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Parameters of the Karmayog CSR Rating
- Products and Services: The subjective rating (0-5) is based on the Company’s main products / services.
- Need of Society: If the product / service offered is not needed by society, then the Karmayog CSR rating = 0.
- Zero Rated Products: Companies which make the following are given a Zero Karmayog CSR rating:
- cigarettes and tobacco based products
- liquor companies
- Must – do CSR: Every Company degrades the environment, just as every individual does. Hence, every Company must be working to reduce environmental degradation, and to rejuvenate the source / place from where it uses resources or operates. To get a Karmayog CSR rating of even 1, a Company must be engaged in environmental work that rejuvenates and restores the damage done.
- Least harmful process: The process followed in the making of that product or delivery of that service is considered while assigning the rating of a Company. The process followed should be one that does the least harm. (apart from the mandatory regulations and laws in place)
- Impacts of usage: The implications of the usage of the product / services is considered while assigning the rating of a Company. (pollution, environmental degradation, waste generation, etc.)
- Harmful products: Companies which make the following extensively damage the environment. Hence a Karmayog CSR rating of not more than 2 can be given to them, even if they are doing extensive work under CSR.
- Chemicals (such as fertilizers, paints, plastics)
- Harmful processes: Companies which engage in the following processes extensively damage the environment. Hence a Karmayog CSR rating of not more than 2 can be given, even if they are doing extensive work under CSR.
- mining
- aviation
- thermal power generation
- cement manufacture
- automobiles, auto parts, tyres manufacture
- Paper, forestry based products manufacture
- Iron and steel manufacture
- Minimum CSR Spend: A company must spend an amount equivalent to at least 0.2 % of its sales for CSR activities. Such an amount provides an idea of the magnitude of CSR that can be done by a Company. If a Company does not spend this minimum amount, then a zero or low Karmayog CSR rating would be give.
- Employee participation and volunteerism:
This factor has not been a deciding factor in the Karmayog CSR rating as it is more important for the Company as a whole to have a defined CSR philosophy which it practises. Within such a set-up, each employee will be a more sensitised participant, and will hence be contributing towards the CSR objectives of the Company. This is a far more effective, and long-lasting method of practising CSR as compared to employee pay-roll giving and volunteerism, which is often not voluntary and is usually also temporary.
11. Reach of CSR Activities:
A second rating has also been carried out simultaneously to determine the extent of impact that a Company’s CSR activities has. Accordingly, a company would be assigned either “a”, “b”, or “c” where a = CSR activities involving employees only, b = CSR activities in the immediate physical vicinity of the Company’s operations and c = CSR activities involving the larger community and society as a whole.
- Social Banking and Social Responsibility: Banking, Insurance and Finance sectors tend to get rated higher because of the nature of their work. However, engaging in micro-finance and rural banking does not automatically mean good CSR practice, as often what is termed as “social banking” is just a simple extension of the customer base and business, and is also part of the priority sector lending that is mandatory.
Examples of some socially responsible and committed companies in India:
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