In a cutthroat business environment, when the going is tough, demands are seeing a slump, and sales across product segments are sagging, it is a rarity to see the chief executive officer of a company talking about the significance of their social investments, implementing new strategies for corporate social responsibility.
When Team CauseBecause met Kazutada Kobayashi, president and CEO, Canon India, last October, they had a few apprehensions, not the least being that the talk might divert from ‘social’ investments to product innovations as the company had just launched a few new products, had forayed into the surveillance-gear market, and was probably revisiting its marketing strategy. The team was expecting the chief to follow the guidelines given to his PR team and focus more on the brand positioning and less on the company’s social responsibility programmes.
However, within a few minutes of the formal introductions, Kobayashi, with his unflinching Japanese politeness, undid all our apprehensions as he expressed his own belief in ‘giving back’ and underlined the fact that India needed a larger corporate involvement to address many social and environmental challenges. He also shared personal views and experiences on leading the social responsibility agenda at Canon India.
Kobayashi San, as he is popularly addressed by his colleagues, said that Canon’s investments toward social programmes were not dependent on the rise and fall in their books – these investments were treated as a ‘necessary’ expense. During our conversation, Kobayashi also approved of CauseBecause’s proposition on setting benchmarks to measure the impact of their programmes. He agreed that Canon should focus on the holistic development of communities and showed interest in partnering with likeminded organisations for a larger impact.
Here’s an abstract from the conversation.
CauseBecause (CB): In the last few years, several international brands have rewritten their corporate social responsibility policy in India, primarily to bring it in sync with the new CSR law. Some even had to discontinue their social projects as they would not qualify as CSR programmes anymore. Did Canon India also make any changes in its policy, etc.?
Kazutada Kobayashi (KK): No, not a single change has been made since the new CSR law was enacted in 2013. Our corporate philosophy of kyosei, which means living and working together for the common good, is about 36 years old and this has remained the same for all the countries that we operate in. Of course, for materialising this philosophy in several different countries, we have had to take different approaches. That said, the focus everywhere is the development of communities – which is the larger objective of the CSR law as well.
So, we are assuming that there has always been a separate budget for CSR. Has there been a change in that with the law coming in?
There has been no change in that either as we have always been spending more than the mandated two per cent of our profits. In fact, the company’s mandate on CSR is not linked to profit. It is rather a commitment that the company has to keep regardless of it being in profits or not – we shall continue to invest in social projects for as long as we can.
I will be honest here that since 2012–13 the Indian rupee has depreciated a lot and our profits have been radically hit… actually we did not make any profit. So, the two per cent of the profit is nothing (chuckles), but yes, we decided to go ahead with all our social initiatives and in fact even launched some new CSR programmes.
As for this two per cent law, our global mandate as well as the intent is to spend a lot more than what is stated in the law.
Do you believe that CSR may also be used as a channel to promote your brand, maybe as a vehicle to promote products and increase sales potential…
Not directly. The promotional activities can neither be confused with CSR activities, nor should any sales purpose be infused in the CSR programme. So when we are donating our devices for a cause, be it the eye-testing machines or the printing devices, we are not getting into the promotions of those products as that is not the objective at all. Yes, the gesture of donating the device, understanding the community’s issues and engaging with them as representatives of Canon, automatically builds a positive image for the corporate brand. Individuals relate to your brand, and believe it to be a ‘responsible’ corporate brand. This brand building, winning the trust of communities, does help the company in the long run.
There have been instances wherein the very existence of companies has been questioned as their processes depleted a lot of natural resources while manufacturing products that weren’t really ‘needed’. Fingers have been pointed at some beverage brands as they were held responsible for water depletion, at gas-guzzling vehicles for pollution, and so on. On the other hand, there are companies that innovate their products to do their bit towards addressing global issues including climate change… Does Canon innovate its products keeping in mind the challenges faced by the world?
Interesting thought there. This issue is at the core of Canon’s research and development. While ideating products, one of the most important elements that is taken care of is energy conservation. All our devices are so designed as to consume minimal energy when in use; many have been programmed to go into auto-cut or auto-stop when not in use. As for the printing devices, apart from energy management, they are embedded with smart technology that can help users keep a count of the paper printed or to put a tab on the number of prints.
The printed literature that is shared with devices also propagates environment conservation. We advise users to be conscious and conserve power and natural resources. This is the practice that we follow globally.
Is there a product that is specifically developed to address a social challenge and also integrates with your social responsibility? For example, Nokia Networks recently launched a ‘network in the box’ device that can retain the mobile signal in case the main network falls in, say, a natural disaster. Companies are also innovating with water-filtration devices, alternate energy sources, medicine… Is Canon trying something along those lines?
While all our products do have a commercial purpose as we are a business entity, some of the products for eye care are quite innovative and are helping ophthalmologists in easy and early diagnosis. For instance, the Canon Retinal Camera is a device that is used to measure crystallisation in the eye. In a country like India, where ultraviolet beams are quite strong and many children are vulnerable to serious eye ailments, the device can have a significant role to play. Early diagnosis can help in prevention of the problem, which may otherwise even cause blindness.
As eye care is also one of our ‘causes’ under our CSR, we have donated several retinal cameras to organisations and these are being used optimally. The device is also used for regular eye check-up camps at the villages that we have adopted.
In any case, Canon is not known merely for the products it makes; it is a global brand respected for its corporate practices. Social responsibility is in the company’s DNA, if I may say so, and this is reflected by the respect that the brand gets from the communities it operates in as well as the loyalty of employees.
‘Village adoption’ is a term that has become quite common in CSR reports of corporate groups. How much engagement do you have with the community?What all activities do you do in the villages that you have adopted?
I understand that there are two ways of implementing CSR in this country. One is through external assistance – we have partnered many organisations that are actively engaged with village communities, for various initiatives focused on education, skill development, healthcare, etc. The other way in which we engage is through employee volunteering, which I personally encourage the staff to do. We engage with communities to share knowledge on everyday happenings, to make them aware of the significance of the environment. We also do plantation drives and cleanliness drives; we have talks on health and hygiene. Sometimes we also engage in sports and organise cricket and kabaddi tournaments together with the village community.
Most of the villages that we have adopted are near our branches so that employees can go there easily, which they do and sometimes even take their families along. At times, employees make personal donations for needy individuals in the adopted villages.
Clearly a lot is happening. If you have to define the change that you will see or wish to see in all the adopted villages, maybe five years from now, what will that be? Have you set some benchmarks to measure the impact of your interventions?
That is a good question. It’s making me think. I am still seeking the criteria that will help us in understanding the ‘change’ that you have mentioned. We do make hypotheses before implementation of any project, but real impact measurement is yet to start. You rightly said that we need to get a few benchmarks in place, and we will consider this as a suggestion to be seriously thought about. The point is noted. We have to measure it and have to have a targeted approach.
One of our CSR programmes was targeted at increasing the attendance of girl children at schools and we were providing sanitary facilities to girls in order to achieve that. I believe that that the project is a success, though we are yet to measure the scale of the success and understand how many girls have actually started going to school after the programme. Also, I agree that such projects have to be of a longer duration, maybe at least five years, to make a stronger impact.
Are you open to joining hands with another corporate in order to implement a larger social project focused on the same set of beneficiaries? For instance, while one company could be taking care of the education of children of one community, another company could be helping in skill development of women in the same community…
That makes so much sense. That is how corporate social responsibility investment will make a great impact. We are open to be a part of a programme wherein we can add value and likewise will welcome another company to our adopted villages if they can add value to the community as part of their CSR.