Work towards a triple bottom line
Enlightened businesses realise that in the long run, business cannot succeed in a society that fails.
Anu Aga
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Anu Aga, Director, Thermax
Recently, a survey rated 500 of India’s largest companies on the effectiveness of their corporate social responsibility (CSR) activities. The survey, conducted by Karmayog, a platform for the Indian non-profit sector, was an eye-opener. On a scale of 1 to 5, as many as 229 companies did not qualify for any rating at all; 91 scored 1; 139 scored 2 and 37 got 3. Only four companies scored 4 out of 5 and none of them could get 5. If this is true, it is a cause for concern.
The survey indicates the distance companies need to cover, especially when visions of a globalised world and its abundance of riches bring with them an awareness of the darker realities of deprivation and poverty. As India registers impressive growth figures and progress in many areas, there are disturbing facets of our national life that we wink at. The large-scale displacement of people in the name of urban beautification and development projects, the suicide deaths of farmers, increasing homelessness of thousands are some aspects of this suppressed reality. It is clear that prosperity in a booming India is not touching the lives of an average Indian. It is time we acted decisively and with a sense of urgency for the betterment of deprived communities, who have hopes and aspirations like us.
Public-Private Partnerships
Fortunately, there is an increasing awareness of the challenges before us. And an Companies need to embrace the idea that business of business is human well-being
understanding that the problems faced by societies are too complex and multifaceted for government to tackle by itself. In every domain, including the development sphere, we hear about public-private partnerships—with NGOs, corporates, private institutions and foundations—for the well-being of communities. Today, they are considered the logical way to reach out to the millions of marginalised and deprived people.
CSR emerged from a realisation by progressive companies that they have obligations to their multiple stakeholders—the wider community—from which they draw their resources. Today, it is acknowledged that business has not just financial accountability but also social and environmental responsibility—known as the triple bottom line of good governance.
I believe that companies need to embrace the liberating idea that the “business of business is human well-being.” There is a striking paragraph I read somewhere stating that the business of business is to generate growth and profits or else it will die; however, if that is the sole purpose of a business, then it should die, for it no longer has a reason for its existence. After fulfilling their first responsibility of being viable and making profits, companies, with their managerial resources and financial muscle, should reach out to the needy.
Inclusive development for the largest number of people is in the interests of the companies themselves. For example, if large sections of our public grow up unhealthy and without meaningful education, where will the companies draw on their expanding need for good people who can contribute? Enlightened businesses realise that in the long run, business cannot succeed in a society that fails.
Taking The Initiative
Today CSR initiatives of companies include applying new technologies for rural welfare, and work in the areas of health and education in urban slums. They also help government to focus its resources on the needy and manage development more effectively. Let me cite an example from our own experience in education.
Our company, Thermax, has created a Social Foundation and 1% of our profit after tax (PAT) goes towards social causes. Focusing mainly on education, we signed a 30-year MoU with The Pune Municipal Corporation (PMC), which runs 21 English medium schools. The MoU will manage one of the English Vidyaniketan Schools, established for brighter children from the municipal schools. PMC, which gave the school building, provides books, uniform and transport expenses for the children. We recruit the Principal and the teachers and pay their salaries. From June 2006, the school began with third, fourth and fifth standards with 180 children.
Every year one more class will be added. Akanksha, an NGO, also partners the foundation for innovative and creative methods of teaching. We find the children love coming to school and are eager to learn.
This model of public-private partnership will never be self-sustaining; there will always be need to pump in money. Another model could be that corporates start private schools for fee-paying children and from the surplus give free education to 20-30% students. A third option could be for the government to give vouchers to parents (as it has already started in Delhi); giving them the choice to decide which school they want to send their children to.
Demand Accountability
Beyond involvement in social projects, corporates and other civic outfits should Partnerships means firms fundings project schould ask the government tough questions
also demand accountability for the huge amounts that the government spends on development. Think of the huge expenditure on education and nutrition, but do we get adequate returns? A government study from Rajiv Gandhi’s time showed us that 80-85% of government spending on social infrastructure goes into mismanagement and corruption. Partnerships also mean that companies funding projects should ask tough questions.
Real involvement happens when a company’s employees participate in the CSR programmes. At the school that we support at Pune, several company employees invest their time and effort to help the students. Hopefully, it will create a ripple effect drawing in more people.
Many people who would like to contribute often don’t know how to go about it. The good work done by the NGO, Give India, shows the way. Its website lists committed and credible NGOs involved in activities ranging from education and health to human rights and women empowerment. The site gives employees of business organiations a chance to support and be part of such schemes. As the boxing legend Muhammad Ali put it, “Service to others is the rent you pay for your room here on earth.”