CSR needs to be embedded in a corporation's operating philosophy. Everything else is just an
Kanika Datta / New Delhi Jul 22, 2010, 00:22 IST
Some years ago, an executive with a beverage manufacturer facing controversies over the safety of its products suggested that all corporate social responsibility (CSR) activities be conducted in East Delhi, where many of the Capital’s journalists tend to migrate, to gain “maximum impact”. Later, its corporate communications chief travelled all the way to Bangalore to enthuse a singularly disinterested press in its campaign to install waste bins in parts of the city.
In western India, a company was mandated by the government of the state, in which it was setting up its giant facility, to plant saplings over a certain area to compensate for the massive deforestation its activities entailed. An internal progress report that was tagged on to the company’s annual CSR wrap-up noted the number of saplings planted over a period of time and carefully catalogued targets and achievements (all on track). One sentence in that report was interesting: it stated that almost half the saplings planted did not survive. There was, however, no comment on whether this high failure rate could or needed to be remedied.
These incidents date from the time the concept of CSR had come into vogue in India. The outcomes, like the examples above, suggested that few companies fully understood the real implications of the term.
This was amply in evidence earlier this week when newsrooms received a joint press release from seven multinational food corporations in India announcing “a common commitment to responsible marketing to children”. The corporations concerned were Coca-Cola India, General Mills India, Kellogg India, Nestle India, Mars International, PepsiCo and Hindustan Unilever.
Their “India Pledge”, as it was called, vowed not to advertise food and beverage products to children under 12 on TV, the print or the Internet or in primary schools (except for products that fulfil scientifically proven “nutrition-based criteria”, meet accepted national and international guidelines or were specifically requested by the schools or institutions concerned). The seven corporations will also commission an independent compliance monitoring study starting January 11.
The release explained that the exercise follows similar international initiatives and is in addition to the Code for Self Regulation in Advertising put out by the Advertising Standards Council of India.
Industry self-regulation is both admirable and desirable — indeed, it would do wonders for businesses like health care and education. But this press release was noteworthy for several reasons. The first was the fact that these companies felt constrained to issue a statement to the media at all. The tenor of the message suggested that it was intended to focus attention on these corporations’ innate sense of social responsibility. But the question is, does this initiative warrant such publicity. Shouldn’t these companies have always abstained from promoting junk foods and beverages to children?
In a sense this joint statement shows that CSR in India has not yet gone beyond the externalities of philanthropy and “good works”. Nothing expresses this more unwittingly than a presentation made by the Department of Public Enterprises on the CSR guidelines that were introduced for government-owned companies in December last year.
True to the government’s style of functioning, the guidelines specify how much these government corporations should set aside for CSR budgets (a percentage of profits depending on their size). Tellingly, though, the “Implementation Modalities” specify that such activities should be carried out by specialist agencies (NGOs, trusts, missions and so on) and “not by CPSE employees/staff” (emphasis in original).
This is actually light years away from the concept as it first gained currency in the US in the 70s (the term came into vogue later). Far from suggesting that corporations redeem their reputations by investing in “good works”, the concept actually meant that companies needed to be responsible in the way they operated.
As Harold Burson, the guru of the public relations industry, said in a 1973 speech he made to Columbia University Graduate School of Business: “A corporation’s first duty, as I see it, is to manage its own affairs properly and profitably. This is the greatest service it can perform… It has a duty to create favourable working conditions and to produce goods and services that meet the highest tests of safety and reliability. I am not saying that good management is the answer to all our social woes. But I am saying a poorly managed company can’t make up for its inadequacies with good deeds that have no bearing on its daily operations.”
CSR, in short, needs to be embedded in a corporation’s operating philosophy. Everything else is just an “extra”.
This refers to planting of saplings over a certain area to compensate for the massive deforestation its activities entailed. It reminds me what was told to me long ago, by the auditor (who expired last year) of a company, which had carried out such an activity, but surprisingly at the behest of the reporter of a financial daily. The company had been threatened that unless half-page advertisement(s) also are simultaneously released to the paper concerned, a series of articles would be published about the pollution caused by its chemical-processing unit. The articles to see light of the day were, however, in admiration of the company's tree-plantation activities, etc.
What is the meaning of CSR? what to tell our children when they ask this question? were the concluding remarks of a moderator at a International Meet on CSR held recently in New Delhi. I read a lot and a number of books and articles on CSR including this one by Kanika Datta. I do not know for everything why we search what has been said by non-Indians?
The real meaning of CSR in the Indian context is "Developing villages where directors were born or developing the ancestral villages of directors or developing villages where employees were born". So far as PSUs are concerned CSR means "developing villages where employees were born".
SC Aggarwal,
Founder, Poverty Trust, New Delhi 110076
Great opinion. It is important to note that these companies served up their press release on marketing to chimdren as a premptive move - to counter nay criticism in India. The thing is that these very companies are under attack for marketing to children inthe US, and that attack is led by Michelle Obama, the US first lady. The principles outlined in the press note are on paper only, and of course only time will tell just how genuine there voluntary commitments are. But if history tells us anything, it says that they will not amount to much. Just check the industry and what their voluntary guidelines have meant so far in the US. Nothing.
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