Governance

Why this is not CSR: A study of 5 major corporates

Description of CSR activities may generate the idea of an inclusive, equitable world; but the premise of the companies’ activities may not be the same 

 
By Srishti, Tavleen Singh
Published: Thursday 10 December 2020
CSR top companies. Photo: iStock

This paper is part of a series ‘This is not CSR’ to discuss the purview of corporate social responsibility in India. DTE brings you the series along with ‘Partners in Change’ and 'Corporate Responsibility Watch'. 

 

In a country where ‘Ease of doing Business’ trumps labour laws as a “step in the right direction”, it is important to have measures to be able to understand the overall contribution of businesses to any aspect of development. This, because the $5 trillion economy dream exists with the harsh reality of more than two-thirds of the country living on less than $1.25 a day. 

Possibly as a way to harness the corporate proficiencies of businesses and bring in ideas of societal change, the concept of Corporate Social Responsibility (CSR) came in to encourage an inter sectoral outlook towards development.

On April 1, 2014, India became the first country to incorporate CSR within its legislature. Rules in Section 135 of India’s Companies Act (2013) made it compulsory for companies of a certain turnover and profitability to spend two per cent of their average net profit of the past three years on CSR.

Due to this, the annual average CSR budget in India in 2020 is roughly Rs 15,000 crore, of which the top 300 companies contribute two-thirds — nearly RS 10,000 crore.

With such a massive input it becomes important to understand how companies decide to finalise their activities, programmes and funds, and to study whether these activities are truly, socially responsible.

Unlike non-profit work, CSR is run with the overarching views, goals and objectives of the business driving it.  Corporate innovations, the tactful skills of delivering ‘public goods’ are at the core of its CSR. While they might wish to positively impact communities, there is also a tilt towards having a ‘business benefit’.

This might not be directly through profits but by gaining a footing in the community to operate, which is seen in many manufacturing and mining companies which carry out activities near their plants, possibly to paint over the bad reputation they might develop due the damages caused by their activities. 

To understand CSR, it is also important to analyse the nature of the company itself.

The reports on the CSR activities might be a compilation of flowery words about ‘helping more than a billion people take action to improve their health and well-being’ — such as Unilever or PepsiCo’s ‘building a more sustainable food system’ — but the very premise of the company’s foundations could be flawed. Their waste could be one of the biggest sources of pollution in the country and they could simultaneously be working on providing ‘safe’ drinking water such as Coca-Cola India.

It is important to analyse this ‘integrated thinking’, and have companies take a more holistic approach to managing their performance by looking at the impact on environmental, social, and governance (ESG) parameters  as well. 

This paper attempts to comment on how the very nature and by-products of five companies (Pepsi Co, Coca-Cola India, Infosys Ltd, Hindustan Unilever and Reliance Industries) contradicts with their CSR activities. The description of these activities might generate an idea of an inclusive, equitable world, but the very premise of these companies is unequal and capitalist. 

 

Coca-Cola: The drink for a malnourished India?

In its sustainability report from 2017-2018, Coca-Cola India claims to have contributed towards the national effort towards a ‘Kuposhan-Mukt Bharat’ (malnutrition-free India) and has launched two new products with this aim. These are ‘Minute Maid Vintigo’, a fortified iron and micronutrient supplement mix and ‘Aquarious Glucocharge’ which claims to provide instant energy with lemon and glucose.

This is reflective of their understanding of malnutrition. Malnutrition does not occur because of an exclusive deficiency in some micronutrients. All local regional diets and staple foods have evolved to cater to a person of that region’s micro and macro nutrient needs.

Quick-fix solutions such as instant energy drinks are a reductive approach to remedying mass hunger and malnutrition. They refuse to acknowledge the exploitative practices that lead to mass hunger.

Mass hunger is because of the surging prices of food and dwindling livelihoods, much of which Coca-Cola is responsible for itself, establishing a monopoly over many farm produce or destroying land resources. 

In the same report, Coca-Cola also claims to be striving towards a water-sustainable mission by using the reduce-reuse-replenish approach and supporting communities, however, reports from the ground show the reality:

Multiple community campaigns have occurred against the activities of the company that endanger essential resources of the land. The primary concern is how they further amplify dire circumstances of less rainfall and depleting water resources in the areas around their plants. 

Coca-Cola established a bottling plant in the village of Kaladera in Rajasthan, an impoverished village which has a semi-arid climate. Farmers had learnt to use the water judiciously and plant crops that would be able to grow in these conditions. However, since the plant was set up, it began to utilise the majority of the water, rendering it insufficient for farming practices and causing livelihood loss within the community.

Its sustainability report tries to hide this acute crisis behind the statistics that the company’s water consumption accounts for only 0.023 per cent of the country’s. However, it must be noted that for each 1-litre bottle of its product, about 3 litres of water is needed; nearly 65 per cent of the country’s reservoirs are running dry, according to data from the NASA Earth Observatory in 2019.

A recent audit by Break Free from Plastic across 51 countries across the globe found that Coca-Cola was the largest pollutant in the world, achieving this rank for the second time. A large part of its waste are the plastic bottles and labels on them, however there are no plans to innovate any replacements for this because the company believes that the lightweight design is an attraction for customers.

In fact, with a recent shift towards Indians choosing healthier options, they even started designing smaller bottles for perceived portion control, which have increased waste-generation but maximised sales and profits. This clearly shows the priorities of their business model.

To overcome the bad reputation generated by reports about their unsustainable products, they focused on recycling of bottles and initiated CSR campaigns to encourage the buyers to reuse bottles. Reusing these bottles is actually harmful as microtears can cause the chemicals such as polyethylene terephthalate (PET) to seep into the liquid.

 

PepsiCo: Is the #AwaazMittiKi muted?

PepsiCo launched an advertisement campaign in 2017 called #AwaazMittiKi — black-and-white shots of farmers and their crops, moving poetry about their strength and perseverance and an underlying message about our reliance on them and need to invest in the country’s own people and resources.

The advertisement ends with a bottle of Pepsi and a visual of the company’s initiatives in partnering with local farmers. These CSR initiatives are packaged into a stirring ad, invoking patriotism and convincing the viewer that their act of purchasing the bottle of Pepsi would uplift this community.

In 2019, the same company sued four farmers in Gujarat who it claimed were growing its variety of FC5 potatoes, which the company uses for its Lays chips. These seeds and the technology for them are distributed as a part of their agro-sustainability and crop-diversification projects which are a part of its CSR activities.

The case was only taken back because of political pressures at the time as it was in the middle of election season in India and the farmers form a huge vote bank.

However, farmers say that it still set an example that if they were the ones providing the seeds, they would be the sole buyers as well. The dangers in this monopolisation of the market are clearly reflective of their power over price negotiation with the farmers.

So, while it might advertise to appeal to the consciousness of their consumers about ‘mitti ki awaaz’ (voice of the soil), they would actually wield the power of their business to suppress it. 

 

Reliance: How reliable are the CSR activities in the long run? 

Reliance Industries has a seperate arm called the Reliance Foundation, headed by Nita Ambani, that is responsible for its CSR activities. One of its largest investments consistently through the years has been in the health sector. Through their various CSR reports for the past years, their perspectives of health and health care become clear.

One of the main conduits towards these goals is the Sir H N Reliance Foundation and Research Centre, a 345-bed multispecialty hospital at the quaternary level, essentially entailing extremely high-end services such as heart transplants and trans catheter valve replacement services.

The report highlights the super-specialties of its doctor, the high success percentage of transplants and the availability of retail services for various medical conditions such as hypertension as well as the use of the latest technology in treating patients.

The hospital is run at rates similar to other private hospitals and while it may be having outreach programs to reach out to marginalized communities, the report does not make it clear how much of the services provided at the hospital itself were specifically catering to them at reduced costs. 

The foundation has also teamed with Tata Trusts, MSD for Mothers, Bill and Melinda Gates Foundation and United States Agency for International Development (USAID) on Alliance for Saving Mothers and New-borns (ASMAN), which aims to reduce neonatal and maternal mortality. This is done through a tablet-based intrapartum monitoring and decision support tool.

The foundation has supported multiple cornea transplants under the ‘Drishti’ project. All these interventions make clear the techno centric and tertiary level focus of the foundation. If efforts are made to bring health care to the rural areas, it is mostly to connect them to the services of the city.

This is an unsustainable and narrow-minded approach to health, which does not take into account the WHO definition that clearly states that health is not merely the absence of disease. It has multiple social determinants which frame it including an individual’s social location (sex, class, caste being some of them), and access to basic services such as housing, clean water and food. 

The foundation has vertical programmes that invest huge sums of money in tackling specific diseases but fails to see the interrelations of various social issues that act as upstream factors that actually lead to the disease.

It tackles tuberculosis while not looking at issues of poor ventilation and housing that cause the disease to flourish. It provides counselling to rural women about anemia without taking into account the biases in society that cause her to be the last person to eat a meal in her household, often incomplete and lacking all nutrients. The foundation acknowledges the rise in diabetes but does not link it to the growing unregulated processed food market that has infiltrated all areas and strata of society, increasing profits for food companies but causing these diseases in the population.

These vertical programs do not look at health as a comprehensive issue that also has preventive and promotive components. It does not plan ways to train the health care community workers themselves and empower the community itself.

It looks at beneficiaries as passive patients who must accept the treatment provided, mostly by private interventions, to them. Health is then not a right but a charitable gift. Its initiatives do not promote ideas of self-reliance, behavioral changes or a sense of ownership by the community.

 

Hindustan Unilever: How ‘sustainable’ are the CSR activities?

Hindustan Unilever presents itself as a strong advocate of a ‘sustainable’ lifestyle. In 2019-2020, it expanded its CSR policy to include contributions in maintenance and development of road medians and protection of flora and fauna of public areas near the company’s headquarters, regional offices and factories and contributions to Non-academic Technopark Technology Business Incubator (TBI), approved and supported by the Department of Science and Technology, Government of India.

However, a study conducted by the ethical consumer said it appeared that while Unilever seemed to be working to end the use of animal testing in some areas, it operated in countries that still required animal testing and had no fixed cut-off date for ingredients tested on animals. 

The company also runs a Dove Self-Esteem programme, whose mission is to ensure that the next generation grows up enjoying a positive relationship with the way they look and helping young people raise their self-esteem and realise their full potential. Lately, Dove skin care as a brand, has altered its marketing technique catering to the ‘progressive’ woman. With campaigns such as ‘real beauty ‘, Dove aims to promote ‘beauty within’, by celebrating women of all sizes, colour, age and skin type.

This seems alright until we look at another product from Unilever, ‘Fair and Lovely’. This product has been criticised for indoctrinating and promoting colourism in an already ‘fair skinne-obsessed’ society, trapped in the colonial hangover. Bothered by the backlash, the company has recently hinted towards dropping the word ‘fair’ from the name. Over a few years, the advertisements of this product have primarily focused on how this ‘cream’ boosts up the confidence, empowering young girls to pursue their dreams.

Another CSR Activity of Unilever, the Fair & Lovely Career Foundation is a mobile platform designed to help women create an identity for themselves by providing them career guidance, skill-based courses and training for job opportunities. While this activity has not breached any law, it seems like an attempt to curb the criticisms around the regressive propaganda of the product.

The contradictions of the Dove and Fair and Lovely products campaigns and the nature of the CSR activity named after them hints at how shallow and opportunist the spirit behind them is. This further goes on to demonstrate how capitalism has tried to appropriate any major movements of its time.

In this case, how feminism has been tweaked and used to make it profitable for the companies because skin care, apparently, is a women’s issue. It is thus not very unbelievable that a company that advertises to care so much about the vulnerable gender, has no woman as a board member.

 

Infosys: who decides what to eat?

In 2018, Infosys Foundation which handles the CSR activities of the leading technology company, collaborated with the Akshaya Patra Foundation (APF) to inaugurate a high-tech centralised kitchen at Kandi in Telangana. APF is run by the International Society for Krishna Consciousness and provides meals to various schools across states as a part of the mid-day meal program. 

In Karnataka it was seen that the meals provided by them were not being consumed by the children as they were not made of staple ingredients and diet preferences of the community. Instead it followed a ‘satvic’ diet, with no garlic, onion or eggs, following the ideas of ISKON.

This is a perpetuation of the notions of purity associated with the ‘upper castes’. If the children are considered actual stakeholders, their needs, preferences and culture would be a priority and this might have been picked up, however with a decision-making committee composed mostly of Brahmin men, and a top-down approach to welfare, this probably did not even register as a concern. 

 

Conclusion: is the 2% just a mandate?

The lack of a proper need assessment, reflected in the above examples, is a direct fault in the working of the CSR. Convenience trumps a proper, well thought understanding of the issue and the community.

There is also a geographical preference for certain states — Maharashtra, Uttar Pradesh, Tamil Nadu, Karnataka and Odisha received 60-70 per cent of total spends — possibly because of advantages to the business as opposed to the people.

All of this makes one question who exactly benefits from CSR? The mandated reporting format neither asks for numbers nor the profile of those who benefit. Companies do submit the data of their beneficiaries but the way it is represented only by numbers and not profiles defined by markers of social exclusion: gender, ethnicity, caste or disability makes it difficult for even preliminary assessments as to the impact of the CSR.

Major choices on which project to fund are made often around short-term projects which are sub-optimal to solve the social issue. In the wake of the novel coronavirus pandemic, a large proportion of the amount prescribed to CSR activities has been allocated towards the PM-CARES Fund, specifically, Rs 5,324 crore. This despite the fund being rife with issues pertaining to transparency and accountability, along with a general lack of clarity over the control and use of money donated to it.

Moreover, companies have traditionally preferred to build physical structures like hospitals and schools because apart from being, quite literally concrete, they can also carry branding. Though these structures are necessary, by doing this, they distance themselves from the field and hence, the activities tend to be a form of charity rather than following major principles of grounded social work.

CSR holds immense potential to provide the funding as well as structured planning capacity that grassroots or non-profit activities might lack, however their impact will be superficial and just a band aid solution till they integrate principles of social justice and community empowerment within their work.

At the moment, while the CSR activities carried out might align with the set guidelines, it becomes all the more important to associate it with the ethics of the company as they are often contradictory. It is time to highlight the Social as much as the Corporate in CSR.

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth. 
 

REFERENCES

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