FICCI-Aditya Birla CSR Centre for Excellence Joins Aide et Action International in Raising Debates on the Changing Paradigm of Corporate Social Responsibility

Hyderabad:The global financial crisis followed by economic recession in several parts of the world, have had unprecedented impact on the world. Though Indian story has been of positive growth, this impact is being estimated in terms of declining rates of economic growth, capital flows, investments, fiscal deficit, investor confidence, and the like. Global economic growth declined from 5.2 per cent in 2007 to a forecast -1.1 per cent in 2009. Economic growth in developing countries in 2009 is projected to be 1.7per cent. This is substantially lower than the observed growth rate of 8.3per cent in 2007, which impacted Millennium development goals set by Governments worldwide to eradicate poverty and hunger. Indeed, building a global partnership on development is one of the MDGs, but as the U.N. notes, only five donor countries have allocated the targeted 0.7 per cent of their gross national income for official aid. The implications are visible in the following facts:

In February 2009, the World Bank estimated that potentially 200,000 to 400,000 more infants may die over the period 2009-2015 due to the effects of the crisis, as the income at family levels decreased.

Worldwide, the number of people living in extreme poverty in 2009 is expected to be 55 million to 90 million higher than anticipated before the onset of the global recession.

The prevalence of hunger in developing countries decreased from 20per cent in 1990 to 16per cent in 2007, but increased to 17per cent in 2008.

The crisis has the potential to create inter-generational poverty traps as children leave school to find employment to supplement family incomes or are withdrawn by parents no longer able to afford education costs.

Apart from increase in violence, women tend to have lower access to social safety nets, and have unequal access and control over economic resources thus exacerbating the effects of the downturn on women.

Corporate bodies are impacted during recession and it had profound impact on the social investments committed by large companies not only globally but in India as well. A study by Rajat Panwar and Eric Hansen, of Forest Business Solutions, reveals that most Indian business houses feel that CSR was only possible if profitability was high. They have quoted an Indian manufacturer who said that “no social activity was possible without at least 25 per cent profitability”. Social programmes are in need now more than ever since the crisis hit the economically vulnerable sections of the society more severely.

FICCI-Aditya Birla CSR Centre for Excellence, New Delhi organised this conclave with Aide et Action International that would like to promote synergy of innovations and efforts made by NGOs/INGOs as well as Corporate Sector for social development. Aide et Action International believes that education is the lever for change and it is working towards more meaningful corporate investments in social sector, more particularly in the area of education. Opening the conclave Mr. Paresh Tewary, Director of FICCI-Aditya Birla CSR Centre for Excellence emphasised the need to have greater dialogue and sharing between the NGOs and Corporate groups. He shared that there are range of corporate groups from those investing in CSR initiatives with knowledge of the social development sector to those with very high quality and innovative work. In her special address, Ms Claire Calosci, International Director General of Aide et Action talked about her organisation’s commitment towards developing excellence in the area of education and sharing the same with all the stakeholders. She mentioned that Aide et Action will work very closely with the corporate groups such as Microsoft, Schneider electric and Hindustan Unilever in realising the goals of an informed and empowered society.

In his key note address, Dr. Y.R. K. Reddy, Director of Academy of Corporate Governance shared his understanding and experiences of the changing paradigm of CSR, where part of their profits returned to the disadvantaged sections in the society has significantly helped the companies to build their repute and customer base. Dr. Reddy urged the companies to invest in their CSR initiatives keeping in mind the current needs of India to build educated and capable human resource base for the knowledge economy. On this occasion, CSR Director of Microsoft Corporation (India) Dr. Vikas Goswami reiterated need to get business ethics right while complying with laws of land. CEO of Bharati Foundation Mr. Vijay Chadda said that their company is committed to change lives of millions and make good impact on society as part of their vision. Mr. Dinesh Agarwal, GM-CSR of National l Power Corporation said, “Its time companies commit 0.5-5% of budgets for CSR activities as policy”. In his concluding address, Mr. Ravi Pratap Singh, South Asia Regional Director of Aide et Action International talked about the need to have policy provisions to encourage greater corporate involvement in the area of education and social development.

The conclave was attended by over 80 corporate foundations and heads of CSR initiatives of various Companies in India.