CSR- Corporate ( led) Social Rejuvenation

Author,Mr. Raulgaonkar Haresh S., Assistant Professor,SPTM, NMIMS (Deemed to be University),Vile Parle, Mumbai - 400056

Introduction to CSR:Traditional Approach to CSR

– The traditional approach of corporates to CSR, is the Philanthropic spending of the corporate’s hard earned profits with an eye on the future benefits from such spending.

ISO 26000- 2010 – The ISO 26000- 2010, Guidance for Social Responsibility

clearly puts forth the objective of the social responsibility initiatives as to contribute to the sustainable development of the society.

Objective of Research Paper:To study the effect of initiatives of some leading FMCG corporates in bringing about, what this paper redefines CSR as the “Corporate (led) Social Rejuvenation”, which by its very nature is a sustainable development of the society.

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The Issues:1. To generate and allocate funds required for

supporting the CSR initiatives without affecting the bottom line of the business.”

2. Corporates are not able to zero down how, when and where they will spend CSR allocated amount.

3. A subtle competition amongst the corporate to get noticed with their CSR initiatives forced to spend more disproportionately indirectly discourages their future CSR initiatives

4. More focus on CSR lost focus on other aspects of their operations generate more dissatisfied customers.

5. Sustainability of CSR efforts is a ? - The CSR spendings treated as investment for generating returns in future; accountants start calculating ROIs and usually get discouraged with the figures.

The Core Issue:

• Donor with ROI in mind?– “How can someone be called as a donor

when he expects something in return? One would rather call him a smart trader doing business with a slightly extended credit period in mind!”

AND,• “Even if the donor gives without expecting anything in return,

what actually is the final outcome of that donation? Creation of a beggar or rather a community of beggars!”

The challenges:1. To identify the real and genuine requirement/s

of the target population.

2. To be able to meet those requirement/s with innovative solutions through your products and /or services with least possible burden on the target population.

3. Continuously track whether your objectives are met and if not put in additional efforts to achieve them.

4. To take the CSR ratio towards “infinity.” My definition of CSR (effectiveness) ratio is –

“The ratio of Number of people receiving the benefit of the CSR initiatives of a company, divided by the expenditure in USD on account of CSR by the company” Or

“Number of people benefited per USD spend by the company on CSR account”

Taking “CSR ratio” to infinity :

P & G’s approach: Marc Pritchard, global marketing and brand

building officer, P & G states “Social responsibility doesn’t have to be at the expense of revenues. The road to profitability for a brand means hitting the road and working with the society”

The first step was getting senior management to define a purpose for each of the brands in P & G stable: a blue print on how the company could touch and improve lives

This is well demonstrated by P & G through their campaign in promotion of “Pampers”. Mr. Prichard defines the brand’s purpose as “to improve a baby’s healthy, happy development.”

The one pack = one vaccine programme run in association with UNICEF is tied into this large purpose too.

Britannia’s Approach: As per CEO and MD Ms. Vinita Bali, Britannia is

committed to “bringing Nutritious and Healthy food to consumers”

One of the most prevalent disorders of humankind is the dietary deficiency of iron and the resulting anemia.

In 2007, Britannia took a commitment to impact 5 million children. Ms Bali says “It is amazing that once you take decision, how things start falling in place!”

Britannia was fortunate to get in touch with GAIN (Global alliance for improved nutrition) . GAIN’s mission is “to reduce malnutrition through sustainable strategies aimed at improving the health and nutrition of population at risk.”

Britannia collaborated with GAIN and created a highly fortified biscuit. The challenge was for the R & D team to get the product sensorial right; it took close to 16 trials to manage costs, sensorial and iron-effectiveness.

Britannia initially worked on fortification of Tiger biscuits as these were affordable by all sections of population. The fortification was done with iron and folic acid (@ 25% RDA/100g biscuits).

Britannia created a partnership with a local NGO named Nandi foundation to supply this iron fortified Tiger biscuits to 150,000 school children in Hyderabad every day through school feeding programme.

Another programme was arranged with Dr Kiran Bedi’s Navjyoti India foundation and first year was spent in piloting the model.

A test was conducted on 282 children, staying in a resettlement residential areas in Bawana at the outskirts of Delhi.

Below are some of the key results:

The Balancing Act by Britannia: Another conscious decision taken by the Management of

Britannia is in the area of cost of this fortification. The cost of this fortification established in the above pilot study was around 2 cents per child per day.

Giving due considerations to other overheads, the annual cost of feeding specially Iron-fortified biscuits per child is 1.08 USD, and for 50 mn children the total cost is approximately 5.4 Mn USD.

The management challenged the business to come up with profit improvement programs by revisiting their methodologies and achieved significant cost reductions and system efficiency improvements.

These savings were used to finance the cost of micronutrients so that the consumer gets a value added product at the same price. i.e. biscuits and breads with micronutrient fortification in the same old price of the biscuits

Britannia Nutrition Foundation (BNF): Britannia announced the creation of the Britannia Nutrition

Foundation through a Nutrition seminar in New Delhi on 12th Oct 2009.

Britannia Nutrition Foundation would be working proactively towards “Securing every child’s right to growth and development through catalyzing rigorous thought and innovative action about nutrition”

Britannia’s major milestones are:1. Launch of Tiger Banana variant with Iron Fortification, Jan 2008

2. Relaunch of staple Britannia Breads with Vitamin Fortification, Jan 2008

3. Largest Power Brand Tiger launched with Iron-Fortification, Apr 2008

4. Vitamin-Mineral Fortification of Mariegold biscuits (July 2009)

5. Launch of Actimind (Nov 2009) a dairy product with Iodine, B Vitamins & Taurine fortification

Close to 60% of Britannia’s portfolio is now fortified.

SOP (statement of Purpose) for Britannia brands is conveyed through various campaigns over past several years,

“Help people enjoy life - through healthy snacking.”

“Eat Healthy think better” “Securing Children’s Right to Growth

and Development through Good Food Every day.”

Conclusion: It is possible to achieve “CSR ratio = Infinity” by

positively impacting the quality of life of millions of your consumers.

Starting point has to be the “Statement of Purpose (SOP)” for your product line

There is hardly any need to spend huge amounts on philanthropic CSR initiatives.

Suggestions / Recommendations: Corporates should clearly identify and define the

SOP (statement of purpose) for the organization and its brands .

To take the CSR ratio to infinity the company needs to really reach out to the people across both urban and rural areas and impact their lives positively, by continuously striving to add value to their product/ service offers.

Work on the operations to absorb the additional costs to the maximum extent so as to keep the brands affordable to many including the underprivileged.

This will lead to “Corporate ( Led) Social rejuvenation” and help society and its people to improve their quality of life.

Corporates should recognize that “CSR is not about how you spend your profits…but it is all about how you earn them!!”

-Thanks a lot for your mindful listening-