Revolutionising the future
Corporate social responsibility (CSR) is a concept whereby companies integrate social and environmental concerns into their business operations and in their interaction with their stakeholders on a voluntary basis. Especially, manufacturing firms in developing countries such as India the world’s ‘manufacturing floors’—are under heavy scrutiny from many parties. The concept of corporate social responsibility (CSR) is underpinned by the idea that corporations can no longer act as isolated economic entities operating in detachment from the broader society. CSR is a company’s commitment to operating in an economically, socially and environmentally sustainable manner whilst balancing the interests of diverse stakeholders. It is a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis. “A stakeholder is any group or individual who can affect, or is affected by the activities and achievements of an organization”. A growing number of scholars take the view that firms can no longer be seen purely as private institutions but as social institutions instead. The benefits from firms need to be shared collectively. So it seems that there is a natural fit between the idea of CSR and an organisation’s stakeholders. The social responsiveness has increased in the recent years and the emerging perspective on CSR focuses on responsibility towards stakeholders. An increasing number of companies are adopting a variety of “voluntary initiatives” associated with improvements in environmental management systems and reporting on social and environmental performance. Economic factors drive most environmental behaviour including behaviour beyond economic and regulatory demand. Firms have claimed that social responsibility is a driver of environmental behaviour. The key dimension of social responsibility has been taken to be environmental initiatives and programs.
Indian companies are now expected to discharge their stakeholder responsibilities and societal obligations, along with their shareholder-wealth maximisation goal. Nearly all leading corporates in India are involved in corporate social responsibility (CSR) programmes in areas like education, health, livelihood creation, skill development, and empowerment of weaker sections of the society. Notable efforts have come from the Tata Group, Infosys, Bharti Enterprises, ITC Welcome group, Indian Oil Corporation among others.
The 2010 list of Forbes Asia’s ‘48 Heroes of Philanthropy’ contains four Indians. The 2009 list also featured four Indians. India has been named among the top ten Asian countries paying increasing importance towards corporate social responsibility (CSR) disclosure norms. India was ranked fourth in the list, according to social enterprise CSR Asia’s Asian Sustainability Ranking (ASR), released in October 2009.
According to a study undertaken by an industry body in June 2009, which studied the CSR activities of 300 corporate houses, corporate India has spread its CSR activities across 20 states and Union territories, with Maharashtra gaining the most from them. About 36 per cent of the CSR activities are concentrated in the state, followed by about 12 per cent in Gujarat, 10 per cent in Delhi and 9 per cent in Tamil Nadu.
The companies have on an aggregate, identified 26 different themes for their CSR initiatives. Of these 26 schemes, community welfare tops the list, followed by education, the environment, health, as well as rural development.
Further, according to a study by financial paper, The Economic Times, donations by listed companies grew 8 per cent during the fiscal ended March 2009. The study of disclosures made by companies showed that 760 companies donated US$ 170 million in FY09, up from US$ 156 million in the year-ago period. As many as 108 companies donated over US$ 216,199, up 20 per cent over the previous year.
Although corporate India is involved in CSR activities, the central government is working on a framework for quantifying the CSR initiatives of companies to promote them further. Moreover, in 2009, the government made it mandatory for all public sector oil companies to spend 2 per cent of their net profits on corporate social responsibility.
Besides the private sector, the government is also ensuring that the public sector companies participate actively in CSR initiatives.
The Department of Public Enterprises (DPE) has prepared guidelines for central public sector enterprises to take up important corporate social responsibility projects to be funded by 2-5 per cent of the company’s net profits.
As per the guidelines, companies with net profit of less than US$ 22.5 million will earmark 3-5 per cent of profit for CSR, companies with net profit of between US$ 22.5 million – US$ 112.5 million, will utilise 2-3 per cent for CSR activities and companies with net profit of over US$ 112.5 million will spend 0.5-2 per cent of net profits for CSR.
The Indian textiles and clothing industry is the largest foreign exchange earner of the country and second most important sector only after agriculture. The sector contributes over 20 per cent of India’s exports and 14 per cent of industrial output, as well as representing some 5 per cent of the national GDP and providing direct employment to 38 million people. The textile sector came third with fifty-three companies according to the study by the Associated Chambers of Commerce and Industry of India. India has become more a viable competition in the textile industry since the end of the quota system in 2005 under the Multi-Fiber Agreement Act. After the dismantling of the quota system, India’s textile exports to the US went up by 34 per cent and 30 per cent in Europe.
“A business that makes nothing but money is poor”
Being from medium scale industry, you know it is not mandatory to maintain CSR activities, but, your CSR activities are getting global recognition. What’s your take on it.
Yes, you are right. It is not mandatory for us to undertake CSR activities. However, we as human beings are not supposed to do something only to reach targets. Whether, they be in business or charity. We at Zenitex, believe in a philosophy “That a business that makes nothing but money is poor”. For which we have set up a foundation by the name “Hearts@Work Foundation”. And it is through this foundation that we manage all our Community Services. Also while implementing the concept of 3600 sustainability, which includes –
- Employee Welfare—Health, Safety & Wellness of the Workers & their Families.
- Energy Conservation, Environmental Protection & Green Cover Plantation
- Community Service & Welfare
We have always believed that the universe that we live in has a very unique way of returning back what we do for it. In our case, we have been marvellously blessed and greatly privileged to get all the top global recognition.
You always say that a business that makes nothing but money is a poor business. Please explain.
A business has more implications on the society and environment in which it functions. Its not only the philanthropic activities which matter but activities like “Go Green” paves the way for a sustainable development and a better future for generations to come. We just take from nature and nature has its unique way of giving it back.
Your joint venture with Metalube has garnered positive response from the players of energy conservation domain. Are you considering more joint ventures in international market?
Due to our top global recognition and appreciation, a lot of international players are keen for association and proposals. We are in the process of evaluation of the same.
Rising prices of cotton, global meltdown and many other factors are hampering the textile sector. What are your suggestions for combating this problem?
This is a global issue, which is based on the basic principle of demand and supply. We should strive to implement more nature friendly techniques to produce more cotton. This will help our farmers sustain the price wave to a great extent and enable them to continuously invest in the cotton crop. If we have a strong stock position then we can dictate the prices and terms with giant economies like the USA and China, rather than dancing to their tunes.
Any new plans in near future?
Yes, we are very happy to share that we are in process of launching our own ZenitexFashions Clothing Line. This again will adhere to the principles of sustainability explained above and a substantial part of its profits will be dedicated to Community Service and Welfare.
Zenitex : leading from the front
Zenitex Private Limited, started at Sachin in Surat in 2003, is making many heads turn with envy as it bagged a host of state and national awards for conserving energy. Maintaining an annual growth rate of 20 per cent, this medium-level textile firm, which processes about 100,000 metres a day, posted a turnover of `10 crore in the 2011-12 fiscal, though it faced tough competition in the domestic as well as overseas markets, besides the overall global meltdown. With the expansion ball rolling, the company, which quietly diversified into the energy conservation domain, is currently striving to become a `100-crore brand by 2022.
Zenitex, which flagged off its business journey with a seed capital of `6 crore, always believes that ‘a business that makes nothing but money is a poor business. So, the company embarked on different routes to serve society through its corporate social responsibility (CSR) initiatives, which include rehabilitation of jobless diamond workers, spreading awareness during the World No-Tobacco Day, organising free cancer screening camps, observing the Pink Ribbon Day, conducting tree plantation programme and the like. Hence, the company’s CSR programme ‘Hearts@Work Foundation’ is receiving overwhelming applause globally.
Through ‘Go Green’, a novel CSR idea, Zenitex claims to have put an end to the pollution menace in Surat. It also invested heavily in employing energy conservation techniques that serve both its internal and external environments with integrity and efficiency. In the words of Viral Sudhirbhai Desai CEO of Zenitex Pvt. Ltd., “Sustainability is important to make sure that we have and will continue to have, the water, materials, and resources to protect human health and our environment. Everything that we need for our
survival and well-being depends, either directly or indirectly, on our natural environment. Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony that permits fulfilling the social, economic and other requirements of present and future generations.”
Mr. Viral Desai, a young & dynamic entrepreneur who holds a Masters degree in Economics & M B A in marketing is the Managing Director at Zenitex Pvt. Ltd. He currently is the Director of Sachin Processor Association & Sachin Infra Management Ltd. He has also been elected as the youngest director contesting for the first time in 2007. His description does not stop here. He has been quite active in various activities in helping the society as a whole. He is the Founder & Chairman of Hearts@Work Foundation which is quite active in various CSR activities.
Achievements and Accolades
The company has won three national awards so far, one for ‘Outstanding Entrepreneur (2010)’ and ‘National Energy Conservation Award (2011 and 2012)’ consecutively two times. In 2013, in the Vibrant Gujarat Summit, the company made a hat-trick by winning the ‘Best Industry Award (Quality & Environmental Protection) for the third time in a row. The Gujarat Government recently signed an
MoU with Zenitex and picked the company for Entrepreneurial Training of 600 ITI students. At present, the company has around 650 employees under its direct payroll. As the expansion gathers pace, the company plans to go on a hiring spree across India.
The emerging concept of Corporate Social Responsibility (CSR) goes beyond charity and requires the company to act beyond its legal obligations and to integrate social, environmental and ethical concerns into its business process. Zenitex believes in value-based and ethical business practices and integrates core values – such as honesty, trust respect and fairness – into its policies, practices and decision-making.
By Nilabh Krishna