Backward Integration – Is it really CSR?

Dear All,

Over a million hectare of Tribal lands are in virtual occupation of ITC in Andhra Pradesh, Telangana and elsewhere. They are doing this under CSR ? This backward integration is part of business and is being pushed under the carpet of CSR. Is this fair? Morally? Ethically?Legally?

I got laughter bursting as I read the following in their Web Site. How cunning it is? This fraud upon our Constitution, on our Adivasi communities is an open secret.

Here’s how ITC’s social outreach programme works

The biggest reason for ITC’s CSR success is the way almost all the major sustainability initiatives have been wedded to the company’s core business, either providing an input source for a business or backward integration. As a result, divisional chief executives and their teams lead each of the initiatives, making them something more than just another CSR programme.

For instance, the famed e-Choupal initiative led by the agri-business division is a major sourcing base for the company’s packaged food and FMCG business, while its social forestry programme supports the paper and paperboard business. ITC has, in the last few years, undertaken massive animal husbandry initiatives covering ten lakh milch animals which will form the base for the proposed foray into the dairy business early next year.

There’s more to ITC’s CSR initiatives than these backward linkages. In the last few years, the company has spent considerable money on developing renewable energy infrastructure. And now, renewable energy meets almost 38% of ITC’s total energy requirements which is indeed remarkable considering the huge manufacturing base and hotels. The target is to increase this to 50% over the next five years. All the premium luxury hotels are certified green buildings making ITC the greenest luxury hotel chain in the world.

ITC has consciously chosen the path less travelled. A path that has led it to create sustainable livelihoods for 5 million people. For ITC this is an expression of a commitment beyond the market. Of a conviction that country must come before corporation. Of a true pride in being Citizen First.

What is ‘Corporate Citizenship’
Corporate citizenship is the extent to which businesses are socially responsible for meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim is for businesses to create higher standards of living and quality of life in the communities in which they operate, while still preserving profitability for stakeholders.

BREAKING DOWN ‘Corporate Citizenship’
As demand for socially responsible corporations increases, investors, consumers and employees are now more willing to use their individual power to punish companies that do not share their values. For example, investors who find out about a company’s negative corporate citizenship practices could boycott its products or services, refuse to invest in its stock or speak out against that company among family and friends.

V.B.Chandrasekaran,
Chatti Mahatma Gandhi Aashramam,
Chatti Post, Chinthur Mandal,
Khammam District, Andhra Pradesh,
Pin Code: 507129.