CSR & COMPETITIVENESS August 2013 by CSR & COMPETITVENESS

The Magazine for CSR and Sustainability Leaders

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www.csrcompetitiveness.com Vol.1 I Issue -2 I August 2013 I Monthly

Dear Readers, I am very happy to share with you that we are receiving overwhelming response for the magazine ‘CSR & Competiveness’ from the leaders from corporate, civil society, researchers and students of not only India but also from various part of the globe. Thank you all for giving this overwhelming & encouraging response, support and useful suggestions and finally your solidarity towards CSR and the cause, “CSR & Competitiveness” stands for. You are well aware that historic Companies Bill has been passed on August 8, 2013. The Indian republic has made a dynamic move by introducing the Companies Bill 2012 to present the new form and structure of the companies act promulgated way back in 1956. We are committed to keep a tab on the changing dimensions of the business environment and sensitize our readers of the latest updates to facilitate them in formulation of strategies to make their products, services and the organization globally competitive. The new bill has ushered an era of optimism among the corporates with a positive view angle. The regulatory environment in India has witnessed a paradigm shift thereby leading to new set of challenges posed to the corporate world to comply with the latest provisions of the companies bill 2012 in a time bound manner.

Rusen Kumar Editor & Director

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‘CSR and Competitiveness’ has been dynamically proactive to analyze the latest developments in the various dimensions of the business environment so as to sensitize and facilitate its’ readers to help them evolve world class strategies to become globally competitive. It is the best time for the Indian corporate world to analyze the varied provisions of the recently passed Companies Bill 2012, in the Lok Sabha to re-align the strategic roadmap of the organization and the CSR strategies to make their organization globally competitive and sustainable. The government and the corporates have done a commendable job by structuring, aligning the priorities of the government and the various stakeholders in the form of companies bill 2012. The most challenging imperative for the companies is to bring about a change in composition and configuration of the top level management

including the board of directors to ensure scrupulous compliance to the provisions of the Companies Bill 2012 in a time bound manner. The dynamic team of board of directors is required in the light of various expectations from the compliance perspective as well as to ensure development of team of highly competent professionals in a conducive environment committed to the cause of excellence and innovation on a dynamic basis in the light of exponentially dynamic dimensions of the business environment. The secret of success in the modern digital era would be to create a world class team of professionals at various levels of organizational hierarchy committed to the cause of learning and development focusing on innovation and excellence on a dynamic basis to be proactively dynamic, committed to deliver quick response to challenges and opportunities in the globally dynamic corporate world. To conclude, the Companies Bill 2012, has led to the emergence of challenges and opportunities for the companies looking at change with a proactive view angle. It is the best time to introspect and evolve the strategic planning process reoriented towards highest degrees of compliance in the light of the recent changes. The companies which shall proactively plan and implement the strategic roadmap to combat the challenges arising in the new regulatory environment shall be able to tide over the challenges of the competitive market scenario at the national and international level. The enhanced level of focus on strategic planning, implementation and control optimally complimented and supplemented by an organizational environment driven by the culture of learning and innovation in all facets and domain areas shall make the organization, its products and services globally competitive. CSR Toon- Renowned Cartoonist Triyambak Sharma, Editor, Cartoon Watch, the only monthly Cartoon Magazine of India, has agreed to contribute ‘CSR Toon’ for the magazine. We welcome him in our editorial board and hope our readers will enjoy his creativity. Triambak is featured in Limca Book of Records for publishing only bilingual cartoon magazine over 15 years. Enjoy the ‘CSR Toon’ published in cover page.

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Editorial and Advisory Board Rusen Kumar Editor Dr (Prof.) Rana Singh Executive Editor ranasingh@indiacsr.in Anil Jaggi Executive Editor anil@indiacsr.in

Vijay Kapur Eminent CSR Consultant & Author Director – Kohana CSR

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Enakshi Sengupta Eminent CSR Consultant & Author Director – Kohana CSR

CSR & Competitiveness

Prof BD Singh Renowned Academician & Author

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Dr (Prof) Saurabh Mittal Sub-Editor, New Delhi saurabh@indiacsr.in

Dr K K Upadhyay Head CSR-Ficci Aditya Birla CSR Centre of Excellence

Harsha Mukherjee Sub-Editor, Mumbai harsha@indiacsr.in

Monaem Ben Lellahom Co-Founder & Head of Sustainability Advisory Services Sustainable Square Consultancy and Think Tank UAE

Triambak Sharma Renowned Cartoonist Editor-Cartoon

CSR & Competitiveness | August 2013

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News

Tata Steel’s direct contribution to community development is Rs. 170.76 crores which is 3.37% of the Company’s Profit After Tax. This is not inclusive of the expenditure on environment, which is more than Rs. 300 cores.

www.csrcompetitiveness.com

Tata Steel CSR Touches 20 Lakh Lives in Jharkhand and Odisha

ata Steel Ltd spent Rs. 170.76 crores towards corporate social responsibility (CSR) during financial year 2012-13 which is 3.37% of company’s Profit After Tax (PAT) excluding spend on Environment Sustainability which is about Rs. 300 crores. The Tata Steel CSR initiatives touched nearly 2 million lives last years, Tata Steel said in Annual Report for the year 2012-13. Profit After Tax at Rs 5063 crores during the financial year 2012-13 was lower by 24% as compared Rs 6696 to the financial year 2011-12. The amount was spent under the broad categories such as infrastructure development to improvement to quality of the life of community, community development, health & medical support and support to charities and NGOs & Government for social cause. The operational area of the Company is the state of Jharkhand and Odisha are plagued by poor social infrastructure for health services, education, road, electricity and other basic amenities. The range of interventions encompassed infrastructure support to rural and urban schools through scholarships and coaching classes as well as incentives like free mid-day meals to encourage attendance form part of its key thrust area for improving the quality of life.

Solar Streetlight Project For instance under the solar streetlight project Tata Steel installed solar streetlights in villages. To ensure the upkeep of installed lights and their sustained use by the village community, discussions were held with community resulting in the constitution of committees called ‘Urja Samitee’. Select members from the village community are enlisted onto the Urja Samitees (Energy Committees) and are responsible for the maintenance of the solar panels.

Thrust Area for CSR Tata Steel focuses on responsible business practices with community-centric interventions. The thrust area for Tata Steel are sustainable livelihood-specially skill development and employability training, education

and health care, all of which constitute the Human Development Index- a quality of life indicator.

Partners for CSR Implementation Tata Steel partners with NGOs, Governments and funding agencies to implement its CSR interventions in the thematic area of health, education, livelihoods and ethnicity. Through employee volunteerism it also utilises in house resource persons. The CSR activities are implements through the following delivery arms: 1. Corporate Sustainability Services comprising, Tata Steel Rural Development Society (TSRDS), Tribal Culture Society (TCS), Tata Steel Family Initiatives Foundation (TSFIF), Tata Steel Skill Development Society (TSSDS), Urban Services and Education 2. Medical Services 3. Sports Department 4. Tata Steel Adventure Foundation 5. Jamshedpur Utilities & Services Company Limited 6. Other societies such as Ardeshir Dalal Memorial Hospital, Blood Banks, Kanti Lal Gandhi Memorial Hospital, etc. 7. Tata Relief Committee

Impact Assessment

ods such as social audit, aspiration surveys, village level study of Human Development Index (HDI) and XISS JRD Tata Chair. Social Audit : As a socially responsible corporate citizen, Tata Steel commissions social audits through independent professionals to get authentic and comprehensive review of its social activities. The Social Audit is conducted in ten years. Aspiration Surveys : Conducted among community residing in the operational areas of Tata Steel in Odisha. Village Level Study of Human Development Index (HDI): Conducted by a team of researchers from Xavier Labour Research Institute (XLRI), Jamshedpur. XISS JRD Tata Chair : The ‘JRD Tata Chair’ has been instituted at Xavier Institute of Social Services, Ranchi with the objective of conducting a study on ‘ Contribution of Tata Steel towards Sustainable Development . The value underpinning all business actions at Tata Steel is to serve Common Good, ensuring that all its excellence programmes integrate economic, environmental and social performance driven.

What Does Sustainability Means to Tata Steel? Tata Steel has been one of the first companies in India to adopt sustainability as a policy. It is a core value, built on our respect for people, our desire for growth and our respect for the environment. Building further on this vision, Tata Steel is the first Indian company to be a part of the International Integrated Reporting Council (IIRC) – an international initiative towards voluntary communication on how an organisation’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long-term. (Tata Steel, 106th Annual Report-2012-13)

The impact assessment is done through various meth-

Fullerton India Bags Asia CSR Award for Community Development Fullerton India has a widespread reach in Rural India through its network of 144 rural business branches called Gramshakti, which service over 15,000 villages.

Inputs for handloom weavers for adoption of new techniques, designs and materials.

Training in sewing embroidery using machines to cater to the garment industry

CSR & Competitiveness | August 2013

Fullerton India Credit Company Limited, a leading NonBanking Finance Company, has been granted the Asia CSR Award for Community Development at the 3rd Asia’s Best CSR Practices Awards event, held in Singapore on August 1, 2013. On behalf of Company, the award was received by Anindo Mukherjee, Head of Integrated Risk Management, Fullerton Financial Holdings, Singapore & Cynthia Lee, Director on Board of Fullerton India & Head of Human Resources, Fullerton Financial Holdings, Singapore. The award was bestowed, recognising Fullerton India’s Rural Livelihood Advancement initiative and its large impact on rural households across India. The award is Asia’s most prestigious and highest recognition of corporate organisations that have created a significant and positive impact on the lives of people in society. Fullerton India has a rich history of rural development initiatives in India and has won a string of awards for its CSR initiatives across various platforms, adding another feather to its cap with this esteemed win. Commenting on the occasion, Ravi Shankar, Executive Vice President Marketing & Rural Business stated, “Fullerton India is strongly committed towards the overall development of rural India and works towards this by facilitating new and alternate vocational training programs to men and women in villages, across our rural branch catchments.”

He added, “Our CSR initiative is focused on Rural Livelihood Advancement and designed to have a sustainable impact on its beneficiaries. These programs aimed at rural households are implemented by engaging over 2000 of our employees. We are honoured to have received this award as recognition towards our efforts and initiatives.” As part of its Livelihood Advancement Initiative, Fullerton India conceptualises various Livelihood Programs with Partner organisations across various disciplines, thus bringing together Partner organisations like the Government, NGOs, Socio-Economic development organisations, Manufacturing and Trading organisations in the Private sector to implement the programs. Fullerton India Credit Company Limited has over 360 branches spread across 20 states in urban and rural centres. It offers several retail finance products for varying needs of customers ranging from rural households to SMEs, in the locations it serves. Fullerton India has a widespread reach in Rural India through its network of 144 rural business branches called Gramshakti, which service over 15,000 villages. Fullerton India is a whollyowned subsidiary of Fullerton Financial Holdings, Singapore, which is a subsidiary of Temasek Holdings of Singapore.

Cover Story

Historic Companies Bill, 2012

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Parliament Passes the Historic Companies Bill, 2012 Six decades after the first Companies Act was enacted and over 20 years after liberalisation, India inched closer to bringing more contemporary issues, such as corporate governance, investor protection, corporate social responsibility and measures to check frauds, under the legislation.

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With the new legislation, India would possibly become the first country to have Corporate Social Responsibility (CSR) spending through a statutory provision.

hen Companies Act, 1956, was promulgated there were only 30,000 companies while in May 2013, there are 13.21 Lakh firms in India. The historical New Companies Bill, which will replace the nearly 57-yearold Companies Act of 1956, was finally passed in Rajya Sabha by voice vote on August 8, 2013. The lower house of parliament Lok Sabha had already been cleared the bill December 18, 2012. Now, only the President’s assent will be required for it to become law. The draft rules on the companies act will then be made public and the act comes into effect with notification by Ministry of Corporate Affairs. Wrapping up the debate in Rajya Sabha, Corporate Affairs Minister Sachin Pilot termed the passage of the legislation a “historic feat”. “The passage of the Bill will give impetus to the growth momentum,” Pilot said, adding, “The focus of the bill is to enhance transparency and ensure fewer regulations, self reporting and disclosure...It will outline the positivity in the economy”. The new law requires companies that meet certain set of criteria, to spend at least two per cent of their average profits in the last three years towards Corporate Social Responsibility (CSR) activities.

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Replying to the debate on the bill in the Rajya Sabha, Corporate Affairs Minister Sachin Pilot said it sought to bring India’s corporate governance in sync with the changing business environment of the 21st century. Pilot said the bill was progressive and the main focus was on enhancing transparency and compliance and it would help growth of the economy. “For the next two to three decades, this (new legislation) will bring positivity in the economy,” said Pilot adding that the views of all the stakeholders, including industry chambers, have been taken into consideration. “The focus of the bill is to enhance transparency and ensure fewer regulations, self-reporting and disclosure,” Pilot said. The Bill has been designed to consist of 29 chapters, containing 470 clauses and 7 schedules. The law has been rewritten extensively with several new provisions for investor protection, better corporate governance and corporate social responsibility etc. It defines a number of new terms such as Associate Company, Small Company, Employee Stock Option, Promoter, Related Party, Turnover, Chief Executive Officer, Chief Financial Officer, Global Depository Receipt, that have come into vogue in recent times. The new Bill has introduced numerous changes and concepts which should simplify regulations and bring greater clarity and transparency in managing businesses. The global environment calls for economic laws and regulations that are effective and efficient, have a reasonable compliance cost and keep Indian businesses competitive. Upon enactment, there will also arise the indispensable need for aligning the existing regulations with the new law. Industry hopes that the working rules which are expected to be put out in the public domain before notification would provide greater clarity on the operative provisions in the Bill while taking into account legitimate concerns of India Inc.

CSR & Competitiveness | August 2013

Journey of Passing the Bill The bill was first introduced as Companies Bill 2009 in Lok Sabha on August 3, 2009. It was referred to Parliamentary Standing Committee on Finance a month later. It brought back to the Lok Sabha as Companies Bill 2011, but again referred to the Standing Committee . Government accepted about 96 per cent of the suggestions of the Standing Committee. The bill was cleared by the Lok Sabha after the standing committee submitted its report in June 2012. Lok Sabha had been passed the bill December 18, 2012 The Companies Bill, which will replace legislation that has often been criticised for being outdated and cumbersome, had been in the works for at least a decade but gained momentum after an accounting scandal at Satyam Computer Services Limited in the year 2009. This was country’s biggest corporate fraud case where Satyam Computer Services caused loss to the investors to the tune of Rs.14,162 crore. The company head, Ramalinga Raju and members of his family secured illegal gains to the tune of about Rs.2,743 crore by various tricks. The new Companies Bill, on its enactment, will allow the country to have a modern legislation for growth and regulation of corporate sector in India. In view of various reformatory and contemporary provisions of the law, together with omission of existing unwanted and obsolete compliance requirements, the companies in the country will be able to comply with the requirements of the Companies Act in a better and more effective manner. The existing statute for regulation of companies in the country, viz. the Companies Act, 1956 had been under consideration for quite long for comprehensive revision in view of the changing economic and commercial environment nationally as well as internationally. The new law will facilitate business-friendly corporate regulation, improve corporate governance norms, enhance accountability on the part of corporates/ auditors, raise levels of transparency and protect interests of investors, particularly small investors. The Companies Bill is commensurate with global standards vis-à-vis disclosure requirements, increased democratic rights for shareholders, self-regulation and accountability. At the same time, it also seeks to restrain the management powers of promoters, who nurture the company during its initial stages and provide the seed capital. In a country where 75-80% of the businesses are family-run/ promoter-driven, industry hopes that the new law would be able to achieve the fine balancing between ownership and management, which is crucial for success of any enterprise and also fostering the spirit of entrepreneurship.

Cover Story

Historic Companies Bill, 2012

www.csrcompetitiveness.com The Bill provides for class action suit, the move aids individual shareholder to take action against companies, better disclosure requirements in financial statements and disclosure of interests of directors etc. The Bill has tightened the screws on insider trading norms in the country, it aims at prohibition on forward dealings in securities of company by key managerial personnel, insider trading rules and restriction on non-cash transactions involving directors.

Highlights of the Companies Bill •

Concept of One Person Company (OPC limited) introduced. Which will be treated as Private Limited Company only.

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The bill increased the number of members of private companies from 50 to 200. This allows companies access to large pool of capital without going public.

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cent stake against no thresholds earlier. •

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The bill restricts creation of multi-layered holding structures, prohibiting making investments through more than two layers of investment companies.

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The new bill bans holding ‘Treasury Stock’, which is often used by companies to increase shareholding or future monetization after consolidation.

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The new bill asks that listed companies and other specified companies will have to change individual auditor after five years and audit firm after 10 years. The old bill had no provisions for this.

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Under the new bill, companies are required to spend at least 2 per cent of their net profit on Cor-

The new bill gives recognition to transfer restrictions on inter-se shareholders – ‘Right of First Refusal’ will be enforceable. This would clear existing ambiguity on legal enforceability on transfer restrictions under JV/shareholder agreements.

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The new bill also has a detailed mechanism for acquisition of shares by majority shareholder from minority shareholders.

The salient features of the new Companies Law

While the old bill only permitted merger of a foreign company with an Indian company, the new bill allows merger of Indian companies into foreign companies which would aid in consolidation of cross-border businesses/assets.

e-Governance Initiatives;

Good Corporate Governance and CSR;

The new bill permits merger of a listed company with an unlisted one, subject to exit opportunity being offered to shareholders of the listed company.

Enhanced Disclosure norms;

Enhanced accountability of Management;

Stricter enforcement;

While the old bill depended on precedents for merger of a subsidiary with a parent (or between two small companies), the new bill provides a separate and simplified regime for this without any approval from High Court.

Audit accountability;

Protection for minority shareholders;

Investor protection and activism;

The new bill also gives rights for objections to schemes to only creditors who owed over 5 per cent and minority shareholders with over 10 per

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The new bill also requires companies to appoint one woman director.

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The proposed legislation would ensure setting up of special courts for speedy trial and stronger steps for transparent corporate governance practices and curb corporate misdoings.

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The changed law allows more statutory powers to the government’s investigative arm Serious Fraud Investigation Office (SFIO) to tackle corporate fraud.

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To help in curbing a major source of corporate delinquency, introduces punishment for falsely inducing a person to enter into any agreement with bank or financial institution, with a view to obtaining credit facilities.

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The limit in respect of maximum number of companies in which a person may be appointed as auditor has been proposed as 20.

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Independent directors’ shall be excluded for the purpose of computing ‘one third of retiring directors’.

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Appointment of auditors for 5 years shall be subject to ratification by members at every Annual General Meeting.

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‘Whole-time director’ has been included in the definition of the term ‘key managerial personnel’.

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The term ‘private placement’ has been defined to bring clarity.

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Maximum number of directors in a private company increased from 12 to 15 which can be increased further by special resolution.

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Financial Year of any company can end only on March 31 and only exception is for companies, which are holding / subsidiary of a foreign entity requiring consolidation outside India, can have a different financial year with the approval of Tribunal.

Business friendly coporate Regulation/ pro-business initiatives;

porate Social Responsibility (CSR). The companies to give preference to the local areas of their operation for such spending.

Better framework for insolvency regulation; and Institutional structure.

Major Amendment in the Bill are as follows: 1.

(Amendment in Clause 135): In the Section on Corporate Social Responsibility (Section135), which is introduced as a statutory provision for the first time, the words ‘make every endeavour to’ have been omitted from its Subclause (5). So that the first para of Sub-clause (5) of Clause 135 now reads as follows: “The Board of every company referred to in sub-section (1), shall ensure that the company spends in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.” Such clause is also amended to provide that the company shall give preference to local areas where it operates, for spending amount earmarked for Corporate Social Responsibility (CSR) activities. The approach to ‘implement or cite reasons for non implementation’ retained.

(Amendment in Clause 186): Clause 186 amended to provide that the rate of interest on inter corporate loans will be the prevailing rate of interest on dated Government Securities. CSR & Competitiveness | August 2013

(Amendment in Clause 203): Provisions relating to separation of office of Chairman and Managing Director (MD) modified to allow, in certain cases, a class of companies having multiple business and separate divisional MDs to appoint same person as chairman as well as MD.

(Amendment in Clause 147 And 245): Provisions relating to extent of criminal liability of auditors - particularly in case of partners of an audit firm - reviewed to bring clarity. Further, to ensure that the liability in respect of damages paid by auditor, as per the order of the Court, (in case of conviction under Clause 147) is promptly used for payment to affected parties including tax authorities, Central Government has been empowered to specify any statutory body/authority for such purpose.

(Amendment in Clause 143): Provisions relating to audit of Government Companies by Comptroller and Auditor General of India (C&AG) modified to enable C&AG to perform such audit more effectively.

(Amendment in Clause 144): Provisions relating to restrictions on non audit services modified to provide that such restrictions shall not apply to associate companies and further to provide for transitional period for complying with such provisions.

(Amendment in Clause 36): To help in curbing a major source of corporate delinquency, Clause 36 (c) amended, to also include punishment for falsely inducing a person to enter into any agreement with bank or financial institution, with a view to obtaining credit facilities.

(Amendment in Clause 141): The limit in respect of maximum number of companies in which a person may be appointed as auditor has been proposed as twenty companies.

(Amendment in Clause 139): Appointment of auditors for five years shall be subject to ratification by members at every Annual General Meeting.

10. (Amendment in Clause 139):

Provisions relating to voluntary rotation of auditing partner (in case of an audit firm) modified to provide that members may rotate the partner ‘at such interval as may be resolved by members’ instead of ‘every year’ proposed in the clause earlier. 11. (Amendment in Clause 2): Whole-time director’ has been included in the definition of the term ‘key managerial personnel’. 12. (Amendment in Clause 42): The term ‘private placement’ has been defined to bring clarity. 13. (Amendment in Clause 61): Approval of the Tribunal shall be required for consolidation and division of share capital only if the voting percentage of shareholders changes consequent on such consolidation. 14. (Amendment in Clause 152): Clarification included in the Bill to provide that ‘Independent Directors’ shall be excluded for the purpose of computing ‘one third of retiring Directors’. This would bring harmonisation between provisions of Clause 149(12) and rotational norms provided in Clause 152. 15. (Amendment in Clause 470): Provisions in respect of removal of difficulty modified to provide that the power to remove difficulties may be exercised by the Central Government up to ‘five years’ (after enactment of the legislation) instead of earlier up to ‘three years’. This is considered necessary to avoid serious hardship and dislocation since many provisions of the Bill involve transition from pre-existing arrangements to new systems.

Cover Story

Historic Companies Bill, 2012

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Business Chambers Welcome the New Companies Bill

Board Shall Ensure the Company CSR Spends

Leading business chambers and professional body including FICCI, CII and The Institute of Company Secretaries of India (ICSI) has welcomed the New Law. “We heartily welcome the passage of the Companies Bill which will give India a comprehensive and contemporary legislation. This legislation is indeed a milestone in the history of company law and will revolutionize the administration and management of businesses in the times to come. FICCI hopes that there are no inconsistencies in various laws since consistency and certainty in laws helps in effective functioning of business. Any legislation evolves with time and we are certain and hopeful that the new Companies Act while providing an enabling environment for smooth working and growth of India Inc. will also address valid concerns of the Industry. The Bill has been through many stages of discussion and has brought in many radical changes to the erstwhile Act. FICCI has been part of these discussions and compliments the Ministry of Corporate Affairs and its officials for adopting a highly pragmatic and consultative approach towards evolution of the present day Companies Bill. ” Naina Lal Kidwai, President, FICCI

Once the new law is put in place, profit-making companies will be required to spend two per cent of their average net profit of three years on activities related to corporate social responsibility (CSR). Three years will be counted as preceding the one during which CSR was to be undertaken. However, the government has diluted the mandatory provision for CSR after objections from India Inc. Those failing to meet the obligation will have to explain the reasons for the shortfall. The norm is valid only for companies with net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more, or a net profit of Rs. 5 crore or more, during the past three financial years. Experts believe this would bring a paradigm shift because the old legislation only provided for voluntary guidelines for CSR. It will create an opportunity for companies to evolve innovative strategies to contribute towards inclusive growth.

The Purpose of Inclusion of CSR in the Companies Bill • The CSR provisions of the Bill seek to create an enabling environment; • Bill allows corporates to harness and channelize their core competencies as well as develop effective business models; • It will promote and facilitate far better connect between businesses and communities. • It will facilitate deeper thought and longer term strategies for addressing some of our most persistent social, economic and environmental problems; • It will assist in synergizing partnerships between Corporates, Governments, Civil Society Organizations, Academic Institutions and Social Entrepreneurs.

Catalytic Role of the Bill

(c) monitor the Corporate Social Responsibility Policy of the company from time to time. (4) The Board of every company referred to in subsection (1) shall, (a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company’s website, if any, in such manner as may be prescribed; and (b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company. (5) The Board of every company referred to in sub-section (1), shall ensure that the company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy: Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities: Provided further that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount. Explanation. For the purposes of this section “average net profit” shall be calculated in accordance with the provisions of section 198.

• “We commend the Government for prioritizing the Bill. It shows the Government’s commitment to usher in the new era of corporate regulation. The Companies Bill as in its present form is a culmination of efforts for over a decade and we are happy that many of CII’s views have been incorporated in the legislation. Now that the law is ready, it is time to focus and work on the practical aspects of complying with its provisions. CII will continue to engage with the Ministry of Corporate Affairs to work out the modalities for various provisions that prescribe delegated legislation in the form of Rules. One such vital provision is surely the clause dealing with CSR spend.” Chandrajit Banerjee, Director General, Confederation of Indian Industry

“ The new law promises improved corporate governance norms, enhanced disclosures and transparency, facilitation of responsible entrepreneurship, increased accountability of company managements and auditors, protection of interest of investors particularly small and minority investors, better shareholder democracy, facilitation of corporate social responsibility (CSR) and stricter enforcement processes. New Companies law will further accelerate the transformation of Company Secretaries into corporate governance professionals by recognizing them as Key Managerial Persons in a Company along with the Chief Executive Officer / Managing Director / Manager, Whole-Time Director and Chief Financial Officer. The Company Secretary is expected to become the Chief Governance Officer of the Company and lead the governance initiatives. It envisages a much larger role for Company Secretaries in areas of secretarial audit, restructuring, liquidation, valuation and much more.” S. N. Ananthasubramanian, President, Council of The Institute of Company Secretaries of India CSR & Competitiveness | August 2013

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The Bill also provides great flexibility to business and industry for strategizing and conducting their CSR initiatives; Intention of government and purpose of bill is not to make a rigid structure which will constrain the creativity and imagination of the corporates; It will enhance their efforts, provide an even broader platform and re-energize their efforts.

Company Bill, 2012 Section 135 (1) Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. (2) The Board’s report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee. (3) The Corporate Social Responsibility Committee shall, (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII; (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and

Number of Registered Companies Crossed 13-lakh Mark The total number of registered companies in the country has crossed 13 lakh mark, but 1.44 lakh of these firms are ‘dormant’ and have not filed their annual returns for past three years. As on May 31, 2013, there were 13.21 lakh companies registered with Ministry of Corporate Affairs. Of these, as many as 2.6 lakh companies have been closed for various reasons including court order and voluntary winding up, while another 30,435 firms are in the process of being liquidated, an official statement said. Besides, 1.44 lakh companies have not filed their annual returns/ balance sheets for more than past three consecutive years and are classified as ‘dormant’. There are 8.77 lakh active companies of which 1.5 lakh had been incorporated within the preceding 18 months.

New Rules to be in Place by FY’14 End The Ministry of Corporate Affairs expects all the rules regarding the Companies bill likely to be in place by the end of this fiscal, after taking into account the suggestions from experts, public and other stakeholders. A rules advisory committee comprising members from leading industry chambers, dignitaries, experts and lawyers among others, is currently working on draft rules and the same are expected to be put forth on MCA website for public comments by the end of this month itself, Ministry of Corporate Affairs Joint Secretary Renuka Kumar said.

Philanthropy

Nilekani is among India’s growing list of “givers” who have pledged a significant portion of their wealth towards philanthropy.

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Rohini Nilekani Sells Infosys Shares, Raises Rs.163 cr for Philanthropic work “For the past several years, I have taken philanthropic initiatives in multiple sectors such as education, water, environment and governance among others. The proceeds of the sale of shares, post tax, will be deployed towards these and other philanthropic contributions, over time.” - Rohini Nilekani

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An ex-journalist, author and philanthropist, high net worth individual (HNI) Rohini Nilekani, wife of one of Infosys co-founder Nandan Nilekani, raised about Rs 163.58 crore by selling 5.77 lakh of her shares of the IT services company for philanthropic work.

nfosys Ltd, a global leader in business consulting and technology solutions, has said that wife of one of its co-founder Nandan Nilekani, Rohini Nilekani, has raised about Rs.163.58 crore by selling 577,000 shares of the company for philanthropic work in India. Nilekani is the wife of Infosys co-founder Nandan Nilekani, who is currently the chairman of the Unique Identification Authority of India (UIDAI). Mr Nilekani founded Infosys with NR Narayana Murthy and five others in 1981. He was the chief executive of Infosys from March 2002 to April 2007. Nandan holds 1.45% stake or 83,45,870 shares in this Bangalore- based firm. In a BSE filing, Infosys said Rohini Nilekani, who is also a promoter in the company, sold 577,000 shares between 16-19 July for a total of Rs.1,63,51,83,925. After the sale, her stake in Infosys stood at 1.31% or 7,501,174 shares, it added. For the period ended 30 June, her stake in the firm was 1.41% or 8,078,174 shares. In the filing, she said: “For the past several years, I have taken philanthropic initiatives in multiple sectors such as education, water, environment and governance among others. The proceeds of the sale

of shares, post tax, will be deployed towards these and other philanthropic contributions, over time.” Rohini, 53, has been an active woman philanthropist for more than a decade. Her organization Arghyam grants funds to organisations, which implement and manage groundwater and sanitation projects in India. Arghyam has made grants to recipients in 22 states of India since 2005, the year of its founding. Arghyam, a foundation she set up with a private endowment, to work on water and sanitation issues in India. She is also Founder-Chairperson of Pratham Books, a charitable trust which seeks to put “A book in every child’s hand.” Rohini has been deeply involved with development issues and is currently a member of the Audit Advisory Board of the Comptroller and Auditor General of India. She sits on the Boards of many non-profits, notably ATREE (the Ashoka Trust for Research in Ecology and the Environment) and Sanghamithra Rural Financial Services. Rohini has authored a novel – “Stillborn” - and also a non–fiction account of dialogues she moderated between social and corporate leaders called “Uncommon Ground”. Nilekani is among India’s growing list of “givers” who have pledged a significant portion of their wealth towards philanthropy.

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Tata Chemicals Invites Nominations for Best Chemistry Teacher Award 2013 M

UMBAI: In line with its mission of serving society through science, Tata Chemicals, a Tata Group Company, is organizing its 3rd edition of the annual BCTA (Best Chemistry Teacher Award) 2013 along with Association of Chemistry Teachers (ACT) and Confederation of Indian Industry (CII). These awards recognize exceptional contribution of individuals from the Chemistry teaching fraternity and inspire a whole new generation to actively pursue chemistry and its allied subjects. Nominations to apply for the awards will be open until September 30, 2013, wherein the applicant should be a full-time teacher engaged in teaching chemistry to class XI, XII, Graduate or Post Graduate level. The applicants of BCTA 2011 and 2012 (excluding the winners) are also eligible to participate in BCTA 2013. The nominations for the entries are classified in five distinct award categories: Best Chemistry Teacher (Class XI/XII and equivalent), Best Chemistry Teacher (Bachelor’s Degree and equivalent), Best Chemistry Teacher (For Master’s Degree and above), Best Chemistry Teacher for promotion of Chemistry as a subject and Best Young Chemistry Teacher.

Tata Chemicals has created an interactive website called the Human Touch of Chemistry (www.humantouchofchemistry.com), wherein interested and eligible teachers can send in their nominations online for awards in the above mentioned categories. Teachers can also submit handwritten applications by downloading the forms from www.humantouchofchemistry.com The winners for the awards will be selected by eminent panelists comprising renowned Indian scientists, professionals and academia. The winner teachers will be felicitated at a formal award ceremony which will be announced in November 2013.

Best Chemistry Teacher Award Best Chemistry Teacher Award (BCTA) is an annual initiative organized by Tata Chemicals to honour exemplary chemistry teachers teaching class XI and XII, undergraduate courses and postgraduate levels. The Best Chemistry Teacher should demonstrate expertise in generating a passion for chemistry in students. This Award also takes into cognizance contributions made by teachers towards promoting overall scientific literacy. CSR & Competitiveness | August 2013

“With the tremendous nationwide response received in the past, we are excited to launch the third series of the award. The BCTA awards recognize the efforts of teachers who are responsible in creating awareness and educating the younger generation about the intrinsic presence of Chemistry in everyday life and its role in meeting modern day challenges. We at Tata Chemicals believe that chemistry is fundamental to the sustainable development of human society and this is in line with our mission of Serving Society through Science.” R. Mukundan Managing Director, Tata Chemicals

Article

The Indian philosophy sets it goals beyond this world transforming our lives even in the next birth and this is where it differs from the philosophy propagated by the western world.

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CSR and Wisdom from Ancient India By Enakshi Sengupta & Vijay Kapur Vijay Kapur & Enakshi Sengupta are the Executive Directors of Kohana – A dedicated CSR Consultancy (www.kohanacsr.com). They bring with them both academic and practical experience in the field of CSR.

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The importance of a leader and his role in society as a protector and a giver was also stressed by Sri Krishna in the Bhagvad Gita and the same opinion was voiced by Manu and Shukrachrya.

he contemporary concept of Corporate Social Responsibility became popular in India less than a decade ago. CSR along with other management theories has been dominated by western theories which happened due to colonization and widespread use of English in many countries. When one digs a bit deeper one can find that concepts and management theories popularised by the western world have been in use in India for centuries, long before it was codified by European thinkers. Sharma (2001) explains that in order to gain success by effective use of a management concept it has to emerge from the soil of that region, firmly rooted to its own culture. Hence many countries have now taken the endeavour to look back at their own ancient scriptures and explore their own system of management and CSR. Practice of CSR can be traced back to the ancient civilization in Greece (Eberstadt 1977). A similar development of CSR took place in ancient India which was based on the teaching of Vedas (Pandey and Tripathi 2002). The onus of CSR in ancient India was bestowed to the king (Rig Veda 1-8), which emphasized the role of a king as an accumulator of wealth and the use of his wealth for the betterment of his stakeholders or subjects. In return the king would be blessed by his subjects to grow and shine like a sun. The importance of a leader and his role in society as a protector and a giver was also stressed by Sri Krishna in the Bhagvad Gita and the same opinion was voiced by Manu and Shukrachrya. The Manusmriti states that a country reaches a state of lawlessness and chaos without its king as the king is the messenger of God on earth to protect and look after his subjects. In today’s world the state and then the firm is expected to replace the king and become the benefactor of society.

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Indian philosophy is deep rooted in the concept of Dharma or virtue. Dharma as explained by Radhakrishnan (1929) forms the basis of all social and moral values practised by an individual or society. Taittiriya Upanishad instructs all individuals to speak the truth (satyam vada) and then to practice virtue (dharma cara). Dharma has been the guiding light to right living and stability in society. The other concept that is expected to guide individuals in India is the concept of Karma (cause and effect). The concept of Karma implies that the present state of an individual is determined by their antecedent actions. Hence the law of Karma along with virtue or Dharma forms the basis of self-realization. The Indian philosophy sets it goals beyond this world transforming our lives CSR & Competitiveness | August 2013

even in the next birth and this is where it differs from the philosophy propagated by the western world. The teachings in the four Vedas, namely, Rig Veda, Yajur Veda, Sama Veda and Atharva Veda form the fundamental basis of human life on earth. The Rig Veda particularly states that the cosmic order is governed by the physical relationship of man to moral laws. Swami Dayananda classified the Rig Veda into four orders (Rig Veda 10-09-9). The first order is that of ‘Gyana’ or transcendental knowledge of absolute truth of God. The second order is action or ‘Karma’. The third order is ‘Upasana’ or worship and the fourth order is ‘Vigyan’ or science which is the allencompassing body of knowledge. Vedic knowledge propagates that right moral practice couple with knowledge and right action leads to business excellence and a balanced life. Sri Krishna in the Bhagvad Gita stated that “value system protects you if you follow it” (dharmo rakshati rakshaitaha). Swami Vivekananda in his teachings and reflection of the Bhagvad Gita also states that the basis of the social and political system in a country rests on the goodness of mankind. While accumulation of wealth is encouraged in ancient scriptures, it also proposes the right action on the use of wealth that is on self and on donation for the welfare of others. It has been explicitly stated that whatever is given to others selflessly comes back to the giver in many folds (Rig Veda 1-8). Business is viewed as an integral part of society; it should create wealth for society through right means of action of “sarva loka hitam” or well-being for all stakeholders. Vedic literature while talking about business states: “May we together shield each other and may we not be envious towards each other. Wealth is essentially a tool and it continuous flow must serve the welfare of the society to achieve the common good of the society.” (Atharva Veda 3-24-5). Sri Krishna in the Bhagvad Gita (3-13) has said that all sorrows from society would be removed if socially conscious members of society enjoy remnants of their work in creating selfless welfare to others (Muniapan 2007). When we summarize the teachings of Vedas and Bhagvad Gita we find that these teachings advocate that business excellence should be weaved around spiritualism and is grounded in the concept of self-determination and self-realization. Secondly business should follow right actions and right measures and should be virtuous.

Thirdly business should accumulate wealth through right actions Karma and wealth should be shared equally with all stakeholders. Finally business can only achieve excellence if business practices are ethical and socially responsible. If one reads the Arthasashtra we find that Kautiliya while mentioning the duties of a king, akin to a business leader of today’s world, he mentions, that the king should have no selfinterest but his satisfaction should lie in the welfare of his people and is summed up in the line “bahujana sukhaya bahujana hitayachya” – the welfare of many and happiness of many. In the Shantiparva of the Mahabharata, the public interest is to be accorded precedence over the leader’s interest. Kautiliya lays down three mian responsibilities of a leader which are ‘Raksha’ (security), ‘Palan’ (Growth) and ‘Yogakshma’, which means welfare. Kautiliya also stressed the happiness of all stakeholders not only by wealth and profit but by doing the right things “sukhasya moolam dharma”. The knowledge that exists in our ancient scriptures gives us the direction towards a better society and towards creating happier and healthier stakeholders. The teachings in the ancient scriptures borders on ethics and stakeholder management. Italso forms the basis of a good human being who believes in conducting his work in a right and virtuous way resulting in the welfare of his stakeholders. Reference: • Eberstadt, N.N. (1977) ‘What history tells us about corporate responsibilities’, in A.B. Carroll(Ed.), Business and Society Review (Autumn) in Managing Corporate Social Responsibilities.Boston, MA: Little, Brown and Company. • Muniapan, B. and Shaikh, J. (2007) Lessons in Corporate Governance from Kautilya’sArthashastra in Ancient India, World Review of Entrepreneurship, Management andSustainable Development (WREMSD). Special Issue on: “Accounting StandardsConvergence, Corporate Governance and Sustainability Practices in East Asia”, Vol. 3,pp.50–51. • Pandey, R.K. and Tripathi, P.S. (2002) ‘Vedic values and corporate excellence’, in S.C. Dhamijaand V.K. Singh (Eds), Vedic Values and Corporate Excellence (pp.168–171). Uttaranchal,India: Gurukul Kaugri University. • Sharma, G.D. (2001) Management and the Indian Ethos. New Delhi, India: Rupa and Company. • Radhakrishnan, S. (1929) Indian Philosophy: Volume 1 (2nd ed.). London, UK: George Allen andUnwin.

News

Google wants to shine a spotlight on the many Indian non-profits working to help solve some of the world’s most pressing challenges.

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Google Launches Rs 12 cr Hunt For India’s Best Innovative Social Entrepreneurs This is also part of Google’s ongoing giving efforts. Every year Google gives away approximately $100 million in grants, $1 billion in free and discounted apps and ads, and 50,000 employee volunteer hours around the world. In 2012, Google launched the Global Impact Awards to support entrepreneurial non-profits with a tech idea for how to change the world.

EW DELHI: Google has launched the Google Impact Challenge in India, asking Indian non-profits how they would use technology to tackle problems in India and around the world. The four submissions judged to be the best will each receive Rs 3 crores and technical assistance from Google to help make their project a reality.

“We are thrilled that the Google Impact Challenge is launching in India. It is a great opportunity for Indian nonprofits to scale their efforts to help solve some of our toughest problems. India already has a rich tradition of corporate giving and hopefully the Challenge will galvanize social entrepreneurship in India.” Rajan Anandan Vice President and Managing Director, Google India

On the eve of India’s independence, Google is celebrating the spirit of creativity, diversity and entrepreneurship that are the hallmarks of the world’s largest democracy, by enabling the best local non-profits that are using technology to make the world better, faster. Applications open today and Indian nonprofits are invited to apply online by September 5, 2013 at:g.co/indiachallenge. A team from Google will review applications and announce 10 finalists on 21st October. The public will then be invited to learn more about the top 10 finalists and cast a vote for their favourite projects. The final event, to take place on October 31, 2013, will feature a judging panel including Google board member Ram Shriram; Google’s Chief Business Officer, Nikesh Arora; Jacquelline Fuller, Director, Google

Giving; Anu Aga, Social Worker and former Chairperson, Thermax and Jayant Sinha, Managing Director, Omidyar Network India Advisors, who will select three awardees. The fourth awardee, based on online votes from the public, will also be revealed. In addition to backing Indian social innovators, Google wants to shine a spotlight on the many Indian non-profits working to help solve some of the world’s most pressing challenges. This is Google’s first Challenge in India and only its second overall. Google’s Global Impact Awards support entrepreneurial non-profits using technology to tackle some of the world’s toughest problems. Previous awardees have developed projects ranging from technology that allowed under-privileged students to access maths and science education to real-time sensors that help ensure people have better access to clean water.

“I have had the privilege of working with budding inventors for many years, and I know India’s entrepreneurs are some of the biggest and boldest thinkers in the world. Today I’m thrilled to be part of a new tech-oriented, venture model that will support our country’s amazing engine of social entrepreneurs, identifying and backing the best technology ideas to improve the lives of millions.” Ram Shriram Judge and Google board member

CSR of Coal Companies, 80% Budget to be Spent in Local Area N

EW DELHI : The Department of Public Enterprises erative Society, Infrastructure Support, Heritage sites Minister further said that the Department of Public (DPE), had framed the CSR guidelines, based on in the CSR purview ensuring involvement of emEnterprises (DPE) had framed the CSR guidelines in which, Coal India Ltd. (CIL) formulated a Corporate Soployee’s representatives in this Project, Empowerment 2010 and as per CSR policy, the budget allocation for cial Responsibility (CSR) policy and provided funds to of women for education, health & self-employment, CSR increased tremendously. However, the CIL and the tune of 5% of retained earnings of previous year Adoption of village for carrying out the activities its subsidiaries were not geared to utilize the funds subject to minimum of Rs. 5 per tons of coal production like infrastructural development e.g. road, water supwithin the financial year commensurate with higher for subsidiaries & 2.5% for CIL. The criteria for spendply, electricity and community center etc. The details allocation. Besides, the CSR projects are to be impleing funds under CSR. cover the economically backward of amount utilized during last three years for the develmented by specialized agencies. In order to quantify and needy section of the society living in different opment of the surrounding villages by CIL & its subsidithe impact made by CSR activities, baseline data had parts of India. For Carrying out CSR activities, 80% of aries is given below. to be compiled by conducting baseline survey before the budgeted amount should be spent within the rastart of a project. The above formalities took time redius of 25 km of the projects or mines and 20% sulting in slow utilization of funds. However, the Company 2010-11 2011-12 2012-13 2013-14 (Up to of the budget would be spent on CSR activities unutilized fund for 2011-12 was carried over to June) (Fig in Rs. within the State or States in which the Subsidithe next financial year. Further, CIL has taken Crs.) ary companies are operating. For CIL (HQ) CSR measures to step up utilization of CSR funds should be broadly executed in the areas, which in the current year. A separate Cell in CIL, HQ. ECL 04.74 13.14 09.42 0.35 are beyond the jurisdiction of subsidiary comas well as its subsidiaries has been established BCCL 03.15 05.53 07.43 01.73 panies. This information was given by the Minisunder senior level executives of the Company. CCL 10.98 11.00 13.66 02.08 ter of State for Coal, Pratik Prakash Bapu Patil in For monitoring of CSR activities the Committee WCL 07.12 07.85 20.96 02.33 a written reply in Lok Sabha on August 13, 2013. comprising of Board Level Directors have been formulated at CIL, H.Q and its subsidiaries sepaSECL 15.70 17.66 46.63 14.71 Minister said that as per CIL’s CSR policy, the narately. CIL has entered into a Memorandum of MCL 53.45 14.47 25.56 17.19 ture of work on which CSR funds are being utiUnderstanding (MOU) with Tata Institute of Solized include Education, Water Supply including NCL 04.35 09.25 17.64 03.84 cial Science (TISS), A National CSR Hub for exdrinking water, Health care by providing Indoor CMPDIL 00.19 00.49 01.06 0.00 tending assistance in implementing CSR activimedical facilities and medicine, Sports and culCIL & NEC 08.71 02.59 07.19 53.13 ties for CIL and its subsidiaries. ture, Social Empowerment, Infrastructure for Total 108.42 82.00 149.55 95.36 Village Electricity, Solar Light, Pawan Chaki. Etc., Generation of employment & setting up Co-opCSR & Competitiveness | August 2013

Success Story

Vedanta has so far formed more than 1180 such Self-Help-Groups and the company is further scaling up the project to bring in more rural and tribal women so that they can be socio- economically empowered.

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Women Entrepreneurs of Rural India Rural women out to make mark in Indian market with their art and craft through Vedanta Self-Help-Groups A tribal woman of Lanjigarh, Kada Majhi from village Kinari who has been trained by Vedanta in stitching and tailoring sends her children to DAV Vedanta International School now. Vedanta also provided her a sewing machine and now she is able to earn about Rs. 2000 pm. In Lanjigarh area itself, 260 tribal women have been trained in various skills.

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Women in rural and tribal India live a life that requires social and economic upliftment. As the women are core of family system in India, it is important for the rural society, like in urban society, that she should not only be educated but also socially and economically empowered.

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ost of these rural women were illiterate. Vedanta arranged their adult-education classes in the villages to make them capable of maintaining itinerary of their own products. Initially, Vedanta’s team helped them in linkages but a situation has come when these women have become independent and they handle their ledger book and accounts with banks themselves. Shahnaz is one of the 14,870 rural and tribal women who have been able to support their families by joining Vedanta’s SHGs. A tribal woman of Lanjigarh, Kada Majhi from village Kinari who has been trained by Vedanta in stitching and tailoring sends her children to DAV Vedanta International School now. Vedanta also provided her a sewing machine and now she is able to earn about Rs.2000 pm. In Lanjigarh area itself, 260 tribal women have been trained in various skills. Tamil Nadu is also not behind. Lalitha from the state says, ‘I and my mother and sister are members of Jasmine self-help-group (SHG) and had interest in saree decoration skills, like embroidery etc. and Vedanta besides providing training also linked us with the local textile shops. Now, we are able to earn about Rs. 4000 to 5000 pm. About 750 such women are working in various Self-Help-Groups formed by Vedanta Group company MALCO in Tamil Nadu. In Tuticorin where Vedanta has copper plant, Juliet Suganthi showed interest in painting work. She joined

CSR & Competitiveness | August 2013

State Rajasthan Chhattisgarh Odisha Tamil Nadu Goa Zambia

Company Hindustan Zinc BALCO Vedanta Aluminium Ltd MALCO, Sterlite Copper SESA Goa Konkola Copper Mines

‘Nachithiram SHG’ and went for training in fashion jewellery. She now makes chains, necklace, rings and other items to sell in the market. Similarly, Shanti Kanwar of Chhattisgarh is a member of ‘Sarvmangla SHG’ formed by the group company BALCO. Shanti has been linked with rice milling and flour making unit. Girja Saarthi, a member of ‘Mahamaya SHG’ is engaged in paper plate making unit. Girja says, ‘we started getting orders for our product from the day we started operating the unit. BALCO, besides forming our group also gave us financial support and helped us getting the orders. Now, we are directly linked with market.’ Like Girja and Shanti, about 325 women are working in various SHGs and earning about Rs. 5000 pm. Not just in India, in the States of Rajasthan, Chhattisgarh, Tamil Nadu, Goa and Orissa, Vedanta has organised Self-Help-Groups even in Zambia where the group has Konkola Copper Mines. A number of NGOs across India and banks like HDFC, Indian Bank, Indian Overseas Bank, State Bank of Bikaner and Jaipur and State Bank of India have come forward for providing fi-

nancial assistance to the members of Self-Help-Groups. Vedanta has so far formed more than 1180 such Self-Help-Groups and the company is further scaling up the project to bring in more rural and tribal women so that they can be socio- economically empowered. Today, these women are business women of rural India and are out to make mark in Indian market with their art & craft and their skills in handicraft, embroidery, terracotta, tailoring, saree decoration, jewelry making, mushroom cultivation, poultry, goat husbandry, puffed rice processing, leaf plate-making, fish-farming, phenyl making, incense sticks/ agarbati making, beauty parlor, typing institute, gold covering, oil sales, birds rearing, to name a few.

When Shahnaz Hussain lost her husband 15 years ago, her life had come to a standstill. The thought of completing education of her 2 children and sustaining respectable livelihood almost dragged her into depression. This simple house-hold woman of village Bichhdi in Rajasthan had no financial support and the future looked uncertain. Speaking to fellow women of her village, for her sustainable livelihood, she came in touch with a Self-Help-Group ‘Jai Hind’ a women empowerment project by Vedanta Group in rural India. Shahnaz joined the group and was provided stitching and tailoring training by Vedanta Group Company in Rajasthan, Hindustan Zinc. Her determination to get her children educated and have a sustainable livelihood made her an active member of the group. Women in rural and tribal India live a life that requires social and economic upliftment. As the women are core of family system in India, it is important for the rural society, like in urban society, that she should not only be educated but also socially and economically empowered. With this thought, Anil Agarwal’s Vedanta Group started Self-Help-Groups in rural India in 2006. Each Self-Help-Group needed to have about 10-15 women who would be provided relevant training according to the needs and interest and would be linked with market for selling the products and also with banks for financing the raw material.

“The larger challenge has been to convince the rural women to spare time and join the groups. The rural system has its own challenges in terms of the social system. The support of family members for the women becomes the vital point. Vedanta group representatives need to convince not just the women in question but also the family members and make them understand as how her empowerment will bring prosperity to the entire family as well. Once they came together, they started working like a strong team where they extended helping hand to each other and ensured their SHG comes out with best of products.” Pavan Kaushik, Head - Corporate Communication Vedanta Group

Article

The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy. It will also reshape capitalism and its relationship to society.

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The Corporate Paradigm Shift for Creating Shared Values By Akanksha Sharma Capitalism is an unparalleled vehicle for meeting human needs, improving efficiency, creating jobs, and building wealth. But a narrow conception of capitalism has prevented business from harnessing its full potential to meet society’s broader challenges.

The concept of Corporate Social Responsibility has been debated for years. The general understanding of policy makers is that every firm must ensure a balance between business and society. With the increasing response of the shareholders towards the underlying business philosophy, Corporate Social Responsibility is today being considered as the commitment of business to contribute to sustainable economic development, working with employees, environmental responsibility, local community and society at large to add value in all spheres of influence. Over the years, the stakeholder engagement with the business and by the business has grown substantially, making business to effectively engage all significant groups of stakeholders ensuring smooth business operations. Moreover, changes in the global context catalyzed the chain reaction for taking corporate responsibility to a new level. Moving from the era of Milton Friedman who has defined the subject as Capitalism is an “the social responsiof business is to unparalleled vehicle bility make profits”, to the age where businesses for meeting human across the global are professing organizaneeds, improving tional culture develefficiency, creating opment for creating shared values, both jobs, and building businesses and the sowealth. But a narrow called concept of CSR have witnessed evoconception of capilution hand-in-hand. by merely talism has prevented Precursored profit-making rapid industrializationto the business from harstage of obtaining nessing its full poten- the lisence to operate charity to the tial to meet society’s through present times of corpoadvancement tobroader challenges. rate wards creating shared values, “CSR” has travelled through various experimental stages of evolution.

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Moving Beyond Trade-Offs Businesses and society have been pitted against each other for too long. In this journey of responsible evolution of businesses, various schools of thoughts have played significant roles.Profit- centric group of economists have legitimized the idea that to provide societal benefits, companies must temper their economic success. In neoclassical thinking, a requirement for social improvement—such as safety or hiring the disabled—imposes a constraint on the corporation. Adding a constraint to a firm that is already maximizing profits, says the theory, will inevitably raise costs and reduce those profits.

CSR & Competitiveness | August 2013

A related concept, with the same conclusion, is the notion of externalities. Externalities arise when firms create social costs that they do not have to bear, such as pollution. Thus, society must impose taxes, regulations, and penalties so that firms “internalize” these externalities—a belief influencing many policy decisions. This perspective has also shaped the strategies of firms themselves, which have largely excluded social and environmental considerations from their economic thinking. Firms have taken the broader context in which they do business as a given and resisted regulatory standards as invariably contrary to their interests. Anything more is often seen by many as an irresponsible use of shareholders’ money.

Blurring the Profit/ Nonprofit Boundary The concept of shared value, in contrast, recognises that societal needs, not just conventional economic needs, define markets. It also recognizes that social harms or weaknesses frequently create internal costs for firms—such as wasted energy or raw materials, costly accidents, and the need for remedial training to compensate for inadequacies in education. And addressing societal harms and constraints does not necessarily raise costs for firms, because they can innovate through using new technologies, operating methods, and management approaches—and as a result, increase their productivity and expand their markets.

Creating Shared Values The corporate pandits have defined the concept of Creating Shared Values in varied forms but the most preferred definition lies in developing a system of inclusive business models. A growing number of companies known for their hard-nosed approach to business have already embarked on important efforts to create shared value by reconceiving the intersection between society and corporate performance. Yet our recognition of the transformative power of shared value is still in its genesis. Realizing it will require leaders and managers to develop new skills and knowledge—such as a far deeper appreciation of societal needs, a greater understanding of the true bases of company productivity, and the ability to collaborate across profit/nonprofit boundaries. And government must learn how to regulate in ways that enable shared value rather than work against it. Capitalism is an unparalleled vehicle for meeting human needs, improving efficiency, creating jobs, and building wealth. But a narrow conception of capitalism has prevented business from harnessing its full potential to meet society’s broader challenges.

The moment for a new conception of capitalism is now; society’s needs are large and growing, while customers, employees, and a new generation of young people are asking business to step up. The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy. It will also reshape capitalism and its relationship to society. Perhaps most important of all, learning how to create shared value is our best chance to legitimize business again.

The Evolving Corporate Behavior Corporates all over the globe are gradually evolving from the typical mindset of doing mere philanthropy on the name of CSR to the value added approach of have programmatic outlook towards the business case of CSR. This approach endeavors to create values shared by not only business and business associates but also by the society at large. Besides this, the increasing trend of Advertising CSR amongst stakeholders is a true catalyst for the evolving corporate behavior towards CSR. Now, companies do not want to show case the ‘good work they do’ as an extended responsibility towards society but understanding the stakeholder expectations CSR is now advertised as a pure case of ‘Shared Value Proposition’. The recent development at the government front has further added fuel to this trend.

The Ripple Effect towards Inclusive Growth More and more companies are now evolving from the narrow view of value creation and are taking the lead in bringing business and society back together. The recognition is there among sophisticated business and thought leaders, and promising elements of a new model are emerging. Yet we still lack an overall framework for guiding these efforts, and most companies remain stuck in a “social responsibility” mind-set in which societal issues are at the periphery, not the core. The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success and inclusive growth. Akanksha Sharma is the Manager- CSR & Sustainability at Jubilant FoodWorks Limited.

Article

If you plan to develop a purpose-driven social brand and do a lot of cause-marketing, then develop a policy which deals with many of the above issues.

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Cause-Related Marketing:

The Right Direction ? By Monaem Ben Lellahom Monaem Ben Lellahom is a pioneer and thought leader in Corporate Sustainability and Responsibility (CSR) practices in the Arab region. Monaem is co-founder and Head of Sustainability consultancy services at Sustainable Square Consultancy and Think Tank. He was the first Social Return on Investment (SROI) practitioner in the Arab world to master social impact measurement and has authored research reports to demonstrate the social value of community development work through SROI analysis. Monaem also focuses on developing sustainability strategies for organizations across various industries, conducting gap analysis and studying Socio-economic (SEIA) progress in various issues. He has extensive knowledge of Sustainable Value Chains and Product Transparency, and the linkages between Sustainability and Branding.

n their ever increasing need to differentiate themselves, many companies are turning to the use of causerelated marketing. Decades ago, if you dropped the phrase “cause-related marketing” in the meeting room, your colleagues would most likely return an empty stare.

Historically, “Marketing 1.0” was a productfocused enterprise born of the Industrial Peter Duckers Once Revolution, and “Marketing 2.0” was a cussaid, “profit is not tomer-focused effort leveraging insights the purpose of a gained from informabusiness but rather tion technology, and now with “Marketing the test of its valid3.0”, Philip Kotler came ity.” I will take that a to confirm that marlatest incarstep further: The real keting’s nation must engage indicator of measurpeople in ways that provide “solutions to ing the success of their anxieties to make the globalized world a a sales force is not better place”. It is a givmaking profit. It is en fact that consumers believe companies the test of its added have obligations bevalue and effectiveyond making money their owners. In ness to the customer. for fact, it is getting more difficult for a company to connect with customers and prosper if it does not stand for something more than its financial bottom line.

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Consumers Prefer Causes The 2013 Cone Global Cause Evaluation Survey shows that 55% of surveyed customers have boycotted a company because of irresponsible business practices. 53% would NOT invest in a company that does not actively support a good cause. When choosing between two companies with similar products that engaged in cause marketing, 70% of those surveyed cited “personal relevance of cause” as the reason they chose one company over another. On another note, 76% think it is ok for brands to support good causes and make money at the same time. According to a new research presented at CSR & Competitiveness | August 2013

the World Federation of Advertisers’ annual conference in Brussels, global marketers surveyed overwhelmingly said that CSR will be increasingly important in building brands in the future, with 88% agreeing with that statement. However, only 46% of those marketers thought that consumers share and approve their support for good causes. When in fact 60% of consumers surveyed claimed to be looking for brands with a sense of purpose. Companies are asking the following questions every day: Should we stand for a purpose or continue doing traditional marketing? How do we optimize our purpose-driven marketing investments? Can being socially responsible be used as a messaging strategy in our marketing campaigns to help increase revenue?

American Express Starts a Trend The concept of cause-related marketing was first introduced in 1983 by American Express to describe its campaign to raise money for the Statue of Liberty’s restoration. American Express donated one cent to the restoration every time someone used its charge card. As a result, the number of new cardholders grew by 45%, and card usage increased by 28%. Nowadays, there is an increasing number of companies introducing marketing activities involving corporate efforts of business and non-profit organizations for mutual benefit. The market is seeing a flooding number of new collaborations between corporates and NGOs in which their respective assets are combined to create shareholder and social value.

Businesses and Nonprofits Must Align Their Stories If you have ever purchased a product or service and felt good about it because it had a little pink ribbon or a sustainability label on it, you have likely been a consumer of a cause marketing campaign. We have totally changed the way we live our commercial lives; we now invest more of our minds, hearts and spirits. We keep searching for solutions that bring value to us and let us feel that we have a purpose in life. “Marketing 3.0 will be won by those who become purposedriven social brands” explains Philip Kotler in Marketing 3.0: From Products to Customers to the Human Spirit, and to do so, businesses and non-profits must align to bring a

cohesive brand story to life. Companies are increasingly turning to purpose-driven marketing with the hope of cultivating loyalty among their key customers. Sure, consumers are happy to help save the world and be more responsible. But they must first see the benefit to their own households. When going through the process of developing purpose-driven social brands, companies have to make sure that there is a win-win situation between customers and the charity. This is achieved when customers feel their livesare enhanced by the charity efforts and that good feeling is transferred to how they feel about the market.

Cause Marketing: The Right Direction? Despite compelling data however, lots of businesses are still indecisive on whether it is the right direction to take and whether is it the right time to start investing. “As marketers, we spend billions of dollars each year trying to understand consumers all over the world. Unfortunately, it is harder and harder” Edward Martin, Director Marketing Excellence and CSR Insights at The Hershey Company. Therefore, it is time to understand that only a minority of customers take time to answer marketing surveys and ads. However, customers are more willing to engage with companies on social causes and environmental issues. It is not a good way to get into the customers’ minds? Try it once and you will see the immediate result. Peter Ducker once said, “Profit is not the purpose of a business but rather the test of its validity.” I will take that a step further: The real indicator of measuring the success of a sales force is not making profit. It is the test of its added value and effectiveness to the customer. We need to step back from our conventional practices and take a larger view of what connects us to build deeper bases for purpose-driven engagement. However, in order for these efforts to be effective, customers must feel that your efforts are authentic and truly supporting a cause. Businesses have to be transparent about how they are distributing funds to the cause and clearly outline the win-win solution the product or the campaign is preaching for. If you plan to develop a purpose-driven social brand and do a lot of cause-marketing, then develop a policy which deals with many of the above issues.

Article

For most organisations, the cost of reporting in accordance with GRI will go up in the short term, but will decrease over the long run because the new Materiality focus will lead to more effective reporting and better return on investment for organisations who take the time to do it properly.

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GRI G4 – Is it worth it? By Dwayne Baraka Dwayne Baraka is a speaker, trainer and consultant in CSR and is expert in of corporate strategy. Mr Baraka’s background in corporate law has given him a solid understanding of the influence that corporations have on society and his experience as Director at Business in the Community means his insights are grounded in practical implementation. His consultancy, valueCSR, has a burning focus on the business case for CSR.

he G4 will be a challenge for many companies, but the challenges will bring a number of benefits: better embedded CSR, more engaging CSR reports and better returns from CSR investments. In reviewing the latest version of the Global Reporting Initiative ( GRI), three important criteria stand out as competing for the attention of CSR pundits, investors and others who care about CSR: Transparency, Comparability and Materiality.

Transparency

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Big companies have relied on GRI’s Reporting Standard to guide them when writing CSR reports. The latest version, G4, will change the reporting game and make companies more aware of the commercial benefits of CSR.

Increased transparency means greater trust from readers of CSR reports. Previous versions of the GRI has increased trust in business through clearer reporting of issues that concern many stakeholders. But transparency doesn’t always mean that the most important issues are dealt with. For many NGOs and other interested society groups, the G4 reaches a lot further into supply chains and levels of remuneration, and that seems likely to be welcomed. However, the G4 is likely to result in most companies reporting on a smaller number of issues, which may frustrate some.

Comparability Making reliable judgments on CSR information published is easier if reports are comparable. The common set of GRI metrics means that information is often directly comparable between companies. The GRI has thus far helped them by giving a relatively ubiquitous framework. The G4, in allowing companies to generally report on less metrics, will mean a decrease in comparability of CSR reports.

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Materiality Materiality is the degree to which the issues covered by a company are the most important ones. The GRI has probably muddied materiality waters until now. The G4 has significantly increased focus on materiality and especially on companies reporting how they derive their most important issues.

Transparency, Comparability, Materiality – FIGHT! Each of the three areas are inherently in conflict with each other. A focus on Materiality will decrease comparability because it will reduce the number of metrics common across all companies. It also has potential

CSR & Competitiveness | August 2013

for reduction of overall transparency and comparability, because ‘nonmaterial’ issues might not be included in a report. The SRI community is desperately trying to connect CSR to corporate performance and presumably welcome the help they will get in identifying the most important CSR issues for companies. Companies have long argued that Transparency is all well and good, but that GRI compliance causes them to waste resources on issues that didn’t really matter. Conversely, many NGOs have argued that GRI compliance doesn’t go far enough – they want more information and further into the supply chain than GRI had previously delivered. As a general rule, transparency will not be useful for materiality, but will often increase comparability. An increase in Comparability generally increases transparency, but may reduce the effectiveness of identifying the most material issues. Comparability requires an exhaustive list of metrics or clear consensus for all concerned about what the comparable issues should be. Little consensus of that type exists, although GRI and SASB are trying to achieve sector specific metrics. G4’s focus on materiality will result in longer discussion of issues that matter the most. That will use more resources, but deliver higher quality outcomes. The return on resources invested in the G4 will deliver different result to different organisations.

Simple Organisations For simple organisations, the G4 will probably result in shorter reports with a clearer focus. CSR Reports will reach deeper into the most important issues through the greater focus on impact and consequent reach into supply chains.

Complex Organisations For complex organisations, we will probably see longer reports, because they will need to discuss materiality on a strategic-unit basis, which may mean different issues need to be addressed based on variation in business model, customer base and operational strategy. For some organisations, they will need to have multiple discussions of the same issue because of the different operational contexts.

Controversial Organisations For organisations which have controversial or significantly detrimental impacts on society, they will prob-

ably suffer the worst of both worlds; having to fully disclose all GRI metrics (due to expectations of certain stakeholders) and identify their most material impacts. Those organisations are likely to bemoan the GRI changes because they will need to greatly increase the resources needed to meet their social expectations and conform to the highest GRI and disclosure standards.

Conclusions The focus on Materiality is a very good way to make the GRI relevant for the mid-term. It gives organisations the chance and an excuse to revise their views on CSR and to work out more specifically what the arguments are for and against particular CSR measures. It is also likely to result in more focus on performance targets and greater measurability. Many organisations have underachieved on those and I think the G4 will be a much needed shot in the arm. It also increases the transparency of the most material issues, which has potential to bring the SRI and broader investment communities closer to business. It will also mean that more companies will talk about the financial return of CSR initiatives, just like they do in relation to other parts of their business. As a result, CSR programmes will be better embedded and drive a new round of value creation from CSR- thinking. For most organisations, the cost of reporting in accordance with GRI will go up in the short term, but will decrease over the long run because the new Materiality focus will lead to more effective reporting and better return on investment for organisations who take the time to do it properly. For organisations who try to fake the Materiality stuff (and there will be more than a few of those), they are probably in for a long-term increase in costs and run the risk of being targeted for lack of transparency and honesty and also of disenfranchising investors in the medium term. In summary, the G4 will be easy for companies that have taken integrating CSR into their business seriously (or who will do so now) but will increase overall costs for not much benefit for companies that don’t. Dwayne Baraka blogs at www.dwaynebaraka.com/blog, where this article was first published. E-mail - dwayne.baraka@yahoo.co.uk

Article

The government responded with pleas to companies to maintain Bangladesh as their playground even as it did nothing to address factory safety or land supply for the garment sector in the 2013-14 budget.

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Bangladesh – The Difference Between Policy and Action By Radhika Mehrotra Radhika Mehrotra : As an Analyst- Stakeholder Engagement at Solaron Sustainability Services Pvt. Ltd. since October 2012, Radhika Mehrotra is responsible for incorporating Solaron’s proprietary ‘stakeholder engagement’ component of company research and rating services in Emerging Markets. A post graduate from the esteemed Tata Institute of Social Sciences (TISS), Mumbai, India, Radhika started out as a Research Intern at ATLMRI Research and Policy Advocacy Programme, Mumbai. She has also worked as a Product Head at the Centre for Monitoring Indian Economy (CMIE), Mumbai. She was instrumental in spearheading research and analysis for two of CMIE’s flagship databases.

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On 24 April 2013, an eight-story commercial building, Rana Plaza, collapsed in Savar, a sub-district in the Greater Dhaka Area, the capital of Bangladesh. The search for the dead ended on 13 May with the death toll of 1,129. Approximately 2,500 injured people were rescued from the building alive. Bangladesh is the second largest garment exporter of the world after China, controlling about 20 per cent of the total US apparel import with a dramatic share increase in the recent years.

here has been enough and more said on the Rana Plaza collapse and the absence of a regulatory framework, poor corporate monitoring of large supply chains, cheap labor and the ensuing price wars between countries, contractors and laborers; and of course consumer activism. While all of these are valid causal factors, none are revelations. What stands apart this time, is that while accountability was accepted rather grudgingly by a majority of the global retailers found churning out the latest trends from the debris of the Rana Plaza, most wax eloquent about their sustainable endeavors in consistent annual reports. The natural consequence is a compromise on worker safety. Data provided by the International Labor Rights Forum confirms this with 1,800 worker fatalities recorded since 2005, all attributed to factory collapses and fires. The culmination of this deep negligence was the Rana Plaza collapse in April 2013 where obvious structural faults were ignored so that daily production targets were uncompromised. The government responded with pleas to companies to maintain Bangladesh as their playground even as it did nothing to address factory safety or land supply for the garment sector in the 201314 budget. Meanwhile, the Bangladesh Garment Manufacturers & Exporters Association has stated over other things a rise in cost of production (mainly due to exchange rate fluctuations) that has marginalized incomes and logically led to a fall in compliance related spending. Companies like Disney, Levi Strauss and Target are seeking to withdraw licenses while some are making amends. PVH Corp and German retailer Tchibo have signed a binding agreement to ban sub-contracting at high risk facilities, finance renovations & fire safety training and make audit results available to the public. The much delayed Accord on Fire & Building safety has been signed by 40 major retailers and may finally see the light of day. Clearly, the onus of dignity & safety of Bangladeshi labor rests on the responsible business practices of companies.

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An analysis of H&M and Walmart, the largest buyers of garments manufactured in Bangladesh, reveals gaps in implementation and the liberty to default on commitments in a weak regulatory environment. H&M–With a presence in 43 countries, H&M has multiple sustainCSR & Competitiveness | August 2013

ability commitments including organic raw materials, stringent targets on water consumption and model factories in Bangladesh. For its 785 suppliers, H&M monitors factory compliance, provides training for suppliers & their workers and promotes social dialogue through multiple associations such as Better Work, the Fair Labor Association and the Fair Wage Network. The company acknowledges second and third tier sub-contracting and states that its 148 ‘strategic partners’ who account for 53% of production, can own and subcontract work to multiple factories. The company has successfully conducted 2,646 audits till date for all its suppliers. Additionally, with a focus on Bangladesh, the company has provided more than 100,000 workers and middle managers with training in fire and safety. Supplier factories are required to conduct electrical assessment as well, with costs shared by the company. Overall, the company states a collaborative and exhaustive system to ensure sustainability in its supply chain. However, the scope of these exercises is limited to first-tier suppliers. Only 58 audits covered second-tier suppliers. Similarly, only 30 of 747 head audits and 28 of 1,779 follow up audits checked on second-tier suppliers. In Bangladesh, a majority of the 5,400 factories are second and third tier suppliers. Implementation is negated by ground experiences as well. In March 2010, structural faults led to a fire and 21 fatalities at the Garib & Garib factory. The company had reported compliance with its ‘Code of Conduct’ and health & safety audits conducted five months prior concluded no serious drawbacks. Similar discrepancies in audit results and actualities emerged recently. A factory owner in Ashulia who supplies exclusively to H&M stressed on complete compliance with fire and safety requirements, even as all fire exits were bolted shut. In May 2013, the company reconfirmed a satisfactory health & safety audit for the unit. Unfortunately for H&M, its operations in Cambodia followed suit. A factory collapse in May had the company absolve itself of responsibility citing unapproved sub-supplier linkages; surprising, since Cambodian workers have been striking since 2012 against inadequate wages and poor conditions of work.

Wal-Mart- As the common link between the Tazreen Factory fire in November 2012 and the Rana Plaza collapse in April 2013, Walmart can no longer avoid addressing its health & safety norms. In both cases, the company was found to be operating from grossly unsafe factories. In both cases, the company has distanced itself from suppliers, citing the much abused complex subcontracting web. It continues to make its supplier policy more stringent – with limited action on its part. Walmart’s response to the two accidents directs accountability to the suppliers. From three chances earlier, suppliers will now face a ‘Zero Tolerance’ policy regarding undisclosed subcontracting. Statements from Walmart’s management circulating in media sources make the company sound like a victim of shoddy suppliers as opposed to an active stakeholder. Rajan Kamalanathan, Walmart’s vice president of ethical sourcing stated “We want the right accountability and ownership to be in the hands of the suppliers” and that “We are placing our orders in good faith.” The company on its part failed to sign up to the Accord on Fire and Building Safety. A shareholder proposal by a former Bangladeshi factory worker to comply with the Accord and ensure more transparent and timely action for its supply chain was voted down by the Board in June 2013. Serious gaps mark the company’s performance as well. The Tazreen Factory was audited in May 2011 with ‘higher risk violations’ even as media reports point out that five licensers continued to source work to Tazreen in 2012. The Ethical Sourcing Program document dated January 2012 has detailed guidelines that enable factories to comply with environmental and social sourcing. Among other things, it directs suppliers to disclose all factories and sub-contractors involved in the manufacturing process. Walmart then determines the scope and nature of audits. Costs are to be borne by suppliers, placing the financial and execution liability of sustainability on its suppliers. Further, Walmart’s disclosure processes are carried out on-line, guaranteeing global access but not guaranteeing coverage in poverty-ridden Bangladesh with internet access limited to only 3.5% of the population.

Interview

The biggest drawback of our sector is the lack of regulation and organization. We work in an imperfect environment. Though the things are changing now but it will take some more time for them to be in perfect state.

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Education is the Key to Lead a Dignified Life By Santanu Mishra, Co-Founder & Executive Trustee, Smile Foundation In an exclusive interview with CSR & COMPETITIVENESS , Santanu Mishra, Co-Founder Executive Trustee, Smile Foundation shared about his work and passion towards Social Venture Philanthropy (SVP) model.

Smile Foundation works on the subjects of education, healthcare, livelihood and women empowerment through 158 projects operational across 25 states in India. Through the SVP model, Smile Foundation makes an effort to broad base investment in order to maximize its reach and optimize returns by approaching and strengthening a large number of like-minded individuals and organizations globally.

The realization of a group of young corporate professionals, that it was their Social Responsibility to give back to the society, laid the foundation of Smile. In the early 90’s when liberalization happened, we were the first ones to get the fruit of success beyond expectation. My needs were limited. The very thought of doing something beyond just professional gain haunted me always. I brought in a group of likeminded friends to start discussing what and how to do something which can impact maximum lives with our limited understanding and resources.

What are the various social projects initiated by Smile Foundation in India? Since 2002 Smile Foundation has been working on the subjects of education for children, livelihood for the youth, healthcare in rural villages and urban slums, women empowerment and sensitization of the privileged masses through programmes- Mission Education- the education programme for underprivileged children, Smile Twin e-Learning Programme (STeP) – the livelihood programme for underprivileged youth, SWABHIMAN- a Programme on girl child & women empowerment and Smile on Wheels (SoW) – innovative mobile hospital programme.

How the project is serving the community? Smile Foundation believes that education is the key to lead a dignified life. It enables an individual to become conscious about his rights, enables him to make informed choices. When we talk about empowerment it starts with education. In our child education programme ‘Mission Education’ we focus on bringing the children to the remedial and bridge course centres, provide them an enjoyable and effective learning, avail them with basic healthcare and also nutrition. Most of the children come from parents who have never been to school. Hence the basic awareness about the need to go to school is missing. Secondly, they cannot take the first step towards school. So we need to sensitize and mobilize the whole communities for sending their non-school going children to our centres. Then comes making the children continue studying in the centres, learn effectively and then mainstreaming them into government and public schools. Today many of our children are studying in reputed schools across India.

What do you think of India govt emphasis on child education and rights? Government no doubt is doing its best but everything cannot be left on laws and government alone. India is a big country with different demographics. Government can make laws and bring acts like RTE but taking them to people cannot be done by government alone.

CSR & Competitiveness | August 2013

Right To Education (RTE) has provisions which can help in getting more and more children to school. But there is a major gap of awareness and enactment in terms of RTE. A majority of underprivileged population does not even know that there is something like RTE for them. For this civil society needs to be active to spread the reach and awareness of acts like RTE. The privileged section of our society should be proactive everything cannot be left on law or government alone.

The Smile Foundation calls itself a ‘Social Venture Philanthropist’ (SVP). Could you please elaborate a bit on that? Social Venture philanthropy is one of the working model of Smile Foundation. It is based on the model of venture capital. Under the Social Venture Philanthropy (SVP) model, Smile Foundation identifies handholds and builds capacities of genuine grassroots NGOs to achieve accountability, sustainability, scalability, leadership. Through the SVP model, Smile Foundation makes an effort to broad base investment in order to maximize its reach and optimize returns by approaching and strengthening a large number of like-minded individuals and organizations globally.

What is the motivation behind producing child feature film “I am Kalam”. Kindly Share the achievement of the film. ‘I am Kalam’, was an astounding success with the film travelling to over 30 countries and winning 22 national and international awards. With “I am Kalam” Smile Foundation advocated the cause of Sending Every Child to School. The story of a child daring to dream and surpassing the boundaries of reality won not just awards but accolades from the general audience across the world. With ‘I am Kalam’ we had stepped into the film genre. It sensitizes the civil society towards the plight of poor and their importance in helping them to lead a better life.

What are your future plans for the year 2013? My future vision is to bring good and sustainable changes in lives of as many people as possible. Smile Foundation would like to develop and promote good governance in the sector more intensely in near future. Application of technology in achieving efficiency and cutting cost would another area we are already working and it would be developed further. Thirdly, sharing the learning and knowledge in real time with similar development organisations both in India and in similar countries internationally would be something we would like to pursue further. Making the civil society members as partners in change in every developmental initiative locally is another future objective.

What kind of challenges you are facing to implement to social projects?

In development sector, input is not always equal to the output. There are so many subjective processes and outputs which one needs to understand and appreciate. The biggest drawback of our sector is the lack of regulation and organization. We work in an imperfect environment. Though the things are changing now but it will take some more time for them to be in perfect state. In our country giving culture is not so inclined towards development work. So aligning people with resources and the needs have always been a challenge since the inception. This sector had been struggling with trust deficiency so changing the perception of people is another major task which we face.

How do you measure Social Impact of the projects implemented? Smile Foundation always believes in and follows good governance. We monitor our work both internally and externally. Internally we have an in bill process and a review is done on monthly, quarterly and annually basis. Smile also engages external evaluators to understand, evaluate our programmes, methodology and the impact of our work. We not only get the evaluation done for our work internally and externally but also do course corrections and improvements in order to reach out to as many people as possible in a better way.

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Social Venture philanthropy is one of the working model of Smile Foundation. It is based on the model of venture capital. Under the Social Venture Philanthropy (SVP) model, Smile Foundation identifies handholds and builds capacities of genuine grassroots NGOs to achieve accountability, sustainability, scalability, leadership.

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Brief us about the historical background of Smile Foundation and its mission.

Article

The potential for big businesses to engage in the social delivery sector via social enterprises opens a huge opportunity for such businesses.

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Innovation as Corporate Social Responsibility By Shailaja D Sharma

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The focus on innovation – via social enterprise and via technology incubation – in the Companies Bill is not a chance event. If businesses take this opportunity to switch their CSR focus from transactional and PR-led activities to strategic, risk-alleviating and option-generating activities, this would lead to the flow of a substantial and muchneeded fund into areas that will increasingly be critical for business sustainability.

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SR or Corporate Social Responsibility has been practised for many reasons and does not necessarily provide benefits to society, or in fact even to the company. Money spent on various causes may well have been deemed to have ‘gone down the drain’ – the actions funded often having but a transient presence in the targeted audiences’ consciousness and in the world. Internationally, the debate has moved from whether companies should undertake CSR to what they should do by way of addressing the need for business sustainability. In this context, CSR is thus perceived more as an act of self-preservation than of charity, and is focused on regulatory compliance – on environmental compliance, occupational health and safety standards, business ethics and corporate governance – on the one hand, and active risk management via stakeholder engagement on the other. In India, government has made it clear that it expects that all large companies will undertake activities that can be classified as CSR. In other words, government is making it mandatory for companies to pick up a part of the developmental burden, especially while businesses experience growth and economic expansion. While this government fiat has mixed implications, the main negative implication being the undermining of the voluntary, unilateral and business-determined character of CSR, there are also some interesting and positive fall-outs. The main positive result is that companies are being gently nudged and prodded to take a serious look at (among others) innovation – as a business responsibility. Formulating CSR objectives in line with national development goals helps channelize otherwise sub-optimal resource-flows into defined domains of national importance. Government has included traditional activities such as health and education in the ambit of CSR, allowing companies to continue to perform charitable works in these areas, and claim the benefits of being CSR-compliant. However, by inCSR & Competitiveness | August 2013

The potential for big businesses to engage in the social delivery sector via social enterprises opens a huge opportunity for such businesses. It will then be necessary for companies to identify the right sort of partnerships and platforms, whereby the opportunity can be best exploited in the interests of sustainable development. cluding items such as social enterprise and technology incubation in the ambit of CSR, government has definitely opened an important new channel to tap these funds. Government is urging lethargic businesses to focus their attention on these two areas – which can be developed only by business enterprises. By definition, social enterprises target important developmental objectives, but carry high risks as businesses, because they serve people with lower paying capacity and are often based on untested business models. Often they are experimental in nature, small in scale and undertaken by individuals with an idea but little else. In India, social enterprises have taken up all kinds of causes, from garbage segregation and recycling, to health services and skill-building, IT services and renewable energy. Social enterprises routinely describe shortages of operating cash and distributor and warehousing networks, lack of brand-image, inability to raise loans for their customers, and lack of business and marketing know-how as inhibitors of growth. Their last-mile focus is at odds with their scale-up aspirations. These are areas where association and partnership with large companies can be beneficial. Large businesses on the other hand increasingly recognise the rural sector and social enterprise as a source of sustainable businesses and business models. They would like to be involved, but do not wish to invest heavily – both in terms of resources and shareholder attention. Incidentally, these concerns are also true of other types of CSR activities, except those which directly address the firm’s business risks. Allow-

ing companies to fulfil their CSR obligations by investing and supporting these enterprises offers a tremendous opportunity for expansion of these social enterprises and their impact and for firms to legitimately direct some of their time and resources towards this important sector. The potential for big businesses to engage in the social delivery sector via social enterprises opens a huge opportunity for such businesses. It will then be necessary for companies to identify the right sort of partnerships and platforms, whereby the opportunity can be best exploited in the interests of sustainable development. Thus the opportunity comes with a suitable challenge. Business organisations shaping the sustainability agenda can play an important role in this regard. Government has also indicated that investments in recognised technology incubators will be considered as execution of CSR. Engagement of the business sector in technology development has lagged in India, making us severely dependent on ideas and technologies and indeed products fashioned abroad. The underlying assumptions about the availability of energy and resources including materials, land, water and labour, and about the end-uses would be different when a product is conceptualised and built in industrialised societies, versus if it were to be conceptualised and developed from the start in India. Already certain large Indian companies are staking their claim in the innovation space – but it will be when there is fierce competition in this space -- and when that space becomes truly inclusive – that we will see real innovation. It is there-

fore heartening that the Companies Bill encourages companies to channel their CSR spends into this domain, rather than pour it down the drain. A sustainability challenge that cannot be met purely by market forces with or without regulatory support is the cleantech sector, as also BOP (bottomof-pyramid) energy services. Another area that could do with infusion of additional funds and corporate attention is that of indigenous products and services –e.g. indigenous architecture, using locally available materials and resources. Innovation is multiplied by inclusion. Thus the provision of suitable rural/urban youth exchange programmes and apprenticeships – is an area of great potential. Experimenting with new developmental concepts such as community-based sustainability standards – would be another interesting area for corporates who wish to have a window on the future. Channeling CSR funds towards a set of such activities would be to truly fulfill the national and developmental vision expressed in the provisions of the Companies Bill, while steering businesses into strategic and forward looking pathways. In sum, everywhere in the globe, CSR or more generally business responsibility has been recognised as being closely linked to addressing social needs sustain ably. Without innovation, businesses cannot hope to be sustainable. The focus on innovation – via social enterprise and via technology incubation – in the Companies Bill is not a chance event. If businesses take this opportunity to switch their CSR focus from transactional and PR-led activities to strategic, risk-alleviating and option-generating activities, this would lead to the flow of a substantial and much-needed fund into areas that will increasingly be critical for business sustainability. Shailaja D Sharma is a sustainability specialist and an independent business and development consultant.

Social Innovation

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Mahindru Foundation – Lighting up Lives of Visually Impaired With the vision of working towards total eradication of corneal blindness from the country, the Gurgaon-based NGO – Y.P. Mahindru Niramaya Eye Bank, under Ashok Mahindru, has crossed the milestone of 1000 eye donations in 2012.

“We Plan to Open 50 Eye Banks all over India to ensure that corneal blindness is completely wiped out from India.” Ashok Mahindru Chairman, Mahindru Foundation

journey that began almost a decade back has lit up lives of thousands suffering from corneal blindness. In the year 2005, Y.P. Mahindru Niramaya Eye Bank and Cornea Transplant unit was set up at the Niramaya Charitable Trust, an NGO founded and run by a team of professionals. In 2004, Late Shri Yashpal Mahindru along with his son Ashok Mahindru guided a group of motivated professionals with experience in health and eye care to set up North India’s first and largest private Eye bank with a mission to provide ‘Quality Health Care to the Rural and Urban Poor”. It is the only government approved Eye Bank in South Haryana which is registered with Eye Bank Association of India. It follows standard world class procedures and is equipped with latest technology.

these corneas have been transplanted by AIIMS, Delhi and PGIMS, Rohtak (Haryana) through an ongoing collaboration.

Y.P.Mahindru Niramaya Eye Bank Chairman, Ashok Mahindru, says, “India is home to world’s largest visually impaired population. Around 1,20,00,000 people are suffering from some kind of eye problem. 80 % of them are suffering from cataract or refractive errors which are curable through a normal medical process.” “Remaining 2.1 million people are suffering from acute corneal blindness that can only be eradicated through transplantation of corneas from eye donor, which must be carried out within about 6 hours before one breaths his/her last,” added Mahindru.

On the occasion of their 1000th successful eye donation program, Ashok Mahindru said, “The journey has not stopped here, rather it has just begun and I will urge my fellow citizens to enlighten someone’s world by donating your eyes.”

Underlining the problem with regards to lack of eye donations, Ashok Mahindru said, average number of eye donations in India languishes at about 38,600 per annum implying that even an impossible wait of 112 years will not help most. On the other hand approximately 9 million people die every year and one pair of eyes from a deceased person can be implanted on two blind persons implying a potential of 1 Crore 80 Lakh corneal transplants.”

ized free eye surgery/care camps for the under privileged. Ashok Mahindru has been taking forward his father’s vision by expanding the footprint through Run for Vision Foundation.

Founder of the Eye Bank, Late Shri Y.P.Mahindru, father of Ashok Mahindru, was a visionary philanthropist who believed that one gets deep inner satisfaction and happiness when one gets physically involved in philanthropy. Late Shri Mahindru had worked for health care for over 6 decades and had regularly organ-

Ashok Mahindru leads these initiatives under the Mahindru Foundation (earlier known as Mahindru Charitable Trust) and provides financial support to various NGOs in eye care. The Trust is dedicated to enlarge the footprint of awareness campaigns for eye donation. The Foundation has been laid and now the plan is to benefit the needy in the society. The eye bank is planning to open 50 eye banks across the country and provide free treatment for corneal blindness to people from economically weaker sections. Y.P. Mahindru Niramaya Eye Bank provides Cornea Transplants free of cost. Niramaya Charitable Trust runs 10 rural eye care centres to provide primary eye care. The transplants are carried out at the fully-equipped and reputed Ahooja Eye Hospital, Gurgaon. Mahindru Foundation has taken to wide awareness campaigns on eye donations, through carnivals, marathons, seminars, painting competitions, walk for vision event, etc. The foundation has dedicated its services to eradicate corneal blindness from the country and aims at creating: modern facilities using best technology and equipment, extensive awareness about merits of eye donations and providing high quality medicare free of cost for the benefits of poor and under privileged. So far the foundation has received 7000 to 8000 eye donation pledges, and conducted more than 1200 corneal Retrieval and more than 400 cornea transplantations. The foundation has adopted professional strategies to achieve its objectives. The strategies include creating primary eye care and eye donation facilities jointly with like-minded NGOs at all cities with 0.5 million population, and setting up one integrated hub having 9-12 remote centres and the central unit with cornea processing facility attached to a full fledged eye hospital. “We plan to open 50 eye banks all over India to ensure that corneal blindness is

CSR & Competitiveness | August 2013

completely wiped out from India,” Ashok Mahindru, who heads Y P Mahindru Eye Bank, said.

The major cause for this unfortunate situation is lack of awareness among our countrymen about eye donations, its need and life changing impact on entire families of cornea recipients who are able to see this beautiful world again. Therefore, there is an urgent need to raise awareness about eye donation. With the vision of working towards total eradication of corneal blindness from the country, the Gurgaon-based NGO – Y.P. Mahindru Niramaya Eye Bank, under Ashok Mahindru, has crossed the milestone of 1000 eye donations in 2012. Ashok Mahindru, who has carried forward his father’s dream initiative Y.P. Mahindru Niramaya Eye Bank. Many of

With a vision to reach out to many more and bring light in their life and family, Ashok Mahindru through his organization is relentlessly working hard to set up many more such eye banks. Infact Ashok Mahindru is actively involved in other philanthropic initiatives also. Ashok Mahindru’s father Late Shri Y.P Mahindru was founder member of a school in 1959, named Arya Kanya Vidyalaya in Gurgaon. The school presently has 825 students most of them are getting free education, books & uniform as per the guidance of Ashok Mahindru. Arya Veer Netra Chikitsalaya, committed to eye care, was started as a weekly dispensary and grew to become a daily one. Under the leadership of Ashok Mahindru, it has now become a full-fledged 12-bed hospital with an operation theatre. Nine doctors and other para-medical staff perform almost 1000 cataract and other surgeries and 3000 OPDs in a year here.

Case Study

The company has a well defined policy and a CSR committee consisting of senior members of the management to guide the CSR activities of the Group.

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Skilling Ethnic Communities of Rubber Tappers of Tripura Rubber Tapping Training Programme is running its third year and has Trained 315 Rubber Tappers. DS Group actively employs locals from the region across different levels and aims to generate employment through various secondary & tertiary operations. DS Group has an ongoing programme to train the unskilled or semi skilled rubber tappers of Tripura. The basic objective of this initiative is to train the tribals and the unskilled tappers in scientific latex extraction to increase the rubber yield and minimize the damage to the rubber plant by teaching them precision in tapping. The curriculum also highlights the method of tapping rubber in monsoon season and protection of plants from fungal infections during rains by conducting theoretical and practical training programs with the help of the Rubber Board, TFDPC and TRTC.

total of 13 training programme have been organised till date, in which, 315 unskilled and semi skilled rubber tappers were trained. Corporate Social Responsibility forms an integral aspect of DS Group’s business objectives. Taking this philosophy forward, the company has been executing a wide range of CSR programs on education, health, drinking water, empowerment and disaster relief. The Company believes that economic empowerment of individuals transforms them into powerful agents of social change. DS Group has set up an ultra modern Heat Resistant Rubber Thread manufacturing plant in Agartala. This state-of-the-art manufacturing facility has an installed capacity of 5000MT per annum and has earned the status of a Mega Project from the state government. The opening of this plant, has given an impetus to the socio economic growth of the region

and a livelihood opportunity to more than 200 tribal families, by buying the latex they tap. The Company has long term programmes running in Tripura to support the local communities through initiatives like school kits distribution and free DS Mobile Clinics. The company has also started a program on empowerment to train the unskilled and semiskilled rubber tappers in scientific way of rubber tapping. This will increase the latex collection and the life of the rubber plants, which, in turn will contribute to high yields, thereby improving the lives of the tribal farmers. The climate condition of Tripura is very favorable for growing rubber. Thousands of marginal / small farmers, who have 1-5 acres of tilla (undulating) land, have been planting rubber for the last few decades. As a result large quantity of rubber is being produced every year and recently the state has been declared as the

second largest rubber growing state in India, next to Kerala. It is a cash crop, is a profitable cultivation and gradually has become popular amongs the farmers. It was however observed, that in Tripura, tapping decreases significantly during monsoon as the tappers are not aware of tapping techniques in rains. All this leads to less productivity and consequently less income for the tappers. Tapping is a skilled job and the tapper should have sufficient technical knowledge about the science involved in the process, to do the job properly. But due to lack of proper scientific knowledge, maximum plants do not give adequate latex and gets damaged at a very young age. Thus, DS Group decided to start a unique Training program for Rubber Tappers.

Objectives

Background of Participants

The objectives of the programme are:

The training Programmes were organised for the existing rubber tappers to improve their skiils. A total of 315 trainees have been trained in the 13 training programs. Details of participants given below:

•

To provide training to unskilled or semi skilled rubber tappers through well designed module

•

To improve the socio economic status of rubber tappers from backward communities

•

To increase the production of natural rubber (latex) through scientific rubber tapping in the state

Locations The training programmes were organised for the existing communities involved in rubber tapping or related activities. Following locations were covered in the first phase: Location

From

Bhati Fatik Charra, Mohanpur

Nov 19, 2011

Dec 17, 2011

Pepireakhola, Rajnagar Block, Belonia

Dec 19, 2011

Jan 12, 2012

Tarapur, Hezamara

Feb 12, 2012

March 12, 2012

Poangbari , Melaghar

March 18, 2012

March 31, 2012

Harendra Nagar, Mohanpur

April 18, 2012

April 30, 2012

From

Sabar Colony Para of Bagafa, South Tripura

July 22, 2012

August 10, 2012

Haripur, Motai GP, Hrishamuk

Aug 22, 2012

Sept 10, 2012

Mujaffar Para, North Bharat Chandra Nagar, Ra- Sept 14, 2012 jnagar

Oct 5, 2012

Owangchara A.W.C Rajnagar

Nov 3, 2102

Nov 25, 2012

Dhuptali Colony, Kakrabon, Gomati

Dec 16, 2012

Jan 4, 2013

Devipur A.W.C, Hrishyamukh, South Tripura

Jan 21, 2013

Febr 9, 2013

CSR & Competitiveness | August 2013

Total

20 or less than 20

18.73

Between 21 to 30

154

48.88

More than 30

102

32.38

Total

315

100

Mostly participants are young; the average age is 27.83 years. Out of total participants, almost 70% were below 30 years and many are from tribal and backward classes. We ensure that at least 30% of the participants are Women.

Training Duration and content As per the Rubber Board Guidelines, 70 to 75 hours are required to complete the training on scientific rubber tapping. The following aspects were covered in the training programs: • Importance of training for scientific rubber tapping • Identification of plants for tapping • Introduction of tools & equipments for tapping

In Second phase below mentioned locations has been covered. Location

Age Group (in years)

• Collection of latex and further preservation • Tapping management during the Monsoon period and Injured plant protection from several fungal diseases • Visit to rubber processing unit. • Personality development

Impact of First Phase Total 125 unskilled and semi skilled rubber tappers have been trained in first phase of the program.

Case Study www.csrcompetitiveness.com

An impact assessment was conducted to understand the outcome of the first phase of the program. A total of 62 participants were contacted out of the 125 trainees. The responses of the participants given below: Occupation before the Training Program Occupation

Before Training

Labour related to rubber tapping

Farmer

Rubber Tapping

Home maker

Rubber Nursery

Unemployed

Total

62 Before attending the training 33 (53.2%) participants were garden labourers who used to support tapping activities only and 22.6% participants were involved in rubber tapping as primary occupation. After the training programme all the participants are working as rubber tappers. Of the total par-

‘‘

“Rubber Tappers in the rural Northeast area are untrained as far as rubber tapping is concerned. Moreover, the plants are affected with diseases and the lifespan of the rubber plants were found declining. Monsoon is the ideal for taping rubber but majority of them failed to tap it because that had no training to do so. This training programme covers all aspects of scientific Rubber tapping and also teaches them a method to tap Rubber in monsoons. The socio economic conditions of the tappers has improved considerably as even the garden owners now prefer trained tappers who keep the trees safe , get maximum produce and can tap rubber round the year.

‘‘

Bhavna Sood, Senior Vice President Corporate Communications, PR and CSR, DS Group

CSR & Competitiveness | August 2013

Skilling Ethnic communities of Rubber Tappers of Tripura

ticipants, 88.7% of them are full time tappers (primary occupation is rubber tapping). Rest of the participants are also engaged in other aspects of rubber tapping business like managing nursery and latex marketing. The current graph shows the income of the participants. Before the training, the monthly income of the 59.7% participants were below Rupees 3000/- where as 9.7% participants were unemployed or involved in householdwork. After the training program, the monthly income of 70.9% participants has become more than Rs. 4500 in a month while 21% participants are able to earn between Rs. 3000-4500 per month (part time engagement).

Present Status The company is continuing providing training program to the semi skilled and unskilled rubber tappers. The third phase of the program started in June 2013. Below mentioned locations have been covered till date: Location

From

Gamaibari, Kashia Mongal, Khuwai Tripura

June 18, 2013

July 13, 2013

Devipur A.W.C ,Hrishyamukh R.D. Block

July 18, 2013

August 14,2013

Further, the following locations will be covered in the current phase. S. No.

Location

Block

District

Laxmibil

Bisalghar

Sipahijala

Niharnagar

Rajnagar

South Tripura

Sarasima

Hrishymukh

South Tripura

Mirza

Kakraban

Gumati

DS Group Dharampal Satyapal Group (DS Group) is a rapidly growing multi-diversified conglomerate, with a turnover of more than Rs 3300 crores in the fiscal ending 2013. The Group has strong presence in F&B, Hospitality, Mouth Fresheners, Tobacco, Packaging, Agro forestry, Rubber Thread and Infrastructure. The most recent forays have been the Group’s entry into the Dairy, Confectionary and Powdered Beverages businesses. DS Group is committed towards premium quality products & credited with several innovations over last eight decades. Catch Spices, Catch Spring water, Catch flavoured water, Chingles-the mini chewing gums, Piyoz, Yomil- the one minute shake, Dairymax, Meetha Mazaa, Tulsi, Pass Pass, Rajnigandha, Tansen, Tulsi Saada, The Manu Maharani and Unitex are some of the leading brands the Group proudly shelters today. DS Group constantly nurtures its responsibility as a committed corporate citizen by regarding Corporate Social Responsibility (CSR) as an integral part of its business objectives. The company has a well defined policy and a CSR committee consisting of senior members of the management to guide the CSR activities of the Group. Wide range of CSR initiatives ranging from education to health to safe drinking water and making tribal and ethnic communities self reliant are being implemented on ground, all over the country. The Group works strongly on the principles of sustainability, dedication, resourcefulness and commitment.

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Earthquake, landslides, cloud-burst, flash-floods are not new to the people of Uttarakhand, but 16th June 2013, came as horror day for them, when thousands of people lost their lives in this calamity. It appeared as if Lord Shiva decided to intervene about the wrong doings taking place in his own land.

12 Years of Uttarakhand Formation and 66 Days of Uttarakhand Catastrophe By Anil Jaggi

We need to make green GDP, Sustainable and Inclusive Development as our priority. We need to design our vision documents considering these fragile issues. At the cost of safe and green earth, no development is desirable and justified.

‘‘

Earthquake, landslides, cloud-burst, flash-floods are not new to the people of Uttarakhand, but June16, 2013, came as horror day for them, when thousands of people lost their lives in this calamity. It appeared as if Lord Shiva decided to intervene about the wrong doings taking place in his own land. Many families have lost their shelters and many villagers have lost the bread earners of their family.

Ignoring the basics of sustainable, safe and green development, the policy makers were happily giving very rosy picture of development. Citizens could not understand that this all was fake development, while it is disastrous route for its habitats, biodiversity. They had aspired, fought and scarified their lives to get separate developed Himalayan state while protecting the nature’s blessings. Earthquake, landslides, cloud-burst, flash-floods are not new to the people of Uttarakhand, but 16th June 2013, came as horror day for them, when thousands of people lost their lives in this calamity. It appeared as if Lord Shiva decided to intervene about the wrong doings taking place in his own land. Many families have lost their shelters and many villagers have lost the bread earners of their family. Thanks to Indian Army, Indian Air Force, other paramilitary forces, local NGOs, CSOs and many more unsung heroes who helped 100,000 plus people get evacuated from there within few days. According to state government, 5748 people are still missing and more than 2500 mules were washed away. Many small villages/clusters are shaken badly and are not safe for further habitation. There is major loss of human life, liveCSR & Competitiveness | August 2013

‘‘

he memories are still fresh in my mind and I still remember the call from a friend in New York, informing me about the formation of new state “Uttarakhand”. It was a moment of great happiness and fulfilment, not only for myself but the whole Uttarakhandi community across the world. Every non resident Uttarakhandi was excited and wanted to contribute towards the progress, prosperity and inclusive growth of the state. But gradually they realised that political leadership and bureaucracy are not concerned for equitable development of the state. Even they seemed ready to sell green cover of the state (65 % of total land area), natural resources (forest, rivers, minerals etc.) to become wealthy and powerful overnight. Ruling parties (BJP & Congress) did not take long in selling the thousands of water streams coming down from hills to greedy power sector companies. It all happened despite the regular protest from environmentalists like Sunder Lal Bahuguna, Chandi Prasad Bhatt, Prof. Agarwal and seers from all over India.

stock, agriculture, business activities and major loss of infrastructure in terms of road, bridges, telecom etc. Interestingly, metrological department gave alerts in advance to state government about heavy rains and possible cloud burst. But as usual, the government officials did not give any quick response to these alerts. The government machinery miserably failed in taking the preventive steps to reduce the impact of the natural calamity. This led to a blame game between government and metrological department for the loss of thousands of lives. At the beginning of rescue operation, government did not have any idea about the number of people stranded there. No database of the residents, tourists and vehicles was available with the authorities. Coverage by the media helped government to get the understanding of the severity of the catastrophe. Help started pouring in from all over India for rescue and relief work. Our team (from SFID-Society For Inclusive Development) jumped into it by extending help to the agencies and groups working in this mission. Inspite of meteorological department warnings of heavy rains in the coming days, we finally moved to Kedar Valley in the first week of July. Loaded with emergency medicines, ration etc. we left for Kedar Valley and reached Guptkashi, passing through broken roads & damaged bridges witnessing landslide on the way. Next day team SFID visited many severely affected villages. We kept on changing vehicles due to landslides/ road blocks and even trekked down many villages to meet the victims. We realised that this disaster has not hit at one level, but it is a multi level disaster. Of course it is nature’s fury added with ineffective governance (at preparedness & response level), lack of vision and directions. We cannot escape from our own responsibilities, poor planning, insensitive approach towards mother earth and ever growing greed of human being, to make more & quick money by exploiting our own natural resources. Next day we stopped at one Hydel project site, setup on one of the tributary of Mandakini river. Guards on duty informed us about the damage to the power house. To our surprise, local villagers expressed their mixed emotions toward the damage caused to the ongoing hydel projects. Villagers consider them as main culprits for damaging the basic attributes of the mountains. It

was interesting to know, how around 70 hydel projects were built in last few years, in which 23 mega projects of 100 MW, 22 Medium Projects of 10-100 MW and 25 small projects of less than 10 MW are coming up. They are damaging local eco system, cutting down large number of trees, using tonnes of dynamite to shake mountains for constructing huge tunnels. We were surprised that, when a layman can explain the logics & probable reasons for this calamity in Uttarakhand hills for the sake of so called development, but probably our decision makers, experts, political leaders are not willing to understand. While we trekked number of villages, we could not find government officials, except some local NGOs and CSOs involved in relief work. Not even local MPs/MLAs were present there. Our ministers were busy in debating on national television channels, as if it was an opportunity for them to come in limelight at national level forgetting their own people in distress and pain. Our conclusive observation is that in this fragile eco zone, natural disasters are part and parcel of life. The more we challenge the nature, it will hit back with more force as it is a balancing act of nature. Looking at the whole disastrous event, it reminded me the quote of Paulo Coetho that human beings always say, “Save the Planet” but what Planet must be saying “Save yourself Idiots, I will take care of myself!”. So, with this understanding I can say that leaving behind the concerns of nature, even damaging it, the development will always remain fake! The talk of development in terms of growing concrete buildings, industries, growing GDP etc. is not the actual development. We need to make green GDP, Sustainable and Inclusive Development as our priority. We need to design our vision documents considering these fragile issues. At the cost of safe and green earth, no development is desirable and justified. We have to fix the responsibility and accountability for death of large number of innocent people and loss of life. The handling of post disaster rescue operations and the development of amiable future developmental design has to be done in more planned and nature friendly manner. People of Uttarakhand, land of Chipko, never wanted such disastrous development for their state. We do need development, we do need infrastructure and we do need responsible industry/ business to create employment with people’s participation, but not at the cost of endangering human life and our eco system. General questions in the masses today are“Was it possible to avert such Catastrophe?” If Yes, then why we didn’t! “Is the government ready to deal with future calamities?” If Yes, then how? Anil Jaggi is the Executive Editor, CSR & Competitiveness based at Dehradun.

The Magazine for CSR and Sustainability Leaders

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Interview

Sunfame India’s product portfolio includes range of innovative with latest technology solar powered lanterns and power packed home lighting solution system.

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Our Dream is to Bring Solar Energy to Reach all Strata of Society Rajat Bothra, Director, Sunfame India

Sunfame India is a venture of East India group. Sunfame India aspires to become one of the leading player in off-grid solar products. In an interview with CSR & COMPETITIVENESS, Rajat Bothra, Director, Sunfame India, speaks about the Solar Products and and how products are sustainable and creating hope for India.

‘‘

Sunfame India’s has unwavering commitment for promoting good quality products with clear polices on after sales service at the best price.

‘‘

Tell us about Sunfame India and its vision and mission. Sunfame India is a part of East India Group. We are committed in promoting solar energy for empowerment of communities that are deprived off grid connectivity or have partial access to electricity that will lead to inclusive growth in Indian economy. Our vision is to innovate and promote solar products that will be towards creating H.O.P.E. for holistic development. Our dream is to bring solar energy within reach of all strata of our society. Further, we work towards removing the dependence on Kerosene (instead of giving healthy light, it slowly kills people) and any other conventional methods (like wood burning) for lighting.

How is H.O.P.E different from HOPE? Our H.O.P.E is very different from HOPE. Through all our solar energy products we will be striving towards creating H (Improving Health – eliminating dependence on Kerosene), O (Creating Social and Economic Opportunities), P (enhancing Prosperity – eliminating dependence on non-renewable energy to unlimited source of clean n healthy energy), E (promoting Education).

What makes you passionate about Solar Products? In our country, there are more than 30,000 non electrified villages and electrified villages face problem of poor or intermittent power supply, power cuts, high fluctuation etc. This leads towards poor quality of life of rural as well as urban population. Solar energy is one of the easily available resource which can help in solving the problem of power scarcity. Solar powered products promote clean and healthy environment (Zero pollution and unlimited source of energy).

Please brief us about your Product Portfolio? Sunfame India’s product portfolio includes range of innovative with latest technology solar powered lanterns and power packed home lighting solution system.

Does Sunfame India have manufacturing process for solar products in India? Yes, presently we have set up a testing lab for solar products at our existing venture East India CSR & Competitiveness | August 2013

Technology Company. We have capabilities to manufacture innovative and multiple solar powered products in India through our existing sister concerns’ manufacturing setup in Dehradun and Bangalore.

Does Sunfame India have an in-house research & development team or outsourcing from other company? We have an in-house strong research & development team which constantly keeps on working and upgrading our existing product range, developing new technology, and innovating new solar products.

How important has it been for Government to show such leadership in supporting solar power? Today, the biggest challenge we are facing is to educate and generate awareness among the people on the cost-benefit analysis of solar products. Through Ministry of New & Renewable Energy (‘MNRE’) and Indian Renewable Energy Development Agency Ltd. (IREDA), the Indian Government is trying to regulate solar industry and promoting solar powered products through multiple levels of support activities. Indian Government is playing the utmost responsible role in promoting solar energy in India.

How your products are competitive in terms of prices amongst available options in the market?

Products” under their Corporate Social Responsibility programmes? First of all, we do not consider our products as only solar powered products. We are promoting green initiatives towards clean and green environment. We believe that we promoting multilevel integrated solar powered environment. To explain this point through example, one of our products “Shiksha” is targeted towards promoting education. Shiksha works for 5-6 hours (after full charge of 8 hours) and gives appropriate white light which is very good for studying. It helps to increase reading hours for students at evening after getting dark in non electrified areas. In effect, we are promoting education and improved health of students through our products. Therefore, Corporate India should look at our solar solutions as harbingers for creating H.O.P.E.

The use of solar energy in India could help to change this problem, in providing a clean, cheap source of electricity for many areas /communities.What are your views? As I mentioned earlier, Sunfame India’s mission is to eliminate dependence of the people on “Kerosene (EVIL)” for lighting purposes.

Have you been seeing increased interest in alternative energy in recent years due to high fuel prices?

Our product range offers solar powered product (lantern) from Rs. 500-1500 with excellent product quality, durability, innovative with latest technology and reliable after sales service.

In recent years, we have noticed that with promotion of benefits of alternative / clean energy through multiple modes of communication platforms, the interest in alternative energy has shown a positive trend.

Why people need to have Sunfame Solar Lamps in their households?

East India group

Sunfame India’s has unwavering commitment for promoting good quality product with clear polices on after sales service at the best price.

Making low cost and easy electricity availability in the rural India, particularly in dense forest areas, is still a challenge for the Government. How do you think the government agencies can take advantage from your products? It is a challenge for the government and private players operating in this industry. However, with public private partnership, promoting solar products will get huge boost. Further, building networking with Central, State and local level NGOs or civil society organizations, we can generate awareness and promote the solar products. Sunfame India is in discussion with private players for developing effective distribution network and channel across India.

How corporate India can take advantage by promoting “Sunfame Solar

E-Pack Polymers Pvt. Ltd. E-Pack is India’s largest player in EPS packaging and provides custom moulded EPS packaging to LG Electronics (India’s largest consumer durables company) with large distribution network across North India. It is also a notable player in PU based pre-fabricated structures like modular corporate offices, schools, toilets, etc.

East India Technologies Pvt. Ltd The company provides EPS packaging to Philips, Panasonic, Dakin, Samsung Electronics and other customers. The company also does PCB assembly for global giants like Schneider.

Edurables & EVision The firm is the 2nd largest OEM manufacturer of air-conditioners and microwave ovens for leading brands like LG Electronics, Voltas, Philips and various other customers.

visit - www.sunfameglobal.com

Empowering Rural Youth Vedanta IL & FL Skill School, Korba Bharat Aluminium Company Ltd. (BALCO), through this premier project, has produced nearly 2200 young men and women who are providing their services to various reputed companies and are happy to have become ‘self reliant’.

he greatest achievement for anybody is ‘self reliance’. Robert D. Hales, rightly says “As we become self-reliant, we will be prepared to face challenges with confidence and peace of mind.” • The Vedanta IL & FL Skill School was put up in Balco Nagar, in Korba in the State of Chhattisgarh, to make people self reliant and to instil confidence in people by making them skilled in various fields. • After learning about the requirements of various industries, the youth are trained in skilled works like sewing, welding and in mastering hospitality. A national level agency IL & FS assists Balco in the project. • Unemployed youth are screened and then provided a month’s free training at the School. During their stay, accommodation, conveyance and meals are provided for by Balco. • Though, the project was started to target the youth living below the poverty line, the training opportunities at the School are also available to promising young persons who have a zeal for learning and in becoming self reliant.

I am proud that I stand on my feet

‘Athithi Devo Bhava’ - means our Guest is God and it means much more to Deepika Mahant as the feeling unfolds itself in a beautiful smile while she welcomes guests at Hotel Babylon, Raipur, Chattisgarh. The twinkle in her eye and her confidence speak volumes of her hospitality skills. Daughter of, Budhwa Mahant and Akti Mahant, she learned the rudiments of hospitality at a special course – ‘Athithi Satkar’ run by Vedanta IL & FS School at Balconagar, Korba, Chhattisgarh. A resident of Nehru Nagar in Balconagar, this Class 12 Commerce student did not have the faintest idea what life had in store for her. She had come to the Skill School to learn industrial sewing, but after counselling she convinced herself that she should take up training for the hospitality sector. The new course on hospitality - ‘Athithi Satkar’ kindled her passion for hospitality. She passionately finished the course and is gracing the front reception of Hotel Babylon, Raipur today. Life has its ups and downs. Growing up , Deepika realised that her father’s earnings as a labourer were not enough to bear the expenses of the family. Being the eldest of the two siblings, she learnt it early that she had to supplement her father’s earnings. It was her father’s vision to let Deepika join the newly introduced hospitality course at the Balco Skill School. Ever since, the June 28, 2012, the first day of her placement in Hotel Babylon at Raipur, Deepika is brimming with self reliance and confidence. Along with her job, she is also pursuing a bachelor’s degree in Commerce. Her face lights up as you ask her about her ambition – ‘To get higher and higher in the hospitality industry’ she says with confidence. Hats off to her diligence and passion ! Her father , Akti Mahant, couldn’t hold his tears as Deepika’s first salary graced his palm. “ I am proud of my daughter” he said as joy flooded his face. Mahant never misses a chance top raise Vedanta’s vision and support to help unemployed youth be able to stand on their own feet, just like Deepika. Balco Skill School is proud of Deepika ! Vedanta IL & FL Skill School Bharat Aluminium Company Limited P.O. : Balco Nagar, Korba - 495 684