The business world has been facing turmoils during the pandemic crisis in the world. According to The Guardian, the coronavirus pandemic gave the world economy the fastest and the deepest economic shock. Many businesses continue to work virtually, in other words, work-from-home. But, the value of the firm on the stock exchanges continues to bite the dust. A 50% drop on the stock exchanges around the world tags the pandemic crisis on the economy bigger than World War II and the Great Depression economic crisis.
As the world practices social distancing, the businesses and the Government should continue to accommodate social responsibility. Indian Prime Minister, Mr.Narendra Modi addressing the nation had rightly stated that if the country doesn’t shut down for 21 days, then India would lag behind for 21 years hence. Allocating Rs.15000 crores towards meeting the healthcare demands in the nation may or may not suffice. The MNCs and private business houses of India can lend a hand as a part of their Corporate Social Responsibility (CSR). The pandemic crisis may one day come to an end, but would the nation still be in a state to thrive in business and market?
Corporates: Social Responsibility during Social Distancing
The Indian government had initially levied its share of public expenditure of Rs.15000 crores towards meeting the pandemic crisis. Economically, all public expenditures come as part of fiscal policy measures. The public expenditure, thereby, helps the economy and society as a whole. The other important entity of the country is the corporate world. Both public and private companies can now incredibly work on CSR. The Schedule VII of The Companies (CSR) Rules 2014, under the Companies Act, 2013, prescribes for mandatory CSR activities by the companies with a net worth of Rs.500 crore or more, turnover of Rs.1000 crore or more, net profit of Rs.5 crore or more among other applicability guidelines. The companies currently standing in the above three categories may have at all times practised CSR, if abided by the rules of the Act. It becomes a need of the hour to honour the requirements of the world.
The provisions on financials earlier made towards the practice of Corporate Social Responsibility towards various social causes nationally and internationally can now see a division of a small amount towards the Social Responsibility for combating the world crisis. The social responsibility during social distancing would, in turn, benefit their human capital, and the society at large. From a business viewpoint, it becomes primary for the corporates to take care of their market. The Great Depression took three years to consistently pose a threat to world economies. Coronavirus has taken only three weeks to win over its predecessor.
It is not only the vulnerability of humans but also the business at this point. To immunize the businesses from the falling shares; measures have to be taken to pull the company against its competitor; the coronavirus. Fictionally, if Covid-19 was a company, then this competition has attracted the attention of human capital, driving them away from their desk jobs, and also achieved to constantly play the consumers’ mind. How would you tackle this competitor? What would your competitive advantage be? Otherwise, the business would go into analysis and research, a very relevant and known weakness of Covid-19 company is its lack of social responsibility. Perhaps, a socially responsible company would add to the competitive advantage against a socially irresponsible company, such as Covid-19.
Social enterprises, Non-profit organizations, and non-government organizations have partially or wholly taken up a fight against the Covid-19. But, a huge amount of financial resources are vested in the treasuries of the companies in the private sector mainly. The private sector could prove to be a boon during social distancing by practising voluntary social responsibility.
Corporate Social Responsibility comprises of:
- Responsible labour practises
- Philanthropic activities
- Economic responsibility
- Environmental protection
Responsible labour practices were the initial steps taken by companies in the wake of the pandemic. It is important for the essential services in the healthcare and agriculture sector for the survival of mankind. But, a few MNCs persistently push employees to come to work. A few organizations have provided paid leave for virus-infected people and constantly reminded human capital to work virtually practising social distancing. This act of effective labour practices by organizations partly fulfils CSR activities. Although, the next three CSR activities are yet to be fulfilled by global enterprises.
Monetary or kind contributions by the companies towards Covid-19 can add to their philanthropic CSR activities. The financials set aside per year for conducting CSR as per Companies Act, 2013 guidelines can be put to use. The economic responsibility is intertwined with combating the virus. The more prolonged and persistent the crisis is, the more severe the market gets. To pull back from depression will continue to haunt if the Government is not aided by the private sector. The environment is biodiversity which includes not only the world’s plantations but also animals. Narendra Modi in his address to the nation had specified how stray animals are helpless. The people who used to feed them by the stall, by the street, near the store, are all in quarantine. He urged people to feed them if they spot the stray animals. The poor and daily wage earners have impending thoughts about the coming months. Poor labourers are paid Rs.500 to leave the factory and go home. Their home, which is 900 km away, is being reached by a walk.
An awareness of human difficulties can be created by organizations through CSR activities. I have worked with CSR policies and it only stands to true to say that it is highly essential to contribute to society. It may come at a cost, but a better society is a better future for your company and economy at large.
- The CSR activities by major companies of India are as listed below IDFC Bank has hosted a special made on its website for CSR-COVID-19 saluting all front line warriors and also have enlisted multiple links to donate to government and non-government activities benefitting society. In 2014, IDFC Ltd was given the approval of setting up a new bank in the private sector by the Reserve Bank of India. Following this, the IDFC Limited divested its infrastructure finance assets and liabilities to a new entity – IDFC Bank. The bank was launched through this demerger from IDFC Limited in November 2015. IDFC Bank started operations on 19 October 2015. with 23 branches in Madhya Pradesh, Delhi, Mumbai, Hyderabad, Bengaluru, Pune, Chennai, Ahmedabad and Kolkata. 15 branches are in settlements with a population of less than 10,000.
- Muthoot had come up with a food drive activity for COVID-19. Muthoot Group is a conglomerate with headquarters in Kerala. Muthoot occupies itself majorly in the services of finance, technology, information technology, healthcare, media, power generation, plantations, infrastructure, tourism, precious metal, and hospitality. Muthoot Group operates in 29 states in India and has a presence in Nepal, Sri Lanka, US, UK and UAE. The company is named after Muthoot family of Kerala. The company was established by the founder, Muthoot Ninan Mathai in 1887 at Kozhencherry, it is a small town in the Kingdom of Travancore (Kerala). Muthoot was later succeeded by the son of Muthoot Ninan Mathai, M George Muthoot, and he had incorporated the finance division of Muthoot Group at the time when the Group was primarily engaged in grains and timber.
- National Thermal Power Corporation of India (NTPC) has contributed Rupees. 257.5 crores. NTPC is a public sector undertaking whose business is the generation of electricity and other activities that are associated with it. They primarily focus on state-owned power distribution companies and State electricity boards. Apart from the power generation activities that the company also undertakes consultancy, turnkey, which are in lieu of engineering, construction and project management, operations and power plant management. NTPC has also included themselves in coal mining and gas explorations.
- The Steel Authority of India (SAIL) had duly contributed Rupees. 30 crores. Steel Authority of India Limited (SAIL) is an Indian state-owned steel making company which is headquartered in New Delhi, India. SAIL is a public sector undertaking, which is owned and operated by the Government of India and has an annual turnover of INR 66,267 Crore (US$9.32 Billion) for the fiscal year 2018-19. SAIL was incorporated on 24 January 1974, SAIL currently has a large workforce of 69,808 employees as on 1 February 2020. Steel Authority of India (SAIL) has an annual production of 16.30 million metric tons and is duly the 20th largest steel producer in the world and the 3rd largest in India. In 2025, it is expected that the Hot Metal production capacity of SAIL will increase to reach a level of 50 million tonnes per annum. Steel Authority of India is currently headed by the chairman Sri Anil Kumar Chaudhary. The Steel Authority of India has five integrated steel plants which it owns and operates in Rourkela, Durgapur, Bhilai, Bokaro and Burnpur(Asansol) and three exclusive steel plants at Bhadravath, Durgapur, and Salem. SAIL also has the Ferro Alloy plant at Chandrapur to its name. SAIL is expected to reach new global heights and is in the process of massive expansion and modernization which included upgradations and construction of new facilities and also levies emphasis on green technology which is sustainable. According to a new survey conducted, SAIL is one of India’s fastest growing Public Sector Units. Besides, it has an R&D centre for Iron & Steel (RDCIS), centre for Engineering in Ranchi, Jharkhand.
- Vedanta group has contributed Rupees. 101 crores. The globally diversified company in metals and mining, Vedanta Resources Limited has its headquarters in London, United Kingdom. The company produces the largest non-ferrous metals and is the largest mining company in India. The mining operations are not only in the domestic territory but in foreign lands as well, that is; Zambia, Australia and oil and gas operations in three other countries. Vedanta Group’s other primary products also include Lead, Zinc, Silver, Iron Ore, Oil & Gas, Steel, Power and Aluminium. The Vedanta Group has also developed commercial power stations in India in Odisha (over 2,000 MegaWatts) and Punjab (over 1900 MegaWatts). The primary owners of the Vedanta Group are the family of Anil Agarwal. Vedanta Limited (formerly Sesa Goa / Sterlite) is one of the many Indian subsidiaries of Vedanta resources and operates iron ore mines in Goa. Vedanta was listed on the London Stock Exchange and was a constituent of the FTSE 250 Index until Chairman, Anil Agarwal’s offer to take the company private went unconditional in September 2018.
Many companies have listed their contributions to Covid-19 donations as CSR activity. On March 24, 2020, a circular on behalf of Ministry of Corporate Affairs entailed that company expenditure for coronavirus handling will thereby be listed as a CSR activity.
Like the human capital working from home, CSR can be practised from home by the top-level decision-makers of the companies.
A few quick decisions by the decision-makers towards social responsibility during social distancing.