Thought Leadership
SoulAce believes in sharing and spreading knowledge through ‘Thought Leadership summits’. We have collaborated with other like-minded partners to organize events on subjects like Corporate Social Responsibility (CSR), Sustainability, Creating Shared Value (CSV) and Social Entrepreneurship. The summits are attended by eminent personalities, corporate representatives (CXOs) and development practitioners to discuss issues that affect stakeholders.
Some of the Thought Leadership Summits organized by SoulAce are:
- Eastern INDIA CSR Summit
- Shared Value Summit
- CSR Compendium
- Social Enterprise Summit
- Sustainability Summit
About Us
SoulAce is one of the leading research and advisory firm operating in the CSR & Development Sector space in the South Asia region working with Corporate, NGOs, Government and Funding agencies. SoulAce has a strong team of practicing professionals with varied background ranging from sociologists, development sector experts, educationists, nutritionist, environmentalists, academicians, project managers, who together strive to provide innovative solutions for people at the bottom of the pyramid with focus on impact and sustainability.
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We help Corporate and Funding Agencies in Monitoring and Evaluation of CSR/ Development Sector Projects. We also undertake due diligence of NGOs in South Asia Region and help in forging long term partnerships with relevant stakeholders.
Read MoreCSR for disabled people to get a boost from new law
With the passage of a new bill on people with disabilities in the winter session and the CSR rules already in place, companies will have more ways to deploy funds
KickStart Cabs, a taxi service for people with reduced mobility, is part of the CSR projects of Mphasis.
The winter session of Parliament, which began on 16 November and ended on 16 December in 2016, failed to achieve much in terms of usual business, except perhaps the passage of the historic Rights of Persons with Disabilities Bill, 2016.
The Bill has revived many debates, including the one on the need to create inclusive infrastructure to facilitate greater independence among the differently-abled. One of the key players in this debate is the corporate sector which has engaged with the issue in a limited way so far—from token reservations for internal employment to working with differently-abled persons under the ambit of corporate social responsibility (CSR). The Bill is expected to increase corporate support for and engagement with the differently-abled. As Sugandhi Baliga, lead of the health portfolio at Tata Trusts, says, "This is an opportune time for more people to come forward and support creation of an inclusive environment."
With the new law coming in and with CSR rules already in place, firms will have more ways to deploy funds in favour of helping people with disabilities, she adds.
CSR rules, which fall under the purview of Section 135 of the Companies Act, 2013, require firms with a net worth of Rs500 crore or revenue of Rs1,000 crore or a net profit of Rs5 crore to spend 2% of their average profit of the previous three years on social development activities under Schedule VII.
Tata Trusts runs over 450 projects in different social sectors like health, education, etc., and 30 of these are focused on creating inclusive environments, job opportunities, and living spaces for people with disabilities. These account for around 6-7% of the total budget, which comprises philanthropic donations and a large part of CSR funds from Tata group of companies.
While CSR rules do not pose any roadblock to working for the disabled, they do not list such work as a separate category. Firms that work with differently-abled people classify such activity as part of promoting education, vocational training or preventive healthcare.
So far, projects or engagement with disabled persons by firms was restricted in terms of the scale of operations, suggest experts. "With the coming of this Bill, more firms are encouraged to look at the challenges and address them in a more holistic manner," says Adarsh Kataruka, director, Soul Ace, a CSR consulting firm.
He says that the Bill encourages mainstreaming of a greater number of differently-abled people. Earlier the government of India recognized only seven categories of disability, the Bill has increased that to 21.
Kataruka adds that the Bill will help firms go beyond CSR and devote more strategic thought to CSR for the differently-abled.
However, Sminu Jindal, managing director of steel maker Jindal SAW Ltd and a champion of the rights of the disabled, believes disability is a development issue, one that goes beyond what firms can do under philanthropy or CSR. "Disability is a fact or current state of affairs for a person dealing with it; accessibility in infrastructure is the solution, thereby making it (accessibility) a development issue," she says.
Founder of the Svayam Foundation, Jindal has been working on the issue for the past 16 years. While Jindal SAW put Rs75 lakh of its CSR funds last fiscal into the foundation that works exclusively on improving accessibility and infrastructure for differently-abled persons, the foundation also receives other financial support (in the form of individual donations and grants from aid agencies) to run its programs.
For others already working on the issue, like the Nasscom Foundation—the philanthropic arm of the information technology trade association, skilling is the most important aspect of helping people with disability.
The foundation has been working for and with differently-abled persons for the past six years by providing digital literacy and skill development. “The main focus of the foundation’s work is to help remove barriers to people with disability and we do so by helping them gain access and employability,” says Shrikant Sinha, CEO of Nasscom Foundation. He adds that jobs give the differently-abled independence. The foundation also helps other agencies make workspaces more accessible.
Firms across sectors are already working for differently-abled people, but Sinha says the IT sector is more advanced in this aspect. He adds that roughly 15% of all social development or CSR funds from the IT sector are deployed on disability-related programmes.
According to Dipesh Sutariya, founder of EnAble, a not-for-profit working with differently-abled persons since 1999, from the CSR point of view, monitoring, impact assessment and tracking of skilling projects is simpler and that is why firms prefer them. He says under CSR or other forms of corporate engagement, firms should look to go beyond training. "We strongly encourage interested firms to look beyond schemes and programmes that already receive funding from government agencies," he says.
For instance, Pradhan Mantri Kaushal Vikas Yojana launched in 2015 provides funds to organizations training differently-abled persons. Prior to this, there have been other versions of the same scheme under different names.
Following the implementation of CSR rules from 2014, EnAble was approached by 10 firms of which it works with eight including Mphasis, JP Morgan and Accenture that have provided close to Rs3 crore for different projects.
One such CSR-funded initiative by EnAble is a mobile connect (Mobile Vaani) project in Karnataka. A differently-abled person can give a missed call to a specific number, where EnAble India has stored 80 different scripts on job awareness opportunities, accessibility solutions and other narratives for challenges faced by differently-abled persons, which are then played back to the person.
Among the handful of firms that are thinking out of the box on disability is Mphasis Ltd, which has been doing such work for the past 15 years. Mphasis CSR is focussed on education, livelihood training and inclusion.
Among the handful of firms that are thinking out of the box on disability is Mphasis Ltd, which has been doing such work for the past 15 years. Mphasis CSR is focussed on education, livelihood training and inclusion.
Citing the ongoing support programme Namma Halli, in partnership with local governments and also involving Mphasis’s own employee volunteers in 10 districts of north Karnataka, Bhambhani says owing to its sensitization, advocacy and building of physical infrastructure, the company has helped increase enrolment of children with disabilities in government schools from 1% to 21% over a period of 7 years.
Another ongoing CSR project that Mphasis is particularly proud of is KickStart Cabs in Bengaluru, a taxi service for people with reduced mobility. For Bhambhani, while selecting partners is key, the firm is always on the lookout for "programmes or interventions that are innovative and disruptive".
A helping hand for sports infrastructure
A helping hand for sports infrastructure
Moyna Manku
Local youth take part in a martial arts coaching camp organized by Jindal Steel and Power Ltd in Barbil town, Odisha.
New Delhi: With the Rio Olympics just a month away, there is not much that can be done at this stage to help the athletes headed for Brazil. However, the All India Council for Sports (AICS) is using the buzz around the Games to give sports funding a shot in the arm by expanding the definition of sports promotion under Corporate Social Responsibility (CSR) Rules, 2014.
“We are hoping to help sportspersons for events beyond 2016, and to get quality sportspersons, we need to start working on them from today,” said V.K. Malhotra, president, AICS.
So far, training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports were the only permissible activities as part of CSR. After much negotiation on 8 June, AICS, established in 2015 to serve as an advisory body for the ministry of youth affairs and sports, succeeded in getting the ministry of corporate affairs (MCA) to approve the construction, renovation, maintenance of stadiums, gymnasiums and rehabilitation centres as part of the permissible CSR activities.
As per the CSR Rules, which come under the purview of Section 135 of the Companies Act, 2013, firms with a net worth of Rs.500 crore or a revenue of Rs.1,000 crore or a net profit of Rs.5 crore need to spend 2% of their average profit of the previous three years on social development activities such as sanitation, environment protection, rural development and others. These activities are defined in Schedule VII of the Rules.
The inclusion of infrastructure construction and maintenance as part of CSR has been welcomed by both companies and consultants. “The provisions as enshrined in the Act previously only allowed corporate houses to incur the cost of coaching and training as a part of CSR. It did not allow CSR spending in developing sports infrastructure, which could benefit a larger section of the aspiring sportspersons. The amendments would be helpful in nurturing a larger pool of budding sportspersons and would shift the focus from the selected few,” said P.K. Joseph, director programmes at DLF Foundation, the philanthropic arm of real estate firm DLF Ltd.
The foundation spent Rs.10 lakh on sports promotion in 2014-15. It partnered with the government under Special Olympics Bharat, a national federation working with differently abled persons competing in paralympics, to support 10 athletes who eventually came home with seven gold medals, six silvers and a bronze from the Special Olympics World Games in Los Angeles last year.
The foundation spent Rs.10 lakh on sports promotion in 2014-15. It partnered with the government under Special Olympics Bharat, a national federation working with differently abled persons competing in paralympics, to support 10 athletes who eventually came home with seven gold medals, six silvers and a bronze from the Special Olympics World Games in Los Angeles last year.
“CSR funds supporting only training was restricting the scope of what the private sector can do in this field,” said Kataruka.
Adil Sethi, operations manager, Anglian Medal Hunt Company, a company set up to nurture talent across sporting fields, believes that the quality of training that an athlete gets is directly proportional to the quality of infrastructure available and the support staff.
“Despite the fact that training and promotion of Olympic, paralympic and other nationally recognized sports were considered as a CSR activity, for the last two years a majority of corporates have not seen it as a viable thematic area to invest their funds in. With the introduction of a broader spectrum to invest in sports, it would inevitably become attractive,” said Sethi.
Malhotra added: “Training is only one aspect of sports promotion and to truly achieve excellence and repute in sports, we need to include other factors like hosting national-level and international-level events.”
Malhotra is in the process of reaching out to other government agencies, including the Sports Authority of India, to convene a meeting of all stakeholders such as heads of CSR divisions in large companies, sports promotion boards of large government-held companies and ministries in order to chalk out a road map about how such funds can be best channelled for creating excellence in sports, going beyond the Rio Olympics.
Malhotra is in the process of reaching out to other government agencies, including the Sports Authority of India, to convene a meeting of all stakeholders such as heads of CSR divisions in large companies, sports promotion boards of large government-held companies and ministries in order to chalk out a road map about how such funds can be best channelled for creating excellence in sports, going beyond the Rio Olympics.
Malhotra is in the process of reaching out to other government agencies, including the Sports Authority of India, to convene a meeting of all stakeholders such as heads of CSR divisions in large companies, sports promotion boards of large government-held companies and ministries in order to chalk out a road map about how such funds can be best channelled for creating excellence in sports, going beyond the Rio Olympics.
Jindal Steel and Power Ltd (JSPL) also expressed doubt over how hosting of events would qualify under CSR.
“As the rules stand today, sports provisions for communities living around plant locations of companies has to be the focus of CSR,” said Miniya Chatterji, chief sustainability officer, JSPL.
The company has been supporting sports activities in and around its manufacturing plants through talent identification via village-level sports tournaments.
JSPL spent Rs.12 crore of its total CSR spend of Rs.83 crore in 2014-15 on promoting traditional sports such as kho kho, kabaddi, popular games such as cricket, volleyball and martial arts, and athletics.
Over the past two years, JSPL has supported 200 coaching camps, benefiting more than 3,000 youths, claims the company. These people are given sports accessories, nutritional supplement, rural gymnasiums through JSPL’s CSR funds and are helped to compete in district-level tournaments and then promoted for state and national-level tournaments. According to Chatterji, sports promotion is important for the firm as “it helps engage communities, especially the youth, in productive and healthy activities”.
Expressing concern over the narrowing definitions of CSR activities, as seen with this back and forth between the AICS and MCA, Sudhir Singh, partner at consulting firm PricewaterhouseCoopers (PwC) India said, “Sponsorship is a loose term. In the last two years, we have noticed repeated questioning of what qualifies as CSR. This is tightening the scope in the field and goes against the spirit of the law.”
Private sector interventions need to be flexible and not restrictive, he said, adding that while sponsorship of an event such as the Indian Premier League cannot be considered CSR, similar sponsorship of sports in rural and remote areas could qualify. Companies need to be cautious when undertaking such initiatives, he added.
Echoing the view, Oil and Natural Gas Corp.’s chief CSR officer S.S.C. Parthiban said that the funds from CSR budgets of companies are spent at the discretion of the board and the CSR committee of the company and that independence is paramount.
“The statutory provisions empower the board and the CSR committees to decide about the CSR activities and all major CSR projects, including sports, are taken up with their approval,” he said.
ONGC has done work under sports infrastructure development, promotion of rural sports in 13 states in areas of its operations. It has also extended support for many national events like the hockey league by providing money for equipment, coaching and infrastructure even prior to the CSR Rules coming into force as part of the firm’s sports promotion board, a must for all state-controlled companies.
ONGC was among the highest CSR spender in 2014-15 and of its total Rs.215.16 crore CSR budget, it spent only Rs.1.22 crore on sports. In FY15-16, its total CSR expenditure was Rs.419.07 crore of which Rs.3.63 crore was channelled towards supporting sports.
The CSR-FCRA contradiction
Possible amendments to the Companies Act or FCRA will help more companies conduct corporate social responsibility activities with ease
Moyna Manku
CSR rules specify that funds from companies that have over 51% foreign shareholding or are subsidiaries of foreign-owned companies are to be treated as coming from a foreign source.
Of the many grievances that companies have regarding the challenges posed by the Corporate Social Responsibility (CSR) Rules, 2014, one that has remained largely understated is to do with the treatment of funds from certain companies such as Infosys Ltd and Hindustan Unilever Ltd (HUL) as a foreign source.
These companies, registered and operating in India, either have substantial foreign shareholding or are 100% subsidiaries of foreign entities. The CSR 2014 rules for such companies differ from those for firms with little or no foreign shareholding.
With effect from 1 April 2014, every company with a net worth of Rs.500 crore, a turnover of Rs.1,000 crore or a net profit of Rs.5 crore is required to spend a minimum of 2% of its average profit for the three preceding fiscal years on charitable activities.
The rules specify that funds from companies that have over 51% foreign shareholding or are subsidiaries of foreign-owned companies are to be treated as coming from a foreign source. Therefore, these companies can only work with not-for-profits that are registered with the home ministry under the Foreign Contribution (Regulation) Act, 2010, or FCRA, norms. Even foundations run by such companies must obtain an FCRA licence to operate.
Mint approached HDFC Ltd, ICICI Bank Ltd, HUL, Britannia Industries Ltd and Infosys, among the better-known firms with substantial foreign shareholding. The firms declined to comment.
A study on corporate foundations conducted by Charities Aid Foundation in association with other not-for-profits shows many companies are facing operational difficulties because of the requirement of an FCRA licence to conduct CSR activities.
The report, Study on corporate foundations: An emerging paradigm, released in May, studied the top 300 companies by market capitalization. It found that of the lot,142 companies had 153 foundations between them. “More than half the foundations were registered under FCRA, entitling them to receive funds from outside India.”
The common refrain among the foundations was that FCRA registration procedures are extremely cumbersome and that the government should try and minimize the formalities needed to obtain and renew the registration. One step taken by the government earlier this month has been to put all FCRA-related paperwork online.
Problems persist
Adarsh Kataruka, director at Soul Ace, a CSR consultancy, believes the treatment of funds from some companies looking to fulfil their CSR obligations as a foreign source limits the options for both companies and not-for-profits. “There are roughly 30 lakh not-for-profits registered in India, of which only 45,000 have FCRA licences. And, of the 45,000 organizations certified to receive foreign funds, barely 20,000 are actually operational... This limits the number of organizations that corporates can work with,” Kataruka explained.
He added that the provision had restricted access to CSR funds to large not-for-profits that had the foresight to register under FCRA norms.
Another challenge, according to CSR consultants, is that in the first year of implementation not many non-profits were aware of the rules governing “foreign source” funds. There are a number of companies registered in India with over 51% foreign shareholding, but this is not a well-known fact.
Sanjay Agarwal, director at Account Aid, an audit firm focused on the development sector, said most non-profits do not have information about a company’s shareholding pattern.
“The two laws (FCRA and CSR) are acting in contradiction,” said Lalit Kumar, partner at law firm J. Sagar Associates. He explained that while on the one hand, the government wants companies to take up development work, on the other, looping in FCRA hinders that work. This contradiction stops a company from funding a not-for-profit of its choice, forcing it instead to opt for one eligible as per the law to receive funds, Kumar said.
However, some companies such as Toyota Kirloskar Motor Pvt. Ltd believe the overlap of CSR and FCRA laws is not a bad thing.
Naveen Soni, vice-president-external affairs, said, “FCRA licence may have acted as a deterrent for some companies to doing CSR but it also acts as a safety net. The FCRA application and other bureaucratic processes act as the first-stage filter to weed out organizations that are not doing genuine work.”
Toyota spent around Rs.6.5 crore on CSR initiatives such as building toilets, water and sanitation projects, even though the Indian arm of the Japanese auto firm did not qualify for CSR as per the rules.
With the corporate affairs ministry expected to act on the recommendations of the high-level committee chaired by former urban development secretary Anil Baijal, made in October, companies can hope for some clarity on the applicability of FCRA to CSR rules before the start of the next fiscal year.
Kumar suggested that either FCRA be amended to state that not-for-profits receiving money from companies complying with Section 135 of the Companies Act (to do with CSR) do not need FCRA clearance or that the Companies Act be changed to accommodate this aspect.
Impact assessment is the CSR game-changer
Impact assessment is the CSR game-changer
Moyna Manku
A volunteer hands out financial health cards as part of the Crisil Foundation’s CSR initiatives. Crisil conducted a baseline survey in 2014 and is looking to conduct a mid-term review in early 2017.
New Delhi: With Corporate Social Responsibility (CSR) Rules moving into their third year of operation, the outlook of companies towards social problems is seeing a change.
In the first and second year of the rules taking effect, most companies were focused on compliance rather than on the impact of their initiatives. Now, it is mostly about course correction and expansion.
Many companies are conducting impact assessment studies of their CSR activities to ensure long-lasting impact and optimal use of funds.
The CSR Rules 2014 state that companies with a net worth of Rs.500 crore, a revenue of Rs.1,000 crore or a net profit of Rs.5 crore are required to spend 2% of their average profit in the last three years on social development-related activities such as education, healthcare and sanitation.
According to Ramraj Pai, president of Crisil Foundation, the philanthropic arm of financial analytics firm Crisil Ltd, “Resolving social problems requires the same rigour and discipline as business operations and firms are realizing that.”
The ratings firm started its CSR activities on scale only after the 2014 rules and spent over Rs.4 crore (1.42% of its net profit) in FY15 on increasing the financial capabilities of rural women and environmental conservation.
Pai believes the baseline assessment conducted by a third party at Crisil Foundation’s behest, helped it approach financial inclusion in a holistic manner. “Impact assessment is essential and needs to be a continuum, not just a survey at the completion of activities. You can only know the impact if you can compare the before and after of an initiative with specific metrics,” he explained.
A key point to remember is that impact assessment cannot be an end in itself. It needs to be built into the design of the project starting with baseline evaluation, mid-term review and then final assessment. Citing Crisil Foundation’s work on financial inclusion in Assam, Pai said that while the project was aimed at creating financial literacy, the baseline survey helped the company understand that to make a real difference, it would need to work on building trust.
“Even before we could start working with women to teach them how to open an account, use an ATM, etc., we learnt that we needed to build a relationship with the community elders, who in turn, could influence and assure the women to work with us,” Pai added.
The firm conducted the baseline survey in 2014 and is looking to conduct a mid-term review in early 2017.
Social development issues show wide variations based on region and community. This also makes a strong case for impact assessment as each geography and community has specific needs, limitations, etc., and cannot be addressed in a one-size-fits-all approach.
“Impact assessment helps in course correction and gives direction to a company to scale up/replicate its successful initiatives and at the same time, remodel or shut down the initiatives which have not been able to create impact,” said Adarsh Kataruka, director at CSR consultancy firm SoulAce Ltd, which works with more than 60 CSR clients across 250-plus locations.
Fast-moving consumer goods company ITC Ltd started six impact assessment studies in 2015-16 across its CSR initiatives, which are currently being implemented in 17 states.
The company has been involved in community-based initiatives in sectors such as sustainable agricultural practices, social forestry, etc., long before the CSR Rules came into force
S. Sivakumar, group head of agriculture and information technology businesses at ITC, said such appraisals have helped the company take stock of projects on the ground and tweak them. “Besides, the studies also present recommendations and highlight areas of improvement which enable us to take appropriate action in the project. The studies are also be used to substantiate and validate a point of view for advocacy purposes,” he added.
The Piramal Group has been implementing CSR initiatives through its philanthropic arm Piramal Foundation since 2008. The foundation also periodically conducts impact assessments.
Paresh Parasnis, CEO of Piramal Foundation, cited the example of the foundation’s work in education, where it conducts assessments at the beginning as well at the end of the academic year in 1,200 government schools in Rajasthan, Gujarat and Maharashtra in order to gauge how much the students have actually learnt. The group spent a total of Rs.56.65 crore in FY15-16 on CSR initiatives across sectors like education, healthcare and drinking water.
“We have realized unless we start with assessing needs of the community, designing projects that address these needs and then measure whether those needs have been sufficiently addressed, we will end up only spending money without positive outcomes or making a difference to people’s lives,” said Parasnis.
He added that social return on investment is best measured by independent assessors.
However, these assessments across firms are largely used for internal purposes and are not in the public domain. For instance, car maker Maruti Suzuki Ltd conducted one such survey for internal use in 2016 as, according to Ranjit Singh, its CSR head, there is merit in conducting an assessment.
Perhaps one reason why firms do not want such information out in the public domain is because they believe that declaring such findings in the public domain could foster a negative perception, especially if the evaluation of a project leans in favour of course correction.
Urging firms to plan and execute proper impact assessment studies as well as share the information, Sidharth Dutta, senior manager of development advisory services at EY India, emphasizes that this information “can help in improving the overall effectiveness of a social initiatives. It contributes towards knowledge development beca-use it helps in establishing good practices for achieving higher success in projects and reduces individual procedural burden.”
Also, firms and the public must bear in mind that shortcomings may not entirely be the fault of the companies as many have only started CSR initiatives after the rules came into force.
Dutta of EY explained, “For proper impact assessment—to understand what change has taken place on the ground—a substantial number of years of the project being in operation are needed.” He said that a proper impact assessment is possible only after two-four years of a project being implemented.
Again, an impact assessment for the sake of conducting one is not the answer. “Many companies do not measure the real impact of their CSR spend. They do it in terms of how many children were given school uniforms or how many mothers were given protein powder, etc. Very few of them have set up mechanisms to measure the real, long-term impact on the community,” said Sunil Chavan, honorary director at Dr. M.L. Dhawle Trust, a philanthropic organization working on issues of health, livelihood and sustainable agriculture.
According to him, the focus of the impact assessment should be on the change in beneficiaries’ socio-economic situation (or any specific component for which the initiative was planned) rather than the number of people impacted.
Citing the example of numerous firms undertaking sanitation CSR projects, following Prime Minister Narendra Modi’s call for a Clean India by 2019, Dutta highlighted that currently, assessments generally focus only on outputs like the number of toilets built. “But to understand the actual impact on the ground, firms need to move from external factors of only counting the number of toilets to analysing qualitative variables in the lives of beneficiaries such as actual usage figures, evaluating status of health indicators along with extent of improvement in sociocultural variables of community life,” he said.
He also pointed out that if firms are serious about addressing or resolving social problems, they should look to conduct baseline surveys. “Without baseline surveys, impact assessments end up being partially qualitative in nature—where, though change can be noticed, the magnitude of impact created through that change cannot be analysed,” Dutta said.
Experts Debate The Scope Of Conscious Capitalism At Social
Enterprise Summit 2016
A panel discussion on the topic 'Expanding the idea of Conscious Capitalism' was held during the recently
ICICI Bank To Meet FY16 CSR Target, Spend Rs 200 Crore: Kochhar
'Our Customers Are Definitely Our Biggest Role Model'
BW Businessworld Chairman Anurag Batra Gets 'Guardian Of The Media Award' At FIIB Event
Winner Again, No Surprises There
The Social Enterprise Summit 2016 on the topic 'Doing Business with a Conscience' was held in Mumbai on July 1. The summit brought together civil society leaders, social enterprises, and corporates on a common platform which included names like Raj Sisodia, Co-Founder & Co-Chairman, Conscious Capitalism Inc., Anurag Batra, Chairman & Editor-in-Chief, Businessworld, Dr. Wilfried Aulbur, Managing Partner, Roland Berger, Strategy Consultants, Jordan Kassalow, Founder, VisionSpring, Chinmay Sengupta, Chief Operating Officer, ICICI, Foundation, Jasmine Gogia, Head, CSR, Sustainability & Occupational Health, Suzlon Group, Aarti Wig, Country Director, Yunus Social Business, Rajeev Dubey, Group President, HR & Corporate Services, CEO-Aftermarket Sector, Member Group Executive Board, Mahindra and Mahindra Ltd, Deepak Arora, CEO, Essar Foundation, Adarsh Kataruka, Managing Director, Soul Ace and Dr. Amit Kapoor, Honorary Chairman, Institute for Competitiveness.
A panel discussion on the topic 'Expanding the idea of Conscious Capitalism' was held during the event and attended by experts like: Dr. Wilfried Aulbur, Managing Partner, Roland Berger, Strategy Consultants, Raj Sisodia, Co-Founder & Co-Chairman, Conscious Capitalism Inc., Deepak Arora, CEO, Essar Foundation and Chinmay Sengupta, Chief Operating Officer, ICICI, Foundation, the session was moderated by Anurag Batra, Chairman & Editor-in-Chief, Businessworld.
Speaking about the way companies across the world are redefining capitalism and the shift in the concept of capitalism, Sisodia said, "The shift in capitalism has already taken place. It is actually the unconscious capitalism that has given rise to the radical forces that mostly follow the profit only mindset. I believe that the idea of capitalism has to be practised right because it is the best system to create prosperity around the globe."
Elaborating on the co-relation between mindfulness and the practice of conscious capitalism, Aulbur added, "When we talk about polarization, it has significantly come down with the practice of capitalism in many emerging markets. However, the fact that only 80 billionaires hold more than 50 per cent of the global wealth also raises some critical questions about how capitalism is being practised. This also indicates that we have allowed the system to get skewed towards few individuals and I think we need to create a strong narrative, which is different, and the philosophy of conscious capitalism can set things right."
When asked about the shift that conscious capitalism has brought in the last five years, Chinmay Segupta, said, "I have seen the shift in the system from an outsider's perspective. There is a very gradual shift from maximum profit making to inclusive business practices. I think conscious capitalism is closely linked to the power dynamics and it is empowering people and helping to strengthen the system to become powerful enough to deliver what it is supposed to deliver."
So, do businesses that are not doing well find it easy to adopt conscious capitalism? Elaborating on it, Deepak Arora, CEO, Essar Foundation, said, "There is a definite correlation between capitalism and welfare to the society. Capitalism is more about wealth creation which also goes into value addition at the social level. When you create enterprises, and most enterprises are in the rural areas, and the moment you set up the enterprise there is pressure from the social communities to create a shared value, and it is not a matter of choice but they have to engage otherwise there would be grave consequences."
Speaking about the reforms needed in the financial sector, Sisodia said, "The fact is that the financial sector has got disconnected from the real economy. The real purpose of the financial sector is to serve and help businesses grow, and if you do that well you will flourish. Unfortunately, it has now come to a point where it is all about creating money without adding any significant value to the society. I think every sector, every industry exists for a purpose and when it loses that purpose it just becomes about profit making. The other sectors that I think need reform are the Pharma and the Food sectors, which have been increasingly focusing on the profit making bit and thus moving away from their main objectives."
Highlighting what today's CEO needs to do to deliver, Sisodia added, "It gets down to having right leaders in politics and business and unfortunately there is a system in place in which power and virtue do not go together, and they need to. The more power leaders have the more they need to show they are virtuous and conscious. Moreover, the level of consciousness of the leader has to align with the trajectory of progress."
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution
Four out of 10 BSE-listed firms are shying away from CSR spending
Jyotindra Dubey
Hindustan Times
Contributions to the Swachh Bharat Abhiyan come under CSR spending.(Hindustan Times)
Four out of ten companies listed on the Bombay Stock Exchange failed to spend the prescribed amount for corporate social responsibility (CSR) in 2015-16 with the total unspent amount totalling to 1,200 crore.
The Companies Act 2013 makes it mandatory for every company with a net worth of more than 500 crore (or a net profit of at least 5 crore or a turnover of at least 1,000 crore) to spend 2% of their average net profit of last three years on CSR activities.
An analysis of annual reports on corporate social responsibility (CSR) activities filed by respective companies for 2015-16 reveals ONGC, Bharti Airtel, HCL Technologies, HDFC and HDFC Bank as some of the major names that fell short of the target.
Out of the 969 BSE-listed companies, 395 had filed their annual reports on CSR as on Friday.
ONGC spent 173 crore lower on CSR activities in 2015-16 than the 594-crore prescribed under the Companies Act. ONGC was still the third highest in overall CSR expenditure despite falling short of the target by 30%.
Bharti Airtel fell short by 136 crore, which is 72% of the prescribed amount. HCL Technologies could only spent ₹10.5 crore with 91% of the expected amount remaining unspent.
While the companies did not respond to queries sent by HT, they have fleshed out explanations in their annual reports.
For instance, ONGC and HCL Technologies cited long gestation periods of projects as a reason for not being able to spend the prescribed amount. “Major flagship CSR projects have project duration of more than one year with milestone-based payment spread in different fiscals,” ONGC said in its report.
On its part Bharti Airtel said: “Being in the initial years of implementation, the company is persistently exploring new opportunities to increase its CSR expenditure.”
HDFC, in its annual report, highlighted restrictions in contribution to organisations under the Foreign Contribution Regulation Act, 2010 (FCRA 2010) and the difficulty to find organisations that are aligned to the social objectives of the company.
“Most of the companies with large sums of CSR budget, were in the first couple of years of the law in 2014-15 and 2015-16, trying to figure out right initiatives. Pilot initiatives were undertaken and fine-tuned. From this financial year we expect 95% of the top 500 listed firms to spend their entire CSR budget,” Adarsh Kataruka, director of SoulAce, a CSR advisory firm.
On the other hand, there are companies that have spent more. NTPC spent 490 crore or 40% more than what was prescribed. Likewise, Reliance Industries, the highest CSR spender in 2015-16, disbursed 651 crore, 17% higher than required.
GAIL, Tata Steel and Larsen &Toubro also spent more than required by law.
The Evolution of CSR IMPACT SHOULD DRIVE CSR INITIATIVES
The launch of the second annual ET CSR Compendium saw some truly innovative approaches to CSR being discussed
QUOTE UNQUOTE
The first 2 years of the CSR mandate was about piloting initiatives for large set of corporate. In the coming few years, we expect long term scalable CSR projects especially in the field of Education, Health & Skill Development with professional monitoring and evaluation systems and partners in place.
ADARSH KATARUKA
Director
SoulAce Consulting
The Union Minister for Law & Justice, Electronics & IT, launching the 2016 Compendium
Future Forward
L to R: Anant Bhagwati (Bain & Co.), Rajiv Chugh (Ernst&Young), T K Arun, Ajay Shankar (L&T) & Adarsh Kataruka (SoulAce Consulting) discussing the changes that we can expect in CSR activities
In recent years, Corporate Social Responsibility (CSR) has been in the limelight both as a concept that is gaining ground and as a practice. CSR is a way businesses are increasingly being managed across the globe to bring about an overall positive impact on the communities, societies, cultures and environments in which they operate. Essentially corporations are being made stakeholders in social development.
This is a fundamental departure from the classic view of what CSR is postulated by the Nobel Prize winning American economist, Milton Friedman. He said, "The business of Business is to do business". In other words, creating employment and generating profits was the social responsibility of corporations.
Today, however, CSR has evolved. Corporations are being viewed as stakeholders in the social communities within which they operate. And so their CSR responsibilities and roles have shifted accordingly. Businesses today have to operate with a sense of responsibility and obligation towards public good — whether it is social or environmental good. Indian entrepreneurs and businesses have risen to the challenge admirably. They have undertaken programmes and initiatives that go well beyond business. They are actively discharging their CSR obligations with an eye towards national development.
The Economic Times celebrated and highlighted the CSR initiatives of a host of companies with its release of the second annual The Economic Times CSR Compendium on December 21 in New Delhi. The Compendium, in parternership with SoulAce Counsulting, aims to highlight some of the inspiring work done by various companies while fulfilling their CSR obligations. The programmes and initiatives highlighted cover a wide range of social issues - education for the under privileged, healthcare for those without access, rehabilitation and resettlement of migrant populations, sanitation, road safety programmes, immunization drives and setting up sustainable livelihood programmes.
The event was hosted by Sanjiv Kaura, CEO – CSR, The Times Group. The welcome address was delivered by T K Arun, Editor - Opinion, The Economic Times, who placed the evolution of CSR in the context of an emerging social and environmental consciousness. This was followed by a felicitation of the chief guest - Ravi Shankar Prasad, Union Minister for Law & Justice, Electronics & IT, Government of India by T K Arun and Amitabh Bhatnagar, vice president, Response, The Times Group.
In his address Amitabh Bhatnagar emphasised the willingness of the citizens to join in campaigns and programmes that were for the greater good. Witness the success of the Teach India campaign and resounding number of participants in the second annual Hero-TOI Green Drive - a tree plantation programme organised by The Times of India, Hero MotoCorp and the DDA, he said.
The chief guest, Ravi Shankar Prasad then launched the second edition of the ET CSR Compendium. In his address, the minister explored the fundamental philosophy that underpins CSR and differentiates it from philanthropy. The latter is a form of generosity and charity with a centuries-old tradition in India. But CSR is not charity. Rather, it is a kind of social commitment ingrained in the corporate culture today. This social commitment is one of refashioning CSR to take forward the new India that is one of hopes and aspirations. His speech was followed by a small skit that showcased the achievements of the Teach India programme. A panel discussion ensued.
THE CHANGING NATURE OF CSR
The panel consisted of Anant Bhagwati, Partner - Bain & Company; Ajay Shankar, Board Member, L&T; Adarsh Kataruka, Director SoulAce Consulting and Rajiv Chugh, Partner and National Leader : Tax Performance Advisory Ernst & Young India. The discussion was moderated by T K Arun. The discussion was centred on the Road Map for CSR in 2017-2018.
Boardrooms today take their CSR very seriously said Ajay Shankar, but the real challenge, according to him was "to move beyond writing a cheque or creating a physical asset. The need is to create models and processes and methods which can be replicated and scaled up."
Anant Bhagwati highlighted the two issues that have to be faced by corporations when it comes to CSR. The first is the fascination with doing what one would like to do as opposed to doing what actually needs to be done. The second is the fascination with experiments. And they can be great and are often needed. But the problems of India can only be solved through scale. So, effectively, even a successful experiment becomes meaningless if it cannot be replicated and scaled. So what we need is to create an ecosystem perspective when it comes to determining where to focus CSR resources and efforts. Ultimately, "the role of corporates needs to be one of enablers of scaling up," according to Bhagwati.
Adarsh Kataruka, however, rightly pointed out that in the initial years of CSR, experiments were the need of the hour as companies figured out what they wanted to do and what they could do. Now, the corporations themselves are moving towards discussing how they can scale up their initiatives. Another major problem is the lack of availability of credible organisations on the ground to partner with.
Moving forward, the corporations need to think in terms of whether the activity they want to focus on will even begin to make a dent in the social problem they are taking up. The CSR initiatives now need to be focused on the longer horizon - they need to factor in the potential for scaling. Ultimately, CSR has the potential to change the social sector of India when done right. If the innovative, result-oriented approach of big businesses can be successfully allied to initiatives that can be replicated and scaled, then India's social future is a whole lot better.
Snapdeal adopts village in Uttar Pradesh and residents renames village to Snapdeal.com
ET Bureau
There is Tatanagar and Modinagar, now there will be a Snapdeal.com Nagar. While Gujarmal Modi and Jamshetji Nusserwanji Tata established industries in the regions that went on to bear their names, Snapdeal has achieved this milestone by adopting a village called Shiv Nagar, in Uttar Pradesh.
The one ¬year ¬old online group buying venture will develop the village's infrastructure, including installation of water pumps and supporting the local school and hospital.
Shiv Nagar's residents, many of whom would not have even heard of e¬commerce or Internet, decided to take on the company's name as an expression of gratitude.
Corporate Social Responsibilty (CSR) has emerged as a major contributor to a brand's identity and goodwill. A number of established companies have scholarships, sponsor NGOs and work with local communities. Mahindra & Mahindra's Education Trust, Tata Consultancy Services' Adult Literacy Program, Dabur's Sustainable Development Society (SUNDESH) and DLF's Swapana Sarthak Informal School for children of construction workers are just some examples.
"Companies look at CSR as giving back to the society but many have also realised they can leverage their initiatives to build their brand image and strategy," says Adarsh Kataruka, Founder of SoulAce, which works as a CSR consultant with companies.
Snapdeal has emerged as a front runner in the still¬nascent group buying industry in India. The site, which offers daily discounted deals, has over 5 million subscribers and claims to be adding a new subscriber every second.
CSR: An opportunity for pharma companies
Adarsh Kataruka, Director, SoulAce Social Venture, talks about why each company needs to chart a CSR vision and work towards creating sustainable and long-term impact
Corporate social responsibility is currently a buzzword in India with the Companies Act 2013 making it mandatory to spend two per cent of profit for companies having profits of above Rs five crores or turnover of Rs 1,000 crores or net worth above Rs 500 crores.
Now with the new CSR regulation being applicable from April 1, 2014 for Indian companies as well as global companies having operations in India, it is important that each company charts a CSR vision and works towards creating sustainable and long-term impact. Also two per cent of profits would mean large pharmaceutical companies having CSR budgets going upto Rs 50 crores annually to be spent in India.
One of the key reasons, why CSR has been gaining momentum in the last few years and eventually becoming mandatory arises from the role the manufacturing firms play in and around their factory. Majority of the factories are either in rural region or on the outskirts of cities, which are surrounded by villages. In recent years, rural communities have started demanding better services of healthcare, education, potable drinking water, sanitation, livelihood opportunities etc. The expectation of these communities in the villages is the highest from the company as directly or indirectly they are affected by the factory’s presence. The stark contrast in the visible facilities enjoyed by the company officials and the community, leads to increased expectation.
The CSR notification also stresses on the need to focus on activities in and around company locations. Pharma companies have manufacturing setup across the country especially in hilly regions with better environment conditions like Baddi (Himachal Pradesh), Sikkim etc. As part of CSR, pharma companies should use this opportunity to develop innovative healthcare delivery models in communities surrounding their factory locations. This could help in replicating similar models for the large NGO sector and the government healthcare initiatives across different geographies. It is important for the companies, to first understand the prioritised needs of the community before planning initiatives, the intervention needs to have long-term focus instead of standalone ad-hoc initiatives. Initiatives should focus on eradicating certain prevalent diseases or checking fraudulent healthcare practices.
Currently, very few pharma companies have been active in CSR. Companies like Glenmark Pharma have been working towards reducing child mortality in Madhya Pradesh and Rajasthan. Ranbaxy has also been running mobile health vans in selected villages in Punjab to meet healthcare needs of the disadvantaged villagers and has made an effort to reduce infant mortality rate in the region. Dr Reddy’s has been working on education and livelihood initiatives with well-defined goals and objectives. Cipla has established Palliative Care centre in Pune.
One of the pharma companies, Wockhardt, seeing the gap in the healthcare delivery by the social sector, has established its own foundation and is working as an independent NGO bringing best of healthcare facilities to the needy in remote areas of the country. It works on range of healthcare issue as an implementing partner for Wockhardt and other corporates ranging from running mobile health van to providing water purification tablets.
These are commendable initiatives but not necessarily done around the factory locations. Focusing on regions near its factories has certain long-term advantages. One advantage of working near the company locations is that the commitment of the respective company is greater and it can have deeper engagements with the communities, can have efficient monitoring mechanism and progress with set milestones to be achieved to have larger and long-term impact on the lives of marginalised and disadvantaged communities. Through the initiative there can be a higher level of employee engagement, especially near its manufacturing locations, which also adds up to be a learning ground for its employees. If required, professional help should also be sorted towards creating plant level CSR strategy with short, medium and long-term objectives.
If we look at top pharma companies in India, till now only a handful have been active in CSR considering their size of operations. Majority of them feel that they are already creating a social impact through their business and therefore are already acting as responsible citizens. With the new CSR law, pharma companies should take the lead in this direction and create path-breaking work towards changing the healthcare delivery models. Pharma companies can use their knowledge, network and dynamism in the healthcare sector to impact the lives of the poor bringing them affordable and accessible healthcare facilities. It is also an opportunity to partner with other corporate in designing collaborative solutions.
Few ways in which pharma companies can align their CSR, which would also be in norm with the CSR regulation:
- Setup vaccination and awareness generation centres for different diseases prevalent in the regions it operates. This could also be done in collaboration with government in terms of using the existing infrastructure of district hospitals or even primary healthcare centre present in villages.
- Work in collaborations with CSR initiatives of other pharma companies especially in Special Economic Zones (SEZ) regions to tap into larger CSR funds and expertise, which would also lead to enhance overall industry image
- Holistic healthcare delivery models around their factory locations, which can be replicated and showcased to the Government and other NGOs for development at larger scale.
Another interesting phenomenon with the pharma companies is that their core business and the products are directly creating a social impact, therefore pharma companies walk a thin line when it comes to balancing their profitability and affordability of the medicines to the consumer. Some companies in the last 10 years have tied up with international organisations like World Health Organisation and tried to develop specific drugs for prevalent diseases in backward regions in India, Africa and Latin America.
After eight to 10 years of research, Ranbaxy has launched specific improved drugs related to malaria and HIV. Cipla has worked towards making cancer drugs affordable in India and has also been working with international organisations to make medicines, drugs for neglected disease like malaria, HIV/AIDS etc. at affordable price. These might not come under new regulation by the Government on CSR, but plays an important role towards being a socially responsible pharma company.
