Emerging CSR Trends

The 2001 survey of 536 companies across India conducted by Partners in Change (PiC)
reveals that Philanthropy is the most significant driver (64%) of CSR, followed
by image building (42%), employee morale (30%) and ethics (30%) respectively. The
survey showed that there are appreciable several cases of companies in India
Involved in diverse issues such as healthcare, education, rural development,
sanitation, micro-credit and women empowerment, arts, heritage, culture and
conservation and wildlife and nature etc. However, given the economic progress
and increases in corporate profits on the one hand, and reality of
human-poverty and development indicators in India on the other, analysis of the
surveys quoted suggest that though many companies in India have taken on board
the universal language of CSR, it seems to be in confused state. Individual
companies define CSR in their own limited ways and contexts. The end result
being that all activities undertaken in the name of CSR are merely Philanthropy,
or an extension of Philanthropy. Creating trusts and foundations seem to be
favorite route of CSR practice by Indian companies, but largely such trust and
foundation work at an arm’s length from the company preventing the
mainstreaming of CSR into the core business processes and limiting CSR to
community development only. Neatly all companies with CSR embedded in the core
corporate activity do so because of company tradition rather than a company
strategy leading to ad hoc and largely CEO-driven CSR policy.

According to the survey, four models of CSR co-exist in India:

·      The ethical model as suggested by Mahatma Gandhi, where companies voluntarily
commit to public welfare and participate in nation building.

·      The statist model propounded by Jawaharlal Nehru which calls for adopting
responsible practices by State interventions in economic activities and
protecting stakeholders through legislation.

·      The liberal model by Milton Friedman which discusses CSR being limited to private
owners or shareholders

·      The stakeholder model championed by R Edward Freeman, which calls for companies to
respond to all stakeholder needs.

The CSR survey conducted in 2002 by British Council et al. revealed that many companies
are still steeped in an amalgamation of transition from trusteeship/ethical
model to the statist model, and highlighted growing recognition among companies
that passive Philanthropy is no longer sufficient in the realm of CSR.

The release of the National Voluntary Guidelines on Social, Environmental and Economic
Responsibilities of Business in 2011 and the CSR section 135 in the Companies
Act 2013 have led to a larger discussion amongst the stakeholders about the
linkage between them. However, perceptions and practices vary and businesses
continue to engage in a range if ways on these issues across the spectrum. Key
finding of the report are as follows:

·      Strong areas in Business Responsibility (BR) are environment, employee affairs and
governance.

·      Areas of concern are human rights, corruption and supply chain.

·      About 25% companies surveyed spend at least 2% of PAT on CSR activities.

·      Women are under-represented at the workplace. Women employees account for less than
10% for more than half of the top 200 companies.

·      Nearly 50% companies have no women in the top management or on the board.

·      About 48% of the companies have or are in the process if conducting ecosystem
footprint.