Corporate Social Responsibility - Is It A Myth Or A Reality In India

There's something called corporate social responsibility!

When we talk about corporate houses or, so to say, large incorporated companies, we are actually talking about immortal humans transcending generations unless, otherwise, dissolved in accordance with law. 

It is to be understood that men may come and go but corporations remain as a brand, a business entity, and like humans, who may either choose to make a difference in the society by their acts of omission, by not harming the society in any way, or by their acts of commission, by actively participating in the welfare of the society at large. 

Businesses, too, have a combination of options open for them, they may harm the society in their quest for maximizing their profits and, simultaneously, shy away or perform their social obligations, choose not to harm the environment and still perform their social obligations, choose to harm the environment and discharge their social obligations and so on...

Corporate houses having a long-term vision make it a point to actively engage themselves in efforts that go beyond what may be required by regulators or environmental protection groups, but such businesses are rare and few. 

In reality, the discharge of Corporate Social Responsibility (CSR) by most corporate houses does not actually fall within the ambit of philanthropy, it has an ulterior motive as managers are often under pressure to shoot up their CSR initiative as just another in the quiver of their marketing strategies that are, almost always, working as a mask to deliver even better profit results, deviating from what must be its main objective – to align the businesses’ social and environmental activities with its business purpose and core values.

Let us not despair! 

Ranging from steel, automobiles and software to consumer goods and telecommunications, there is the Tata Group that operates more than 80 companies and has around 200,000 employees across India. 

The largest private employer’s CSR activities are rooted in the knowledge that businesses have a duty to enable all living beings to get a fair share of the planet's resources. 

The group believes that businesses are powerful constituents of society and the most successful, respected, and desirable businesses exist to do much more than make money; they exist to use the power of business to solve social and environmental problems and their philosophy is not a new found one or developed under statutory compulsions. 

For the group, CSR is a pragmatic approach, the responsibilities towards itself, employees, shareholders, state, consumers, environment, everything. The group had the tradition of nation and community building sowed more than a century back by J. R. D. Tata, the visionary Founder of the group.

He was inspired by Gandhi's views on trusteeship and, as such, the companies are involved in a wide variety of community development and environment preservation projects, social activities that relate to health, primary education, skills training and entrepreneurship, livelihoods, women empowerment and strengthening services for the differently-able section of the society.

The group was even reported by the ‘The Times Of India’ dated July 16, 2014, as being the highest CSR spender who spent Rs 1,000 crore and if one were to exclude the salt-to-software enterprise’s philanthropic trusts, the group had spent Rs 660 crore in 2013-14. 

A significant amount of the total spend has gone into skill development, health and education. The diversified Indian multinational's CSR spend was well above 2% of its net profit, a minimum requirement for an Indian company under the Company’s act with Tata Steel emerging as the biggest spender within the group.

Even some top profit making PSU’s are not far behind in discharging their social responsibilities. Apart from ONGC, whose percentage of annual net profit spent on CSR remained short of the statutory requirements at 1.42%, PSU’s like CIL, NTPC, NMDC, PFC, too have gone beyond the minimum requirements. 

CIL spent 8.05, NTPC 3.05, NMDC 2.17 and PFC 2.68 percent of average net profit in 2015-16 (source: Corporate Social Responsibility: An Analysis on Central Public Sector Undertakings in Indian Context Srirupa Ray Research Scholar, University of Calcutta, Bosepukur Road, Kolkata, India).

No matter how highly placed and crucial were Gandhi’s views with regards to industry, that they “...should regard themselves as trustees and servants of the poor…”, the numbers actually imbibing this spirit are few if the assessment of CSR activities undertaken by the PSUs and private sector companies by the government is any indication. 

The 2016 assessment had shown that CSR expenditure of 460 listed companies, which had placed their annual reports on their websites, indicated that 51 Public Sector Undertakings (PSUs) and 409 private sector companies together spent about Rs. 6337 crores on CSR during 2014-15 that fell short of the mandated CSR expenditure of 8347.47 crores.

The time is ripe for the industry to understand fully well that CSR lies at the very core of sustainability, shying away from fulfilling it and considering it a statutory liability would only mean tossing stones right over our own heads. 

Statistics on CSR have begun to speak volumes about how much we actually care for the society from which we take.

The scenario is likely to worsen with newer companies coming up every single day, adding to an estimated 800,000 companies already registered under the Company Law in India.