The Hindu Business Line : `Corporate social responsibility necessary'

PLANNING for and spending on corporate social responsibility (CSR) will be no more an option for corporates. It is an imperative for corporates, according to Dr J.J. Irani, Director of Tata Sons.

Spending on CSR would benefit corporates in the long run, though it might have added to their overall expenditure in the short-term.

Delivering at the valedictory at the two-day Green Business Summit here, he said in the days to come, investors would invest and customers would repose trust in those corporates that had ingrained the principles of CSR. He cautioned that a stage would come when societies would not permit industries that didn't show CSR.

The summit was organised by the CII-Sohrabji Green Business Centre (CII-GBC).

Relating the Tata experience, he narrated the Hazaribagh example where it started helping local communities in a variety of ways some 50-60 years ago. The land the company acquired was originally thought to be not so profitable for mining. But over a period of time, the company developed technologies that resulted in better realisation.

Not only that. While some other industries suffered in the region because of the Naxalites, the Tatas could go on tapping the mines thanks to the support of the locals. "They (the locals) accepted us as their benefactors," he said.

The company, he said, did not invest there, expecting a future benefit. "But our investment there helped us in reaping benefits," he said.

"CSR spending in the long run will turn out to be a good business proposition," he asserted.

He also showed the Jamshedpur example to back his argument. It had got several firsts to its credit. "We have introduced the eight-hour working day for the first time in the world. We were also the first to introduce maternity leave, long before it became a law in the country," he said.

Initiatives like these didn't really add up to the company's costs. "Over the years, they helped us in generating wealth," Mr Irani said.

While it was important to generate wealth, it was more important to see what would happen to the wealth thus created. "That is the real differentiator," he pointed out.

Usually, wealth generated would either go for personal aggrandisement or expansion of companies or go partly for expansion and mostly on community spending. The latter way was the most meaningful one.

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