The Hindu Business Line : Mere publicity stunt or...

Corporate social responsibility isn't about running to the media every time a tree is planted or a safety drive is launched. It's time to distinguish between efforts that bring in social change and those that are mere image-building exercises.

Corporate Social Responsibility (CSR) has become the buzzword as globalisation entrenches itself in the country and more and more companies set up shop here. But what exactly is the concept that everyone is talking about? In the monopolistic era too, were there not schools, hospitals, community projects and even temples set up by our home-grown Birlas, Tatas and Goenkas?

At that time no one talked about the virtues of CSR ad nauseum, nor did they see the efforts of these companies as image-building exercises. The projects were largely considered to be charity gestures of companies giving back to the community that had helped them grow.

Today, CSR has taken such dimensions that companies, large and small, make it a point to emphasise the project that each of them is working on, whether it is spreading AIDS awareness, financing education schemes, funding health ventures or putting in place environment clean-up drives. What's more, even small efforts such as organising blood donation camps, funding trashcans and dotting the landscape with public messages are being trumpeted.

The difference is that `charity' is no longer the mode of `giving back' and `social responsibility' is seen as an activity that can deliver great benefits to a company and its stakeholders. Several corporates have no qualms in admitting that their efforts in the long run come back to help the company sell more of its products. And that's the advice that corporate gurus also give CEOs — lobby to build the community and raise its living standards so that it throws up consumers for you to service.

For instance, Nestle's well-known inputs into the surroundings of its Moga plant in Punjab have helped the company as well as the farmers who supply it the raw material — milk — for its products. The company engaged itself in organising an economic milk collection system and provided extensive technical inputs, education and advice to farmers, including loans for buffaloes and tube-wells. Besides, it involved itself in welfare projects such as providing clean drinking water to milk shed village schools, medicines to the tuberculosis clinic in Moga town, and check posts for the police in the area. Now, would you call this `social responsibility' or an effort to enhance business interests and also win the goodwill of the people of the area?

Take the efforts of Holland Tractors to entrench itself in the community close to its plant in Greater Noida. The company obtained land from the community and took it upon itself to fund the education of one person from each displaced family and provide them employment at the company shop floor. For that matter Intel's `Teach to the Future' project that involves training teachers on a large scale in imparting education via computers, as well as helping introduce the same skills at the academic level in teacher-training institutions, is social responsibility at its best. However, the company is honest enough to admit that in the long run, introducing computers would benefit it in terms of increasing sales and consumer awareness. So, while some of these would be seen strictly as CSR projects, they go to build a company's consumer base and goodwill for the organisation.

This is exactly why so much time and space is devoted to CSR programmes and CSR reporting is seen as a significant part of corporate governance. In fact, a survey that was conducted by the Public Relations Society of America among its 185 members some time ago revealed that CSR reporting is a crucial part of any comprehensive stakeholder communication strategy.

And chambers of commerce overseas or in India know exactly the benefits of such ventures. Just this month at the FICCI Annual Awards 2002-2003, several corporates were recognised for the community initiatives they have put in place. Larsen and Toubro (L&T) was awarded for its family welfare schemes, where through its health centres and family welfare schemes it has contributed to preventive healthcare, mother and child care, immunisation, treatment of tuberculosis and leprosy, and the sensitisation of the community to such issues. L&T has undertaken such projects along with the Municipal Corporation of Greater Mumbai. In Bangalore, Orissa and Gujarat too, its centres are involved in similar activity.

Kinetic Engineering Ltd, Pune, too was similarly awarded, this time for its efforts at empowering the physically challenged. Through a programme that's 15 years old, Kinetic helps in the recovery and rehabilitation of leprosy patients. Kolkata's Indian Aluminium Company Ltd was recognised for its rural development initiative in the fields of literacy, healthcare, family welfare, sustainable agriculture and development of physical infrastructure.

These are initiatives outside of the company. But in-house initiatives too were recognised. For instance, the Chennai-based Henkel Spic India Ltd's efforts at environmental conservation and pollution control, where the company has spent considerable resources in adopting eco-friendly technologies in the manufacture of detergents and reduced water consumption by 20 per cent over two years through engineering upgrades, were saluted.

And that's exactly what corporate responsibility is all about. Not running to the media every time you plant a tree or fund a traffic safety drive, but looking at the company's policies in the long run and setting stringent values and standards for oneself.

Body Shop's Anita Roddick is one such example. She has ensured that her company not only sells ethically-produced products, but that in the process, the communities engaged in their production are also economically and environmentally sustained. In fact, that's where the concept of CSR provided by the global organisation Business for Social Responsibility (BSR) makes the most sense. It feels that CSR involves a "set of policies, practices and programmes that are integrated into business operations, supply chains and in the decision-making process throughout the company" and it includes in the definition "responsibility for current and past actions as well as future impacts."

Going by this concept, not all companies that profess to be socially responsible can do so. And it's time that India too makes the distinction between companies that are truly socially responsible and ethical and those that make CSR gestures for the purpose of mere image-building.

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