Workshop on CSR, Hyderabad 28-29 May 2010 (Part 1)

By Suresh Kr Pramar

First Day

A two-day workshop on Corporate Social Responsibility was organized jointly by the Centre for Training and Research in Responsible Business & Social Initiatives (CTRiRB&SI), Noida and the Nice Foundation, Hyderabad, had participants from several business houses, including NTPC, Singareni Colleries Company Limited, Reliance Energy, Vedanta, DQ Entertainment International, VIT University, Vellore.

The flagging of the Workshop was Suresh Pramar, Executive Director, CTRiRB&SI, spoke of the similarities between Gandhiji’s concept of Trusteeship and Corporate Social Responsibility. He said both call upon business to be more responsible and work for the welfare of the society.

He said Gandhiji had on many occasions said that making money was, in itself, not a sin as long as the means adopted were ethical. He had called upon businessmen to set aside their excess wealth after they had satisfied their needs, for the welfare of the people. Suresh Pramar quoted Gandhiji as saying “Earn your crores but understand that your wealth is not yours; it belongs to society. Take what you require for your legitimate needs and use the remainder for society.”

CSR, as it is understood today, has almost all the elements of Gandhiji’s Trusteeship. Like Gandhiji’s concept of Trusteeship, Corporate Social Responsibility calls upon business to give back to society. CSR enjoins business to take into consideration the needs and aspirations of the stakeholders.

Pointing out that CSR is the responsibility of the business organization for the impacts of its decisions and activities on society, the environment and its own well being, he said, all definitions of CSR recognize the fact that it was a voluntary activity. Suresh Pramar said CSR is about going beyond the narrow focus on shareholders and profitability. It is about a set of business practices and strategies which deal with social issues.

He spoke about the issues involved in CSR. He said CSR covered five main issues which were, Human Rights, Employees Rights, Environment Protection, Community Involvement, Customer Relations and Supplier Relations

CSR, Suresh Pramar, emphasised, was profitable for business. He said studies had shown that companies which practiced good CSR were able to show increased profit. They have shown a direct correlation between socially responsible business practices and positive financial performance.

Good CSR also helps to reduce operating costs and increases operational efficiency. He said contrary to widely-held opinion, improved environmental management systems do not automatically result in greater cost. Over time, they improve operational efficiency by reducing waste production and water usage, increasing energy efficiency and in some cases, selling recycled materials.

CSR has also helped companies to enhance their brand image and reputation. A strong reputation in environmental and social responsibility can help a company build this trust. However, it needs to result from real practices and policies and integrity towards the companies responsibilities Better Brand image and reputation results in increased sales and customer loyalty. Consumers not only want good and safe products, but they also want to know that what they buy was produced in a socially and environmentally responsible way. CSR can lead to new markets and product lines.

According to Pramar good CSR increases the ability of the company to attract and retain employees. It also helps to reduce the severity of government regulations. He said the more a company shows it is committed to CSR by complying with and going beyond legislation, the more lenient governments and regulators may be with the company.

For enlightened companies, embracing corporate social responsibility makes good business sense. Those that get ‘left behind’ are missing business opportunities, competitor advantage and improved management opportunities. By NOT engaging in CSR, companies are not only under-managing their impact on society and the environment, they are under-managing their own economic self-interest.

Tracing social responsibility in India, Suresh Pramar pointed out that helping the needy has been ingrained in Indian culture. The rich in the country have always donated for the well being of the less fortunate in society. In the earlier years it was more in the form of charity and philanthropy and largely religion oriented. This has changed in the recent starting with Gandhiji concept of Trusteeship. Thereafter came the Bombay Plan in 19944-45 when leading business houses like the Bajaj, Birlas and Tatas took the first initiatives in India. Today most known companies are involved in some way or the other in CSR activities.

Traditionally the main areas of community interventions, he said, were health, education and creation of livelihood programmes. These continue to dominate even today. However some prominent business houses, particularly those set up in rural areas, have become more actively involved in various programmes for rural development.

Suresh Pramar pointed out that while CSR was spreading there was still a lot to be done. Many of the programmes initiated by business houses were not well planned taking into account the actual needs of the beneficiaries. He said a large number of Corporates were involved in CSR only to show their CSR credentials and to gain publicity for their brand development. There were however also those companies which were serious about the involvement and were going about it with a deep sense of dedication.

Speaking on Unleashing the Potentials of CSR, Ms Meena Raghunathan, Director, Community Services, GMR Varalakshmi Foundation, said the potential exists because Corporates feel a responsibility to do something for the community/society (moral imperative).She said Corporates also have legal and other obligations (legal imperatives) and because they have a need (practical imperatives).

Meena pointed out that Corporates have resources. They also have freedom to define their scope of work. They have speed of decision making and they have managerial skills. The corporate she pointed out, often has a local presence and do interact with the community. She said corporates can provide ‘last mile connectivity.

Before jumping onto the CSR bandwagon, Meena said, they need to ask themselves a few essentials questions. Among the first would to understand why it wants to do it. Meena pointed out that there is never usually one single reason, but it is important to think through the various reasons and weights Companies need to ask themselves:

• Do they want to do it?
• Do they want to make a difference?
• Will they fulfil requirements to have good relations with local community and with decision makers?
• Or is it to have a good image?

Having decided the reason why it wants to do CSR the company will need to decide what it should do. Should it focus on education or health or women or heritage or should it be involved in advocacy or action or both. Corporates also need to decide whether they should have an advisory role, a funding role or an action role.

Having decided what to do corporates need to ask themselves what is the scope and scale of their intervention. Whether they would like to make a national impact or work around their business operations. If they are interest in education they need to decide whether to work in five schools or fifty and whether they should do it themselves or outsource it.

The next question they need to ask themselves is whether to do it in-house or to outsource it? If they decide to do it in-house, who will take the responsibility? Also do they have the professional know how. How will they acquire the know how if they do not have it. The company will also have to decide which department will handle the responsibility. Should a separate identity, like a foundation or a trust, be created? To whom will these identities be responsible?

The company will also have to devote some time to decide on the funding of the activities. What will be the model of funding? How to ensure that the funding is sustained? Will the funds available to the activity be dependent on profits? Also will the company seek other resources?

Meena described the CSR activities undertake by the GMR Foundation which she said was the CSR arm of the GMR Group, with a mandate to work with under-served sections of the community around all Group Businesses. The Foundation currently works in 21 locations with the focus on Education; Health, hygiene and sanitation; Empowerment and livelihoods and Community Development.

At the new Hyderabad airport site over 500 families were relocated from airport site to an outside location (Airport Colony). Many lost their land and livelihoods due to the move. She said though compensation, good infrastructure, etc. has been provided to families, livelihoods is a major issue with most of them going for daily manual labour. Access to health services and education continues to be low.

According to Meena, there was a dire need and a social responsibility to provide sustainable livelihoods, strengthen education and health services and improve the overall standard of living of the displaced people. Besides those settled in this colony, others have lost land to the airport or have been affected by this development.

To contribute to strengthen quality of education the Foundation has built a fully-equipped school at Shamshabad for imparting quality English medium education. The school is run by Chinmaya Mission. Twenty percent of the seats in the school are reserved for poor and meritorious students, selected from neighbouring communities, sponsored through the foundation.

In addition, the foundation works with the government to provide infrastructure support to schools, such as benches, classes, toilets, etc. The foundation also conducts Summer Camps as a fun-n-learn activity with exposure visits, arts, crafts and film-shows.

According to Meena the Foundation has taken strong steps to provide basic health care to the most vulnerable sections of the population MMU are operational since April 2005 with basic mandate to cater to elderly people.

Under an agreement with the Greater Hyderabad Municipal Corporation, the foundation has constructed use and pay toilets at eight different locations in the city. These were constructed after undertaking a survey among women to find out why they do not use public toilets.

Over the past two or three decade the number of civil society organizations has increased substantially, both in India and abroad. With Governments unable to deliver social services for the growing populations, NGOs have stepped in to take charge. NGOs are presently working in a number of areas helping to solve social problems. They are largely not for profit organizations and rely on their funding on government and corporate houses.

In recent years many NGOs are converting themselves into for profit organizations. They continue to provide social services but for this they charge a small fee. Known as Social Entrepreneurs they are people to have taken up a social problem and developed a means to provide a solution which will benefit society at large. To sustain their initiative they charge a fee which helps to cover costs and ensures their long term sustainability.

Social Entrepreneurs are independent entities who work outside the confines of a business organization. They find a problem develop a solution and work on their own to spread the benefits among the people. Another group of persons have emerged in recent years who are actually innovators working within organiations. These individuals, who are being called Social Intrapeneurs are employees of a business organization who have visualized a problem and have created a solution for it.

Speaking on Corporate Social Intrapreneurship: A Form of CSR, Professor, K.L.Srivastava, from the Centre for Social Initiatives and Management, Hyderabad pointed out that both Social Entrepreneurs and Social Intrapreneurs shared many common traits. Both focus on innovation/new approaches. They look for Sustainable solutions. Blend idealism with practicality. Measure their success in terms of social and environmental impact. Understand business processes as well as needs of the humanity.

Corporate Social Intrapreneurship is a process aimed at enabling business to develop more advanced and powerful forms of Corporate Social Responsibility (CSR). It emerges from and builds on three other conceptual frameworks: entrepreneurship, corporate entrepreneurship, and social entrepreneurship.

Over time corporate bureaucracy was seen as stifling innovation. To remedy this, a focus on Social Intrapreneurship within companies emerged with “the presence of innovation with the objective of rejuvenating or redefining organizations, markets, or industries in order to create or sustain competitive superiority. It is the process of extending the firm’s domain of competence and corresponding opportunity set through innovative leveraging of resources, both within and outside its direct control, aimed at the simultaneous creation of economic and social value.” The fundamental purpose of the Social Intrapreneur is to accelerate companies’ organizational transformation into more powerful generators of societal betterment.

Surveys in India and abroad have revealed that most firms have not been able to significantly integrate CSR into their organizations. The Social Intrapreneur aims to provide an approach that will accelerate the CSR journey.

It is not another form of CSR but rather process for invigorating and advancing the development of CSR. The Social Intrapreneur aims to produce a significant and comprehensive transformation of the way a company operates. The following elements are central to that process: creating an enabling environment, fostering corporate social intrapreneurs, amplifying corporate purpose and values, generating double value, building strategic alliances.

Companies that want to move from their old approach to CSR to the Social Intrapreneurship or Corporate Social Entreprise approach must adopt an entrepreneurial mindset and cultivate an entrepreneurial environment that enables fundamental organizational transformation. This can only happen if top leadership champions the change. This requires a powerful vision of where the CSR revolution is taking the company and why it is vital to the organisation’s success.

While there are several examples of Social Intrapreneurs abroad in India we have our Shiv Kumar, who initiated the Choupal concept for ITC, Vijay Sharma, who is responsible for the Hindustan Lever Shaki Amma Initiative and Nachiket Mor, who fathered the ICICI Bank’s Microfinance initiative. All these people found the idea and developed solutions which has brought in immense benefit for their companies and helped them gain higher CSR credits.

Rural Health care is one of the crucial areas where government efforts have failed to deliver. Where government has created facilities it has failed to place the required medical personnel. In many places the required medicines are not available. The result has been poor or not available health care in the rural areas and particularly for the women and child.

Speaking on the Rural Health needs Dr M.Padmanabh Reddy, Chief Executive Officer, Nice Foundation highlighted the fact that India had made substantial progress in certain sectors. He said the country was now the world’s fastest-growing economies with over 600 billionaires. Almost 50 percent of the country’s 1.2 billion population has access to a mobile phone. Another major achievement was that the country had the fourth-largest solar and wind energy programme in the world.

While these were achievements which made every Indian proud the country also had large areas of poverty and destitution. Dr Reddy revealed that the country had a high child mortality rate. He said one million newborns die within the first 28 days of life, of their fifth birthday. One infant dies every 15 seconds. Every second child under 5 years is malnourished. Two out of five children are underweight.

According to Dr Reddy one woman dies every seven minutes due to pregnancy related complications, most of them preventable. Two – thirds of pregnancies are not monitored and conducted by qualified health professionals.

He said it was a paradox that whereas 73 percent of population lives in rural India, whereas 75 percent of health infrastructure, medical HR are concentrated in urban areas. He said around 27 percent live in urban areas. According to Dr Reddy water borne and tropical diseases are the commonest causes of morbidity and mortality in rural settings, mostly preventable and treatable. He said the major health concerns in the rural areas were:

• Lack of quality healthcare services
• Inaccessibility
• Affordability
• Alternative practices
• Cultural beliefs
• High mortality /morbidity

According to Dr Reddy, the Nice Foundation, which is a charitable trust was set up to meet the health care delivery and research needs of the rural population. He said the Nice Foundation Hospital has its core focus on Newborn and Children, Tribal Communities School children – Urban & Rural.

The hospital he said was the largest and first of its kind in the country which offered highest quality care at affordable costs. He said it also has care training and research facilities and was a replicable model to be followed elsewhere.

Dr Reddy revealed that the Foundation and created an innovative approach to ensure comprehensive healthcare for government school children. The programme was using health as an incentive to promote school. The programme was in operation in Andhra Pradesh and Rajasthan in four locations where over 225,000 children are getting the benefit of good comprehensive health care.

Under the programme the Foundations run outpatient clinics at nodal schools for children living in a radius of 2 to 3 kilometres during school hours. It provides emergency transport to referral centres along to toll free telephone access. It runs round the clock in-patient facilities with the provision of medicines, investigations, surgeries and hospital stay. The programme has the provision of tertiary care tie up with leading health institutes for eye care, cardiac surgeries orthopedic surgeries, etc.

According to Dr Reddy, the cost for these services has been kept at the bare minimal. He pointed out that the cost of schoolchild health plan works out to just 50 paise per child per day or Rs 183 annually. The cost for Reproductive and Child Health (RCH) and SHIFT (Safe Health Initiatives for Tribals) programmes is Rs 2,700 per village per month.

The main objective of this programme is to reduce absenteeism and increase retention amongst government school going child due to health related reasons. He said this was a unique replicable model for delivery of comprehensive healthcare services to school children covering common cold to cardiac surgery with the slogan Not Well Come to School.

For Part Two, click here.