CORPORATE

SOCIAL
RESPONSIBILIT
Y

Concept of Corporate Social Responsibility

INTRODUCTION
CSR, which is nowadays associated with several terms and phrases
like corporate responsibility, corporate accountability or ethics,
corporate citizenship, triple bottom line, and Environmental Social and
Governance (ESG) norms, is becoming progressively integrated into
advanced business patterns and exercises. There is an upcoming trend
of referring to it as responsible competitiveness or corporate
sustainability. Defining CSR is elusive, as it is a dynamic and ever
evolving concept (Pinkston and Carroll, 1996). There is no unanimity
among the researchers on what CSR is and what the corporate or
business entities need to do to fulfill their social responsibilities.
CSR apparently is divided into two broad approachesmicro and
macro. Under the micro approach, every company is expected to
consider the social obligations and contribute generously towards their
fulfillment. Under this approach, each business unit at the micro level
must come forward, along with the government and other such
entities, and work for social advancement. Theorists like Ackerman and
Carroll believe in the micro approach and advocate the individual
responsibility of business units towards the society. Contrary to this,
the believers in the macro approach of CSR reject the concept of
individual responsibility of business units towards society and advocate
that it is the government, not business units that should work on social
welfare programs and achieve the countrys social goals. Theorists like
Milton Friedman and Theodore Levitt are the proponents of this
approach, who advocate and highlight that the business unit has
nothing to do with social objectives and must concentrate only on the
economic responsibilities. The concept coined by Milton Friedman, no
doubt, gained ground in the earlier times, but in the changing scenario,
micro approach is being accepted by the business globally, and social
objectives have received attention of business strategists, who believe

that expenditure on social issues is not an expense but investment, the

benefits of which will certainly accrue to them in future.
Milton Friedman proposed a general (macro) CSR theory, stating that
the only responsibility of business (corporate) is to use its resources
and perform activities that would increase profits within the rule of the
game. He was of the view that if managers spend corporate funds for
social purposes, they are essentially stealing from the share
of stockholders (Friedman, 1962). While Cadbury (2006) opposed it
saying that rule of the game is a deceptive term used by Friedman, as
these rules are set by the society externally. Levitt (1958) also took a
similar line, dreading that the business might come to overshadow the
society in case social issues gain importance in the agenda of business
firms.

The emerging concept of Corporate Social Responsibility (CSR) goes

beyond charity and requires the company to act beyond its legal
obligations and to integrated social, environmental and ethical
concerns into companys business process.
Business has today, emerged as one of the most powerful institutions
on the earth. Some of the biggest companies in the world are in fact,
bigger in size than some of the developing countries of the world.
Globalization makes the world smaller, and business, worldwide, is
expanding like never before. Companies are expanding their
operations and crossing geographical boundaries.
Indian companies too have made their way into the business boom and
are today globally acknowledged as major players. India is currently
amongst the fastest growing countries in the world. The globalization
and liberalization of the Indian economy has helped in stepping up
growth rates. Integration of the Indian with the global economy has
also resulted in Indian businesses opening up to international
competition and thereby increasing their operations.
In the current scheme of things, business enterprises are no longer
expected to play their traditional role of mere profit making
enterprises. The ever-increasing role of civil society has started to put
pressure on companies to act in an economically, socially and
environmentally sustainable way.

The companies are facing increased pressure for transparency and

accountability, being placed on them by their employees, customers,
shareholders, media and civil society.
Business does not operate in isolation and there is today, an increased
realization that not only can companies affect society at large, but they
are also in a unique position to influence society and make positive
impact.
Milton Friedman, Nobel Laureate in Economics and author of several
books wrote in 1970 in the New York Times Magazine that the social
responsibility of business is to increase its profits and the business of
business is business. This represented an extreme view that the only
social responsibility a law-abiding business has is to maximize profits
for the shareholders, which were considered the only stakeholders for
the company. However, time has given the term stakeholder wider
connotations.
Edward Freeman defines, a stakeholder in an organization is any group
or individual who can affect or is affected by the achievement of the
organizations objectives. Thus, the term stakeholder includes (apart
from shareholders), but not limited to, customers, employees,
suppliers, community, environment and society at large.
These and a host of other such ideas have given rise to the concept of
Corporate Social Responsibility (CSR). The concept of CSR goes beyond
charity or philanthropy and requires the company to act beyond its
legal obligations and to integrate social, environmental and ethical
concerns into its business process. Business for Social Responsibility
defines CSR as achieving commercial success in ways that honor
ethical values and respect people, communities, and the environment.
It means addressing the legal, ethical, commercial and other
expectations that society has for business and making decisions that
fairly balance the claims of all key stakeholders. In its simplest terms it
is: what you do, how you do it, and when and what you say. A widely
quoted definition by the World Business Council for Sustainable
Development states that Corporate social responsibility is the
continuing commitment by business to behave ethically and contribute
to economic development while improving the quality of life of the
workforce and their families as well as of the local community and
society at large.

Though, there is no universal definition of CSR but the common

understanding amongst most of these definitions concern with how the
profits are made and how they are used, keeping in mind the interests
of all stakeholders. The concept of Corporate Social Responsibility is
constantly evolving.
The triple bottom line approach to CSR emphasizes a companys
commitment to operating in an economically, socially and
environmentally sustainable manner. The emerging concept of CSR
advocates moving away from a shareholder alone focus to a multistakeholder focus. This would include investors, employees, business
partners, customers, regulators, supply chain, local communities,
the environment and society at large.

Chapter - 1

The key components of CSR would

therefore include the following:

Corporate Governance:
Within the ambit of corporate governance, major issues are the
accountability, transparency and conduct in conformity with the laws.
Good corporate governance policy would enable the company to
realize its corporate objectives, protect shareholder rights, meet legal
requirements and create transparency for all stakeholders.
Business Ethics:

Relates to value-based and ethical business practices. Business ethics

defines how a company integrates core values such as honesty,
trust, respect, and fairness into its policies, practices, and decision
making. Business ethics also involves a companys compliance with
legal standards and adherence to internal rules and regulations.1
Workplace and labor relations:
Human resources are most important and critical to a company. Good
CSR practices relating to workplace and labor relations can help in
improving the workplace in terms of health and safety, employee
relations as well as result in a healthy balance between work and nonwork aspects of employees life. It can also make it easier to recruit
employees and make them stay longer, thereby reducing the costs and
disruption of recruitment and retraining.

Affirmative action/good practices:

Equal opportunity employer, diversity of workforce that includes
people with disability, people from the local community etc., gender
policy, code of conduct/guidelines on prevention of sexual harassment
at
workplace,
prevention
of
HIV/AIDS
at
workplace,
employee volunteering etc. are some of the good practices which
reflect CSR practices of the company.
Supply Chain:
The business process of the company is not just limited to the
operations internal to the company but to the entire supply chain
involved in goods and services. If anyone from the supply chain
neglects social, environmental, human rights or other aspects, it may
reflect badly on the company and may ultimately affect business
heavily. Thus, company should use its strategic position to influence
the entire supply chain to positively impact the stakeholders.
Customers:
The products and services of a company are ultimately aimed at the
customers. The cost and quality of products may be of greatest
concern to the customers but these are not the only aspects that the
customers are concerned with. With increased awareness and means

of communication, customer satisfaction and loyalty would depend on

how the company has produced the goods and services, considering
the social, environmental, supply-chain and other such aspects.
Environment:
Merely meeting legal requirements in it does not comprise CSR but it
requires company to engage in such a way that goes beyond
mandatory requirements and delivers environmental benefits. It would
include, but not limited to, finding sustainable solutions for natural
resources, reducing adverse impacts on environment, reducing
environment-risky pollutants/emissions as well as producing
environment-friendly goods.
Community:
A major stakeholder to the business is the community in which the
company operates. The involvement of a company with the community
would depend upon its direct interaction with the community and
assessment of issues/risks faced by those living in the company
surrounding areas. This helps in delivering a community-focused CSR
strategy making positive changes to the lives of the people and
improving the brand-image of the company. Involvement with the
community could be both direct & indirect through funding and other
support for community projects implemented by local agencies.

Relevance of CSR in
Business
Corporate social responsibility (CSR) has become one of the standard
business practices of our time. For companies committed to CSR it
means kudos and an enhanced overall reputation a powerful
statement of what they stand for in an often cynical business world.
The establishment of a CSR strategy (sometimes referred to as a
sustainability strategy) is a crucial component of a companys
competiveness and something that should be led by the firm itself. This
means having policies and procedures in place which integrate social,
environmental, ethical, human rights or consumer concerns into
business operations and core strategy all in close collaboration with
stakeholders.
For companies, the overall aim is to achieve a positive impact on
society as a whole while maximizing the creation of shared value for
the owners of the business, its employees, shareholders and
stakeholders. Not so long ago, the European Commission defined CSR
as the responsibility of enterprises for their impacts on society, a
succinct and distinct summation for sure.
A 2015 study by the Kenexa High Performance Institute in London (a
division of Kenexa, a global provider of business solutions for human
resources) found that organizations that had a genuine commitment to
CSR substantially outperformed those that did not, with an average
return on assets 19 times higher. Additionally, the study showed that
CSR-orientated companies had a higher level of employee engagement
and provided a markedly better standard of customer service.
And yet, despite the positivity and optimism that CSR brings to the
corporate table, companies do not always accept their responsibilities
in this area in good heart, with a fair number admitting to having
adopted CSR mainly as a marketing gimmick. In some cases, firms may
have been coerced into adopting CSR and did so with insufficient
enthusiasm and vigor, leaving many of them to ponder what they
could and should have done differently.

For those considering CSR as a strategic option the question to ask

may very well be this: is the CSR payoff always worth the outlay?

Establishing a CSR programmed

The factors driving companies to pursue a CSR agenda are fairly
consistent across the corporate world; however, once a company
makes the decision to adopt CSR orientated activities, a plan (involving
a lot of engagement with employees, managers, suppliers, NGOs and
others) must be implemented to carry out the agreed CSR
programmed.
Within the pages of its CSR Implementation Guide the International
Institute for Sustainable Development (IISD) outlines what it considers
to be the six key components which go towards a coherent CSR plan:
(i) CSR Assessment; (ii) CSR Strategy; (iii) CSR Commitments; (iv)
Implementation Plan and Actions; (v) Verification and Evaluation of
Results, and (vi) Refinement. Perhaps most important, however, is an
underlying commitment to multi-stakeholder engagement as a
foundational pillar to any credible CSR program, says Jason Potts, a
senior associate with IISDs sustainable markets and responsible trade
initiative. CSR is fundamentally about ensuring that companies
forward broader public objectives as an integral part of their daily
activities and this can only be ensured with the appropriate
communication channels with stakeholders.
CSR policies need to be considered as a core and inseparable
component of the overall service or product offering.
For Klara Kozlov, head of corporate clients at the Charities Aid
Foundation, every companys situation is unique, with many different
models in existence which can help organizations to achieve their CSR
aims. In turn, this preponderance of choice has led to many companies
recognizing that they are defined by what they do, not just what they
give. Companies are not solely providing a financial contribution but
are increasingly unlocking their intellectual assets and the power of
their people to achieve a positive impact, claims Ms Kozlov.
Ultimately, coherency comes from clear purpose, program of work

which is authentic to and valued in the business and an acceptance

that it is critical to business performance.
Tobias Webb, founder and managing director of the Innovation Forum,
is clear on what a CSR program, or a sustainability strategy, should
accomplish. It comprises re-evaluating how the company thinks about
its impact, engaging stakeholders beyond shareholders and coming up
with a plan to improve the impact of the business on society and seize
business opportunities and make cost savings as a result, he attests.
This would involve a lot of planning and engagement with employees,
managers, suppliers, NGOs, perhaps academics and others, to figure
out where and how this is best done.

CSR resistance
Cynics suggest that companies often develop a CSR agenda not
because of an altruistic desire to assist in curing the ills of society, but
for reasons more akin to a box ticking exercise. Whatever the
consensus, some organizations either implement their CSR program
with a distinct lack of heart or resist adopting a CSR policy altogether.
In the opinion of Mr. Potts, if a resistance to CSR policies does exist, it
usually stems from the notion of allowing external stakeholders to
directly influence corporate policies and strategies, an idea that is
largely antithetical to the basic mindset under which many, if not most,
corporations operate. An honest adoption of CSR often requires a
serious reformulation of corporate purpose and decision-making
structures, advises Mr. Potts. Such change also implies, and rests
upon, the adoption of a corporate culture which actively encourages
employees to consider how the company might be able to do better in
the world. When CSR policies are adopted without simultaneous tools
for stimulating and allowing deep change, one can expect similarly soft
results in terms of CSR outcomes and impacts.

Avoiding ethical blowback

According to Mr. Webb, many companies are shackled by an adherence
to a 20th century mindset imbued by the Milton Friedman paradigm of
only shareholder returns count. Instead, companies should be looking
at business strategy through the lens of sustainable supply or
resilience a very different proposition from the Friedman philosophy.
Tesco suffered hugely because all their suppliers hated them, and so

did everyone else, says Mr. Webb. This was because they squeezed
everyone and it backfired on them in the end. The Wharton Business
School professor Thomas Donaldson calls this type of scenario the
ethical blowback.
Sustainability is clearly important. More businesses are adopting a
strategic approach to their CSR policies because they are increasingly
seeing the benefit across their business and for their stakeholders.
Many businesses have made significant strategic advances in
sustainability, affirms Ms Kozlov. CSR allows businesses to
demonstrate their values engage their employees and communicate
with the public about how they operate and the choices they make, to
ensure a sustainable future. CSR helps pave the way for partnerships
between businesses and civil society that are based on common goals
and shared actions to deliver impact-driven outcomes.

Pressure to deliver strong financial results

As CSR program continue to evolve and extend their reach, it may well
become the case that companies find themselves under added
pressure to have their CSR initiatives deliver a strong financial result. If
this is indeed true, many would question whether this financiallyorientated approach is not somewhat at odds with what the core aims
of a CSR program are supposed to be. This depends on your
timescale, suggests Mr. Webb. In three to five years, a good CSR
strategy will have delivered more engaged employees, better access to
talent, lower capital constraints and a better reputation. In the longer
term it can deliver serious business innovation and transformation of
the company culture and how the firm sees its role in the world.
Companies attempting this not yet successfully, but on the way
include Unilever and Nestle, among others. Two well-known examples
of those that are already there are Interface and Patagonia.
Others are not convinced that organizations are feeling extra pressure
due to a need to demonstrate stronger financial outcomes in
conjunction with their CSR activities. Significant pressure to bolster
financial outcomes has always existed and will continue to exist, says
Mr. Potts. There is no reason why CSR commitments cannot deliver

strong financial results, and it would be folly to expect companies to

throw this core corporate objective out the window altogether.
The problem arises when companies attempt to measure the financial
results of their CSR policies independent of their other corporate
activities. Rather, CSR policies need to be considered as a core and
inseparable component of the overall service or product offering.
Furthermore, the costs related to CSR should not be expected to
demonstrate traceable financial gains.
CSR policies should set the rules of the game which the company
concerned has established, and within which broader corporate
financial returns need to be secured. Basic CSR principles and
commitments should be considered non-negotiable parameters of
business operations rather than being subject to specific financial
performance requirements, says Mr. Potts.

Future embrace
At present, the incorporation of CSR program by businesses on a
fundamental level appears as prevalent as ever. However, the jury is
still very much out as to whether companies have it within them to
embrace a broad or multifaceted vision of CSR. It would be atopic to
expect a sea change among industries, says Mr. Potts. While there
are plenty of examples of companies using strong CSR performance as
a brand-building and product marketing strategy, far too many
corporate executives still rely on the old financial and hierarchical
models of yesteryear as the basis of their own planning. The biggest
and most influential companies also tend to be the most reliant on the
conventional way of doing business. What is happening, however, is a

broad

transition

to

the

adoption

of

external

multi-stakeholder

processes in the form of multi-stakeholder sustainability standards

and labels as a way of outsourcing the stakeholder engagement
process.
Ultimately, there are no hard and fast rules governing CSR. The more
companies understand the growing resilience, reputation and legal risk
they face, the more opportunities our globalised and connected world
has to offer them. This often depends on the sector, points out Mr.
Webb. If you make mining equipment, your focus will be energy
efficiency and perhaps new technology that is safer. If you sell
chocolate, your concerns are around the economic viability of your
supply chain.
With a number of recent legislative and behavioral developments, such
as the transparency of supply chains, sustainable development goals,
the ramifications of the Modern Slavery Act 2015 and the zero landfill
initiative, all contributing to the CSR melting pot, Ms Kozlov is in no
doubt that companies are unifying their CSR activities under an
overarching, business-aligned strategy, and using them as a tool to
drive

innovation,

tackle

material

issues,

strengthen

community

engagement and mitigate risks.

Whether a force for good or an exercise in brand enhancement, what
cannot be denied is that CSR is very much an integral part of the
global business landscape.

Chapter - 2
The Scope of Corporate Social Responsibility

The Circular states that while companies should be encouraged to

involve employees in their CSR activities, monetization of the pro-bono
services provided by employees would not be counted towards CSR
expenditure
In order to facilitate effective implementation of Corporate Social
Responsibility (CSR), the Ministry of Corporate Affairs (MCA) has
released a Circular on Frequently Asked Questions (FAQs) with regard
to CSR under Section 135 of the Companies Act 2013. The Circular
follows closely on the heels of the release of a report by the High Level
Committee set up by the MCA to suggest measures for improved
monitoring of the implementation of CSR policies in October 2015, and
provides clarity on some of the topics covered in the report. The key
highlights of the Circular are:

Applicability of CSR

Section 135 of the Companies Act, 2013 is applicable to every

company registered under the Act, and any other previous Companies
Law, with a net worth of Rs 500 crore or more, or a turnover of over Rs
1,000 crore or a net profit exceeding Rs 5 crore in any financial year.
The circular further explains that any financial year implies any of the
three preceding financial years.

No role for government in CSR monitoring

The Circular emphasizes that the government has no role in monitoring
CSR activities; it lays the onus on the board of the company to ensure
the quality and efficacy of a CSR project.
The circular states that the government has no role in appointing an
appropriate authority for approving and implementing CSR program of
a company or in engaging external experts in monitoring the efficacy
of CSR expenditure of companies such as for impact assessments.

Companies boards will decide all aspects of

CSR
The board of the company takes a call on the CSR expenditure and
qualifying activities as CSR.
CSR projects (and any changes thereof) and their monitoring are
subject to the approval of the companys board on recommendations
of its CSR committee.
Boards or committees are fully competent to engage third parties to
have an impact assessment of CSR program to validate compliance of
the CSR provisions of the law.

Current tax exemptions valid for CSR spend

No specific tax exemptions are extended to CSR expenditure. However,
certain activities such as contribution to Prime Ministers National
Relief Fund (Section 80G), scientific research (Sections 35(1)(ii), 35(1)
(iia), 35(1)(iii), 35(2AA)), rural development projects (Section 35AC),
skill development projects (Section 35CCD), agricultural extension
projects (Section 35CCC), etc. aligned to Schedule VII already enjoy

exemptions under different sections as indicated under the Income Tax

Act, 1961. Further, the Finance Act 2014 clarifies that the CSR
expenditure does not form part of business expenditure.

No carry forward for CSR spend

The Circular provides clarification that in case of CSR spends greater
than the prescribed CSR spend (2% of average net profit of three
preceding financial years), then the excess cannot be carried forward
to the subsequent years against that years prescribed CSR spend.
For any unspent amount of the prescribed CSR spend, the board can
chose to carry forward to the subsequent years, provided it is over and
above that years prescribed CSR spend.

CSR policy and reporting must for all qualifying

companies
The Circular confirms that the contents of the board-approved CSR
Policy must be disclosed in the board of directors report and on the
companys website.
All qualifying companies must report in the format provided by the
Companies (CSR Policy) Rules, 2014 on the annual report on CSR.
Further, a foreign company unless otherwise exempted by the central
government, should attach a report on its CSR activity as an annexure
to the balance sheet document that it submits to the Registrar of
Companies every calendar year.

Investing in government schemes as CSR

The Circular states that the objective of the CSR Law is to promote innovative
ideas and corporate enhanced management skills in discharging social
responsibility that results in greater efficiency and better outcomes.
Therefore, CSR should not be interpreted as a source of financing the
resource gaps in government schemes.

The board may decide to supplement government schemes should it

be deemed to qualify under the CSR provisions of the law.

Employee volunteering and in-kind donations

The Circular states that while companies should be encouraged to
involve employees in their CSR activities, monetization of the pro-bono
services provided by employees will not be counted towards CSR
expenditure.
Contribution in kind cannot be monetized to be shown as CSR
expenditure unless the company spends the amount as per Section
135 of the Companies Act 2013.
The Circular reiterates that those activities that benefit only the
employees or their families, one-off events, expenses towards
fulfillment of regulatory statutes, contribution to political parties,
activities as part of normal course of business or those undertaken
outside of India do not qualify as CSR expenses. It also reiterates that
the contribution to corpus of a trust/ society/ Section 8 companies etc.
will qualify as CSR expenditure as long as the entity is created
exclusively for undertaking CSR activities or where the corpus is
created exclusively for a purpose directly relatable to a Schedule VII
item

Chapter - 3
CSR global and Indian perspective
In India, Global Compact (GC) is accepted with great appreciation and
has achieved large participation that enabled it to create an advanced
network structure. However, GC failed to involve all business houses
into its network due to the partial acceptance of multi-stakeholder
approach. Apart from this, non-communicating and no reporting
behavior of the participants was observed and analyzed in detail in the
paper. Several reasons like lack of resources with firms, lack of
understanding the need and importance of the initiative while
implementing into the core business processes, and change in the
upper-level management which may lead to the discontinuation of
existing Corporate Social Responsibility (CSR) policies were identified
for the non-responsive behavior of participating firms. Inconsistent
records of local networks and non-responsive nature of Indian networks
were also found to be the problem areas of GC that must be looked
into by UN. The paper focuses on the firms commitment and sincerity
towards GC principles. It assesses and highlights the actual growth rate
of Indian CSR agenda while associating with GC.
Introduction
Over the last decade and a half, we have seen a revolutionary shift in
the relationship of private sector with the state and civil society. The
prospects of consumers, employees, investors, partners and local
communities in the context of the functions of businesses in the
society and towards the society are rapidly changing. Every small- or
large-scale firm has its stakeholders with both positive and negative
encroachments in the society. Globalization has highlighted the
strategic concern of stakeholder relationship, brand rapport and other
such issues which have become crucial for conducting the business
ethically and morally. The presence of roadblocks to global trade and
investment has led to a more structured, integrated and
interdependent paradigm of international trade. Globalization,

privatization and liberalization have drafted new lines between the

state and the market that have changed the private sector, which is
expected to contribute towards the civil society. The relationship
between firms and the civil society is continuously moving from
traditional philanthropy to the reassessment of the purposes, rights
and obligations of business to the society. Enormous propagation of
Corporate Social Responsibility (CSR) thought and its uses have been
prompting the firms to adopt a code of conduct of social responsibility.
Today, the common goal of the domestic and international business
community seems to be bringing forth wealth in a socially and
environmentally responsible way.

Global Compact of United Nations1

A Multiple Stakeholders Model On January 31, 1999, while addressing
World Economic Forum in Davos, the then Secretary-general of the
United Nations (UN), Kofi Annan, challenged the Chief Executives of
large business entities to join in a Global Compact (GC) of shared
values and principles which will give a human face to the global market
through a creative partnership between the UN and the private
sector. Pursuant to this, on July 26, 2000, the GC was formally launched
by UN in partnership with the International Chamber of Commerce
(ICC). UNGC is an initiative to encourage corporate entities worldwide
to adopt sustainable and socially responsible policies and to report
their implementation. Under the GC, companies are brought together
with UN agencies, labor groups and the civil society. The GC is a purely
voluntary initiative with twin objectives 1) mainstreaming the ten
principles2 in business activities around the world; and 2) catalyzing
actions in support of broader UN goals propounded as the Millennium
Development Goals (MDG)3 . The GC seeks to achieve its MDGs
through a multi-stakeholder network, which supports the development
of CSR with collective learning, policy dialogue and partnership
projects at global and local levels

Global Compact India

In India, the GC was accepted at a high-level meeting of business
leaders in Mumbai on December 4, 2000. The structure of the GC in
India formally consists of Global Compact Society (GCS). Besides GCS,
there is another association, the Indian Partnership Forum (IPF), in
India, which is also focusing on CSR. IPF, which was founded by the
United Nations Development Program (UNDP) and Confederation of

Indian Industry (CII) in 2001, has no formal association with GC, but
promotes a similar idea. IPF acts as a forum for multi-stakeholder
dialogue for promoting CSR in India, developing social code for
business, operational zing the GC principles and providing more
specific guidelines and supporting national network development. GCS
is only concerned with the networking of GC participants, while IPF
promotes CSR in general. GCS was formally launched and registered in
New Delhi, in November 2003, as an all India forum, and 41 Indian
organizations from public and private sector, professional bodies and
institutions joined as founding members, and a governing committee
was formed. As on January 2010, about 117 organizations from India
had joined the compact. As a non-profit body, GCS acts as an apex
level nodal agency, representing various Indian corporate bodies,
networks, institutions/ organizations to provide a forum for exchange of
experiences and for working together on activities related to CSR to
promote sustainable growth and encourage good corporate citizenship.

Tech
Mahindra
CHAPTER - 4

History

Mahindra & Mahindra's Kandivali Unit, Auto Sector Main gate

overlooking Western Express Highway, Mumbai.
Mahindra & Mahindra was set up as a steel trading company in 1945
in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra
and J.C. Mahindra and Malik Ghulam Mohammed. After India
gained independence and Pakistan was
formed,
Mohammed
immigrated to Pakistan. The company changed its name to Mahindra &
Mahindra in 1948 It eventually saw a business opportunity in
expanding into manufacturing and selling larger MUVs, starting with
the assembly under licence of the Willys Jeep in India. Soon established
as the Jeep manufacturers of India, the company later commenced
manufacturing light
commercial
vehicles (LCVs)
and
agricultural tractors. Today, Mahindra & Mahindra is a key player in the
utility vehicle manufacturing and branding sectors in the Indian
automobile industry with its flagship Mahindra XUV500 and uses India's
growing global market presence in both the automotive and farming
industries to push its products in other countries.
Over the past few years, the company has taken interest in new
industries and in foreign markets. They entered the twowheeler industry by taking over Kinetic Motors in India. M&M also has a
controlling stake in the REVA Electric Car Company] and acquired South
Korea's SsangYong Motor Company in 2011 In 201011 M&M entered in
micro drip irrigation with the takeover of EPC Industries Ltd in Nashik.

CSR Initiatives at Tech Mahindra

Overview
Corporate Social Responsibility has always been an integral part of the
Mahindra Group's vision and the cornerstone of our Core Value of Good
Corporate Citizenship.
- Keshub Mahindra, Chairman
The Mahindra Group defines Corporate Social Responsibility as making
socially responsible products, engaging in socially responsible
employee relations and making a commitment to the community
around it. At the Mahindra Group, Corporate Social Responsibility is not
just a duty; it's a way of life.
In 2005, the Group celebrated its 60th anniversary by renewing its
commitment to Corporate Social Responsibility. It pledged to dedicate
1% of its profit (after tax), on a continuous basis towards Corporate
Social Responsibility. A unique kind of ESOPs - Employee Social Options
was launched to enable Mahindra employees to involve themselves in
socially responsible activities of their choice. The Group also
announced a special gift: to provide free cochlear implants to 60
profoundly hearing-impaired, under-privileged children.
In addition to giving impetus to the Nanhi Kali project for the girl child
and the Mahindra All India Talent Scholarship for the economically
disadvantaged, the Mahindra Group is planning to set up two Mahindra
Pride Schools. These schools will offer a variety of courses, with an
emphasis on employability, including training for Information
Technology, Retail, and Automotive Engineering etc. They will provide
new skills and capabilities to the weaker sections of society,
particularly the scheduled castes and scheduled tribe youth. While
these projects are already underway, plans for more social initiatives
are on the anvil.

Education
A) K. C. Mahindra Education Trust

Established by the late Mr. K. C. Mahindra in 1953, the K. C. Mahindra

Education Trust aims to Transform the lives of people

in India through education, by providing financial assistance and

recognition to them, across age groups and across income strata'. It
was registered as a Public Charitable Trust under the Bombay Public
Trusts Act, 1950.

The K.C. Mahindra Education Trust has undertaken a number of

education initiatives to make a difference to the lives of deserving
students. The Trust promotes education mainly by way of scholarships.
It has provided more than Rs. 13.80 crores (approximately US $ 3.0
million) in the form of grants, scholarships and loans. Some of these
scholarships were instituted as far back as the 1950s, while others
were founded recently. These are funded through an investment
portfolio, the main donors of which are the Mahindra Group of
companies.
Encouraging Students In its efforts to encourage and motivate students, the K. C. Mahindra
Education Trust has set up the following scholarships:
K. C. Mahindra Scholarships for Post-Graduate Studies Abroad Interestfree loan scholarships for post-graduate studies are awarded to
deserving students interested in pursuing advanced studies overseas.
Mahindra Search for Talent Scholarship
This has been set up in 35 schools across the country with an objective
to enthuse and reward excellence in academics.
K. C. Mahindra United World College Scholarship
This is offered to deserving students in the age group of 16 -18

Encouraging Teachers
To further encourage teachers, the Trust has set up

K.
C.
Mahindra
Chair
the Institute of Science, Mumbai.

for

Nuclear

Chemistry

at

- Dhandevi Mahindra Scholarship Award at Sophia College, Mumbai

- The Trust has also established several awards and scholarships for
the academia.
Empowering the Under-privileged

Mahindra All India Talent Scholarship

To empower the under-privileged and disadvantaged sections of
society, the Trust has set up the Mahindra All India Talent Scholarship.
These are given to students belonging to lower income group families,
to help them pursue job
Oriented diploma courses at recognised government polytechnics.
Most of the awardees are girl students, as the Trust is keen on helping
girls earn well, to elevate their standard of living.

Nanhi Kali
Government of India statistics reveal that out of every ten girls who
enrol in school in India, only three complete Standard X. The Nanhi Kali
project, launched in 1996 by the K. C. Mahindra Education Trust, aims
to change this by providing quality
Education to the disadvantaged girl child. This national girl child
sponsorship programme ensures that every girl child completes her ten
years of formal school education in an environment that would help
her to realise her potential to the fullest. Also, various corporate and
individuals can join the Nanhi Kali project by becoming guardian angels
to these disadvantaged girls.

What is most encouraging is that it takes only Rs. 5/- per day to take
care of the girl childs education and provide her with a life of dignity.
The project addresses attitudes and issues towards girl children by
sensitising the teachers, family members and community on the
importance of providing the child with a good education. Sponsors of
Nanhi Kali are provided with a profile of the child (including her

photograph), along with periodic progress reports so that her academic

progress can be tracked. The
Nanhi Kali project is currently looking after the education of 30,000 girl
children and intends to reach out to many more in a phased manner.

Recently, the K.C. Mahindra Education Trust entered into a strategic

alliance with Naandi Foundation, a not-for-profit organisation, to jointly
manage the Nanhi Kali project. Naandi Foundation works with 1500
government schools in Andhra Pradesh, Madhya Pradesh and
Chhattisgarh. Through its Ensure Children Learn Programme, Naandi
Foundation is creating child-friendly school environments that prevent
dropouts and ensure that children learn. The partnership complements
the efforts put in by Naandi Foundation in enriching the learning
environment, by helping the girl child in the form of uniforms,
textbooks and other learning material.

The Nanhi Kali project is spearheaded by Mr. Keshub Mahindra and Mr.
Anand Mahindra on the K. C. Mahindra Education Trusts board, and Dr.
Anji Reddy, Mr. Anand Mahindra, Dr. Ishar Judge Ahluwalia, Mr.
Ramalinga Raju and Mr. K. S. Raju on the Naandi Foundations board.

B) Mahindra Education Society

As part of its Corporate Social Responsibility activities, the Mahindra
Group has established schools near its factories primarily for children
of its employees. At present, the Group has three schools that impart
high standards of education - Mahindra Academy at Malad in Mumbai,
Mahindra Academy in Zaheerabad and a school in Khopoli.The
establishment of these schools has not just benefited their employees
but also the community around these schools. Teachers at these
schools are qualified and undergo regular training as well as attend
relevant workshops. Their teaching methodologies are constantly
evaluated and modified when necessary.

C) Mahindra United World College

The striking feature of the United World Colleges is that they embrace
the entire world across all divides of race, history, culture, wealth,
religion, economic status and political belief: they are unique and they
are conscious of their responsibilities.
Nelson Mandela, United World College Honorary President

The
Mahindra
United
World
College
of
India,
part
of
the United World College movement, was founded by the late Harish
Mahindra in 1997. It is the Groups endeavour to promote world- class
education with an emphasis on the ideals of peace and understanding,
central to the ethos of the United World Colleges. There are 10 United
World Colleges spread across the globe, with colleges situated
in United Kingdom, Singapore, Canada, Swaziland, Italy, United States
of America,Venezuela, Hong Kong, Norway and India. Her Majesty
Queen Noor of the Hashemite Kingdom of Jordan is the President of the
United World Colleges and Mr. Nelson Mandela, former President of
the Republic of South Africa, is the Honorary President of the United
World College International Council.

Located 40 kms. west of Pune, the Mahindra United World College of

India brings together students of various nationalities for a preuniversity degree. The school is global not only because of the
International Baccalaureate degree, but also because of the true
international culture in which the students study, live and learn. Each
years batch of about 100 students accommodates about 65 to 70 from
abroad.
The
faculty
includes
professors
from Argentina, Australia, Austria,
Cameroon, Canada, Colombia, Ecuador, France, Germany, India, Italy, J
apan, Malaysia, Mexico, the Netherlands, New Zealand, Sweden, South
Africa, UK and USA. The teacher-student ratio is 1:9.

This international mix facilitates global exposure and helps students

transcend all artificial barriers based on race, religion, ethnicity, class,
gender or nationality. Keen focus is given on all-round development,
and students are encouraged to think innovatively by involving
themselves in socially and environmentally relevant issues. The
students also contribute to the local neighbourhood through
community service program.

Health & Disaster Relief

Mahindra Foundation
The Mahindra Foundation has been set up with a specific objective: to
provide medical relief to the poor and needy sections of society. The
foundation has helped patients suffering from cancer, heart ailments
as well as burn victims. It has also been very active during national
calamities and disasters and has helped contribute and mobilise
resources. The foundation also extends its support to academia and
other professionals and sportsmen by helping them attend workshops
and conferences overseas.
The Mahindra Group has always been very responsive to any major
disaster
in India.
Whether
it's
been
the
tsunami
or
the Gujarat earthquake, the Mahindra family has got together and
always provided support either by way of financial help or by way of
sending vehicles, supplying material or manpower.

Arts & Culture

Theatre Week
The Mahindra Excellence in Theatre Awards (META) is the latest in the
Mahindra Groups efforts to encourage national theatre in two broad
categories - Emerging theatre and Established theatre. The annual
awards are in tune with the Groups Corporate Social Responsibility
program, which have already received a fillip in the Conglomerates
60th anniversary year. The awards will initially cover English & Hindi
theatre and include

The selection process covers four broad areas of the country, namely,
North, South, East and West. The Critics Panels are based in each of
the four regional hubs of Kolkata, Mumbai, Delhi and Bangalore.
Six plays are selected from each region and are referred to the
respective Critics Panel. The Panel from each metro city then sends
the final list of eight productions to the Grand National Jury.
The Grand National Jury for the year 2006 includes theatre luminaries
such as Shyamanand Jalan, Shabana Azmi, Ila Arun, Shashi Kapoor,
Zafar Hai and M. S. Sathyu. The Mahindra Group also plans to set up
a Mahindra Academy for Excellence in Theatre.

Environmental Initiatives

Environment protection is a part of everyday being at the Mahindra

Group. Right from Mahindra products such as vehicles which are

designed meeting International standards of Safety and emission, to all

Mahindra plants across the nation which comply way beyond necessary
environmental regulations by setting new standards in natural resource
conservation, efficient water management and with the most recent
Green IT; Mahindra shows that it care of planet earth proactively.

Towards making planet earth greener, the Group has vowed to plant a
One Million Trees across the Nation by October 2008 under the
Mahindra Hariyali initiative. Mahindra Hariyali, is a mass tree plantation
initiative undertaken by each and every Mahindra location - be it a
Plant/factory setting or a corporate office. Shramdaan by Mahindra
employees (and their families) themselves and even Mahindra dealers
is a major driver of the initiative. With strong and meaningful
partnerships with various stakeholders in the civil society such as
schools, colleges, trusts, and also the Government (Forest
Departments etc), the Mahindra Hariyali model ensures plantation and
nurturing of these trees in the society at large. What started as a seed
with top management vision is now bearing fruits towards reaching the
zenith of completion.
Since 1984, the Mahindra Group has been lending a hand to the Green
Bombay movement by developing and maintaining municipal gardens.
Greenery is at a high premium as the city has less than half an acre of
open place per thousand people. Thats ten times less than Delhi and
twenty times less than what London offers.

The Group has transformed three municipal

gardens:
The Shivaji Garden (near Gateway of India) is admired for its beautiful
architecture and flourishing plants and flowers. Completely renovated
by the Mahindra Group at a cost of Rs. 6 Lakhs, it now has pathways
for pedestrians as well as new stretches
of lawns and flowers. An area formerly frequented by anti-social
elements has been merged with the garden, to prevent further misuse.
Every effort has been taken to keep the garden in an immaculate
condition and visiting hours are in place, facilitating maintenance
work.

The Traffic Island Garden (opposite Regal Cinema) has been

completely renovated by the Mahindra Group at the cost of Rs. 1 Lakh.
New lamp posts and a variety of plants
were put into place and the fountain was restored to its former glory.
The garden provides visual relief in this crowded and traffic congested
circle.
The third garden is located at the junction of Madame Cama Road, to
the south of Oval Maidan. This is a brand new garden, developed by
the group from scratch, at a cost of Rs. 1.5 Lakhs. Formerly misused by
vagrants, it is now a serene and beautiful little corner.

Excerpts from letters of appreciation the

Mahindra Group has received over the years:
The President of India and all VVIP's who witnessed the Presidential
Review recently were very happy about the way the Gateway has been
given a new look. This was mainly because your organisation did a
splendid job in giving a face-lift to Shivaji Garden, which added to the
beauty of the surroundings. With your co-operation, the garden stands
out as a model to be emulated by others.
- Mr. D.M. Sukthankar, Municipal Commissioner, Bombay
The Review of the Fleet by the President of India on February 12, 1984
and the other functions concerned with it have been a great success.
This achievement would not have been possible without the dedicated
efforts of a number of agencies. I would like to especially thank you for
your personal interest in the beautification of the garden at the
Gateway of India, which distinctively lent charm and character to the
Beating Retreat Ceremony and reception that followed.
- Vice Admiral R.H. Tahiliant, Flat Office Commanding-in-Chief, Western
Naval Command,Bombay
The traffic island opposite Regal Cinema has become a beautifully
appointed garden. Of greater merit perhaps would be your initiative at
undertaking such a job. I consider this a textbook example of showing
us a simple, albeit effective way of improving the quality of life in this
crowded metropolis.

- Sr. Columbiere, Principal, St. Annes School, Bombay

A long-time resident of Bombay, I have been in the Virgin Islands, USA,
for the past two years. On a recent visit home, I was pleasantly
surprised to see new greenery in this city. The garden at the side of
Oval Maidan with its pretty lawns and flaming
bougainvillea specially caught my eye. I am sure that citizens
of Bombay greatly appreciated your company's efforts in beautifying
our city.
- Shobha Idnani

Sports
Mahindra United Football
A) History
All work and no play can indeed make a company very dull. Thats why
a simple club with a few games and basic amenities was set up in
1950. No one ever thought that this would grow into an establishment
that ran a professional team and offered high quality facilities,
incentives and allowances.

The shift was gradual. In 1956, a group of youngsters enrolled

themselves as the Mahindra official team in the Bombay Football
League and made valiant efforts to reach the top. To further improve
the standards, the company provided a full- size football field for

practice and training. At this point, with the football teams

representing the company at tournaments in Bombay, the need for a
sports club arose. So the Mahindra & Mahindra Allied Company Sports
Club came into being in 1962.

Since then the team has gone from strength to strength, getting
into Bombays senior division Harwood League in 1964 and earned the
dashing sobriquet, The Giant Killers. Football was developing
in Maharashtra and in Mahindra too. In 1969, Mr. Harish Mahindra was
elected Vice President of Western India Football Association (WIFA).
Mahindra & Mahindra Allied Company Sports Club, then known as the
Orange Brigade, was the most popular team in Maharashtra after
strong teams like TATAs, Mafatlals and Caltex. The late 80s saw
Mahindra emerge as one of the most formidable teams in the country,
attracting talented international players like P. M. Shivdas, C. Mustafa,
Jerry Bassi, Henry Menezes, Santosh Kashyap and Godfrey Pereira. Top
teams likeEast Bengal, Mohun Bagan and Mohammedan Sporting went
all out to recruit the Mahindra players.

In 2000, the Mahindra Football Team underwent a total revamp and the
Orange Brigade turned red. The team was renamed Mahindra United
under the leadership of Mr. Alan Durante, Executive Director &
President of the Automotive Sector. Committed support from the
Chairman, Keshub Mahindra, and Managing Director & Vice Chairman,
Anand Mahindra, set the ball rolling. Big names like Raghavan, Derek
Desouza, Harish Rao, Karel Stromsik, David Booth and Dhronacharya
Awardee, Syed Nayeemuddin, have coached the team and taken it
from victory to victory.

There's been no looking back since then. Mahindra United of Mumbai is

the only team in Maharashtra to win the Durand Cup twice, which is
the second oldest trophy in the world. It is also the first team
in Maharashtra to win the Harwood League and the Nadkarni Cup three
times in a row. In fact, right now the Indian football team too, is led by
the captain of Mahindra United.

B) Mahindra United Under - 19 years

In an attempt to nurture young talent and promote football in Mumbai,
Mahindra United fielded an Under-19 years team from 2003. The team
performed extremely well in the NFL league for U-19 years and
reached the semi-finals, beating teams like Churchill Bros and
Salgaocars. This promotion of the U-19 years team has helped the
players to develop and display their talent at the top level and has got
them instant recognition and offers from some leading clubs in
Mumbai.

C) Mahindra United under - 15 years

Spurred by the success of its U-19 years team, Mahindra United
fielded an Under-15 years team from 2006. The team played the
Manchester United Premier Cup Asian Qualifiers held at Kolkata where
top NFL Clubs participated.

Awards & Recognitions 2008

The Nashik Plant became the first plant to win the prestigious CII
National Award for Excellence in Energy Management 2008 at an
event held in Pune on 22nd and 23rd August 2008.. The award
recognizes various industrial sectors for their outstanding
contribution to Energy Conservation and Management. The
award was conferred on the basis of Nashik plants various
energy conservation initiatives and its performance over the last
three years.

Mahindra & Mahindra was honoured with the Business world

FICCI-SEDF Corporate Social Responsibility Award from the
Honourable Finance Minister, Mr. P. Chidambaram in New Delhi
on May 18, 2008. Instituted in 1999, the Business world FICCISEDF Corporate Social Responsibility Award identifies and
recognizes the efforts of companies in integrating and
internalizing CSR into their core business operations. Mahindras
CSR activities focus on the three areas of education, environment
and health, and the company has pledged 1% of its profit after
tax (PAT) on a continuing basis for CSR activities.

M&M won the Auto Monitor CSR award for the Lifeline Express at
a glittering ceremony held in New Delhi on the 7th of March
2008. The Lifeline Express was the organizations largest Esops
initiative and was undertaken by the FES Rudrapur plant, which
together with other volunteers such as doctors put in an amazing
21,742 man hours.

On January 18, Mahindra and Mahindra won the BSE award for
Best Corporate Social Responsibility Practice at the Social and
Corporate Governance Awards (Innovative strategies Measurable Impacts), presented by BSE and NASSCOM
Foundation. The Award ceremony was the culmination of the
Business for Social Responsibility Contest organized by BSE and
NASSCOM Foundation in which Mahindra and Mahindra Limited
was short listed along with 28 other Corporate for the category
Best Corporate Social Responsibility Practice.

From Annual Report

Corporate Social Responsibility
Corporate Social Responsibility (CSR) has always been an integral part
of the vision of the Mahindra Group and has been the cornerstone of its
core value of Good Corporate
Citizenship. CSR for the Company is all encompassing, including
making socially responsible products, engaging in responsible
employee relations, and not only making a
Responsible commitment to the community but also encouraging
employee engagement in community initiatives.
The Mahindra Group has pledged amounts not exceeding 1% of its
profit after tax (PAT) on a yearly basis for the Companys CSR
initiatives, largely to benefit the socially
and economically disadvantaged sections of society.
While the Companys focus area for CSR has been in the field of
education, as responsible citizens, the Company has also been actively
supporting issues such as health and environment.

Some of the major initiatives your Company

has invested in are described below:
Mahindra Pride School:
As part of the 60th year celebrations, through the K. C. Mahindra
Education Trust, the Company has committed to setting up two
Mahindra Pride Schools. The Schools aim to empower the youth from
socially disadvantaged sections of society by extending livelihood
training which will enable them to gain employment based on the skills
learned at these Schools.

Mid Day Meal Kitchen:

The Company had entered into a tripartite public private partnership
with the Government of Rajasthan and Naandi Foundation for setting
up of a centralised Mid Day Meal Kitchen at Govindgarh Taluka, Jaipur
District, in the state of Rajasthan. This kitchen will hygienic, nutritious
and wholesome mid day meals to approximately 25,000-35,000
primary school children studying in 314 Government Schools in
Govindgarh Taluka, Jaipur District.

Supporting Nanhi Kali:

Nanhi Kali, which supports the education of the disadvantaged girl
child has been the flagship programme of the K. C. Mahindra Education
Trust. The Mahindra Group
has committed to independently support 6,000 girls in urban, rural and
tribal parts of India by providing academic support as well as material
support in the form of uniforms, clothes, school bags, shoes, etc. In
addition, the Company has entered into a partnership with the
Government of Rajasthan to jointly support the education of 10,000
disadvantaged girl children in the tribal area of Udaipur District.

Gifting Cochlear Implants:

By gifting the power of sound through the donation of cochlear
implants, the Mahindra Group has changed the life and future of 41
profoundly hearing-impaired, underprivileged children till date.
Operations are performed by Dr. Milind Kirtane, Indias leading ENT
surgeon. All recipients are selected in consultation with Dr. Kirtane and
his team of doctors, audiologists, teachers of the hearing impaired and
social counselors.

Supporting Government Schools:

Continuing its commitment to make quality education accessible to all
children, the Mahindra Group has continued support to 6 Government
Schools in Mumbai (5 Schools at Kandivli and 1 in Worli). Naandi
Foundation, the implementation partner for the School Adoption
Programme, has through its Ensuring Children Learn strategy, been
running Gyan Jyothi Centres or academic support classes to ensure
that children coming to BMC Schools acquire grade specific learning
competencies.

Mahindra All India Talent Scholarships (MAITS):

498 students from 11 Centres all over India were awarded the MAITS in
the last financial year to enable them to pursue a job oriented diploma
course at a recognised Government Polytechnic in India. These
students have been provided with this scholarship for a 3 year period.
A majority of the scholarship awardees are girls, as the Trust is keen to
empower girls through vocational education.

Employee Social Options (ESOPS):

Employee Social Options (ESOPS) the unique programme at the
Mahindra Group where each employee can exercise his own social

responsibility by volunteering in CSR initiatives received great support,

with 14,535 employees volunteering for various initiatives with ESOPS
expanding to 6 new States namely Uttar Pradesh, Assam, Madhya
Pradesh, Rajasthan, Bihar and Tamil Nadu.

Some of the Notable ESOPS initiatives this year

were:
The Lifeline Express; undertaken by the Tractor Plant in Rudrapur,
where 647 surgeries were performed free of cost.
Mahindra Hariyali; The Managements vision of planting One million
trees has already reached the 2.8 lakhs mark across the country.
AIDS Awareness Campaign; inaugurated in July, 2007, and conducted
in partnership with an NGO AAS Centre for Human Hope aims to create
Aids awareness among the Companys employees, school/college
students, vendor/ suppliers and other citizens of Nashik City.
The Company has been recognised for its CSR work and feels
privileged to have received the Business world FICCI SEDF CSR Award
and the BSR Business for Social Responsibility Award.