Companies have realized that consumers need to see a direct link between buying a certain product and its effect on society. For example, a 10% donation to an AIDS charity for buying a pair of jeans turned out to be as convincing as buying bio- degradable shampoo, which did not stain the environment.
On the other hand, consumers shied away from buying a certain companyâ€™s jeans when they realized that the firm used child labor at its manufacturing sites.
Take the recent advertisement of ITC, which while urging consumers to buy their turmeric or packaged flour, affirms that a certain portion of the amount would go to the improving of rural India, for drinking water and for basic health facilities. For the biscuit major, it is a simple way to beat the competition. For the consumer, it is a time to feel involved.
CSR has been in the news for various reasons: when new businesses or reformed corporate companies join the ethical marketplace.
Companies are increasingly involving employees and consumers to add to the halo effect of corporate social responsibility.
SP is getting ready to dip into her savings. Come April, this employee of multinational drug giant Novartis along with other employees, will spend a day in a tribal area in Palghar (Maharashtra, India) helping dole out much-needed medicines as well as provisions like rice and cereals, towels, saris, bed sheets, notebooks, and even chalk and slate.
SP aided by her boss and managing director at times, is an eager participant of Novartisâ€™ Community partnership week, and has been doing socially relevant work for the last 10 years.
There is no tangible benefit accruing to SP due to her involvement. She does not get a special rating during her appraisals, nor a special fee for the voluntary community service.
What she does get is intense, emotional satisfaction, a sense of giving back to society. It is the other CSR: Consumer social Responsibility. More and more corporate companies are encouraging their employees, their investors, their stakeholders and even their consumers to jump in, engage, and feel the high.
Lupin a leading pharmaceutical company employees volunteer to visit the 45-odd projects that Lupin does for the disfranchised. They even help out with the abandoned camels in Rajasthan (India), in Lupinâ€™s adopted town of Bharatpur known for its bird sanctuary.
Another case is of Samsung employees are encouraged to sit in at one of the firmâ€™s 10 computer training centers, on company time. And Rosy blue employees are encouraged to farm out in the hinterland in Gujarat and help in social work. And thereâ€™s a Novartis employee, who helps sweep up Bombay Central station.
The tasks are many and there is no- dearth of non governmental organizations (NGOs) seeking individual, consumer participation.
In recent times, a number of foundations set up by leading firms including Infosys, Wipro, Tataâ€™s, TVS, and Dr Reddyâ€™s Laboratory, have taken a keen interest in corporate activism to improve healthcare, education, and living conditions.
Most of these foundations are known to support numerous government primary schools and hundreds of NGOs and have built orphanages, hospitals and schools.
It may be their bit towards corporate social responsibility, but there are huge funds involved. Some 66% of the profits of Tata Sons go to charity. At Jamshedpur (India), the steel town, Tataâ€™s still pay full health and education expenses for all its employees, and runs the schools and a 1,200-bed hospital.
A little known fact here is that most of these firms engage their employees in hoisting the CSR flag. Employees are encouraged to fan out into the community, do social work on company time, donate time, money and energy and reach out too those that need help.
Companies are increasingly involving their employees and consumers to add to the halo effect of social responsibility.
The original CSR:
Corporate Social Responsibility can include almost anything from corporate philanthropy to investments in environmental sustainability to protecting the rights of children to having good labor relations.
Some of them are dedicated to the environment (especially the chemical and leather industries), some could just be falling in line with the old CSR formula, angling for a piece of the moral profit pie.