Corporate Social Responsibility: The Indian Context
The concept of social responsibility among Indian business leaders is not new. Historically, it has been evident in the form of dharamshalas, mosques, and temples.
Until the late 20th century, the primary mission of business firms was economic. However, developments in the business environment, such as the shift from capital to knowledge and increased societal awareness, have led to heightened expectations from businesses.
By 1950s, the concept of Corporate Social Responsibility (CSR) has evolved significantly, encompassing corporate social responsiveness, corporate social performance, and more. While originally rooted in management literature, CSR has grown to become a critical component of business strategy worldwide.
During the 1960s and 1970s, the relationship between business and society was re-examined, leading to new theories regarding corporate responsibilities. Researchers proposed that large firms exert significant societal influence and thus have a responsibility to use economic resources altruistically to meet social goals. This perspective aligns with the argument that CSR can improve a company’s competitiveness and financial success over the long term.
Paradigm Shift in CSR
“For many years, community development goals were philanthropic activities that were seen as separate from business objectives, not fundamental to them; doing well and doing good were seen as separate pursuits. But I think that is changing. What many organisations are learning is that cutting-edge innovation and competitive advantage can result from weaving social and environmental considerations into business strategy from the beginning.”
– Carly Fiorina, Hewlett Packard, Business for Social Responsibility Conference, November 12, 2003
Indian Philosophy and CSR
Global leaders are promoting collaboration between industries and society to create sustainable strategies. In India, the confluence of profits and social ideals is gaining traction, as illustrated by several successful initiatives.
Indian philosophy has long emphasised the interconnectedness of all beings and the welfare of the community. The ancient concept of Vasudhaiva Kutumbakam (the world is one family) and the prayer Sarve Bhavantu Sukhinah (may all be happy) have served as guiding principles for Indian CSR.
These philosophies underpin the belief that businesses have a responsibility not only to shareholders but also to society at large, ensuring holistic and inclusive growth.
India’s Developmental Challenges and CSR’s Role
India faces significant developmental challenges, with over 800 million people living on less than $2 a day. Such economic backwardness threatens societal stability and, consequently, business growth. Therefore, creating sustainable livelihoods is an essential economic objective that business strategists cannot ignore. Many Indian companies have adopted unique business models to contribute to sustainable livelihoods while enhancing natural capital and shareholder wealth.
10 CSR Success Stories of India
- FINO (Financial Information Network & Operations): In areas like Dharavi, traditional banking services were inaccessible to the economically disadvantaged. FINO bridged this gap by providing technology and operational services, facilitating financial transactions for underserved communities. FINO’s agents, called bandhus (friends), visit customers at their doorsteps, making financial services accessible and inclusive.
- Hindustan Unilever – Project Shakti: Project Shakti aims to create income-generating opportunities for underprivileged rural women by offering sustainable micro-enterprise opportunities. By 2010, it had reached over 100,000 villages, significantly improving living standards through health and hygiene awareness programs.
- ITC Group – E-Choupal: E-Choupal, an internet-based platform, transformed ITC’s agri-business by directly procuring from farmers, reducing procurement costs, and enhancing supply chain predictability. The initiative has reached over 4 million farmers across 40,000 villages, offering a range of services and products.
- FabIndia: FabIndia commercialises handmade products, supporting artisan communities through a pioneering, community-led supply chain. Artisans hold substantial shares in community-owned companies, ensuring they benefit from FabIndia’s growth while maintaining high-quality standards.
- Tata Group: The Tata Group has been a pioneer in CSR, introducing various welfare schemes even before they were mandated by law such as the 8-hour workday, free medical aid, and workers’ provident fund schemes long before they were mandated. Also, their employee-centric initiative like educational scholarships have significantly improved employee welfare and community development and have given workers a stronger voice in the company’s affairs.
- Reliance Foundation: Reliance Foundation, the CSR arm of Reliance Industries, has launched several initiatives focusing on rural transformation, healthcare, education, and urban renewal. Their Bharat India Jodo initiative aims to bridge the urban-rural divide through integrated development.
- Infosys Foundation: The Infosys Foundation focuses on healthcare, education, and rural development. Their Aarohan Social Innovation Awards celebrate innovations aimed at addressing societal challenges in India.
- Wipro Cares: Wipro’s CSR activities focus on education, community ecology, and disaster response. Their education programmes aim to improve the quality of primary education in rural areas.
- Mahindra Rise: Mahindra & Mahindra’s CSR initiatives, under the umbrella of Mahindra Rise, include projects in education, health, and environmental sustainability. Their Nanhi Kali programme supports the education of underprivileged girls. It has enabled over 330,000 girls to pursue education, thereby empowering them and their communities.
- Godrej Group: Godrej’s Good & Green initiative aims to create a more inclusive and greener India. Their projects focus on employability, environmental sustainability, and promoting health and wellness.
- Larsen & Toubro (L&T): Larsen & Toubro (L&T) undertakes various community initiatives as part of its CSR activities. Mostly focused on water conservation, skill development, health, and education. Their initiatives have significantly contributed to improving the quality of life in the communities they serve.
The Future of CSR in India
CSR in India has transitioned from philanthropy to a strategic business approach, aligning social and environmental goals with economic objectives. By adopting comprehensive CSR practices, businesses can achieve sustainable profits while contributing to societal welfare. As India continues to evolve, integrating CSR into core business strategies will be crucial for fostering inclusive growth and achieving long-term success.
Corporate Social Responsibility is no longer just about philanthropy; it is about creating a symbiotic relationship between businesses and society, ensuring sustainable development and mutual growth. Drawing from the ancient Indian philosophies of Vasudhaiva Kutumbakam and Sarve Bhavantu Sukhinah, CSR in India aims to build a world where businesses contribute to the overall happiness and welfare of all members of society.