Mahindra & Mahindra tops CSR list in India even as companies scale up operations
Only about 18% of all companies surveyed met the mandatory 2% spending norm. Not a single services company features in the Top 10.
When The Economic Times partnered Futurescape and IIM Udaipur to conduct the first 'The Best Companies for CSR' study last year, 115 companies participated. This year, the number has risen to 216. There's more competition, and as a result several new companies have risen to find a place in the top 10 rankings of the Best Companies for CSR 2014 study. That's just one side of the story. Only about 18% of all companies surveyed met the mandatory 2% spending norm. Not a single services company features in the Top 10. What do these facts reveal? "Companies need to think of CSR more strategically," says Namrata Rana, director, Futurescape. For now, companies are engaging with communities in limited areas. "Education, health and environment are prominent. Areas like women's empowerment and supporting artisans, sportspersons etc get a short shrift," says Janat Shah, director, IIM Udaipur. Having said that, the top 10 corporates featured in this report are veterans, with a tradition of executing and monitoring CSR projects. Others can learn from them.
This year's CSR study finds that many companies have scaled up operations in CSR and are looking at it as a priority. Mahindra and Mahindra leads the pack. Compared with the previous study, it has jumped two ranks. There are four Tata group companies in the top 10 list. GAIL replaces SAIL in the public sector honours while Bharat Petroleum joins the top ten list. Interestingly no foreign players make it to the top 10 list. Jubiliant Life Sciences, a healthcare company, has entered the top ten list.
Last year's study was in the context of the introduction of mandatory spending on CSR brought on by the Companies Act, 2013. The focus of the companies has now shifted from anticipating the change and trying to understand the ramifications of the change to implementing it. This is in the early stages. Hence, this year companies need to shift their focus from anticipating to implementing.
To better understand where individual companies are at, we have categorised them across four quadrants: pace setters, smart utilisers, starting out and low efficiency.
Mahindra & Mahindra
Key CSR Areas: Focus on the girl child, youth and farmers through programmes in the domains of education, public health and environment. Mahindra Pride Schools provide livelihood training to youth from socially and economically disadvantaged communities and have trained over 13,000 youth in Pune, Chennai, Patna, Chandigarh and Srinagar. M&M sponsors the Lifeline Express trains that take medical treatment to far flung communities. Then there's Project Hariyali, which has planted 7.9 million trees till date, including four million trees in the tribal belt of Araku Valley. M&M has constructed 4,340 toilets in 1,171 locations across 11 states and 104 districts specifically for girls in government schools as part of Swachh Bharat Swachh Vidyalaya. Expenditure on CSR in the last fiscal was Rs 83.24 crore — 2% of PAT.
Flagship Programme: Set up by Anand Mahindra in 1996, Project Nanhi Kali supports the education of over 11 lakh underprivileged girls in ten states, providing material support (uniforms, bags, notebooks, shoes and socks) and academic support (workbooks, study classes). The key outcomes of the project include an increase in both enrolment of girls in schools and curtailing dropouts to less than 10%.
Key CSR Areas: Education, environment, community development, health, safety, security, resource and energy conservation, women empowerment, skill development and livelihood generation. Its total CSR spending in FY15 stood at Rs 31.1 crore as against the 2% of PAT requirement of Rs 29.8 crore. Further, the CSR spending of subsidiaries and joint ventures of the company was Rs 18.2 crore as against the requirement of Rs 17.2 crore.
Flagship Programme: 'Act for Mahseer', a conservation initiative started in 1975 for saving endangered species. Tata Power set up a breeding centre in Lonavala as part of its eco-restoration and eco-development project for the lakes. The programme has produced and distributed in various water bodies seeds of Mahseer in excess of 10 million in India and internationally.
Key CSR Areas: Education, healthcare, facilitation of empowerment and sustainable livelihood opportunities, preservation of ethnicity and culture of indigenous communities and sports. Initiatives run across ten districts in Jharkhand, Odisha and Chhattisgarh, covering nearly 500 core villages. Total spending in 2014-15 on CSR was Rs 171.46 crore, which is 2.04% of the average net profit of the last three fiscals.
Flagship Programme: Maternal and Newborn Survival Initiative (MANSI), a public-private initiative, is being implemented in 167 villages of the Seraikela block of Jharkhand's Seraikela-Kharsawan district since 2009. The project goals are to reduce child and infant mortality. MANSI has achieved improvement in all process and outcome indicators, such as reduction in neonatal mortality by 32.7%, reduction in infant mortality (up to the age of one year) rate by 26.5%, increase in institutional delivery from 58% to 81%. Based on the early evidence of success and learnings from the MANSI project, Tata Steel is scaling up the project to cover 1,500 villages.
Key CSR Areas: Water and sanitation, education, healthcare and skill building. L&T partners with local governments on health programmes focused on reproductive health, tuberculosis & leprosy control, integrated counselling & testing centres for HIV/ AIDS. L&T's community health centres are located at Mumbai, Thane, Ahmednagar, Hazira, Vadodara, Coimbatore, Chennai, Lonavala and Kansbahal. L&T's Construction Skills Training Institutes (CSTIs), established in 1994, provide skills training to rural youth. In the last fiscal, L&T spent Rs 76.54 crore on CSR, amounting to 1.44% of the average net profit for the preceding three years.
Flagship Programme: L&T recently committed to the construction of 50 check dams in Talasari block of Palghar district in Maharashtra, taking the total number of check dams constructed over the years to 150. This will benefit over 75,000 villagers.
Key CSR Areas: Focused on sustainable community development and preserving the ecosystem. The company has a climate change policy that maps its carbon footprint and is creating an abatement strategy for sustainable manufacturing. In the last fiscal, it spent Rs 12.76 crore on CSR, amounting to 2.93% of standalone PAT.
Flagship Programme: 'Save the Whale Shark Campaign', started in 2004, aims to spread awareness about the whale shark, the world's largest fish, which was fast depleting because of slaughter by fishermen along the Gujarat coast for export. After a decade of campaigning through street plays, games, posters, inflated shark flotillas, community meets, postage stamps and engaging with fishermen and school communities, more than 498 whale sharks have been saved. The company is now involved in the scientific study of the species to ensure its long-term survival.
Key CSR Areas: Education and employability (skill development). Most programmes are in the vicinity of manufacturing locations but employability programmes focused on building skill of youth in automotive trades are implemented across India. The company has created a CSR Committee of the board under the chairmanship of RA Mashelkar, which monitors CSR performance. It spent Rs 18.62 crore on CSR in 2014-15, despite reporting a net loss.
Flagship Programme: Learn, Earn and Progress (LEAP) for mechanic motor vehicle training, a year-long programme where theoretical learning is supplemented through 'on-thejob' exposure at service centres. Tata Motors' Dealers, implementation partners (NGOs and Technical Training Institutes) are partners. Dealers provide the training and contribute two-thirds of monthly stipend of the trainee while Tata Motors contributes the rest. The implementation partner provides theory training.
Key CSR Areas: Supporting communities in multiple thrust areas like health, sanitation, education, skill development, livelihood, and environment. Through GAIL Utkarsh, the company has helped over 500 students from economically backward communities join India's premier engineering institutes. They are provided residential coaching programmes and given monthly scholarships once they get into IITs/NITs. The GAIL Institute of Skills (GIS) is also working towards bridging the skill gap faced by the oil and gas industry. GAIL's CSR programme operates in 25 states and UTs. In the last fiscal, it spent Rs 71.89 crore, or 1.21% of the average net profit of the last three years, against an allocation of Rs 118.67 crore.
Flagship Programme: GAIL has established GIS which addresses the issue of unemployment and skill gap, by providing job-linked skill training to local youth of communities in and around its areas of operation.
Key CSR Areas: Quality education (strengthening primary, secondary education and empowering teachers), water conservation, skill development (employment linked skill training to the underprivileged with an inclusive approach for women, unemployed youth and persons with disabilities), health/hygiene and rural development. In 2014-15, BPCL had a CSR allocation of Rs 76 crore, of which it spent Rs 33.95 crore. The balance has been carried to the current fiscal, and has been spent on Swachh Bharat Swachh Vidyalaya projects.
Flasgship Programme: Project BOOND, which has evolved from the construction of rain water harvesting structures to making villages drought-free. It began with four villages in Maharashtra, which were along BPCL's product pipeline. In the past 6 years, it has been extended to over 140 villages in Maharashtra, Tamil Nadu, Karnataka, Rajasthan, Uttar Pradesh and Andhra Pradesh, making them water positive. In 2014-15, 40 villages were made water positive by creating 7 crore litres of water, benefitting over 5,500 families.
Key CSR areas: Works with Infosys Foundation, headed by Sudha Murty, towards removing malnutrition, improving healthcare infrastructure, supporting primary education, rehabilitating abandoned women and children and preserving Indian art and culture. Infosys Foundation USA is focused on bridging the digital divide in America by supporting computer science education and training in underrepresented communities. In FY15, Infosys spent 2% of its average net profit for the three preceding financial years on CSR.
Flagship program: The Infosys Foundation mid-day meal program, an initiative in partnership with the Akshaya Patra Foundation, spans several states across India.
Jubilant Life Sciences
Key CSR Areas: The Jubilant Bhartia Foundation (JBF) focuses on elementary education, improving health indices, employability and promoting social entrepreneurship. Jubilant's CSR programmes are implemented around its manufacturing locations in six areas in India.
Flasgship Programme: To reduce malnourishment in children, JBF has proposed to develop an effective and affordable platform for real time growth monitoring process for improving the nutritional intake and status of children under five years through focused expansion of home fortification and promotion of breastfeeding in village communities.
The study is based on the examination of corporate social responsibility (CSR) reports such as Global Reporting Initiative (GRI), Business Responsibility Reports (BRR), as well as publicly disclosed information online and via annual reports. The study ranks companies on the basis of four criteria: governance (weightage: 20%); disclosures (10%); stakeholders (35%); sustainability (35%). Companies are ranked on their focus on CSR and sustainability by creating a combined score that weighs each of the four parameters. The study looked at the top 214 companies to arrive at the ranking. The top 200 companies were taken from the ET-500 list. A further 16 companies responded to, and qualified for, the call for entries. This took the sample size to 216. However, two companies that did not report data on CSR and sustainability were dropped. This reduced the final sample size to 214. The sample consisted of 165 private companies and 49 public sector companies.
The other companies who made the list are listed below in order of their ranking:
11 Reliance Industries Ltd
12 ACC Ltd
13 Shree Cements Ltd
14 Maruti Suzuki India Ltd
15 Hindustan Unilever Ltd
16 Cummins India
17 Tata Consultancy Services Ltd
18 UltraTech Cement Ltd
19 Indian Oil Corporation Ltd
20 Essar Oil Ltd
21 JSW Steel Ltd
22 Steel Authority of India (SAIL) Ltd
23 Ambuja Cements Ltd
24 HDFC Bank Ltd
25 Dabur India Ltd
26 Cisco Systems India Pvt. Ltd
27 Coca-Cola India Pvt. Ltd
28 Oil And Natural Gas Corporation Ltd
29 Wipro Ltd. Rank
30 YES Bank Ltd
31 Welspun Corp Ltd
32 Bharat Electronics Ltd
33 Vedanta Limited
34 Siemens Ltd
35 Hindustan Construction Company Ltd
36 Rashtriya Chemicals & Fertilizers Ltd
37 ITC Ltd
38 Bajaj Auto Ltd
39 Hindustan Petroleum Corporation Ltd
40 Hindalco Industries Ltd
41 HCL Technologies Ltd
42 Jindal Steel & Power Ltd
43 Dr. Reddy's Laboratories Ltd
44 Nestle India Ltd
45 Bharat Heavy Electricals Ltd
46 Chambal Fertilisers & Chemicals Ltd
47 NTPC Ltd
48 Titan Company Ltd
49 Idea Cellular Ltd
50 Power Grid Corporation of India Ltd
51 Jaiprakash Associates Ltd
52 Tata Global Beverages Ltd
53 National Aluminium Company Ltd
55 Cairn India Ltd
56 ABB India Ltd
57 Godrej Consumer Products Ltd
58 Bosch Ltd
59 Neyveli Lignite Corporation Ltd
60 Axis Bank Ltd
61 Hero MotoCorp Ltd
62 Hindustan Zinc Ltd
63 NMDC Ltd
64 Mahindra & Mahindra Financial Services Ltd
65 Tata Communications Ltd
66 Tech Mahindra Ltd
67 Asian Paints Ltd
68 Oil India Ltd
69 Rural Electrification Corporation Ltd
70 Petronet LNG Ltd
71 Kotak Mahindra Bank Ltd
72 Sun Pharmaceutical Industries Ltd
73 Adani Power Ltd
74 Lupin Ltd
75 DLF Ltd
76 Exide Industries Ltd
77 Sesa Sterlite Ltd
78 Reliance Communications Ltd
79 IndusInd Bank Ltd
80 ING Vysya Bank Ltd
81 Bharti Airtel Ltd
82 ICICI Bank Ltd
83 Coal India Ltd
84 IDFC Ltd
85 Havells India Ltd
86 GMR Infrastructure Ltd
87 Union Bank of India
88 Cipla Ltd
89 Container Corporation of India Ltd
90 Aditya Birla Nuvo Ltd
91 Bharti Infratel Ltd
92 NHPC Ltd
93 Mangalore Refinery And Petrochemicals Ltd
94 Ranbaxy Laboratories Ltd
95 Adani Enterprises Ltd
96 Punjab National Bank
97 Cadila Healthcare Ltd
98 Jain Irrigation Systems Ltd
99 Reliance Power Ltd
Utkarsh Majmudar is a professor at various IIMs; Namrata Rana is director, Futurescape, and Neeti Sanan is a professor at IIM Udaipur