Indian giants focus on CSR

4 January 2013

NEW DELHI: Major Indian companies such as Bharti Enterprises, Godrej and Thermax are focusing on corporate social responsibility (CSR), a field where big players will soon be legally required to invest.

The Companies Bill, passed by the Lok Sabha, the lower house of Parliament, in late 2012 mandated that large businesses spend at least 2% of average net profits from the last three years on CSR.

Firms valued at Rs500 crore, with annual turnovers of more than Rs1,000 crore or profits over Rs5 crore during a fiscal year will have to meet this stipend or provide adequate reasons why they failed to do so.

Bharti Enterprises, one of India's leading business groups, runs 254 schools across India offering free primary and secondary education in rural areas, funded through its Bharti Foundation arm.

"Every child has talent and potential, and it is our duty to support village kids so that they can grow up to contribute to the economy rather than be a burden on it," Rakesh Bharti Mittal, vice chairman of Bharti Enterprises, told the Economic Times.

Godrej, another diversified holding company, has also formulated the "Good and Green" programme, which aims to train 1m young people with core skills for employment in sectors from beauty to retail.

Indeed, Godrej has predicted that some 33% of its total revenues will be derived from the products, services and initiatives at the heart of its "Good and Green" plan by 2020.

On its part, Thermax, the industrial conglomerate, invests 3% of its net profit in training and education schemes, but deliberately looked beyond issues such as solar power where it has business interests.

"There are enough causes staring at us in India, like malnutrition, women's empowerment, rural development and even city planning," said Any Aga, a director at the firm. "I can't think of a single area where we cannot contribute."

Ambuja Cement today allocates 2.3% of its net profit to CSR. Communities close to its plants are the main priority. As an example, it sends mobile health teams to nearly 160 villages in Chandrapur.

"Our philosophy is simple," said BL Taparia, a director at the organisation. "We're going to be in these areas for the long term, so we owe it to the local people to assist with their development."

"A few years before we set up a plant, a team from the Ambuja Cement Foundation visits the location for a needs-assessment of the local population," he added. "We then structure our CSR programme around those needs."

Data sourced from Economic Times; additional content by Warc staff