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

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. Karmayogs 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

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The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

Karmayog Corporate Social Responsibility Ratings of 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 societys 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.

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The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

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 companys vision and mission and is part of the companys 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
www.karmayog.org The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

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 companys 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 Karmayogs 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

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The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

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 Level 5 Level 4 * Level 3 Level 2 Level 1 Level 0 (Lowest) Total

Number of Companies 0 10 45 220 231 494 1000

Percentage of companies 0% 1% 5% 22% 23% 49% 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 the Karmayog CSR Ratings of the 1000 largest Indian companies, 2008
Karmayog CSR Ratings
60% %of C om panies 50% 40% 30% 20% 10% 0% 5 4 3 2 1 0 Ratings from Le ve l 0 to Le ve l 5

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The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

Rating Criteria A) Minimum Necessary Criteria Necessary parameters that make a company eligible for a particular rating level:
Necessary Criteria If undertaking any CSR Activity If CSR is linked to reducing the negative impacts of companys own products or processes If CSR initiatives are for the local community If CSR is embedded in the business operations If innovative ideas and practices are developed for CSR Explanation Where any kind of social, developmental or community work is done CSR activities that aim to improve processes and products of the company. CSR activities that are focused on those who are affected directly by the company CSR activities form a part of the daily business activities of the company. CSR activities enable sustainable and replicable solutions to problems faced by society. Rating Level Level 1 Level 2

Level 3

Level 4

Level 5

B) Sufficient Criteria for Minimum Rating

If the company is doing this, they automatically get this rating at least
Sufficient Criteria Company fulfilling the basic needs of society e.g. manufacture of food Unique CSR activity which would not otherwise happen e.g. Developing a mapping and tracking software for adoption in India Company reducing negative impact of others e.g. A company that makes water purification & waste recycling systems Company adopting the GRI Framework for CSR reporting Companys annual expenditure on CSR = 0.2% of sales What this means The products and services of the company are useful and benefits society The CSR activity being undertaken by the company is not being done by government, NGOs, etc. The companys products or services provide solutions to mitigate harm caused by actions of companies, their products, etc. The company is committed to measuring and reporting its CSR initiatives as per a voluntary globally accepted framework. The company is committed to a minimum expenditure on CSR annually, and thus considers CSR as an integral part of its business Rating Level Level 1

Level 1

Level 1

Level 2

Level 3

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The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

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 Companies that make liquor, tobacco, genetically modified crops Companies that violate laws/rules/regulations Companies engaged in high impact processes

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

Rating Level Level 0 Level 1 Level 1

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The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

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 PSUs 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 Karmayogs detailed note on Group Companies) 7. Several companies repeat the exact same information every year for CSR with no fresh records of the current years 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.

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The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

Karmayogs 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 companys ability to do good.

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

Size by Sales 1 200 400 600 800 1000 Company Sales in Rs. Cr. 226000 1800 880 500 310 100 Net Profit in Rs. Cr. 7000 370 51 30 30 60 Minimum CSR Rs. (cr.) at 0.2% of Sales 452 3.6 1.8 1.0 0.6 0.2

Indian Oil Corp. Indian Hotels Ahluwalia Contracts Trent Technocraft Industries Marathon NextGen. Realty

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 companys 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 processes The 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.
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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 company Companies 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 defined CSR philosophy and focus to be developed from and based on the companys vision and mission 2. Ensure responsibility of suppliers Every 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 governments development plans It 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 CSR A 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 sector Companies, 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 society Companies 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.
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8. Support areas and issues that are neglected In 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.

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Industry Sector Analysis The 1000 companies were grouped into 35 industry sectors and analysed Consolidated Sector Wise CSR Ratings
S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Industry Sector Auto Ancillaries Automobiles Banking Cement Chemicals Computers Construction Diversified Electronics Engineering Entertainment & Media Fertilizers Financial Services FMCG & Consumer Durables Heavy Engineering Hotels Iron and Steel Jewelry Logistics Metals Mining Miscellaneous Oil and Gas Packaging Paper Petroleum and Petrochemicals Pharmaceuticals Polymers and Plastics Power Retail Software & ITES Sugar Telecommunication Textiles Trading Total No. of Cos. 48 13 40 30 63 7 57 13 18 44 15 19 32 60 10 9 93 11 17 14 6 42 19 10 13 7 49 10 46 5 40 25 20 77 18 1000 Sales in Rs. crores 45000 100000 260000 47000 45000 21000 65000 24000 35000 40000 8000 41000 50000 75000 31000 5300 180000 19000 27000 51000 13000 45000 750000 6300 7400 6800 43000 7000 140000 8000 88000 15000 64000 57000 68000 2487800 Level 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Level 4 0 0 0 1 1 1 0 0 0 0 0 0 1 0 0 0 1 0 0 0 0 1 0 0 1 0 1 0 0 0 2 0 0 0 0 10 Level 3 1 4 6 0 3 0 2 0 1 3 0 0 1 4 1 0 2 0 1 1 0 1 2 0 1 0 1 1 2 0 2 0 2 2 1 45 Level 2 11 4 9 11 14 0 9 4 2 10 3 10 2 15 1 3 18 0 6 7 3 4 5 0 6 1 16 0 11 1 13 7 2 10 2 220 Level 1 10 0 8 11 19 2 10 4 3 9 1 6 6 14 6 2 17 4 5 2 2 10 8 3 2 2 17 5 8 2 6 3 6 16 2 231 Level 0 26 5 17 7 26 4 36 5 12 22 11 3 22 27 2 4 55 7 5 4 1 26 4 7 3 4 14 4 25 2 17 15 10 49 13 494

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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 Karmayogs 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 Level 5 Level 4 Level 3 Level 2 Level 1 Level 0 Total Number of Companies 0 0 2 10 10 35 57 Percentage 0% 0% 4% 18% 18% 61% 100%

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

Construction Sector
70% 60% 50% 40% 30% 20% 10% 0% 18% 0% Level 5 0% Level 4 4% Level 3 Level 2 Level 1 Level 0 18% 61%

% of com panies

Rating Levels

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

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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 Karmayogs recommendation), then annual CSR expenditure would amount to Rs.520 crores Table of the CSR Ratings of companies in the Banking sector
Karmayog CSR Rating 2008 Level 5 Level 4 Level 3 Level 2 Level 1 Level 0 Total Number of Companies 0 0 6 9 8 17 40 Percentage 0% 0% 15% 23% 20% 43% 100%

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

Banking Sector
50% % o f C o m p an ies 40% 30% 20% 10% 0% 0% Level 5 Level 4 Level 3 Level 2 Level 1 Level 0 Rating Levels 0% 15% 23% 20% 43%

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Some Sector specific best CSR practices

No. Sector 1 Cement 2 Paper 3 Finance 4 Software Expected CSR Quarry Rehabilitation Farm Forestry Enabling access to affordable housing Software to improve public systems Example of a company doing this ACC Ltd Ballarpur Industries Ltd. HDFC Ltd. Infosys Technologies Ltd., TCS Ltd. Jubilant Organosys Ltd. Kansai Nerolac Paints Ltd. Moser Baer Ltd. Tata Steel Ltd. Titan Industries Ltd.

5 Pharmaceutical Reducing environment pollution through process improvement 6 Paints Development of environmentallyfriendly paints 7 Hardware Improvement in product design and use to benefit society 8 Steel Mitigating impact on the natural and human environment 9 Watches and Employment of handicapped and Jewellery village artisans

Importance of the industry Sector-wise analysis of CSR of companies: 1. Snapshot of sector It 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 impact The 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 guidelines The 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 sector The sector analysis showcases best CSR practices by companies in a sector, thus enabling other companies to also take up such initiatives. 5. Comparison between sectors The sector analysis enables comparisons between different sectors, and shows up sectors with low and high CSR initiatives.

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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. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Industry Sector Automobiles & Auto Ancillaries Banking Cement Chemicals Construction Computers Electronics Engineering Entertainment and Media Fertilizers Financial Services FMCG and Consumer Durables Heavy Engineering Hotels Iron and Steel Jewelery Logistics Metal Mining Oil and Gas Packaging Paper Petroleum and Petrochemicals Pharmaceuticals Polymers and Plastics Power Retail Software and ITES Sugar Telecommunications Textiles Example of expected CSR Reduction of auto emissions Support small entrepreneurs Quarry Rehabilitation Minimise air and water pollution Low cost housing E-Waste management Energy efficient products Reduce material content and wastage Raising awareness on social issues Promote use of organic fertilizers Support small entrepreneurs Reduce packaging Mitigating impact on environment Promote local tourism Environment restoration Promote local artisans and craftspeople Fuel efficient vehicles Environmental restoration Quarry rehabilitation Promote and develop alternate energy resources Use of recyclable material Farm Forestry Environmental restoration Focus on prevention of diseases Environmental restoration Use of renewable energy sources Reduce use of plastic and packaging Green IT Using by-products and waste to generate energy Improving connectivity and services in rural areas Use of environmentally friendly materials

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CSR by Group Companies

Observations: 1. No. of Groups in this study Of 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. Philanthropy Some group companies contribute money to the group Foundation/Trust as a part of their CSR 5. CSR Expenditure Individual companies do not mention the amount spent by the company; instead the group expenditure is listed 6. Group Foundation The 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 group There 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 groups 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

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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

Karmayog CSR Rating 2008 Level 5 Level 4 Level 3 Level 2 Level 1 Level 0 Total * TCS, Tata Steel, Titan Industries ** Tata Elexsi

Number of Companies 0 3* 7 10 3 1** 24

Percentage 0 13% 29% 42% 13% 4% 100%

Some recent trends in Corporate Social Responsibility in India

1. Increase in expectations of stakeholders Various stakeholders have come to expect more from corporates, beyond just their profits 2. Governments role as a regulatory body The 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 students There 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 Responsibility Companies are encouraging suppliers to adopt socially responsible business practices. 5. Disclosure about social & environmental performance Stakeholders are demanding more information about a companys social & environmental performance. 21 of the companies in this study have published a Sustainability Report, as compared to 6 companies last year.

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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.

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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 1. Announcing the Karmayog CSR Ratings of India's Largest 1000 Companies Presentation on the Karmayog CSR Ratings of the largest 1000 Indian Companies-2008 Executive Summary of the Karmayog CSR Ratings, 2008 - (2 page note) Report on the Karmayog CSR Ratings of India's 1000 Largest Companies (20 pages) 2. Karmayog CSR Rating 2008 Karmayog CSR Rating 2008 of 1000 Biggest Indian Companies - Compiled Table Karmayog CSR Rating Criteria Table of Level 3, Level 4 and Level 5 Companies Quotes from Level 3 and Level 4 rated Companies 3. Alphabetical Tables of CSR Rating of 1000 companies 2008 4. Details of CSR Activities of companies Individual CSR activities and profiles of the largest 1-500 companies Individual CSR activities and profiles of the largest 501-1000 companies Individual CSR activities and profiles of other companies 5. Sector-wise analysis of CSR activities of companies 6. Sustainability Reports 2007-2008 B) Karmayog CSR Ratings of the largest 500 Indian companies 2007: www.karmayog.org/csr2007 C) Corporate Social Responsibility: www.karmayog.org/csr

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 Karmayog C/o Shri R.O.Somani Charitable Trust Shreeniwas House, 2nd Floor, H. Somani Marg, Fort, Mumbai 400 001 Tel.: 022 22940109 / 22013535 Email: info@karmayog.org Website: www.karmayog.org Pooja Roy Tanya Mahajan

www.karmayog.org

The Karmayog CSR Ratings of the 1000 largest Indian companies - 2008

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