Initiatives of Change - Indian Business Leaders Emphasize Sustainability and Compassion

Dr Jamshed J Irani (Photo: Altaf Mohammed Abid)

The Tata group dispenses $73 million a year in community support projects under its corporate sustainability policy. This was not an expense but an investment, Dr Irani said. ‘It is the very essence of our being.’

But he also warned that corporations were being over-regulated. A number of international companies were delisting from Wall Street and re-listing on the London Stock Exchange. He also expressed his concern about investors’ pressure on companies to publish their results every quarter as ‘it takes the eye off the ball as far as long-term planning is concerned’.

Dr Irani was speaking at a conference on ‘Asia’s relevance in a globalizing world’, organised by Caux Initiatives for Business (CIB), at the Initiatives of Change centre in Panchgani. In a developing country such as India, where there was no social safety net, ‘corporates have to step in’ to provide education and hospitals, ‘and provide water to communities not even connected with us’.

He described an occasion when Narasimha Rao, then Prime Minister, had invited top industrialists to New Delhi to discuss their social commitment. Prime Minister Rao had suggested that corporations allocate one per cent of their net profits to social spending. Dr Irani and the then Tata Chairman, J R D Tata, had subsequently calculated Tata’s percentage of profits spent on social investment. As the company’s social spending never fluctuated year on year, but profits did, the ratio varied. They found that the minimum ratio of their social spend was 3 per cent of net profits, when profits were high, and the highest was 20 per cent, when profits were low. This illustrated how committed the Tata group is to corporate responsibility, Dr Irani said.

There was also a dividend for the company as employees wanted to work for a company with ethical standards. And customers trusted ethical houses. Corporations of the future would be known for their ethics, he said.

Dr Irani said that British trade union leaders had welcomed Tata Motors’ bid to take over Jaguar cars, being sold by the Ford motor company. He said that Tatas were the unions’ preferred owner. Tata’s Indian competitor, Mahindra and Mahindra, are also bidding for Jaguar.

Speaking at a session of the CIB conference on ‘the impact of globalization on corporate social responsibility’, Dr Irani said that Tata’s were taking people from underprivileged communities and training them. ‘We have to train people in entrepreneurship. We have to have credible leadership.’

Next week, he said, 400 senior Tata executives are due to meet to talk about climate change and ‘what is expected from our individual companies’. ‘We must have environmentally friendly processes. We have to leave the world for our children. That should be our objective,’ he concluded.

The CIB conference, 23 to 27 November, has brought together senior Indian and Japanese executives to look at trust and integrity in business leadership. Among the 23 Japanese taking part are Toru Hashimoto, chairman of Deutche Securities in Japan and head, in Japan, of the Caux Round Table group of senior executive; and the President and CEO of Canon India, Kensaku Konishi, based in Gurgaon, Haryana State, near New Delhi.

Subir Rana, the Executive Vice-Chairman of the Hinduja group, India’s largest transnational, emphasized that globalization encouraged ‘ever increasing’ connectivities, communities, commonalities (such as across cultures) and compassion (such as towards natural disasters). These were the most important benefits that globalization brings, he said. He concluded by posing the question, ‘How can we bring compassion into what we do, so that we can bring a brighter future?’

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by Michael Smith, Panchgani, 26 November