosys, Bharti Enterprises, ITC Welcome group, Indian Oil Corporation among others.

The 2010 list of Forbes Asia's '48 Heroes of Philanthropy' contains four Indians. The 2009 list also featured four Indians. India has been named among the top ten Asian countries paying increasing importance towards corporate social responsibility (CSR) disclosure norms. India was ranked fourth in the list, according to social enterprise CSR Asia's Asian Sustainability Ranking (ASR), released in October 2009. According to a study undertaken by an industry body in June 2009, which studied the CSR activities of 300 corporate houses, corporate India has spread its CSR activities across 20 states and Union territories, with Maharashtra gaining the most from them. About 36 per cent of the CSR activities are concentrated in the state, followed by about 12 per cent in Gujarat, 10 per cent in Delhi and 9 per cent in Tamil Nadu.

The companies have on an aggregate, identified 26 different themes for their CSR initiatives. Of these 26 schemes, community welfare tops the list, followed by education, the environment, health, as well as rural development. Further, according to a study by financial paper, The Economic Times, donations by listed companies grew 8 per cent during the fiscal ended March 2009. The study of disclosures made by companies showed that 760 companies donated US$ 170 million in FY09, up from US$ 156 million in the year-ago period. As many as 108 companies donated over US$ 216,199, up 20 per cent over the previous year.

Although corporate India is involved in CSR activities, the central government is working on a framework for quantifying the CSR initiatives of companies to promote them further. According to Minister for Corporate Affairs, Mr Salman Khurshid, one of the ways to attract companies towards CSR work is to develop a system of CSR credits, similar to the system of carbon credits which are given to companies for green initiatives. Moreover, in 2009, the government made it mandatory for all public sector oil companies to spend 2 per cent of their net profits on corporate social responsibility. Besides the private sector, the government is also ensuring that the public sector companies participate actively in CSR initiatives. The Department of Public Enterprises (DPE) has prepared guidelines for central public sector enterprises to take up important corporate social responsibility projects to be funded by 2-5 per cent of the company's net profits.

As per the guidelines, companies with net profit of less than US$ 22.5 million will earmark 3-5 per cent of profit for CSR, companies with net profit of between US$ 22.5 million - US$ 112.5 million, will utilise 2-3 per cent for CSR activities and companies with net profit of over US$ 112.5 million will spend 0.5-2 per cent of net profits for CSR.

CSR Initiatives and Green Measures

India Inc has joined hands to fine-tune all its activities falling under CSR. For this, it has set up a global platform to showcase all the work done by Indian firms. Confederation of Indian Industry (CII) and the TVS Group collaborated to form the CII-TVS Centre of Excellence for Responsive Corporate Citizenship in 2007. It provides consultancy services and technical assistance on social development and CSR.

According to a National Geographic survey which studied 17,000 consumers in 17 countries, Indians are the most eco-friendly consumers in the world. India topped the Consumer Greendex, where consumers were asked about energy use and conservation, transportation choices, food sources, the relative use of green products versus traditional products, attitudes towards the environment and sustainability and knowledge of environmental issues.

1. Reliance Industries and two Tata Group firms—Tata Motors and Tata Steel—are the country's most admired companies for their corporate social responsibility initiatives, according to a Nielsen survey released in May 2009.

2. As part of its Corporate Service Corps (CSC) programme, IBM has joined hands with the Tribal Development Department of Gujarat for a development project aimed at upliftment of tribals in the Sasan area of Gir forest.

3. The financial services sector is going green in a steady manner. With an eye on preserving energy, companies have started easing the carbon footprint in their offices. The year 2009 witnessed initiatives including application of renewable energy technologies, moving to paperless operations and recognition of environmental standards. Efforts by companies such as HSBC India, Max New York Life and Standard Chartered Bank have ensured that the green movement has kept its momentum by asking their customers to shift to e-statements and e-receipts.

4. State-owned Navratna company, Coal India Ltd (CIL) will invest US$ 67.5 million in 2010-11 on social and environmental causes.

5. Public sector aluminium company NALCO has contributed US$ 3.23 million for development work in Orissa's Koraput district as part of its Corporate Social Responsibility (CSR).

India's Human Resource (HR)

Over the last decade, India's vast manpower has played an instrumental role in its economic success story. Several corporate bigwigs are now thinking of ways of building the skill sets of their employees.

Moreover, as the global economy recovers from recession and Indian companies expand in the US and European markets, India Inc is grooming global managers who can effortlessly connect with diverse geographies and fuel opportunities for growth. Indian companies are shifting their young managers abroad to handle diversity at an early stage and help create a reserve of globally competent people. The Tatas, Aditya Birla Group, Essar Group, Infosys and mid-cap firms like Glenmark Pharmaceuticals and S Kumars Nationwide (SKNL) are among companies that nurture global talent.

Not only is India Inc grooming global managers, but companies from across the globe are scouting the country for quality talent to fill positions across geographies. India is fast gaining the distinction of becoming one of the world's largest talent incubators.

Recruitment companies, such a s Europe, Africa, Asia-Pacific, Middle East and the rest of the South Asian Association for Regional Cooperation (SAARC) region are expected to import talent from India across profiles and domains, in significant numbers. According to industry estimates, close to 100 top level executive (CXO) positions and 30,000 middle- to junior-level hirings, across profiles and domains are expected during 2010, and these numbers are expected to go up in the coming years.

A survey by global HR services firm, Hewitt Associates, released in March 2010, said that a majority of Indian companies, particularly those in infrastructure and energy sectors, were planning to hire in a big way this year. About 93.4 per cent of the firms surveyed were expected to hire this year. Firms in sectors like telecom, oil and gas and infrastructure were likely to recruit the most, across lateral and entry levels.

As per a new survey by Manpower Inc, released in June 2010, India's job market is likely to return to pre-slowdown days in the third quarter of this fiscal. India's hiring outlook is most optimistic among 36 nations, with a net employment outlook of 42 per cent. The hiring is expected to be strongest in the mining and construction industries, with 46 per cent of the respondents planning to recruit in the next quarter.

Manufacturing too is set to recruit in a big way with about 44 per cent of employers indicating their plans to do so.

Sourced from India Brand Equity Foundation

skf CSR consultants