Corporate Social Responsibility of Private Companies in Natural Disasters


1.1. THE ABC of CSR:

History is the sole witness to the phenomenon of shift in priorities in Business. There was a sudden lateral shift, wherein the focus drastically shifted from profit maximization to welfare of the society. This in terms of various management Gurus was the era of ‘Corporate Social Responsibility.’ CSR can be defined as ‘bringing corporate behaviour up to a level where it is congruent with the prevailing social norms, values, and expectations of performance.’

By Indian Companies Act, 1956, Section(3) (1) a company means a company registered under companies act, like any juristic person company is a legal entity. By this act it acquires a legal status muta mutandis to that of a person, one who is capable of having his own Rights and duties. CSR is nothing but a way to accomplish the fundamental duties prescribed in the constitution of India which a normal legal person is suppose to follow.

According to Berle ‘Company’ is not merely a legal institution rather a device for attainment of socio economic end. In layman’s term Corporate Social Responsibility (CSR) is an obligation rather a mandate that a corporation needs to abide to in order to maintain a perfect equilibrium between the 3Ps i.e. Profit maximization, people’s right, and the planet. Nothing in this world comes for free, CSR is the opportunity cost that the company has to pay in order to exist in this society.

Archie B. Carrol (1979) defines social responsibility as a four step scale. He feels the company apart from economic and legal responsibilities also has ethical responsibilities. Several scholars tried to develop an integrated model to define the perfect structure of CSR, however no one has successfully propounded one.

Modern business organisation is nothing but a hub of socially conscious people who constantly make an effort to align their profitable opportunities and ventures with their social industries and values intact. CSR provides a skeleton of boundary for free market to operate in a responsible manner. It is an undisputed fact that the legal framework of India has empowered the companies to the heights of zenith, but one must never forget with great power comes great responsibility.

To conclude this section, It may be noted that CSR is not a modern discovery and certainly not a discovery that can be accredited to the economically developed nations around the globe. Altogether CSR has travelled a long way, from the lines of philanthropy to a legal mandate; it has incorporated several changes in itself. Hopefully the noble concept of CSR doesn’t disappear midst the urban blight.

1.2. CSR and Natural Disasters: A brief idea

There has been a rapid growth in the facet of CSR for disaster management and combating techniques. India has been customarily susceptible disasters on account of its unique geographical dimension. In view of India’s high vulnerability profile, the recurrent phenomena of a range of geophysical as well as hydro-meteorological hazards impact millions across the country leaving behind a trail of heavy loss of lives, property and livelihoods. Many Areas tend to lose their development gains due to these draconian events. The economic and social losses caused by natural disasters continue to scale year after year as disasters occur with unswerving regularity encircling every possible segment of the nation including the industrial and corporate sector.

Comprehensive risk management activities is an inalienable part of Corporate Social Responsibility. Corporate Sector in order to comply with this obligation has started exploring its precious mine of knowledge in order to obtain paradigms to avoid disasters. The Research and Development team of several companies have actively tried to adopt measures which would mitigate the risk of the disasters. In addition to this, the corporate sector can be a precious source of technical knowledge, as for example in the case of identification and research on technological solutions to prepare for and respond to natural disasters. On the whole, corporate sector has the prospective for fortification of its own safety and protection against natural cataclysm as well as in assisting the community in reducing its vulnerability to the disasters.


2.1. Brief Idea:

Despite of all the debates in the society it is an undisputed fact that Business houses can prove to be of immense significance in disaster management. After all the root of proper business development lies in the well-being of the society. A disaster doesn’t spare any strata of the society. When a disaster strikes, the first thoughts those race to all our mind is the – what is government doing? Where are the NGO? Where are the social support organisations? Business houses take a backseat and come to mind only as a source for fund raising. Unlike what we think and believe There is a lot more to Disaster Management (DM) than just providing monetary support. Many of the business needs like “Proactive support” is applicable in the areas of disaster management also. While government has responsibilities on one side the business also has equal responsibilities if not more to the society in such situations of dire needs. After all the business happens only due to existence of such societies and business needs shoulder its share of responsibilities.

Can business houses contribute more to disaster management that just provide money? Can there be a better proactive role that business houses in India can play in such disaster management situations? A vaccine is nothing but a proactive measure taken to avoid possible damage due to onset of a disease (when disease itself cannot be stopped). This is precisely what each business is trained for and focuses to do – to avoid future pitfalls and protect itself against future uncertainties.

2.2. The Indian Perspective And Role of Companies:

The companies in India have closely weaved philanthropy in their business schedule and most importantly, they never tried shying away from the moral and ethical obligation they have as responsible part of the country. ‘N’ number of example can be quoted from our day to day life where such mega mammoths have come up for help, times when they were needed the most. Gandhi described large business as ‘trusts’ of the ‘wealth of the people’ and thus emphasized on the larger social purpose that industrial wealth should serve in India. Following the same ideology a number of companies have taken the front seat and tried mitigating risk at large. The Companies that have taken a lead are:

• The Birla Group: Birlas have opened the Aditya Birla Centre for Community Initiatives and Rural Development with focus areas of sustainable livelihoods and environmental sustainability. Specific projects include developing and building capacity through Self-help groups, SGSY – dairy, readymade garments, jute project, basket making, aggarbatti (incense sticks) making, bee keeping, durries making, check dam, irrigation, land development, Soil and water conservation, Pasture development, Social forestry/ plantation activities/ nursery, Horticulture, Farmer training etc. The foundation also stresses on infrastructure development by focusing on creation and maintenance of Roads, Dams, Community centers, water channels and culverts.

• The Bajaj Group: JBGVS, a Registered Society and a Trust, is an apolitical and secular organisation which aims to act as a catalyst for rural and urban development. It assists the resident community of the selected villages and areas, in integrated development, making their villages and areas into models of excellence for others to emulate. JBGVS works with the participating rural community in the selected villages to improve their quality of life. Stress is laid on alleviation of poverty, health care, education, empowerment of women & gender justice. JBGVS relies on a participatory approach in implementing all its projects and also that of the local elected bodies like the Gram Panchayat (village council), Co-operative Societies, Self Help Groups, Women and Youth Clubs in decision making. JBGVS works at the grassroots level in 33 villages and hamlets of Khed and Maval Talukas of Pune District and 11 villages of Aurangabad district, Maharashtra. The integrated development activities under implementation include women empowerment, income generation, health programmes, agricultural extension, animal husbandry, watershed development, drinking water schemes, sanitation and education. 5600 families comprising a rural population of about 30,000 people are co-partners in these development activities. An HIV/AIDS Awareness, Prevention and Care Programme called ‘Project JEEVAN’ was launched in September 2004, with the aim of generating awareness about HIV/AIDS, thereby, arrest further spread of disease and help those affected to lead a comfortable life. It covers 33 villages in Pune District and slums of Pimpri Chinchwad Municipal Corporation (PCMC) area.

JBGVS has been implementing Drought Prone Area Development Project of Zilla Parishad in 7 villages of Pune District since 2003. The overall project cost is Rs.2.10 crores and it includes watershed development work over 3,500 ha. 22 farm ponds, 3 diversion bunds, 4 soil nala bunds and 3 cement check dams have been constructed till April 2008. The activities carried out under this programme helps increase water table in non irrigated area, wells and thereby increase crop yield.

• The Reliance Group: The Reliance Rural Development Trust (RRDT) works to improve the rural infrastructure under the Government of Gujarat’s rural development plans. RRDT created 760 facilities in the rural areas at a cost of Rs. 24.07 crore. The facilities included 247 concrete roads, 465 anganwadis, 38 drinking water facilities, 1 panchayat office, 2 community halls, 5 check-dams and 2 other amenities in the rural areas of the State of Gujarat. RRDT has turned out to be an exemplary corporate NGO implementing government’s developmental plans for rural areas of Gujarat. It is a unique synergy between a corporate giant like Reliance Industries Limited and the Government of Gujarat, formed to carry out rural development projects in private public partnership.

• The TATA Group: The Tata Group instituted the Tata Council for Community Initiatives (TCCI) to work out a comprehensive plan for its social and community initiatives. TCCI acts as a facilitator for the entire group’s social initiatives. It is the umbrella agency that guides and supports Tata Group companies with their community development initiatives. Reinforcing the implicit beliefs the Group brings to its mission of sustainable development with an explicit set of structures, TCCI has a charter that embraces social development, environmental management, biodiversity restoration and employee volunteering. The Tata culture in this critical segment of the overall corporate sustainability matrix – inclusive of working for the benefit of the communities in which they operate, of building India’s capabilities in science and technology, of supporting art and sport – springs from an ingrained sense of giving back to society. In collaboration with the United Nations Development Programme (India), TCCI has crafted the Tata Index for Sustainable Human Development, a pioneering effort aimed at directing, measuring and enhancing the community work that Group enterprises undertake. The Index provides guidelines for Tata companies looking to fulfil their social responsibilities, and is built around the Tata Business Excellence Model (TBEM), an open-ended framework that drives business excellence in Tata companies.

• Infosys: Infosys Foundation has made significant contributions in disaster relief and rehabilitation. It has worked in the tsunami-affected areas of Tamil Nadu and the Andaman Islands, earthquake-affected areas of Kutch, cyclone-devastated areas of Orissa, tribal areas of Kalahandi in Orissa and drought-hit areas of Andhra Pradesh. After the Indian Ocean Tsunami, the Foundation helped victims in Tamil Nadu and the Andamans at various stages.

• The Oil & Natural Gas Corporation (ONGC): The corporation organizes health and community welfare programs in the neighbourhood. Major emphasis has been given for promotion of education, health and community development and in times of natural calamities such as floods, cyclones, earthquakes, landslides, etc. Priority is given to areas around the projects with the following themes:

Education, Promotion of literacy and higher education, Grant of scholarship & assistance to deserving young pupils of weaker sections of society, Facilities for constructing schools, renovation of school buildings, other infrastructure, Healthcare & Family Welfare, Medical camps, Mobile dispensaries, Supplementing the efforts of already existing health centers in the rural areas, Health care for women, children and disabled.

• ICICI Bank Ltd: Its work is focused on four distinct areas:

Sustainable development: To provide the poorest of India’s households access to technology and services that improve livelihoods while conserving natural resources and protecting ecosystems.

Climate change:To promote investments, policies and research that reduce the impact of harmful climate change, improve India’s ability to adapt to climate change and explore linkages between poverty and climate impacting behaviours

Responsible Investment:To encourage policy makers, financial institutions, corporations and individuals to incorporate long term thinking on environmental impacts into investment decisions and to measure quality in green investments.

Accountability:To engage in research and policy advocacy to improve environmental governance and encourage accountability for environmental degradation.

Apart from these there are several others who have effectively tried evolving ways to mitigate disasters and their effects. Others that follow closely behind are Mahindra and Mahindra, Eicher, DCM Shriram etc. A glimpse of such an unending list gives us a feeling that we do reside in a nation where not only people but also the corporations keep their schedule in line with philanthropy and ethics.


Companies should concentrate on disaster mitigation, i.e., minimizing the potential risks by developing disaster early warning strategies, preparing and implementing developmental plans to provide resilience to such disasters, mobilizing resources including communication and tele-medicinal services, helping rehabilitation and post-disaster reduction.

There are three main ways in which corporate sector contributes to the process of disaster risk reduction:

• Corporate Social Responsibility (CSR) in supporting relief, rehabilitation and risk reduction activities;

• Redefining the business continuity plan to factor in hazards, risks and vulnerabilities;

• New business opportunities created in disaster reduction due to the increase in emphasis on risk reduction.

In many countries, big business houses have their own non-profit organizations which run range of social projects on education, health, community development and entrepreneurship development etc which reduce disasters in the long run. Smaller business houses mainly contribute to projects run by NGOs. Government can create an enabling environment for greater corporate sector investment in disaster risk reduction activities through innovative partnership.

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