Good community involvement activity alone does not make good CSR

By Suresh Kr Pramar

Singapore based John Hosking, who manages the Eco.business.com, has started an interesting discussion on Linkedin. He has asked readers to name the best CSR and Sustainability Award. The responses have been few mainly because, I think, few CSR Practitioners have ever given any serious thought to this or most practitioners,  like me, feel that there is no award which can be identified as the best.

I believe very strongly that there are no awards in India for CSR or Sustainability that can be termed as the best. Most award organizers hand out these awards without proper verification to companies which enjoy a high reputation, created by good PR. There are also unconfirmed reports that certain audit houses solicit business by promising prospective clients that they will ensure that they receive a CSR Award.

Let’s take CSR awards. Actually these awards are not for CSR as such. They are for community involvement. They are awarded on the basis of the company’s performance in the area of community development. Companies in India who have been given these awards have done good work in the area of community development but that is enough to qualify as good CSR.

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What is Corporate Social Responsibility?

The World Business Council for Sustainable Development defines the concept as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the work force and their families as well as of the local community and society at large.” The British Government’s definition says “the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society.”

According to the Confederation of British Industry it is “the acknowledgement by companies that they should be accountable not only for their financial performance, but for the impact of their activities on society and/or the environment.”

The European Union defines the concept as “A concept whereby companies integrate social and environmental concerns

in their business operations and in their interaction with their stakeholders on a voluntary basis.”

The major issues involved in Corporate Social Responsibility are:

Human Rights, Employees Rights, Environment Protection, Community Involvement, Customer Relations, Supplier Relations and Corporate Governance.

Sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.  A company can be said to have attained a level of sustainability after it has tackled all the issues involved in CSR successfully.

Many companies who have been given CSR awards have failed in one or several issues involved in a full CSR programme. We have several examples of companies in India who have won CSR awards even though they have failed in a majority of issues involved in CSR.

These awards have been handed to them largely for their work in community involvement. One glaring example in India is Satyam, excellent community work but utter failure in corporate governance. Satyam, under Raju, won the Business World-FICCI-SEDF 2006 award for ‘Best Corporate Citizen’ and the TERI Corporate Award 2006-2007.

It bagged every conceivable award including, of course, the famed Golden Peacock Global Award for Excellence in Corporate Governance. It has got awards for “providing complete, accurate and timely investor relations information (providing anti-money laundering solution of all things!)” and for being the “most admired knowledge enterprise”.

Two months before the Satyam bubble burst it was awarded the Peacock Award for excellence in Corporate Governance. The day Raju went public about the scan in his company the organizers of the Award were red in their face. Within days the Award was withdrawn. It is very clear that the organizers had not  undertaken a serious study of the corporate governance in the company.

Even the celebrated TATA, which has bag loads of fame as a responsible company lost out in Singuar where eleven people were killed protesting the land grant to the company. In recent years one of the Tata companies Tata Steel is locked in a dispute over its Dharma port project, on the Orissa coast which it is setting up jointly with Larsen & Toubo.

Greenpeace points out that the port’s proposed site is just 15 kilometres from Gahirmatha Marine Sanctuary, the world’s largest mass nesting site for the rare species of migratory Olive Ridley turtles.

Every year in the six months from November to May, about 500,000 turtles congregate in Gahirmatha to mate and feed. Artificial lights from the giant port and populated areas would disorient the turtles and their hatchlings and eventually force them to abandon the Gahirmatha beaches, campaigners say.

They also fear pollution from the port would contaminate the turtles’ offshore habitat. An expert committee appointed in 2004 by the Supreme Court to assess the port’s likely environmental impacts recommended that the project site be shifted, as the proposed location would seriously affect nesting turtles.

Greenpeace India’s lead campaigner, Ashish Fernandes, says the group is not against the port, but its location. “By pursuing the project, the Tatas would have no moral right to claim to be a responsible company.” Tata continues to reject the activists’ claims.

Almost all CSR Awards in India fail to look at a company’s CSR activities in total. The emphasis is mainly on the work done in the area of community involvement and the amount of PR the activity manages to generate. Over the years, the corporatisation of CSR/sustainability has led to a multitude of annual celebrations. During those events, media publishers, trade associations and other professional event organisations celebrate of the responsible companies.
There is no foolproof method of judging a company’s CSR achievements.

It is virtually impossible for any organization to shift through all the details offered by the company or to visit the work sites to understand the content of any CSR programme. Therefore to call any award the best would, in my opinion, be a very difficult task. The CSR Awards being handed out should most appropriately be renamed Corporate Community Involvement Awards.

About the author

Suresh Kr Pramar, Writer, Trainer, CSR Consultant and Executive Director, Centre for Training & Research in Responsible Business is a veteran journalist presently actively involved in promoting CSR through his publication CRBiz and by conducting workshop on Corporate Social Responsibility.