What is C S RWhat is C S R

CORPORATE SOCIAL RESPONSIBILTYCORPORATE SOCIAL RESPONSIBILTY

This is the first time that a CSR Rating for companies has been undertaken in India or anywhere in the world. The Karmayog CSR study led to some very clear & simple insights, that:

“Every company harms the environmentEvery company harms the environment!” (Just as an individual does)

Corporate Social Responsibility is thus only about two aspects:

1) Reducing the Negative Effects: Steps taken by a company to neutralise, minimise or offset the harmful effects caused by its processes and product-usage

2) Increasing the Positive Contributions: Further steps taken using its resources, core competence, skills, location and funds for the benefit of people and the environment

Easy everyday examples of social responsibility…

No.

Type of Organisation

Examples of socially responsible activities

1 Movie Theatres / Multiplexes / Malls

-Screening of social message films-Special shows for underprivileged groups-Offering table space for NGOs -Adopting a nearby garden / open space and maintaining it

2 Petrol Pumps -Promoting accident awareness, pedestrian safety -Checking and offering fuel efficiency tips

3 Shops e.g.: Chemists

-Awareness posters of symptoms of different diseases-Collecting & donating old medicines to charitable hospitals-Offering discounted medicines for poor patients

4 Private Hospitals -Creating a Patients’ Information Centre & Library -Encouraging citizens to help accident victims by taking care of legal aspects of accidents / emergency cases

Easy everyday examples of social responsibility

No. Type of Organisation Examples of socially responsible activities

5 Private Schools & Colleges

-Getting Alumni to institute scholarships & prizes -Offering space for training / classes / sports, etc.-Adopting a local garden

6 Housing Societies -Suggesting solutions for local problems to govt & media-Maintaining nearby public spaces, including footpaths-Offering space in society (garage, etc.) for use for training/classes. etc. and as a material collection centre

7 Hotels and Restaurants -Donating excess food responsibly -Composting food waste

8 Media (TV, print, radio) -Featuring profiles and achievements of NGOs / citizens -Spreading social service messages

Inferences

from

the Karmayog CSR rating exercise

Inferencesfrom the Karamayog CSR rating exercise…

1) No CSR The results of the CSR Rating exercise are extremely disappointing since almost half of the companies are not doing any CSR

2) Token Gestures

Many are only making token gestures towards CSR in tangential ways such as donations to charitable trusts, NGOs, sponsorship of events, etc.

3) CSR as PR Most use CSR as a marketing tool

4) CSR

Commitment

Most seem reluctant to do CSR activities unless mandated by law

5) CSR Effectiveness

Most spread their CSR funds thinly across many activities, thus reducing the effectiveness and seriousness

Inferences from the Karmayog CSR rating exercise

6) CSR Philosophy

Very few have a clearly defined CSR philosophy. Most implement CSR in an ad-hoc manner, unconnected with their business process.

7) CSR Transparency

Very few companies openly state the damage caused by their processes and the steps being taken to reduce this damage

8) CSR Reporting

Only 7* companies publish a Corporate Sustainability Report to measure and assess the impact of their business on the environment

* These are Cummins India, Jubilant Organosys, ITC, Reliance Industries, Dr. Reddy’s, Tata Motors and Tata Steel

9) CSR Spend Virtually no company states how much it spends on CSR

The 4 companies taken for CSR are :-The 4 companies taken for CSR are :-

BritanniaAmulNestleITC - Sunfeast

Britannia Industries Ltd.C S R Activities

Bai Jerbai Wadia who single mindedly and commitedly set out to construct low cost baugs or housing colonies in Bombay for lower and middle-class Parsis.

Health care facilities was another area close her heart . With her inspiration, her sons Ness and Cusrow set about building much needed hospitals in Bombay.

The Sir Ness Wadia Foundation, a charitable trust set up in 1969. The trustees have disbursed funds to a broad spectrum of causes from scholarships for the disabled to drought relief in Bombay.

Their income was Rs1700 cr. Spent 3.4% on CSR. Net profit was Rs.150 cr. Karmayog CSR rating – 2/5

Principal CSR activity done in :- healthcare, disaster, general donations

AMULANAND MILK UNION LTD.

AMUL is a three tier co-operative organization.

1st tier :- co-operative society at the village, of which; milk producers are voluntary members. They purchase

milk form member & sell it to the district level co-operative.

2nd tier :- The district co-operative that processes milk into milk products, markets locally & sells surplus to the state co-operative for national & international marketing. There are 12 district co- operatives managed by a 15 member board elected by nominated representatives

or chairmen of the village co-operatives.

3rd tier :- The state level co-operative - the Gujarat Co-operative Milk Marketing Federation (GCMMF) responsible

for national and international marketing of milk and milk products produced and sold to it.

CSR-Sensitive Business Philosophy The first step towards discharging the CSR is the business

philosophy of the GCMMF. It is two-fold: one, to serve the interests of milk producers and second, to provide quality products to consumers as value for money. The milk producers are paid for their milk in accordance with market forces and realisation of value for their produce.

CSR-Orientation to Distributors & Retailers

In Amul Yatra the distributors and their salesmen are taken on a visit to Anand. During this visit they are shown dairy plants, their upkeep, international standards of hygiene and quality, the practices adopted for clean milk production, and above all the cooperative philosophy. Through one to one talk with the farmers, the distributors and salesmen realise AMUL is a large business of small farmers.

Earnings Of GCMMF

Nurturing its primary members - the milk producers - is the first mission of the GCMMF. Discharge of this responsibility is reflected in the manner in which the GCMMF conducts its business and shares its earnings. The milk from the village co-operatives is purchased at an interim price. So as to maximize the earnings of the milk producers. The GCMMF changes the product profile during the fiscal and directs its sales and marketing activities towards those products that would bring in maximum returns.

Expenditure done on CSR by GCMMF(Gujarat Co-operative Milk Marketing Federation)

PROFITS:- Profit of the GCMMF is very low. The net profit (PADT) of the GCMMF during 2003-04 was Rs 7.31 crore against a turnover of Rs 2,947 crore, a meagre 0.25%. Further out of the net profit of Rs 7.31 crore, Rs 4 crore was given as share dividend to the co-operatives. To fulfill its corporate social responsibility towards its milk producers and co-operatives the

GCMMF works on razor thin profits and retention of funds.

Nestlé India has always focused on long term, sustainable and profitable growth and helped communities around its factories to improve their quality of life in a similar manner. Nestlé Agricultural Services has used the experience gained by Nestlé across the world to set up a system of direct and efficient contact with the farmers.

Milk storage facilities have been set up close to the farmers. Veterinary services are provided free, and medicines provided at wholesale cost & helps them in procuring loans.

CSR-Safe Drinking Water

Water is a scarce resource.

Almost 200 million people do not have access to clean drinking water.

They are committed to improving the situation and believes that the first step is to create awareness in the communities around its factories. A key focus area of our Corporate initiatives is to help provide Clean Drinking Water and educate children in schools to conserve this scarce resource.

Karmayog CSR rating – 2/5

Principal CSR activity done in :- health , community projects, infrastructure.

CSR-Education and Training

Nestlé create awareness about the right to education & encourages the communities around its factories to send their children to school. Their employees have developed a special play 'Let Us Go to School' for this purpose. It supports local schools, helps in the maintenance of public parks and green belts, facilitates blood donation camps and health awareness programs.All these initiatives strengthen the bond between Nestlé India and the community. Their LOGO says “GOOD FOOD GOOD LIFE” Their income was Rs2200 cr. Spent 4.4% on CSR. Net profit was Rs.250 cr.

ITC Ltd. - Sunfeast

ITC Limited – Foods Division announced the launch of the 'Sunfeast' range of high quality biscuits with offerings in Glucose, Marie and Cream segments at a function in Chennai on April 20, 2004.

The Company continued to intensify its footprint in the social sector by expanding to newer districts during the year. It continued to focus on the three main areas of interventions under ‘Mission Sunehra Kal’

(a) natural resource management (b) sustainable livelihoods (c) community development, with focus on

primary education and health and sanitation. Their income was Rs8000 cr. Spent 16.0% on CSR.

Net profit was Rs.2000 cr.

CSR activities of ITC-Sunfeast The collaboration between ITC and the Government of AP for wasteland development under ‘Indira Kranti Patham’ was sustained during the year – 830 hectares of plantations were promoted through this public-private partnership. In the area of environment, health and safety, ITC is moving towards achieving ‘zero solid waste’ status through recycling of all solid wastes. Recycling of waste in 2006-07 was 93% as compared to 2005-06 (78.7%)Reduction in usage of plastic bags: School children were given practical lessons on the disadvantages of plastic bags and the adversities faced thereof. Encourage butterfly gardens: A team of experts educated and introduced children to the concept of 'Butterfly Gardens', wherein special plants are grown whereby creating a natural habitat for butterflies to breed.