Corporate Social Responsibility:
A New Strategic Dimension
 

Introduction

Corporate Social Responsibility (CSR) is the strategic approach toward sustainable community development and the key to inclusive growth. With an excellent sustainable economic development taking place in the country, the Indian industry has the responsibility of becoming connected with the community by sharing its economic growth through various community based programmes. It is equally important for the industry to get their employees sensitised on social issues and get them engaged in community work through volunteering programmes. This gives the employees and the management an opportunity to connect with each other as also with their target audience, the community in their immediate operational space or with those linked in the supply chain. CSR is a major initiative that engages with multi stakeholders, i.e., the employees, who apparently are the most important stakeholders, and the investors, the community and others in the supply chain. Whoever may be the target of engagement, the bottom line in the realm of CSR is to engage and connect with people by speaking the ‘language of the heart’ and making an honest endeavour in fulfilling the needs of the community through a community based participatory approach.

Brief Perspective on CSR

It is, therefore, important to reiterate that CSR is a sustainable development of both the internal and external environment through various activities and programmes planned over a period of time. Although the methodologies vary with the corporate strategy, the area of implementation and the situation, yet the aim of CSR remains the same, i.e., ‘To provide a platform to build upon and empower a group or a community through repeated processes, making the target self reliant and sustaining’. The aim is achievable only when as CSR professionals, we develop need-based programmes through a process of direct intervention with the community. What the people need should be the question and not what we think they need. Only after analysing the need assessment should projects / programmes be initiated, as there may be a real difference between the perceived needs and the actual requirements.

There are a number of methods for programme implementation. However, for ease of understanding, I would categorise these methods under two basic approaches, i.e., the indirect approach and the direct approach. The indirect approach is running a programme through an external agency, like an NGO, or a private organisation, or some other body, which has the requisite expertise and skills of programme implementation on a partnership model. In such an approach, the onus of running the programme lies with the partner organisation, and a periodic feedback is received from them. To validate the processes, the corporate visits the project, though usually these are planned visits and, therefore, the exact status of the project at times gets blurred. This model is essentially a chequebook philanthropy model, with a feel good attitude as it gives a reasonable freeship to a corporate in running the programme and yet qualifies under a CSR focused corporate. The direct approach is when a corporate engages directly with the community, having the advantage of connecting with the people in a real way and seeing the community develop in line with the overall corporate strategy. This direct intervention programme is again carried out with the support of external resources, to include government bodies, etc., but the onus of running the programme lies with the corporate CSR staff recruited for the purpose. (You can also have a mix of both the models.) Both models are good. However, the advantages of the latter are rather significant and advantageous as the corporate has a direct connect with the community, and the employees become sensitised to various social issues. The former model is a tricky business due to an inherent uncertainty regarding an NGO’s credibility and, in today’s environment, the problem gets further compounded as it gets extremely difficult to identify a good NGO which follows the best practices on the ground and not merely in boardrooms and presentations. The exercise becomes even more difficult when an NGO dons the mantle of a corporate. Hence, the rules of engagement for a good implementation strategy are clarity of aim, good monitoring systems and transparency in all transactions.

While the former model follows the ‘Charity Welfare Philanthropy (CWP) concept’, the latter model is the real ‘CSR concept’, engaging directly with the community. The CWP model is usually momentary and has a short shelf life of little recall value, while the CSR concept is the real bonding between the supporter and the supported. An NGO engaged to carry out a programme has a timeline for support and then moves elsewhere. This, at times, creates a void in the area, and the sudden de-link results in negative vibrations amongst the community. Hence, it must be understood that charitable initiatives lack sustainable development unless the programme has sustainability built into the programme. Thus, we need to be careful with the enormous fund flow coming in to the social sector, especially with the likes of Bill Gates and Warren Buffet investing billions of dollars in the areas of health care, education and other programmes.

Various Dimensions of CSR

CSR benefits are intrinsic in any corporate strategy. However, such factors should not become overbearing in complexion and the only reasons for interventions. Co-lateral engagements or projects linked to the central or the state governments should be seen through a Nelson’s eye, where a large number of foreign sponsors or successful business houses are keen to invest large sums either directly in the social sector or through cleverly worked out programmes, which gives them a long-term partnership. Here it will be pertinent to mention that some international agencies support government programmes with a long-term dependence of the government on the partner to provide software / equipment for running a programme. This must be guarded against and independence assured in implementing such long-term initiatives. Hence, as CSR professionals, we need to be endemic in our facilitation and not take everything at face value and the reality of economic growth having a direct relationship with social development cannot be altered in today’s concept of ‘Inclusive growth’.

Toward this end, I would like to share the linkage of CSR with CFP, an acronym for Corporate Financial Performance. Recent studies indicate that the companies with good CSR practices have been found to increase their overall sales and financial status. It is, therefore, important to understand the linkage and relevance of CSR with CFP as also the CSR’s relationship with brand equity. From this would flow the relevance of CSR in formulating the corporate strategy and, hence, the need of having good CSR practices.

CSR is also a key to Reputation Insurance. Researchers have highlighted a number of benefits of CSR such as increased purchase intentions, higher sales, enhanced image, improved employee morale, and so on. However, the potential for CSR to act as an insurance policy and mitigate the effects of negative events has gone largely unexplored.

The potential for CSR to provide Risk Mitigation is again a widely accepted benefit of such activities. Knox and Maklan, while discussing social responsibility, have commented that ‘Being trusted by stakeholders and pursuing socially responsible policies reduces risks arising from safety issues, potential boycotts and loss of corporate reputation’.

Social Charter and Corporate Citizenship

There has been a lot of talk on the social charter and corporate citizenship. We need to take a note in the paradigm shift in government’s policies toward social engagement of corporates from a community perspective. The 10-point social charter announced by the Hon’ble Prime Minister reflects that CSR is centric toward inclusive growth and becomes even more relevant in today’s context of high economic returns and development. The main reason for such an intervention at the highest level is because of a lack of distribution of this growth. We have usually never questioned ourselves as to why such a gap exists with unequal economic distribution and what can the corporates do in giving back to the community, especially in areas where they have their presence either because of their manufacturing apparatus or because of some strategic interests. It is in this context that we need to think of having a collaborative CSR model, a Private-Private-Public-People Partnership, where corporates amongst themselves, as also corporates with the government / others, can initiate joint programmes and facilitate in transforming the society and strengthening the common agenda through a process of integration and jointmanship.

Jindal Stainless Ltd (JSL) - A Major CSR Initiative

Against this backdrop, I would like to share the major CSR initiatives that are being / have been developed by JSL, which are essentially thematic in content. Since CSR in its true sense is a new chapter in the corporates, the evolving themes are in their nascent stages of development. JSL, a technical oriented manufacturing company, has laid emphasis on skill up gradation as an important area of intervention.

Skill Training Programme

The Skill Training Institutes close to our plant locations at Hisar and Jajpur, Orissa, have helped the community in a very significant manner, wherein the underprivileged have been employed and managed to supplement their family income. The Skill Training Institutes run six certificate courses, which include computer hardware and software, dress designing and fashion technology, beauty culture, electronics and hospitality. To cater to the upcoming demand of the industry, we also plan to open a Stainless Steel Skill Training Institute at Delhi, which will be the first of its kind in the country. In addition to the stainless steel application technology, we will also run informal programmes in mechatronics and the environment.

Community Development Programmes

We also have a number of community development programmes in which the community’s needs are looked into in a professional manner with environmental issues taken care of in the rehabilitation colonies. Youth groups are encouraged and adequate facilities are provided to develop talent.

Women Empowerment

We have programmes for the SHGs created in the villages around the plant, in Orissa and at Hisar. The SHGs are given entrepreneurship training and helped in setting up their own businesses. Efforts are also being made to establish market linkages and make the women become self reliant.

Integrated Community Health Programme, which as per the latest McKinsey survey is the number two problem across the world only after climate change, is a major area of our intervention programme. Apart from a multi specialty 300-bedded hospital at Hisar, which has a newly constructed Cancer Unit, we have outreach services for the poor and also operate mobile and static clinics in the remote areas of Orissa, Andhra Pradesh and Haryana. These interventions have made a big difference in the communities starved of basic health care services. In addition, we hold health camps with a focus on a particular disease or a problem, with specialists hired for the purpose. Our recent eye camp initiative in Orissa was a great success and a number of beneficiaries have become useful members of the community. Dental care is yet another major concern and we have a dental clinic in a remote location in Orissa for the tribal population.

Education is being addressed selectively with different practices followed for formal and non-formal education systems. In addition to the two formal (10 + 2) schools at Hisar, (one being a residential girls school), we have adult education centres, remedial education programmes, tuition centres and NIOS Study Centres for school dropouts. The effort is to ensure quality and adequate attention is laid on initiating students with the latest training modules and the life skill training programme incorporated into the education system. CSR activities also encourage sports and youth activities through schools and volunteer groups / youth groups. A new format ‘OP Jindal Educational Merit Scheme’, has also been initiated, which is basically a merit scholarship scheme being awarded to students who are either selected into the courses or are currently undergoing Management and Engineering courses. A very strict selection process has been instituted with online examinations and videoconference interviews.

Environment is another area of our intervention, where the activities are linked to ‘Climate Change’, in order to include advocacy, adaptation and mitigation. Besides the awareness campaigns through structured talks on the subject to different segments of society, we are adopting the best practices in agriculture and training farmers on how they can increase agriculture production through organic farming and other techniques, with a focus on what is available to them and not opting for pesticides and other inorganic fertilisers, The concerns of the farmers are being addressed and efforts are being made to facilitate market linkages and provide certification of their organic products.

Some of the other areas where we plan to carry out intervention programmes are in the area of waste management and environment protection. Strict control is exercised on ensuring safety norms as per government guidelines and some Clean Development Mechanism (CDM) projects have been formulated as per United Nations Framework Convention on Climate Change (UNFCCC) protocols and have been approved. We are also in the process of acquiring other appropriate technologies for our plant waste and optimally utilising fly ash through livelihood programmes of brick making and related opportunities.

A Passenger Reservation Centre has been opened in one of the remote locations in Orissa. This facilitation has helped a large number of people, who earlier had to travel several kilometers to reserve their train tickets.

To get the requisite fillip for CSR, there is a need to have excellent networking with government / non-government agencies. Hence, efforts are on toward this end and a constant upgrade is important in any meaningful intervention programme.

Conclusion