This article by Mrs. Rajashree Birla appeared in Quality Times, a journal of the Institute of Directors, in the October 2010 issue.
Mrs. Rajashree Birla spearheads the Aditya Birla Centre for Community Initiatives and Rural Development, the Group's apex body responsible for development projects. She is the Director on the Board of all major Aditya Birla Group companies in India and globally. Mrs. Birla is the Chairperson of the FICCI – Aditya Birla CSR Centre for Excellence as well as of Habitat for Humanity (India); she is on the Board of Asia Pacific Committee, Habitat's Global Committee and the Advisory Board of the University of Kanchipuram (South India). She serves on the Boards of The Research Society for the Care, Treatment and Training of Children in Need of Special Care, Mumbai, India; Population First, India; BAIF Development Research Foundation, Pune, India; Tirumala Tirupati Devasthanams Development Advisory Council and the Executive Committee of the Gandhi Smriti and Darshan Samiti, Delhi, India
Over three decades ago, Milton Friedman, the Nobel Prize Winner — a name with which all of you must be extremely familiar — said, "There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits." Prior to him, in the early 1920s, renowned economist Prof. John Keynes said, "The business of business is to do better business and transfer its benefits to its consumers and stockholders."
Of course, both Keynes and Friedman were talking in the context of developed nations. These never had to face major societal issues. Over the last decade, the ground has shifted considerably. A high sense of business ethics and corporate social responsibility, inclusive of accountability to multiple stakeholders — such as shareholders, customers, employees and the community — is on top of every progressive management's agenda.
Social and economic policies are becoming inextricably intertwined. Economic debates are increasingly influenced by societal issues such as health, education, and livelihood.
Today more than ever, it is necessary to look into societal issues. This is in the face of poverty in several parts of the world. Over the last two decades, India as a nation has been successful in pulling up a significant number of people from below the poverty line. Unfortunately, we still have quite a large number of our people living below the poverty line — that is, less than $1.25 a day. This is a problem. The Government of India has an ambitious vision for inclusive growth. But the government alone cannot handle this issue. And I find this is true of several countries where we operate, as well. So it behoves corporates to proactively respond to challenges such as providing education, economic self-reliance/women's empowerment, sustainable livelihood, healthcare, sustainable development, and water conservation, which can help mitigate poverty and partner development.
Against this backdrop, let me now walk you through how we as a business house are working to decrease poverty.
We are a US$ 30 billion corporation. The Aditya Birla Group is in the league of Fortune 500 companies. We have an extraordinary force of 130,600 employees, comprising 40 nationalities and operating in 26 countries.
Our roots — Mahatma Gandhi and the G. D. Birla connection.
Ours is a 120-year-old organisation, rooted in history. Our roots go back to the early 1900s and the nation's struggle for freedom. It was during this formative period in our history that the legendary Mr. G. D. Birla, my grandfather-in-law, worked shoulder to shoulder with Mahatma Gandhi. While Mahatma Gandhi was passionately engaged in the political freedom of our nation, Mr. G. D. Birla worked with equal obsession for the economic liberation of India. They were thus two sides of the same coin. At that point in time, India had no indigenous industries. It pained Mr. G. D. Birla to see the total dependence on imports even for basic needs; India's economic independence became a cause. With his remarkable vision and foresight, he turned this social cause into a profitable business.
He ventured into industries that catered to the basic needs of Indians. He first forayed into jute, textiles, banking, and insurance and then, eventually, got into automobiles, chemicals, cement, aluminium and publishing. And from the wealth that he generated, he financed the Mahatma's fight for freedom. For more than 25 years, he supported Gandhiji's nationalism with his financial strength.
There developed a special bond between the two — a bond that united them in the pursuit of a common cause: India's freedom. Gandhiji looked upon my grandfather-in-law as his mentor and confidant. He would always stay at our house in New Delhi. It was at the Birla House that, on the 30th of January, 1948, the Mahatma Gandhi was assassinated by Nathuram Godse. Even though the void left by Gandhiji's absence could not be filled, his legacy lived on in the trusteeship concept. This dictated that part of your profits should be ploughed back into society for the larger good. Apart from charitable donations, such as Rs70,000 to the Aligarh Muslim University in honour of Gandhiji, or Rs200,000 for the Harijans, he set up schools and temples. His reasoning was that education is a great leveller and a temple, a great unifier. The philosophy of trusteeship became an unwritten edict in the Birla family. It is a legacy which continues even today. My husband Adityaji fostered this philosophy. My son Kumar Mangalam has a zealous, evangelical approach. He has made the philosophy of caring, giving, developing and empowering an underserved people part of our Group's DNA. He feels we have a tremendous responsibility to give back to society, and to make a difference.
Our CSR vision
In fact, we have articulated a vision: "To actively contribute to the social and economic development of the communities in which we operate, and, in so doing, to build a better, sustainable way of life for the weaker sections of society and raise the human development index of our country." Our focus areas are education, healthcare and family welfare, sustainable livelihood encompassing agricultural and watershed development and women empowerment processes; infrastructure support and espousing social cause. Our social vision is integrated into our business vision. It is rooted in our values and it makes a difference in the way we do business. We have charted our path according to our beliefs. While we do not turn business into a cause, we do "social cause marketing". We turn it into a lever, where the ROI, or "return on investment", lies in the transformation of a people's lives, as they are no longer mired in poverty.
We work in 2,500 villages and reach out to 6 million people. CSR is a priority at all our manufacturing units. All of our projects at our various Group companies are carried out under the aegis of the Aditya Birla Centre for Community Initiatives and Rural Development. I am privileged to spearhead this Centre. Askaran Agarwala, Dr. Pragnya Ram and I form the apex team. Collectively, we provide the strategic direction and the thrust areas for our work and ensure performance management. We have a dedicated a team of 250 CSR people in this domain. It is anchored by our Group's Corporate Communications and CSR cell. We view our social projects very seriously, as far transcending mere cheque-book philanthropy. Corporate social responsibility is accorded as much importance as are our business projects. Therefore, our social vision forms an integral part of the business vision of all of our Group companies.
Let me give you a sense of our work towards poverty alleviation. Let me first focus on education. In education, we run 42 schools, where 45,000 children are provided quality education. Of these, 18,000 children receive free education. We have enrolled 20,000 children at our balwadis (nurseries). We reach out to more than 29,000 people through our adult literacy and bridge education programmes. Over 8,000 students in the villages are awarded merit scholarships. Nearly 20,000 students are enrolled at our vocational training centres. Our centres of technological excellence include (Birla Institute of Technology and Science) BITS, Pilani; BITS, Dubai; BITS, Goa; and BITS, Hyderabad. From BITS, which is a globally recognised premier institute, we get some of the best recruits for our companies. Over 10 years ago, to put Indian business success stories as case studies for global leaders-in-the-making, we set up the Aditya Birla India Centre at London Business School. It is contributing not only to India's image but ours as well.
To provide healthcare to the people, every year we conduct more than 3,500 medical camps, treating over 5 million patients for various ailments such as AIDS, TB, cataracts, and cleft lips, as well as providing services such as diagnosing cancer. In the last year alone, we have helped immunise 6 million children against polio by sponsoring and managing 23,000 booths. We have also organised polio corrective surgery.
Let me tell you the story of Vishnu, who lives in Nagda in Madhya Pradesh. Vishnu, now a lanky 20-year-old girl, is a great farmhand. From sunrise to near sundown, like a lark she sings in the field while helping her parents on their two-acre farm. You can see shoots of wheat, almost golden in colour, swaying in the wind. Vishnu apparently is enjoying herself. She says, "Once upon a time, I was only three feet tall because I had to bend over and grip my legs while dragging my feet, which were crippled. My parents were always praying that I should walk again. And then a miracle happened, as I underwent polio corrective surgery, persuaded by your teams. After months of physiotherapy, much anguish and physical pain, I can now almost walk straight again." Certainly, she does walk well. The little limp that she has is barely visible; however, we should not let any child get to this stage.
In Vishnu's case, fortunately, we were able to turn the clock back, as we saw a lot of hope when the surgeons reviewed her case. Reconstructive surgery in acute cases is not even attempted. In those cases, we try to rehabilitate polio victims with the Jaipur foot (artificial limb), which accords them mobility to a large extent and reduces their dependence on the family. In a way, it restores their dignity and sense of self-esteem. For almost a decade, polio eradication has been, and continues to be, a priority.
Besides this, we have mother-and-child care projects reaching out to women and children. Our 18 hospitals all over the country cater to more than 500,000 poor people at almost no cost. At the world-class Aditya Birla Memorial Hospital in Pune, 15% of the beds are earmarked for the poor. Through tele-medicine facilities, we connect the rural poor to our hospitals as well.
Water — the life force
Water, which is the life force of all people, regardless of geography, has been a perennial problem in India's villages, which are often plagued by drought. We have been providing water on a continual basis to the villagers in proximity to our plants, but this only meets their basic needs.
We evolved a multi-pronged strategy based on an integrated development plan. Engaging the community influentials at every stage, we worked with water as the pivotal factor, replacing traditional wells with bore wells, dug 400 feet into the belly of the earth, to tap natural aquifers.
We have engaged in recharging underground water sources, such as tube wells and open wells, through rainwater harvesting. The construction of check dams in as many villages as possible facilitated the process, so, at Gindwania, in Nagda (MP), rainwater collected from the roof of the village school is diverted to a water pipe that feeds the hand pumps that were installed at intervals of one every 10–15 houses. We have also provided training in the pumps' maintenance and repair.
Conservation at the community level consists of harvesting the excess run-off down through catering to micro needs such as kitchen gardens and soak pits.
Let me share with you the story of Shakuntala, one of the beneficiaries, which is both touching and inspirational. Shakuntala lives in the Dudhi Block of Renukoot in Uttar Pradesh. A mother of five children, she, along with other village women, would trudge five kilometres to fetch four pots of water for the family, and even that would barely suffice. Voicing her opinion in timid tones, she would say that women in the villages are children of a lesser God, given the hardships they faced. Our team took this up as a challenge. Backed by our Group's resources and UNICEF, they installed hand pumps at intervals of every 10 houses in 110 villages, providing water to over 100,000 people. No longer did women have to spend hours on end collecting water. The UNICEF collaboration mandated that the hand pumps be maintained by women. Shakuntala was the first woman volunteer. Today, she is a qualified hand pump mechanic, earning $650 in the summer months, when the pumps need to be repaired.
She has, in turn, trained another 80 women as hand-pump mechanics. These women, who cannot read or write, earn a good deal of money by rural standards.
Today, Shakuntala very proudly remarks that, from being a seeker of charity, she is now a teacher. She says that the Group has been a life changer not only for her but for all those in the 110 villages who now have easy access to water — their life force. Another 45,000 women across India feel empowered, working in 4,500 self-help groups set up by our teams. They are making a living. Like Shakuntala, these women like believe that they are now in charge of their own destiny.
Homes for the homeless
Yet another aspect that I want to bring to the fore is the issue of homes for the
homeless. In India, we need 50 million houses. On a positive note, India has lifted nearly 60 million people out of their slums since 2000. According to the UN-HABITAT's State of the World's Cities 2010/2011, rates of slum dwelling in India fell from 41.5% in 1990 to 28.1% in 2010. Very recently, I also read that the government has approved 1.5 million houses for the urban poor, to be built between 2005–12. The government has also announced the National Urban and Habitat Policy. Its goal is to provide affordable housing for all. The need of the moment, given the 50-million-houses scenario, is obviously scale.
We are partnering with Habitat for Humanity to provide homes to the poor. Habitat for Humanity is a world-renowned organisation. Its basic objective is to help provide affordable houses to the underprivileged. Habitat for Humanity has already built 370,000 houses across the globe. Of these, 35,000 are spread across India.
I have the privilege to chair Habitat for Humanity in India. We have set ourselves ambitious growth targets. We would like to cross the 100,000 mark by 2015. That would be a major milestone. We in the Aditya Birla Group have supported Habitat, financially and in kind, to the tune of US$ 1.5 million. We have helped build over 3,000 houses. This year, we have committed as a Group to support 1,400 additional houses. Though it may seem but a drop in the ocean, these 4,400 houses make a dramatic difference to the lives of over 25,000 people.
In a far wider move in India, we have aligned with FICCI (Federation of Indian Chambers of Commerce and Industry) and set up the FICCI – Aditya Birla CSR Centre for Excellence. The vision of our Centre, the first of its kind in the world, is "To incubate, nurture and accelerate a paradigm of sustainable and inclusive CSR in India, and, thereby, raise the human development index through poverty alleviation."
We have recently sponsored the Columbia Global Centre's Earth Institute in Mumbai, India. We believe that the Earth Institute will go a long way in making sustainable development in India a ground reality and help us in poverty alleviation.
With a view to creating both employability and entrepreneurship, we are working on a major project in South India, namely, nation building. Our project encompasses a diverse range of disciplines that will foster inclusive, sustainable growth and create employability for the nation's youth.
At the heart of all these interventions, our primary goal is poverty alleviation and long-term sustainability.
We work in many countries besides India. In Egypt, we have
In Thailand, we have established the Aditya Birla Knowledge Centre, a vocational training centre for the less-affluent sections of society. In Philippines, we have helped hundreds of physically challenged people who were crippled get back on their feet through the "Jaipur foot", which is an artificial limb that works like a leg.
At our Canadian company Novelis, headquartered in Atlanta, we have mounted a massive recycling education programme involving our people and the local communities. Over 35 billion cans — Coke, Pepsi, Sprite, and beer, among others, are recycled every year. Novelis is the world's largest recycler of used beverage cans.
Let me now move on to how our engagement with underserved communities has profited us. I speak of profit not in the normal sense of the term — quantified monetarily — but far beyond the bottom-line mentality. We know what we are doing is benefiting society, so our motivation is very different. Our CSR deployment has translated into four distinct advantages.
Firstly, our activities provide us with a great reputational lever that translates into a distinct value-led company image. This enables us to attract, retain and energise talent. Professionals feel a sense of comfort when they see how our Group transcends business and is genuinely committed to social elevation. Today's young want to ensure that the benefits of capitalism percolate down. Like us, talent believes that wealth creation is a noble pursuit. They feel that wealth can be best enhanced by distributing it. A new ethos of generosity is surfacing. This is clearly seen in the willingness to build a society that works for everyone. They prefer to work for companies who are strong in CSR.
Our employees and potential employees think of us as a Group that is cast in that mould, a Group that mirrors their personal values. Our reward lies in the fact that we have been named "The Best Employer in India and among the top 20 in Asia", by the Hewitt / Economic Times Wall Street Journal Study in 2007. In 2009, we were ranked sixth in "Great Place for Leaders to Work" by the Hewitt–Fortune Magazine Study, across the Asia Pacific Region.
Secondly, our work has created and continues to create tremendous goodwill amongst consumers, far in excess of the price tag. Consumers look upon our Group and its companies as having a social conscience, so there is a marked preference for our products. In all of the sectors in which we operate —
cement, aluminium, copper, viscose staple fibre, carbon black — we are amongst the topmost in the industry. And these are undoubtedly profitable businesses.
Thirdly, millions of our shareholders and investors are proud of our Group. They feel that this is a Group that they would definitely like to support. In all of our Group companies' Annual Reports, we provide quantified evidence of our social and environment performance. At the Annual General Meetings, I have seen the special pride that shareholders take in their involvement with our companies on this score. Investors also flock to our Group.
Fourthly, social projects are also a means of sharing with the community the values that we as an organisation stand for. It is a way of telling them that we care about you, that your concerns are ours as well, and that we are a principled people led by a moral compass.
I do hope I have made a strong case for how mainstreaming CSR into our businesses and delivering societal value has given us tremendous profits, albeit of a different kind — the turnaround of human lives, lifting tens of thousands of people out of stark poverty. There is a new-found dignity among them. What more can one ask for?
Dr. Pragnya RamGroup Executive President, Corporate Communications & CSRAditya Birla Management Corporation Private LimitedAditya Birla Centre, 1st Floor, 'C' WingS.K. Ahire Marg, WorliMumbai 400 030.
91-22-6652 5000 /2499 5000
Fax: 91-22-6652 5741/ 42