A Project On Corporate Social Responsibility

Guided by: Ms.Pooja Rani Project coordinator

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submitted by: Rohit Kumar Roll no.7228

ACKNOWLEDGEMENT
Before commencing this project, I would like to express my deep sense of gratitude to respected Ms. POOJA RANI, my mentor, for acting as a guiding spirit and incorporating his excellence in completing this project. I extend my sincere regards to him for rendering his help from time to time and his valuable guidance to me. He was always with me with extended cooperation and best of their eloquences. I would like to take this opportunity to thank all my friends who have assisted me in completing this work. Last, but certainly not the least, I am indebted to my Parents and Almighty. Without their blessings or grace, I couldnt have finished this project under stipulated time and with focused vision.

Rohit kumar

DECLARATION
I, Rohit kumar hereby declare that the present project entitled A Project on Corporate Social Responsibility is a result of my own work and my indebtedness to other work /publication, if any, have been duly acknowledged.

Rohit kumar

Content
Introduction .................................................................................................................................................. 5 Future Social Trends in India ..................................................................................................................... 6 Executive Summary....................................................................................................................................... 7 Education is No.1 ...................................................................................................................................... 7 Image Does Matter ................................................................................................................................... 7 Challenges Galore ..................................................................................................................................... 8 Objectives of Study ....................................................................................................................................... 9 Sampling Methodology ............................................................................................................................... 10 CSR Initiatives by Companies ...................................................................................................................... 11 Year of Initiation of CSR activities ............................................................................................................... 12 Issues Covered and Priority Areas to be Covered under CSR Domain........................................................ 13 Issues currently covered ......................................................................................................................... 13 Rationale for Selection of CSR Initiatives ................................................................................................ 13 Objectives of CSR Policy .............................................................................................................................. 14 Stakeholders in CSR Implementation Process ............................................................................................ 15 Outcome of CSR Initiatives.......................................................................................................................... 15 Benefits of CSR ........................................................................................................................................ 15 Factors Leading to Corporate Houses forming Foundations for CSR Work ................................................ 17 AREA AND TARGET GROUPS COVERED ....................................................................................................... 18 Geographical Areas Covered................................................................................................................... 18 Target Groups Covered ........................................................................................................................... 18 Fund Allocation for CSR Initiatives .............................................................................................................. 19 Fund Allocation for CSR Initiatives .......................................................................................................... 19 ROLE OF THE GOVERNMENT, CIVIL SOCIETY AND COMPANIES ................................................................. 20 Role of the Government in CSR Domain ................................................................................................. 20 Current and Expected Role of NGOs / INGOs in the CSR Domain .......................................................... 20 CHALLENGES TO CSR INITIATIVES IN INDIA ................................................................................................ 21 Conclusion ................................................................................................................................................... 23 Bibliography ................................................................................................................................................ 24

Introduction

At one end of the spectrum, CSR can be viewed simply as a collection of good citizenship activities being engaged by various organisations. At the other end, it can be a way of doing business that has significant impact on society. For this latter vision to be enacted in India, it will be necessary to build CSR into a movement. That is to say, public and private organizations will need to come together to set standards, share best practices, jointly promote CSR, and pool resources where useful. An alliance of interested stakeholders will be able to take collective action to establish CSR as an integral part of doing business. Because of the growing size and power of multinational corporate houses, bond rating agencies and investment funds are exerting increasing influence. In particular, they are demanding an accounting for non-financial measures of value creation as they seek to determine risk premiums. These include an assessment of CSR activities, as well as governance practices, management of intellectual capital, and transparency in reporting. There are now multiple CSR rating agencies in North America and Europe. Socially Responsible Investment Funds (SRIs) now consider CSR activity when deciding whether to invest in public traded companies. A growing trend in large multinational corporations is the establishment of special committees within the board of directors to oversee CSR and sustainable business practices. More and more, executive compensation is tied to specific outcomes in these areas. Groups of corporates are being encouraged to come together to promote CSR. In 2006, Europe created the European Alliance for CSR. It currently consists of 70 multinational corporate houses and 25 national partner organisations and has become a unique resource for building capability in CSR.

Future Social Trends in India

The CSR survey revealed, not surprisingly, those organisations targeted most of their activities close to home providing services for people who live in villages, towns, and districts near where the organization operates. Education, health, and the environment are the top priorities. More than likely, these priorities will continue. There is one social trend in India that looms larger than all others the population tsunami. The current population of India is now over 1.1 billion. Demographers now tell us that India will overtake China by 2026 as the worlds most populous nation with almost 1.5 billion people. At the time of Independence in 1947, Indias population was approximately 350 million. Between now and 2026, India will add almost as many people as there were in the entire nation in 1947. The implications of this are staggering. Will the additional demands for food, water, housing, education, and health care overwhelm the existing infrastructure? Or can all stakeholders work together to build a literate, healthy, capable society with enough jobs to meaningfully employ all those seeking work? The greater the challenges, the greater the ingenuity required.

Executive Summary
The involvement of the corporate sector in CSR seems to have picked up after 1991 as most of the participating organisations started CSR during 1991-2005. About two-third of the private multinational agencies and private national agencies initiated CSR during this period, and one-third of the PSUs too started their CSR programmes during this period. In half of the cases, people living near the organisation or industry are covered as part of the CSR programmes. The other groups under CSR initiatives include poor people living in rural areas, tribal people, people selected in consultation with NGOs and communities selected randomly. In the case of PSUs, coverage of people living near the industry or organization and rural population is more, while selection of people through Nongovernmental Organisations (NGOs) is more common in the case of private enterprises.

Education is No.1
The selection of issues under CSR by organisations depends on host of factors including organisational mandate, current relevance of issues and demand from the community. The priority areas that the respondents felt ought to be covered under CSR initiatives include education, environment, health, women empowerment, livelihood promotion, sanitation, microfinance, HIV/ AIDS, child care, slum improvement, disaster management and agricultural development.

Image Does Matter

For most companies, CSR is a sure way to improve their public perception, and over half of them do so to brand the company. Only one-tenth of the organisations stated that they are into CSR because it is mandatory, and just about two-fifth of them do it for tax exemption. Public goodwill and branding are high on the agenda in the case of private multinational agencies, and improved perception about the company is the motivation in the case of PSUs. Currently, NGOs and International Non-governmental Organisations (INGOs) are involved in implementation of development projects, capacity building of beneficiaries, planning and execution and scalability of projects. The organisations surveyed felt that NGOs and INGOs ought to be more involved in project implementation, providing voluntary support to corporate agencies, monitoring and evaluation of the ongoing projects.

Challenges Galore
Some of the challenges faced by the companies in implementing CSR programmes pertain to community participation and capacity building within the organisation as well as those of NGOs that they tie up with. Especially in the rural areas, companies face the problem of lack of well-organised civil society groups that could identify the real needs of the society and work to address them. Lack of transparency too is a problem they face. Companies also identified the problem of having no way of scientifically researching and gathering evidence on the impact of their CSR initiatives on the communities they target and work for. Without knowing the impact of their programmes, they felt it was difficult to tailor the programmes according to the needs of the people they were meant for. The respondents rued that event-based activities, which did not go a long way, narrowed the role of CSR. They also felt that the non-availability of clear guidelines on CSR and lack of consensus regarding areas of focus too hampered the ability of CSR initiatives to make a greater difference to the lives of the needy and the underprivileged in their respective areas of intervention.

Objectives of Study
Some of the important and broad-based objectives identified by the study are as follows: To provide an understanding of the role played by corporate houses and public sector undertakings To understand the perceptions amongst public about CSR To provide data on CSR practices in India and the role of Government in strengthening CSR and to set the stage for interaction among various stakeholders To understand various issues of social relevance under CSR To elicit views of business houses on CSR policies and role of NGOs and review of existing regulatory mechanism, and To set a stage for interaction amongst various stakeholders and find out challenges and recommend remedial measures.

Sampling Methodology
Data Used: Secondary data sources have been used. Search engines like Google and Wikipedia have been used to collect the information. A survey that has been done by Times Foundation in partnership with TNS India has been used to present different facts and figures.

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CSR Initiatives by Companies

A survey done byTimes Foundation, in partnership with TNS India, shows that 90 percent of the replied in affirmative. Analysis by types of organisations indicates that all the PSUs, about four-fifth of the private national agencies and most of the private multinational agencies are involved in CSR initiatives.

105 100 100 95 90 85 85 80 75 Private Multinational Agency Private Agency PSUs 94

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Year of Initiation of CSR activities

The involvement of corporate sector in CSR picked up after 1991 as threefifth of them started CSR activities and initiatives during 1991-2005. Analysis by types of organisation reveals that about two-third each of the private multinational agencies and private national agencies initiated CSR activities during this period, while one-third of the PSUs also reported likewise. Some of the PSUs started their CSR initiatives during 1971-1980 and 1980-1990.

Year of Initiation of CSR Initiatives (in percent) 40 35 30 25 20 15 10 5 0 0 Before 1970 1971-1980 1980-1990 1991-2000 2001-2005 2006 onwards 9 9 10 9 6 5 9 3 9 9 9 18 18 18 17 27 PSUs Private Multinational Agency National Agency All 37 30 31 37 3333

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Issues Covered and Priority Areas to be Covered under CSR Domain

Issues currently covered
Education, health, environment, livelihood promotion and women empowerment are the major thrust areas currently covered under CSR initiatives of participating organisations. Proportion of organisations covering themes of microfinance and livelihood promotion is less in case of private multinationals and PSUs respectively.

Issues covered under CSR Initiatives

40 82 45 Education Health Environment 55 Livelihood Promotion 77 Women Empowerment Micro Finance 57 66 Sanitation

Rationale for Selection of CSR Initiatives

Regarding the rationale for selection of initiatives covered under CSR by participating organisations, the analysis indicates that the selection of initiatives under CSR by the organisations depends on host of factors including organisational mandate, current relevance of issues and demand from the community.

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Objectives of CSR Policy

The vision and objectives of CSR policy of the organisations are varied and diverse and therefore can broadly be categorised in the following manner: CSR policy aims to uphold commitment to complement the efforts of the Government in the nation-building process. The policy aims at providing localised rural employment and livelihood opportunities to empower rural communities. The policy is committed towards raising the quality of life and social wellbeing of community by contributing to basics of life in harmony with nature. The policy aims at creating business leadership ensuring social and environmental sustainability in a responsible manner. This also aims at upliftment of the deprived and creating a sustainable world in which NGOs, Government and other stakeholders would work together to achieve inclusive growth and equity. The policy also aims at improving the lifestyle of rural people, helping in upliftment of the poor, especially scheduled caste and scheduled tribes, and promoting education among slum dwellers. The policy adopts triple bottom line accounting methods expanding the traditional reporting framework to take into account environmental and social performance in addition to financial performance. The policy aims to create sustainable economies and transform stagnant lives into active partnerships through synergised proactive handholding in areas of infrastructure, education, training, health and environment. The policy also aims at fostering innovation by partnering with Indian universities and providing digital inclusion for people who do not have access to Information and Communication Technologies (ICT). The policy pledges to work with international communities towards mitigating global, human and environmental concerns. The participating respondents also viewed CSR policy of the organisations as building blocks between communities and companies. The survey also highlights that the vision and objectives of the organisations on how they need to pursue CSR initiatives for the beneficiaries will play a key role in streamlining and implementing CSR projects. The role of the Government as enabler to deepen CSR engagement with communities was particularly mentioned by all participating organisations. It is also found in the survey that respondents remain optimistic about the ongoing interventions of the corporate houses on critical human development issues such as education, health and environment. It is also reported that there are already visible imprints of successful engagement between local communities and businesses. The role of State seen to be slowly aligning itself with community and locally operating businesses is a welcome revelation of the survey.
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Stakeholders in CSR Implementation Process

The CSR initiatives are implemented through companies own CSR project managementinitiatives, voluntary organisations and by giving financial support directly to community or community-based organizations. Most of the participating organisations implemented regular programmes whereas a small number of organisations implemented one time CSR events.

Outcome of CSR Initiatives

Benefits of CSR
CSR is seen as a catalyst in bringing positive social change. About three-fifth of the organisations work on CSR to improve perception about the company, while more than half do so to brand the company among people. Tax benefit under 80G is a motivating factor in case of two-fifth of the organisations, while one-tenth of the organisations reported to be taking up CSR work as it is mandatory in their case.

Possible Benefits of CSR (in percent)

70 60 50 40 30 20 10 0 Mandatory by Govt. To get Tax Benefits To Brand Company among People Improve Perception about company 13 43 59 54

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Though goodwill is a common factor of CSR initiatives among all the three types of organisations, branding seems to be higher on agenda in case of private multinationalcompanies. On the other hand PSUs seem to be more concerned about improving perception of the company in the eyes of the public and their stakeholders. Other possible benefits highlighted by the participating respondents include the following: Positive and long-term relationship with communities Nation-building and prosperity of region of their operations and activities Providing support where Governments support is inadequate and limited Helping supply chain management and Supporting creation of a healthy human resource base for the corporate.

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Factors Leading to Corporate Houses forming Foundations for CSR Work

According to the survey findings, the factors which lead the corporate houses to form foundations for CSR-related work, include the following: Exclusive focus on CSR initiatives and activities Demarcation of commercial activities from the social activities Genuine social concerns for community Transparency in CSR activities and Generation of funds to support CSR activities

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AREA AND TARGET GROUPS COVERED

Geographical Areas Covered
According to the survey done by Times Foundation, more than two-third of the organisationscover 1-5 states, while two-fifth of the organisations cover 1-5 districts. Half of the organizations cover 1-3 towns and more than onefourth cover 1-10 villages.

Target Groups Covered

The findings of the survey also suggest that more than half of the organisations cover people living near their organisations. The other groups covered include poor people living in rural areas and tribal areas. Two-fifth of the organisations indicated that they select the people in consultation with NGOs while one-tenth select the communities randomly. In the case of PSUs, coverage of people living near organizations and rural population is more common while selection of people through NGOs is more common in case of private sector.

Target groups covered under CSR

60 50 40 30 20 10 0 Poor people living in Tribal people in any Random Selection of rural areas part of the country area or community Selected in consultation with NGO People living nearby Industry/Organization

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Fund Allocation for CSR Initiatives

In the survey done by the Times Foundation, more than two-third of the organisations surveyed replied in affirmative on being asked if they have separate allocation of funds towards CSR implementation. This was reported more in case of private multinational agencies(81 per cent) followed by PSUs (73 per cent) and private national agencies recording the lowest (59 per cent). On being further asked about the average percentage of annual budget allocated for CSR initiatives in the last three years, more than half of the organisations did not provide any specific information as participating respondents felt that there is no relation between CSR allocation and annual budget. The respondents also argued that there are no specific budgets set for CSR initiatives (14 per cent) and also suggested that allocation of resources for CSR activities depends on the decisions of the board and the management (13 per cent). One-tenth of the organisations did not provide any information on the issue.

Fund Allocation for CSR Initiatives

90 80 70 60 50 40 30 20 10 0 Yes . No Not stated all Multinational agency National Ageny PSUs

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ROLE OF THE GOVERNMENT, CIVIL SOCIETY AND COMPANIES

Role of the Government in CSR Domain
The Government has a role to play in providing facilitation to the agencies that are involved in the implementation of various CSR initiatives. Role of the Government in ensuring implementation of CSR initiatives, capacity building and monitoring was adequately highlighted. The Government should play a positive role in enabling CSR initiatives of the corporate houses including policy development as the major area of its involvement followed by capacity building, regulation and monitoring.

Current and Expected Role of NGOs / INGOs in the CSR Domain

Non-governmental organisations (NGOs) and international nongovernmental organisations (INGOs) are currently involved in project implementation when funded, capacity building, and planning. NGOs should be involved in providing voluntary support to corporate agencies, and capacity building of local communities. It is also suggested that NGOs/ INGOs should play more active voluntary role and help build the capacity of the ground development team for effective delivery of results and effective buy-in of the companies CSR programmes.

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CHALLENGES TO CSR INITIATIVES IN INDIA

The challenges faced by organizations when practicing CSR are listed below: Lack of community participation in CSR activities: There is a lack of interest of the local community in participating and contributing to CSR activities of companies. This is largely attributable to the fact that there exists little or no knowledge about CSR within the local communities as no serious efforts have been made to spread awareness about CSR and instill confidence in the local communities about such initiatives. The situation is further aggravated by a lack of communication between the company and the community at the grassroots. Need to build local capacities: There is a need for capacity building of the local non-governmental organisations as there is serious dearth of trained and efficient organisations that can effectively contribute to the ongoing CSR activities initiated by companies. This seriously compromises scaling up of CSR initiatives and subsequently limits the scope of such activities. Issues of transparency: Lack of transparency is one of the key issuesbrought forth by the survey. There is an expression by the companiesthat there exists lack of transparency on the part of the local implementingagencies as they do not make adequate efforts to disclose informationon their programmes, audit issues, impact assessment and utilisation offunds. This reported lack of transparency negatively impacts the process of trust building between companies and local communities, which is keyto the success of any CSR initiative at the local level. Non-availability of well organised non-governmental organisations:It is also reported that there is non-availability of well organised nongovernmentalorganisations in remote and rural areas that canassess and identify real needs of the community and work along withcompanies to ensure successful implementation of CSR activities.This also builds the case for investing in local communities by way ofbuilding their capacities to undertake development projects at locallevels. Visibility factor: The role of media in highlighting good cases ofsuccessful CSR initiatives is welcomed as it spreads good stories and sensitizes the local population about various ongoing CSR initiatives ofcompanies. This apparent influence of gaining visibility and brandingexercise often leads many non-governmental organisations to involvethemselves in event-based programmes; in the process, they often missout on meaningful grassroots interventions.
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 Narrow perception towards CSR initiatives: Nongovernmentalorganisations and Government agencies usually possess a narrowoutlook towards the CSR initiatives of companies, often definingCSR initiatives more as donor-driven than local in approach. As aresult, they find it hard to decide whether they should participate in such activities at all in medium and long run. Non-availability of clear CSR guidelines: There are no clear cutstatutory guidelines or policy directives to give a definitive directionto CSR initiatives of companies. It is found that the scale of CSR initiativesof companies should depend upon their business size and profile. Inother words, the bigger the company, the larger its CSR programme. Lack of consensus on implementing CSR issues: There is a lack ofconsensus amongst local agencies regarding CSR projects. This lack ofconsensus often results in duplication of activities by corporate housesin areas of their intervention. This results in a competitive spirit betweenlocal implementing agencies rather than building collaborative approacheson issues. This factor limits companys abilities to undertake impactassessment of their initiatives from time to time.

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Conclusion
CSR is not new to India, companies like TATA and BIRLA have been imbibing the case for social good in their operations for decades long before CSR become a popular cause. Inspite of having such life size successful examples, CSR in India is in a very nascent stage. It is still one of the least understood initiatives in the Indian development sector. It is followed by a handful of public companies as dictated by the very basis of their existence, and by a few private companies, with international shareholding as this is the practice followed by them in their respective foreign country. Thus the situation is far from perfect as the emphasis is not on social good but rather on a policy that needs to be implemented. A lack of understanding, inadequately trained personnel, non availability of authentic data and specific information on the kinds of CSR activities, coverage, policy etc. further adds to the reach and effectiveness of CSR programmes. But the situation is changing. And CSR is coming out of the purview of doing social good and is fast becoming a business necessity. The business case for CSR is gaining ground and corporate houses are realising that what is good for workers - their community, health, and environment is also good for the business.

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Bibliography
Web Sources: www.google.com www.wikipedia.com www.timesfoundation.org

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