Some years ago, an executive with a beverage manufacturer facing controversies over the safety of its products suggested that all corporate social responsibility (CSR) activities be conducted in East Delhi, where many of the Capital’s journalists tend to migrate, to gain “maximum impact”. Later, its corporate communications chief travelled all the way to Bangalore to enthuse a singularly disinterested press in its campaign to install waste bins in parts of the city.
In western India, a company was mandated by the government of the state, in which it was setting up its giant facility, to plant saplings over a certain area to compensate for the massive deforestation its activities entailed. An internal progress report that was tagged on to the company’s annual CSR wrap-up noted the number of saplings planted over a period of time and carefully catalogued targets and achievements (all on track). One sentence in that report was interesting: it stated that almost half the saplings planted did not survive. There was, however, no comment on whether this high failure rate could or needed to be remedied.
These incidents date from the time the concept of CSR had come into vogue in India. The outcomes, like the examples above, suggested that few companies fully understood the real implications of the term.
This was amply in evidence earlier this week when newsrooms received a joint press release from seven multinational food corporations in India announcing “a common commitment to responsible marketing to children”. The corporations concerned were Coca-Cola India, General Mills India, Kellogg India, Nestle India, Mars International, PepsiCo and Hindustan Unilever.
Their “India Pledge”, as it was called, vowed not to advertise food and beverage products to children under 12 on TV, the print or the Internet or in primary schools (except for products that fulfil scientifically proven “nutrition-based criteria”, meet accepted national and international guidelines or were specifically requested by the schools or institutions concerned). The seven corporations will also commission an independent compliance monitoring study starting January 11.
The release explained that the exercise follows similar international initiatives and is in addition to the Code for Self Regulation in Advertising put out by the Advertising Standards Council of India.
Industry self-regulation is both admirable and desirable — indeed, it would do wonders for businesses like health care and education. But this press release was noteworthy for several reasons. The first was the fact that these companies felt constrained to issue a statement to the media at all. The tenor of the message suggested that it was intended to focus attention on these corporations’ innate sense of social responsibility. But the question is, does this initiative warrant such publicity. Shouldn’t these companies have always abstained from promoting junk foods and beverages to children?
In a sense this joint statement shows that CSR in India has not yet gone beyond the externalities of philanthropy and “good works”. Nothing expresses this more unwittingly than a presentation made by the Department of Public Enterprises on the CSR guidelines that were introduced for government-owned companies in December last year.
True to the government’s style of functioning, the guidelines specify how much these government corporations should set aside for CSR budgets (a percentage of profits depending on their size). Tellingly, though, the “Implementation Modalities” specify that such activities should be carried out by specialist agencies (NGOs, trusts, missions and so on) and “not by CPSE employees/staff” (emphasis in original).
This is actually light years away from the concept as it first gained currency in the US in the 70s (the term came into vogue later). Far from suggesting that corporations redeem their reputations by investing in “good works”, the concept actually meant that companies needed to be responsible in the way they operated.
As Harold Burson, the guru of the public relations industry, said in a 1973 speech he made to Columbia University Graduate School of Business: “A corporation’s first duty, as I see it, is to manage its own affairs properly and profitably. This is the greatest service it can perform… It has a duty to create favourable working conditions and to produce goods and services that meet the highest tests of safety and reliability. I am not saying that good management is the answer to all our social woes. But I am saying a poorly managed company can’t make up for its inadequacies with good deeds that have no bearing on its daily operations.”
CSR, in short, needs to be embedded in a corporation’s operating philosophy. Everything else is just an “extra”.
