CSR sees slow uptake in India

18 August 2011

NEW DELHI: Most of India's biggest companies have proved slow to enhance their corporate social responsibility credentials, a new study has revealed.

KPMG, the consultancy, assessed the 100 largest Indian businesses by revenue, analysing activities in areas like sustainability, education and community development.

Just 16 of the operators monitored currently have an identifiable CSR strategy in place, while a further 31 report on performance levels in this field.

More specifically, 12 firms boasted policies covering social matters, defined key indicators and provided at least annual updates on their progress.

Exactly 25% of companies have established systems for managing, measuring and reporting on major issues, with media owners, retailers and electronics manufacturers among those lagging behind.

"Most companies start with a 'Me Too' approach with a focus on developing a good enough report," Arvind Sharma, director, advisory, climate change and sustainability services, KPMG in India, said.

"But during the journey many realize the benefits of embedding sustainability in terms of managing stakeholder expectations, finding alternative solutions to raw materials and fuels, designing benign products and services, and so on."

Strengthening corporate reputation and brand image was the main reason for formally reporting on CSR performance among the businesses that did so, ahead of ethical concerns and cost savings.

Economic considerations, innovation and learning and employee motivation, found by KPMG to be the leading parameters globally, followed next in the list for Indian enterprises.

However, a modest nine Indian firms regularly raised CSR matter with investors - for example by uploading data to the relevant section of their website - and only three were listed on special indices such as the FTSE4Good.

Elsewhere, 21 of the organisations tracked by KPMG have allocated responsibility for CSR to a separate department or a named senior executive.

For the companies reporting on CSR performance, 78% had created a dedicated unit to handle this activity or left it in the hands of corporate communications or environmental health and safety teams.

Data sourced from KPMG; additional content by Warc staff