Demonstrating Responsible Business: CSR and Sustainability Practices of Leading Companies in India

DEMONSTRATING RESPONSIBLE BUSINESS

DEMONSTRATING RESPONSIBLE BUSINESS

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY PRACTICES OF LEADING COMPANIES IN INDIA

VINEETA DUTTA ROY

FOREWORD BY BHASKAR CHATTERJEE

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First published in 2019

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To my mother and father

and

to all those who are working for a fairer,

more compassionate world

Contents

Foreword

Preface

Acknowledgements

PART A: RESPONSIBLE AND INCLUSIVE BUSINESS

Elements of Responsible and Inclusive Business and Their Implications Along Business Value Chains

1. Business and Environment

The chapter provides a succinct account of environmental sustainability challenges for people and the planet; underscoring climate change risks and climate change related adaptation strategies for businesses.

2. Business and Human Rights

The chapter provides an understanding of Human Rights challenges for businesses, implications of modern day slavery in business supply chains and the expectations of United Nations Guiding Principles on Business and Human Rights.

3. Corporate Social Responsibility (CSR) in India

The chapter synthesises Corporate Social Responsibility Provisions of section 135 of the Revised Companies Act and analysis of some aspects of its post implementation experience. As a context, it summarises significance and evolution of Corporate Social Responsibility in India.

PART B: LEVERAGING CSR FOR RESPONSIBLE AND INCLUSIVE BUSINESS

Case Studies of CSR and Sustainability Initiatives by Leading Companies in India

4. Bayer India

Prevention of Abuse and Sexual Violence amongst Children and Women, Innovative Preventive Health and Sanitation

The Global Enterprise has a sharp focus on Innovation and reflects it in its operations, strategies and product and service solutions. The Societal Engagement Model of Bayer, aligned with United Nations Sustainable Development Goals extends innovation to designing new approaches to empowering children and women, by helping them combat abuse and sexual violence and working with them towards Preventive Health and Sanitation.

5. Cairn India Limited

Mitigating Water Woes for its Host Community in Barmer, Rajasthan

In the spirit of nurturing good relationships with its stakeholders, the Oil Giant in India, supports its host community, living in one of the most difficult desert terrains in the world, Barmer in Rajasthan, in its most testing ordeals of day to day life - availability and access to clean and safe drinking water.

6. Deepak Nitrite Limited

Main Streaming the Marginalised Tribal Women Farmers in Chhota Udaipur in Gujarat

With a 70 percent market share in India in important inorganic compounds, the Group has built a strong relationship with its host community in Gujarat. Deepak Foundation, is today a leading non-profit civil society organisation with a nationwide presence. Its programmes in areas of health care, skills and capacity building, sustainable livelihoods are well-built with an eye on women empowerment.

7. GAIL (India) Limited

Corporate Engagement in Natural Disasters’ Risk Reduction and Management in Rudraprayag, Uttarakhand

The largest state-owned natural gas processing and distribution company in India has a ‘Maharatna’ status. While the Public Sector Undertaking has always had a deeply entrenched CSR culture, its Long-Term Rehabilitation programme in the aftermath of the Uttarakhand disaster has unique lessons in Natural Disaster Risk Reduction and its Management.

8. Hindustan Unilever Limited

Unilever Sustainable Living Plan and Community Led Water Stewardship in the Villages of Maharashtra

With a vision of a ‘new way of doing business, one that delivers growth by serving society and the planet’, the Global Fast Moving Consumer Goods Company aspires to make its Sustainable Living Plan common place. Its efforts through Hindustan Unilever Foundation (HUF) in India, in the repeatedly draught ridden state of Maharashtra, sets out to demonstrate water stewardship through community participation and ownership.

9. ITC Limited

Building Livelihood Security for All its Economically Marginalised Stakeholder Communities in India

One of India’s foremost multi-business enterprise, the Company is widely acclaimed and admired. With an aim to create societal value through conscious business strategy, the company’s Social Investments Programme aspires to usher in Sunehra kal’, for its economically marginalised stakeholder communities in its agri-operations, and communities in the vicinity of its plants across India.

10. Mahindra and Mahindra Limited

Educating and Empowering the Underprivileged Girl Child in India

The Multibillion dollar Indian multinational group strongly believes that engaging its employees in social experiences has the potential to drive positive social change. Its group-wide programme of employees volunteering for social and environmental causes is amongst its unique strengths. Project ‘Nanhi Kali’ started by the Group in the mid-1990s has been touching the lives of thousands of girls every year, is now experimenting with yet higher aspirations.

11. Maruti Suzuki Limited

Joining Hands with the Government for Swachh Bharat Mission, Adarsh Grams and Skill India Mission

A name synonymous with passenger cars in India, the company has travelled along with its Indian customers since the 1980s and enjoyed remarkable brand loyalty. The thrust of the Indian Government on corporate partnership in its social development programmes has been driving its CSR across the country. The initiatives undertaken with its host community in Manesar, Haryana have interesting insights to offer.

12. Royal Bank of Scotland Plc India

Building Climate Adaptive and Resilient Livelihood Systems in the Kanha-Pench Corridor of Madhya Pradesh

The ‘Supporting Enterprise’ programme started by the Bank through its Foundation in India, in 2007, has been actively facilitating enterprise development, for those that are dependent on resources of country’s endangered ecosystems. The path breaking work of the Foundation in the Tiger Conservation sites of Kanha and Pench corridor in Madhya Pradesh, gives an insight of how ecological security of a critical ecosystem can be achieved by building climate adaptive capabilities of its communities.

Appendices

1. The Sustainable Development Goals 2030 and CSR in India

2. Corporate Social Responsibility: Definitions and Concepts

3. Building Blocks of a Company’s Holistic and Grounded CSR: Accountability, Transparency and Trust

Notes

Foreword

A clear enunciation of the term ‘Sustainability’ may well have come about much earlier in the international context; but for India, we find a detailed exposition for the first time only in the ‘National Voluntary Guidelines’ which were issued by the Ministry of Corporate Affairs in July 2011. These Guidelines on Social, Environmental and Economic Responsibilities of Business, brought clarity and perspective from an Indian viewpoint and provided a blueprint for the corporate sector to take, and consciously discharge, its responsibilities both to society and to the natural environment.

This development was followed soon after, by the Public Enterprises Department issuing the first ever Guidelines on CSR for the Public Sector in April, 2010. Then came the CSR legislation of 2013. Shortly thereafter, the clock stopped ticking on the Millennium Development Goals in 2015. And then came the Sustainable Development Goals envisaging a timeline up to 2030. The rapidity and sequential flow of these related developments, has given to India its own very unique contextual framework in which to move towards the goal of a fully sustainable society.

The merit of Dr Dutta Roy’s book lies in the manner in which she has woven this intricate web into a finely honed narrative. She has accomplished this task by devoting the first part of the book to outlining the theory behind the modern concepts of Environmental Concerns, Human Rights and CSR as they relate to the contemporary business and corporate world. This sets the tone for the Case Studies that follow. The reader, therefore, moves seamlessly from theory to practice and is able to view ground reality through the lens of concept and notion.

With an ever-growing share of economic activities in the hands of business, corporates today are arguably the single biggest influencers and navigators of human destiny. As generators of wealth, capital and equity, they are in a very real sense, the architects of our future. The endeavour of the U. N. and governments across the world, therefore, is the creation of an enabling environment in which companies and businesses have a direct role in shaping the agenda for sustainable growth. In this enabled environment, corporates will also be partners with other stakeholders, such as governments, and NGO’s in bringing their expertise, management skills and processes to work for social development. They must look beyond the bottomline for sustainable growth and focus instead on the bottom of the pyramid. This will help them to reach out to people, to supply chains, to marketplaces and indeed to every segment of society, so as to build and deliver sustainable value.

The role of a corporation in society has changed drastically, shaped by various global and local sociopolitical movements. Over time, many questions have been raised about how a corporation conducts itself in its business and in its practices; what its impact is on the environment and on communities and how it deals with it. As the idea of a corporation’s ‘responsibility to society’ has evolved over time, it has incorporated many different vantage points. There have been many social and political movements that have sought to make corporations more accountable and more responsible toward society by moving beyond simple philanthropic and charitable gestures. CSR and Sustainability have thus emerged as concepts whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders.

These concepts, as understood today, prescribe the ideal scenario where companies attempt to make a positive contribution to society by undertaking social, environmental and economic activities that are bound by a set of ethics and are largely for the welfare of society.

The Sustainable Development Goals commit the international community to an expanded vision of development, one that vigorously promotes human development as the key to sustaining social and economic progress in all countries and recognizes the importance of creating a global partnership for development. These are the most broadly supported, comprehensive and specific development goals the world has ever agreed upon. These seventeen time-bound goals provide concrete, numerical benchmarks for tackling extreme poverty in its many dimensions. They include goals and targets on income, poverty, hunger, maternal and child mortality, disease, inadequate shelter, gender inequality, environmental degradation and the Global Partnership for Development. They provide a framework for the entire international community to work together towards a common end-making sure that human development reaches everyone, everywhere. If these goals are achieved, world poverty will be cut by half tens of millions of lives will be saved, and billions more will have the opportunity to benefit from the global economy.

On the other hand, CSR, in the way that the concept has been developed in India, is not simply about an initiative or project that a corporation launches; rather, it deals with the very role a corporation has in relation to the society in which it is based. CSR is about making businesses and companies more accountable and reducing their negative impacts. While there are many questions surrounding the actual impact of projects undertaken by companies, a certain framework needs to be put forward and strengthened so that CSR can function most effectively.

In the global scenario, the role of corporations in society has changed immensely. There are now new challenges to be faced and new questions that corporations need to answer. Since the scale of their activities and businesses have such a powerful impact on the environment, on societies and on future generations, it is important that they become aware of these and acknowledge all these aspects when drawing up their CSR policies, projects and initiatives.

This is precisely what Dr Dutta Roy focuses on and underscores repeatedly in this comprehensive and carefully crafted book. The real thrust and meat of the work lies in the way the case studies are portrayed. Much care and attention has been devoted to critically and objectively examining the initiatives from a result-orientation point of view. Understanding what learnings these projects throw up is an underlying part of the analysis as well as concentrating on what difference these projects made at the grass roots level. Her perspectives come from a researcher’s questioning and probing mind and she never hesitates to point to shortcomings. Because she is fair and objective, there is both authenticity and credibility in what the case studies convey and communicate. The take away for the reader is that impact is the most vital ingredient of any CSR initiative - impact that is long term, viable and sustainable.

Dr Dutta Roy is clear in her perspective that today’s business paradigm suggests that businesses are inseparable from the society and the environment within which they operate. A failure to account for social and environmental impacts would make businesses focus on short-term goals that are unsustainable in the long run. A shift from mere concentration on the financial bottom line to the framework of the triple bottom line is crucial for businesses today. Corporations are becoming increasingly aware of their roles and responsibilities in this changing scenario and are striving to bring a shift in their policies and practices in order to meet their long-term goals.

In this scenario, Dr Dutta Roy shares her belief that getting CSR right is not a journey; it is the destination. Corporate leaders face tough decisions with increasing pressures to improve their bottom line and to be good corporate citizens. They must persevere because the fruits of their labour today will make for a better tomorrow. They must incorporate the points of view of diverse stakeholders with their diverse needs, priorities and aspirations. To broaden corporate objectives beyond the economic, they must improve the social and the environmental.

It is my considered view that corporate boards, CEO’s, managers, as well as policy makers would benefit immensely from reading this book so as to understand the imperatives of sustainability and social development for all business organizations. I would also encourage NGO’s and social entrepreneurs to pick up this work and discover that a responsible way for achieving the vision of a sustainable future is through taking meaningful action among disadvantaged, downtrodden and marginalised communities and by involving corporate entities in the development efforts of the nation.

December 2018

Dr Bhaskar Chatterjee

Secretary General,

Indian Steel Association and

Former Director General & CEO,

Indian Institute of Corporate Affairs (IICA)

Preface

Expectations from businesses, regarding their role and conduct in society, have been consistently changing, all over the world.

The change is not necessarily so much so in the spirit of social responsibility, which has always been deeply entrenched in business ethics and altruism, as in manner, imperatives, and contemporary wisdom which guide the practices of Corporate Social Responsibility (CSR) from time-to-time. Currently, these practices are being redefined in the light of Sustainable Development Agenda 2030, the