Communities continue to be a “receptacle for charity, rather than a partner in development”, according to the report released by IRBF on India’s top 100 companies businesses. Not a single company disclosed having stakeholder consultations while formulating their CSR policy, the report said.
 
In India, companies with a minimum net worth of Rs 500 crore or turnover up to Rs 1000 crore or a net profit of at least Rs 5 crore have to spend at least 2% of the average net profits the company made during the three immediately preceding financial years on CSR.
 
Only 15 of 99 companies reported a mechanism to find out a community’s problems before planning a Corporate Social Responsibility (CSR) project, and 27 of 99 companies said they had a system in place for third party assessments of CSR projects, the analysis found.
 
IBRF releases the India Business Responsibility Index each year that analyses public disclosures made by the top 100 companies by market capitalisation on five measures–commitment to non-discrimination in the workplace, respecting employee dignity and human rights, community development, inclusiveness in supply chain and community as business stakeholders, which are broadly based on the 2011 National Voluntary Guidelines on Social Environmental and Economic Responsibilities of Business.
 
“As corporates are critical components of the social system, they are accountable not merely to their shareholders from a revenue and profitability perspective but also to the larger society which is also its stakeholder,” the report cited SEBI’s rationale behind the national voluntary guidelines and the index.
 
The index only analyses policy and not actual implementation or performance of the company. It also does not independently validate information provided in public disclosures to SEBI.
 
The number of disclosures increased between 2013 and 2016 showing an increasing openness from companies, but they have become “more careful in reporting over the past one year,” with the number of disclosures stagnating between 2016 and 2017, said Pradeep Narayanan, part of the principal research team of the report, and director of research and capacity building at New Delhi-based Praxis India, a nonprofit working on community participation. The fewest disclosures were related to the inclusiveness of the supply chain, he said.
 
“The overall data, especially when seen alongside the profits of corporate India, continue to reflect a distance between the interests of business and shareholders and those of communities and of workers,” the report said. Only six companies each scored in the top band for just two measures–non-discrimination and community development.
 
And this is when the index is “already biased in favour of companies”. First because we only look at policy commitment and not implementation, and second because we only look at the company’s own disclosures,” Narayanan said.
 
These disclosures, under SEBI’s business responsibility report, are the only disclosures that help in understanding whether businesses follow responsible practices in their core businesses, and can help serve as a source of information for civil society organisations (some of whom might receive funds from these organisations), for communities, the media, and for the government.
 
“Often the questions in the business responsibility report make companies think about these issues,” and could “push companies to be more responsible, Narayanan said.
 
Low commitment to analysing business impact on communities
 
The report also analyses how companies interact with communities and the environment affected by their business operations.
 
About 44 companies, 22% more than in 2016, reported the existence of systems that promote judicious use of natural resources.
 
There is a lack of commitment from companies to provide similar or better living conditions and services to people who are affected by company projects. As many as 90 of 95 companies did not report any such policy, the report found. No company reported local employment generated from their projects.
 
None of the companies disclosed the presence of systems to seek community participation in projects, 13 disclosed policies for the recognition and respect for local cultures, and six said they had policies for recognition of public hearing and communication of project impacts to the community, the report found.
 
The following figure shows the change between 2016 and 2017 in businesses’ commitment to assessing the impact on communities.
 

Figure: Recognition of the need to assess business impact on communities and means to minimise the negative impacts [2016 (n=100), 2017 (n=99)]
 
Few companies disclose policies on ensuring diversity on the board
 
All but 24 companies disclosed commitment to non-discrimination as part of their recruitment process while 50 of 100 disclosed details about systems and mechanisms to ensure non-discrimination, the 2018 report by the IRBF found. Only 27 disclosed policies on ensuring diversity on the board, out of which 7 disclosed steps and mechanisms to ensure diversity.
 
Only 19 companies disclosed policies on people with disability. In terms of diversity in the workplace, 96 companies disclosed number of women employees, while 15 companies disclosed numbers of SC and ST employees, the report found.
 

 
Employee rights don’t extend to contractual employees
 
68 companies recognised the freedom of association for employees, while 54 recognised the principle of collective bargaining, the report found. But few (24 of 99) disclosed commitment to ensuring the minimum wage, while 6 companies reported they were committed to providing a fair living wage, the report found.
 
Further, these policies don’t extend to contractual employees. Only 6 companies explicitly stated in their policies that the social benefits are extendable to contractual employees.
 
(Khaitan is a writer/editor with IndiaSpend.)

Courtesy: India Spend
 

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Research shows

The Super Bowl is not just the biggest and most-watched event of the year in the United States, it’s also one of the most important for advertisers, who shell out an estimated US$5 million for every half-minute of air time.

Indeed, the ads are almost as well watched as the game itself, offering companies spending an estimated $377 million altogether a chance to get a laugh, burnish their brands and reach more than 100 million people with their corporate message.

But what if a brand took that large chunk of cash and bought something else with it? Is there a better way to spend it that could both be good marketing and do more for humanity?

Audi, which along with its parent company Volkswagen is accused of using software to allow its vehicles to emit excess emissions, for example, bought 60 seconds in the first quarter. Is a minute of product-oriented advertising really the best way it has to restore its image when the essence of its brand is in question?

This is not to say that the 40-some advertisers that have already bought ad time need a new message to repair their brands. Rather, the question for me – with one foot in sport marketing research and the other in public policy – is whether they could do more for society and for their own reputations (typically the purpose of advertising) if they were to take a different tack.

In other words, be brave advertisers! Here’s how.

Branded benefits
This isn’t a novel idea, of course. There are plenty of examples of brand-sport relationships diverting their advertising value to society and benefiting in the process.

Hublot, a Geneva-based luxury watchmaker, did just that after it signed on as a sponsor of UEFA’s Euro 2008 soccer tournament. Rather than use its allocated stadium advertising space to trumpet its brand, it promoted its values instead by donating all of this valuable space to Unite Against Racism, a program that seeks to counter discrimination in European football.

This sweeping gesture had a ripple effect as other teams, sponsors and federations took on the social responsibility message. Moreover, it was a meaningful and positive gesture for the watchmaker as well.

More recently, BNY Mellon and Newton Investment Management announced that they would donate their title sponsorship of the Oxford versus Cambridge boat race to Cancer Research UK. As a result, the race to be held on the River Thames in late March will be known as “The Cancer Research UK Boat Races.”

The societal benefits of these actions are clear, but importantly, brands that do good things also benefit.

Research in the U.S. by the Economist Intelligence Unit found in 2008 that being a good corporate citizen supports revenue growth, increases profits and offers cost savings.

Hublot, a Geneva-based luxury watchmaker, did just that after it signed on as a sponsor of UEFA’s Euro 2008 soccer tournament. Rather than use its allocated stadium advertising space to trumpet its brand, it promoted its values instead by donating all of this valuable space to Unite Against Racism, a program that seeks to counter discrimination in European football. This sweeping gesture had a ripple effect as other teams, sponsors and federations took on the social responsibility message. Moreover, it was a meaningful and positive gesture for the watchmaker as well.

Similarly, a research review by RBC Global Asset Management concluded investments in companies with high social responsibility rankings perform just as well as their peers and can even do better.

The Super Bowl itself has already seen some calls for action and delivery of cause-related messages.

At Super Bowl XLVIII, for example, U2, Product (RED) and Bank of America collaborated to benefit the Global Fund, which aims to eliminate AIDS, tuberculosis and malaria. Also in 2014, Chevrolet used its ad time to support cancer survivors and raise awareness for World Cancer Day.

Consumers, however, seem to want more than just words (and ads). Research by public relations firm Cone Communications shows that 82 percent of those surveyed are more likely to purchase a product from a company that clearly demonstrates results from its CSR initiatives.

A thought experiment
What we need to do, then, is imagine profound social investments. My list may not be the same as others, these are issues I think deserve more attention, but that’s the point: to think freshly about how we spend and invest.

In one thought experiment, I imagined that the $5 million slated for a 30-second ad was instead invested in cookstoves. Yes, stoves for cooking. Small three-stone fires are used by nearly half the world’s population to cook meals, according to InStove, a nonprofit dedicated to relieving suffering by developing renewable technologies.

It doesn’t get a lot of attention, but the firewood harvested for cooking by this method is a major contributor to deforestation and its burning indoors results in 4.3 million premature deaths annually.

A clean-burning cookstove able to use wood and biomass costs only about $1,000 and can serve the needs of an extended family or even a small village. Its high efficiency reduces fuel use by 75 percent to 90 percent and health-harming emissions by 90 percent. Easy math says that $5 million could buy 500,000 cookstoves – enough to supply dozens of countries in Africa and Asia.

This is a trifecta win for the environment, human health and the reputation of a company.

Alternatively, Super Bowl advertisers might band together and – in partnership with a nonprofit – buy a vast tract of old growth forest along the coast in the Pacific Northwest. At an estimated $2,000 per acre, 25 minutes of advertising time (at a cost of about $250 million) could purchase 125,000 acres in Elliott State Forest.

Oregon, which owns the land and allows some logging, is considering selling it. Helping a conservation group to buy it would preserve habitat for species that most of us have read about as children such as the Great Horned Owl, save less known endangered species such as the marbled murrelet that prefers to nest in old growth forest and seed stock for plants we have not even named.

Another idea close to my heart: $5 million would go a long way in limiting the trade of elephant tusks. Poachers reportedly slaughter as many as 35,000 African elephants every year, with only 500,000 estimated to remain alive. One 30-second ad forgone could double the total grant contributions toward elephant conservation administered by the African Elephant Conservation Fund in 2014.
 

Better for brands and society
The purpose of this article is not to denigrate the Super Bowl, football, advertising, brands or anything else as American as apple pie.

This is about how wealth might be mobilized to do some of the things we know need doing and some of the things that may not have occurred to us.

It’s also about understanding the relative cost of actions with long-term implications for society and environment and how corporations as “citizens” can communicate and validate their social responsibility record. Corporate social responsibility activities are related to economic performance of firms but claims must ring true.

Socially responsible behavior must be validating and observable in order to influence stakeholder actions and have the positive effect on revenues research shows can happen.

Brave corporate decisions, paired with clever communications, need not cost more for the firm than the millions they freely spend on Super Bowl advertising, but it does require that we think creatively.

Any company needing inspiration or an idea of how to back up their CSR words with actions need look no further than the new United Nations Sustainable Development Goals. For the next 15 years, these goals aim to transform our world. After reading the facts there, only a cold soul would be unable to find a CSR project that deserves a $5 million infusion.

This article was first published in The Conversation

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