Issue: #10 | January 2015

CSR : Not Mandate

BUT CULTURAL CHANGE

IN THE ISSUE
Fiino deliberates on Sustainability @ IOD
CSR in India: Incorporating a Cultural
Change
CEO Speaks
Wipro's View Of Good Citizen
Not Reel, But Real Action : CSR of the
Indian Film Industries
Fiinobservation of International Days

www.inova on.co.in

01

Fiinovation Deliberates on Sustainability @ IOD

New Delhi, January 20, 2015: Sustainability
formed the core of One-day National Convention
on Corporate Governance and Sustainability & IOD
Annual Meet, organised by Institute of Directors on
December 20, 2014 at The Ashoka Hotel, New Delhi.
Fiinovation participated in the event which brought
together leading national and business leaders,
policy makers, investment bankers, multilateral
institutions and thought leaders from across the
world.
Providing an insight during the panel discussion on
'Effective Corporate Governance for Growth &
Sustainability', Mr. Soumitro Chakraborty, Chief
Executive Ofcer, Innovative Financial Advisors Pvt. Ltd. said, "Sustainability is still not a core strategy for corporations in India. It
fails to be a core issue for corporations who are not addressing it adequately."
The issue of credibility of data was discussed which the panellists said eventually lies in the principle of the organisation that
ensures how the organisation understands and evaluates data. Speaking of a delusion which exists between economy and
growth, Mr. Chakraborty said, "We need to understand these two imperatives especially if we talk of economy. Sustainability
tends to take a backseat, since talks around economy are representative of primary prots and primary inferences." He further
explained how the problem arises when we do not align economy with growth.
Drawing an analogy of an economy to a monster which we need to keep feeding into and end up forgetting growth, which is
more human inclusive, he said that the economy delusion factor exists across the industry.
Ensuring corporate governance and sustainability requires suitable corporate governance structures that address sustainability
as a core issue in the board, since we cannot expect sustainability to be addressed down under. Elaborating on how
sustainability needs to be implemented at the policy level, Mr Chakraborty said if the top management is serious about
sustainability, they need to start at a policy level and not at an execution stage. Speaking of the two percent mandate, he
explained that ad hoc contribution to social projects does not feed into the sustainability discourse. Since sustainability and
social responsibility need to start when we start making policies and should not be a part of the last page of the annual report of
corporations.
His session created a stir and ensured an active participation from the panellists who spoke of interesting developments and
activities in the eld of sustainability in their organisations

Food for Thought...

Hear the Inuencers Speak...

The Tata Group spent Rs 1,000 crore on corporate social

"The CSR activities being performed by Coal India, NTPC and

enterprises run by Tatas in Jharkhand are so visible and
pronounced that their impact is felt at the very rst sight
because of the developmental work that these have been
undertaking to build connectivity and linkages."
-Jayant Sinha

responsibility (CSR) in 2013-14.

Aditya Birla Group spent Rs 200 crore on CSR in scal

2014, which is a little over 2% of the net prot from India.

Minister of State for Finance

38.6

million people benet by SAIL's healthcare

initiatives, which include 57 primary health centers and
21 hospitals.

"Top leadership is responsible for looking at the big picture for

the company CSR is a vital part of that."
-K Venkataramanan
CEO & MD, L&T

As per recent report by Mercer, Education emerged as the

most favoured area, followed by community-based
development and environment sustainability for CSR
spend by companies.

Only 11 of the top hundred companies implement CSR

programmes through their own foundations.

Ikea foundation will invest another Rs 190 crore in India in

the year 2015.

Our Target Is To train a Million People In 10 Years.

-Adi Godrej
When it comes to fullling my duties, I want to be known as an
honest man.
-Bharat Ratna JRD Tata
Corporates can offer mobile connectivity to 50,000 villages
through CSR.
-FICCI

02

CSR in India
Incorporating a Cultural Change
It has been a year after the amendments to the Companies Act have come into play, especially Section 135. Corporate
Social Responsibility has been the buzz word among the business community over the last few years. The amendment has
ensured for the rst time in history that voluntary and informal activities are included under the legal mandate.
Even though the essence of CSR has been growing since the last two decades, the new law is more inclined towards
bringing about a cultural change in the operations of the business fraternity. Currently, the aura created ensures that not
only those companies who fall in the CSR ambit, but even those who don't fall are feeling obliged to initiate social
development programmes.
This amendment has created a stir and has been criticized for the challenges involved in setting up credible CSR
programmes that go beyond the letter of the law. Many industrialists and organizations have been vocal that the 2% ruling
could lead to forced philanthropy, check box behaviour, corruption, and manipulation of data for avoidance to comply. As
Ratan Tata says, we have a phenomenon which is meant to be good but is going to be somewhat chaotic ... we don't as yet
know what kind of monitoring there'll be in terms of how well this money is used. As per Azim Premji, 2% on CSR is a lot,
especially for companies that are trying to scale up in these difcult times. It must not be imposed. Many companies are
still grappling with new rules and trying to understand how to avoid the loose connotations associated with CSR.
There are suggestions on how an organization shouldn't just be a cheque writing one and how it should design their CSR
strategy aligned to the organizational goal, and how working with civil society organizations is important. The looming
concern is, can a government-mandated CSR be a social development course for a nation in which over 900 million have a
mobile connection but only 600 million (36% of the population) has access to a clean toilet? I reckon being optimistic
about the amendment and furthered by the words of George Bernard Shaw who said that progress is impossible without
change and those who cannot change their minds cannot change anything.
A recent survey by Mercer suggests that CSR is becoming increasingly important with 81% of the corporations
accepting it to be an important component of the overall business strategy. These are good signs as more companies
are planning to establish CSR and Sustainability departments within their organization in the next two years.
A review of the current landscape makes me believe that companies need to diversify the CSR activities for an overall
holistic development of society. The development in India which continues to increase the ambit of the operations has
been a positive sign. The main focus areas for CSR investment have been on Education, Community Development and
Environment Sustainability within the organization. The inclusion of sanitation after the Prime Minister's call of 'Swach
Bharat' has allowed many corporations to come into the foray. However, I believe crucial areas such as Climate Change,
Women Empowerment, Rural Infrastructure Development, Water Purity, Clean Energy, Sports, Wildlife, and Human Rights
among others need to be included.
Overall I believe the CSR journey has started off well and in the long run it is bound to create a positive impact. However
there is a need to address the challenges and strong monitoring and evaluation mechanism should be brought in place.
Penal provisions for non-compliance are still a debatable topic but to bring about a cultural change, a law must be
stringent. Lastly, I would like to conclude by saying our actions change our minds, our minds can change our behaviour and
our behaviour can change the outcomes.

Rahul Choudhury

We are Successful Because

We Contribute to Society...

03

CSR: The thin line between Commitment and

Mandate
India is shifting its gears of development from an emerging market towards a developed economy, the pressure of limiting the
ever expanding disparity between the industrial prot and overall human development index is slowly becoming a challenge.
With the policy on our side it is not a matter of mandate anymore but a question of commitment that the industry beholds
towards the society at large.
This social responsibility is not limited to the social arena only but to all the stakeholders of any specic objective or corporation
which includes the employees, customers, promoters, suppliers, vendors among others. The onus of limiting this disparity cannot
be justied by an idea running through times immemorial that the responsibility of overall human development in a society lies
only with the government negating the responsibility of action taken by the industry to derive their corporate prot.
Its time to realize that addressing such issues of social imbalance is no longer a matter of discussion but its a requirement of
survival.
The concept of social responsibility has been long in practice in the West with an understanding that Corporate Social
Responsibility is not a part of contribution towards the society through the medium of currency on a percentile of prot derived.
It is now being termed in the West as Corporate Responsibility wherein the corporations have understood that CSR merely
cannot be a percentile of prot but has to be embedded in a responsible behavioral mechanism enabled to derive the prot
throughout the process chain. This concept of social responsibility has to soon be imbibed by the Indian diaspora as well.
The Indian market are governed with the help of a consumer base, aged 18-40 years, which is socially aware, connected ,
enlightened with the developments in the social and nancial arena around them. It would be a wrong assumption if we think
that businesses will sustain without generating a good feeling factor behind the products they manufacture and the services
they render.
Corporate responsibility is a part of a behavioral mechanism wherein every system and the sub- system within a process has to
adhere to certain ethical and social mannerism. Every penny that is proted has to be responsibly sourced, a neglect on these
aspects and a myopic vision to derive prots will not only have destructive results over a long term but will also have catastrophic
results in the business sustainability of the corporation at large.
This kind of an adherence has to be brought in the policy documents and have to be monitored and audited appropriately. One of
the responsibility mechanism is to carry out a Social Impact Assessment and Environment Impact Assessment before the launch
of the product or the services. It has to be then ensured by the leaders that
advisory from such assessments merely should not remain letters in the
policy document but should be transformed into a mechanism of operation as
well. The basic fundamental on which Corporate Social Responsibility
performs is simple, topdown and not bottomsup. The leadership of an
organization herein has to decide to adhere to certain responsibility standards
and ensure such a policy is followed.
Being truly justied years ago by the 'Father of the Nation: Shri Mahatma
Gandhi' , addressing a business conference quoted " The leaders of
tomorrow will not be known by muscles they etch but will be known by
their capacity to take community along with themselves and their
development at large.
This also goes on to establish the fact that Corporate Social
Responsibility is not a very young phenomenon but in fact has
been debated and has been a relevant topic since years. It is
therefore now an imperative to understand that the corporations
and businesses cannot any longer afford to differentiate between
their direct beneciaries, i.e. consumers, suppliers, employees and
the indirect beneciaries which includes society and environment
in which they operate. Businesses will now have to understand that
a sustainable and a prot oriented business can only sustain,
survive and grow in a stable environment and with social harmony.
Corporate Social Responsibility is not merely policy document but
a mechanism of action to ensure that harmony.
Mr. Soumitro Chakraborty
CEO, Innova ve Financial Advisors Pvt. Ltd.(Fiinova on)

04

VIEW OF GOOD CITIZEN

With Ecological Sustainability as the corner stone of the charter, for the
last 15 years WIPRO has been deftly following an integrative approach
towards bringing together Environment, Business and People.

Over the years we have realized and learnt that a corporation's survival and progress is a function of three key
vectors- the corporation itself, the society in which it operates and the environment that envelops all of these. By
design, these are also the vectors that form the crux of our corporate citizenship philosophy and the base of our all
sustainability initiatives, both internal and external."
Anurag Behar

Chief Sustainability Ocer

Wipro Limited

Wipro s Iniatives
Ecological: Minimize internal footprint on energy, water and waste
Education and Community: Work jointly with education & civil society networks on sustainability programs
Workplace: Promote employee diversity, empowerment & continuous learning
Customer Stewardship: Provide products and solutions that enable customers to become greener
Public Relation & Policies: Shape policies by engaging with government, NGOs & industry networks

CASE Study: Pedagogy of Wipro

WIPRO goes back to school with WATIS (WIPRO APPLYING THOUGHT IN SCHOOLS)
WATIS is an initiative to help in societal change and development. This initiative is long-term, deliberate and focused. The
intent of this initiative is to improve the Quality of education so that life opportunities and possibilities are expanded
for everyone, including the most under privileged.
Objective : Coalesce civil
society and build capacity
on the ground for systemic
reform in education

Advocacy
Radical stimulus to inuence macro system
Create good literature
Articles in popular media
Large advocacy project

Wipro WATIS

Build
Eco-system

Strategy

Build Civil Society eco- System

Support new entrants strengthen network
Build capabilities in network

Over the years:

Partner network of 30 of Indias foremost educational
organizations
Worked with 500 schools and 10,500 educators across 17
states reaching around 500,000 students
Helped rebuild and on occasion build social organizations
(supported 6 partners in organization development)
Supported 6 people on Wipro Education Fellowship so far

Experiment
& learn
Deep Engagement
with schools
Support diverse
experiments
Create shareable
learning

Currently:
Deep partnership-projects on the ground with 19 partner
organizations across the country.
20 projects in school reform reaching out to over 750 schools
Supporting 10 organizations in building capacity for working
in school reform
4 people currently on senior fellowship
Direction:
Take the work of our network of organizations to reach every
district in the country

Rahul Jain

05

Not REEL, But REAL

ACTION

CSR of the Indian Film Industry

The Indian lm Industry has seen unprecedented growth in terms of volume of lms being made and the revenue
associated with it. In the past decade the lm industry has reached new heights from ranking rst globally in terms of
annual lm output to reaching overall revenue of Rs.93 billion in 2011. Yes, all of this is not shared by the producers and
promoters but gives employment to thousands of people directly or indirectly associated with the lm production or
promotion or nal screening. It is a joy to watch actors becoming heroes and ghting the evils pertaining in the society.
There is another potential side to the success of the Indian Film Industry as many social issues can be resolved by just
putting a small percentage of its revenue in the social sector. Social Action requires collective action from all sectors
covering horizontal and vertical spectrum bringing the required change.
There are many ways production houses are helping the underprivileged sections of the society through their social
initiatives, though there is no collective action taken up by the lm industry. A small percentage of the billions of revenue
that is generated annually can change many lives. It needs proactive action from the Film Fraternity. The solution can be to
promote a Social Impact Fund where different production houses can have a stake depending upon their revenue
generated in the past year and this fund can then be distributed to various NGOs, Social Incubators, Prime Minister Relief
Fund, or directly through impact initiatives carried out by the Trust itself. For this a collective action is required by everyone
in the lm industry, who can contribute to their share of social responsibility.
This could be under the purview of CSR as many production houses and media partners come under the CSR ambit, and
their share of contribution should not be clubbed with the social responsibility associated with all those who have the
capacity to bring about a positive change in the lives of underprivileged sections of the society. Innovative Financial
Advisors Pvt. Ltd. continues to work to improve the livelihood, education, health and environment aspects of the society
which can be used as a medium to create a sustainable India in association with a Socially Responsible Indian Film Industry.

Manish Narula

Forthcoming Events
India Sanitation Summit 6th Feb, 2015, New Delhi
CII CSR Workshop: Implementation, Impact and reporting 10th Feb, 2015, New Delhi
Conference on Health, Safety, Security and Environment (HSSE)- 12th Feb, 2015, Vadodara
3rd National Conference on Waste to Wealth: The Action Agenda 3rd Feb, 2015, New Delhi
India Corporate Governance and Sustainability Vision Summit - 3rd March 2015, New Delhi

06

Fiinobservation of National Days

National Youth Day

Republic Day

12 January

26 January

National Youth Day is observed every year across India on

12th January. The day is celebrated with great enthusiasm and
joy to commemorate the birth anniversary of Swami
Vivekananda. His ideals, philosophies, writings and lectures
have been a great source of inspiration for the youth of the
country. This day motivates the youth by encouraging them
to work towards making India better. Across the country the
National Youth Day is commemorated in schools, colleges
and other institutions through activities that aim to enlighten
the youth about the ideals of Swami Vivekananda.

India celebrates 26th January as Gantantra Divas (Republic

Day). It is on this day that the Indian constitution was adopted
and the foundation for the largest democracy was laid. We
owe it to the makers of independent India who strived to give
its citizens the right to justice, liberty, equality and fraternity,
keeping the spirit of India intact.

Indian youth today need to have an ability and vision to think

globally and act locally. India has the world's largest youth
population with 356 million people between the age of 10-24.
Fiinovation believes that Indians should learn and adapt
global best practices if they aim for development. This day
inspires us to work together to unite and motivate the youth
who are future torch bearers.

On this day, the political fraternity, from the Indian President

to the Prime Minister, descend on Rajpath to witness the
highlight of the day-Republic Day Parade. India's cultural
landscape includes hues of all religions, castes, and creed
which gets translated in the form of a tableaux for the parade.
Besides this, India showcases its military might to the world.
The three-day festivities come to an end on 29th January with
the Beating Retreat, which is performed by the bands of the
three wings of the military - Indian Army, Indian Navy and
Indian Air Force.

Tweets of The Month

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John Abraham to start CSR
activities to save rhinos in
Assam - Zee News

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Who We Are
Fiinovation, a research based organization, is an integrated solution enabler in the CSR and sustainability domain. It is focused towards enhancing quality across organizational value chain
through meaningful innovation thereby ensuring sustainability. It is Asia's rst proposal research laboratory wherein research is focused primarily on four sectors, which include health,
education, livelihood and environment. The practices: CSR-CSO Partnership, CSR Policy Design & Development, Programme Management, Impact Assessment and Sustainability
Reporting help provide simple solutions to their partners.
Fiinovation
24/30, Ground Floor, Okhla Industrial Estate, Phase III
New Delhi - 110020
Phone: 011-42332200 | Fax : 011-42332205
website: www.inovation.co.in | Email: media@inovation.co.in