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Friday, December 6, 2013

CSR fostered-innovation can lead a change for the public good 12-07

CSR fostered-innovation can lead a change for the public good

Besides improving the image of the chemical industry, chemical companies can nurture efficiency and innovations - which can benefit the society - by committing to CSR

Despite being a critical component of every industrial development, the chemical industry still faces widespread public mistrust. Hence, efforts are required to improve product and process safety, and increase stakeholder dialogue about industry’s considerable corporate social responsibility (CSR) efforts to help remove the negative perception.

But, experts believe that CSR initiatives provide benefits beyond just improving the image of the industry/company. To have profound effect on the society, chemical manufacturers are ingraining CSR culture in their business operations. Ruby Thapar, Director Public and Government Affairs, Dow Chemical International Pvt Ltd, said, “To my mind, improving the image of the industry/company through CSR is the last goal that a responsible corporate should set for itself. CSR should be embedded in the business strategy of the company, for it to make a meaningful contribution. Once rooted in the company culture, it gets key management focus and involvement and thus fosters a culture of giving across the organisation.”

Thapar believes that being a responsible corporate citizen has many tangible benefits like promoting innovation, inculcating and encouraging employee volunteerism, building relationships in the communities in the places where you do business and of course contributing to sustainability.

Improving quality of life 
Impact of the chemical industry’s CSR initiatives can be gauged from the benefits it has provided to the society. Some of these have led to improvement in overall performance of the community. Excel Industries Ltd, which has manufacturing sites at Roha and Lote Parshuram in Maharashtra, has been active in making the villagers self-sufficient, self-employed and entrepreneurs through creating awareness, providing education, training and technical support. As a result of Excel Industries’ initiative, water storage at Virjoli (Roha) has increased from 40,000 m3 in 2008 to 98,000 m3 in 2012. Water is now available round the year. Similarly, there has been a rise in milk production and paddy production has increased from 2000 kg/acre to 2650 kg/acre as a result of efforts taken by Excel Industries.
 
Dow India's Ruby Thapar
Improving the quality of life and fostering sustainable and integrated development in the communities where it operates is central to Tata Chemicals' corporate philosophy. In order to nurture this objective, Tata Chemicals Limited (TCL) has set up the Tata Chemicals Society for Rural Development (TCSRD) in 1980 to help change the lives of hundreds of people that live around TCL factories across the globe which has catalysed and successfully created an organisational environment in which stakeholder engagement can be mainstreamed.
 
Sanjay Choudhary, Chief Sustainability and Technology Officer, Tata Chemicals Ltd, said, “TCSRD has focused on natural resource management through clear policy of ‘avoid, reduce and reuse’ with a strong emphasis on resource optimisation, conservation of bio-diversity. TCSRD is on track to achieve its goal of impacting the lives of a million people by 2015.”
 
Enhancing efficiency
's K Jayaraman
Most of the economic benefits from CSR activities come from the domains of operations and regulatory risk minimisation. “Within operations, a focus on responsible practices can yield process improvements that reduce costs and boost the bottom line. This is true for environmental practices,” opined K Jayaraman, Executive Director - Operations Consulting, PwC Pvt Ltd.
 
For example, BP’s adoption of a greenhouse emissions cap and corporate emissions trading system both reduced emissions significantly and yielded a $600 million increase in net income by improving operational efficiency. He added, “Such uncontroversial forms of CSR should be adopted by any company seeking operational improvements, as these can uncover sources of value creation that executives might otherwise miss.”
 


Some chemical companies are exploring alternate routes to the same product or minimising solvent consumptions which avoids environmental load as well as reducing cost.  “So we see more and more companies moving away from ‘charity based CSR’ towards ‘CSR which also helps in sustainable profits’,” opined Jayaraman.
 
Dr Joerg Strassburger, Managing Director and Country Representative, LANXESS India, added, “As an international specialty chemicals group, we bear a major responsibility toward people and the environment. We strongly believe in our approach - What’s good for business is good for society, which means, growth and success of a company is closely linked to the future of the customers, communities and environment.”
 
Fosters innovations 
Tata Chemicals Ltd's Sanjay Choudhary
Chemical manufacturers can enjoy savings by incorporating CSR measures to reduce energy and resource usage. However, the most important benefit comes from innovations. Companies believe that integrating CSR into business practices fosters innovative ideas and practices leading to improved competitiveness. Dr Strassburger said, “Companies should utilise their know-how and experience, to develop sustainable products and technologies, which not only fosters innovation but also help improve the quality of life of the people and support communities in their upliftment.”

Chemical industry is in better position to utilise their chemistry knowledge for the betterment of the society. For example, RCF has constructed a building for the Govandi Police Station in Mumbai using its eco-friendly rapid wall panels.
 
Dow India’s Thapar believes that integrating CSR into the core competency of the company, in terms of products, solutions and technology, definitely fosters innovation and out of the box thinking and discoveries. For example, one of Dow India’s core CSR principals is to fund sustainable projects where Dow technology can be used. One of its marquee CSR projects, the Jaipur foot, which is based on the Solutionism approach and reflects Dow’s core policies, has been helping thousands of people walk.
 
Lanxess India's Dr Joerg Strassburger
The Jaipur Foot was originally a handmade artificial limb made of vulcanised rubber and manufacturing required hours of tedious manual work. “In 2006, Dow India partnered with the NGO Bhagwan Mahaveer Viklang Sahayata (BMVSS) - a vehicle interiors manufacturer - and the Indian Space Research Organisation (ISRO) to develop the next generation prosthetic foot called the polyurethane (PU) foot,” explained Thapar.
 
While costs have reduced by 25%, the new foot is more durable and 20% lighter. It allows the user greater mobility, increased comfort and flexibility. The speed of production has been increased almost eight times. Thapar said, “In 2012 alone, more than 4000 amputees were helped directly through Dow India’s support. More than 700 Dow India employees have volunteered to run the camps since 2006.”
 
One thing is clear that chemical industry can leverage the symbiotic relationship between innovation and sustainability to drive growth and contribute positively to society.