CORPORATE SOCIAL RESPONSIBILITY

Background and illustrative examples, sanitation

DECEMBER 2015

The Sanitation Technology Platform

Please Note: This report is a good faith effort by RTI International to accurately represent information available via secondary and
primary sources at the time of the information capture. The report is confidential and proprietary and only for internal uses and not for
publication or public disclosure.
TABLE OF CONTENTS Task Objectives

Key Findings

Company Profiles: Domestic

Company Profiles: Foreign

A Case Study: Swarna Tollway Pvt. Limited

Recommendations
TABLE OF CONTENTS Task Objectives

Key Findings

Company Profiles: Domestic

Company Profiles: Foreign

A Case Study: Swarna Tollway Pvt. Limited

Recommendations
 TASK OBJECTIVES

For partners, STeP has evaluated the CSR funds as a

possible source of funding longer term.
In India, Corporate Social Responsibility(CSR) has a Outlined within we have:
long tradition. However, under the recent
Companies Act, 2013, any company having a net • Introduced CSR in India.
worth of rupees 500+ crore, a turnover of rupees • Summarized the 2% rule and the requirements
1,000+ crore, or a net profit of rupees 5+ crore for its allocation.
should mandatorily spend at least 2% of last 3
years average net profits on CSR activities. This, and • Presented company profiles of firms publicly
support for sanitation by Prime Minister Modi’s highlighting their CSR initiatives in sanitation,
Swachh Bharat Mission (SBM) are driving new including, when available the target
investments into social welfare and sanitation beneficiaries, number of units, and investments
projects. to date (with projections when possible).
For partners, STeP has undertaken a review of • Built an illustrative case study uncovered through
corporate social responsibility (CSR)-based other research activities managed by STeP.
philanthropic funding landscape as it relates to
sanitation in India. STeP has sought to identify
opportunities for partners to leverage the growth in
CSR initiatives to support pilot and scaling
objectives. As part of this effort, STeP has
highlighted examples of private sector firms that
are funding sanitation-related efforts through their
CSR activities.

4
 KEY FINDINGS

CSR initiatives have a long history in India both by large

Indian and foreign multi national corporations with an
India presence.
Indian firms have a history of investing in the MNCs operating in India have also developed a
community. strong CSR presence.
Corporate Social Responsibility in India extends into Organizations such as Unilever and Nestle have
its early history. Initially considered charity, CSR was developed highly visible CSR efforts that support their
directed to supporting the poor and advancing social corporate presence, including Project Shakti and dairy
issues such as women’s empowerment. Today, CSR is farmer support programs, respectively. Additionally,
now understood and accepted as a corporate companies such as PepsiCo and Coca-Cola, both of
responsibility within India and supports a broad array which rely heavily on India’s water infrastructure, have
of activities and projects. invested in serious efforts to improve access to water
and sanitation in rural areas.
Tata Group is world renowned for integrating social
responsibility into its corporate DNA. In fact, it is
estimated that Tata Sons Ltd. uses 8%-14% of annual
net profits for social causes. (1)

In a free enterprise, the community is not just another stakeholder in

business but is in fact the very purpose of its existence.
-Jamsetji Nusserwanji, Founder, Tata Group (1)

Source: (1) Srivastava, et al. (2012) IOSR Journal of Business and Management, 3(5), p. 17-27.
5
http://soulace.in/blog/evolution-of-csr-in-india/
 KEY FINDINGS

In 2013, the passage of the Companies Act dramatically

shifted the landscape of CSR in India.
Overview of the 2013 Companies Act
The Indian Parliament passed the Companies Act of Net profits of Rs 5 crore or more during any financial
2013, which featured provisions specific to CSR. The year will require a company to form a CSR Committee,
Corporate Social Responsibility Clause has a which will serve to formulate and recommend a policy.
compulsory CSR obligation of 2% net profits on Indian This policy must be publicly displayed each year on
companies and companies operating in India that have the companies website. The CSR Committee is
a net worth of $80 million, a turnover of at least $160 responsible to disclose the yearly CSR expenditure and
million, or net profits of at least $50 million. The act report publicly if the 2% of net profits quota has not
officially went into effect April 1, 2014. been met.

An estimated $3 billion of capital will be generated annually through the

money spent by 16,000 companies on CSR. (1)

Source: (1) http://www.csrwire.com/blog/posts/1290-the-birth-of-a-new-ecosystem-india-s-mandatory-csr-rule-becomes-a-reality . Accessed 11/11/2015.

6
http://gtw3.grantthornton.in/assets/Companies_Act-CSR.pdfsearch activities.
 KEY FINDINGS

In addition to monetary contribution, the Act outlines

other requirements firms must meet.
Fulfilling the Requirements
To fulfill requirements, a business must spend on CSR A CSR policy must be established that details which
activities no less than 2% of its average net profit for activities will be undertaken by the company and what
its preceding three financial years. budget will be spent on them.
A CSR Committee must be formed and senior-level Companies are encouraged to spend resources on
staff must be engaged. areas where they operate, but not on activities that are
part of their normal course of business nor on projects
Mandatory disclosure of all CSR initiatives are that only benefit their employees.
required, including details of all CSR initiatives in the
company’s annual report posted to their website.

Companies are required to disclose CSR spending in their annual

sustainability reports, which they are required to post online.

Annual report Annual report; Annual report

by division

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 KEY FINDINGS

The Companies Act designates preferred investment

areas and permits the support of third-party
implementers.
Spending Restrictions Administration of CSR Projects
The new act encourages spending in the following Companies can meet CSR obligations by allowing
areas: third-party institutions to complete their activities. The
third party, such as a trust, foundation, or NGO, must
• promoting public health have an established record of at least 3 years of CSR
• ending hunger and poverty initiatives.

• supporting education
• addressing gender inequality
• protecting the environment
• funding cultural initiatives and the arts
Additionally, companies are permitted to support
development projects initiated by the Prime Minister
such as the Swachh Bharat.

Companies can partner with NGO’s or donate

their CSR money directly to their efforts as well
as support government initiatives.

8
 KEY FINDINGS

Still in the early stages of deployment, many firms are not

meeting their legal CSR obligations.
Only 27% of eligible businesses spend greater Presently only 10 corporates are complying with
than or equal to 2% of net profit. these norms with a spending of 2% or more.
An additional 36% spend less than 1% of net profit Most corporates are not meeting with the proposed
and 37% spend in between 1% and 2% net profit. 2% CSR norm–the average CSR spend as a
The top activities these companies are spending on percentage of PAT for 74 companies is 1.02%. (2)
are on health and education, with little focus on
sanitation specifically. (1)

Sources (1) http://populationfoundation.in/wp-content/uploads/2015/09/Sanitation-and-CSR.pdf. Accessed 11/10/15

9
(2) http://www.csrwire.com/blog/posts/1485-evaluating-indias-top-companies-for-csr-2014. Accessed 11/11/2015.
 KEY FINDINGS

Many companies are reporting under the 2% mark but

have a total of 3 years to average out their CSR spending
to meet the goal.
Our Findings
We undertook a study of websites for five of India’s
largest non-state-owned firms to determine if they
had met their CSR reporting requirements:
1. Hindalco Industries
2. ICICI Bank
3. Bharti Airtel
4. Maruti Suzuki
5. Mangalor Refinery
Of the five semi-randomly selected companies, only
three reported their CSR efforts on their website per
This table represents the necessary reporting that must take the Companies Act requirement. Only Maruti Suzuki
place in a companies annual sustainability report in order to fully complied with the Companies Act requirements.
meet the Companies Act requirements.

Sources: http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification2_2014.pdf,
http://www.mrpl.co.in/sites/default/files/CSR/List%20of%20CSR%20actvities%20between%202008-2013_1444200336.pdf
http://www.marutisuzuki.com/annual-reports.aspx
http://www.airtel.in/sustainability-file/common/files/Sustainability_Report-FY_2012-13.pdf
10 http://www.hindalco.com/Sustainability/Corporate-Social-Responsibility
accessed 11/12/2015.
 KEY FINDINGS

Despite the slow ramp-up, there are signs that some

firms are choosing to invest their CSR efforts in sanitation-
related efforts.
CSR efforts have coincided with PM Modi’s
“Swachh Bharat” campaign.
Prime Minister Modi’s campaign calls for construction
of toilets for every household. The program aims to
make India “open defecation free” by 2019, which
requires every household to have a fly-proof toilet
with a septic disposal system. This does not require a
septic system or a decentralized wastewater disposal
system.
Many companies are continuing to build VIP pit
latrines to uphold the requirements of the campaign,
while not investing in effective wastewater disposal Examples of corporate groups investing their CSR in
infrastructure. building toilets for government schools, rural
communities, and individual households.

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 Task Objectives
TABLE OF CONTENTS

Key Findings

Company Profiles: Domestic • Tata Group

• Bharti Group
• L&T Enterprises
Company Profiles: Foreign • Vedanta
• Aditya Birla Group

A Case Study: Swarna Tollway Pvt. Limited

Recommendations
 COMPANY PROFILES – DOMESTIC: TATA CONSULTANCY GROUP

Tata Consultancy Group has consistently been a large spender

on toilets, even before the Companies Act was passed.
Company Profile
One of the largest software services companies, Tata Consultancy Services (TCS)
was the first to proclaim its commitment to financing hygienic sanitation facilities for
girls. The company has announced that it has pledged 18.5 million USD to build
toilets in about 10,000 schools. In the past, Tata group has constructed at least
2,000 toilets annually. Note that this effort comes from the group itself, not from a
separate Foundation.
Location: Greater India
Size: Toilets for 10,000 schools
Target Use Case: Girls’ toilets in public schools
We firmly believe that achieving the
mission of providing hygienic Investment: 18.5 Million USD
sanitation for girl students will have Implementing Partners: NGOs and consumer care companies
a tangible impact on the level of
Links: http://www.tata.com/article/inside/Trustee-to-the-community
education achievement and
development of India’s next https://www.tatapower.com/aboutus/pdf/csr-policy-14.pdf
generation.
-N. Chandrasekaran, TCS CEO & MD

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 COMPANY PROFILES – DOMESTIC: BHARTI FOUNDATION
Bharti Foundation’s 2014 “Satya Bharti Abhiyan” initiative was
aimed at providing toilets to rural villagers and separate toilet
facilities for girls in government schools.
Company Profile
Another Rs 100 crore commitment came from Bharti Foundation, the CSR arm of
Bharti Enterprises. In a media release, the Foundation said that over the next 3
years it would be constructing toilets for every rural household in Ludhiana District
lacking such facilities. In addition to rural household sanitation, Satya Bharti
Abhiyan will invest in improving sanitation facilities in government schools in rural
Ludhiana by building new toilets for girls.
Location: Ludhiana
Size: More than 5,000 household latrines and an undisclosed number of public
schools
It is our commitment that no single
Target Use Case: Public schools and household latrines in rural villages
household or school in rural
Ludhiana will be without a toilet by Investment: Up to 18 million USD
the end of this tenure. Implementing Partners:
-S. Mittal, Bharti Foundation Chairman Links:

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 COMPANY PROFILES – DOMESTIC: LARSEN & TOUBRO

L&T has pledged to leverage its strong presence in engineering,

infrastructure, and construction to build 5,000 toilets.
Company Profile
L&T Public Charitable Trust, the CSR arm of Larsen & Toubro group, has unveiled
plans to build 5,000 toilets. Group Executive Chairman AM Naik announced a
major CSR initiative that would add traction to the Swachh Bharat Abhiyan
program. The company’s statement said that the investments from L&T Public
Charitable Trust would cover water supply and distribution, sanitation facilities,
health care, and skills training.
Location: Greater India
Size: 5,000 toilets
Target Use Case: Household toilets
Objectives of L&T’s ongoing CSR
program were aligned to the Investment: 1.49% of net profit for CSR efforts
mission of Swachh Bharat Abhiyan. Links: http://thecsrjournal.in/lt-joins-swachh-bharat-brigade-pledges-5000-
-AM Naik, L&T CEO toilets/

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 COMPANY PROFILES – DOMESTIC: VEDANTA

Vedanta has partnered with the Rajastan government to

provide 20,000 households with new toilet facilities.
Company Profile
Vedanta Hindustan Zinc has joined with the Rajasthan government to construct
toilets for 20,000 households in Rajasthan. With a CSR fund of about Rs 25 crore,
the project will be completed in 3 years. The MOU states that Vedanta will
construct the toilets with two leach pits below to facilitate disposal of waste. One
leach pit would be opened at a time, which are estimated to be filled in 5 years.
The cost of each toilet is about $130 USD.
Location: Rajastan
Size: 20,000 toilets
Target Use Case: Household toilets
Vedanta’s “Maryadaa” campaign
joins the Prime Minister’s call for Investment: 5 million USD
Swachh Bharat. Special drive at Implementing Partners: Rajasthan Government
Vedanta premises, colony, and
Links: http://articles.economictimes.indiatimes.com/2014-08-
within community.
20/news/53028937_1_toilets-hzl-hindustan-zinc
- Anil Agrawal, Vedanta CEO
http://www.indiacsr.in/en/all-for-the-rural-women-of-rajasthan/

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 COMPANY PROFILES – DOMESTIC: ADITYA BIRLA

Aditya Birla spends a portion of its CSR on sanitation efforts

including building toilets for rural households.
Company Profile
The Aditya Birla Group plans to build 10,000 facilities this year.
Adani Group is headquartered in Gujarat and has an existing CSR project on
sanitation in Gujarat. These will now be extended to states where the group is
present such as Maharashtra, Punjab, Rajasthan, and Himachal Pradesh. It will also
will look at new states for this CSR project.
Location: Madhya Pradesh, Uttar Pradesh, Odisha, Tamil Nadu, and Gujarat
Size: 10,000 facilities
Target Use Case: Household toilets
We collaborate with the Investment: Rs. 250 crore annually
Government and construct dry Links: http://www.adityabirla.com/csr/overview
toilets in the surrounding villages.
This initiative is part of
Government’s Total Sanitation
Campaign, which is a
comprehensive program to ensure
sanitation facilities in rural areas
with a broader goal to eradicate
the practice of open defecation.
- Aditya Birla Group Sustainability Report

17
 KEY FINDINGS

To date, companies appear to be focused on building

toilet facilities at the household level and blocks of toilets
exclusively for women at schools.
CSR spent on sanitation has predominantly been aimed at facilities specifically for women.
The largest builders of toilets have all focused their The RMSA program is supported by the national
campaigns on building exclusive facilities for women government with 10.26 lakh of toilet facilities being
and girls in government schools. built with the help of corporate sponsors under CSR
This is in a large part because of Prime Minister Modi’s initiatives. This initiative specifies separate toilets for
SMB initiative and the Rashtriya Madhyamik Shiksha girls, which has influenced corporate investment in
Abhiyan (RMSA) program. building blocks exclusively for women at schools. (1)

18 Sources (1) http://www.indiacsr.in/en/govt-initiatives-to-provide-separate-toilets-for-girls-and-boys-in-all-government-schools/. Accessed 11/12/15

 Task Objectives
TABLE OF CONTENTS

Key Findings

Company Profiles: Domestic • PepsiCo

• Coca-Cola
• H&M
Company Profiles: Foreign • Unilever
• Siemens
A Case Study: Swarna Tollway Pvt. Limited

Recommendations
 COMPANY PROFILES – FOREIGN

In addition to the increase in water and sanitation by

Indian firms, MNCs have been investing in water and
sanitation initiatives worldwide.
A range of multi-national firms, including PepsiCo and
Coca-Cola have been investing and partnering with public
institutions on efforts varying in size and focus, but are
broad enough to include sanitation-related interventions.
Almost all involve a specific focus on improving access to
clean water and sanitation in rural areas. Most WSH
related investments have focused on Africa, with some
smaller projects being undertaking in Asia. Since 2001,
there have been more than 50 public private partnerships
in the water and sanitation sector in Africa alone, totaling
just over $3 billion USD in investment. (1)

Source: (1) https://ppp.worldbank.org/public-private-

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partnership/sites/ppp.worldbank.org/files/documents/africa_water_ppps_in_africa_en.pdf
 COMPANY PROFILES – FOREIGN: PEPSICO

PepsiCo Foundation has devoted millions to support water-

related causes.
Company Profile
PepsiCo issued an $8M grant commitment–the largest contribution by the
Foundation in its 50-year history–to Water.org to help provide access to safe
water and sanitation to 800,000 people by 2016. This grant specifically supports
WaterCredit, a market-driven model that will provide micro loans to families
throughout India. In addition to supporting Water.org, PepsiCo Foundation supports
other water and sanitation focused efforts through grants for up to $100,000.
Location: Asia and Africa
Size: 800,000 people
Target Use Case: Water and sanitation access
Investment: $8M in Water.org; up to $100k grants to other water and sanitation
programs
Links: watercredit.org

A Next Step: This $8M grant expires early next year. Budgets have
likely been developed to renew major grants. Consider reaching
out to Foundation program managers or VP Sue Norton to
discuss prospective partnerships going forward.

21
 COMPANY PROFILES – FOREIGN: COCA-COLA

Coca-Cola and USAID partnered to invest in 22 countries in

Africa to improve rural access to water & sanitation.
Company Profile
The Water and Development Alliance (WADA) is a partnership between the Coca-
Cola Company and USAID to address community water needs in developing
countries. WADA contributes to protecting and improving the sustainability of
watersheds, increasing access to water supply and sanitation services, and
enhancing productive uses of water. WADA will support the development of
infrastructure for clean water, sanitation and hygiene education for schools, clean
water kiosks for communities, and the installation of sanitation infrastructure in
schools and health clinics.
Location: 22 countries
This important public-private Size: 190,000 people with improved clean water or improved sanitation services
partnership builds on our Agency's by the end of 2015
new and first-ever Water and
Development Strategy to improve Target Use Case: Schools, communities
health and food security across the Investment: $28.1 million since 2005
world. Its programs represent the Links: http://www.getf.org/our-projects-partnerships/wada/
next generation of this vital
alliance--helping families lift
themselves out of poverty and
communities onto a path towards
sustainable development.
-Dr. Rajiv Shah USAID Administrator

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 COMPANY PROFILES – FOREIGN: H&M CONSCIOUS FOUNDATION

H&M Conscious Foundation has partnered with WaterAid to

supply toilet facilities to schools in five countries.
Company Profile
H & M Conscious Foundation has pledged that 250k students will have access to
clean water and toilets in school and have been educated in hygiene practices by
2017. National policies in five countries will have water, sanitation, and hygiene in
schools integrated into the educational policy supported with concrete plans and
resources for implementation. A large focus of the project is on supplying toilets to
girls at schools. When schools do not have toilets, girls miss school when their
periods start. And it is hard to find good teachers who want to work somewhere
without running water or toilets. Economic growth and gender equality suffer as
education is disrupted for whole generations of children, especially girls.
H&M Conscious Foundation is Location: India and Bangladesh
proud to work with WaterAid to Size: 250K students by 2017
help some of the world’s poorest
students gain access to life’s most Target Use Case: Schools, communities
basic needs: safe drinking water Investment: $9.3 million
and toilets. Links: http://www.wateraid.org/us/audience/corporate-partners/corporate-
-Helena Thybell partners/hm
H&M Conscious Foundation
Global HR

23
 COMPANY PROFILES – FOREIGN: UNILEVER

Unilever is creating entrepreneurial “Toilet Academies” in three

countries to train individuals to build toilets and teach sanitation.
Company Profile
Unilever’s leading toilet hygiene brand, Domestos, has started several sanitation-
focused initiatives designed to change behavior and help individuals gain access
to improved sanitation. The Unilever Foundation is supporting UNICEF’s Community
Approaches to Total Sanitation program, which will result in more than 600,000
people living in open defecation-free communities. With eKutir and the World
Toilet Organization, Domestos runs the Domestos Toilet Academy program, a
market-based model that teaches entrepreneurs how to start their own sanitation
business. In the next year, 24,000 toilets will be built, reaching approximately
120,000 people. Domestos also supports sanitation programs in schools, and
For every toilet built through the advocacy activities with the London School of Hygiene and Tropical Medicine,
program, five people will gain WaterAid, and WSSCC.
access to improved sanitation. As it Location: India and Vietnam
expands internationally, it will Size: Employ 120 entrepreneurs and produce 24,000 toilets by early 2015
significantly contribute to Unilever’s
ambition to help 1 billion people Target Use Case: Schools, communities
take action to improve their health Links: https://www.unilever.com/brands/brand-stories/domestos-rolls-out-its-
and well-being. toilet-academies.html
-Dr. Mendez
Director of Expertise and Authority
Unilever

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 COMPANY PROFILES – FOREIGN: SIEMENS

Siemens Stiftung has launched an appropriate technology scale-

up award for products created in emerging countries.
Company Profile
Siemens Stiftung runs a competition to look for innovative technological solutions or
products with business potential for basic supply problems in developing and
emerging countries. The “empowering people award” is addressed to any
individual, team, organization, or enterprise from any region in the world. The
award helps business scale their product within the region they are currently
operating in. All intellectual properties remain with the developer/developing
team. Developmental cooperation organizations and institutions such as Siemens
Stiftung may also approach inventors to further their products. A previous winner
was a portable household toilet for informal settlements: link
The goal of the contest is ultimately Location: Worldwide
to empower people in developing Target Use Case: Energy, WASH-related technologies
regions to have access to basic
services for their daily needs. We Investment: First prize €50,000, second place €30,000, third place €20,000
want to locate creative solutions Links: http://www.empowering-people-network.siemens-
and we are eager to work with stiftung.org/en/shortlist/projects/portable-household-toilets-for-informal-
innovative teams to bring settlements/
their solutions to the lives of those
who need them most.
-Rolf Huber
Managing Director Siemens Stiftung

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 Task Objectives
TABLE OF CONTENTS

Key Findings

Company Profiles: Domestic

Company Profiles: Foreign

A Case Study: Swarna Tollway Pvt. Limited

Recommendations
 A CASE STUDY: SWARNA TOLLWAY

Swarna Tollway purchased four Banka Bioloo biotank

systems in July 2015 for installation into two government
schools as part of its CSR initiative.
Licensee
Retail &
DRDO (product Manufacturer Customer Beneficiary
Installer
development)

Swarna Tollway
Pvt. Ltd. CSR
initiative Local school

27
 A CASE STUDY: SWARNA TOLLWAY

Swarna decided to invest its CSR efforts in sanitation as a

display of support for PM Modi’s SBM.
During an interview with Deepak, who is the site engineer, we learned:
• Swarna Tollway Pvt. Limited selected to install the • Swarna’s purchasing department found Banka
4 biotanks and 20 biotoilets in two local schools as Bioloo online by a Google search.
part of its CSR efforts.
• It said that Banka Bioloo was a cheaper option,
• It selected biotoilets from the list of approved which is why Swarna used it for schools.
options as a display of support for SBM and PM
Modi. • Swarna Tollway said the biggest problem is
maintenance, which in this scheme no one is
• It stated that for CSR requirements it is required responsible for ensuring.
only to pay the initial cost of installation. It
explicitly stated that it was not responsible for
paying for any ongoing service and maintenance.

28
 Task Objectives
TABLE OF CONTENTS

Key Findings

Company Profiles: Domestic

Company Profiles: Foreign

A Case Study: Swarna Tollway Pvt. Limited

Recommendations
 RECOMMENDATIONS

Three reasons why now may be a great time for BMGF to

pursue broader engagement with CSR initiatives to
support piloting and scaling sanitation technologies.
CSR support could raise

1 Firms may be quick to

engage
As firms struggle to meet the new
2 awareness of the options
available in sanitation.
To date, most CSR efforts have
3 Efforts may influence “the
list” of CSR activities
Firms that receive “the list” of
CSR requirements of the been directed toward education, approved CSR activities indicated
Companies Act and strive to environment, and health with little that installation of DRDO systems
express support for Modi’s efforts, focus on sanitation. Raising in schools is explicitly mentioned.
like SBM, firms may be seeking awareness among corporate Influencing what appears on the
partners with whom they can community may present many list could unlock new investment for
achieve their legal obligations. options. proven sanitation and wastewater
treatment solutions.

30
“The task now is to convert the opportunity this legislation provides
into tangible outcomes that not only comply with the law but also
highlight the larger vision of the organizations they impact. Indian
companies’ unique culture, skills, and intrinsic ability to innovate can
establish new ways to support society and build their brands. CSR
solutions can take the form of collective funds for greater impact,
financial innovation, and new social impact models.”

Source: http://www.csrwire.com/blog/posts/1485-evaluating-indias-top-companies-for-csr-2014. Accessed 11/11/2015.

CONTACTS
Jamie Jones, PhD
[email protected]
Patrick Woodson
[email protected]
Brandy Salmon, PhD
[email protected]