Doing Good is Good Business

NEW DELHI – The concept of corporate social responsibility began to gain popularity in mainstream Indian business thinking at the dawn of this decade. It was, like so many things, a modern avatar of an old idea.

In ancient times, it was not just noblemen who undertook great public works. Businessmen also set aside a portion of their profits from a successful venture to give back to the community. In Rajasthan during the 1500s, this took the form of building bawaris — step-wells to provide water for thirsty travelers on the dry, dusty plains. Of course they didn’t call it CSR back then, but the spirit was the same. And then there’s the CSR record of the Tata Group, whose former leader, J.R.D. Tata, took to heart Mohandas K. Gandhi’s idea that businesses should act as trusts for the wealth of the people. American companies are adding their own chapter to this long history.

In an example of bringing things full circle, Coca-Cola India worked with Rajasthan government bodies to restore some of those ancient CSR projects — two bawaris around the city of Jaipur — to their former glory. Once filled with waste and silt, the Sarai Bawari in a small village off the Delhi-Jaipur highway is now home to healthy schools of fish, and provides water for residents without plumbing systems. “It’s beautiful underneath; it has so many stairs,” says Mohanlal Saini, a villager who played a key role in the restoration. The water level is so high now that the elegant archways are largely hidden — a happy problem indeed.

Today, American companies’ CSR efforts are more comprehensive than ever — so that even an accountant’s job responsibilities include finding ways to serve the environment. The commitments go deep into the business, past the posters of smiling children in the hallways and into the cubicles, where a recording system sits open for employees to read out textbooks for the blind. And deeper into the ground itself, with rainwater harvesting systems that reach the water table below the summer-parched surface. American businesses take
corporate citizenship “very seriously and do much in the way of education, outreach and employee involvement,” says Carmine D’Aloisio, minister counselor for commercial affairs at the U.S. Embassy in New Delhi.

Beyond philanthropy

Though it’s a frequently heard term, CSR is hard to define. Bradley Googins, an expert from Boston University who is bringing his message to India this summer, explains. “Many people think CSR is charitable giving, but it’s a much broader framework that covers how a company lives out its values through all of its behaviors: the products they make, how they treat their employees, how they ensure sustainable environments, how they govern the company, etc.”

It need not be a separate activity. Indeed, Emory University professor Jagdish Sheth has found that when both employees and management believe in CSR and make it part of their profit system, it’s more likely to be carried out over the long term. Moreover, his co-authored book Firms of Endearment found that companies which seek to maximize their value to society as a whole, “develop a significant and lasting competitive advantage over their counterparts who subscribe to the more traditional shareholder perspective.” They also found that such companies also had better long-term stock performance.

An integrated CSR program doesn’t just improve a company’s image, it also improves employee recruitment and morale. As qualified job seekers get more discriminating, they look not just for big pay packets, but a company with a positive image that is active in the community. After they join, the opportunity for team bonding during the implementation of a CSR project is something that cannot be reproduced at say, a holiday party. Plus, as Ajay Singha, executive director of the American Chamber of Commerce in India notes, when
you have a good environmental and social track record, more state governments will invite your company to do business there.

Corporate leaders in India readily admit that their earlier efforts often lacked cohesion and follow-through. They have learned that the old method of simply writing checks to charitable organizations is clearly no longer enough. “Corporates, U.S. corporates especially, are very mature now in their presence in India…. They are fully aware now that CSR activity is an integral part of their existence here,” says Singha. So much so that the Chamber has instituted a CSR award for American companies, which will be handed out later this
year.

Coca-Cola’s Journey

Take the case of Coca-Cola. In 2009, the company won the Social and Corporate Governance Award for Best Practices in CSR, given by the Bombay Stock Exchange, Nasscom Foundation and Times Foundation. In 2008, it also won multiple awards for its CSR efforts. These are the fruits of changes within the company and its approach to CSR.

Earlier this decade, some Indian communities felt that Coke’s bottling plants were adversely affecting the local water tables, and a widespread debate ensued. “The fact is, we have come a long way,” says Deepak Jolly, the vice president for public affairs and communications at Coca-Cola India. “We realize that building sustainable communities around our plants is equally important as building sustainability of the plants.”

Coca-Cola began its formal CSR activities in 2002, but realized it needed to go further, leading to their consolidation under one office in 2006. Manager positions responsible for CSR were created at the company level and at the bottling organizations. One of the men given new duties was Praveen Aggarwal, a general manager who came from a straight business background. The job has changed his outlook, he reports. “From me and a typical NGO guy, you won’t find much difference now,” he says, laughing. “We are happy to work in fields and dirty our hands.”

Hands-on leadership like his, from high levels, has caused enthusiasm for CSR to trickle down the company hierarchy. “We were not talking a language that was totally alien to the balance sheet side,” says Aggarwal. “We realized we can’t expect a production manager to leave behind his production and sales and come for tree plantation. But if he realizes that while doing tree plantation people will respect you more, he will be more sustainable in business.”
In addition to other measures such as increased wastewater recycling, Coke has created an Advisory Council on Environment and Sustainability. Including the former chairman of the Central Ground Water Board, Saleem Romani, the council visits all bottling plants once in a quarter and audits their water usage and overall environmental impact. These changes have led to concrete results: Coke’s total water usage across India went down from 5.62 billion liters in 2004 to 4.43 billion in 2005. It crossed the 6 billion liter mark after a 37 percent production increase in 2008, the company said in its environmental report in the same year.

The importance of partnerships

The scope of Microsoft’s India-wide CSR effort is impressive. For its educational initiative alone, part of a global Partners in Learning program in 111 countries, $40 million is allotted to India for 2003-2013. Project Shiksha, which trains school teachers in technology, has already passed 470,000 participants. Suneet Sethi, who heads the project, says it was conceptualized in 2004 when IT penetration was not very high in India. As is the case in many areas, schools are finally getting the resources to provide computer labs to students, but, “Teachers were not even comfortable touching a computer. They were scared of it,” he says.
The program is carried out under a public-private partnership model with state governments, and Uttarakhand was the first to take it up. The state government provides conveyance and accommodation for teachers who spend days in Microsoft classrooms. The company provides equipment, trainers, curriculum, post-trainingsupport and assessment. Since the project is carried out according to the build-own-operate-transfer (BOOT) model, after a few years Microsoft will hand over the staff and center to the government, check in periodically on the technical infrastructure and provide updated curriculum.

Microsoft’s computer academies in Uttarakhand and Andhra Pradesh have already been transferred to the state governments and are running smoothly. Shiksha is running in 12 states, and also worked to rebuild computer labs and train teachers in the Andaman Islands after the 2004 tsunami.

Being a global brand does have its benefits. Vikas Goswami, Microsoft’s head of CSR, says, “The international experience does help us to see how it’s done in Africa and Asia and other developing countries.” It also provides the resources and organization-wide vision for big initiatives. That’s not to say that doing an effective CSR program is easy, even for a company as big as Microsoft. Goswami points out that India has “more than three million to four million” NGOs, and finding the right one to partner with is critical for success.

For community technology centers and youth job training programs, the company experiences different challenges throughout India. In rural areas, they discover they need to ensure a regular electricity supply. In urban areas, merely finding the space to set up a center is a challenge. A local NGO must have a solid track record to ensure community participation, as well as the sustainability of the center.
Focusing on youth and education was a natural choice for Microsoft. “It makes sense to invest in people who will be assets to the country,” Goswami says, especially those who cannot afford access to technology. But isn’t Microsoft also creating potential customers? Yes, Goswami, says, that is part of the point. “You need a business connect. It can’t just be seen as philanthropy, otherwise it’s the first thing to go when business gets bad.”

Empowering employees

Amway India’s unique business model—based on 5.5 lakh independent product distributors in a nationwide direct product selling network—has allowed the company to adopt a grassroots CSR approach. For instance, national blood donation camps organized by the head office have consistently had big turnouts. “The agency would run out of bottles,” says Yoginder Singh, a member of the Amway Opportunity Foundation executive committee. At one such camp in Orissa, more than 800 people donated blood in a single day.

Distributors and employees find themselves emotionally invested in such projects because they are allowed to choose them. The selection process is largely decentralized because, as Singh says, the head office in New Delhi recognizes that it does not have the ground knowledge to say what would work best for Kolkata or Imphal. Local implementation committees of three distributors and two Amway staff in a city plan all charity and fund-raising activities. The CSR efforts are also monitored and evaluated.

Globally, Amway CSR focuses on underprivileged children, and in India the corporation has adopted more than 50 orphanages and sponsored programs for the blind or sight-impaired. In New Delhi, this has taken the form of Amway’s financial and technical support for an advanced computing job training center run in association with the All India Confederation of the Blind. For a 12-month course, Amway provides computers, instructors and the JAWS software that allows the students to navigate a desktop just as fast as someone who can see.

Inside the classroom, one hears a cacophony of computer-generated voices, asking for commands, reading out text and surfing the Internet. It speaks far too fast for the average sighted person to comprehend, but student Deepashi Sharma slows it down for a visitor’s benefit. Sharma has been placed as an assistant scientist at the Indian Defence Research and Development Organisation, and another student recently completed an initial interview for a headline writer position at NewsX.

Amway works with the human resources agencies it uses for its own recruitment to reach out to other businesses and show them the value the visually impaired can provide as employees. Amway has also hired one graduate for its own offices. Many students have been hired as technical writers and call center workers in IT companies — fulfilling J.L. Kaul’s dream of seeing his students placed into modern corporate sectors.

Kaul, secretary general of the All India Confederation of the Blind, relates the common story of businesses visiting the organization with offers to provide meals for the students. “All will try to feed them,” says Kaul, “but no one tries to give them training so they can be competitive in the market.” For the 30 graduates that have completed training so far, it’s a gift that will last a lifetime.

By Erica Lee Nelson
Photograph by Pankaj Nangia

Published in SPAN, July/August 2010.