Global chemical firms focus on India to promote TfS for sustainable supply chains

Many Indian companies with large international exposure are showing their willingness to join Together for Sustainability (TfS) - a global initiative aimed at chemical suppliers

Sustainability image via Shutterstock

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With global chemical companies making ambitious growth plans, they are also taking steps to increase efficiency and improve productivity with minimum carbon footprint. For this, they are ensuring that sustainable processes are adopted not just within their production facilities but also beyond their factory boundaries. These chemical firms are increasingly taking steps, individually or in groups, to augment sustainability in their supply chains. 

One such initiative is Together for Sustainability (TfS), established in 2011 by six global chemical companies to create benchmarks for sustainable supply chains. TfS has developed and implemented a global program to assess, audit and improve sustainability practices within the supply chains of the chemical industry. 

The initiative is increasingly gaining traction among the chemical industry as TfS membership has more than tripled in the last five years to 19, with companies such as AkzoNobel, Arkema, BASF, Bayer, Clariant, Covestro, Evonik, Henkel, Lanxess, Solvay, etc, as its members. 

TfS has established a standard approach for assessing and improving the sustainability performance of suppliers within chemical industry supply chains. Its assessments and audits are conducted to a pre-defined set of criteria and then shared across TfS members, improving efficiency for all involved. The TfS members currently share approximately 5,500 assessments and 580 audits.

India on a sustainability path

At the recently concluded India Chem 2016 conference, Union Minister for Chemicals & Fertilizers Ananth Kumar stated that the Indian chemical industry is expected to grow at 9 percent annually to become a $ 226 billion sector by 2020 from present $ 147 billion, driven by growth in end-use industries and government initiatives. As India gears up to corner large pie of the global chemical industry market, it will have to align its manufacturing processes to international standards in terms of quality as well as sustainability quotient. 

Indian companies having large international exposure are increasingly showing their willingness to join TfS. “We have already started to implement our supplier engagement program in India. Approximately 300 suppliers have been assessed and 28 sites of Indian suppliers have been audited. We currently have more than 25 approved auditors in India that can conduct TfS audits,” said a TfS official. Due to the importance of the Indian market and supplier base, the TfS members have chosen Mumbai as location for this year’s TfS supplier conference, to be held on September 20, 2016.

With global companies looking at alternative avenues to source their raw materials, India, with its diversified manufacturing base that produces a wide range of products, has the potential to emerge as their reliable supplier. As a result, TfS members are also looking to promote this initiative among their Indian suppliers. 

“TfS aligns well with our goal of responsibly procuring goods and services, along with partnering with supplier companies to standardise various processes and services. We are a part of the Indian chemical industry, which is setting global benchmarks when it comes to sustainability. Asustainable supply chain therefore becomes imperative to the process. We are pleased to partner with Tfs globally and in India, to develop and implement a program to assess, audit and improve supplier sustainability practices,” said Biju Mathew, head - procurement, BASF South Asia.

Through TfS resources can be used more efficiently and with a minimum of administrative effort, among the member companies and their suppliers. This helps in better collaboration between member companies and their suppliers. “Our combined efforts help in providing standardised sustainability assessments and audit data of suppliers, while adhering to all compliance requirements; thus simplifying vendor review process. This leads to enhanced collaboration between member companies as well as suppliers, at an international level and will play an important role in developing a stronger future for the chemical industry,” added Mathew.

The suppliers’ perspective

Through TfS, the member companies have invested in developing a global program to conduct audits and assessment under pre-defined criteria on management, environment, health & safety, labour & human rights, and governance issues for their suppliers. TfS offers single platform to assess supplier credibility for sustainable procurement, thus avoiding double audits and assessments for suppliers opting for this process. It also helps suppliers to engage with customers on sustainability requirements and build long-term business relationships with customers.

“Sustainability of business is must for all stake holders which is essential for business growth in global scenario. To become a preferred supplier Vinati Organics Limited understood the significance of  TfS,” said Jayesh Ashar, chief operating officer, Vinati Organics Ltd (VOL), which has opted for TfS audit. 

VOL, a specialty chemicals producer with presence in over 22 countries, is one of the highest rated suppliers for TfS. This has helped the company to immensely enhance its exports business and to be among the top suppliers to the world’s leading chemical companies. 

“Our sustainability program is an overarching framework that supports our long-term business strategy and drives continual improvement. Sustainability is our business, which is reflected in our approach and structure. Clients, suppliers, communities and employees are part of our value chain. Engagement strengthens our understanding of stakeholder priorities. We place extraordinary focus on health and safety in everything we do, guiding principles and values drive our sustainability performance. Auditors audited our performance on all these fronts & get satisfied,” commented a VOL official. 

A windfall of opportunities awaits Indian chemical companies opting for TfS as this initiative becomes a standardised platform for suppliers. This will also help them to be a part of the process of building sustainable supply chains throughout the global chemical industry.

Business needs and social good are in synergy

September 12, 2016

IANS

By Sajid Ahmed

You want to help. Your heart is in the right place. You come with a pedigree. You are talented. You want to live with a spirit of generosity and integrity. Now what?

First, we must accept and concede that the technology to feed, cure, educate, transport and sustain 1.3 billion Indians does not exist yet. We cannot declare victory on a social cause. All we can hope for is to keep shifting the equilibrium through a series of small upgrades.

The pivotal challenge is to decide on the best ways to accomplish these upgrades — access to food, water, healthcare, safety, dignity and freedom. Where do we look for solutions? So far, we have found hope in the energy and enthusiasm of non-governmental organisations (NGOs), gracious government programmes, generous philanthropists, and other noble social outfits. Their abundant generosity has seen a consistent rise paralleling India’s economic growth. This has not translated into the results we hoped for, at least not at the pace we expected.

Whether you are an individual or an established social organisation, a corporate management approach to charity can help organise and simplify the process.

India is home to the largest number of registered NGOs. The heroic efforts of the government’s various projects like village outreach and childhood education initiatives are admirable. Social organisations are at the forefront of both social welfare and social reform. The altruism of our movie stars and cricketers eclipses their performances on the screen and the field. Yet, progress is neither proportionally fast nor sustainable because the cycle of fundraising has to be repeated periodically with unpredictable results, with no resources to scale. Scale is what business does best.

Many see business as the problem rather than a solution. Think of banking, the drug industry, the fast-food industry, the furniture industry or any other kind of manufacturing and you can see the justification for this attitude. Greed and exploitation mark most people’s perceptions of business operations — but that is a gross distortion of the role of business. It is true that profit motivates businesses to create resources. All wealth is created by business and only business can create, sustain and scale resources. It is this very repetition and scalability that moves the mass of humanity forward.

Donations, subsidies and exemptions can never be enough to solve extreme poverty. Moreover, it is disheartening that we tend to turn a blind eye towards the results after we receive our tax exemptions and accolades. Programmes like Corporate Social Responsibility (CSR), which urge businesses to give more and get more involved in social issues, have started yielding benefits in finite silos. For all its limitations, a business solution to social issues is the only self-sustaining one and by far the fastest one, considering that the cost of improving lives in India is startlingly low compared to other countries.

Far from being out of sync with each other, business needs and social good are in synergy. Lacking is the knowledge and awareness on ways to address social issues with a business model. Business owners must take the responsibility of good fortune and see themselves as agents of change and see philanthropy as the market for love and care. The most effective changes so far have come from partnerships between NGOs, governments and businesses to collaborate and share knowledge and techniques to scale.

The activist Dan Pallotta urges that in addition to businesses seeing themselves in a new light, the rest of us also need to look at non-profits differently, letting go of our many biases concerning their management.

Making money in the non-profit sector is uncomfortable for many. While we understand completely the need to make money in the for-profit sector, we treat the pursuits of doing well for oneself and doing well for the needy as mutually exclusive. Why is that?

Another bias is our stringent intolerance of operational costs and overheads in the use of our charity money. Advertising and marketing are as important in the non-profit sector as in the for-profit sector; yet our attitude becomes tight-fisted when we hear of money spent on promoting non-profits. How else will a non-profit raise awareness and donations?

Overhead costs have long been cursed for taking a percentage away from actual charity, but there is no distinction between the two. When we stop looking at overheads and start looking at impact, we realise that overheads allow charities to scale. Without overheads, charities would only have the seed capital collected from donations. Fundraising is an overhead and it allows charities to multiply seed capital.

Lastly, innovation in the non-profit sector is curbed because failure can put your character into question. Prohibiting failure kills innovation. An encouragement to take risks can generate new revenue ideas just like in the for-profit sector.

Our ability to solve social ills has not kept pace with our ability to create them. We need business leadership to step up in finding a cause and to support it consistently, because sustainable funding is a problem for all non-profits. As with any new venture, a savvy investment is one that yields maximum impact. Corporations can encourage accountability by requesting annual reports from the charities they support — and then measure effectiveness and impact, giving priority to numbers.

Corporations will have to take the entrepreneurial risk to fuse business and social issues. We need leaders who understand the new reality, and are audacious enough to break the mould of traditional thinking, to use the scientific method to test new ideas for social change and, above all, to use reason and empathy.

Miserly India Inc.: 66% companies don't spend compulsory amount on CSR

CATCH TEAM| First published: 7 September 2016, 20:34 IST

File photo

Ever since the Companies Act came into effect in 2013, two-thirds of Indian companies have failed to comply with the mandatory 2% expenditure on Corporate Social Responsibility (CSR). This includes 32 of 50 NIFTY companies.

This information was revealed on Wednesday in a report titled "CSR in India, 2016", by Praxis India and Corporate Responsibility Watch at New Delhi. The report also exposes the low representation of women in corporates, which is mandated under Companies Act, 2013.

Here are some interesting findings from the report:

Rs

6,500-10,000 crore

• Estimated amount of CSR expenditure by the top 100 listed companies in 2015, according to the Indian Institute of Corporate Affairs.
• When the Companies Act came into effect, it was estimated that Rs 15,000 to Rs 25,000 crore would be spent.
• The Ministry of Corporate Affairs sent a show cause notices to more than 100 companies for not meeting expenditure standards.

1

• Only one company out of 100 analysed in the report involved communities in designing CSR projects.
• Only 17 of the 100 companies carried a 'need assessment' for CSR projects.
• Only 22 companies have options of independent assessment of projects by external audit agencies.

2

• Only two of 98 Indian companies had more than 30% representation of women in 2014-15.
• The Companies Act, 2013, also mandated that there should be representation of women in the board of directors of a company. The deadline was October 2014, and was later extended to April 2015.
• However, despite two deadlines and threats of fines, 247 out of 1,451 companies did not comply.

How is CSR Law driving the Corporates towards Shared Value Approach?

AMIT KAPOOR0AUG 31, 2016, 01.09 PM

During the last three decades, there has been significant changes globally regarding advancement of technology, globalization of markets, globalization of production, and growth of enterprises. Despite all these so-called achievements, the gap between developed and other economies is widening. The gap between wealthy and poor is growing. The environmental degradation is becoming a bigger challenge for the future generations. 

However, the majority of the countries address these challenges by relying on voluntary actions of the large corporates as well as populist measures by the government. There have been little efforts to collaborate and strategize the action plan for these issues or setup the outcome driven metrics for performance assessment as to what has been achieved, what not, and why? 
The launch of global initiatives like MDGs followed by SDGs however signifies a gradual recognition and acceptance of the social and environmental inequalities. The governments and corporates have started talking about collaborative actions, strategic CSR, metrics and assessment as a way forward. 

India has mandated Corporate Social Responsibility (CSR) activity for the corporates by introducing the CSR law on 1 Apr 2014. The first objective of CSR law is to raise the consciousness and motivation among the corporates to undertake social and environmental action as the core of the business model rather than a fringe activity. This is needed to achieve significant impact at the grassroots level. The second objective is to encourage the social and environmental impact measurement and reporting. During 2014 Independence Day, The Prime Minister of India, Sh. Narendra Modi put emphasis on "walk together, we move together, we think together, we resolve together, and together we take this country forward." 

The new CSR law mandates long-term orientation of social and environmental initiatives having better accountability and responsibility by the corporates. To be precise, there is an attempt to make a shift from pure capitalism towards a socially responsive mode of capitalism. This implies enabling a change in focus from checkbook charity based model to socially responsible, engaged and embedded business model where companies invest their time, capital and manpower on the long-term basis for sustainable social and environmental interventions. 

India, as a country represents a land of extremes and contrasts. One aspect of India highlights the country as a modernizing economy, which is dynamically becoming a force for social innovation. India is known as one of the largest emerging economies having a population of more than 1.25 billion. This represents 1/6th of the world's people. The majority of this population lies at Base of the Pyramid (BoP). India is also one of the fastest growing economies having an average GDP growth rate of around 7% (2011-15). According to UN Report, India has the world's largest youth population of 356 million (10-24 years old). Another contrasting aspect of India involves low rating on Human Development Index (HDI) and Social Progress Index (SPI) calculated by UNDP and Social Progress Imperative respectively. HDI 2015 ranks India at 130 among 180 nations while SPI 2015 ranks India at 101 among 133 countries. HDI ranks the countries on the basis of three dimensions - to lead a long and healthy life, ability to acquire knowledge, and ability to achieve a decent standard of living. SPI measures the social progress of a nation on the basis of three dimensions - basic human needs, foundation of well-being, and opportunity. The majority of the population in India lives in the rural areas; lacks access to the formal market ecosystem for the fulfilment of their basic needs and transacts in an informal economy. Around two-third of the population in India earns less than $2/day (USD 1990 PPP level) and lives and transacts in an informal economy. 

Traditionally, large Indian corporates have contributed to social and environmental issues by undertaking convenience based philanthropic initiatives at random, which are not necessarily integrated into the core of the business. However, this approach has created a limited impact on the society and environment. The basic needs and challenges faced by the underserved segment in India require systemic solutions, which are scalable, replicable, integrated and sustainable over a long term. These solutions need to have top management buy-in and involve continuous monitoring with proper impact assessment and evaluation. The companies need to integrate the social and environmental focus areas into the core of their business model, something which had been missing from the social and environmental initiatives of the majority of the companies before the introduction of CSR law. 

There exist many examples in India where social and ecological focus areas are getting integrated into the core business model of the company. In FMCG, companies like HLL have engaged the rural women as "Shakti Ammas" for selling its products in the villages. This is a shift from the traditional wholesaler-to-retailer distribution and delivery model. The rural women get trained in the sale of daily use products like soaps, detergents etc. door-to-door. At one end, this leads to last-mile channels for creating awareness and delivery thereby generating volumes. At another end, this creates viable income opportunities for rural women. In agriculture, companies like Mother Dairy have brought together the marginal farmers and milk producers to bring their products like fruits, vegetables, and milk to the market. The marginal farmers get transparent pricing for their products being sold to Mother Dairy besides getting market exposure, training and consultancy on improving the quality of their offerings. In Telecom, Airtel has launched "Apna Choupal", a voice-based value added service for delivering information on day-to-day activities like agriculture, job, education, weather and health to the customers in rural and semi-urban areas. In inter-state bus transport, redBus has created a multi-sided technology platform, which provides a real-time interface between the unorganized small bus operators and bus travellers regarding seat availability and booking. redBus has eliminated the information asymmetry between bus operators and inter-state bus passengers thereby reducing the high bargaining power of travel agents. The small bus operators no longer depend on travel agents for selling their seat inventory. The bus passengers no longer depend on travel agents for booking their tickets. Then, there are other companies likeMahindra group, which have created a digital platform - "Spark the Rise" to stimulate social innovation by crowd-sourcing the best ideas from the individuals and groups related to energy, technology, agriculture and rural development issues. 

What acts as a differentiator in the above examples is the willingness of the companies to view the social and environmental issues from the same angle as the need for economic growth and financial performance. That implies getting CEO and top leadership on board to be a part of social and environmental initiatives, integrating the social and ecological focus areas into the core of the business as well as ensuring that appropriate social and environmental impact metrics are identified, assessed and reported to all the stakeholders in a similar manner as financial performance. 

However, to enable large scale adoption of shared value philosophy and compliance with CSR law, there is a need for systemic focus and concerted efforts of the government, consulting organizations and other social institutions towards awareness building and behavior change orientation among the corporates. Creating Shared Value is indeed a strategic approach for the corporates, who are aiming to make a sustainable social and environmental contribution to the needs of the underserved segment after the introduction of the new CSR law in India. 

The artcle has been authored by Sandeep Goyal (CEO, Shared Value Initiative India) and Amit Kapoor (Honorary Chairman of Institute for Competitiveness, India; President & CEO, India Council on Competitiveness)

Government May Engage Expertise Of India Inc Under CSR commitments.

For instance, a company like Hindustan Unilever could assign some of its brightest marketing minds to a women’s self-help group or Larsen & Toubro could send engineers to help with a village water conservation project.

Skilled technicians, water experts, marketing managers and engineers will support government schemes as part of companies’ CSR commitment to address the shortage of skills in many flagship public programmes.

The rural development ministry has sent a proposal along these lines to the corporate affairs ministry, the nodal ministry for CSR, for its consideration. The monetised value of the manpower provided by a company will be considered toward its CSR contribution of 2% of profit as mandated under the Companies Act.

“We have adequate programme funds. We do not want that. We want good professionals,” said rural development secretary Amarjeet Sinha.

The ministry wants to engage private sector professionals in four key areas — value chain development; marketing; water conservation, solid, liquid waste management; and the Saansad Adarsh Gram Yojana.

Sinha cited the example of women maize growers in Khagariya, Bihar, who got together to trade their produce on the NCDEX with some expert help. That led to a 20% increase in the income, he said.
The government wants rural selfhelp groups to be helped with setting up value chains and marketing of products. This can help them gain access to emerging market segments such as organic products or widen their reach in existing ones such as handicraft items.

Once the programme is firmed up, the rural development ministry will float tenders to get the private sector involved.

“We have built a lot of social capital in villages and now to use it to create economic activity, we want to get companies, retailers to partner us,” Sinha said.

Under CSR norms, companies with a net worth of more than Rs 500 crore or revenue of over Rs 1,000 crore or a net profit of over Rs 5 crore need to spend 2% of their three-year average annual net profit on CSR activities in each financial year. The government is also looking for know how in building watershed and water conservation facilities in villages based on specific needs and limitations of soil and weather among other factors.

The waste management programme, which gets funds from the Mahatma Gandhi National Rural Employment Guarantee Scheme, would benefit from skilled professionals. Experts said the corporate sector needs to be incentivised to take part in skilling activities in rural areas.

“There is a lack of good mentoring in rural areas not talent,” said Ashok Pamidi, senior director, Nasscom. “Companies should be extended CSR benefits for sponsoring incubation centres, for instance… If such projects have to scale up, industry has to be involved.” Companies could “pitch in with human element” in villages covered by the Saansad Adarsh Gram Yojana, Sinha said.

Under the scheme, members of parliament are responsible for developing the socio-economic and physical infrastructure of one Adarsh Gram (model village) by 2016, two more by 2019 and one in each of the following five years.

(The Economic Times)

CSR Liveweek 2016...CSR for Social Good & its Impact at World Trade Centre, Cuff Parade. Mumbai on 30-31 Aug 2016

NGOs getting over Rs 1 cr as govt grant brought under Lokpal

The new rules will apply to the NGOs, Limited Liability Partnership firms or any such group partly or wholly financed by the central government.

PTI| Wednesday, June 22, 2016 - 07:52

In order to keep a check on the funding of NGOs, organisations receiving more than Rs one crore as government grant and donations above Rs 10 lakh from abroad have been brought under the ambit of the Lokpal.

Under the new rules, office bearers of such NGOs will be treated as "public servants" and charged under the anti-corruption law in case of irregularities, official sources said in New Delhi on Tuesday.

The Home Ministry has been made the "competent authority" to take action against executives of foreign-funded NGOs in case they are found misutilising overseas grants, they said.

Any person who is or has been a director, manager, secretary or any other officer of a society, association of persons or trust (whether registered under any law for the time being in force or not), wholly or partly financed by the government, and the annual income of which exceeds Rs one crore will be under the Lokpal ambit, as per the new rules issued by the Department of Personnel and Training.

The move comes close on the heels of the government cancelling licences of two NGOs -- Lawyers Collective and Sabrang Trust--recently for allegedly misutilising funds received from overseas.

The new rules will apply to the NGOs, Limited Liability Partnership firms or any such group partly or wholly financed by the central government.

Any of the top executives of the NGOs are supposed to file annual returns relating to receipt of donations from a foreign source "till such time the entire amount of the donation aforesaid, received by such society or association of persons or trust stands fully utilised", it said.

In case of NGOs receiving government grants here, the Minister-in-charge of a department of ministry giving the highest amount of aid to any such organisation will act as the competent authority to decide on action in the event of violations by them.