November 25, 2016
OneWorld South Asia: How have CSR activities been redefined after the new Companies Act, 2013?
Naveen Soni: The Act is in good spirit but the sense of responsibility should come from within. It is the responsibility of corporates to give back to the community in exchange for all the benefits accrued from the society.
But the stipulated CSR activities under the law make the exercise stereotyped, in a way. It makes me visit each section, sub-section and check whether all the things that I want to do for the society fits under the scope of law or not.
The new Act serves as a reference mark for us to see if we are doing anything which is outside the scope of law from the point of view of compliance. There is a certain process through which we have to mandate a new project, update information on our website about it for people.
Another striking thing about the mandatory two per cent expenditure is that people feel a right over that amount. However, the main problem is that the law does not mention as to where we need to spend that two per cent.
OWSA: What inspires you to engage with CSR activities at Toyota?
Soni: The law says that if the company is in profit then only it is obligated to spend 2% of its income. But it was never the law that compelled us.
Since 1999, when TKM was formed, we took it up as our responsibility to give back to the society regardless of whether we made profits or not.
We have continued with our CSR commitment including environment, education, road safety, skill development and traffic safety.
Till date, we have 42 institutes all over India and a college which we own in Bangalore where all the things related to the above issues are being taught.
OWSA: How can a corporate entity strike a balance between profit making and its social responsibilities?
Soni: It has been our mission to serve the communities with sustainable projects. One thing we need to understand very carefully is that there is a big difference between a corporate and an NGO.
For corporate entities to progress it is not possible for them to incline towards one aspect at the cost of other. Because if profits will not be there, there can be no social initiatives.
OWSA: How do you rate Indian businesses for their social endeavours?
Soni: India is a big country with a number of organisations. It is not easy to measure the company’s progress in relation to the world. There is a range of companies which take their responsibility towards the society seriously along with those who are just doing it because of the law.
Thus, it is very difficult to say whether India is ahead of the world or behind it. Toyota, with its presence in 140 countries, has self imposed regulations like zero per cent discharge wherein no chemical is to be discharged untreated into the environment.
Kaizen is our benchmark to improve our performance, with our own last standards. But real difference can be made only when key stakeholders like the corporates, society, government and the NGOs work together.
OWSA: What is the importance of corporate citizenship?
Soni: Whenever a customer deals with you, they deal with two aspects. One is a very rational aspect, that is, if a customer gives you 100 rupees, are you able to give him the value for that money or not?
It is also about the emotional-connect. This emotional connect establishes between the customers and the company when they feel that this company is aware of its social responsibility.
For example, we took up the work of building toilets in the schools of some cities for girls, and it is in no way connected to the business interest of Toyota’s car selling business. This disconnect helps the consumers to feel, that yes, they are committed towards social responsibility and they want the country to prosper.
OWSA: How can CSR activities strengthen the country’s efforts in realising certain Sustainable Development Goals (SDGs)?
Soni: The CSR projects should look at making a sustainable difference to society. The idea is to move forward with an eye in the larger interest of SDGs.