The India context

Though Indian companies are no stranger to corporate social responsibility (CSR), the discipline itself has metamorphosed in the last 100 years or so. According to a survey by The Energy & Resources Institute (TERI), CSR in India, much like elsewhere in the world, has evolved to its current sustainability platform through four different stages.

In the first stage, Ethical Model approach (during 1930-50), businesses were encouraged to manage their business entity as a trust held in the interest of the community. The post-Independence Statist Model (1950-70) was more aggressive with state ownership and legalities deciding corporate responsibilities. The Liberal Model (1970-90) maintained that it was sufficient for business to obey the law and generate wealth. It was only in the late 1990s, that a quasi sustainable model came upon the business horizon - what TERI terms as the Stakeholder Model.

Today, businesses have realized that, in order to continue thriving, they have to adopt a more holistic and inclusive business model, which has a direct correlation with the business performance. This includes a system of triple bottom-line reporting - economic, social and environmental - and a focus on transparency and accountability.

CSR is more than philanthropy and does not necessarily refer to 'giving and receiving'. To quote Venu Srinivasan, chairman, The Confederation of Indian Industry (CII) National Summit on CSR 2007, and managing director, TVS Motors and Sundaram Clayton, 'an effective CSR initiative must engage the less privileged on a partnership basis.'

Over 80 per cent companies in India are engaged in CSR-oriented activities, marking a 17 per cent jump since 2004. Significantly, a recent study by the Nottingham University Business School has ranked India number one, in terms of CSR penetration among the seven Asian countries surveyed, even though India had the lowest per capita GNP (gross national product).

And, while the government has been evolving a large number of welfare schemes for the people, these benefits rarely reach the most deserving. Industries, on the other hand, have expertise in man management, financial management and business planning - and can easily provide the missing ingredients of leadership and organisation, and establish the 'last mile connectivity' to reach the benefits to the deserving people. Therefore the focus of CSR could be 'unlocking' the last mile connectivity, especially in fast-developing countries like India.

Showcasing CSR

Almost every large corporation is increasingly investing to improve its performance on sustainability parameters. The trend is being fuelled by the belief that working for communities as stakeholder in the businesses has a direct correlation with the business performance. While some may still call the efforts 'patchy' considering the size of the country, it is estimated that 40-50 large companies in India have a formal machinery to undertake development work to build sustainable communities in their respective regions. Many more are getting added to the list. 'As more and more companies come into the public domain, there will be pressures on them to build sustainability in their business models,' says PricewaterhouseCoopers (PwC) executive director Bharti Gupta Ramola.

In fact, India Inc has joined hands to fine-tune all its activities falling under CSR. For this, it has set up a global platform to showcase all the work done by Indian firms. CII and the TVS Group have collaborated to form the CII-TVS Centre of Excellence for Responsive Corporate Citizenship. The outfit, based in Chennai, will provide consultancy services and technical assistance on social development and CSR.