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Program CSR training India

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1 Program CSR training India
CSR in India Birendra Raturi CBI Trainer Venue: 8-9 June 2011 FICCI New Delhi India Program CSR training India

2 Social Responsibility
Societies are not destroyed by the activities of rascals but by the inactivity of good people. What a paradox! If they can tolerate destruction by being inactive, how can they be good? The question is, are they discharging their social responsibility? Responsibility vis a vis Accountability Centre for the Promotion of Imports from developing countries | June 2011

3 Great Leaders said “We do not claim to be more unselfish, more generous or more philanthropic than others, but we think we started on sound and straightforward business principles considering the interests of the shareholders, our own and health and welfare of our employees…the sure foundation of prosperity”. ---Jamshedji Nusserwanji Tata The price of greatness is responsibility. --Winston Churchill For evil to flourish, good people have to do nothing and evil shall flourish. --Edmund Burke and thus Every individual and organization has social responsibility without which society starts dying Centre for the Promotion of Imports from developing countries | June 2011

4 CSR in India- Background
Today's buzzword, Corporate Social Responsibility or CSR has been part of the Tata Group ever since the days of Jamshetji Tata. Right From 1892 Workers' welfare requirements of the country Granting scholarships for further studies abroad in 1892 Supporting Gandhiji's campaign for racial equality in South Africa First science centre, hospital and atomic research centre providing relief and rehabilitation to natural disaster affected places Tata initiated various labour welfare laws, like the establishment of Welfare Department was introduced in 1917 and enforced by law in 1948 or Maternity Benefit was introduced in 1928 and enforced by law in 1946. Centre for the Promotion of Imports from developing countries | June 2011

5 CSR progression in India
Evolved through the concept of ‘giving’ – an integral part ofIndian culture Philanthropy Religious donations Modern connotation Gandhian concept of Trusteeship Bombay Plan ( ) – First initiative by leading business houses (Tata, Bajaj, Birla group through FICCI) Individual initiatives by individual corporate The problem with the this philanthropy –based model has several problems ( • The corporation does not commit its resources fully behind such a project and often confines itself to one-time or periodical financial grants. • Since its an act of charity, the corporation does not feel the need for community participation in the designing or management of such initiatives and people participation, if any, is restricted to limited implementation aspects reducing the efficiency and effectiveness of corporate social responsibility measures at the ground level. • The lack of involvement from the primary resource provider i.e. the corporation leads to low levels of accountability and transparency at the implementation level. This transformation has been the result of three reasons: • Recognition of the importance of 'reputation capital' for capturing and sustaining markets. Therefore corporate social responsibility is basically a new business strategy to reduce investment risks and maximize profits by taking all the key stakeholders into confidence. • The growing importance attached to the ‘eco-social’ stability i.e. social and environmental stability and sustainability is necessary for the survival of a free-market economy in the long run. • The importance being attached to accountability, transparency and social and environmental investment as the key aspects of corporate governance in the era of globalization. Centre for the Promotion of Imports from developing countries | June 2011

6 The Evolution of CSR to Sustainable Business
integrated into business functions, goals, strategy to corporate community investment strategic partnerships initiated by company to community affairs strategic giving linked to business interests (includes cause- related marketing) to philanthropy passive donations to charities when requested from profit focus a company exists only for short term share holder profit Centre for the Promotion of Imports from developing countries | June 2011

7 What is CSR (macro-level)
Strategic alignment towards CSR, community involvement, stakeholder dialogue, multi-sector partnerships, social investment, institution building, CSR-oriented advocacy. Social and environmental auditing and reporting, voluntary standards, codes of conduct, multi-sector partnerships, stakeholder dialogue, eco-efficiency measures. Legislation, inspection, criminal and civil prosecution, foreign direct liability (for overseas subsidiaries), industry standards. Centre for the Promotion of Imports from developing countries | June 2011

8 CSR in India: Drivers National and international laws
Globalization brought new players to Indian markets Growing middle class Entry of new money (payment systems) made previously inaccessible products accessible Brands support by attracting advertising Part of the population remains poor Education is not for everyone a reality Welfare GAP between urban and rural areas Hidden poverty: official poverty line 12 Rp p.d. in reality that should be 17 Rp p.d. ( But….. 25% of the population remains poor Hidden poverty 40 – 80 mln children do not go to school or will not finish their school Welfare gap between urban and rural areas Centre for the Promotion of Imports from developing countries | June 2011

9 CSR - INTERNAL v/s EXTERNAL
Internal (carried out within the organisation) viz. Energy and water conservation Employee welfare – training, healthcare Affirmative action – employment of backward sections Corporate governance External (within vicinity or for society at large), viz. Community development Capacity building Environmental protection Healthcare Creating awareness - education, health, social issues E-initiatives – Online Information, éducation, etc. Centre for the Promotion of Imports from developing countries | June 2011

10 Developments in CSR in India
From philanthropy to CSR to Inclusive business. Carroll’s CSR pyramid Centre for the Promotion of Imports from developing countries | May 27, 2010

11 CSR Initiatives in India
Ministry of Corporate Affairs published the “Corporate Social Responsibility Voluntary guidelines 2009” Guidelines on Corporate Social Responsibility for Central Public Sector Enterprises (March 2010) National Foundation of Corporate Citizenship Governance (NFCG) in partnership with Confederation of Indian Industry (CII), Institute of Company Secretaries of India (ICSI) and Institute of Chartered Accountants of India (ICAI) – a portal for information on CSR The corporate growth is sometimes seen as widening the gap between the India and Bharat through its income – skewing capability. This gap needs to be bridged. While the Government undertakes extensive developmental initiatives through a series of sectoral programmes, the business sector also needs to take the responsibility of exhibiting socially responsible business practices that ensures the distribution of wealth and well-being of the communities in which the business operates. Guidelines is developed for the corporate sector. Centre for the Promotion of Imports from developing countries | June 2011

12 Federal government policies and legislation
Specific issue policies and legislation, e.g.: Tax reduction in respect of donations to certain funds, charitable institutions, etc. (80D) Child Labour Law (1996) Environmental Protection Act (1986) and many sub-regulations Right to Information Act (2005) Right to Information Act mainly focuses on govt agencies and publicly owned companies. However, it does show needs of information disclosure. Centre for the Promotion of Imports from developing countries | May 27, 2010

13 CSR initiatives Confederation of Indian Industry (CII)
CII is a non-government, not-for-profit, industry led and industry managed organisation, playing a proactive role in India’s development process National Committee on Corporate Social Responsibility & Community Development (constituted 2001) CSR Activities Social Development Agenda Develops CSR guidelines Promotes the sharing of CSR experiences and best practices The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the growth of industry in India, partnering industry and government alike through advisory and consultative processes. CII is a non-government, not-for-profit, industry led and industry managed organisation. playing a proactive role in India's development process. Founded over 115 years ago, it is India's premier business association, with a direct membership of over 8100 organisations from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 90,000 companies from around 400 national and regional sectoral associations. working closely with government on policy issues provides a platform for sectoral consensus building and networking. Major emphasis: on projecting a positive image of business, assisting industry to identify and execute corporate citizenship programmes. Sectors: Agriculture, Infrastructure, manufacturing, Services and Industrial Competitiveness ( Partnerships with over 120 NGOs across the country carry forward our initiatives in integrated and inclusive development, which include health, education, livelihood, diversity management, skill development and environment, to name a few. CII has taken up the agenda of “Business for Livelihood” for the year Businesses are part of civil society and creating livelihoods is the best act of corporate social responsibility. Looking ahead, the focus for would be on the four key Enablers for Sustainable Enterprises: Education, Employability, Innovation and Entrepreneurship. While Education and Employability help create a qualified and skilled workforce, Innovation and Entrepreneurship would drive growth and employment generation. Nation Committee on CSR & Comm Dev. CII also organizes an annual CSR Summit to enable the stakeholders to review and strengthen the CSR Movement. The CII Development Initiatives ensures the continuity of these programmes, particularly with respect to women empowerment, industry-NGO partnership, and persons with disabilities. Centre for the Promotion of Imports from developing countries | June 2011

14 CSR initiatives Bombay Chamber of Commerce & Industry
Bombay Chamber of Commerce & Industry provides a platform for those members who are looking for suitable projects and activities to fulfill their responsibilities. Provides information regarding a few projects run by NGOs which may be considered for support either individually or jointly with other members. Handbook on CSR Centre for the Promotion of Imports from developing countries | June 2011

15 CSR initiatives Global Compact Network India
Formed in 2003, National Contact Point of Global Compact (GC) GC: Guiding principles for businesses towards respecting values of Human Rights, Labour Rights, Environment Protection and Anti-corruption and working towards achievement of UN Millennium Development Goals. Centre for the Promotion of Imports from developing countries | May 27, 2010

16 CSR initiatives Close cooperation with OECD (as a non-member country)
India is on the Governing Board of the OECD’s Development Centre and it also participates as an observer in some OECD Committees and various working groups. The OECD Development Centre: Innovative solutions to global challenges of development, poverty alleviation and inequality India also supports the OECD regionally-focused activities in Asia, hosting regional forums and workshops on issues including investment, taxation, financial education, private pensions, and development. In May 2007, OECD countries agreed to invite Chile, Estonia, Israel, Russia and Slovenia to open discussions for membership of the Organisation and offered enhanced engagement to Brazil, China, India, Indonesia and South Africa. While enhanced engagement is distinct from accession to the OECD, it has the potential in the future to lead to membership. The approval of so-called "road maps" marked the start of accession talks with Chile, Estonia, Israel, Russia and Slovenia. The OECD Development Centre helps policy makers in OECD and developing countries find innovative solutions to the global challenges of development, poverty alleviation and the curbing of inequality. Centre for the Promotion of Imports from developing countries | May 27, 2010

17 Key issues in export markets
What are expectations of international buyers? Strong supply chain responsibility (from raw material to final consumer) Environmental responsibility (India’s biodiversity heritage) Transparency (CSR reporting) Safe and healthy working conditions Human rights (child labour, forced labour, working hours) Centre for the Promotion of Imports from developing countries | May 27, 2010

18 Why is CSR important for SMEs in India?
To Manage risks by integrating environmental and social performance with business strategy To strengthen your license to operate in the local community due to a strong relationship with stakeholders and regulatory authorities To access international markets To improve access to funds and investors To reduce costs: savings of inputs, increase in productivity Improvement of supply chain and customer relations See also Centre for the Promotion of Imports from developing countries | May 27, 2010

19 Why is CSR important for SMEs in India?
To motivate your employees To recruit high quality employees To strengthen relations with other stakeholders in the supply chain To ensure natural resources do not run out To prevent pollution, health hazards To create awareness (e.g. consumers) To build a sustainable future (society and business) See also Centre for the Promotion of Imports from developing countries | May 27, 2010

20 Current status and perceptions of CSR in India
Economic reforms and rise have not yet lead to substantial changes in CSR approach India adopted some aspects of global mainstream CSR, but mainly follows its own CSR agenda Perceptions CSR still has connotation of philanthropy Strong feeling of ‘giving something back to society’ Centre for the Promotion of Imports from developing countries | May 27, 2010

21 Current status and perceptions of CSR in India
More traditional sectors Philanthropy embedded in India’s culture and enhances employee motivation Focus on environmently-friendly products, rather than focus on waste reduction, footprints, emissions Training on the job: to overcome India’s poor education system and poor educational levels of the poor ‘New’ sectors (e.g. IT) ‘Going green’: focus on integrated environmental management More relaxed and open culture: first name identification, direct s, performance driven packages Could the West learn something from the Indian approach? Centre for the Promotion of Imports from developing countries | May 27, 2010

22 Current status and perceptions of CSR in India
50% of Indian companies consider CSR as part of sustainable business rather than philanthropy An imbalance between internal and external CSR dimensions: the vast majority of Indian companies include external dimensions, only 20% include internal dimensions like working conditions and environmental practices However, the vast majority of multinational companies consider CSR part of sustainable business Including a better balance between internal and external CSR dimensions (p.31) Centre for the Promotion of Imports from developing countries | May 27, 2010

23 Current status and perceptions of CSR in India
SMEs SMEs lack structured approach and proper stakeholder dialogue to communicate their action and results on planned CR activities Overall, SME’s tend to focus more on internal issues like labor issues, employee & family welfare, emissions reduction etc. Fear of bureaucracy, time & cost are the main barriers to further engagement, but barriers tend to be built on perception rather than reality. In present scenario there is a need for them to engage in whole umbrella of CR activities involving diverse stakeholder groups primarily Society, NGO’s, Government and Shareholders. (source: Partners in Change) (p.31) Centre for the Promotion of Imports from developing countries | May 27, 2010

24 A Survey among 82 Indian companies on CSR
Corporate initiatives with regard to CSR PSU= public sector undertaking On being asked whether the company has CSR initiatives, 90 per cent of the 82 organisations replied in affirmative. Analysis by types of organisations 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. Mainly philanthropy. Focus of CSR policies of companies participating in this research see link: Entire research Source entire research: Centre for the Promotion of Imports from developing countries | May 27, 2010

25 Challenges for CSR initiatives in India
Challenges from the research: Lack of community participation in CSR activities Need to build local capacities Issues of transparency Non-availability of well-organised non-governmental organisations Visibility factor Narrow perception towards CSR initiatives Non-availability of clear CSR guidelines Lack of consensus on implementing CSR issues Centre for the Promotion of Imports from developing countries | May 27, 2010

26 SWOT Analysis CSR in India
Strengths Weaknesses Allready some PSU and Large Private Organisation doing some good CSR work National Guidelines /Framework on CSR Philanthropy – a giving approach No training and knowledge on CSR No clear framework for SMEs and MSMEs to work on SR Large Gap of Rich and Poor Opportunities Threats Potential of inclusive business concepts Growing demands for CSR in export markets Growing importance of bio-diversity May become a trade barrier Increasingly aware society within and overseas Is industry voluntarily giving back something to the society? Are these actions inspired by a sense of guilt to the society, earning good name in market, philanthropy, etc.? Is it part of core business strategy? Is it adopted by the board? Centre for the Promotion of Imports from developing countries | June 2011

27 Overview of Samples in Moradabad
Centre for the Promotion of Imports from developing countries | June 2011

28 Moradabad Cluster Internal and External CSR – Business Case
Internal -Labour welfare Health care - Fair and timely payment to workers - Provision of monetary aids when in need - Provision of Festival bonus - Monetary help for weddings - Interest free advances - Satisfactory work bonus - Providing free refreshments (tea and snacks usually twice a day) For some exporters only: - All provisions of factories law are abided e.g.: standing orders, appointment letters, minimum wage payment - All policies are displayed - Provision of provident fund for core employees - Provide medical help when needed in the form of monetary support and referral to hospitals - No work overload: - Use of protective mask (although minimal) - A dedicated hospital by the industry association, - In house dispensary, - First aid boxes, - Maternity benefits. - Provision of medical claim for employees and their families - Provision of basic safety measures Centre for the Promotion of Imports from developing countries | June 2011

29 Moradabad Cluster Internal CSR – Business Case
Environment Training and Development For exporters only: - Training in hazardous chemicals, - Fool proof system for air and water pollutants control, - Fire drills - Recycling of all Products - Participated in a training by an ILO project to improve work efficiency Exporters only - Staff orientation Program Centre for the Promotion of Imports from developing countries | June 2011

30 Moradabad Cluster External CSR – Business Case
Health Education - Charity to hospitals OPDs and dispensaries - Organize health camps and HIV/AIDs education - Medical aid to poor - Aid in setting up and running of ‘Madarsas’ (primary schools based on Muslim teachings) - Contribution to NGO run schools - Engaging with NGOs to sponsor child education - Felicitation of retired school Teachers Charities - Zakaat and Fitra - Donating blankets in winters - Free water service in summers, - Monetary help to poor for marriages - Donation to mosques for construction activities etc - Donating to Masjid for external community work Centre for the Promotion of Imports from developing countries | June 2011

31 Some Indian Companies Auto Ancillaries: Sundaram Clayton Ltd. Automobiles: Ashok Leyland Ltd. Banking: Union Bank Ltd. Cement: ACC Ltd. Chemicals: Kansai Nerolac Paints Ltd. Computers: Moser Baer Construction: GMR Infrastructure Ltd. Electronics: Siemens Ltd. HeavyEngineering: Larsen and Toubro Ltd. Financial Services: HDFC Ltd. FMCG and Consumer Durables: Dabur India Ltd. Engineering: Praj Industries Iron and Steel: Tata Steel Ltd. Logistics: Transport Corporation of India Ltd. Metal: Tinplate Co. of India Ltd. Oil and Gas: Bharat Petroleum (BPCL) Paper: Ballarpur Industries Ltd Pharmaceuticals: Jubilant Organasys Ltd. Polymers and Plastics: Jain Irrigation Systems Ltd. Power: Suzlon Energy Ltd. Software and ITES: Infosys Technologies Ltd. Telecommunications: GTL Ltd. Textiles: Arvind Ltd. Trading: 3M India Ltd. Miscellaneous: Titan Industries Ltd Centre for the Promotion of Imports from developing countries | May 27, 2010

32 any Centre for the Promotion of Imports from developing countries | June 2011


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