The term corporate social responsibility was coined in 1953 with the publication of “Social Responsibility of Businessmen” by Bowen.
But, the seeds of CSR in India were sown much before the term was coined in the west.
The TATAs and the BIRLAs; large businesses in India under the colonial rule, were practitioners of ethical business, were actively involved in community development and regularly contributed to development of the marginalized in society.
The father of the Indian nation, Mahatma Gandhi had gone so far as to suggest that the business owners and capitalists in India should see themselves as the trustees (The Trusteeship Model) of the capital that they have generated which should not only be used to expand the business but also enable the important stakeholders in the business (namely the workers and their families, civil society and the masses) to improve their lives. This was quoted by Mahatma Gandhi well before the term CSR was written and debated in the west.
In India, CSR is not clearly defined in any official policy document or charter. However, given the long history of corporate philanthropy in the country, largely managed by family owned trusts, one could say that CSR has existed in India, albeit in a different form from how it is understood in the west.
Contemporary understanding of CSR, based on western models have encouraged Indian businesses to re-model their existing family run and managed philanthropy initiatives and establish their own CSR charters and weave that into their overall corporate strategy.
They have also been encouraged to adapt and adopt contemporary CSR practices, by the thought leadership provided by policy think tanks like the CII (Confederation of Indian Industry), FICCI (Federation of Indian Chambers of Commerce) and ASSOCHAM (Association of Chambers of Commerce).
The Indian government has also begun to realize that its long cherished goal of creating an inclusive society in a large country of 1.2 billion people will not be successful if they do not establish a strong PPP (PUBLIC- PRIVATE PARTNERSHIP) model, where the government (PUBLIC) plays the role of facilitator; the corporate (PRIVATE) plays the role of implementer and the partnership in mutually beneficial. Various positive policy initiatives by the government have encouraged the corporate in India to adopt CSR as an important part of their strategic initiatives for the long term.
CSR in corporate India has gone beyond mere charity and donations, and is now a fully functional institution within the corporate managed by professional teams who devise strategies, goals and policies for their initiatives and have budgets. CSR initiatives focus on the immediate stakeholders, the employees and then on the society at large. Focus areas for these initiatives would largely depend on the core business focus; for example, GSK pharmaceutical in India focuses on healthcare in the tribal areas of India. There would be exceptions like the TATA group who are strong in IT, automotive and steel, but their CSR focus is wide ranging, focusing on education of the girl child, renewable energy for the rural communities etc. CSR focus in India is primarily focused on education, healthcare, energy, affordable shelter although most CSR initiatives do mention protection of the environment.
An excellent example of a corporate CSR initiative in India would be the TATA group. They have a long history in serving the interests of both the shareholders as well as the stakeholders and this is part of their corporate DNA. Not only have they demonstrated their empathy for the stakeholders in the Indian sub-continent, but also at a global scale. When the TATA group bought Jaguar-Land Rover in the UK, they promised the management that no one would be fired after the takeover. Subsequent to the takeover, they fulfilled their promise and the result is that the company is back in profit and in fact has grown in the segment, the staff is motivated and there have been more hiring’s in the JLR business.
On the other hand CSR initiatives by the VEDANTA group would qualify as a bad example because the group is engaged in mining in the tribal heartland in India, and have gone at length to engage with the stakeholders to sell their proposal claiming that in the process they will not harm the environment. Subsequent studies by NGOs and independent environmental activists have revealed large scale pollution and deforestation by the group who are now under scrutiny by the ministry of environment in India.
Certain practices that are unique to India may be construed as unacceptable globally. Prime example is the customary practice of exchanging sweets and gifts during the festival of lights, Diwali. It is acceptable and quite common place to exchange gifts between business associates in India during this festival, however it is frowned upon by all Multinational corporations as being akin to a subtle form of bribery. But most MNCs have adjusted to this by restricting the gifts to only sweets or chocolates and under a certain value. Some have even gone a step further by stating that instead of the employee receiving gifts from their suppliers or distributors, the company would send them gifts during the festival to reciprocate the gesture and mitigate the negative tag associated with this practice.
Most corporate in India would be willing signatories to the UN GLOBAL COMPACT initiative.
The reasons are elucidated below.
Most large Indian corporate houses are of recent origin and have global ambitions. In order to map a global foot print they need global acceptability as a business entity that believes in ethical practices and is a responsible global corporate citizen.
By embracing the UN GLOBAL COMPACT charter in totality, they will have taken the first steps towards acceptance by the global community and this would be strategic as well as tactical.
With a strong media, independent watch dogs and vibrant democracy, corporate in India adhere to human right laws and thus will be comfortable with the first 2 principles of the charter.
Corporate in India are governed by strong labor laws that protect the right of the workers- therefore the principles in the charter addressed at the labor will be acceptable to all corporate in India.
India is committed to protection of the environment and an active member of the UN lead initiatives. It is a strong defender of the rights of the poor and has aggressively negotiated with the west on these issues. It is also committed to green technologies to meet its energy needs and has policy framework in place to encourage corporate to invest in green technologies to meet its energy needs and protect the environment at the same time. Indian corporate will therefore have no issues with adhering to the principles on environment as set out in the UN GLOBAL COMPACT charter.
And lastly, the Indian corporate have lent their vocal support to a strong anti corruption bill recently tabled in the Indian parliament, the LOKPAL Bill. This collective voice from corporate India demonstrates that this community has had enough of graft and corruption which they rightly believe is dragging the country down on many indicators in the League of Nations. Indian corporate will have no hesitation in signing the UN GLOBAL COMPACT charter.
The Indian corporate is ready to take its rightful place in the global community of business and it brings a sagacity and ethos to the international business community that is borne out of a culture where giving is as natural as breathing.
· KPMG – ASSOCHAM Corporate Social Responsibility, Towards a Sustainable Future, A white paper, 2008.
· Corporate Social Responsibility in India, by Sunyoung Lee (A Case study for the Oxford- Achilles Working group on Corporate Social Responsibility)
· CSR in India, C.S. Venkatraman, Director International Management Institute , New Delhi.