cover story
I
s it that difficult to imagine the
excitement of the villagers in
the hinterlands of Gadimoga and
Bhairavapalem panchayats of
Students gaining Andhra Pradesh, who have just
computer skill in seen the true transparency of po-
Social Center built in table water through Rural Water
Thenampattinam— Supply (RWS) scheme, and experienced the
one of the Tsunami long-desired luxury of speedy transporta-
affected villages in
tion through the Main District Road (MDR)?
Tamil Nadu.
Both the projects have been done re-
Picture Courtesy: Siemens Ltd.
cently as the roll-out of Reliance Indus-
tries’ Corporate Social Responsibility
(CSR) plan. RIL along with the local dis-
trict administration there have delivered a
permanent solution to the severe drinking
water shortage problem faced by the vil-
lagers. The company has built water tanks
and overhead reservoirs in Gadimoga and
Chinavalasala villages. Also, with the sup-
port from the company, a pipeline has been
laid for water distribution to the villages
in Gadimoga and Bhairavapalem. The al-
most 10 km long two-lane MDR connects
Bhairavapalem with Tallarevu on NH-214.
This helps more than 35,000 village dwell-
ers reach their agricultural produces and
fishery products to the district market very
fresh and fast.
Although CSR is not a new concept, es-
pecially in the Indian sub-continent, where
business families like Tatas, Birlas, Godre-
Accelerating the
Growth Vehicle
js and some others have got a rich heritage
of leveraging social causes almost wayback
from the turn of the nineteenth century,
with passage of time the focus of CSR has
been widening, and today its scope has ex-
Putting
CSR Gear
tended beyond mere humanitarian issues
to environmental causes where the gamut
is literally unlimited.
on Top
Thus, in today’s scenario, defining CSR
is not very easy. Although, manufactur-
ing organizations hold varying views,
which are mostly influenced by the factors
such as, the nature of business and prod-
ucts, manufacturing site, pollutants or
harmful outlets or byproducts generated
by them, effect of economizing opera-
tional procedures and the firms’ economic
capability etc., the common target is to
Corporate Social Responsibility is the key to sustaining business in the long achieve a balance of socio-economic and
run. Manufacturers, who voluntarily and sincerely shoulder this responsibility, environmental imperatives maintaining
can successfully create a good brand image over a time and attract social the shareholders’ or investors’ interest. Of
course to a large extent, pressure of the
support, which are the best assets that they can look for sustainability.
country laws in the form of compliance,
by p. k. chatterjee
22 january 31, 2010 | industry 2.0 - technology management for decision-makers www.industry20.com www.industry20.com
also direct the CSR policy of a manufactur-
ing organization.
According to Federation of Indian Cham-
bers of Commerce & Industry (FICCI), CSR
is slowly, but surely, being recognised as a
priority area the world over. The general
understanding on CSR, till sometime back,
was deeply rooted in the concept of phi-
lanthropy. However, the emerging concept
to CSR is focusing on going beyond char-
ity. The companies are now expected to
integrate social, environmental and ethical
concerns, in addition to financial concerns,
into company’s business process.
In common parlance, in India, as on
date, CSR is being interpreted by the manu-
facturing organizations as an effort to com-
pensate the losses caused to the environ- CSR is close
ment because of their operations, as well to my heart
as to improve the overall quality of life of and we are working
the people—mostly nearby their operating day and night for the
areas. This aims at becoming environmen- benefit of the under-
tally and socially sustainable, maintaining privileged children in
the profitability of the operations. So, it is the country. Through
an urge to make the best of today without computer education,
damaging or compromising the resources mid-day meal and Bal
of tomorrow, which may be seen from en- Chetna Anganwadi
vironmental, social and economic angles. project, we would be
touching the lives
Major focused areas of about 2.5 million
In the Indian context, rather from the children in coming
standpoint of a developing country, the
3-5 years time.”
CSR focus areas of the manufacturing com-
panies are quite varied, although they may Anil Agarwal
be categorised under three major heads— Group Chairman
environment, society and economy. Of late Vedanta Resources
with the growing environment conscious-
ness in the nation, the manufacturers are
also adding more heavily weighted impor-
tance to this aspect of CSR. However, foci
on socio-economic development are also
increasing appreciably.
Few areas where very prominent stress
is visible include—in the environment cat-
egory: carbon reduction effort, product
recycling, waste disposal, water purifica-
tion and conservation, animal protection
and prevention of cruelty towards animals,
in socio-economic front: education, social
welfare, motivating people for self-help,
safety, medical facility, prevention of dis-
eases, women empowering, prevention of
child labour, care for senior citizens’ in-
terest, encouragement of sports, heritage,
culture etc.
industry 2.0 - technology management for decision-makers | january 31, 2010 23
 cover story
“We care Role of the corporates
Q&A
It offers a comprehensive package of medi- country. However, as Indian manufacturing

for carbon
Almost all of the large manufacturing organi- cal services to the community. It has also SMEs are yet to gain a strong and steady
zations in India are involved in some or other set up several full-fledged schools and runs ground under their growth wheel, and espe-

economy”
kind of CSR activities. The trend is now flowing nurseries of talent. Initiatives against HIV/ cially after the hit of global economic slow
down to the small and medium enterprises’ lev- AIDS are part of L&T’s wide spectrum of down, this is not the right time to discuss
el too. From the notion of charity, today there health and welfare programmes for the their CSR activities.
Q: What’s your view on Corporate Social is a visible shift in paradigm towards respon- community. A number of business associations and
Responsibility (CSR)? sibility. It bids fair that the famous thought of At Siemens India, the CSR programme federations in India, such as FICCI Socio
A: CSR is a part of any corporate entity. I Arthur Page—“ All business in a democratic is three fold, namely: Social Responsibil- Economic Development Foundation (FIC-
think, every person whose acts can have an country begins with public permission and ex- ity Programmes—that includes long-term CI-SEDF) and The Associated Chambers
impact on society, environment or to a group ists by public approval,“ is now being realised projects with employee volunteering and of Commerce and Industry of India (ASSO-
of people whether related or unrelated has a at most of the Indian manufacturing organiza- programmes on learning and research, CHAM) have been actively leveraging the
social responsibility. tions irrespective of their business volumes. Crisis Actions—that means providing aid aspect of CSR through their members.
Every business organization should em- With a mission to impacting the lives of over for victims of natural disasters and health
Vimal Kumar Somani, brace responsibility for the impact of its activi- 2.5 million under-privileged children, Vedanta emergencies and Cause-based Support— Common modus operandi
Managing Director & ties on the environment, consumers, employ-
Resources group has strengthened its CSR meaning supporting causes like environ- According to a recent study from AS-
CEO, Gujarat Foils ees, communities, stakeholders and all other
programmes across all its operating states ment, disability, issues of the senior citi- SOCHAM, about 67 per cent of domestic
members of the public sphere. Furthermore, We at
in India. Its holistic approach encompassing zens and promoting art / culture / music, corporates have chosen the NGOs for part-
every business firm should proactively promote the public interest by en- PepsiCo
health, education, livelihood, self help group­ sports. The company has also undertaken nering closely to discharge their CSR initia-
couraging community growth and development, and voluntarily eliminating
women empowerment, vocational training to initiatives to support the hearing impaired tives or projects, while 58 per cent of them India have initiated
practices that harm the public sphere, regardless of legality. Essentially, CSR
rural youth, schools, mid-day meal to children, students in Vadodara, Chennai and AIDS prefer government departments for spread several projects to
is the deliberate inclusion of public interest into corporate decision-making,
and the honouring of a triple bottom line: People, Planet and Profit. infrastructure development, integrated child patients. They have taken up activities like of their CSR obligations. provide water to
development scheme and other projects are ‘Turtle walks’ with employee participation The Chamber also points out that 21 of villagers who had
Q: Why’s CSR gaining so much importance these days? impacting the lives of millions of people in to protect the endangered species of ‘Olive domestic corporates are working with mul- to earlier walk up to
A: The term CSR came in to common use in the early 1970s, after many mul- Rajasthan, Orissa, Chattisgarh, Tamil Nadu Ridley’ turtles along the Chennai coast. tilateral or bilateral organizations for their 2 kms every day to
tinational corporations were formed, although it was seldom abbreviated. and Goa. SMEs, especially medium enterprises CSR activities. Among 37 per cent corpo- collect water. It is very
The term stakeholder, meaning those on whom an organization’s activities According to Sangita Jindal, Chairper- are also gradually coming up with their rates, CSR initiative implementation has heartening to note
have an impact, was used to describe corporate owners beyond sharehold- son, JSW Foundation, “The CSR initiatives of share of discharging CSR. Ahmedabad- gone through a well structured foundation that this (Paithan)
ers as a result of an influential book by R Freeman in 1984. JSW Group are undertaken through the JSW based Rainbow Papers has recently dis- and among 58 per cent domestic compa- particular project
At that time, as the social, economic and environmental scenario was Foundation. All social initiatives are carried tributed around rupees two lakhs among nies, they have formed a separate CSR de- will benefit nearly
much less complicated than that we see these days, the profit making com- out with a focus on ‘Community Development needy women of Rajpur village through partment to implement CSR. 12,000 community
pany’s just used to donate money for social causes based on their whims through People for People,’ wherein voca- Garib Mahila Sahog Yojna. The company FICCI-SEDF has been working on to pro- members, and the
and fancies. But today, all business runners are realizing the importance tional training, agriculture development, gar- also has donated some new computers to vide an institutional base to the social sec- villagers will now have
of uplifting the society as well as preventing damage of the environment, bage management, health initiatives, women Gujjar High School, Julasan, near its fac- tor activities of the corporate sector, and an opportunity of a
therefore, they are coming up with CSR projects. If the society does not grow empowerment, educational initiatives and art, tory, to provide computer literacy to stu- to promote corporate social responsibility second cultivation
where will you get skilled manpower to run your machines? And who will buy culture and heritage preservation activities dents studying there. There are many other amongst the members of FICCI. The body cycle during the
your sophisticated products? If the environment is not livable, where will you are undertaken. Annually, JSW allocates 1.5 instances of Indian SMEs’ contributions has been assisting FICCI members in iden- Rabi season due to
be? Where will you set up your factory and for whom? It’s so simple. per cent of profit after tax for community de- in social works in different regions of the tification and implementation of social de- improved availability
velopment works.” velopment projects, bringing together vari- of water.”
Q: As there is no fixed standard of CSR as on date, how to distinguish CSR
Employee Social Options (ESOPs) is one ous stakeholders for improving the quality
activities from others? Sanjeev Chadha
of the most effective initiatives of Mahindra & of life of people and designing and imple-
A: Whilst there is no recognized standard for CSR, organizations, such as Chairman, PepsiCo
Mahindra’s CSR programme. ESOPs is a Ma- menting projects in the social sector.
(say for example) the United Nations adhere to the Triple Bottom Line (TBL). India Region
hindra pledge whereby members of the Mahin- There is a plethora of NGOs, who are ac-
It is widely accepted that CSR adheres to similar principles but with no for-
dra ‘parivaar’, on any given day, would be con- tive in implementing social welfare or de-
mal act of legislation. The UN has developed the Principles for Responsible
Investment as guidelines for investing entities. tributing to society somewhere in the country. velopment projects on behalf of the Indian
Take it in a very simple way, you being the manufacturer of a particular The Mobile Medical Van project is a part of manufacturing companies. In some cases,
product, you know its future requirements from the society or environment M&M’s sustained ESOPs programme. there is a joint support to a particular
Larsen & Toubro is involved in a range of cause or the NGO working onto that field.

Picture Courtesy: Vedanta Group

as well as its present effects on the society and environment. So, take up
projects that will help you to sustain your business, and do good to others. CSR activities spanning from environmental Also, many NGOs help corporates in plan-
That’s how you can discharge your CSR. preservation to rural and social development. ning, staffing and directing corporates’ CSR
It has taken giant strides in promoting safety, projects.
Q: What’s the best CSR practice in Gujarat Foils? health and hygiene, both within the corpora- According to Siemens’ Head-CSR, Praja-
A: We are following the path of carbon economy. We are using wind power tion and externally. The company’s rural devel- kta Malgi-Mirji, “Siemens has been associ-
in our industry. Also, we are going to set up a 30 MW captive green power opment programmes touch the lives of people Dongria Kondha women learn Leaf- ated with St. Catherine’s Home, a primary
plant soon. in remote villages and isolated communities. Plate making art in Lanjigarh. school and orphanage for street children in

24 january 31, 2010 | industry 2.0 - technology management for decision-makers www.industry20.com www.industry20.com industry 2.0 - technology management for decision-makers | january 31, 2010 25
 cover story
“We employ
Q&A
differently
abled people”
Q: How does ADC KRONE look to the
matter of CSR?
A: For us, the guidelines outline the
company’s value statement with regard
to Customer, Quality, Innovation, Team-
work and Integrity. The ADC foundation
designs, manages and funds community-
focused activities in three core areas:
K Bala Chandran, Charitable grantmaking, Employee
Chairman & Managing volunteerism and Corporate community
Director, KRONE relations.
Communications Ltd. Under Charitable grantmaking, our
funding priorities are in the areas of
mathematics and science education and technology for non-profits.
This is to align our foundation’s focus with our core business while ad-
dressing the issue of ‘digital inclusion’ around the globe.
As far as Employee volunteerism is concerned, ADC employees are
committed to making a difference by giving their time and talent to the
communities where we live and work. Volunteerism takes place at an
individual level as well as a corporate level, and ADC stands behind
these activities by matching employee donations of money.
Corporate community relations is the third component of our com-
munity engagement programme. This is a focused set of corporate
community relations activities, particularly in the company’s headquar-
ters community, aimed at achieving our strategic community goals and
supporting our community partners.
Q: What’re you doing in India to discharge your CSR?
A: In India, we support a wide range of community outreach initia-
tives through employee grants, collaboration with other organizations
and creation of job opportunities. Recently, ADC employees donated a
minimum of 1 day’s salary towards flood relief in North Karnataka and
an equal amount was matched and donated by the company as well.
Through ADC’s CSR initiative, we regularly extend charitable grants to
Samarthanam Trust, which helps children and adults cope with physical
and visual disabilities. The Akshara Foundation received a grant to sup-
port enhancement of mathematics capability in children.
Having said this, it is not just about making grants - ADC supports
employment of differently abled people through its contract manufac-
turers. This was an initiative through the Samarthanam Trust, which
acquired a sick unit which was conducting assembly work for an auto-
motive product. The entire work force there consisted of both destitute
and differently challenged women. Working with them, ADC established
a contract assembly line and provided them training, which is now
stabilized. Doing this enabled a means for livelihood and an opportunity
to promote social responsibility in business.
In the recent past, ADC has also provided grant and supported
Tata Indicom’s FISH-Intelligent Navigation Gear (FISHING) initiative—to
enable rural fishing communities to receive updates on weather and
information pertaining to the concentration of fish in the sea on their
mobile phones.
26 january 31, 2010 | industry 2.0 - technology management for decision-makers
Mumbai for over seven years. So far Siemens has
adopted three batches of 115 children, and con-
tributes towards their boarding and educational
expenses on a yearly basis, in addition to refur-
bishment and upgradation of infrastructure at the
school. We also organize counseling sessions and
recreation programmes for the children with active
employee volunteering.”
Public-private participation (PPP)
As Vikram Kirloskar, Vice Chairman, Toyota Kirlos-
kar Motor, recently pointed out in a CII meeting,
“Industry must adopt responsible, ethical and good
practices within their own factories and offices be-
fore reaching beyond to serve the community and
society. The government and industry need to part-
ner more closely and effectively to ensure equitable
growth and distribution of wealth,” obviously there
is still a huge untapped potential.
Although instances of public-private participa-
tion is not rare in discharging the responsibilities
towards society, it has to be remembered that India
being a bureaucratic country of very high order, pri-
vate enterprises mostly need to get approval from
the bureaucrats for their projects, and in many
cases it is associated with a political nod. And of-
ten that delays the proposed work. However, some
fantastic developments are being observed here
through the joint effort of public and private bodies.
Eighty students were inducted to the second
edition of Student Traffic Volunteers Scholarship
Scheme (STVS) in Kolkata by Hyundai Motor India
recently. The Student Traffic Volunteers Scholarship
Scheme (STVS) has been conceptualised in collabo-
ration with the Kolkata Traffic Police, with the sole
aim of helping the traffic police force to manage
and improve the traffic conditions in that city. The
scheme also provides stipend to the student volun-
teers to encourage the students to actively partici-
pate in the programme and thus help the Kolkata
Police in maintaining discipline on the roads.
Coca-Cola India too in partnership with UN-
HABITAT and Lake Conservation Authority (LCA) of
Madhya Pradesh have completed several Rain Wa-
ter Harvesting (RWH) projects in Madhya Pradesh.
These projects have been constructed in different
government schools in four major cities of Madhya
Pradesh—Bhopal, Indore, Jabalpur and Gwalior.
They have a combined potential to harvest 36 lakh
litres of rainwater annually at normal rainfall, and
will benefit nearly 18000 children, besides the
communities around these schools.
Stressing the need for nutritious diet for young
children, the Vedanta Chairman Anil says, “Chil-
dren are under-weight, almost half of their regular
www.industry20.com
weight. They do not get good nutritious food. We are
trying to make sure that through our Vedanta Bal
Chetna Anganwadi Project (Integrated Child Welfare
Scheme) and Mid-Day Meal Programme, children get
proper diet.” Working in over 2050 Anganwadis un-
der partnership with the State Governments of Ra-
jasthan, Chattisgarh and Orissa, in a Public Private
Partnership- PPP Mode, the group is already reach-
ing out to about 85,000 children under-this project.
Today, these Anganwadis have a planned diet for the
children, water filters for safe drinking water, hy-
Picture Courtesy: Vedanta Group
gienic toilets, toys, colourful books, utensils etc.
The new paradigm
As mentioned at the outset the foci on the CSR as-
pect is rapidly changing among the Indian manufac-
turing leaders. From mere charity, it’s now moving
towards active participation. In the words of Anand
Mahindra, Vice Chairman and Managing Director of
Mahindra & Mahindra, “At Mahindras, CSR means
not just the sharing of our wealth, but of our time
and of ourselves.”
Mahindra Tractors’ pan-India programmes like
Mahindra Vishwaas, door step service, mobile vans
and Padyatra mark their physical involvement in
implementing the chalked out plans. Mahindra FES
melded its customer centricity and social concerns
with initiatives like Swasth Tractor Swasth Chalak,
wherein hundreds of Mahindra FES camps across
the nation addressed the health concerns of farmers.
The same thought is reflected when Siemens’ CSR
Head Prajakta says, the company does not believe in
merely handing over a donation pay cheque towards
a cause, but supports a cause with active participa-
tion from the employees.
Of late yet another benefit of discharging CSR is
clearly being felt by the India manufacturing com-
panies, whereby they are becoming more focused
to discharge CSR. A well planned CSR improves
bottomline of the company. An ethical, environmen-
friendly and socially responsible management along
with selling products can buy customers’ and em-
ployees’ loyalty.
Thus, the new paradigm is shifing from outsourc-
ing CSR to deploying corporate’s own resources. Also,
the philanthropy-based model is gradually shifting
towards stakeholder-participation based model. Di-
rect involvement of corporates in development proj-
ects will certainly bring in the better management
concepts in running the CSR projects—resulting in
well organized and accelerated development.
Flip sides need to be eliminated
As Indian manufacturing industry has come of age,
right at this stage, it is no better than to be called
www.industry20.com
Children at a Vedanta Bal Chetna Anganwadi Centre.
ridiculous to claim (simple, and not special, say
for disable people) employment creation as a part
of CSR. Wherever, there is a commercially viable
business activity, complementarily there comes up
employment opportunities. So, there is nothing to
claim about, and under no reasoning that can be
recognised as a part of CSR activities. However, the
companies who are genuinely innovative to create
employment opportunities for the otherwise-not-fit
people are really praiseworthy.
Also, instances of misleading claims or advertise-
ments centring around CSR to catch up people’s at-
tention is another sign of weak focus or performance
as far as discharging of CSR is concerned.
Both these actions, although not so prominently
and frequently practised by the Indian manufactur-
ers, they are seen here at times. As it is not possible
to set any benchmarks on CSR, manufacturers’ as-
sociations are supposed to attempt to persuade the
practitioners to stay away from such practices.
Conclusion
The shifting trend in discharging CSR through
active involvrement is good as long as the compa-
nies can sustain the process of active participation,
and they have enough expertise to complete the
projects. This will obviously ensure better and more
economic utilization of fund provided for the pur-
pose. Yet some other positive avenues that will open
through this practice are orientation of the employ-
ees, motivation and better understanding of the mar-
ket demands.
The shift of paradigm from charity to support
for value added project partnership will accelerate
the growth of the unprivileged people, lead to bet-
ter distribution of facilities and obviously add to na-
tional growth. n
industry 2.0 - technology management for decision-makers | january 31, 2010 27