Month: August 2016

Although early examples of Corporate Social Responsibility (CSR) began to emerge in other parts of the world around 1960s, the concept, even after five decades, is still in its infancy in India. As a consequence of the Indian government’s move to regulate and mandate CSR, the amount of funds involved in CSR activities has witnessed exponential growth. A recent news report by IANS is a testimony to this fact. According to this study, India is the only country with a legislated CSR and is equipped with a spending threshold of up to $2.5 billion (Rs. 15,000 crores). But despite the rapid influx and availability of massive funding, CSR is yet to generate the right response from the target demographic or getting the expected goodwill from the general population. This basically means that corporate social activities need to reorient to fulfil the very purpose they were supposed to serve. What could be the challenges faced to implement CSR activities in India? Here’s an overview of common CSR practices in the country and how they can be modified for success. The Present System: Where Are The Companies Going Wrong? In order for any organisation to carry out CSR activities successfully they need to begin with developing the right infrastructure. CSR needs to be Board initiative. It should be recognised as a strategic initiative. This needs to be engrained in the DNA of the organisation. CSR needs be driven and supervised by individuals with relevant on-field knowledge and experience in strategizing and executing successful programs. While few major conglomerates in India like the TATA Group and Reliance Industries have set up a robust system to handle their CSR activities, a majority of the mid-to-high revenue companies have failed to understand the basic requirements that go into making their CSR projects a success. For starters, these companies usually shift the responsibilities to their HR department, which is usually not equipped to handle and carry out CSR operations. Other reasons why such programs have gaps include: CSR activities are primarily carried out through head-office initiatives which fail to garner enough support from all the involved parties. There are cases where various departments go head-to-head over the ownership of these projects, and spend a lot of time debating the mobilisation of funds, thereby throwing the whole process into disarray. CSR is usually run with a core team holding the cards and making executive decisions. The problem with this is that in a lot of cases the individuals at the helm don’t have the experience or skills to take the right decisions. Under such cases, the CSR executives lose grip on the exact scenario they are serving, which could lead to failure. The Future: How Can This Challenge be resolved? The solution to the problems faced by a majority of the organisations when it comes to building effective CSR strategies is relatively simple. Essentially, companies need to integrate external stakeholder engagement with the way they strategise their operations and run their overall business. The reasoning behind this is quite simple. The success of a company is directly proportional to its relationship with the external factors tied to it (customers, employees, vendors, lenders, community, regulators etc.). The decisions made in the boardrooms of each company affect the relationship and the way people perceive the establishment on a whole. This is why external engagement should be taken into account every time a company takes a particular decision. To sum it up, a company’s good relationship with its varied stakeholders, and not adopt practice of only maximising returns to only one stakeholder – “The Shareholder”. Instead, every company needs to adapt and make these things achievable by placing these factors into the core of its decision-making processes. The only way to connect all the dots is to make integrated external engagement (IEE) through a thoughtfully designed strategy and if necessary with the help of CSR consultancy firms. References: http://www.environmental-watch.com/2014/06/27/can-environmentally-sustainable-business-practices-inform-csr/ http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/beyond-corporate-social-responsibility-integrated-external-engagement

A vast majority of the general public is under the impression that multinational corporations, while helping to grow the economy, don’t really do much to help the environment or the people who work for them. Although this may prove to be a substantive point with plenty of arguments to be made on either side, there have been a number of companies that have gone beyond their means to do the right thing. However, plenty of laws and policies have been formed to tackle both these issues on a regular basis. In fact, there has been a legislation too, to get all profitable companies to not only to complete their motto of providing employment but also to take on social responsibilities to resolve some environmental issues. With the awareness of protecting the ecosystem and with a number of companies willing to partake in building a sustainable system, there has been a revolution of sorts. Here are a few examples of popular Indian companies who have implemented some of the most effective CSR strategies that do good for the environment. The Pepsico Story After considerable backlash due to several environmental issues caused by the company, Pepsico introduced two key programs to for environmental management. They were Waste to Wealth and Replenishing Water. Under the Replenishing Water program, the MNC tackled the issue of groundwater depletion and water quality by introducing the concept of positive water balance. They began with implementing In-Plant Water Recharge and Zero Water Discharge programs at their manufacturing plants. Apart from this they also took up projects that focus on enhancing and rejuvenating local water bodies in Uttarakhand and Karnataka. By doing this, they achieved a recharge rate of 300 million litres of water every year. The Waste to Wealth program also came back with positive results for the company. Through this program, Pepsico reduced material wastage with the help of sustainable packaging and recycling of waste generated within its plants. The firm is currently using a ‘lightweighting’ method which has been successful in generating less waste, is cost-effective, and has drastically reduced consumption of raw materials. water to wealth program – csr india The Successful Tale Of Shree Cement The next tale is just as interesting and impressive as any other. Shree Cement, a cement manufacturing company, has been converting thermal waste to energy for use in its day-to-day operations. Based in Ajmer, Rajasthan, Shree Cement is one of the largest cement manufacturers in Northern India. It conserves both energy and resources with its pioneering ‘Waste Heat Recovery’ (WHR) project. Mobilised to its full potential within just 17 months as opposed to the industry standard of 24 months, the WHR project has been nothing short of a monumental milestone. sree cement csr program This project has cut down the company’s capital expenditures on water and electricity while reducing the negative effects cement production has on the ecosystem. The reuse of thermal waste generated during its cement production cycle saves over 1250 kl of water, reduces CO2 emission by 1312 tonnes, and reduces SOx emission by 30 tonnes a day. The heat generated is being used and reused to fuel the company’s operations and is also transferred to the local municipal body and other interested parties. Although the capital cost of setting up this operation has been $1.8 million with the ROI projected to arrive after 7-8 years, the company stands by its “clean and green is profitable” motto. These are the two most successful example of companies that have been working towards meeting their business targets, while at the same time contributing to the betterment of the environment as a whole. References:

• http://www.unep.org/resourceefficiency/Portals/24147/scp/business/dialogue/2012/pdf/BCGE_Technical_Background_Paper.pdf
• http://www.ipcbee.com/vol64/012-ICEE2014-E114.pdf
• https://upload.wikimedia.org/wikipedia/commons/4/4b/Plant_growing_through_hole_in_cement.jpg
• https://pixabay.com/static/uploads/photo/2014/12/24/05/02/drops-of-water-578897_960_720.jpg