Report on the Karmayog CSR Ratings and Study - 2007-2008

A REPORT

ON THE

Karmayog Corporate Social Responsibility Ratings 2008

of the

1000 Largest Indian Companies

March 2009

In a democracy like India's, sustainable solutions to society's problems can only be found though the collaboration and involvement of all stakeholders. Karmayog, established in 2004, is a unique organization that connects citizens, civil society groups, corporates, academicians, media and government through online and offline methods. Visit us on www.karmayog.org

http://www.karmayog.org/

Contents

1. Why a Rating on Corporate Social Responsibility?

2. Definition of CSR

3. Importance of CSR Ratings for Different Stakeholders

4. Methodology for the CSR Ratings and Study

5. Results of the Karmayog CSR Ratings of the 1000 largest Indian companies, 2008

6. Rating Criteria

7. Some observations from the Study and Ratings

8. Karmayog’s Recommendations to companies

9. Industry Sector Analysis

10. CSR by Group Companies

11. Some Recent Trends in CSR in India

12. Some Developments in CSR in India since the first Karmayog CSR Ratings in 2007

13. Closing Statement

14. Karmayog CSR web-sections

15. About Karmayog

16. Annexure 1: Table of Level 4 rated companies


www.karmayog.org The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008 2


Karmayog Corporate Social Responsibility Ratingsof the 1000 largest Indian companies - 2008

www.karmayog.org/csr2008

Why a Rating on Corporate Social Responsibility?

The problems and issues that confront society today are too large and complex to be solved by government and NGOs alone. Sustainable solutions to society’s problems can only be found through the collaboration and involvement of all who are part of it.

Companies have tremendous strengths; they have extremely capable people, technology, access to money, the ability of geographical reach, etc. Many companies worldwide and now even in India are more powerful than governments and even countries, and thus corporates are important stakeholders in society.

The Karmayog Corporate Social Responsibility Study and Ratings of Indian Companies was undertaken to explore and understand the role that corporates are playing and can play in finding meaningful solutions to the problems facing India today.

CSR Ratings are important to various stakeholders for different reasons:- government bodies can use CSR Ratings to develop industry-wise CSR guidelines, industry associations can use them to set benchmarks of CSR for companies to follow, NGOs get to know about the CSR undertaken by companies, thus enabling partnerships with them, and companies themselves learn about and from the CSR initiatives of other companies.

Usually corporates are invited to enter or nominate themselves for CSR awards, and hence only the good companies are highlighted, whereas a rating enables a comparative study across all companies. Karmayog undertook a CSR study and rating to understand the CSR activities of all companies on an equal level, thus showing up companies doing no CSR, as well as showcasing companies doing good work.

The Karmayog CSR Ratings also help to identify areas where corporates, government and civil society organizations can work together.

This is the second CSR study and ratings undertaken by Karmayog, the first of which was done in 2007.

Definition of CSR

“Every company harms the environment and people!”

Corporate Social Responsibility is thus just about two aspects

1. The steps taken by the company to neutralise, minimise or offset the negative effects caused by its processes and product-usage



2. The further positive steps a company takes using its resources, core competence, skills, location and funds for the benefit of people and environment.

Corporate Social Responsibility helps to define the contribution of a company beyond economic value and creating employment, and weighs this contribution against the damage done by the company through its products and processes.

Corporate Social Responsibility is also a forward-action, i.e. it flows from a company’s vision and mission and is part of the company’s everyday actions, rather than a retrospective action that is undertaken by a company at the end of its process.

Importance of CSR Ratings for different stakeholders

Corporates and their activities are connected to a large number of people, directly and indirectly. These include employees, suppliers, consumers/customers, government, investors, citizens/community and the environment. Each of these has a role to play to make CSR effective and sustaining, and the CSR Ratings helps to identify their individual and collaborative roles.

Some of these roles for different stakeholders are as listed below:

For Companies To sensitize their directors and their employees about their responsibility towards society To identify CSR activities they can and should undertake To understand the various international guidelines and norms for CSR and to effectively

implement these To learn about and from the CSR initiatives of other companies

For Industry and trade associations To get a snapshot of the state of CSR in India To set benchmarks of CSR for companies to follow To prepare case studies and highlight best practices of CSR To provide consultation on CSR To work with Government and NGOs and international organizations to upgrade and improve

CSR activities in India and to set milestones for companies To recognize companies doing good CSR activities by instituting awards based on these

parameters To understand the huge scale and magnitude of the benefits that are possible if an entire sector

spends at least the recommended minimum amount on CSR.

For Government bodies To make industry wise guidelines and to introduce legislations that cause companies to work

effectively towards reducing environmental damage, and restoring damage done (in the areas of raw material sourcing and usage, by product and waste disposal, product usage and end disposal)

To make legislation that rewards CSR and penalizes damage to the environment

For NGOs and consultants To know about the areas of CSR work undertaken by companies thus enabling partnerships

with them



To be able to identify companies which are not doing CSR or doing in a token manner, so as to approach these companies to initiate meaningful projects

To assist companies to formulate CSR objectives, implement CSR activities and monitor and evaluate their CSR activities

For Media To stop eulogizing corporate leaders whose companies are damaging the environment and

harming lives To present a clear view of CSR that is separate from philanthropy, charity, marketing,

advertising, or expanding business scope and to sensitize the public about this. To highlight companies which are practicing good CSR, and to negate those companies which

are actually engaged in marketing or advertising their products or services under the guise of CSR

To encourage and enable business publications to have a regular feature or column dedicated to CSR initiatives along with feedback from NGOs and other stakeholders

For researchers To study CSR practices and results To influence the shaping of CSR policy and regulations

For students and colleges/ institutions To become sensitized about the role and responsibility of companies and to understand the

impact and consequences of everyday processes and actions To join a company that is working to benefit society and not one that is harming it To develop a holistic view of life and living

For citizens, shareholders and investors To understand that as consumers and stakeholders of companies , we can and need to influence

companies to change harmful policies and adopt CSR practices due to the huge impact and power that companies have on people and the environment

To ensure that through our purchase choices we get desirable values for society to be reflected in how companies do business.

Methodology for the CSR Ratings and Study

List of 1000 largest Indian companies is taken as per Sales figures from the BSE Sensex as in June 2008

Information on the 1000 companies was collated from the company’s website and Annual Report of 2007-2008

Impact of the products and processes of the company is taken into account CSR initiatives of the company for the current period is studied, including a comparison with

previously listed CSR initiatives , as well as rating level assigned in the Karmayog CSR Ratings, 2007.

Companies are rated from Level 0 to Level 5 (Level 5 being the highest) Rating is based on Sufficient, Necessary and Negative Criteria for different levels (See

Karmayog’s detailed note on Criteria) All companies were informed of the assigned rating and requested to respond with further

information, if necessary The Karmayog CSR Rating of any company is open to review whenever new information is

provided by the company



Results of the Karmayog CSR Ratings of the 1000 largest Indian companies

Table showing the results of the Karmayog CSR Ratings of the 1000 largest Indian companies

Karmayog CSR Rating 2008 Number of Companies

Percentage of companies

Level 5 0 0% Level 4 * 10 1%

Level 3 45 5%Level 2 220 22%Level 1 231 23%

Level 0 (Lowest) 494 49% Total 1000 100%

* Companies with the highest rating of Level 4 are: ACC, Ballarpur Industries, HDFC, Infosys Technologies, Jubilant Organosys, Kansai Nerolac Paints, Moser Baer, TCS, Tata Steel, and Titan Industries.

Bar chart showing the results of theKarmayog CSR Ratings of the 1000 largest Indian companies, 2008

Karmayog CSR Ratings

0%

10%

20%

30%

40%

50%

60%

5 4 3 2 1 0

Ratings from Level 0 to Level 5

% o

f C

om

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Rating Criteria

A) Minimum Necessary Criteria

Necessary parameters that make a company eligible for a particular rating level:

Necessary Criteria Explanation Rating Level

If undertaking any CSR Activity Where any kind of social, developmental or community work is done

Level 1

If CSR is linked to reducing the negative impacts of company’s own products or processes

CSR activities that aim to improve processes and products of the company.

Level 2

If CSR initiatives are for the local community

CSR activities that are focused on those who are affected directly by the company

Level 3

If CSR is embedded in the business operations

CSR activities form a part of the daily business activities of the company.

Level 4

If innovative ideas and practices are developed for CSR

CSR activities enable sustainable and replicable solutions to problems faced by society.

Level 5

B) Sufficient Criteria for Minimum Rating

If the company is doing this, they automatically get this rating at least

Sufficient Criteria What this means Rating Level

Company fulfilling the basic needs of societye.g. manufacture of food

The products and services of the company are useful and benefits society

Level 1

Unique CSR activity which would not otherwise happene.g. Developing a mapping and tracking software for adoption in India

The CSR activity being undertaken by the company is not being done by government, NGOs, etc.

Level 1

Company reducing negative impact of otherse.g. A company that makes water purification & waste recycling systems

The company’s products or services provide solutions to mitigate harm caused by actions of companies, their products, etc.

Level 1

Company adopting the GRI Framework for CSR reporting

The company is committed to measuring and reporting its CSR initiatives as per a voluntary globally accepted framework.

Level 2

Company’s annual expenditure on CSR = 0.2% of sales

The company is committed to a minimum expenditure on CSR annually, and thus considers CSR as an integral part of its business

Level 3



C) Negative Criteria that usually determine the maximum possible Rating

Companies in this category will not normally get a higher rating than the one shown

Negative Criteria Reason Rating Level

Companies that make liquor, tobacco, genetically modified crops

These products are not needed by society, and cause harm to people and the environment. The CSR to do is to stop making these products.

Level 0

Companies that violate laws/rules/regulations

CSR is not limited just to how a company spends its money, but also to how it makes that money in the first place

Level 1

Companies engaged in high impact processes

Processes that severely damage the environment require extraordinary efforts by the company to reduce and repair the damage, and require greater contributions to benefit society

Level 1



Some observations from the Study and Ratings

1. 509 out of 1000 companies (51%) are doing CSR.

2. 21 of the 1000 (2%) companies publish a separate Sustainability Report.

3. 30 (3%) of the 1000 companies have reported the amount spent on CSR

4. 107 out of 1000 (11%) companies are doing CSR through their own trust or foundation

5. All PSU’s undertake a basic minimum level of CSR based on mandatory regulations (e.g. relating to employment, target groups of beneficiaries, etc.)

6. Many individual companies under a group report the same CSR activities across the group (See Karmayog’s detailed note on Group Companies)

7. Several companies repeat the exact same information every year for CSR with no fresh records of the current year’s CSR, showing their low commitment to CSR.

10. Common areas in which CSR initiatives are undertaken include Education, Healthcare and Rural development

11. Many companies spread their CSR funds thinly across many activities, thus reducing the effectiveness and seriousness of their initiatives

12. The 1000 companies were grouped into 35 industry sectors and analysed. The Entertainment & Media, Retail, Mining, Trading, and Construction industries all have low levels of CSR activities. The Software, Banking and Paper industries are amongst those sectors with high levels of CSR.



Karmayog’s Recommendations to companies

The CSR study led to a set of recommendations from Karmayog to companies.

A) Mandatory Recommendations

There are 3 mandatory recommendations flowing from the premise that ‘every company must do CSR’, and these are:

1. Minimum annual CSR expenditure

Every company must spend a minimum of 0.2% of its sales on CSR activities (i.e. Rs. 20 lakhs per Rs. 100 crores). The scale of operations of a company and its impact is connected with its turnover and not with its profit. The larger the company the greater is the damage it is doing to the environment. Conversely the greater is the company’s ability to do good.

Table showing Rupee impact of 0.2% of sales for CSR expenditure

Size by Sales

Company Salesin

Rs. Cr.

Net Profitin

Rs. Cr.

Minimum CSRRs. (cr.)

at 0.2% of Sales1 Indian Oil Corp. 226000 7000 452200 Indian Hotels 1800 370 3.6400 Ahluwalia Contracts 880 51 1.8600 Trent 500 30 1.0800 Technocraft Industries 310 30 0.61000 Marathon NextGen. Realty 100 60 0.2

Total sales of 1000 companies: Rs. 25,00,000 crores

If recommended minimum CSR is spent @ 0.2% of sales, this = Rs. 5000 crores

2) CSR Reporting

A Corporate Sustainability section should be included in the Annual Report and preferably a separate Corporate Sustainability Report (as per the Global Reporting Initiative framework) should be published by the company.

CSR reporting should also include details of CSR expenditure by the company.

CSR is linked to the company’s processes. It is recommended that the section on CSR reporting should come after the EHS (Environment Health and Safety) section in the Annual Report.

3) Recommended Steps for CSR

a) Adoption of industry guidelines for improving processesThe first step is to identify and adopt methods to minimize the environmental damage caused by the products and processes. A comprehensive set of guidelines, both general as well as sector-specific, have been drawn up by the World Bank. These are known as the Environment, Health and Safety Guidelines



(EHS) of the International Finance Corporation (IFC). The EHS Guidelines are technical reference documents with general and industry-specific examples of good international industry practice.

b) CSR linked to the skills of a company Companies must use their core competence, skills and strengths while undertaking CSR activities, as CSR is not an un-related activity

c) CSR linked to the location of a companyCompanies must first undertake CSR activities in the areas they are located in. (factories, plants, offices, etc.) The greatest impact (in terms of land, pollution, livelihoods, etc.) is on the local environment and community, and hence companies must focus on improving conditions in the communities in which they operate.

B) Non Mandatory Recommendations Karmayog has also made 9 non-mandatory recommendations on CSR to enable companies to make their CSR programmes more meaningful and effective.

1. CSR philosophy to be definedCSR philosophy and focus to be developed from and based on the company’s vision and mission

2. Ensure responsibility of suppliersEvery company should make efforts towards ensuring responsible behavior from their suppliers/vendors who must follow all environmental, health and safety as well as human rights guidelines and norms. It is recommended that reviews and audits of suppliers be conducted.

3. Create inclusive employment Companies to offer employment to those who find it difficult to get jobs, by reserving a small percentage of the workforce for such jobs, with a special emphasis on the local community

4. Link CSR initiatives to government’s development plansIt is recommended that companies undertake CSR activities that are connected with and supplement the governments social and development goals for India, which are outlined in documents such as the Five Year Plan, and implemented through various schemes at the centre and state level. Companies must partner with government in the implementation of such programmes and schemes.

5. Involve employees in CSRA company should involve their employees in its social responsibility efforts. This ensures sustainability of CSR initiatives, as there is a commitment to CSR throughout the organisation. Further, each employee acting in a socially responsible manner helps the company as a whole to do undertake more effective CSR.

6. CSR activity to improve the industry sectorCompanies, through their CSR activities, should work towards raising standards and setting benchmarks for their specific industry sectors, thus gradually leading to an overall more socially responsible sector.

7. Expand Reach to benefit societyCompanies must extend their products & services to markets and areas that may not be as profitable to the company, so as to extend solutions to the problems and issues in remote, under-serviced areas. While companies do expand their markets into new areas, they must do so more beyond areas that are



potential new markets. Extending business into new areas that need development may not give immediate profits to a company, but this has long-term positive impacts on the area and its people.

8. Support areas and issues that are neglectedIn a developing country such as India, there are some areas and issues that require sustained support of a greater depth, beyond what government and society is able to provide, and companies must come forward to take up these. E.g. Sports such as chess, protection of endangered species of wildlife, heritage conservation, etc. are all issues that require corporate support.



Industry Sector Analysis

The 1000 companies were grouped into 35 industry sectors and analysed

Consolidated Sector Wise CSR Ratings

S.No. Industry Sector

No. of Cos.

Sales in Rs. crores Level 5 Level 4 Level 3 Level 2 Level 1 Level 0

1 Auto Ancillaries 48 45000 0 0 1 11 10 262 Automobiles 13 100000 0 0 4 4 0 53 Banking 40 260000 0 0 6 9 8 174 Cement 30 47000 0 1 0 11 11 75 Chemicals 63 45000 0 1 3 14 19 266 Computers 7 21000 0 1 0 0 2 47 Construction 57 65000 0 0 2 9 10 368 Diversified 13 24000 0 0 0 4 4 59 Electronics 18 35000 0 0 1 2 3 12

10 Engineering 44 40000 0 0 3 10 9 22

11Entertainment & Media 15 8000 0 0 0 3 1 11

12 Fertilizers 19 41000 0 0 0 10 6 313 Financial Services 32 50000 0 1 1 2 6 22

14FMCG & Consumer Durables 60 75000 0 0 4 15 14 27

15 Heavy Engineering 10 31000 0 0 1 1 6 216 Hotels 9 5300 0 0 0 3 2 417 Iron and Steel 93 180000 0 1 2 18 17 5518 Jewelry 11 19000 0 0 0 0 4 719 Logistics 17 27000 0 0 1 6 5 520 Metals 14 51000 0 0 1 7 2 421 Mining 6 13000 0 0 0 3 2 122 Miscellaneous 42 45000 0 1 1 4 10 2623 Oil and Gas 19 750000 0 0 2 5 8 424 Packaging 10 6300 0 0 0 0 3 725 Paper 13 7400 0 1 1 6 2 3

26Petroleum and Petrochemicals 7 6800 0 0 0 1 2 4

27 Pharmaceuticals 49 43000 0 1 1 16 17 14

28Polymers and Plastics 10 7000 0 0 1 0 5 4

29 Power 46 140000 0 0 2 11 8 2530 Retail 5 8000 0 0 0 1 2 231 Software & ITES 40 88000 0 2 2 13 6 1732 Sugar 25 15000 0 0 0 7 3 1533 Telecommunication 20 64000 0 0 2 2 6 1034 Textiles 77 57000 0 0 2 10 16 4935 Trading 18 68000 0 0 1 2 2 13

Total 1000 2487800 0 10 45 220 231 494



Industry Sectors that have high CSR: Banking, Software, Paper

Industry sectors with poor CSR: Retail, Entertainment & Media, Mining, Construction

Example of an industry sector with poor CSR: the Construction sector

57 of the 1000 companies are part of the construction industry 61% of the companies are doing no CSR work. 80% of the companies are below Level 2 2 companies which are at Level 3 are DLF and GMR Infrastructure Total Sales of the 57 companies’ amounts to Rs.65000 crores. If 0.2% of sales is spent on CSR (as per Karmayog’s recommendation), then annual CSR

expenditure would amount to Rs.130 crores.

Table of the CSR Ratings of companies in the Construction sector

Karmayog CSR Rating 2008 Number of Companies Percentage

Level 5 0 0%Level 4 0 0%Level 3 2 4%Level 2 10 18%Level 1 10 18%Level 0 35 61%Total 57 100%

Bar chart showing the CSR Ratings of companies in the Construction Sector

Construction Sector

0% 0%4%

18% 18%

61%

0%

10%

20%

30%

40%

50%

60%

70%

Level 5 Level 4 Level 3 Level 2 Level 1 Level 0

Rating Levels

% o

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Example of an industry sector with good CSR: the Banking sector

40 out of 1000 companies are in the banking industry (this does not include financial institutions) 57% of these companies are doing CSR

60% of the companies are working in the area of Rural development There are 6 Level 3 companies: (Andhra Bank, Canara Bank, ICICI Bank, PNB, Union Bank of

India, Yes Bank)



Mandatory regulations on CSR for PSU banks makes this sector high performance The total Sales of 40 companies is Rs.2,60,000 cr. If 0.2% of sales is spent on CSR (as per Karmayog’s recommendation), then annual CSR

expenditure would amount to Rs.520 crores

Table of the CSR Ratings of companies in the Banking sector


Level 5 0 0%Level 4 0 0%Level 3 6 15%Level 2 9 23%Level 1 8 20%Level 0 17 43%Total 40 100%

Bar chart showing the CSR Ratings of companies in the Banking sctor

Banking Sector

0% 0%

15%

23% 20%

43%

0%

10%

20%

30%

40%

50%

Level 5 Level 4 Level 3 Level 2 Level 1 Level 0

Rating Levels

% o

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Some Sector specific best CSR practices

No. Sector Expected CSR Example of a company doing this

1 Cement Quarry Rehabilitation ACC Ltd

2 Paper Farm Forestry Ballarpur Industries Ltd.

3 Finance Enabling access to affordable housing

HDFC Ltd.

4 Software Software to improve public systems Infosys Technologies Ltd., TCS Ltd.

5 Pharmaceutical

Reducing environment pollution through process improvement

Jubilant Organosys Ltd.

6 Paints Development of environmentally-friendly paints

Kansai Nerolac Paints Ltd.

7 Hardware Improvement in product design and use to benefit society

Moser Baer Ltd.

8 Steel Mitigating impact on the natural and human environment

Tata Steel Ltd.

9 Watches and Jewellery

Employment of handicapped and village artisans

Titan Industries Ltd.

Importance of the industry Sector-wise analysis of CSR of companies:

1. Snapshot of sectorIt presents a picture of an entire industry, CSR initiatives undertaken by companies in that industry and examples of companies doing good CSR

2. Potential CSR impactThe sector analysis shows the sales figures of the entire sector and the possible impact of spending 0.2% of sales (as recommended by Karmayog) on CSR by that sector

3. Sector-specific guidelinesThe sector analysis helps to frame norms and guidelines for different processes across the entire sector as well as develop and encourage sector specific CSR activities.

4. Best practices for the sectorThe sector analysis showcases best CSR practices by companies in a sector, thus enabling other companies to also take up such initiatives.

5. Comparison between sectorsThe sector analysis enables comparisons between different sectors, and shows up sectors with low and high CSR initiatives.



Industry sector-specific CSR initiatives

The CSR study helped to identify several sector-specific CSR initiatives that should be taken up by companies of that industry sector, as these initiatives are directly connected to the processes and products of that industry sector. As a society, we would expect any company working in these sectors to be doing the following as an integral part of their CSR initiatives:

Table showing Expected CSR initiatives for different sectors

S. No.

Industry Sector Example of expected CSR

1 Automobiles & Auto Ancillaries Reduction of auto emissions2 Banking Support small entrepreneurs3 Cement Quarry Rehabilitation4 Chemicals Minimise air and water pollution5 Construction Low cost housing6 Computers E-Waste management7 Electronics Energy efficient products8 Engineering Reduce material content and wastage 9 Entertainment and Media Raising awareness on social issues10 Fertilizers Promote use of organic fertilizers 11 Financial Services Support small entrepreneurs12 FMCG and Consumer Durables Reduce packaging 13 Heavy Engineering Mitigating impact on environment14 Hotels Promote local tourism15 Iron and Steel Environment restoration 16 Jewelery Promote local artisans and craftspeople17 Logistics Fuel efficient vehicles18 Metal Environmental restoration 19 Mining Quarry rehabilitation 20 Oil and Gas Promote and develop alternate energy resources21 Packaging Use of recyclable material22 Paper Farm Forestry23 Petroleum and Petrochemicals Environmental restoration 24 Pharmaceuticals Focus on prevention of diseases25 Polymers and Plastics Environmental restoration 26 Power Use of renewable energy sources27 Retail Reduce use of plastic and packaging 28 Software and ITES Green IT29 Sugar Using by-products and waste to generate energy30 Telecommunications Improving connectivity and services in rural areas31 Textiles Use of environmentally friendly materials



CSR by Group Companies

Observations:

1. No. of Groups in this studyOf the 1000 companies studied there are 30 groups with individual companies ranging from 2 to 24

2. Largest Groups The 5 largest groups (by sales) in this study are: Tata Group, Aditya Birla Group, Mahindra Group, Reliance (ADAG), and Essar Group

3. Same CSR reported Most of the companies under the group report the same CSR activities across the group

4. PhilanthropySome group companies contribute money to the group Foundation/Trust as a part of their CSR

5. CSR ExpenditureIndividual companies do not mention the amount spent by the company; instead the group expenditure is listed

6. Group FoundationThe common Foundation of the group undertakes all the CSR activities, as a result of which CSR is often not connected to the processes & core competence of the individual companies

7. Benefits of CSR as a groupThere are several benefits of having a Group of companies doing CSR together:

- the group can develop tools for its individual companies to measure the impact of their CSR activities

- Individual companies can improve their CSR initiatives relative to each other, thus eventually raising the CSR of the entire group

- Best practices can be shared and applied across all group companies (similar to all companies in an industy sector)

Recommendation:

While there are synergies and various managerial reasons for companies to do CSR activities at a group level, it is necessary for each company to undertake its own CSR activities (linked to its processes and skills), while also contributing to the group’s CSR work.

The Karmayog CSR Ratings are assigned for an individual company, based on its own processes, products, and work towards improvement of society; the CSR Ratings are not assigned to a Foundation, Trust or Group, though these may be formed of the companies themselves.

An example of a Group that is doing CSR at an individual company level as well as a Group level: the Tata Group

24 companies that are part of the Tata Group are included in this study of 1000 companies



The Tata Group has a Code of Conduct for all individual companies that includes CSR initiatives that have to be undertaken by the company in the community near its factories and offices.

The Tata Group has developed tools such as Tata Index for Sustainable Human Development which is a model for measuring the social work that the group enterprises undertake

The CSR focus areas for companies of the Tata Group include education, health, environment, rural development, sports, arts and employee relations.

Table showing CSR ratings of the 24 companies of the Tata Group


Level 5 0 0Level 4 3* 13%Level 3 7 29%Level 2 10 42%Level 1 3 13%Level 0 1** 4%Total 24 100%

* TCS, Tata Steel, Titan Industries** Tata Elexsi

Some recent trends in Corporate Social Responsibility in India

1. Increase in expectations of stakeholdersVarious stakeholders have come to expect more from corporates, beyond just their profits

2. Government’s role as a regulatory bodyThe government has recognised the role of corporates in the development of the country, and is taking steps to define this role and has introduced some mandatory and non-mandatory recommendations to corporates

3. Increasing awareness amongst consumers, management colleges and studentsThere is an increasing awareness and interest among consumers towards CSR. More seminars, discussions & summer projects are being held by colleges to sensitise students as future leaders, about CSR.

4. Suppliers ResponsibilityCompanies are encouraging suppliers to adopt socially responsible business practices.

5. Disclosure about social & environmental performanceStakeholders are demanding more information about a company’s social & environmental performance. 21 of the companies in this study have published a Sustainability Report, as compared to 6 companies last year.

Some developments in CSR in India since the first Karmayog CSR Ratings in 2007



1. December 2007- RBI Notification to all Banks & Financial Institutions recommending that Non Financial Reporting (NFR) be undertaken as a step towards ‘Responsible Banking

2. June 2008 - Ministry of Corporate Affairs has stated that it would like to encourage all companies to “disclose on their balance sheets the social work that they do”

3. September 2008 - Government of Gujarat: mandates CSR expenditure - directs 6 PSUs to set aside 30% of their profit before tax to carry out welfare activities across Gujarat.Draft industrial policy of Gujarat Govt. mandates CSR for industry associations and corporate houses in the state

4. February 2009- Petroleum Ministry says that it will be mandatory for public sector oil companies to spend a minimum of 2% of their net profits on CSR activities

Closing Statement

While it is difficult to quantify the reasons for companies to take up Corporate Social Responsibility, it is clear that all companies must be doing this, in order to help society as a whole to improve.

We, as consumers and stakeholders must accelerate and support those companies who have recognised this and are taking steps to do business responsibly as well as contribute to benefit society.

When companies take up activities that help improve society, they are perceived as being better companies in other areas as well, such as having better products and services, being a better place to work in, and a better company to invest in. Today, companies that are doing nothing to give back to society from which they have taken so much, are being looked at differently, despite the profits that they make. Further, those companies that have already included CSR as part of their business, will be far ahead of the rest, when CSR expenditure becomes mandatory for all companies, as it soon will.

Enlightened businesses worldwide, small and large, have begun to realise that responsible practices enhance profitability & ensure long-term survival. For those which disrespect the environment or living beings, we, as responsible citizens, need to individually and collectively, reward or penalise them through our voices and our wallets.

The Karmayog 2008 CSR Study and Ratings presents a comprehensive picture of the state of CSR in India. It is hoped that this study will be an effective base for industry associations, government bodies, researchers and academia, and NGOs to work together with corporates in improving society.

Karmayog CSR sections



The Karmayog CSR Study and Ratings of Indian companies were started in 2007, and there are over 4000 pages of information on CSR on the Karmayog website:

A) Karmayog CSR Ratings of the 1000 largest Indian companies – 2008: www.karmayog.org/csr2008

Announcing the Karmayog CSR Ratings of India's Largest 1000 Companies o Presentation on the Karmayog CSR Ratings of the largest 1000 Indian Companies-

2008 - (pps) o Executive Summary of the Karmayog CSR Ratings, 2008 - (2 page note) (doc) o Report on the Karmayog CSR Ratings of the 1000 largest Indian companies - 2008 -

(25 pages) (doc) Discuss your Company's CSR Rating and activities

o Form to submit the CSR initiatives of your company - o Would you like to send feedback or discuss your company's CSR Rating? -

Karmayog CSR Rating 2008 o Karmayog CSR Rating 2008 of 1000 Biggest Indian Companies - Compiled Table

February 16th, 2009 (xls) o Karmayog CSR Rating Criteria - o Table of Level 3, Level 4 and Level 5 Companies - (xls) o Quotes from Level 3 and Level 4 rated Companies - showing the company's overall

vision and mission, and CSR philosophy (xls) o Citation to 10 companies with Level 4 rating - o Certificates Awarded to the Karmayog CSR Ratings 2008-Ten Level 4 Companies -

(doc) Alphabetical Tables of CSR Rating of 1000 companies 2008 (nos. in brackets)

o Alphabetical tables - Details of CSR Activities of companies

o Individual CSR activities and profiles of the largest 1-500 companies - o Individual CSR activities and profiles of the largest 501-1000 companies - o Individual CSR activities and profiles of other companies -

Sector-wise analysis of CSR activities of companies o Sector-wise listing and analysis of companies -

Sustainability Reports 2007-2008 o List of companies and their Sustainability Reports 2007- 2008 -

Media coverage o Media coverage of the Karmayog CSR Ratings 2008 -

B) Karmayog CSR Ratings of the largest 500 Indian companies – 2007: www.karmayog.org/csr2007

C) Corporate Social Responsibility: www.karmayog.org/csr



http://www.karmayog.org/csr

http://www.karmayog.org/csr2007

http://www.karmayog.org/csr2008

About Karmayog

Karmayog, established in 2004, is a unique organization that connects citizens, civil society groups, corporates, academicians, media and government through online and offline methods

The Karmayog website has 70,000+ pages of information in researched modules on over 350 civic and social causes, a directory of civil society organizations in India (17,000) and an active discussion group of 43,000 people who daily share their concerns, opinions, ideas, news, etc .www.karmayog.org/

For more information contact:

Vinay Somani Pooja Roy Tanya Mahajan

KarmayogC/o Shri R.O.Somani Charitable Trust Shreeniwas House, 2nd Floor,H. Somani Marg, Fort, Mumbai 400 001Tel.: 022 – 22940109 / 22013535Email: [email protected]: www.karmayog.org




mailto:[email protected]






Companies with 3/5 Karmayog CSR Rating:

No. No. Company Industry Category

Sales ('07-'0

8) in crores.

(Rs.)

Recommen

ded CSR

(0.2% of

sales) in

crores (Rs.)

Actual

amount

spent on CSR

in crore

s (Rs.)

Registered Office Location

CSR Rating ('07-'08)

1 2 3M India Ltd Trading 600 1.2 Bangalore 3

2 17Aditya Birla Nuvo Ltd Textiles 4140 8.3 Veraval 3

3 48 Andhra Bank Banking 4300 8.6 7.6 Hyderabad 3

4 59Apollo Hospitals Enterprise Ltd Miscellaneous 1200 2.4 Chennai 3

5 64 Arvind Ltd Textiles 2300 4.6 Ahmedabad 3

6 66Asahi India Glass Ltd Chemicals 1000 2.0 New Delhi 3

7 68 Ashok Leyland Ltd Automobiles 7730 15.5 Chennai 3

8 123Bharat Petroleum Corporation Ltd Oil and Gas 122000 244.0 Mumbai 3

9 125 Bharti Airtel Ltd Telecommunications 25700 51.4 New Delhi 3

10 155 Canara Bank Banking 14200 28.4 Bangalore 3

11 193 Dabur India Ltd.FMCG and Consumer Durables 2120 4.2 New Delhi 3

12 215 DLF Ltd Construction 5500 11.0 Gurgaon 3

13 217Dr Reddys Laboratories Ltd Pharmaceuticals 3330 6.7 Hyderabad 3

14 221Edelweiss Capital Ltd Financial Services 1100 2.2 4.5 Mumbai 3

15 275 GAIL (India) Ltd Oil and Gas 18000 36.0 26.0 New Delhi 3



16 299GMR Infrastructure Ltd Construction 220 0.4 3.5 Bangalore 3

17 305Godrej Industries Ltd Chemicals 800 1.6 Mumbai 3

18 319 GTL Ltd Telecommunications 1400 2.8 1.3 Navi Mumbai 3

19 349Hero Honda Motors Ltd Automobiles 10000 20.0 New Delhi 3

20 365Hindustan Unilever Ltd

FMCG and Consumer Durables 14000 28.0 Mumbai 3

21 379 ICICI Bank Ltd Banking 30000 60.0 Vadodara 3

22 439Jain Irrigation Systems Ltd

Polymers and Plastics 1600 3.2 4.2 Jalgaon 3

23 464 JSW Steel Ltd Iron and Steel 12500 25.0 Mumbai 3

24 479Kanoria Chemicals & Industries Ltd Chemicals 500 1.0 Kolkata 3

25 521 Lanco Infratech Ltd Engineering 1600 3.2 Hyderabad 3

26 523Larsen & Toubro Ltd Heavy Engineering 25000 50.0 26.0 Mumbai 3

27 544Mahindra & Mahindra Ltd Automobiles 11500 23.0 11.0 Mumbai 3

28 691 Praj Industries Ltd. Engineering 700 1.4 3.0 Pune 3

29 708Punjab National Bank Banking 14000 28.0 New Delhi 3

30 803 Siemens Ltd. Electronics 8400 16.8 Mumbai 3

31 851Sundaram Clayton Ltd. Auto Ancillaries 430 0.9 Chennai 3

32 869 Suzlon Energy Ltd. Power 13700 27.4 Ahmedabad 3

33 883 Tata Metaliks Ltd. Iron and Steel 1000 2.0 Kolkata 3

34 885Tata Power Company Ltd. Power 5900 11.8 Mumbai 3



35 888 Tata Tea Ltd. FMCG and Consumer Durables 1150 2.3 Kolkata 3

36 899 Thermax Ltd. Engineering 3200 6.4 Pune 3

37 906Tinplate Company of India Ltd. Metal 400 0.8 Kolkata 3

38 913

Transport Corporation of India Ltd. Logistics 1200 2.4

Secunderabad 3

39 884 Tata Motors Ltd. Automobiles 39000 78.0 Mumbai 340 932 Union Bank of India Banking 9500 19.0 14.0 Mumbai 3

41 976 Voltas Ltd.FMCG and Consumer Durables 3000 6.0 Mumbai 3

42 983West Coast Paper Mills Ltd. Paper 580 1.2 Dandeli 3

43 987 Wipro Ltd. Software and ITES 17500 35.0 Bangalore 3

44 991 Yes Bank Ltd. Banking 1300 2.6 Mumbai 3

45 997Zensar Technologies Ltd. Software and ITES 335 0.7 Pune 3

Total 443635 887



Documents

Report on the Karmayog CSR Ratings and Study - 2007-2008