FMCG: Fast-moving (and meandering?) consumer responsibility  

COMPANIES COVERED

Nestle | ITC | HUL | P&G | Dabur | Marico | Amul | Britannia | Mondelez | Agro Tech  

Aside from the technology sector, these companies are perceived to be the most active in this domain and it is time to separate the myth from the facts.

ITC
ITC has opted for the popular triple bottom line (economic, social and environmental) approach in its do-good mission, as part of its overarching ‘India First’ vision. The core principle guiding its CSR is that models to generate livelihood and environmental benefits through entrepreneurial creativity are far more scalable. The stated CSR policy rests on rural development schemes, women empowerment and skills training. Consequently, its three main focus areas are: social investments (or what one many call its standard CSR programmes), environment, health and safety (EHS), and promoting thought leadership in sustainability, which is its advocacy arm to build awareness in the industry about sustainability.

On CSR projects, communities local to their operational areas and long-term partners (such as small and marginal farmers) are given priority. Stakeholder identification is done through rigorous processes such as participatory rural appraisals (PRA) – last year 483 such appraisals were done in numerous villages, with separate PRAs conducted for women and SC/ST households. These periodic exercises help them prioritise projects and causes as well as understand the socio-economic dynamics in project areas. Benchmarking, goal-setting, and timelines have also been set for each desired outcome and objectives in all focus areas.

ITC’s social investments programmes (as it likes to call them) cumulatively come under the ambit of ‘Mission Sunehra Kal’. These are broadly classified into two distinct categories: the first is to strengthen and make sustainable existing sources of income through carefully designed interventions, while the other is to create capabilities for wealth and livelihood generation.

By far, ITC’s most well-known initiative is e-Choupal. (It was singlehandedly responsible for generating half of the course component in the country’s many b-schools.) Simply put, these internet kiosks provide access to small and marginal farmers in rural India to real-time weather and price information, and other services. More than 4 million farmers in over 35,000 villages, through 6,100 kiosks across 10 states, have benefited. The company’s other initiatives targeting rural and farming communities include afforestation, which has created over 112 million person-days of employment and a green cover of over 6 lakh acres; an integrated watershed development programme across 7 lakh acres, generating over 50 lakh person-days of employment; and improved agricultural practices that have reportedly impacted about 1.7 lakh farmers.

ITC’s women empowerment projects take the standard course of SHGs and micro credits with skills training to make them more empowered – about 10,200 were being supported until last year. Skills and vocation-based training is also provided to young people from rural areas, with specific focus on SC and STs (42 per cent of those trained belong to these groups). Interventions in education involve strengthening infrastructure in government schools, teacher training, and collaborations with education-based NGOs like Pratham. Until 2016, about 4.6 lakh children had been impacted and a little more than 1,300 government schools assisted. Overall, ITC’s many initiatives have led to the creation of over six million livelihoods”not an unimpressive number.

On the environment side, energy and water conservation, reduction of greenhouse gases (GHGs), and waste recycling are the focal point of its efforts. ITC is one of the few companies in the world that has been carbon, water and solid waste recycling-positive in the past decade. One of its more innovative project is the waste recycling programme, ‘WOW – Well Being Out of Waste’, which works with the public, schools and businesses to promote recycling and source segregation of waste. It is currently working with 400 municipal wards in southern India and has created sustainable livelihoods for an estimated 10,000 rag pickers and waste collectors. Much of the information on ITC’s CSR and sustainability programmes is available in its annual sustainability report, which is easily one of the more detailed ones among all FMCG companies in India. Exact numbers on CSR expenditure amounts to Rs 247.50 crore in 2015″16.

Monitoring of these programmes is done through a mix of internal and external processes. Internally, progress is measured through feedback received from participants and stakeholders (both formal and informal), quarterly reports, and regular audits, while annual third-party audits and external evaluation are done for projects that have been in motion for three to five years.

HUL
Hindustan Unilever (HUL) is one of the best-known FMCG companies in the country and, hence, kind of expected to take a lead on CSR as well. The company’s CSR principles emphasise ‘sustainable growth’ and engagement with various societal and business stakeholders. Its CSR initiatives can be broadly classified into education and livelihood generation, healthcare, and sustainability. Under the ambit of education and livelihood, the most famous one is Project Shakti – it trains and enables rural women to become entrepreneurs by selling HUL products (which they receive at a lower rate than market price) to consumers and retailers. Other projects are the Fair and Lovely Foundation and Rin Career Ready Academy – the former offers scholarships and career guidance to women and the latter gives basic English and etiquette training to young people from poorer backgrounds. Prabhat (Dawn) is another programme that works for the betterment of the communities around HUL’s factories. On healthcare, HUL’s in-house projects are Hand Washing Behaviour Change (in partnership with the Bihar government), Domex Toilet Academy (based on the SHG- MFI model), and Sanjivani, which promotes preventive healthcare.

However, it is sustainability that is the central focus for HUL. The sustainability living plan, launched in 2010, has three main goals: improving health and well-being, reducing environmental impact, and enhancing livelihoods – these are applicable globally across Unilever. Sustainable sourcing, water conservation, reduction in waste and GHG, and health interventions are all part of the mission to achieve these goals.

Progress is being made: reductions in carbon emissions, water usage and disposed waste have been 42, 48 and 92 per cent respectively; 200 billion litres of water conservation potential has been created; and 398 tea estates have been certified as sustainable. In terms of spend, 2 per cent of net profit, or Rs 9,212 lakh, was spent on CSR activities, with the highest amount going to Project Shakti and water conservation projects (HUL Foundation). As reported, Shakti has impacted nearly 118,000 people, Rin Career Academy has had more than 2 lakh participants, and Prabhat has had 138,000 beneficiaries. More than 70 billion litres of safe drinking water has been delivered, while Domex Toilet Academy has impacted 160,000 people – all of these are 2015 figures. One piece of information that stands out is the all-women factory at Haridwar, the same being a first for an Indian FMCG company. These are encouraging signs of growing diversity within the company.

P&G
While P&G’s products have found their way into almost every rich and semi-rich Indian’s house, the company has adopted the ‘Live, Learn and Thrive’ catchphrase for its worldwide causes, with the primary beneficiaries being disadvantaged children and youth. Accordingly, its flagship programme in India is Shiksha, launched in 2005. Through partnerships with multiple NGOs, the programme has helped 280,000 underprivileged children access their right to education and supported over 140 schools across the country. Linking product purchases to this scheme allows consumers to contribute directly towards the well-being of these children. The intervention areas are manifold – infrastructure building, supporting schools and government schemes, girl child education, facilitating education for differently abled children, etc. The company’s other large-scale initiative is rather unique in its focus area – called Parivartan, it provides timely menstrual education and protection to young girls, which is especially required in this country where any talk related to shedding of blood is commonplace unless it has to do with women’s biological functions. This programme also educates girls about not using unhygienic clothes for sanitary protection. To date, over 2 million girls annually across 15,000 schools in India have benefited.

On sustainability, the company has specific goals for both operations and products for the year 2020 (with 2010 as the base year), with clear targets for reductions in waste, packaging, truck transportation and increases in sustainable sourcing and renewable energy usages. In India, there have been some encouraging results such as the Baddi (Himachal Pradesh) plant achieving 40 per cent reduction in carbon footprint over the last three years and the Bhiwadi plant saving 13.3 million litres of water last year. However, with the last sustainability report being issued in 2011 (which was a global one), there is no data on the current status of these initiatives.

Dabur
Dabur India’s CSR policy elucidates the main areas where its ‘community development programmes’ are run: these are promoting sanitation and preventive healthcare, promoting biodiversity, and providing vocational skills training. Other causes taken up are education and women empowerment.

Promoting sanitation really means constructing toilets in 1,048 rural households (funded by sales of Sanifresh) in 2015″16 and meeting the nutrition needs of 5,000 children through distribution of juice packs, while healthcare is educating students and organising health camps (about 55,798 patients were examined at 386 such camps). Under environmental sustainability, it has taken up protection of endangered plant species and provided solar lamps to seven villages.

Dabur provided vocational training to 569 women in 2015; the Swavalamban programme is for training rural youth. The company works with small and marginal farmers and tribal communities, training them on cultivating rare herbs and on bee-keeping, in order to supplement their income. It has also taken up a water conservation project in Rajasthan. On education, it has partnered with Sundesh to run non-formal education centres for out-of-school underprivileged children and provide basic infrastructural assistance to schools. Through Sundesh, it also runs adult literacy centres for women in the age group of 15″35 years.

To evaluate the needs of the community before project implementation, need assessments and baseline surveys are carried out – for instance, before starting the sanitation programme, surveys were conducted in two villages in May 2014 which revealed that nearly 50 per cent of the households in these villages did not have household toilets. Community participation and long-term success were ensured by involving women from various households in the project and linking payments to the construction. Dabur India’s CSR head A Sudhakar explains this: ‘The success of any CSR initiative is ensured if the projects and programmes are implemented with a participatory approach involving the community, instead of as a charity.’ Annual targets are set for each project – the sanitation programme’s is to cover 1,200 new households for 2017″18. The project, which initially covered Uttar Pradesh, Uttarakhand and Himachal Pradesh, is now being extended to schools in Assam and Rajasthan.

On the sustainability front, hard data is conspicuous by its absence – some of the numbers available were: energy conservation measures resulted in an annual saving of approximately Rs 60 lakh in 2015″16; 100 per cent of herbal waste was recycled; raw water consumption decreased by 31 litres/MT of production; and CO2 emission reduced by 0.01 kg/MT of production. However, it is unclear what the absolute numbers are, whether benchmarking was done, and what the targets (if any) were. What we do know is that Rs 17.44 crore was spent on CSR as mandated by the 2013 Act. Small mercies.

Nestle
Nestle India has (wisely) limited its CSR focus areas to nutrition, water and sanitation, and rural development. On nutrition, the main impetus is through awareness and education on the importance of nutrition (the Healthy Kids programme is the main example), done in partnership with the Department of Home Science and Food Science, while with Magic Bus India Foundation it promotes healthier lifestyles through the ‘sports for development’ model. In total, it claims to have reached out to over 184,000 young children.

Project Jaagriti is being implemented in partnership with Mamta Health Institute for Mother and Child to provide education programmes for good nutrition and feeding practices for adolescents and caregivers. Last year, the project was extended to 15 districts in 7 states and 1 UT. The goal is to reach out to 3 million beneficiaries by the end of 2018. The company has also collaborated with Drishtee Foundation to set up health camps in villages in the Mathura region. Its ‘Swasth Janani Swasth Sishu’ project touches upon the key issue of breastfeeding and has reached out to some 100,000 people since 2014 in disseminating its message.

Similar awareness sessions are carried out for water conservation as well. The company has constructed clean drinking water facilities in schools around all of its factories – over 255 water projects have been taken up, benefitting over 126,000 students. Other projects include constructing toilets, water conservation in agriculture, training for street vendors, and awareness campaigns for educating the girl child as part of Mahindra’s Nanhi Kali programme. All of these initiatives roll into its ‘creating shared value’ ethos, adopted by the company in 2009 and articulated by Nestle’s Sanjay Khajuria, senior vice president, corporate affairs: ‘While fulfilling the promise of high quality and safe products and services, we recognise our responsibility of creating long-term value for both society and shareholders and also ensuring a healthier future.’

In the sustainability space, there have been concerted efforts to reduce water and energy consumption as well as waste water and CO2 generation. This has resulted in water and energy consumption per tonne of production falling by 72 per cent and 57 per cent respectively, and CO2 generation per tonne of production by 64 per cent from 1999 to 2014 (latest numbers are not available). As of the 2015 annual report, Rs 235 million was to be spent on CSR activities, with Rs 28.9 million slated to be spent in 2016 (as part of the 2015 expenditure). This was less than the mandated 2 per cent spend (Rs 332.9 million) since some of the activities didn’t qualify as ‘CSR’ as per the rules stated by the government. The company has pledged to achieve the required spend in 2016. For now, we are in wait-and-watch mode as the 2016 report is yet to be issued.

Below is the progress made for some of Nestle’s leading projects:

Amul (GCMMF)
Amul is easily one of the biggest FMCG companies in the country but information related to its CSR is sparse. Tribhuvandas Foundation, which is the integrated rural health and development programme of Amul, looks after the entire range of healthcare needs in the villages where Amul operates, including preventive healthcare. It is a need-based programme, for and run by the villagers themselves. It covers 700 villages and is one of Asia’s largest community healthcare service providers. Till March 2014, total population covered was 1,388,834.Amul is an active participant in the ministry of rural development’s Swarnajayanti Gram Swarozgar Yojana in Kheda district of Gujarat. This self-employment programme is designed to enable below-poverty-line (BPL) families to transition into sustainable livelihoods. Amul’s role here is to organise them into SHGs, help them in the selection of key activities, build their capacities through training, technology and marketing support, and create necessary infrastructure. Other activities undertaken are tree plantation, blood donation camps, dairy demonstration farm, scholarships for students from farmers’ families, and its rural sanitation programme with the explicit goal of ensuring that each and every dairy farmer follows basic hygiene practices.

Agro Tech
Agro Tech’s corporate citizenship principle is ‘Good for You, Good for the Community and Good for the Planet’, and its CSR is based on providing health and nutrition for children. Accordingly, the company has established a programme called Poshan, through which it collaborates with anganwadis and schools to introduce peanut butter (which is a source of protein) as part of the children’s diet. Each child gets approximately 32 gm of peanut butter in the daily diet, thereby providing 47.9 per cent RDA (recommended dietary allowance) of protein for children aged 1″3 years and 39.8 per cent for those who are 4″6 years old. Currently, there are 12,000 children under this programme across the country. Various case studies have shown that peanut butter has had great success in addressing malnutrition among children in some African countries. The results of Agro Tech’s programme in reducing malnutrition have not been disclosed though. In FY 2015, Rs 7.37 million, or 1.3 per cent of net profit, was spent on CSR.

Marico
Marico is one of the few FMCG companies to issue annual sustainability reports although it is far from being detailed or comprehensive. The major themes of its CSR and sustainability strategy are climate change, resource optimisation and corporate citizenship. On the first two, emphasis is on sustainable procurement, energy-efficient manufacturing relying on less waste and less carbon emissions, and green, ecofriendly buildings. For example, its agri-extension programme has helped over 63,000 farmers in five states, while it has also partnered with the Kerala government, Coconut Development Board and the Maharashtra government on various projects to train and assist farmers. On energy efficiency, over 9 lakh units of savings were achieved in FY 2016 – this is a 5.8 per cent improvement over the previous year.

The company works on education through the ‘Chote Kadam Pragati ke Aur’ programme that targets poor children in the age group of 6″18 years to improve retention in schools and in-class learning. About 2 lakh children had benefited till last year. Mobile Pathshala is another education-based initiative for young students in rural areas. On healthcare, Saffola World Heart Day is marked by awareness drives and checkup camps to educate the public on heart diseases and better health practices. Overall, the company spent Rs 10 crore on CSR in the last FY – this was slightly less than 2 per cent of its profit after tax (when it should be before). Honest mistake?

It is Marico Innovation Foundation (MIF) which finds the prime spot in the company’s CSR efforts. Started in 2003 by its chairman, Harsh Mariwala, the Foundation has four main initiatives: a scale-up programme, Innovation awards, Innowin and Hackathon. The MIF start-up programme works with established, innovative social organisations to tackle issues afflicting people at the bottom of the pyramid. Solutions are then designed in consultation with mentors and experts within the company and outside. Currently eight social enterprises are active, working across healthcare, education, livelihood, etc. The MIF awards are given to the ‘greatest innovations’ in social sectors, while Innowin (or India Innovates) is a video series that showcases people and organisations working on truly transformational initiatives. Hackathon is a fairly novel idea that takes ideas, practices or processes with the most potential to change communities and moulds them into viable solutions with maximum impact. The winners of the Hackathon sessions are given cash prizes.

Britannia
Strangely enough, there’s no CSR-related information on Britannia’s website. There’s also no clarity on what the CSR objectives are in its CSR policy document – one has to look through the annual report to get some semblance of information. The two main (and only) strands are preservation of the heritage building of Bai Jerbai Wadia Hospital for Children (BJWHC), which was established in 1929, and the Britannia Nutrition Foundation (BNF). The latter was set up in 2009 to promote and secure the health and nutrition needs of children from poor backgrounds. To achieve this, the company has entered into a partnership with the Maharashtra government to help build capacity and provide technological assistance to government entities in the Melghat region in Amravati district. Another approach is to work in the communities around its factories. In total, Rs 10.46 crore was spent on CSR – this amounts to 2 per cent of its net profit.

Mondelez
Mondelez India’s (better known for its Cadbury products) flagship CSR programme, Shubh Aarambh, has been structured to benefit children and their health needs, education of young people, and gender equality. Launched in 2014, the programme is primarily based around the company’s manufacturing operations in Tamil Nadu and Kerala and is currently active in 65 villages in 7 states. Shubh Aarambh’s main goal is to provide support for children’s nutrition needs, encourage healthy lifestyle through sports, and also educate them and the community at large on its importance. This it does through NGO partners like Save the Children, Magic Bus and AFPRO.

Other related initiatives are skill and livelihood training for the youth to make them employable. The target is to impact 200,000 beneficiaries across 7 states over the next few years”however, there’s no clarity on what ‘few’ means here. Greening projects – that is, providing safe drinking water, soil and water conservation, sanitation, etc. – have been taken up in Baddi, Induri and Malanpur. Mondelez International Foundation has also committed funding for three years (2014″17) in these three areas for active play, nutrition education and access to fresh foods. Out of the prescribed Rs 6 crore to be spent on CSR activities in 2015″16, about Rs 3.96 crore was actually utilised.

CB view
As easy as it is for companies to put up their (mandatory) CSR policies online, it seems equally hard for them to answer basic questions on how exactly those policies are implemented. Aside from ITC, Nestle, Dabur and Agro Tech, companies simply chose to ignore our basic queries on their CSR initiatives. In a few cases (hey, Britannia!), they did send back a generous email stating ‘they wouldn’t be able to participate’ – we weren’t aware that asking simple CSR-related questions was akin to giving them a last-minute notice to run a full marathon. With all the self-indulgent humblebrag on their own websites and annual reports, one would assume that some of that would have a basis in real work and hence enough to express and expound when media comes calling for information. Right now, all evidence points to the contrary.

Aside from ITC, Nestle, Dabur and Agro Tech, companies simply chose to ignore our basic queries on their CSR initiatives. In a few cases (hey, Britannia!), they did send back a generous email stating ‘they wouldn’t be able to participate’ – we weren’t aware that asking simple CSR-related questions was akin to giving them a last-minute notice to run a full marathon.

A few observations on the efforts of these companies – to the extent that information provided online is true, there seems to be enough and more going on in the sustainability space, with a broad commitment towards more ‘green’ practices. Reductions in carbon emissions and waste coupled with better usage of water and energy are the predominant themes of conservation initiatives. The issue, though, is that without explicit benchmarks, targets and timelines (as well as the rationale behind them), sustainability work tend to be more like sales pitches than sincere efforts. Percentage increase or decrease doesn’t mean much when you don’t know the underlying denominator or the aspiring goals. Also, companies of this size and scope need to come out with detailed annual sustainability reports. Right now, very few do.

The issue, though, is that without explicit benchmarks, targets and timelines (as well as the rationale behind them), sustainability work tend to be more like sales pitches than sincere efforts. Percentage increase or decrease doesn’t mean much when you don’t know the underlying denominator or the aspiring goals. Also, companies of this size and scope need to come out with detailed annual sustainability reports. Right now, very few do.

On the CSR front, there seems to be a concerted effort by most FMCG companies to champion every CSR cause there is – health, sanitation, nutrition, education, livelihood, women empowerment, you name it. However, as Dr Ashesh Ambasta, executive vice president and head” social investments, ITC Ltd, explains, ‘End-to-end solutions are required to address the full spectrum of needs of communities, rather than one-off interventions. Also, given the realities of the Indian social structure, it is essential that conflicts of interest between different classes/castes of farmers be anticipated and resolved before undertaking any programme.’

However, for most of the companies, the evidence seems to point towards a ragtag coalition of half-baked but well-intentioned ideas. To us, it looks like nobody in their CSR departments tried to come up with some sort of a screening process or even a skeletal, broad plan that actually played into their company’s core capabilities.

However, for most of the companies, the evidence seems to point towards a ragtag coalition of half-baked but well-intentioned ideas. To us, it looks like nobody in their CSR departments tried to come up with some sort of a screening process or even a skeletal, broad plan that actually played into their company’s core capabilities. While working with communities on their myriad problems is partly worth applauding, there is only so much long-term, meaningful change that can be brought about to so many deeply entrenched issues. Better to do one thing really well than multiple half-hearted attempts. And simply partnering with NGOs and giving them money to spend isn’t really CSR, is it? Companies would be wiser to not only identify which issues need their help but also grasp why they would be a good fit for that particular intervention. CSR is not benevolence; it is part of the social contract that these companies have with those same communities. They would do well to remember that.

Companies who had nothing to say

P&G, Amul, Asian Paints, Marico, Wipro, CavinKare, GSK, Mondelez:  Did not respond

Britannia:  Stated in an email that they would be unable to participate this time

Unilever: Asked us to send the questionnaire again but despite follow-ups, did not respond