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2nd National Summit on CSR 2008 by S1S5Pyq


									               2nd National Summit on CSR 2008
                     New Delhi, India, 5-6 May 2008

                   Confederation of Indian Industry
                            in Partnership with

                        Ministry of Corporate Affairs
                            Government of India


                          National Foundation for
                          Corporate Governance

                  “The New Business Model :

       Engaging Society, Enhancing Competitiveness”

                     Review Notes by Suresh deMel
                 Business for Peace Alliance – Sri Lanka

Suresh deMel                    Page 1 of 10               5/6-May-08
Inaugural Session

Addresses by:

   o Athul Singh, Chairman, CII National Summit on CSR 2008 and President &
     CEO, Coca Cola India Inc.
   o K V Kamath, President Confederation of Indian Industry (CII) and Managing
     Director and CEO, ICICI Bank Ltd.
   o Kajo Wasserhovel, State Secretary, German Federal Ministry of Labour and
     Social Affairs.
   o C Banerjee, Director General, CII.


“This summit takes place when we are truly at a crossroads, when technology is making
strides yet millions of people are becoming more vulnerable. India faces the challenge of
making its growth inclusive and sustainable and the 2nd National CSR Summit looks at the
challenges and ways to overcome these”.

Indian industry has graduated to an understanding that for CSR to truly transform the Indian
business model, it needs to be more than just a CSR department or some development
projects a business supports. It must be a business strategy discussed at the CEO and board
level. It is a key element in building a sustainable business strategy that guides every
department, partnership and policy.

For a long time, Corporate Social Responsibility (CSR) has been equated with charity. It has
to become a basic strategy and drive of business and focus on education, employment, health
and financial inclusiveness.

Skill based Education at the grassroots level

Indian education and employment market is made of a strange paradox: on one hand there are
more jobs than right talent in the economy, thus creating a talent crunch, on the other hand,
there are lakhs of unemployed youth. This paradox can only be solved by providing skill-
based education at the grass roots level.

“Talent Crunch” & Human Development

Indian education and employment market is made of a strange paradox: on one hand there
are more jobs than right talent in the economy, thus creating a talent crunch, on the
other hand, there are lakhs of unemployed youth.

There is no question that this lack of progress in human development will reverse the
economic growth of the recent past, and that which this country hopes for in the future, if an
industry-wide commitment to proactively support people-building measures does not take
hold in the present.

Suresh deMel                            Page 2 of 10                              5/6-May-08
Economic growth not reaching most people

India's well-documented growth story has elicited enormous amounts of pride within India
and envy from different corners of the globe. However, its GDP growth rate, often the
symbol of India's economic progress and new role as a global player, seems to no longer be
the lead to every analysis of India's budding economy. One might deduce that this is in large
part due to the increasing public and private recognition by government and industry that
India's economic growth, while consistently above 8% for the past decade, is not reaching all
of its citizens. Not only is it not reaching most people from India's 7,00,000 villages, which
Mahatma Gandhi called "the true India", but it is creating greater income disparity and a vast
divide in the quality of life enjoyed by those included in the growth and those not yet touched
by it.

Inclusive Growth

Industry needs to grow inclusively, to support the communities they operate. Likewise,
society needs to work jointly with businesses to improve their livelihoods, to allow the
resources and competencies of businesses to benefit the growth of the nation.

People-Private-Public-Partnerships (P4)

Industry and capitalism must re-invent itself by mainstreaming Corporate Social
Responsibility (CSR) through People-Private-Public Partnerships (P4) if economic growth
has to be inclusive and sustainable. Capitalism needs to renew itself by including those who
are excluded from its benefits so far, and corporates need to move towards the Gandhian ideal
of ‘trusteeship’ and make social responsibility operative by making local communities
stakeholders and through affirmative action.
 Responsive Corporates
 Centers of excellence

CSR as DNA of the Corporate World

“Corporate Social Responsibility, with inclusiveness as its ethos, has to become a part of the
basic DNA of the corporate world in order to address the twin needs of enhancing society and
building India”. Growth that is sustainable will only happen when it is inclusive of all
citizens. Making Corporate Social Responsibility (CSR) an integrated part of each company's
"DNA" is the mechanism to achieve inclusive growth.

   “Building people, building India”

   Bottom up – prevention
   Bank the unbanked – Challenge and opportunity
   CSR – The smallest common denominator
   CSR – A win-win solution
   Sustainable communities

Suresh deMel                            Page 3 of 10                             5/6-May-08
Four Pillars

Mr Kamath laid out "four pillars" of CSR initiatives at CII. "Education, health, financial
inclusion and employment are pillars on what I believe CSR initiatives should rest. Of course
there are several other areas like climate change, but these four are core agendas for me."

CSR Standards

Large corporates as well as small medium enterprises need to work towards social
accountability and adopt new CSR standards like the SA26000, which is in practice in many
European companies (equivalent to India’s SA8000 standard, which has been adopted by
over 200 Indian companies). While adoption of standards like SA8000 is fast becoming a
reality if you have to remain a preferred supplier to the developed world, it is important to
adopt an index to measure impact on human development around the company’s operations.
This will help avoid dis-trust towards industry, unrest amongst the community surrounding
the area of operation and contribute to inclusive growth in real terms.

Session I – CSR Comes of Age: Does it merit being a boardroom strategy?
Role of the Government

Partnership is the key for responsive CSR and inclusive growth and the Government’s role is
to facilitate and enable such partnerships. Anurag Goel, Secretary, Ministry of Corporate
Affairs announced that because there was no distinct institute to coordinate activities between
government, industry and civil society organisations, the Ministry had decided to create an
Indian Institute of Corporate Affairs (as a “nodal agency”) that would facilitate these

   Adequate representation of civil society
   Wasting resources / duplication
   Personal passion, conviction and commitment – Culture
   CSR – a business tool – mindset
   SME’s to get onboard
   Way to understand needs of the people/rural community
   Do not calculate returns from the very beginning
   Too focused on profit – mistrust
   Corporates can do efficient delivery systems / be a Think Tank / a Watchdog etc…..
   Triple bottom line
   Expectations of stakeholders
   Right to info
   Real time info
   Stakeholder participation/accessibility
   Knowledge management structure
   Benefit to employee
   Social responsibility investments
   Beyond charity and philanthropy
   Responding to community needs

Suresh deMel                            Page 4 of 10                             5/6-May-08
   Reaching out to more people
   Coordinated approach
   Level playing field – civil society vs. business vs. Government…..
   Success of partnership vs. success of output
   Accountability / governance
   Law – effective enforcement and delivery of services
   Outcome budget
   Project proposals on a website
   Forge real partnerships

Session II – Revamping Social Infrastructure for Inclusive Development:
Is privatization a solution?

   Biggest challenge: Equal opportunity
   Role of merit
   Extrapolate from facts
   Vast number of poor wanting “private” education
   Taxation and redistribution
   Confusion – Government there to finance
   Government should outsource to private sector
   Education system that nurtures creativity
   Teacher education
   Long term vision
   Remedial education
   Common framework
   Delivering more for less – more efficient systems
   Not for profit Private Sector
   “Creative Capitalism…..” – Bill Gates

Session III – Businesses and their CSR Partners: How they have created
sustainable CSR initiatives, utilizing each other's strengths to make an
impact on communities

   “Business cannot go on in a failed society”

    1. Clarity of objective
    2. Philanthropy/Financial Support as an entry point
    3. Long term relationship
    4. Willingness to struggle
    5. Revise mechanisms
    6. Inclusive, sustainable growth

Suresh deMel                            Page 5 of 10                     5/6-May-08
A multitude of industry members and development organizations shared the innovative and
mutually beneficial ways they are forming partnerships that improve business
competitiveness, while also building the communities around them.

    1. Coca Cola India & UN Habitat – “Partnership for safe water”.
    2. Microsoft and Datamation Foundation – “Bridging the digital divide”.
    3. ACC Cement Ltd., partnered with Christian Medical College and the National AIDS
       Control Organisation (NACO) to create the world's first Corporate Anti-Retroviral
       Treatment (ART) Center in Vellore, Tamil Nadu, providing testing, counseling and
       treatment services.
    4. Cisco Systems India Pvt Ltd., and One World South Asia – “Networking for
       community benefit”.

   Replication and scalability.
   Local opinion leaders – their cause.
   Ownership – civic engagement.
   CSR Credits – recognition.

Atul Singh cited Coca-Cola's goal of being a "net-zero" water company, a term used to
describe that at minimum, they are putting back into the ground as much water as they are
taking out. Tejpreet S Chopra, President & CEO of General Manager of GE, also spoke about
how CSR has become an outreach tool for GE to "better understand the needs of their

Additionally, partnerships are not always easy to formulate in the beginning, but through a
shared commitment, patience and humility, valuable rewards such as further partnerships
and increased trust from society can be gained.

Session IV - Capitalising on a Globalised World: Opportunities for win -
win CSR business strategies with global partners

   Best practice – Next practice

Business and Youth Starting Together – BYST (Bank of Baroda)
Developing entrepreneurs by providing young disadvantaged people in India with loans
against no collaterals and a business guru.
 Empower
 Qualitative difference

Ashoka: Innovators for the Public – Global Entreprenuer-to-Entreprenuer Program
Organisation has supported 2000 leading social entrepreneurs in 70 countries across the globe
to work in the social arena to solve society's problems. They are now connecting corporations
to social entrepreneurs / enterprises and have established a global network of business and
social leaders to share best practices.
 See CSR as good business – not as charity

Suresh deMel                           Page 6 of 10                             5/6-May-08
Development Alternatives Groups
The mission of the Development Alternatives Group is to promote sustainable national
development. The corporate objectives are to innovate and disseminate the means for
creating sustainable livelihoods on a large scale, and thus to mobilise widespread action to
eradicate poverty and regenerate the environment.
The corporate strategy is:
     Innovation, through design, development and dissemination of
           o Appropriate technologies
           o Effective institutional systems
           o Environmental and resource management methods
     Sustainability, through commercially viable approaches
     Scalability, through partner organizations and networks
 “Making money”- Peter Druker
 “Do no harm”- Hypocratese
 “Do good”- Gandhiji
 “Do well”
 CSR – Beyond compliance
 Ultimately – Social Enterprise

Janasankhya Sthirata Kosh – National Population Stabilization Fund
Jansankhya Sthirata Kosh(JSK) has been registered as an autonomous society of the Ministry
of Health and Family Welfare. The Government has provided a Rs100 crore Corpus fund to
signify its commitment to the activities of the Kosh. The Jansankhya Sthirata Kosh has a
mandate to catalyse a movement in favour of population stabilisation and turn it into a
people's programme.

Give India
GiveIndia is a donation platform that allows you to support a cause of your choice from about
100 NGOs that have been scrutinised for transparency & credibility.
 NGO vs. Corporate Foundation
 Empowering Donors to give
 Payroll giving
 Logical business
 Sense of community

Session V – Making Public-Private-People Partnerships (P4) Work: How
governments and industry can partner together to make widespread
inclusive growth a reality

   Working in tandem with Government…..involving people
   Reducing the gap between Corporates and people
   Tourism development example – upgrading homes for guests
   Contribution of everybody
   Chief Minister of Rajasthan, Vasundhara Raje, agreed assuring government facilitation
    at all levels to develop 'P4' partnerships
   Focus on Solution – on community

Suresh deMel                            Page 7 of 10                              5/6-May-08
   Community will reach out to you
   Sustainable communities = sustainable business
   Adding value to the community
   Fashion for development
   Mindset changes
   Shortest way to success
   Empowering women = empowering community
   What is the partnership going to do?….What can we do together?
   What is the succession plan?….not one person
   Facilitators – give opportunity to find their feet
   Moving down to districts
   District Plans and Budgets
   Gap in understanding
   Progression
   Telemedicine example
   Passion ignites passion – P4+1 = P4+Passion

Session VI - The Multiplier Effect of your Supply Chain: Including SMEs,
vendors and customers in sustainable development
For a CSR movement to truly take flight throughout Indian industry though, panelists argued
that while CSR starts with your own business, you must eventually also expect the same from
your vendors, many of whom are small and medium enterprises (SMEs). Globalisation,
advanced communication technologies and greater public awareness and education have all
contributed to consumers, especially Western consumers, demanding higher ethical standards
from businesses throughout their supply chain. They have in turn increasingly used their
leverage as consumers to support or protest certain companies and products.

Bharat Wakhlu, Resident Director, Tata Services Ltd stated that the Tata Group's
recent acquisitions of Chorus, Jaguar and Land Rover were assisted by the fact that
labour unions chose the Tatas over other companies because of their reputation for
socially responsible business practices.

Designmate Ltd, a small information-technology-communication (ITC) business from
Ahmedabad that creates e-learning material for schools, showcased how they have developed
a business model that might serve as inspiration for other SMEs. Of their 129 animators, 79
of them are "challenged", said the company's Director, K J Singh. Their business model grew
naturally out of employing a physically challenged boy from the street who implored the
company to give him work. He has now become a senior animator making Rs 30,000 a
month in Mumbai.

Speaking on how businesses can use their core competencies to enhance their social
engagement strategies, Murali Sivaraman, Managing Director, Philips said that they have
focused their CSR initiatives on the main two pillars of their company, energy and healthcare.

   Millennium Development Goals
   Global Compact

Suresh deMel                           Page 8 of 10                             5/6-May-08
   Engaging smaller companies
   Transforming
   Carbon positive – good for business
   Social & Environmental performance
   SME’s love to align with Corporates
   Alignment of values
   Corporate citizen
   No ‘holier than thou’ attitude
   Behaviour
   Environmental Sustainability Index- ESI
   Ego impaired
   Vendors = Supply Chain Partners
   CSR vs. ISR (Individual Social Responsibility)
   Negative impacts of Industrialization

Session VII - 21st Century Leadership for a Modern India: How today's
Young Leaders in Government can build a more collaborative relationship
with Industry to ensure increased opportunities and more equitable growth
for Indian society?

Members of Parliament, Madhu Goud Yaskhi and Deepinder Singh Hooda both emphasised
that businesses can use their expertise to provide skills training to the millions of Indians who
don't necessarily attend universities but need further professional training to enter the
workforce. Training was also underscored by Krishna Kumar, Director, National Council of
Educational Research & Training (NCERT) who asked industry to partner with them in
creating a national teachers training college.

   Advantages to the community
   Greater common good – not enough!
   Actions must speak
   CSR vs. PSR (Political Social Responsibility)
   Pressure groups
   Special Economic Zone Act – SEZ
     The main objectives:
        o generation of additional economic activity
        o promotion of exports of goods and services
        o promotion of investment from domestic and foreign sources
        o creation of employment opportunities
        o development of infrastructure facilities

Suresh deMel                             Page 9 of 10                              5/6-May-08
Way Forward
"Think of the poorest person you have ever seen, and ask if your next act will be of any
use to him." – Mahatma Gandhi

   Think together – act together
   Let a million ideas bloom

Five steps defining the scope of CSR:

    1.   Identifying stakeholders
    2.   Generating awareness
    3.   Creating an enabling and facilitating institutional structure;
    4.   Building and maintaining partnerships among all sections of society and
    5.   Delivery on a continued basis.

The two overriding themes of the summit were that:
   1. CSR must be a guiding principle in today's contemporary business model,
   2. To maximize social impact, industry must work in partnerships.

“If Indian industry wants to sustain the growth of the past decade, they will have to
evolve their business models in a way that builds the lives of their fellow citizens.”

This entails playing a key role in the expansion of quality:
   1. Education,
   2. Healthcare,
   3. Employment opportunities,
   4. Financial inclusiveness.

“Transforming Capitalism: Business Leadership to improve the World for Everyone” -
a book by Arun Maira, senior advisor, Boston Consulting Group India, was also released
during the valedictory session of the summit. The book talks about listening to the local
communities and creating a model of corporate governance that includes environment and

Suresh deMel                            Page 10 of 10                              5/6-May-08

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