WHAT IS CORPORATE SOCIAL RESPONSIBILITY? Corporate Social Responsibility has been evidently growing with Liberalization, Privatization and Globalization. As said by William Jr. Ford, Chairman, Ford Motor Co. “A good company delivers excellent products and services, and a great company does all that and strives to make the world a better place”, therefore booking profits for yourself in such a manner that is socially, environmentally and ethically acceptable thereby leading to an overall positive impact on society. 10 CSR PRACTICES TO BE FOLLOWED BY FMCG SECTOR CSR IN INDIA
The concept of Corporate Social Responsibility (CSR) is not new in India. It emerged from the ‘Vedic period” when history was not recorded in India. In that period, kings had an obligation towards society and merchants displayed their own business responsibility by building places of worship, education, inns and wells. Although the core function of business was to create wealth for society and was based on an economic structure, the business community with their rulers believed in the philosophy of “Sarva loka hitam” which means ‘‘the well-being of all stakeholders.
Also some instances could be gathered from Mythology such as encounter of Kubera ( Hindu Lord of Wealth) and Ganesha( Son of Lord Shiva and Parvati) that give the key learning that if you have been provided with excess of wealth, you owe an additional responsibility of upliftment of society, be it socially, environmentally or ethically, otherwise a day would come, when imperialism and ecological disturbances created in society would be a black hole for you that will swallow you and all your efforts throughout the years would turn kaput.
Chapple and Moon (2005) while analyzing the CSR activities in Asia found out that in India 72% of the companies claim to have a CSR strategy that is three times higher than other developing countries in the continent. CSR IN FMCG SECTOR The Associated Chambers of Commerce and Industry of India (ASSOCHAM), recently released a report saying that Indian companies engaged in FMCG and chemical sectors were most active in CSR. Out of 175 Indian companies studied, 52 companies in the FMCG sector have taken the most amount of CSR initiatives. This was followed by the chemical sector and then the IT sector.
Community welfare is the top CSR priority area for most Indian companies. The second most sought out CSR initiative was providing education and enlightening rural youth in the country. Environment based CSR initiatives placed third with big corporates placing importance on carbon auditing and working towards reducing their impact. Finally, the corporate sector is involved in health care by providing methods to eradicate diseases and educating rural people about hygiene and disease prevention. CSR forms an important tool in branding especially for FMCGs.
The Indian FMCG sector is the fourth largest sector in the economy and is set to grow to US$ 33. 4 billion by 2015. It is characterized by many MNCs operating out of India as well as good distribution networks. The FMCG sector is also the sector that contributes most towards a growing waste problem within the country and this is something that the sector must address. The food-processing industry alone is set to grow by billions of dollars and this will create its own waste streams. The potential for CSR in this sector is vast and hopefully companies galvanize on their growth will continue to invest in CSR as well.
As well said by Carter Roberts “It doesn’t matter what industry you’re in, the supply chain will include products from all around the world. Whether we’re talking about fabric made in China, soybeans grown in the Amazon, palm oil harvested in Indonesia, biofuels created in Africa—companies will have to know how their products and the raw materials they use in their operations are affecting places, people, biodiversity, and the environment” But as FMCG sector consume major of the resources of nature, be it agro raw material or the energy resources, so it is duly responsible towards the environment.
Also as they are creator of Food and Cleanliness semantically( primarily because of their major production) so they should also take a step forward to eradicate hunger, malnutrition and unhygienic practices from the society. Few of the practices that Fast Moving Cosumer Goods should bring into operation has been categorized in following ways that could be fruitful for the overall development of society. * UPLIFTMENT OF THE LOWER SECTION OF SOCIETY The major areas that has to be concentrated for the upliftment of society is by eradicating poverty and hunger and by promoting school education in rural areas.
We have various programs such as SUNDESH of DABUR’S that focus on ensuring overall socio-economic development of the rural & urban poor on a sustainable basis, through different participatory and need-based initiatives. It aims to reach out to the weaker and more vulnerable sections — such as women and children, illiterate and unemployed – of the society. Also we have TCCI( Tata Council for Community Iniatives) working in collaboration with United Nations Programme India has crafted Tata Index for Sustainable Human Development, a pioneering effort aiming at directing, managing and enhancing the community work.
Also we have ITC working with the concept of Triple Bottom line that would lead to social, economy, environment and social development. Major key focus area of the company is on raising agricultural areas for maintaining the productivity and helping the rural economy to be more socially inclusive. Also these organizations work with NGO’s to provide shelter, food to downtrodden section of the society. Apart from providing livelihood or recreational facilities to the backward sections of the society the sector is much more focused on the education of the children in the country as they are the future of the country.
Also there is a well known Chinese proverb “If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate people”, so companies are indulging in the free educational facilities for children. As we have SHIKSHA, P&G India’s flagship Corporate Social Responsibility Program, an integral part of P&G’s global corporate cause—Live, Learn and Thrive, which currently reaches out to over 50 million children annually. The program funds NGO efforts to address the underlying causes of poor access to education, such as poverty, health issues, and access to immunization.
In cases where schools don’t exist, the program also funds their construction. Now in its 8th year, Shiksha has enabled over 385,000 lesser-privileged children to access good, quality education by supporting the sustainable and tangible assets of schools. Shiksha has built and/or supported over 200 schools by interventions such as reactivating defunct government schools, building new schools or enhancing education infrastructure at existing schools. Also we have Support My School, a partnership among NDTV, Coca-Cola and UN-Habitat.
The partnership took the shape of the campaign “Support My School” in January 2011. The campaign was designed to channelize strengths of the partners and come up with a model of healthy active schools across the country. Today through Support My School, over 100 schools spread over 10 states can lay claim to better access to sanitation, water, playing facilities, libraries, computer centers and a more welcoming and learning environment. Over the last year, Support My School has evolved from being a campaign into becoming a platform.
Pearson Foundation and Tata Teleservices added a new dimension to the campaign. Several likeminded organizations, foundations, citizens and citizen groups have extended their support that has led to the schools being revitalized. * LEARNING & DEVELOPMENT OF SOCIETY It is often said that there are two Indias – Bharat which exists in the villages and India which thrives in the urban areas. If our country has to have real progress and make its mark on the global stage, then these two Indias must converge.
Prosperity will have to come to our villages, towns and cities. So for the overall development of the society we should concentrate on rural areas as it is a major factor for progress of the nation. The explosion in rural consumption and growing competition for scarce resources demands that we embrace a new collaborative model of development for agricultural practices. Therefore the key drivers of this model would be Access to Urban India, Technology Adoption, Financial Inclusion, Education & Health, and Skill Building.
First of all coming to access to urban services, we could say that it had led to significantly higher level of knowledge and new sources of livelihood in villages located in 19 R-Urban (Rural-Urban) clusters such as the National Capital Region which has emerged as a single geographical entity from Meerut in UP to Faridabad in Haryana. Basically the idea is creating another 50 R-Urban hubs where every village is within one hour of travel time to an urban centre would be transformational. This could ensure that more than 2/3rd of the rural population has easy access to urban India.
These urban hubs will support rural areas and become the big markets of tomorrow. Technology has the potential to dismantle social and cultural barriers to ensure not only quality of services but also equality of access to all. As it has been rightly said by Bill Gates that “Innovations that are guided by smallholder farmers, adapted to local circumstances, and sustainable for the economy and environment will be necessary to ensure food security in the future”, therefore ITC has taken an initiative of E-choupals that would help in innovating.
E-Choupal project has been launched in 2000 year and has been successfully executed in over 40,000 villages and has gained appreciation worldwide. Basic problem encountered during the implementation of the project was infrastructure inadequacy, telecom connectivity and bandwidth. Therefore it also led to improvement of infrastructure in the country leading to job creation and improvement in the economy of the country. As India’s ‘Kissan’ company, ITC has taken to involve the farmers in the management of whole e-Choupal initiatives.
This project is considered as a success as its acting as a win-win opportunity for the farmers and company too. In the coming few years this project will be extended to 15 more states and also plans to channelize other services along with, related to health and education sector through the same e-Choupal infrastructure. So like this many more companies should come up with these set of ideas that would help in skill building as it would be a boost for their business and nation’s economy as well. * EMPOWERING WOMEN India today is at the cusp of a paradigm change in its growth and its position in the world.
We need to think big and scale up rapidly in each and every area, be it education, infrastructure, industry, financial services or equality of both genders. Even the Nobel laureate and a chief economist Joseph Stiglitz has made a remark that “Giving money to fathers does not mean it will go to their children. Money given to mothers have a greater chance of going to their children”, hence suggesting the importance of empowering the women in the country. For around two centuries, social reformers and missionaries in India have endeavored to bring women out of confines in which centuries of traditions had kept them.
Educational attainment and economic participation are the key constituents in ensuring the empowerment of women. And as in India major population is in rural areas so we should be more focused on elevating their standards by educating women in rural India that make them self sufficient and wise enough so that they could take decisions. Also as we know as they are the so called Home Ministers in the family, therefore it would help women in knowing about proper diet and cleanliness for their family, how precautions taken during sex could control population and much more.
Therefore, if they are educated, they can contribute to the health and education of the next generation. Basically educating a women is educating the nation. To quote an example HUL has started Project Shakti in rural areas. Hindustan Unilever’s Shakti Entrepreneurial Programme helps women in rural India set up small businesses as direct-to-consumer retailers. The scheme equips women with business skills and a way out of poverty as well as creating a crucial new distribution channel for Unilever products in the large and fast-growing global market of low-spending consumers.
Also through the method they are more and more aware of the products in the market that are beneficial such as Lifebuoy soap is a cheap soap bar and helps maintaining cleanliness that eradicates diseases. So such programmes initiated by FMCG sector could create a win-win situation for both the companies and rural India as the market is still untapped in rural India and there is a huge scope. * INVOLVEMENT OF ETHICAL PRACTICES AND SATISFYING THE CUSTOMERS Primarily we know that Fast Moving Consumer Goods majorly comprises of edible items, cleanliness products and much more.
Therefore their consumption directly affects the physical and mental health of the person. As these goods are consumed on daily basis, therefore they should be available at reasonable prices. As now a days it has been found that many of the companies are exploiting their customers by providing less weight for the same price, therefore standardized packing should be use as before profit maximization their major concern should be satisfaction of the customer.
Also warnings and precautions to be taken while consumptions of these goods should be clearly specified as in case of cosmetics their expiry date, composition is really important to be known before consumption. Also quality should be major concern for the companies. Marico produces Parachute oil. Once they found that their oil consist of a dollop of some chemical that was not even harmful to anyone, but they still got all their lots lifted from markets so that nobody consumes it and stopped the production line in order to eliminate it , even it caused them a huge loss, but their major concern was quality to customers.
On the other side , we do have example of Coca Cola, they don’t even purify the water before making aerated drinks as it will cut down on their profits, and as they are directly consumed by children and others, therefore it could affect their health. Hence they should improve their practices. Also one more example is that ITC should not sell cigarettes, because even though they specify the warnings, but they are making profits at stake of somebody else’s life and both the incidents quoted above are against the Rule Utilitarianism and Ethics of Care.
Some companies on the other hand realize importance towards society and help the society to their level best. One of the example is Britannia. As the market was competitive, so instead of using unethical practices to boost their profits, they used the Blue Ocean Strategy by launching health range in biscuit segment. In context to CSR initiatives it has focused upon health care sector, by providing healthy food products at minimal prices and with best quality.
Also companies should not mislead their customers as in case of Easy off Bang and should not commit false promises to customers that could lead to unnecessary hopes in their mind as Complan does by saying it increases your height and mental skills. To conclude, they should be more ethical in their conduct. * RESPONSIBILITY TOWARDS ENVIRONMENT As said “The frog does not drink up the pond in which he lives”, hence we should be more responsible towards the environment as only after the last tree has been cut down, the last river has been poisoned, the last fish caught, only then will we find that money cannot be eaten.
In order to protect the environment all these companies should take initiatives of reducing CO2 emissions, should manage waste, reduce electricity and water consumption and should not destroy forests. To quote few of the practices in operation by some of the FMCG companies are following. ITC is working towards managing water soil level and forest resources to maintain the balance and ecological security. One initiative of Dabur is Medicinal plant project. Dehi me dadami te’ (As you give me, I give you in return). This quote from an ancient text sums up Dabur’s commitment towards nature.
With a strong foundation in the Himlayan Kingdom, Nepal, Dabur has taken many strong — but quiet — initiatives Nepal has been a major source for the herbal plants which are extensively used in Tibetan, Chinese, Nepalese and Indian medicines. However, due to indiscriminate use, over exploitations, poor collection methods, early harvesting and lack of the post harvest technology, these natural reserves are depleting speedily. Dabur Nepal has started the project on medicinal plants in Nepal to provide the modern technology for cultivation of the required medicinal herbs of Himalayas to the farmers.
A state-of-the-art Greenhouse facility has been set up at Banepa, which has the capability to produce 5-6 million saplings of medicinal plants per annum. Besides helping preserve natural resources, this initiative has also gone a long way in generating employment and income for local people and improving the socio-economic conditions of local populace in the Himalayan Kingdom. In case of The Body Shop they are removing low-efficiency lighting in stores and replacing it with LED lighting which uses much less electricity and lasts longer.
In some stores they have piloting energy-management systems to automatically control equipment such as heating and air conditioning. In other stores they have Automatic Meter Readers (AMRs) which track energy usage. The data from AMRs shows exactly how their employees can reduce consumption through direct action. Coca-Cola Hellenic announced the inauguration of advanced energy-efficient power generating capacity at its plant in Ukraine that will reduce CO2 emissions by more than 40% and will increase energy efficiency by more than 32% versus traditional power generation.
Since the year 2004, it has globally implemented the “Water Stewardship” strategy, which strategically promotes the three actions of reducing the water used to produce its beverages, recycling water used for beverage manufacturing processes, and replenishing water in local communities and nature. Such initiatives should also be taken in our country to lower the carbon emissions and reducing the consumptions of water and electricity. The coating added to the exterior walls of the Coca-Cola Japan’s head office in 2005 contains an environmentally considerate substance that is a photocatalyst.
When coming into contact with sunlight or rain, a photocatalyst has the characteristics of being environment considerate, cleaning the air, enhancing energy efficiency, serving as an anti-foulant. The company also planted Hedera canariensis, a type of ivy, on the roof of the head office building, in pursuit of the goal of contributing to a reduction in CO2. Also we do have LEED certified buildings in the nation that help us to minimize the usage of electricity and water.
BEING CONCERNED FOR YOUR EMPLOYEES AND IMPROVING THEIR LIVES As the employees working in the your company are responsible to increase your sales and profit, therefore they should be provided with healthy working conditions and extra benefits. Tata has a variety of programmes among them most of which are community development programmes. It is a leading provider of maternal and child health services such as free reproductive services for women, 98% immunisation in Jamshedpur, family planning etc. It promotes sports as a way of life.
It has established a football academy, archery academy, and promotes sports among employees. AMUL, Verghese Kurien “Father of White Revolution” strongly believed that by placing technology and professional management in the hands of the farmers, the living standards of millions of rural poor could be improved. He believed that the greatest assets of this country are its people, and dedicated his life to the task of harnessing the power of the people in a manner which promoted their larger interests.
Around 65 years later that figure has grown to a staggering 16,100 with 3. 0 million milk producers pouring millions of tonnes of milk into the GCMMF containers twice daily and also it has improved the living standards of these people in rural India. Similarly Nestle the living standard of people in Moga (a village in India) by Dairy Development. * MANAGING WASTE AND USING THE RESOURCES OPTIMALLY It is said “ Earth was not gifted to you by your parents, it was loaned to you by your children”, so we have to make it a better place and then return it back to children that is it should be more happier and healthier.
Therefore we should preserve the nature and use the resources optimally. An unlikely partnership between profitable FMCG companies like Hindustan Unilever and Dabur and penniless rag pickers is now offering a hint of a fix to India’s 12,000 tonnes a day plastic junk pile-up. In an early pilot, HUL is trying to create market value for discarded sachets and lighter plastic packaging so that rag pickers find incentive to collect them from the streets. It has also partnered with a company in Chennai to turn such flexible plastic waste into fuel oil at a viable cost.
HUL’s factory in Pondicherry has been using this fuel to power its boilers. Therefore they are using a strategy that helps in managing waste and produce energy using it that is best out of waste. Also one more way for FMCG companies to reduce the waste would be improving their packaging practices and using environment friendly material. Heinz will be bottling its famous ketchup in more earth-friendly packaging. Company would be using plant-based bottles developed by Coke — aptly named “Plant Bottles” — for all of its 20 oz. ketchup bottles.
The plastic bottles consist of 30 percent plant material, and are made with a Brazilian sugarcane ethanol, which results in a lower reliance on unsustainable resources as compared with traditional PET bottles. Heinz wants to switch to more eco-friendly bottles that is a vital step in reducing the company’s greenhouse gas emissions, solid waste, water consumption and energy usage. When Coke first introduced Plant Bottles in 2009, an initial life-cycle analysis by the Imperial College London showed that the bottle had a 12 to 19 percent reduction in carbon impact.
Coca-Cola said that last year, Plant Bottles eliminated the equivalent of 30,000 metric tons of CO2. Hence other FMCG companies should also come forward and adopt these kind of practices. Coca-Cola Central Japan Products Co. , Ltd. ’ s Tokai Kita Plant has achieved a reduction in the volume of solid waste generated of approximately 90% by fermenting coffee grounds, used tea leaves and the sludge from processed wastewater and converting them to energy resources. Many tea and coffee companies in India can adopt the same strategy to manage waste and create biofuels out of it. RENEWING LIVES Also various FMCG companies in the country are taking specific measures to renew lives of people by giving them a ray of hope and a reason to live. Few of the initiatives taken in the direction are stated. Himalaya Herbal Healthcare signed an agreement with the Department of Prison Rehabilitation, Government of Karnataka, to create employment opportunities for prisoners, with the objective of rehabilitating them. According to the agreement, the prisoners cultivate medicinal herbs for Himalaya.
This helps in skill-building and employment generation. The program targets prisoners charged with minor offences, who have shown good behaviour and a desire to rebuild their lives. Tata has an organized aid programme in case of natural disasters including long term rehabilitation and reconstruction works. It did a commendable work during Gujarat earthquakes and Orissa floods. P&G, Protecting Futures works with partner organizations to provide puberty education, sanitary protection, and sanitary facilities to help vulnerable girls stay in school.
Since 2006, Protecting Futures has worked with nine partners in 20 countries, reaching more than 720,000 girls in the developing world. Almost one billion people in the developing world do not have access to clean drinking water. As a result, thousands of children die every day. The P&G Children’s Safe Drinking Water Program (CSDW) reaches these people through P&G packets, a water purifying technology developed by P&G and the U. S. Centers for Disease Control and Prevention (CDC). One small P&G packet quickly turns 10 liters of dirty, potentially deadly water into clean, drinkable water.
The packets can be used anywhere in the world, including areas affected by natural disaster. CSDW and its partners provide clean drinking water in schools, outreach to mothers in health clinics, and clean drinking water for malnourished children, and also help people living with AIDS to live positively. * DEFENDING ANIMAL RIGHTS Animals are entitled to the possession of their own lives, and their most basic interests such as an interest in not suffering should be afforded the same consideration as the similar interests of human beings.
Therefore animals shouldn’t be molested or used for testing of cosmetics, products and other ingredients. As the human population grows and our demand for natural resources increases, more and more habitats are devastated. Today, we may be losing 30,000 species a year — a rate much faster than at any time since the last great extinction 65 million years ago that wiped out most of the dinosaurs. If we continue on this course, we will destroy even ourselves. The Body Shop is against animal testing. They comply with the very strict requirements of the Humane Cosmetics Standard.
This standard was set by the British Union for the Abolition of Vivisection (BUAV) and is regarded as the highest standard for animal welfare in the cosmetics industry. They audit them regularly to ensure they comply. They also audit out themselves. Every two years they check their policies and compliances to ensure they adhering to the latest animal-welfare guidelines. There are many campaigns that The Body Shop has conducted for animals. Miracle Treatment Partnering with WSPA the Miracle Treatment provided the chance to perform a iracle – to join together to improve the welfare of endangered Borneo Orangutans. 20,000+ pledges. Join the Humane Chain Australian’s to take action to help end the live sheep export trade.
Aiming for 40,000 signatures, a person signing for every sheep that dies on route each year. 63000 customers joined the humane chain. Coca-Cola started a holiday ad campaign to protect polar bears by donating up to $3 million to the World Wildlife Fund. Similar steps should be taken by Indian FMCG companies to save the species (SAVE THE TIGER CAMPAIGN) and to stand for the animal rights. * DEFENDING HUMAN RIGHTS
Our species is one, and each of the individuals who compose it are entitled to equal moral consideration. The true civilization is where every man gives to every other man every right he claims for himself. Therefore initiatives should be taken in order to create an equivalent society for each and every person. The Body Shop has headed for the sake of the same. I am My Homelands It supports Indigenous human rights to stay on their homeland. All Together Now Aiming for 40,000 customers to leave a finger print and commit to constructive conversations about racism with friends, family and colleagues. 0,000 finger prints collected. Your Beauty and Worth cannot be measured Highlighting dangers of restrictive dieting and excessive exercise, it encourages staff and customers to believe beautiful, healthy people come in all shapes and sizes. 26,000 signatures to the Minister for Health & Ageing, requesting eating disorders become a major health priority. Make Your Mark The Dalai Lama helps us launch Make Your Mark. The campaign, in partnership with Amnesty International, marks the 50th Anniversary of the Universal Declaration of Human Rights.
Three million people sign the petition. Stop Sex Trafficking of Children and Young People In September 2009, The Body Shop started a journey together with ECPAT International to Stop Sex Trafficking of Children and Young People. From every corner of The Body Shop, around the world we engaged with our customers, friends and family. We raised awareness and funds, secured petition signatures and we marched! YES, YES, YES to Safe Sex Help the fight against HIV by practicing safe sex and buying a lip butter to fund global HIV awareness work of the Staying Alive Foundation.
And FMCG companies could be really helpful in spreading this by promoting the usage of condoms. These were few of the campaigns conducted by The Body Shop. Indian companies should walk on similar steps in order to make nation and people more secure as they a responsibility towards society. Also companies while recruiting or compensating should not be biased on basis of caste, color, creed, religion, gender , race or AIDS. The policy of Distributive Justice should be followed in order to maintain a healthy environment.
ITC believes that all its employees must live with social and economic dignity and freedom, regardless of nationality, gender, race, economic status or religion. In the management of its businesses and operations therefore, ITC ensures that it upholds the spirit of human rights as enshrined in existing international standards such as the Universal Declaration and the Fundamental Human Rights Conventions of the ILO. CONCLUSIONS Above mentioned are few of the practices that could be implemented in order to do good of all the stakeholders involved.
This is good for health of your business, health of the nation and health of the Earth. Thereby, more strategies should be adopted in order to make the world a better and happier place. And also it’s always been difficult for corporation to lead an examined life. I’ve always felt like a company has the responsibility to not wait for the government to tell it what to do, or to wait for the consumer to tell it what to do, but as soon as it finds out it’s doing something wrong, stop doing it. So the companies should realize their duties and start implementing various policies for the benefits and humanity.