Community

Any visitor to India cannot fail to be struck by dramatic contrasts in levels of income and wealth, with hovels literally co-existing alongside world-class businesses. The Indian economy has been racing along at an average growth rate of almost 6% a year for the last 25 years, and in the 12 months to March 31 it is forecast to have grown by over 8%. But this astonishing economic growth has been accompanied by a widening gap between rich and poor.

I was left with some vivid memories after my visit to India in February. While I was in Delhi, former US president Bill Clinton was among the star guests at a celebrity wedding reputedly costing millions of pounds. Yet one-third of India’s 1.1 billion people live on less than a dollar a day.

My visit to Mumbai coincided with the Indian president’s visit, in town to exhort the Indian IT sector to expand its global market share to 15% from 3.4% by the year 2010. Yet in the same week, the UN Development Programme’s Human Development Report Office director pointed out that India has 2 million child deaths per annum and that half of all Indian children are underweight for their age.

India has the highest number of HIV/AIDS infections after South Africa (although one Indian MP quoted to me a magazine article that suggested only 7% of businesses think HIV is a major issue, versus 46% worldwide) and the environmental impacts of burgeoning urban populations and rapid economic growth are all too clearly visible.

The population is young: 54% of the population is below 25 years and 70% below 35 years. According to a report by the Confederation of Indian Industries (CII) in December 2005, women represent only 6% of the workforce of corporate houses.

Whither CSR

Although CSR seems to be largely still seen as corporate philanthropy in India, there are some promising signs of real progress. Some well-established Indian businesses have a very long tradition of ethical and responsible business. The most consistently quoted is the Tata Group (now in 91 different companies), with parallels to the great Quaker businesses in the UK like Rowntree and Cadbury. Tata was created in the 19th century with a very strong, paternalistic and ethical philosophy, introducing an 8-hour day in 1912 and paid leave in 1915.

Now, some of the newer, globally competitive IT companies like Wipro and Infosys are also regularly quoted as having a holistic approach to responsible business. Dr Reddy Pharmaceuticals in Hyderabad also impressed me, having produced two sustainability reports. It has a very sophisticated approach to environmental management, health and safety, employee development, and community involvement.

The CII has adopted a CSR policy statement and has a series of initiatives both for corporate action on community issues and on corporate environmental practice (although interestingly, the latter is part of CII’s work on competitiveness, not CSR). CII has hosted an Indian equivalent of the Prince’s Youth Business Trust since 1992, which has helped 12,000 young Indians to start their own businesses.

The CII is starting a CSR networking forum, which will eventually operate in each of the 50 CII offices across India. Each local forum will be chaired by an experienced chief executive from a committed responsible business and will involve 20-25 handpicked businesses that want to improve their skills in CSR. They are, using their ‘bully-pulpit’, influencing role on a number of issues such as encouraging businesses to recruit from ‘backward castes’. They have a joint programme with City and Guilds from the UK in order to support this. CII have also set up the Indian Business Trust for HIV AIDS.

International pressure

The growing international pressure for responsible business is probably going to most immediately affect Indian businesses in:

• Tender requirements from international, high profile business customers;
• Due diligence if going in to a joint-venture internationally;
• Acceptance/opposition from trade unions, local communities, regulators, media if taking over an overseas company;
• Reputational issues in attracting and retaining the most talented staff and fully motivating them.

With support from the EU and Business in the Community, the Bombay Chamber of Commerce has a two-year programme under way to develop and implement CSR training for small firms. The chamber hopes to establish a clearing-house of company expertise on particular aspects of CSR with relevant small business materials. The Small Industries Development Bank of India has a $10m facility from German agency KfW to offer low interest loans to small- and medium-sized enterprises for environmental improvements, with free cleaner production audits available.

HSBC is now extending its well-established Hong Kong programme Living Business into India. This is a programme for SMEs developed by HSBC, with the support of the Business Environment Council, to help SMEs be more profitable and productive by implementing socially and environmentally responsible business practices. It provides free seminars, a website and cash awards for the most successful SMEs.

The Narsee Monjee Institute of Management, which is also in Bombay, has become the first of India’s 700 plus business schools to introduce CSR as a compulsory course on their MBA programme. Elsewhere, the SP Jain Institute of Management and Research is partnering with Ashridge and nine other business schools globally, organised by the Aspen Institute for Business in Society.

The 7Ps of effective community involvement

People

A number of Indian headquartered and multinational businesses in India like Citigroup now encourage and support their staff to volunteer in the community. Citigroup staff, inter alia, help micro-credit and other enterprise initiatives.

Product

Businesses can make their own product available free or heavily discounted, to community causes; and/or can donate surplus equipment e.g. office furniture and IT when they are upgrading or moving premises. The Dell Foundation opened the Dell Computer Center for children in Sahakamagar. The company donated the space, computers, and employee volunteer time to teach technology skills to underprivileged youth.

Purchasing

Coca Cola India has installed rainwater harvesting systems in their own bottling plant and has been providing funding and expertise through NGOs for rainwater harvesting projects across India.

Promotion

Jet Airways has replicated BA’sChange for Good campaign for Save the Children and is committed to quarterly features in their in-flight magazine

Premises

Thermax an engineering company producing energy efficient and eco-friendly solutions, has established a school for less privileged children in part of its corporate premises in Pune, for children from nearby slums. Employee volunteers also work in the school.

Power

SP Jain’s BENEX is working with IT companies to hire 'backward castes' and give long-term training/apprenticeships in IT. Unilever’s Project Shakti - Creating Rural Entrepreneurs is training 13,000 underprivileged Indian women to distribute Unilever products to 70 million rural consumers. The company is working with women's self-help groups, to teach selling and book-keeping skills and build commercial knowledge. The women who participate are typically able to double their household incomes.

Profit

Conglomerate ITC’s e-choupal initiative, uses IT to provide farmers with real-time access to customised knowledge on specially designed websites in their own languages – helping them to align farm output to market demands, weather conditions, and to secure better quality, productivity and improved prices. The initiative has already helped over 2.4 million farmers in 21,000 villages. The goal over the next decade is 100,000 villages and 10 million farmers (1/6 India villages). E-choupal has won an international award from IBLF/UNDP International Chamber of Commerce.

David Grayson a contributing editor. David undertook a CSR lecture tour of India at the invitation of the British Council. A full report of David’s week in India and texts of his lectures, can be found at www.davidgrayson.net.

UK business will have the opportunity to hear more about Indian business opportunities at a conference in London in October entitled 'India Calling', organised by the 100-year-old Indian Merchants’ Chamber with the support of the Indian government.

India: key facts

People

• Population: 1.1 billion (India is second only to China in country population)
• 33% of the population live on less than one dollar a day and 80% live on less than 2 dollars a day.
• Life expectancy: 64 years
• Approximately 1% of the population have HIV/Aids
• Literacy: 59.5% (male: 70.2%; female: 48.3%)
• Only 30% of population have access to adequate sanitation (58% urban; 18% rural)
• 9% unemployed
• 70% of population live in rural areas
• 1% of the population have travelled on an aeroplane

Economy

• GDP per capita $2,600
• FDI $5bn in 2006
• Sixth highest energy consumer in the world

Environment

• 50% increase in CO2 emissions per capita from 1990 to 2002
• Approximately 5-6% of national income is lost as a result of pollution
• Approximately 37,000 people die prematurely from air pollution in 7 of India’s largest cities every year
• In New Delhi airborne particulate matter (PM) has been registered at levels more than 10 times India's legal limit

Sources: International Herald Tribune, CSR Asia, World Bank, CIA World Factbook, UNICEF, National Geographic, New Statesman.

Further information

Dr Reddy’s ( www.drreddys.com)
HSBC Living Business: www.hsbc.com.hk/hk/business/livingbusiness/
Narsee Monjee Institute of Management ( www.nmims.org)
The SP Jain Institute of Management and Research ( www.spjimr.org)
Centre for Social Markets (CSM) http://www.csmworld.org/
Indian NGOs www.indianngos.com
Confederation of Indian Industry http://www.ciionline.org/
Bombay Chamber ( www.bombaychamber-projects.com)
British Council ( www.britishcouncil.org.in)

When globalisation leaves people behind – International Herald Tribune (13 February 2006)