Sunday, August 10, 2008

Corporate Social Irresponsibility

CSR definition indeed shrinks in Indian context

There isn’t any doubt in the fact that globally the social and environmental costs inflicted by corporations are of mammoth proportions. The costs that the environment and society as a whole have borne on account of these malpractices and associated public evils are unprecedented. And to mitigate such costs, any amount of Corporate Social Responsibility (CSR) initiatives that are currently taken up by the global corporations cannot match the collateral damage they have already caused upon the environment, by and large. Then again, amidst such colossal damages, the initiatives taken up by a few global entrepreneurs and corporations are noteworthy.

It has been reported time and again that in developed economies like the UK, various think tanks have been helping businesses to frame creative CSR initiatives, while in the US most of the big business houses have been donating copious amounts for diverse CSR acts. For that matter, in Japan, CSR is exceptionally embedded in business traditions. Not to talk much about the likes of Bill Gates, Warren Buffet who almost single-handedly have donated billions of dollars for various initiatives. Even research like Nielsen Corporate Image Monitor 2007 (CIM) has proved that nothing is as effective as a company's efforts in the area of CSR, when it comes to building corporate reputations.

Back home, the very concept of CSR still remains short of global definition, for it still routinely revolves around any corporation’s patchy charitable initiatives towards the community. As such, the scope of CSR seems out of place in today’s context and looks almost redundant when compared to global CSR initiatives that extend to strike a strategic balance between economic, environmental and social needs, plus the eventual image building exercise. In India, except for a handful of firms who have been making some worthwhile contribution, the purported contributions made by others can be at best termed as tokenism. According to reports, companies of the stature of Reliance Industries and M&M have been contributing 0.4 per cent and one per cent respectively towards such initiatives! According to Karmayog CSR Rating of largest 500 Indian Companies (2006-2007), even if top 500 companies of India contributes a mere 0.02 per cent of their income towards CSR initiatives, India will easily raise a staggering Rs 2,900 crore at minimum. As per the same ratings, none has been able to earn 5 out of 5, and a meagre one per cent (that is only four) companies have achieved 4 out of 5 in their rating scale.

It is not that India Inc. doesn’t have examples in front of them. Conglomerates like TATA steel and Hindustan Unilever have gone much beyond the concept of philanthropy. In fact, in the given scenario, I take immense pride that we all at IIPM-Planman contribute one to three per cent of our respective salaries towards CSR, undertaken by our social arm – the Great Indian Dream Foundation. And the bigger pride is in the manner GIDF has been making tangible contribution towards society and environment in its own unique fashion.

All in all, it is pertinent for the India Inc. to realise and appreciate that it is their CSR intervention which will actually create a better and sustainable markets for them, in future. If these arguments are not enough, then the snoozing senior managers should turn the pages of history and look at select case studies of Utkal Alumina, Monsanto, Union Carbide and the likes!


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