CSR: Larsen & Toubro is engineering its way to CSR
Some
months back, middle and senior management executives from across
various plants and project sites of engineering and construction
giant Larsen & Toubro (L&T) gathered for a brainstorming
session. By the end of the session, all of them, mostly engineers,
were familiar with Schedule VII of The Companies Act, 2013.
For the record, Schedule VII lists out CSR activities and suggests that communities be the focal point. Five such workshops were conducted across the country, and chased up with meetings with not-for-profits and partners. Then, after an online survey covering about 3,500 people, including L&T's supervisors, the findings were consolidated and reviewed by two senior management teams.
Finally, L&T had its answer: Known for building bridges, ports and other infrastructure, L&T would now also build the country's social infrastructure. When the new Companies Act came into effect in April this year, the 75-year-old firm saw an opportunity to take a relook at its social sector spending, which was so far centred mostly around its facilities.
"We wanted to do something that created a national impact. We wanted to utilise our strengths to try and build a social infrastructure," says Ajit Singh, the 61-year-old L&T veteran and executive vice-president who heads its corporate social responsibility (CSR) initiatives.
CSR is not an unfamiliar concept within the company. L&T group executive chairman AM Naik has been a strong advocate. In FY14, L&T spent about Rs 76.5 crore on sustainability and social responsibility activities or approximately 1.4 per cent of its profits.
If sustainability initiatives are excluded, the figure would be about Rs 50 crore. This financial year, under the new guidelines, L&T could spend as much as Rs 110 crore on CSR alone. "Top leadership is responsible for looking at the big picture for the company — CSR is a vital part of that," says K Venkataramanan, who took over from Naik as CEO and MD in 2012. "Our corporate governance structure for CSR has a top-down approach ensuring commitment from top management."
For the record, Schedule VII lists out CSR activities and suggests that communities be the focal point. Five such workshops were conducted across the country, and chased up with meetings with not-for-profits and partners. Then, after an online survey covering about 3,500 people, including L&T's supervisors, the findings were consolidated and reviewed by two senior management teams.
Finally, L&T had its answer: Known for building bridges, ports and other infrastructure, L&T would now also build the country's social infrastructure. When the new Companies Act came into effect in April this year, the 75-year-old firm saw an opportunity to take a relook at its social sector spending, which was so far centred mostly around its facilities.
"We wanted to do something that created a national impact. We wanted to utilise our strengths to try and build a social infrastructure," says Ajit Singh, the 61-year-old L&T veteran and executive vice-president who heads its corporate social responsibility (CSR) initiatives.
CSR is not an unfamiliar concept within the company. L&T group executive chairman AM Naik has been a strong advocate. In FY14, L&T spent about Rs 76.5 crore on sustainability and social responsibility activities or approximately 1.4 per cent of its profits.
If sustainability initiatives are excluded, the figure would be about Rs 50 crore. This financial year, under the new guidelines, L&T could spend as much as Rs 110 crore on CSR alone. "Top leadership is responsible for looking at the big picture for the company — CSR is a vital part of that," says K Venkataramanan, who took over from Naik as CEO and MD in 2012. "Our corporate governance structure for CSR has a top-down approach ensuring commitment from top management."
L&T
is focusing its CSR activities in four key areas: water and
sanitation, healthcare, education and vocational training. It is
already present in the last three. It has kicked off the first
initiative by mapping out and identifying waterstressed areas in the
country where it can intervene and help to improve availability of
water.
"We understand that societal prosperity and economic profit are complementary constructs and we can play a catalytic role in nation building," says Venkataramanan, about why businesses need to look beyond just revenue and profits.
The Science-on-Wheels initiative, which L&T funds, gives less privileged students access to a science laboratory by travelling to various schools. L&T, through its CSR activities, is associated with running 360 primary schools.
The laboratory — mobile vans with equipment — travels to these schools and another 300. The company also focuses on providing vocational training and through it, employment. It runs eight training institutes, which skill rural youth and school dropouts.
Students receive a stipend during the training and on completing it, can find employment with some of L&T's contractors or start on their own. Historically, L&T has been involved in healthcare, when in the 1960s it set up a healthcare centre for employees.
Over the years, the centres set up in different parts of the country started catering to the poor, offering free consulting and services such as dialysis and X-rays at substantially subsidised rates. It now also has nine mobile healthcare vans going to remote areas and slums, complementing the healthcare centres.
As with many of its CSR initiatives, L&T's newest initiative in water and sanitation will involve partnering with reputed not-for-profit organisations, who can execute on the ground. "We will also lend engineering expertise and project management capability," says Singh.
An engineer from IIT Khargpur, Singh was heading one of the units under what is now L&T's Electrical and Automation business, when he decided to take up his current responsibility.
"We understand that societal prosperity and economic profit are complementary constructs and we can play a catalytic role in nation building," says Venkataramanan, about why businesses need to look beyond just revenue and profits.
The Science-on-Wheels initiative, which L&T funds, gives less privileged students access to a science laboratory by travelling to various schools. L&T, through its CSR activities, is associated with running 360 primary schools.
The laboratory — mobile vans with equipment — travels to these schools and another 300. The company also focuses on providing vocational training and through it, employment. It runs eight training institutes, which skill rural youth and school dropouts.
Students receive a stipend during the training and on completing it, can find employment with some of L&T's contractors or start on their own. Historically, L&T has been involved in healthcare, when in the 1960s it set up a healthcare centre for employees.
Over the years, the centres set up in different parts of the country started catering to the poor, offering free consulting and services such as dialysis and X-rays at substantially subsidised rates. It now also has nine mobile healthcare vans going to remote areas and slums, complementing the healthcare centres.
As with many of its CSR initiatives, L&T's newest initiative in water and sanitation will involve partnering with reputed not-for-profit organisations, who can execute on the ground. "We will also lend engineering expertise and project management capability," says Singh.
An engineer from IIT Khargpur, Singh was heading one of the units under what is now L&T's Electrical and Automation business, when he decided to take up his current responsibility.
"We
have picked up a lot of business lessons from the CSR activities we
have conducted. Through our CSR activities we have interacted with
our communities, understanding their needs and demands which feed
into the way we do our business," says Venkataramanan . And
that's probably 'corporate wisdom' that comes from being invested in
CSR for many years.
By
N
Shivapriya,
ETCD 5 Dec, 2014, 05.11AM IST
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