Corporate Social Responsibility – Leaving a Legacy

Jolly J Mathews

Outline and Objectives

The New Society is the ‘Knowledge Society’.............

• To propagate and strengthen ...emotional, psychological, logical and evolutionary underpinnings ........

• To take this trend forward....to individual responsibility

• To contribute to develop a social order....

Key Questions......

In the process of generating wealth through manufacturing and services, industrial and business organisations are bound to have social consequences, social impacts ........

• Should CSR be the sole responsibility of business and business leaders alone ?

• Would the impact of business – driven CSR initiatives be sufficient and impactful enough to make the desired impact in the world

• Should CSR - in letter and spirit be a ‘Bottoms – up’ approach ?

Methodology

Observation, Examination, Inquiry and Interviews to elicit :

- Existing practices across businesses and industries

- Study of background and rationale for the current practices

- Emerging challenges that threaten the letter, spirit and purposes

- Evolving trends

The looming shadow of a tragedy.....

27 years ago, in 1984 a chemical gas leaked from the Union Carbide plant in Bhopal, India. Often referred to as the worst industrial disaster in human history, on the horrific night of December 2nd and 3rd, more than 40 tons of the deadly gas methyl-isocyanate escaped from the pesticide factory. Approximately half a million people were exposed to the gas and 25,000 have died to date as a result of their exposure. More than 1,20,000 people continue to suffer from severe health ailments related to the accident and contamination.

The enduring lessons....

There are important lessons to be learnt from this horrific tragedy.

The alignment of business goals and activities with social concerns acquires special significance in the New Knowledge Society.

Social change has become the centre of modern economy.

To navigate effectively in the knowledge society, it will be imperative for the companies to pursue Corporate Social Responsibility. (CSR) that tightly aligns their economic and social goals.

Current realities....

Today society is very different. The role of the state as the primary provider of social services is well established, at least in the developed world, while the institutions which used to underpin the morals of society no longer hold sway.

This has led to a less certain world, where what constitutes ethical behavior is less clear and where there is diminishing trust in institutions to do the right thing. But it is undoubtedly true that the social context in which business operates at the opening of the twenty-first century is uncertain, complex and dynamic.

As Kofi Annan, past Secretary – General, United Nations and a prominent architect of CSR initiatives has said, “The poor are poor not because of too much globalization, but because of too little.”

Indian Traditions.......

The TATA Story ....

And Birla, Mahindra and other enlightened business houses ......

The Pharma Industry – The Caring and Curing Dimension

Pharma Industry : Key findings

CSR activities reach out to a wide array of constituents of the marginalised sections. More than 70 % of companies surveyed focus on children, patients, poor persons, women and disabled in that order.

NGOs receive the highest (65%) support followed by company’s own projects (55%). Government programmes received the least (25%) support from the CSR activities.

While all companies without exception allocated financial resources towards CSR activities, some companies (55%) also devote material/ organisational resources towards CSR activities.

The Pharma Industry – The Caring and Curing Dimension (Contd.)

Key findings..................... Continued

75% of the companies carry out an assessment of the impact of their CSR activities.

Majority of the respondents believed that CSR enhances their competitiveness. Competitiveness largely relates to image building.

Companies believe that they earn a fairly high level of respect from various stakeholders, most from the employees and the locality.

An illustrative list of Community Related CSR programmes by pharmaceutical companies:

1. Adoption of 35 villages in rural Haryana for a primary health care programme through Arpana Research & Charities Trust.

2. Support to health and human resource organisations in the communities by grants and company employee support.

3. Social Welfare schemes and development projects in neighbouring communities.

4. Adoption of villages for developing models in the region through support systems for facilities like drinking water.

An illustrative list of Community Related CSR programmes by pharmaceutical companies: (Contd.)

5. Providing local cultivators with scientific knowledge and steady income for harvesting herbs.

6. Development of 1919 villages, 11 districts in Rajasthan, Maharashtra and Uttar Pradesh through a foundation.

“The pharmaceutical industry, being a life – sciences industry, touches human life at various stages. It leads the way to a healthier world. Its contribution to reducing infant mortality, increasing life span and eliminating diseases like smallpox are well documented. Although its primary responsibility relates to research and development of newer and better medicines and vaccines and their ethical production and distribution, the industry has demonstrated its concern for social issues.”

The advent of Social Marketing

‘Break the language barrier’ says the ad campaign by Idea Cellular on TV and radio.

Another advertisement by handsets manufacturer Nokia encourages people to recycle their mobile phones, “Smart ban, phone recycle kar,”

Both the advertisements belong to India’s leading telecom players. However, instead of selling tariffs or the most feature – laden handset to consumers they are urging people to make themselves instrumental in either national integration or saving the environment.

The advent of Social Marketing (Contd.)

And it’s not just environmental issues that are getting highlighted .....Aircel’s recent initiative strives to involve thoughtfulness among consumers by helping the elderly in old age homes.

So what is all this about ? And more than what, we wonder why all this is being highlighted by marketeers today...... It is putting people at the heart of policies, communication and delivery to encourage behavioral change.

One of the appealing things about Social Marketing is that it is not a completely new idea. Rather it is an idea whose time has truly come.

(From : ‘Branding combined with social responsibility’ Anjali Prasad)

The importance of CSR for your business

1. The Internet has rapidly become the tool of choice for spreading information about companies around the world.

2. The thing every company fears most is becoming the target of a powerful single-issue campaign group. So, rather than wait for it to happen, it is better to take pre-emptive action in the form of environmental product development & labeling, or engaging in such ideas as codes of conduct and social audits.

3. We have to take cognizance of the new forces in the consumer market, where the consumer-citizen is metamorphosing into a citizen-consumer.

4. Cause marketing, development partnerships and environmental concerns make good business sense particularly in terms of recycling materials, employee satisfaction and morale, building up reputational capital and as a distinctive brand marketing tool.

New stirrings....... And now.........there is a fledgling movement from

Corporate Social Responsibility to Continuous Social Business. In his address at the 83rd Annual General Meeting of FICCI, Mukesh Ambani called upon Industry Leaders to move from a model of CSR to a model of CSB.....

His inspiration ? “It is amazing how Mahatma Gandhi brought together the landless farmers of Champaran, the textile workers of Kanpur and Ahmedabad and the business leaders of Mumbai and wove their aspirations for a common cause....”

(From: The Indian Express : 2nd March, 2011)

Importance of CSR.....

CSR is a concept that has huge significance for India given it’s current social and economic realities and it’s hopes and dreams for the future. It is therefore critical that :

Current CSR philosophies and practices should get wider publicity

CSR adoption and reporting must be mandatory and a way of life for all businesses across boundaries of size, nature, location, and origin.

CSR initiatives must be graded, recognized and rewarded appropriately

CSR as a practical philosophy must be included in the curriculum of all Business Schools

Epilogue : Painting a new horizon

While giant corporates work their way to find a balance between commerce and service to humanity..... it is heartening to see a burgeoning spirit of conscientiousness and altruism spread among ordinary people and more encouragingly among the young. This is the true spirit that will heal the world and leave a legacy .........

Epilogue : Painting a new horizon (Contd.)

All it took was one wrong turn to change the direction of his life. Back in 2009, Mulund resident was searching for a ground where his football club could practise. He reached Durgawadi a dumping ground.........

Parvati Pujari a spunky 20 year old football player and Gaurang Chauhan a 23 year old football coach for an NGO decided to start a football team for girls in the Ambedkar Nagar slums........

Suneeta Singh, fair, petite, bespectacled hair pulled back sternly into a pony tail, all of 15 year old teaches children along the Juhu Versova Link Road.....She is the daughter of a vada pav seller....

(From: Sunday Mid Day, 27th February, 2011)

Prologue: The Legacy Lake

Devdutt Pattanaik, Author, Speaker, Illustrator, Mythologist recounts a fable :

Once upon a time there was a King called Indradyumna......

This story draws attention to the notion of legacy...........

Often leaders plan their legacy. They say, “Let me be remembered for this or that.” But often, it is the unintentional consequences of our deeds.......

And may the legacy grow ...........

Thank you !