Professional Documents
Culture Documents
www.karmayog.org/csr2008
Summary of the Presentation
• A paper company manufactures paper from waste cloth to reduce the use of
pulp from trees
• A Chemical manufacturer has protected the largest stretch of mangroves
along Mumbai’s coast
• A software company has developed a special call receiving software for
1098-Childline , India’s national helpline for children in distress
• An FMCG company is working to protect and conserve endangered plant
species in India through re-forestation programmes
ENVIRONMENT
COMPANY
SHAREHOLDERS
• EMPLOYEES
CONSUMERS SUPPLIERS
Importance of the CSR Ratings for
different stakeholders
Industry and Trade To understand the huge scale and magnitude of the
Associations benefits that are possible if an entire sector spends
even 0.2% of turnover on CSR.
continued…
Importance of the CSR Ratings for
different stakeholders
Media To highlight companies practising good CSR, and to negate
those companies which are actually engaged in marketing of
their products under the guise of CSR
Level 5 (highest) 0 0%
4 10 1%
3 45 5%
2 221 22%
1 232 23%
60%
49%
50%
% of Com panies
40%
30% 23%
22%
20%
10% 5%
0% 1%
0%
Level 5 Level 4 Level 3 Level 2 Level 1 Level 0
Rating Levels
Companies with the highest rating of Level 4
No. Company Sector
1 ACC Ltd. Cement
2 Ballarpur Industries Ltd. Paper
3 HDFC Ltd. * Finance
4 Infosys Technologies Ltd. * Software and ITES
5 Jubilant Organosys Ltd. Pharmaceuticals
6 Kansai Nerolac Paints Ltd. Paints
7 Moser Baer Ltd. Hardware
8 Tata Consultancy Services Ltd. Software and ITES
9 Tata Steel Ltd. * Steel
10 Titan Industries Ltd. * Watches & Jewelry
* Indicates companies that received a Level 4 rating in the Karmayog CSR Ratings 2007
Parameters
of the
Karmayog CSR Ratings 2008
Minimum necessary parameters for
different rating levels
If undertaking any CSR Activity Level 1
Note: - Companies that manufacture liquor, tobacco, genetically modified crops have been
given a Level 0 rating
The criteria stated above are only the minimum criteria needed to qualify for a particular
rating; apart from this, there are other negative and positive criteria that are also
applicable, and a combination of these determines the final rating.
Sector–wise analysis
of the
CSR activities
of the
largest 1000 Indian companies
Sector Analysis
• 35 industry sectors were studied
Potential CSR impact It presents sales of the entire sector, and possible impact with
the recommended CSR expenditure
Sector-specific Uniform norms can get created for processes and CSR
guidelines activities for different sectors, & also a level playing field
Best practices for the Benchmarking of best practices internal to & externally by
sector the companies
18% 18%
%of C
20%
• Total Sales of 57 Companies is
10% 4% Rs.65000 cr.
0% 0%
0%
• As per Karmayog’s recommendation
Level 5 Level 4 Level 3 Level 2 Level 1 Level 0 CSR expenditure amounts to Rs.130
cr.
Rating Levels
Example of an industry sector with good CSR
• 40 out of 1000 companies are in the banking industry
Banking Sector Ratings
• 57% of these companies do CSR
45% 43% • 60% of the companies are working in the area of Rural
development
40%
35% • There are 6 Level 3 companies: (Andhra Bank, Canara
Bank, ICICI Bank, PNB, Union Bank of India, Yes
30% Bank)
25% 23%
20% • Mandatory regulations on CSR for PSU banks makes
ies
15%
omp
15%
fC
10% 107 out of 1000 companies are doing CSR through a trust or
foundation
90% More than 90% high impact companies have no separate environment
report
40% Widely done CSR area is Education followed by Healthcare and Rural
upliftment.
Observations….
All PSU’s undertake a basic minimum level of CSR based on mandatory
regulations (e.g. relating to employment)
Individual companies that are part of a larger group do not list their individual CSR
activities; the same CSR activities are listed for all companies of a Group
Support areas and issues Companies must come forward to take up these. E.g.
that are neglected Sports such as chess, endangered species of wildlife,
heritage, etc
Karmayog’s views on
Group Companies CSR
CSR by Group companies
No. of Groups Of the 1000 companies studied there are 30 groups with individual
in this study companies ranging from 2 to 24
The 5 largest groups in this study are: Tata Group, Aditya Birla
Group, Mahindra Group, Reliance (ADAG), and Essar Group.
Same CSR Most of the companies under the group report the same CSR
reported activities across the group
Philanthropy Some Group companies contribute money to the group
Foundation/ Trust as a part of their CSR
CSR Individual companies do not mention the amount spent by the
Expenditure company; instead the group expenditure is listed
Group The common Foundation of the group undertakes all the CSR
Foundation activities, as a result of which CSR is often not connected to the
processes & core competence of the individual companies
• While there are synergies and various managerial reasons for companies to do CSR
activities at a group level, it is necessary for each company to undertake its own CSR
activities (linked to its processes and skills), while also contributing to the group’s CSR
work
Recent Trends and Developments
in CSR in India
Recent Trends in CSR-2008
Expectations of the There are vast majority of stakeholders that have come to
stakeholders expect more from corporates which would extend beyond
their profits.
Government’s Role The government has become sensitive towards the CSR issue
for eg: RBI notification for non financial reporting.
Increasing awareness There is an increasing awareness and interest among the
amongst consumers, consumers towards CSR.
management colleges More seminars and discussions are being held in management
and students colleges to sensitize the CSR issue among the students
Suppliers Responsibility Companies are encouraging suppliers to adopt socially
responsible business practice.
Disclosure of social and Almost every stakeholder is asking for more information on
environmental companies social and environmental performance. As a part
performance of this move 2% of the companies have Sustainability Report
and 5% have information on CSR on website or Annual
report.
Some developments in CSR in India since
the first Karmayog CSR Ratings – 2007
Dec. 2007 RBI Notification to all Banks & Financial Institutions recommending
that Non Financial Reporting (NFR) be undertaken as a step towards
‘Responsible Banking’
June 2008 Ministry of Corporate Affairs has stated that it would like to
encourage all companies to “disclose on their balance sheets the social
work that they do”
Sep. 2008 Government of Gujarat: mandates CSR expenditure - directs 6 PSUs
to set aside 30% of their profit before tax to carry out welfare activities
across Gujarat.
Draft industrial policy of Gujarat Govt. mandates CSR for industry
associations and corporate houses in the state
Feb. 2009 Petroleum Ministry says that it will be mandatory for public sector oil
companies to spend a minimum of 2% of their net profits on CSR
activities
Closing Statement…
• Enlightened businesses worldwide, small and large, have begun to realise
that responsible practices enhance profitability and ensure long term
survival. Companies not doing CSR will not survive –it’s only a question
of when
…..
“We believe that Corporate Social Responsibility is not
an externalised activity nor is it only philanthropy. It is
an internal process reflecting the soul of the Company.”
www.karmayog.org/csr2008