CSR in India

1. 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? 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”. ---JamshedjiNusserwanji 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 (1944-45) – First initiative by leading business houses (Tata, Bajaj, Birla group through FICCI) Individual initiatives by individual corporate 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 partnershipsinitiated 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. 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. What is CSR (macro-level) 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 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 www.nfcgindia.orgGovernance (NFCG) in partnership with Confederation of Indian Industry (CII), Institute of Company Secretaries of India (ICSI) and Institute of Chartered Accountants of India (ICAI) • www.csrindia.info – a portal for information on CSR 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)http://www.incometaxindia.gov.in/acts/income%20tax%20act/80g.asp • Child Labour Law (1996)http://www.indianchild.com/child_labour_law_in_india.htm • Environmental Protection Act (1986) and many sub-regulationshttp://envfor.nic.in/legis/env/env1.htmlhttp://sjvn.nic.in/projects/environmental-regulations.pdf • Right to Information Act (2005)http://righttoinformation.gov.in/rti-act.pdf 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 www.cii.in 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 www.bombaychamber.com 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. http://globalcompactasiapacific.org/india/ www.globabcompact.org 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:Innovativesolutions to globalchallenges of development, povertyalleviation 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. www.oecd.org 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 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) Centre for the Promotion of Imports from developing countries | May 27, 2010

20. Current status and perceptions of CSR in India Status 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 Philanthropyembedded in India’s culture and enhances employee motivation Focus onenvironmently-friendlyproducts, ratherthan focus on waste reduction, footprints, emissions Training on the job: to overcomeIndia’spooreducation system and pooreducationallevels of the poor ‘New’ sectors (e.g. IT) ‘Going green’: focus onintegratedenvironmental management More relaxed and open culture: first name identification, direct e-mails, performance drivenpackages 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 businessIncluding a better balance between internal and external CSR dimensions 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) 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 Source entire research: http://timesfoundation.indiatimes.com/articlelist/articleshow/4592300.cms 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 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 Centre for the Promotion of Imports from developing countries | June 2011

29. Moradabad Cluster Internal CSR – Business Case Centre for the Promotion of Imports from developing countries | June 2011

30. Moradabad Cluster External CSR – Business Case Centre for the Promotion of Imports from developing countries | June 2011

31. Some Indian Companies 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