Karmayog Corporate Social Responsibility Ratings 2007-2008 of the largest 1000 Indian Companies www.karmayog.org/csr200

1. Karmayog Corporate Social Responsibility Ratings 2007-2008of the largest 1000 Indian Companieswww.karmayog.org/csr2008

2. Summary of the Presentation

3. What is Corporate Social Responsibility?

4. “Every 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 by a company using its resources, core competence, skills, location and funds for the benefit of people and the environment

5. Triple Bottom Line and CSR TBL is a concept whereby a company will have to look at not just where the company should deploy its profits but how it made its profits in the first place .This implies looking at impacts on all its stakeholders which in essence is the base of CSR

6. Did you know that…. • A paper company manufactures paper from waste cloth to reduce the use of pulp from trees • A Chemical manufacturer has protected the largest stretch of mangroves along Mumbai’s coast • A software company has developed a special call receiving software for 1098-Childline , India’s national helpline for children in distress • An FMCG company is working to protect and conserve endangered plant species in India through re-forestation programmes • A construction company (in Mumbai) posted a 60 % profit in 2008 amounting to Rs.1400 cr. and did not do any activity to benefit society • Don’t Drink and Drive is the CSR campaign of a leading company that makes alcoholic beverages • A drug manufacturer in India provides gifts and vacations abroad to doctors who prescribe its products. • A power generating company is the highest CO2 emitter in India

7. Importance of the CSR Ratings for different stakeholders

8. Actual Stakeholders of Companies

9. Importance of the CSR Ratings for different stakeholdersSome examples of each continued…

10. Importance of the CSR Ratings for different stakeholders

11. Results of the Karmayog CSR Rating 2008 of the 1000 largest Indian companies

12. Results of CSR Ratings 2008of 1000 largest Indian Companies

13. CSR Ratings BAR Chart

14. * Indicates companies that received a Level 4 rating in the Karmayog CSR Ratings 2007 Companies with the highest rating of Level 4

15. Parameters of the Karmayog CSR Ratings 2008

16. Note: - Companies that manufacture liquor, tobacco, genetically modified crops have been given a Level 0 ratingThe criteria stated above are only the minimum criteria needed to qualify for a particular rating; apart from this, there are other negative and positive criteria that are also applicable, and a combination of these determines the final rating. Minimum necessary parameters for different rating levels

17. Sector–wise analysis of the CSR activities of the largest 1000 Indian companies

18. Sector Analysis • 35 industry sectors were studied • Best Sectors in CSR- Banking, Software,FMCG, Paper • Poor performing sectors in CSR-Retail, Entertainment and Media, Mining , Construction • Each sector shows the the possible impact with the recommended CSR expenditure of 0.2% of Sales.

19. An analysis of 35 sectors has been done for the 1000 companies (Number of companies in each sector is in brackets) CSR in 35 Industry Sectors

20. Importance of the Sector-wise analysis

21. Example of Poor Performing Industry sector • Total of 57 companies were analyzed • 36 Companies are doing no CSR • Only 3 Companies have disclosed the amount spent • Two Level 3 companies are DLF and GMR Infrastructure • Total Sales of 57 Companies is Rs.65000 cr. • As per Karmayog’s recommendation CSR expenditure amounts to Rs.130 cr.

22. Example of an industry sector with good CSR • 40 out of 1000 companies are in the banking industry • 57% of these companies do CSR • 60% of the companies are working in the area of Rural development • There are 6 Level 3 companies: (Andhra Bank, Canara Bank, ICICI Bank, PNB, Union Bank of India, Yes Bank) • Mandatory regulations on CSR for PSU banks makes this sector high performance • Total Sales of 40 companies is Rs.2,60,000 cr. • If 0.2% of sales is spent on CSR (as per Karmayog’s recommendation), then annual CSR expenditure would amount to Rs.520 cr.

23. Some sector specific best CSR practices

24. Observations from the Karmayog CSR Ratings

25. Observations

26. Observations….

27. Mandatory CSR: our 5 Recommendations

28. Mandatory CSR:- Our 3 Recommendations Every Company must do CSR

29. Mandatory CSR: Our 3 Recommendations…

30. Non Mandatory CSR: Our Recommendations

31. Some of our Voluntary Recommendations

32. Some of our Voluntary Recommendations…

33. Karmayog’s views onGroup Companies CSR

34. CSR by Group companies While there are synergies and various managerial reasons for companies to do CSR activities at a group level, it is necessary for each company to undertake its own CSR activities (linked to its processes and skills), while also contributing to the group’s CSR work

35. Recent Trends and Developments in CSR in India

36. Recent Trends in CSR-2008

37. Some developments in CSR in India since the first Karmayog CSR Ratings – 2007

38. Closing Statement… • Enlightened businesses worldwide, small and large, have begun to realise that responsible practices enhance profitability and ensure long term survival. Companies not doing CSR will not survive –it’s only a question of when • For those companies which disrespect the environment or living beings, we, as responsible citizens, need to individually and collectively, reward or penalise them through our voices and our wallets. …..

39. “We believe that Corporate Social Responsibility is not an externalised activity nor is it only philanthropy. It is an internal process reflecting the soul of the Company.” Titan Industries Ltd. Corporate Social Responsibility Report 2008

40. Karmayog Corporate Social Responsibility Ratings 2007-2008of the largest 1000 Indian Companieswww.karmayog.org/csr2008