A new dimension to Corporate Social Responsibility of Indian IT firms

The basic philosophy that the corporate world follows is that every company, like every individual, has a duty to the society. Just like an individual harms the environment, so does every company in its own way. Corporate Social Responsibility (CSR) thus focuses on reducing the negative effects to eradicate the harmful effects caused by a firm’s processes and product-usage and takes steps towards increasing its positive contributions. Positive contributions can be brought about by taking proactive steps by using its resources, core competence, people and funds for the benefit of the society and the environment.

The society has its share of multiple issues and problems. Much as we look at some good Samaritans in the government and the NGOs to resolve them, the magnitude of the issues is such that it needs much greater participation. This participation must come from the individuals and a body of individuals. The think tanks of the corporates bring together the individuals and its resource pool within a strategic boundary, to create a holistic approach and plan to counter the problems. Corporates are important stakeholders of the society, with great strengths of capable people, technology, access to funds and the ability of reach to find meaningful solutions to the problems facing India today.

Early days of CSR in IT industry

Notwithstanding its contributions to the GDP growth of the country and the employment opportunities, the IT industry is also obliged to meet its responsibilities towards curbing some of the social problems prevalent in India.

CSR is not a new phrase for Indian IT firms. Many IT firms have already incorporated corporate social responsibility concepts in their core values. However, it also appears that there is no real consensus about what it really means. According to a survey conducted by Nasscom a few years back, on IT firms' understanding of corporate social responsibility and its importance to their firms, the key barriers to CSR used to be a lack of knowledge of the concept, insufficient resources and lack of commitment. Moreover, though many international standards were available to support, measure and assist companies implementing CSR, most of the Indian firms did not follow the guidelines in the past.

CSR till early this decade was basically understood in terms of philanthropy or charity. Welfare programs or initiatives were introduced not as a responsibility but as a form of charity that was supposed to indicate the virtues of a company. Many industrial groups like the Tatas or Birlas had setup charitable trusts that provided financial grants for various worthy causes. But due to the fundamental base being just charity, this model had its share of problems when applied by a lot of other firms:

1. Commitment was lacking and often the activities were just a one-off case or periodical financial grants rather than sustaining efforts towards a problem resolution.

2. Community participation was lacking in managing such programs due to lack of ownership and strong involvement of employees.

3. The lack of involvement from the corporation led to low levels of accountability and transparency at the implementation level.

Many companies made token gestures towards CSR in ways such as donations to charitable trusts or NGOs and sponsorship of events, without taking any ownership and accountability. Most companies believed that charity and philanthropy equals to CSR, while very few companies used their core competence to benefit the community.

Some companies even used CSR as a marketing tool to further spread the word about their business. Very few companies actually communicated openly about their CSR policies, damage caused by their processes and products, the steps they had taken to minimize the damages and uplift the society and how much they were spending on CSR activities (which anyway remained a small fraction of their regular corporate spending).


The new emerging trend

However, some strong trends are emerging in the Indian CSR front in the past few years. The stakeholders are becoming CSR savvy. They expect more from the corporates beyond just their profits and even demand a company’s social and environmental performance. Further, there is an increasing awareness amongst consumers, management and students who now appreciate the CSR fundamentals more and are ready to participate. Thus, one of the motivations for some IT firms still remain as an effort to change the stakeholders' perceptions on the organizations without changing their actual economic performance.
Quite a few IT firms undertake health service initiatives such as building hospitals, treating cancer patients, blood donation camps and food programs (such as midday meals for school children or providing food for people affected by flood, famine, earthquakes and other natural disasters) and even green technology movements.

The geographical and climatic changes are also emerging as mainstream issues like the natural disasters such as the Tsunami, Katrina, Aila et al. Quite a number of firms engage in community development to meet such natural disaster situations with a planned approach. Such engagements are initiated more often by employee groups rather than firm managements. The firms contribute to community development programs by topping up the monetary contribution made by its employees towards community development programs. A focus on global energy issues has also intensified as crude oil prices have topped $135 per barrel last year, driving consumer awareness to conservation efforts, alternative fuel development and green technology investment.

Today, the corporate world has just started seeing the opportunity to help solve the problems CSR addresses. It is relatively easy to claim good intentions, but it is much more challenging to deliver on them. The trick is to measure the impact! A number of national and international organizations promote CSR reporting guidelines and actively monitor corporate performances. Today we see more acceptances of these norms and a willingness to adhere to such guidance by the corporates. The emerging trend is a move towards clear and comprehensive public disclosure of CSR data with an emphasis on measurable performance versus marketing spin.
The Global Reporting Initiative is one such example. The initiative’s vision is to have a reporting on economic, environmental and social performance by all organizations as routine and comparable as financial reporting. Officials have developed a sustainability reporting framework, of which the sustainability reporting guidelines are the basis for organizations to use for disclosure about sustainability performance. These guidelines also provide stakeholders with a universally applicable, comparable framework in which to understand the disclosed information.
There are other important factors providing the foundation for the business’s financial success or failure as well. These other areas are: learning and growth, internal business process and customer satisfaction. Each perspective can include metrics that effectively measure CSR initiatives and help the organization realize benefits. Given these dependencies, there is a strong indication that CSR is moving from a tangential public-relations-driven initiative to a business imperative. Companies with strong corporate social values have embraced this transparency by publishing annual reports addressing these metrics.

CSR of tomorrow in Indian IT space

With the shifting of the CSR paradigm to a stakeholder centric approach, practices at the ground level have also undergone a radical transformation. In every aspect of CSR measures we are seeing corporations innovating to increase efficiency, effectiveness and accountability. The focus is on developing initiatives that are people-centric with active community participation at all levels. Further, the corporations themselves are moving away from the charitable initiatives like giving financial grants or sponsorships to providing products and services in a manner that would make a real difference in the target communities.

Let’s have a quick look at some examples of Indian IT corporations’ CSR activities*.

TCS has always recognized the responsibility corporates should have towards the wider communities they operate in. TCS' community initiatives have been in areas addressing environmental and civic problems; setting up and maintaining infrastructure for urban beautification, pollution reduction and healthcare; waste management in the office environment, tree plantation and water treatment.

Wipro Cares is an initiative by the Wiproites, their family members and friends to contribute in the areas of education, community and social development. Wipro Cares contributes through two pronged strategy: providing rehabilitation to survivors of natural calamities and enhancing learning abilities of children from the under privileged sections of the society

Infosys Foundation has worked to support the underprivileged in society and enrich their lives. Promoted by Infosys Technologies Limited, the Foundation began its work in Karnataka, India, gradually extending its activities to the states of Tamil Nadu, Andhra Pradesh, Maharashtra, Orissa and Punjab. It has successfully implemented projects in four key focus areas of healthcare, social rehabilitation and rural upliftment, learning and education and Art& culture.

i-flex solutions has special programs for disaster relief, disable children’s program (where they sponsored disabled children to International Special Olympics), Association with Freedom Trust pool, Chennai to provide support in the form of coaching, kits, and other assistance to under privileged children. I-flex solutions is also developing a comprehensive Decision Support System (DSS) at its own cost, to help the Education Department in Karnataka to monitor the quality of elementary education in schools across the State.

The changing face of CSR in SME IT firms is also visible in baby steps that are taken in the direction of involving the employees to the cause. For example, Innominds Software of Hyderabad has devised special programs for a three way CSR drive: Natural disaster support, Green Environment promotions and uplifting of small scale industries in the State of Andhra Pradesh. The innovation Innominds brought in, is the way of attracting the employees through its in-house club “IMpressions”, which along with the HR team creates an environment to generate employee participation in a sustained basis throughout the year to participate in the CSR initiatives. Finally it’s the hands-on involvement of the employees and the backing of the management that makes the programs a success rather than funding charity programs.

It ushers a new era of CSR in the Indian IT space, as we see the introduction of a host of innovative programs and schemes in areas like education, healthcare, rural development, environment protection, protection of artistic and cultural heritage and disaster management. These programs are customized to meet the specific needs of target groups. Corporations devote not only financial resources but expertise, manpower, products and services for the successful implementation of these schemes. As a part of the Indian IT community, we seem to be finally catching up with the fundamental definition of CSR. Way to go!

* Source www.karmayog.org.