The Art of Benefiting by Giving: A case study on CSR buoying competitive
advantage
ABSTRACT
Strategic corporate social responsibility is a propitious concept when the CSR policy
amalgamates with the company’s vision, mission and philosophy. Corporate social
responsibility brings coherence between business economic performances and societal
capital. The synchronization of corporate social responsibility and business strategies and
practices will lead to leveraging the value and potential of the company to achieve
company’s competitive advantage and realize the transformational capacity of company
towards the enhancement of societal & environmental capital. This case study throws
light on how ITC Limited Company’s corporate social responsibility initiatives added
values to the society and how they gained competitive edge over the process.
INTRODUCTION
ITC Limited is a big multi-brand diversified business organization and its business
encompasses fast moving consumer goods to hotels, paperboards and specialty papers
and packaging, agricultural business and IT. It is one of India’s foremost multi-business
enterprises with a market capitalization of US $ 52.69 billion and with a growth of
10.69% as on the financial year 2019. The vision of the company is to sustain its position
as one of India’s most valuable corporations through world class performance, creating
growing value for the Indian economy and the Company’s stakeholders and its mission is
to enhance the wealth generating capability of the enterprise in a globalizing
environment, delivering superior and sustainable stakeholder value.
The company realized the imperativeness of society development and implemented the
triple bottom line approach to assess the contribution of company in building economic,
social and environmental capital towards societal sustainability.
The competitiveness of ITC’s diverse businesses rest on the strong foundations of
institutional strengths derived from its deep consumer insights, cutting-edge Research &
Development, differentiated product development capacity, brand-building capability,
world-class manufacturing infrastructure, extensive rural linkages, efficient trade
marketing and distribution network and dedicated human resources.
ITC AND CSR
ITC is India’s leading Fast Moving Consumer Goods Company, the clear market leader
in the Indian Paperboard and Packaging industry, a globally acknowledged pioneer in
farmer empowerment through its wide-reaching Agriculture Business and runs the
greenest luxury hotel chain in the world.
CSR is defined by the European Commission as “the responsibility of enterprises for
their impacts on society. The process of responsible corporate governance through CSR
was enshrined into law when the companies Act 2013 were enacted by the Indian
parliament. Every company having net worth of Rs 500 crore or more or a net profit of
Rs 5 crore or more during any financial year shall constitute a CSR committee of the
Board consisting three or more directors. At least 2% of the average net profits of the
company made during the three immediately preceding financial years shall be spent on
pursuance of its corporate social responsibility. The CSR activities of ITC are focused o
two stakeholder communities: rural communities with whom ITC’s agri-businesses have
forged enduring partnerships and with communities residing in close proximity to our
production units.
The Chairman of ITC, Mr. Sanjiv Puri mentioned “We are deriving far more value by
being together than being separate”. ITC believes that their aspiration to work together
and create enduring value for the entire nation drives the shareholder’s faith on the
company. ITC implements this philosophy to move its businesses towards international
competitiveness and also enhance the competitiveness of the larger value. ITC group
directly employs more than 31,000 people and the Company’s Businesses and value–
chains generate around 6 million sustainable livelihoods many of whom live at the
margin in rural India. ITC believes that in the strategic context of business, enterprises
possess, beyond mere financial resources, the transformational capacity to create game–
changing development models by unleashing their power of entrepreneurial vitality,
innovation and creativity. In line with this belief, ITC will continue crafting unique
models to generate livelihoods and environmental capital. Such Corporate Social
Responsibility (“CSR”) projects are far more replicable, scalable and sustainable, with a
significant multiplier impact on sustainable livelihood creation and environmental
replenishment. These initiatives are independent of the normal conduct of ITC’s business.
A report by Goodera last year ranked ITC Limited as the 7th largest spender on Corporate
Social Responsibility in India. The company’s CSR spend was a steep INR 307 crores last
year, with long-running, multi-year projects in different activities, including the often-
neglected culture and national heritage.
ITC’s CONTRIBUTIONS
1. Sustainable Agriculture: ITC’s Sustainable Agriculture Practices Programme is designed
to assist such small farmers to cope with these challenges. Demonstration plots and farmer
